| Commentary

12 New account

| Commentary

12 New account

Bankers’ forms of mortgage securing ‘all moneys due’ often contain a provision allowing the bank to rule off the account secured on receiving notice of any subsequent encumbrance affecting the mortgaged property and to open a new account with the mortgagor. This is because in certain circumstances1 subsequent mortgages will rank in priority to further advances made on the original security from the time when the bank receives notice of such subsequent mortgages. In this situation, under the rule in Clayton’s case, debits made after the receipt of notice will be postponed to the subsequent

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