Mortgages and Encumbrances.

42. After entering on the form of mortgage or encumbrance th name, residence, and trade or calling of the intending mortgagor or encumbrancer, describe the land as directed in paragraphs 10 and 25, and state the nature of the estate intended to be charged, whether fee-simple or leasehold, also the particulars of leases, prior mortgages, or other encumbrances (if any) affecting the property.

43. Next must be stated the name, residence, and trade or calling of the person in whose favour the mortgage or encumbrance is to be created, the amount of the sum of money or annuity to secure which the land is to be pledged, the date (if any) fixed for the payment of the sum so secured, or the occurrences or conditions upon which it may be intended that such payment shall be contingent, together with the rate of interest, and the dates on which it is to be paid.

44. Covenants for punctual payment, for keeping in repair, and for right of entry upon the premises to inspect the state of repairs, need not be inserted, as these are declared by law to be implied in every mortgage under the Land Transfer Act, unless expressly barred or modified by words to that effect.

45. Covenants to insure and other covenants may be introduced by using the form of words specified for leases (see paragraph 39), but the use of those abbreviated forms is not compulsory. Any other covenants agreed on between the parties may be introduced into the mortgage or encumbrance.

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46. Repayment by instalments or periodical payments may be provided for by a special clause, and forms of mortgage adapted to the use of Building or Benefit Societies are supplied at the District Land Registry Offices, and are set out in the Schedule. Mortgages to these societies must be made to the trustees, without mentioning their names. ("Land Transfer Act Amendment Act, 1871," section 26.)

47. The memorandum of mortgage or encumbrance, when filled in and executed as directed in the instructions for preparing instruments given in paragraphs 4 to 13, together with the grant, certificate of title, or lease under which the land intended to be pledged is held, must be forwarded to or presented at the District Land Registry Office, in order that the particulars may be entered in the register-book.

48. One counterpart of the memorandum of mortgage or of encumbrance will be delivered to the mortgagee or encumbrancee bearing certificate under the hand and seal of the District Land Registrar that the particulars have been entered in the register-book.

49. Entry in the register-book is the essential which gives validity to the transaction, and the certificate of the District Land Registrar makes the instrument evidence in all Courts of justice that such entry has been made.

50. The question who shall hold the counterpart, grant, or certificate of title, or lease, representing the property pledged, is left to be settled between the parties. It cannot be deemed an important point in the interest of either party, when it is considered that an original of the grant, certificate, or lease remains in the District Land Registry Office, which, as well as the counterpart in the bauds of the proprietor, bears upon it a memorandum recording the mortgage or encumbrance, and the date and hour of its creation, certified under the hand of the District land Registrar; and that the law declares that all mortgages, encumbrances, and other liens shall take effect according to the date of their registration, and that no subsequent transaction or entry can affect the rights or powers of the previous mortgagee or encumbrancee, whose title is guaranteed by the law as indefeasible.

51. It should also be borne in mind that no lease granted subsequent to a mortgage or encumbrance can have any validity as page 27 against the mortgagee or encumbrances, unless his concurrence shall be certified thereon in manner directed in paragraph 13.

52. Although the grant, certificate, or lease will itself for the most part exhibit the state of the mortgagor's title, the mortgagee is nevertheless advised, as a precautionary measure, before paying the mortgage-money, to cause search to he made, lest caveat should he entered forbidding the registration of dealings with the property; he may also, if necessary, protect himself by lodging a caveat, forbidding any further dealing, pending the registration of his mortgage.

53. Any number of sections or allotments belonging to the same proprietor may be included in one form of mortgage or encumbrance.

54. A mortgage or encumbrance may be discharged by the simple indorsement thereon of a receipt for the money secured, signed by the party entitled, attested by a witness, and duly registered; and in ease the mortgagee is absent from the colony, or if there be no person authorized or capable of giving a receipt for the mortgage-money at the date appointed for the redemption, the mortgagor may pay the amount of principal and interest due, to the Colonial Treasurer; and the District Land Registrar, upon production of the Treasurer's receipt for the same, will release the land from mortgage, by entering in the register-book and on the grant the memorial of discharge. In such cases, the amount so paid will be held by the Treasurer in trust for the mortgagee.

55. In case of default made by mortgagor or encumbrancer in payment of interest or principal, or in the observance of any covenant, the Act gives a remedy to the mortgagee or encum-brancee, by empowering him to sell the property, after one month's notice, in writing, served on the mortgagor, or left at his last known place of abode in the colony, or on the mortgaged premises.

56. The notice should state the circumstances of the default, and the intention of the mortgagee to sell unless the same be remedied.

57. The procedure to be followed in such sales is the same as that prescribed in the instructions under the head of "Transfers."

58. The District Land Registrar is bound to give effect to sales by mortgagees where the transfer purports to be in exercise page 28 of the power of sale contained or implied in the mortgage, the mortgagee signing the memorandum of transfer; and the Act declares snch sales to be "as valid and effectual to pass such mortgaged estate or interest as if the memorandum of transfer had been executed by the mortgaging or encumbrancing proprietor, prior to the execution of the mortgage or encumbrance."

59. The sale may be by private contract or by auction, but should be properly advertised. The property may be sold either in one block or several, and the balance of the proceeds, after paying the amount secured and all expenses, must be paid to the mortgagor or encumbrancer.

60. A mortgagee or eneumbrancee is also empowered by the 62nd section of the Act to distrain for arrears due twenty-one days or upwards, after giving seven days' notice to the tenant or occupier, to the extent of any rent that may be then due by such tenant or occupier.

61. Foreclosure under the Land Transfer Act is a very simple and inexpensive process. For this purpose, after default in payment has been made for six months, the mortgagee may apply to the District land Registrar for a foreclosure order, accompanying his application by a certificate of a licensed auctioneer that the land has beeu offered for sale after due advertisement, and no bidding obtained sufficient to cover the mortgage-money with interest and expenses. The property will thereupon be again advertised for sale; and if no bid in excess of the mortgage-money, interest, and expenses be obtained, a certificate of title will be issued vesting the land in the mortgagee with indefeasible title.

62. The simplification of title and dealing with land under the Land Transfer Act has rendered an easy and inexpensive procedure for recovery of possession applicable in substitution for ejectment under the old law. (See section 122.)