(1.) This is a case in which the mortgagor after a transfer of the mortgage has paid off (so he alleged) the mortgage debt. The transfer to the plaintiff was on 30 June 1930 and the payment by the mortgagor is supposed to have been made on 11 October 1930 to the original mortgagee.
(2.) It is clear that there was no express notice by either the mortgagee or the assignee to the mortgagor and therefore the ordinary principle laid down by Cozens-Hardy J. in Dixon V/s. Winch (1900) 1 Ch. 736would apply. No reference was made at the Bar to this decision but it is a well-known decision on this point. The principle was stated thus: It is well settled that payments of interest or payments on account of principal made by the mortgagor to the mortgagee after, but without notice of, a transfer must, in the absence of collusion, be allowed to the mortgagor as against the transferee.
(3.) The main principle is stated in these words: It is well settled that where a mortgage is transferred without the privity of the mortgagor, the transferee takes subject to the state of account between the mortgagor and mortgagee at the date of the transfer; and Cozens-Hardy J. also relying on the case, In re Lord Southampton's Estate, Allen V/s. Southampton (Lord) Banfather's claim (1881) 16 Ch. D. 178 stated that the principle applied to the case where the mortgagor paid off the whole of the mortgage debt in the absence of notice.