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Rudge v Richens (1873) LR 8 CP 358

Lender entitled to exercise power of sale when borrower in default

Facts

The plaintiff lender took possession of mortgaged premises and sold them after a default in mortgage payments. The defendant borrower pleaded, on equitable grounds, that he had been deprived of his right to have the premises re-conveyed to him upon payment of the principal money and interest due.

Issue

The Court considered the principles of equity in relation to mortgages. It considered the case of Walker v Jones Law Rep. 1 P. C. 50. In that case,it was confirmed that the borrower in a mortgage has the right to a reconveyance of the mortgage property upon payment of the money due under the mortgage and that every lender is under a duty to make such a reconveyance where payment is made. This is the necessary result of the relative positions of the parties. However, in the present case, despite the sale of the mortgaged property by the plaintiff, there remained an outstanding balance of principle and interest.

Held

Keating J upheld the judge at chambers decision to strike out the defendant plea as bad and dishonest. The authorities relied upon by the defendant showed that, where the claim of a lender has been satisfied, the borrower is entitled to a reconveyance of the property. However, this did not apply in circumstances where an amount remained outstanding. Grove J concurred with Keating J and added that the plaintiff had an undoubted right to exercise the power of sale and the defendant’s plea was no answer to this.

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