There are two kinds of notice—actual notice, as in the cases above referred to, where the banker is informed verbally or receives notice in writing, and constructive notice. If by a perusal of the title deeds lodged as security, the banker can ascertain the existence of a prior charge upon the land, either directly, or by reference to some will or other deed, he has constructive notice of the contents of the charge recited therein, or if he receives any information which should reasonably give him a hint of the existence of a charge and lead him to find out about it, it is also a constructive notice. All clues should be carefully followed up. A tiny thread may lead the way to an important fact. A banker is not legally fixed with notice of a charge affecting the security of his customer, by any information regarding that property which might be included in deeds deposited by other customers, but he would naturally give heed to any such information which might come to his notice.
With regard to restriction on construc tive notice, the Conveyancing Act, 1882, Section 3 provides : " (I) A purchaser shall not be prejudicially affected by notice of any instru ment, fact, or thing unless "(a) It is within his own know ledge, or would have come to his knowledge if such inquiries and inspections had been made as ought reasonably to have been made by him ; or "(b) In the same transaction with respect to which a question of notice to the purchaser arises, it has come to the knowledge of his counsel, as such, or of his solicitor, or other agent, as such, or would have come to the knowledge of his solicitor, or other agent, as such, if such inquiries and inspections had been made as ought reasonably to have been made by the solicitor or other agent." A second mortgagee should always give notice of his charge to the first mortgagee. Such notice will prevent the first mortgagee from any further advances upon the property or buying up any mortgage subse quent to the second and tacking it to his own first mortgage. (See TACKING.) Equitable charges rank according to the date of the charge, not according to the date of notice. If a banker receives a third charge upon a property, he cannot, by giving notice to the first mortgagee, before the second mortgagee gives notice, obtain priority over the second mortgage.
Where notice is required to be sent to mortgagees or trustees, a separate notice should be sent to each one and an acceptance of notice received from each. In the case of Sagron Ir a lden B uilding Society v. Rayner (1880, 14 Ch. D. 406), it was held that notice to the solicitor of trustees or mortgagees did not bind them. James. L.J. • in the course of his judgment, said : " If the solicitors were to receive notice in such a xvay as to affect the trustees with all the consequences of that notice, it would be imposing a most tremendous burthen upon trustees to say that merely because they have employed a solicitor (the trustees haying a trust fund) in effecting an investment of the trust fund upon mortgage, they were in some sense agents of the trustees to receive any notices of subsequent incumbrances or dealings by the cestuis que trustent of that trust fund. 1 find it utterly impossible to arrive at such a conclusion. We have all had occasion several times to express our opinion of the prevailing fallacy that there is such a thing as the office of a solicitor, that is to say, that a man has a solicitor, not as a person whom he is employing to do some particular business for him, either conveyancing, scrivening, or conducting an action, but as an official solicitor, and that because a solicitor has been in the habit of acting for him, or been employed to do something for him, that solicitor is his agent to bind him by anything he says, or by receiving notices or information. . . . I am prepared, there fore, to say that before a notice of this kind of a charge upon the property can be of the slightest validity it must be given, if given to a solicitor, to a solicitor who is actually either expressly or plainly authorised as agent to receive the notice of that incum brance." With respect to the registration of charges, see LAND REGISTRY ; LAND REGISTRY (MIDDLESEX DEEDS) ; REGISTRATION OF MORTGAGES AND CHARGES: YORKSHIRE REGISTRY OF DEEDS.
Notice of the assignment of a debt passes the legal right to such debt from the date of such notice. (See DEBTS, ASSIGNMENT OF.) (See :MORTGAGE, PRIORITIES. TACKING.)