RE: KAYFOLD LTD (In liquidation) 1975 1 All E.R. In that case the Managing Director of the company concerned about protecting customers who had send in money was advised to open a special account called a “customers Trust Deposit Account” into which such customers money will be deposed. The manager rather than open the account, the “Managing director agreed with his Banker to use an existing formal deposit account. After the customers funds had been deposited in the said account for the agreed purpose only, the Bank sought to apply those funds to other purposes. The court held that a trust had been created in favour of the customers of the company as the three certainties were present to create a trust.
FORECLOSURE PROCEEDING IS FOR EQUITABLE MORTGAGE – MORTGAGOR HOLDS LEGAL ESTATE IN TRUST
In considering the scope of the rights of an equitable mortgagee (not by way of charge) it should be borne in mind that the general rule is that foreclosure (and not sale) is the proper remedy of an equitable mortgagee (See James vs James (1873) L.R. 16 E. 153 citing with approval Pryce vs Bury...