The consideration in the last conveyance may be much smaller than in previous deeds. This may be because the last deed represents only a part of the property contained in the earlier deeds ; or it may indicate that the property has suffered a serious fall in value.
Where a person is the owner of land which is built upon and land which is vacant, both close together, and conveyed (before any houses were built ) under separate deeds, care should be taken that a mistake is not made by accepting the deeds of the vacant build ing land when it is the deeds of the houses which are to form the security.
It is also to be careful in taking a conveyance, say to John Brown (where there is a father and a son with the same name), lest the John Brown offering the security is not the actual person to whom the property is conveyed.
A seal should be opposite each signature to a deed. 1 It is usual, though not absolutely necessary, that the execution of the deed should be witnessed.
The banker should see that the legal estate is conveyed to Jones free from all charges or mortgages. If the land has been mortgaged it should have been reconveyed. If it previously belonged to Smith and he died, charging it in his will with the pay ment of various legacies, evidence that the legacies have been satisfied and all death duties paid should be produced.
Some bankers require that the title of all deeds offered as security should be investi gated by their solicitors, but there are many cases in which a banker is dependent upon his own examination of the title. Where a banker knows his customer and is already well acquainted with the property repre sented by the deeds, and has (as often is the case in country towns) a good knowledge of the history of the property, knowing from whom it was acquired and practically all about it, he will, as a rule, feel satisfied, in taking such a security, that he is quite safe. But in the absence of such knowledge and in the presence of a title which is not entirely " plain sailing," he would not, as a rule, be justified in advancing money upon the security until he had received a report upon the title from his solicitor.
No doubt a banker may frequently scruti nise an ordinary simple title with quite satis factory results, but if there is any difficulty at all, arising from mortgages, life interests, settlements or anything which requires special knowledge to investigate, a banker would be acting imprudently if he did not go to his solicitor for a report. It is quite
possible for the property to be subject to a mortgage, life interest or some trust, with out the bundle of documents handed to the banker showing any evidence thereof. A solicitor's opinion in every case would be desirable, but, in practice, this cannot always be obtained. It is well to remember that, though a deed may appear on the face of it to be all right, it is quite possible that it may not be what it appears to be, and so a lay man is wise if he does not depend too much upon his own investigation of the title. The more a banker knows about the nature of the documents he is dealing with the better, but a little knowledge should not lead him to too much self-confidence.
Subject to these remarks a banker must, when he has to examine a title, do the best he can. The points to be attended to will vary according to the nature of the estate, whether freehold, leasehold, or copyhold.
Whenever possible, a banker should actually see the property which is offered to him as security, for what looks very valu able on parchment may be quite the opposite in reality.
If a bundle of old deeds is handed to the banker along with the more modern ones the old ones should not be refused, for what happened in the following case might happen again. In Dixon v. Muckleston (1872, L.R. S Ch. 155) certain earlier deeds of a farm were pledged with a private party for a loan, he being informed in writing that they were the title deeds of the farm, and some later deeds of the farm were lodged with bankers as security. It was held that the first deposit created an equitable charge, and that the owner of the prior charge had not been guilty of negligence.
It is possible that deeds may be handed to a banker as security, which are already mortgaged to some other person. If the banker accepts them without any knowledge of the mortgage, he may find that his charge is postponed to the party holding the legal estate. But under such circumstances the banker would have a good right to maintain his claim and to say that the person holding the _mortgage had been negligent, that he should have got the title deeds into his own possession and not left them in the mort gagor's hands.