Bolton v Salmon
Jurisdiction | England & Wales |
Date | 1891 |
Court | Chancery Division |
Principal and Surety - Giving of Time - Covenant to pay Mortgage Debt - Covenant in Consolidation Deed to pay at later Date - Discharge of Property as well as Personal Liability of Surety - Tenants in Common - Redemption Action - Parties.
Where a surety pledges his personal credit by bond or covenant, and by the same contract pledges also his goods, or mortgages or charges his lands, as security for the same debt, any alteration of the contract by the mortgagee and the principal debtor behind the back of the surety — e.g., by a consolidation deed, with a fresh covenant for payment of the principal sum with other moneys subsequently advanced at a later date — not only discharges the surety from all personal liabilityF1, but also releases the property which the surety had included in the contract.
Wheatley v. BastowF2, Hodgson v. HodgsonF3, and Holme v. BrunskillF4 discussed.
Parties necessary to a redemption action by mortgagees of the interests of tenants in common, whether of an undivided share or of the entirety, stated.
ACTION by George Bolton, a puisne mortgagee, to redeem a prior incumbrancer, under circumstances which, so far as material for the purposes of this report, were as follows.
By an indenture of the 18th of October, 1854, two undivided fourth shares in a freehold farm at Bardwell, in the county of Suffolk, known as Clarke's Farm, belonging respectively to Susan Booty and the Defendant Sarah Buckenham, and an equitable charge on the entirety of the said farm for £850, belonging to the Defendant Sarah Buckenham, were conveyed and assured to one Eliza Middleditch, by way of mortgage, to secure £1000 and interest. The deed, though containing the usual covenants by both mortgagors, was entered into by the Defendant Sarah Buckenham as surety only.
By an indenture of the 4th of September, 1857, John Clarke Buckenham, the Defendant Sarah Buckenham, and Robert G.
Buckenham, entered into a joint and several covenant with one Cooper for the repayment on the 4th of March then next ensuing of an advance of £450 made by Cooper to John Clarke Buckenham, with interest at £5 per cent.; and by the same indenture, two undivided fourth shares in Clarke's Farm, belonging respectively to John Clarke Buckenham, and Robert G. Buckenham, and the Defendant Sarah Buckenham's said undivided fourth share, and her said equitable charge for £850 on the entirety, were conveyed to Cooper, subject, as to the Defendant Sarah Buckenham's interest, to the said mortgage of the 18th of October, 1854, by way of security for the said sum of £450 and interest. This deed was executed by the Defendant Sarah Buckenham and Robert G. Buckenham, as sureties for John Clarke Buckenham.
John Clarke Buckenham, having effected other mortgages of his interest in Clarke's Farm, and also of other property, to secure repayment of divers advances, subsequently arranged for the consolidation of all his incumbrances, including that of the 4th of September, 1857, by a deed of the 15th of December, 1884, under which George Bolton, the Plaintiff, was the mortgagee. By this deed, after reciting that John Clarke Buckenham was entitled to one undivided share in Clarke's Farm, subject to the incumbrance created by the indenture of the 4th of September, 1857, and to other subsequent charges thereon, which were specified, and that he was also entitled to other property, subject to some of the aforesaid charges, and other charges therein specified; and reciting, that the said John Clarke Buckenham had applied to the Plaintiff to advance the total sum of £3200 — in order to pay off the before-mentioned several mortgages and charges, which he, the Plaintiff, had agreed to do, “upon having the said several mortgages and charges transferred to him, and upon having repayment thereof with interest further secured in manner hereinafter appearing,” the various mortgagees respectively, in consideration of the payment of the amount of their respective debts, conveyed to the Plaintiff such debts, “and the full benefit of the covenants and other powers and provisions” contained in their respective mortgage deeds for securing the payment of the respective principal sums and interest, “and of all securities for the same.” The...
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