Rice v Rice

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Citation: Rice v Rice (1854) 61 ER 646.

This information can be found in the Textbook: Edgeworth et all, Sackville and Neave's Property Law Cases and Materials, 8th edition, Lexis Nexis, 2008, pp. 429-32 [4.178].


Background facts

  • A vendor was selling to a purchaser, and the vendor signed a receipt although the purchaser had not paid.
  • He thus had an equitable lien in the house.
  • Meanwhile, the purchaser created an equitable mortgage through the deposit of title deeds.
  • The competing titles are thus a prior equitable lien and a later equitable mortgage.

Legal issues


  • The 'time' of the equitable interest should only be used as a last resort to determine priorities between equitable interests. Instead, the court examines the 'merits' of the interests.
  • The merit is examined by looking at:
    • Nature and condition of the equitable interest.
    • Special circumstances of the interest in this case.
    • The whole conduct of the party in this case (eg, failing to make proper inquiries will diminish one's merit).
  • In this case:
    • The nature and condition of the equitable mortgage and the equitable lien are the fairly equal, since they both arise from a party being owed money. They might be a little bit different because the equitable mortgage involved a contract, but that's not enough to constitute a difference for this purpose.
    • The only special circumstance here is that the equitable mortgagee had possession of the title deeds, but again, this isn't enough to constitute a difference.
    • The vendor in this case could have demanded the purchase price but instead he executed the conveyance and signed the receipt. This is his own mistake, and because of it, the purchaser was freely able to deal with the property as if it was his. This diminishes the merit of the vendor.
  • Accordingly, the vendor's equitable lien is inferior to the equitable mortgage of the mortgagee, and the time factor is irrelevant.


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