it is subject to a mortgage means that the sale is subject to the mortgage
Reception-Sale of . house subject to mortgage-Egyptian, English and French
law considered

A sale of a house means a sale free from incumbrances; if the purchaser
does not know that the house is subject to a mortgage, then the agreement
could only be interpreted as an agreement to buy fr~e from the mortgage;
if the purchaser has knowledge of the mortgage and its approximate value,
then oral evidence may be adduced to prove that the house was sold

                subject to the mortgage.                                                            .

Appeal

                  Advocates: Mr. T. Francoudis ..................................... for appellant.

                                          Mr. P. D. Christodoulides .................... for respondent.

April 7, 1920, R. H. Dun C.l.: In this case the appellant agreed
to buy and the respondent to sell a house for iE.250. There was no
written contract, but a receipt was given for the first instalment of
the purchase money in the following words:

"I have received from Mr. George Mikhalides the sum of
iE.25 (twenty five pounds Egyptian) on alc of the sum of
iE.250 due by him and being the price of the house No. 999
and this is a receipt by me. On the payment of one half of the
above mentioned amount I should pay to him the profit in
accordance with our agreement: This is written to be done
accordingly. October 2, 1916, (signed) Abdel Aziz Mohammed."
There were' subsequent payments for which somewhat similar

receipts were given, but they throw no light on the matter in dispute.
At the time of the sale both parties knew that the house was charged
by mortgage; neither party knew exactly how much was due on the
mortgage; in fact it was iE.55 and arrears of interest.

The question is whether the sale was free from this particular
incumbrance or subject to it. The evidence of the parties is conflict-
ing as to their intentions; and no evidence was given on either side
as to the value of the house to assist the court in guessing what their .
intentions were.

The respondent (vendor) did not contend in the High Court that
the parties were never agreed on this important question.. and there-
.fore the contract ought to be declared void; he contended that the
appellant (purchaser) was not entitled to specific performance, first
because. he did not pay .off the' mortgage, secondly because he did
not pay the whole price. The learned judge has held that there was
no agreement that the appellant should payoff the mortgage, that the appellant has in effect paid the whole pnce and is entitled to
specific performance of the agreement, and he has held that the
agreement was for sale of the house subject to the mortgage.

From this latter part of the decision the appellant appealed in
May last. The parties were then informed that the appeal could
not be heard before October 1. On December 16, notice was given
to both parties that the appeal would be heard on January 19. On
that date the appeal was opened by the advocate for the appellant
and the court adjourned in order to" enable the respondent to instruct.
the advocate who appeared for him in the High Court and who was
then absent from Khartoum: the advocate returned to Khartoum at the
end of February and the hearing of the appeal was continued on
April 7.

No application for a cross appeal was made except in the course
of the argument for the respondent, and the court felt bound to
reject it as it was made so late.

I am unable to find any authority on the question whether in
English law a sale of a house known by both parties to be \ subject
to a mortgage is a sale of that house subject to the mortgage or
"free from it when the contract is silent on the point.

I have considered the French law and found that the French
decisions are inconsistent with each other.

Under the Egyptian codes it seems that the venoor warrants
the purchaser against disturbance unless two conditions exist, the one
that there is a stipulation excluding the warranties, and the other
that the purchaser knew of the existence of the defect " of title at the

          time of sale.                                                                                                   

Here there is no stipulation excluding the warranties and the
purchaser would seem to oe entitled by Egyptian law to the same
remedy against his vendor in the event of the mortgagee attempting
to enforce his security.

To my mind a sale of a house means a sale free from incum-
brance: if the purchaser had not known of the mortgage there is
no doubt that the agreement could only have been interpreted as
an agreement to buy free from the mortgage. I think the knowledge
which the purchaser had of the existence of the mortgage and of its
approximate amount opens the door to oral evidence to prove that
the house was sold subject to the mortgage, but leaves the burden of
proof on the vendor to show that this was the natural intention. The