Bradley v Carritt [1903] UKHL 1; [1903] AC 253

Key points

  • A term of a loan is a clog or fetter on redemption if it impedes the sale of the mortgaged property upon its redemption
  • It is not necessary for a term to relate directly to the mortgaged property to be void as a clog or fetter


  • Clause 4 of a mortgage of shares in a tea company required the mortgagor (Mr. Bradley) to use his best endeavours to ensure the employment of the mortgagee (Mr. Carritt) as tea broker to the company

Held (House of Lords)

  • Clause 4 was void as it was a clog and fetter on the equity of redemption

Lord MacNaghten

Rejecting Santley v Wilde

  • ‘[The Court of Appeal] say in effect: “The mortgagor may pay off the debt if he likes, but that will not discharge the mortgage. The mortgage will remain as a security for the performance of the obligation relating to the share of profits. As long as that obligation lasts the mortgage stands.” The result, therefore, was, to use the words of Cozens-Hardy J., that “the proviso for redemption was nugatory,” because it only came into operation when there was “nothing on which it could operate.” That seems to me to be a very far-reaching decision. It reduces the rule that a mortgage cannot be made irredeemable to a dead letter. You have only to tack on some stipulation, such as men of business might well agree to if there were no mortgage, and the thing is done.’

Current case

  • ‘My Lords, it seems to me to be playing with words to say that on redemption these shares came back to Mr. Bradley no worse than they were when he mortgaged them’
  • ‘We were told, and it seems to stand to reason, that the only market for shares of this description is to be found among tea brokers. Tea brokers want to get hold of shares in a tea company in order to have the sale of the company’s teas. That means or points to the displacement of the acting broker. A change of brokers in Mr. Bradley’s company would, if the respondent be right, necessarily expose Mr. Bradley to a heavy liability.’
  • ‘The Court of Appeal says that is not enough: the mortgagee has not retained any direct hold upon the shares, though he may have indirectly brought about the same result. My Lords, I do not think it is necessary that there should be any hold upon the property, direct or indirect.’

Lord Lindley dissenting

  • Santley v Wilde was a difficult case, and it may have been wrongly decided, although I do not think it was. Be this as it may, I do not understand that the legal principles laid down in it have been condemned by this House as unsound.’
  • On the facts, clause 4 was not part of the mortgage but a bargainindependent of it and is thus not void as a clog or fetter that impedes the redemption of the shares
    • ‘I hope that nothing which ever has fallen from me, or which may fall from me now, will cast any doubt on this matter. But beyond that I am not prepared to go. I cannot bring myself to believe that it is part of the law of this country that mortgagors and mortgagees cannot make what bargains they like with each other so long as such bargains are not inconsistent with the right of the mortgagor to redeem the property mortgaged by discharging the debt or obligation to secure which the mortgage was effected’


  • Note that in this case we are not dealing with a mortgage on real property (land) but the clogs and fetters doctrine is applicable to mortgages over both land and chattel
  • In Kreglinger v New Patagonia Meat, the dissenting judgment of Lord Lindley was approved