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I read it as part of a case [1] Judgment; used as follows:

1.)

If the creditor bank has notice, actual or constructive, of the undue influence exercised by the husband (and consequentially of the wife's equity to set aside the transaction) the creditor will take subject to that equity and the wife can set aside the transaction against the creditor (albeit a purchaser for value) as well as against the husband.

2.)

Where a wife has agreed to stand surety for her husband's debts as a result of undue influence or misrepresentation, the creditor will take subject to the wife's equity to set aside the transaction if the circumstances are such as to put the creditor on inquiry as to the circumstances in which she agreed to stand surety.

[1] Barclays Bank plc v O'Brien [1994] 1 AC 180, House of Lords

Thank you.

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The phrase isn't take subject to, it's will take followed by subject to that equity – Jim Dec 14 '12 at 20:38
put a comma after the word take and it will be a little more understandable. – Sean Cheshire Dec 14 '12 at 20:40
Take subject to is not a constituent; it's the last word of one constituent (take), followed by the first two words of the next constituent (subject to). Strings are not part of language; grammar is not a BBoW – John Lawler Dec 14 '12 at 20:56
Also note that this is legalese. It's not meant to be easily understood, but it is meant to be specific and precise as to how it will be parsed by courts of law. There are many, many sets of legal phrases and sentences that are used precisely because their meaning has already been argued and decided in court. – Robusto Dec 14 '12 at 22:33
thank you; it does make more sense. – janexlane Dec 15 '12 at 1:32

1 Answer

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The phrase take subject to (something) means take possession of, in this case, a wife's equity that is standing surety against her husband's debt. If the bank takes subject to the equity, they purchase it from the wife subject to any conditions previously put upon it--interest owed, mortgage payment, etc. However, the bank is not required to pay them; the wife is. In the event, though, that the bank doesn't pay them and the wife cannot, the wife may foreclose or claim bankruptcy and the bank would lose the equity value.

Another option would be for thebank to assume the wife's equity. In this case, the bank would not just buy the equity, they would also assume all appertaining responsibilities.

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