Santley v Wilde [1899] 2 Ch 474

Court: Court of Appeal

Basic Facts: X mortgaged a theatre to Y for £2000, with Y also claiming 1/3 of the profits from underleases for the entire period X had an interest in the theatre. After repaying the £2000, X contested Y's right to the profits.

Issue for the Court: What constitutes a clog or fetter on the right of redemption in a mortgage?

Held: The court established the principle that any stipulation preventing the mortgagor from redeeming the property is void.

Lindley MR:

• A mortgage is meant to secure a debt and must allow redemption upon payment of that debt. Any provision that prevents redemption on payment is a clog or fetter on the right of redemption and is void.

• Terms related to redemption must not restrict the right to redeem; they must clarify the security without hindering the redemption process.

Sir F H Jeune:

• Collateral advantages in a mortgage are acceptable as long as they do not impede the right of redemption.

• Such advantages are valid unless they fundamentally prevent redemption.