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Judgment
John Wallis, C.J.—Exhibits V and VI both contain agreements about effecting an equitable mortgage by deposit of title-deeds Similar
documents have been held in England to affect land and require registration under the statute of 7 Anne relating to Middlesex in Moore v.
Culverhouse (1860) 27 Beav. 639; s.c. 54 E. R. 254, Neve v. Pennel (1863) 2 H. & M. 170. Kedarnath v. Shamloll Khettry (1873) 11 B.L.R.
405 is distinguishable. The learned Judge was therefore right in holding that Exhibits V and VI required registration and were inadmissible u/s 49 of
the Registration Act, even as regards the stipulation for compound interest on the equitable mortgages.
The appeal is dismissed with costs.
Phillips, J.
The question for decision in this appeal is whether Exhibits V and VI are admissible in evidence although they are not registered. Plaintiffs bad
effected an equitable mortgage by deposit of title-deeds with a third party and then arranged with the defendant to pay off this mortgagee and to
mortgage the property to him. They accordingly executed two promissory notes for the mortgage amount and executed the two agreements
Exhibits V and VI. These documents set out the terms of the contract and authorized the defendants to receive the title-deeds from the previous
mortgagee. There is further an agreement that the terms of the promissory notes should be modified by a provision for compound interest. There is
no other evidence of agreement to pay compound interest and consequently defendant''s claim there to has been disallowed on the ground that
Exhibits V and VI are inadmissible in evidence. If Exhibits V and VI are to be excluded for want of registration, defendant cannot support his claim
for compound interest. This question of whether a document executed contemporaneously with a mortgage by deposit of title-deeds requires
registration is one not without difficulty and the answer depends upon the effect of the document, that is, whether it is a mere memorandum or
narrative of facts constituting the mortgage or whether it sets forth the terms of the contract in such a way that the terms of the contract can be said
to have been reduced to the form of a document (vide Shephard and Brown on Transfer of Property Act, page 255, and Ghose on Mortgage,
page 158). That the distinction is a very narrow one is shown by the opposite conclusion arrived at in the cases reported in Dwarkanath Mitter v.
Sarat Kumari Dasi (1871) 7 B.L.R. 55 and in Kedarnath v. Shamloll Khettry (1873) 11 B.L.R. 405 In the present case, however, I think that the
facts of the case and the terms of Exhibits V and VI show that those documents are more than mere memoranda of facts. When the promissory
notes were executed no deposit of title-deeds was effected and consequently the subsequent deposit cannot be connected with the loan without
some connecting link of evidence and without that link there would be no evidence of a mortgage. That link is supported by Exhibits V and VI and
it is really those documents which evidence the mortgage and it is only under them that the compound interest agreed to be paid becomes
chargeable upon the property. Those documents accordingly purport to create a charge on and thus affect Immovable property and are
consequently compulsorily registered. It is further contended that Exhibits V and VI should be treated as mere agreements to mortgage, but I
cannot accede to this contention for after execution of Exhibits V and VI the mortgages were completed so far as the mortgagors were concerned
and the mortgagors had no further act to perform nor document to execute to complete the mortgage. Being unregistered they are inadmissible in
evidence and there is then no proof of defendant''s claim to compound interest.
I agree in dismissing this appeal with costs.