The plea of purchase for value without notice is a single plea to be proved by the person pleading it; it is not to be this solitary class of cases in which the defence of purchase for value without notice, without more, was a complete defence has disappeared. Ind, Coope & Co. v. Emmerson, 1887, 12 App. Cas. 300, 21 R.C. 702.

(y) See Sec. 64, supra.

(z) See the keen and illuminating discussion of the nature of equitable estates and interests in Maitland, Lectures on Equity, pp. Ill ff., 120 ff., 142 ff. See also Langdell, Brief Survey of Equity Jurisdiction, 2nd ed., pp. 4 ff., 251 ff. On the other hand Ewart finds fault with the "absurd deference still paid" to the legal estate. Estoppel by Misrepresentation, pp. 252 ff.; 17 C.L.T. 282 (Dec. 1897). For a discussion of the priorities of legal and equitable mortgages respectively, see Taylor v. London and County Banking Co., [1901] 2 Ch. 231; cf. analysis of this case in Maitland, op. cit., 138-141. In 1875 the British parliament purported to take away partially the protective efficacy of the legal estate in the case of mortgages, leaving rival innocent encumbrancers to rank according to the respective dates of their securities. The result was, however, so disastrous to the credit of persons wishing to borrow on mortgage, that a precipitate retreat had to be made, and the old rule was restored in the next session. Underhill, Changes in the English Law of Real Property during the Nineteenth Century (republished in Select Essays in Anglo-American Legal History, vol. 3, p. 672, at p. 703) regarded as a plea of purchase for value to be met by reply of notice (a).

The position of a purchaser for value without notice was described by James, L.J. (b) in the following terms:

"I propose to apply myself to the case of a purchaser for valuable consideration, without notice, obtaining, upon the occasion of his purchase, and by means of his purchase deed, some legal estate, some legal right, some legal advantage; and, according to my view of the established law of this Court, such a purchaser's plea of a purchase for valuable consideration without notice is an absolute, unqualified, unanswerable defence, and an unanswerable plea to the jurisdiction of this Court. Such a purchaser, when he has once put in that plea, may be interrogated and tested to any extent as to the valuable consideration which he has given in order to show the bona fides or mala fides of his purchase, and also the presence or the absence of notice; but when once he has gone through that ordeal, and has satisfied the terms of the plea of purchase for valuable consideration without notice, then, according to my judgment, this Court has no jurisdiction whatever to do anything more than to let him depart in possession of that legal estate, that legal right, that legal advantage which he has obtained, whatever it may be. In such a case a purchaser is entitled to hold that which, without breach of duty, he has had conveyed to him."

Some special phases of the doctrine of purchaser for value without notice, with special reference to the acquisition of the legal estate, may be stated as follows (c):

(1) A mortgagee (d) who at the time of his advance acquires the legal estate in good faith for value and without notice of any earlier equitable claim takes free from such claim, although the person who conveys the legal estate knowingly commits a fraud or breach of trust in conveying it and although the title is acquired through an instrument which discloses the earlier equitable claim, if such instrument is concealed from the mortgagee (e).

(a) In re Nisbet & Potts' Contract, [1905] 1 Ch. 391, at p. 402; Union Bank of Halifax v. Indian and General Investment Trust, 1908, 40 Can. S.C.R. 510, at p. 520. In Ontario it is provided by the Conveyancing and Law of Property Act, R.S.O. 1914, c. 109, s. 39, that it shall not be necessary, in order to maintain the defence of a purchase for value without notice, to prove payment of the mortgage money or purchase money or any part thereof.

(b) Pilcher v. Rawlins, 1872, L.R. 7 Ch. 259, at p. 268, 21 R.C. 729, at p. 737.

(c) As already pointed out a purchaser, whether for value or not, of the legal estate, who takes with notice actual or constructive of an earlier equitable claim, takes subject to it.

(d) An absolute purchaser is in the same position, but for the sake of simplicity the propositions are stated with reference to a mortgagee alone.

(2) If a mortgagee has no notice of an earlier equitable claim when he takes his mortgage and advances his money, such priority as he then has will not be affected by the subsequent receipt by him of notice (f), but if he has not the legal estate the subsequent receipt of notice may in some circumstances prevent his acquiring priority by getting in the legal estate.

(3) A mortgagee in good faith for value and without notice who at the time of his purchase does not acquire the legal estate and therefore prima facie takes subject to any earlier equitable claim may gain priority by getting in the legal estate even after receiving notice of the earlier claim provided that he has not notice that the conveyance of the legal estate to him constitutes a breach of trust on the part of the grantor or that the earlier equitable claimant has the better right to call for the legal estate (g).

(e) Pilcher v. Rawlins, 1872,.L.R. 7 Ch. 259, 21 R.C. 729.

(f) So that his transferee, even with notice, has the same priority. This equitable principle resembles the principle expressed in s. 57 of the Bills of Exchange Act, which confers upon a holder deriving title to a bill through a holder in due course, and who is not himself a party to any fraud or illegality affecting the bill, all the rights of the holder in due course as regards all parties to the bill prior to that holder. The equitable principle is subject to an exception similar to that expressed by the words in italics. Where the transferee was himself a party to the suppression of notice of the earlier equitable claim, he will not be permitted to take advantage of his own fraud. In re Stapleford Colliery Co., Barrow's Case, 1880, 14 Ch.D. 432, at p. 445.

(g) Taylor v. Russell, [1892] A.C. 244, 10 R.C. 544. In other also entitled to priority for advances made by him on account of the first mortgage after the making of a later mortgage but without notice of it. This subject is more conveniently discussed in connection with the Registry Act in chapter 8, Sec. 76.

(4) A mortgagee in good faith for value and without notice who at the time of his advance does not acquire the legal estate but obtains the better right to call for it is entitled to priority over another equitable claim (7t), unless the other equitable claimant subsequently actually acquires the legal estate in good faith for value and without notice of the equitable priority conferred by the better right to call for the legal estate (i).

(5) If a mortgagee gets in the legal estate or obtains the best right to call for it in such circumstances that under the next preceding paragraphs he acquires priority on one mortgage, he also acquires priority on any subsequent mortgage for any.advances made by him without notice of intermediate encumbrancers (j). Similarly if a person advances money on words a mortgagee cannot gain priority by subsequently getting in the legal estate if when he acquires that estate he knows that there is a trust or equity in favour of the person against whom the legal estate is sought to be set up. S.C., [1891] 1 Ch. 8, at p. 29, 10 R.C. 544, at p. 555; cf. 21 R.C. 745-747; Powell v. London and Provincial Bank, [1893] 1 Ch. 610, at p. 616. It is not certain whether the limitation on the right to gain priority by subsequently getting in the legal estate applies where the grantor has notice of the breach of trust but the grantee has not. 21 Halsbury, Laws of England, 328; Bailey v .Barnes, [1894] 1 Ch. 25, at p. 37, 18 R.C. 510, at p. 521, 21 R.C. at p. 746; 2 Wh. & T.LC. Eq. 127 ff.

(h) This rule as to the better right to call for the legal estate is stated in Wilkes v. Boddington, 1707, 2 Vern. 599; Taylor v. London and County Banking Co., [1901] 2 Ch. 231, at pp. 262-263. Many of the cases as to a "better right" acquired contemporaneously with the advance are collected in 2 W. & T.L.C. Eq. 151-154; at p. 153 it is suggested that an equitable mortgagee who made his advance without notice could rely on a "better right" subsequently acquired, provided that the conditions permitting him to rely on a legal estate actually acquired were fulfilled.

As to the better right to the legal estate when a person pays off the first of two mortgages on the understanding that he is to get the legal estate, see Crosbie-Hill v. Sayer, [1908] 1 Ch. 866, and chapter 21, Merger, Sec. 201.

(i) See next preceding paragraph.

(j) Lloyd v. Attwood, 1859, 3 DeG. & J. 614, at p. 657. He is what is in fact a third mortgage but which is taken without notice of the second mortgage, he may purchase the first mortgage and get in the legal estate and thereby become entitled to payment of the third mortgage as well as the first mortgage in priority to the second mortgage (A;). This latter doctrine is more specifically designated as tacking (I).

(k) Marsh v. Lee, 1670, 2 Vent. 337, 2 W. & T.L.C. Eq. 118, 18 B.C. 523; Brace v. Duchess of Marlborough, .1728, 2 P. Wms. 491; Blackwood v. London Chartered Bank of Australia, 1874, L.R. 5 P.C. 92, at p. Ill; Halsbury, Laws of England, 330. The privilege is known as the creditor's tabula in naufragio, a term attributed to Hale, C.J.

(I) The doctrine of tacking and other rules mentioned in this chapter are here discussed without reference to the effect of the Registry Act, which is the subject of chapter 8. The doctrine of tacking and that of consolidation are distinguished, and the effect upon them of the Registry Act is discussed in chapter 9. As to the Land Titles Acts, see chapter 10.