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Samuel v Jarrah Timber [1904]

Facts

  • A mortgage was granted over stock,which gave the mortgagee the option to purchase the stock
  • The mortgagee purported to exercise the option

Issue

  • Was the option enforceable?

Decision

  • No

Reasoning

  • Having an option to purchase the stock would undermine a mortgagor’s right to redeem his mortgage
  • This likely applies to mortgages of real property also (land), such that an option to buy a fee simple estate in a mortgage agreement would not be enforceable
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