ABSTRACT
A mortgagee, as we have seen, is a trustee of the proceeds of sale,61 but he is not a trustee of the power of sale itself,62 which he is entitled to exercise in his own interest. Thus, for instance, if at the time he wishes to sell the property the market is depressed, he is not obliged to wait for a rise in market prices,63 even though it is clear that by selling immediately there will be a smaller surplus to hand over to the mortgagor; nor is he obliged to put the property in a better state of repair in order to obtain a higher price;64 nor to attempt to sell by auction before selling by private contract. As Salmon LJ explained, in the leading case of Cuckmere Brick Co Ltd v Mutual Finance Ltd:65
In Cuckmere Brick, the mortgagee was held liable in damages for negligence because, in advertising the property for sale, it carelessly omitted to mention that planning permission had been granted for the erection of apartments on the mortgaged land, and it thus obtained a lower price than it ought to have done. The mortgagee was thus liable for the difference between the price obtained and the proper market value of the property. Cuckmere Brick is, accordingly, authority for the proposition that the mortgagee must take reasonable care to obtain the true market value of the property.
