Russel v Russel (1783) 1 Bro CC 269
Depositing title deeds raised presumption of equitable mortgage.
Facts
A borrower deposited the title deeds to the leasehold with the plaintiff in order that he might obtain a loan from the plaintiff. When the borrower became bankrupt, the plaintiff brought an action before the Court of Chancery in order that he might sell the leasehold estate.
Issues
The defendants argued that the plaintiff’s case was against the law, as it amounted to creating a legal charge without writing, which was against the 4th clause of the Statute of Frauds at that time. The main issue for the court was whether it could be said that the lease had been deposited with the plaintiff as security for the loan that had been advanced to the borrower.
Decision/Outcome
The court found for the plaintiffs. Lord Loughborough stated that the lease was valuable consideration in exchange for the loan and that, therefore, this was a case of a contract which had been performed on both sides and the court would supply the necessary formalities. Ashurst, Lord Commissioner stated that this depended, however, on the terms on which the lease was deposited. A jury had found that on the evidence the lease was indeed deposited as a security with the plaintiff. Consequently, the deposit of the title deeds entitled the holder of the deeds to have a charge over the leasehold land, even though there had been no express agreement to this effect. Depositing title deeds with the lender raised a presumption that there was an intention to create a mortgage.
Updated 21 March 2026
This article accurately summarises the historical case of Russel v Russel (1783) and the equitable principle it established: that deposit of title deeds raises a presumption of an equitable mortgage, without requiring written formality.
Readers should be aware of one significant development affecting the continued practical relevance of this principle. The rule in Russel v Russel depended on the practice of depositing paper title deeds. Following the compulsory extension of land registration across England and Wales, and the Land Registration Act 2002, title to registered land is evidenced by the register rather than by physical deeds. The Law of Property (Miscellaneous Provisions) Act 1989, s.2 requires contracts for the disposition of an interest in land to be made in writing and signed by both parties. This has substantially curtailed the operation of the equitable mortgage by deposit of title deeds in respect of registered land, though the principle retains some academic and historical significance, and may still arise in limited unregistered land contexts. Students should consult current land law and equity texts for the modern position on informal security interests.
