474. Satisfaction of claims of subsequent mortgagees.

474.     Satisfaction of claims of subsequent mortgagees.

Where there are subsequent incumbrancers, their claim to receive the surplus proceeds of sale is prior to that of the mortgagor, and if the first mortgagee has notice, he is liable to them if he pays the proceeds to the mortgagor1. It seems that knowledge of the existence of a subsequent incumbrance acquired by the first mortgagee's solicitor does not necessarily constitute constructive notice to the first mortgagee unless the solicitor acquired his knowledge in his capacity as such2. The mortgagee should, however, search the register in the case of