Santley v Wilde (1899)

Transfer of Property · Redemption & Clog

Facts.

A leasehold was mortgaged to secure a loan, with a term that, in addition to repayment, the mortgagee would receive a share of the profits for the residue of the term. The nature of the mortgagor’s right to redeem came into question.

Issue.

What is the essential character of a mortgage, and may any term prevent or fetter the mortgagor’s right to redeem on discharging the debt?

Held.

Lindley MR gave the classic exposition: a mortgage is a security for a debt, and any provision inserted to prevent redemption on payment or performance of the obligation is a “clog or fetter” on the equity of redemption and is void. The right to redeem is an inseparable incident of every mortgage — “once a mortgage always a mortgage, and nothing but a mortgage.”

Why it matters.

It supplies the definition of a mortgage and the foundational statement of the no-clog principle that Indian courts apply under s.60 — redemption is a right that cannot be contracted away.

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