Vernon v Bethell
Encyclopedia
Vernon v Bethell 28 ER 838 is an English property law
case, where it was affirmed that there could be no clog on the equity of redemption
. In justifying this rule, Lord Henley made the famous observation that,
The case stands for the principle that "once a mortgage, always a mortgage", meaning a borrower cannot contract to give up his right to redeem title to his property once his debt is discharged.
where he lived. Vernon had taken out a £278 mortgage on the land, and on 5 March 1729 he assigned the mortgage to Mr Bethell, to whom he sold sugar, and got from him further loans of £5000 to £6000. On 23 April 1738 Bethell requested repayment of sums owed, by then £9541 9s 1d, or the enforcement of the security by taking possession of the land, but still leave some for Major Vernon and his family. On 25 August 1738 Vernon replied that he would convey possession of the land to Bethell for five guineas, and its profits, for release of the debt of £9976 1s 11d. Various other letters and statements by Bethell acknowledged that Vernon should be able to recover title if his debts were paid off. When Bethell died his will, from 19 March 1758 stated that if Vernon ceased with some ‘unjust pretences’ to defeat his title to the land and would accept £6000, then he should be given full title. The price of the land by then had risen significantly, and Vernon sought a declaration that he retained the equity of redemption, that he could get full title to his land back with debts repaid.
held that there could be no clog on the equity of redemption
, so that any restriction on the right to redeem one's property had the debt been discharged was ineffective. He held the exchange of letters between Mr Bethell and Major Vernon showed that only a security interest, and not an absolute conveyance was intended.
in the United States
, in favour of basic social and economic guarantees.
English property law
English property law refers to the law of acquisition, sharing and protection of wealth in England and Wales. Property law can refer to many things, and covers many areas. Property in land is the domain of the law of real property. The law of personal property is particularly important for...
case, where it was affirmed that there could be no clog on the equity of redemption
Equity of redemption
The equity of redemption refers to the right of a mortgagor in law to redeem his property once the liability secured by the mortgage has been discharged.-Overview:...
. In justifying this rule, Lord Henley made the famous observation that,
The case stands for the principle that "once a mortgage, always a mortgage", meaning a borrower cannot contract to give up his right to redeem title to his property once his debt is discharged.
Facts
Major James Vernon wished to pay off his debts to Mr Bethell’s estate and recover title of a sugar plantation in AntiguaAntigua
Antigua , also known as Waladli, is an island in the West Indies, in the Leeward Islands in the Caribbean region, the main island of the country of Antigua and Barbuda. Antigua means "ancient" in Spanish and was named by Christopher Columbus after an icon in Seville Cathedral, Santa Maria de la...
where he lived. Vernon had taken out a £278 mortgage on the land, and on 5 March 1729 he assigned the mortgage to Mr Bethell, to whom he sold sugar, and got from him further loans of £5000 to £6000. On 23 April 1738 Bethell requested repayment of sums owed, by then £9541 9s 1d, or the enforcement of the security by taking possession of the land, but still leave some for Major Vernon and his family. On 25 August 1738 Vernon replied that he would convey possession of the land to Bethell for five guineas, and its profits, for release of the debt of £9976 1s 11d. Various other letters and statements by Bethell acknowledged that Vernon should be able to recover title if his debts were paid off. When Bethell died his will, from 19 March 1758 stated that if Vernon ceased with some ‘unjust pretences’ to defeat his title to the land and would accept £6000, then he should be given full title. The price of the land by then had risen significantly, and Vernon sought a declaration that he retained the equity of redemption, that he could get full title to his land back with debts repaid.
Judgment
Lord Henley LCRobert Henley, 1st Earl of Northington
Robert Henley, 1st Earl of Northington PC , was the Lord Chancellor of Great Britain. He was a member of the Whig Party in the parliament and was known for his wit and writing.-Family:...
held that there could be no clog on the equity of redemption
Equity of redemption
The equity of redemption refers to the right of a mortgagor in law to redeem his property once the liability secured by the mortgage has been discharged.-Overview:...
, so that any restriction on the right to redeem one's property had the debt been discharged was ineffective. He held the exchange of letters between Mr Bethell and Major Vernon showed that only a security interest, and not an absolute conveyance was intended.
Significance
The famous phrase that "necessitous men are not truly speaking free men" was repeated in Franklin D Roosevelt's 1944 State of the Union Address to justify a Second Bill of RightsSecond Bill of Rights
The Second Bill of Rights was a list of rights proposed by Franklin D. Roosevelt, the then President of the United States, during his State of the Union Address on January 11, 1944. In his address Roosevelt suggested that the nation had come to recognize, and should now implement, a second "bill...
in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, in favour of basic social and economic guarantees.
See also
- English property lawEnglish property lawEnglish property law refers to the law of acquisition, sharing and protection of wealth in England and Wales. Property law can refer to many things, and covers many areas. Property in land is the domain of the law of real property. The law of personal property is particularly important for...
- Toomes v Conset (1745) 3 Atk 261; 26 ER 952, Lord Hardwicke LC, “This court will not suffer, in a deed of mortgage, any agreement in it to prevail, that the estate become an absolute purchase in the mortgagee upon any event whatsoever.”
- Russell v. Southard 53 US 139 (1851)
- Samuel v Jarrah Timber and Wood Paving Corp Ltd [1904] UKHL 2
- G&C Kreglinger v New Patagonia Meat & Cold Storage Co Ltd [1913] UKHL 1, Lord Parker, 61, “there is now no rule in equity which precludes a mortgagee, whether the mortgage be made upon the occasion of a loan or otherwise, from stipulating for any collateral advantage, provided such collateral advantage is not either (1) unfair and unconscionable or, (2) in the nature of a penalty clogging the equity of redemption or, (3) inconsistent with or repugnant to the contractual and equitable right to redeem.”
- Warnborough Ltd v Garmite Ltd [2003] EWCA Civ 1544