Redemption suit and service clauses survive challenge where decree nisi is not final res judicata and no clog on redemption is shown.

A decree nisi does not operate as res judicata because it is only provisional and not a final adjudication, so it could not bar the redemption suit. The service clauses in the 1901 and 1905 agreements were held admissible and binding to that extent because they did not themselves create or extinguish rights in immovable property requiring registration. The arrangements were also not treated as a clog on the equity of redemption or as an unconscionable bargain, as the evidence showed a commercial transaction without proof of domination or undue influence. The defendant further failed to prove that the second and third mortgages were acquired as the company's agent or with company funds.

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Issues: (i) whether the redemption suit was barred by the earlier decree nisi and the material recorded in the foreclosure proceedings; (ii) whether the agreements of 1901 and 1905, so far as they embodied the contract of service, were inadmissible for want of registration or otherwise invalid and unenforceable; (iii) whether those agreements were void as a clog on the equity of redemption or as an unconscionable bargain obtained by undue influence; (iv) whether the defendant proved that the second and third mortgages were acquired as the plaintiffs' agent and out of the company's funds.

Issue (i): whether the redemption suit was barred by the earlier decree nisi and the material recorded in the foreclosure proceedings.

Analysis: A decree nisi is provisional and is not a final adjudication unless and until it is made absolute. Only a final decision can operate as res judicata. On the peculiar facts, the earlier decree had also become incapable of effective execution, and the materials relied upon could not enlarge it into a final bar to a later suit for redemption.

Conclusion: The suit was not barred by res judicata.

Issue (ii): whether the agreements of 1901 and 1905, so far as they embodied the contract of service, were inadmissible for want of registration or otherwise invalid and unenforceable.

Analysis: Although the agreements were part of a larger transaction touching mortgaged property, the court held that the service clauses did not, on their face, create or extinguish rights in immovable property within the registration law. The court further held that the directors who acted were sufficiently constituted in a de facto sense, that the company's internal objections did not invalidate the agreements, and that the contract of service could be treated as supported by consideration and as binding between the parties.

Conclusion: The service clauses were admissible and the agreements were valid and binding to that extent.

Issue (iii): whether those agreements were void as a clog on the equity of redemption or as an unconscionable bargain obtained by undue influence.

Analysis: The court applied the settled equitable principle that a mortgagee may not stipulate for an oppressive collateral advantage that fetters redemption. On the evidence, however, the bargain was found to be a fair commercial arrangement made in the circumstances to keep the mill going, without sufficient proof of domination, oppression, or unconscionability.

Conclusion: The agreements were not void on the ground of public policy, clog on redemption, or undue influence.

Issue (iv): whether the defendant proved that the second and third mortgages were acquired as the plaintiffs' agent and out of the company's funds.

Analysis: The court found no satisfactory evidence that the defendant purchased the second mortgage as agent of the company, and no proof that the money used for the third mortgage belonged to the company. The surrounding circumstances and documentary evidence did not establish the alleged agency.

Conclusion: The plaintiffs failed to prove that the mortgage purchases were made for the company or with its funds.

Final Conclusion: The principal challenges to the defendant's reliance on the earlier decree and on the service agreements failed, and the alleged agency in respect of the mortgage purchases was not established.

Ratio Decidendi: A decree nisi is not res judicata because it is not a final decision, and a separable service agreement connected with a mortgage is enforceable if it does not itself create or extinguish rights in immovable property and is not shown to be an unconscionable clog on redemption.

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