Re Monolithic Building Co. 1915

Re Monolithic Building Co. [1915] 1 Ch. 643

Property law – Mortgage – Mortgagor rights

Facts

Monolithic Building Co. was an incorporated company who loaned money to the plaintiff by way of a mortgage. This was not registered under the Companies (Consolidation) Act, 1908 section 93. The company later charged the money by sub-mortgage to a third-party, with notice of the original mortgage, and it was claimed that the original mortgage was void for the fact it had not been registered under the Act. The mortgage was subsequently registered over a year later from it being initially being released to the plaintiff. The trial judge found in favour of the plaintiff and gave the plaintiff the rights to the property under the first mortgage. The decision was subsequently appealed by the defendant.

Issue

The trial court found in favour of the plaintiff on the basis that when the company took the money for the first mortgage, the plaintiff should have had a valid, first mortgage upon the property. The court also found that when the second mortgage was given to another individual, it was expressly subject to the plaintiff’s rights. However, the issue for the court in this case, was to decide how the Companies (Consolidation) Act, 1908, section 93 should be read in line with the circumstances.

Decision/Outcome

The court found in favour of the defendant, allowed his appeal and rejected the decision of the earlier court, which found in favour of the plaintiff. The judges applied a strict definition to the relevant section of the Act, finding that the plaintiff had erred in not registering the mortgage, and therefore lost the rights attributed to this.