this Court previous to the passing of the Common Law 25 & 26 Vict. c. 42; Johnson v. Wyatt (loc. cit.). Willcock, Q.C., in reply. TURNER, L.J., said, the two points for the Court to consider were: first, whether the plaintiff was entitled to an injunction, and secondly, if he was not, whether this Court by the 21 & 22 of Vict. c. 27, in conjunction with 25 & 26 Vict. c. 42, was compelled to award him damages. On the first point it was clear, that if the manure was properly carried by the company, the plaintiff would have no case; but the plaintiff alleges the contrary. How then stood that question on the evidence? His Lordship thought, that the evidence showed that the manure had been occasionally left at the sidings for longer periods than was correct. The real question, however, was, not whether the manure had been detained occasionally at the station for the purpose of being carted, but whether there had been such a continuance of the detention of the manure as to be prejudicial to the plaintiff. The case of the Attorney-General v. Sheffield Gas Consumers' Company (loc. cit.) showed, that it was not in every case that the Court would interfere by injunction in lieu of leaving the plaintiff to obtain damages. He did not think, on the whole, that there was here such a case as warranted the Court in interfering by injunction. It was, therefore, necessary for the Court now to consider the question of damages-a question which they had previously occasion to consider in the case of Johnson v. Wyatt (loc. cit.). This Court had jurisdiction under the recent Acts to give damages where a bill was properly filed, and a point had arisen for decision. But it was not compulsory on the Court to give damages. Here the evidence was conflicting as to the amount of damage actually sustained by the plaintiff, and that question could be better decided by a Court of Common Law, than by this Court. The bill, therefore, would be dismissed, but without prejudice to an action at law, and without costs. Mortgage-Priority-Fraud-Annuity- The plaintiff, in 1854, was mortgagee of real estates in Ireland; the next year the mortgagor, who was chairman of a banking company, mortgaged the same estates to the defendants, the banking company, without notice of the plaintiff's prior security. The defendants, before the loan to the mortgagor was completed, received notice of the plaintiff's incumbrance, but on the mort gagor's verbal promise to obtain a release of it, they completed the loan. The mortgagor afterwards obtained a release to himself from the plaintiff in exchange for certain forged securities, but did not execute any further conveyance to the defendants. Before the fraud was discovered, the mortgagor and the defendants joined in a transfer of one of the estates comprised in the defend ants' security to a bonâ fide purchaser for value, who paid the purchase-money on the faith of the release. The release was allowed by the defendants to remain in the mortgagor's possession until his death in 1856. The purchaser having sold the estate in the Incumbered Estates Court in Ireland, the plaintiff filed a bill to recover from the defendants a sum of money equal to that realised by the sale :— Held, that as the defendants had given no consideration for the release, they could not, though innocent, avail themselves as against the plaintiff of the advan tage which they had obtained by the fraud of the mortgagor, and that, although the estate could not be followed in the hands of the last purchaser, the purchase-money in the hands of the defendants was subject to the same equities as the estate had been subject to before the sale. A mortgage-deed contained a proviso that, so long as the mortgagor paid to the mortgagee the sum of 30001. a year, on account of the moneys intended to be thereby secured, it should be lawful for the mortgagor to receive the rents of the mortgaged estates : Held, that this sum was to be treated as an annuity, so that no interest was payable on the arrears. By an indenture, dated the 20th of October, 1854, made between John Sadleir of the one part, and the plaintiff of the other part, Sadleir, who, as the plaintiff's solicitor, had involved him in considerable losses, conveyed to the plaintiff, by way of security, the Kilcommon, Clonmore, and Castle Grace estates, in the county of Tipperary, subject to a prior mortgage, and to a proviso for redemption on payment by Sadleir of the whole balance which should, on the day of payment, be due to the plaintiff, with interest at 61. per cent. The indenture provided that, as long as Sadleir paid to the plaintiff 3000l. per annum, he should be at liberty, either himself, or by Mr. Kennedy, as his agent, to receive the rents of the estates thereby conveyed: and for more effectually securing the payment of the 30007. per annum, Kennedy was appointed receiver on behalf of both parties. Out of the rents Kennedy was to pay, first, rates and taxes; secondly, costs and expenses, together with 57. per cent. commission for himself; thirdly, 30007. per annum to the plaintiff, and the residue, if any, to Sadleir. At the date of the indenture of the 20th of October, 1854, Sadleir was a shareholder and chairman of the board of directors of the London and County Bank, and continued to be so till his death, in February, 1856. In June, 1855, he was indebted to the bank in more than 200,000l., and was negotiating a further loan of 95,000l. on the security of large estates in Ireland. And on the 1st of August, 1855, to secure 15,000., part of the 95,000, which had been already advanced, and the balance which was to be advanced, he executed twenty several indentures, conveying certain estates (three of the indentures comprising the Kilcommon, Clonmore, and Castle Grace estates, and a fourth the Castle Hyde estate) to three trustees, who on the following day signed a declaration of trust that they stood seised of all the property conveyed to them by Sadleir, upon trust to realise it and pay to the banking company all such sums of money as Sadleir then owed or might thereafter owe to the company. During the negotiations for the loan, Sadleir with held from the banking company all knowledge of the deed of the 20th of October, 1854. Early in the same month of August, Mr. Stevens, the solicitor of the bank, went to Ireland to register the twenty deeds, and he then discovered for the first time that the Kilcommon, Clonmore, and Castle Grace estates were mortgaged to the plaintiff. He telegraphed to London, and the bank refused to complete the loan of 95,000l., of which 25,000l. then remained unpaid; but on the assurance of Sadleir that the mortgage to the plaintiff was a collateral security, and that the plaintiff had agreed to release it, the balance of the loan was advanced. By an indenture dated the 6th of October, 1855, the plaintiff released the three estates to John Sadleir. No consideration was expressed in the deed, but the release was in fact executed in exchange for other securities which Sadleir handed over to the plaintiff, and which, after Sadleir's death, were found to be forged and worthless. The release, after being executed and registered, was sent by Kennedy to Sadleir, and did not come into the possession of the bank until after Sadleir's death. After the execution of the release, no further conveyance was made by Sadleir to the bank in pursuance of his covenant for further assurance contained in the indentures of the 1st of August, 1855. By a declaration of trust dated the 7th of September, 1855, the three trustees for the bank, to whom the estates comprised in the deeds of the 1st of August, 1855, were conveyed, declared that they would stand possessed of the said estates upon trust to sell them, and stand possessed of the purchase-money, or so much thereof as was not required to discharge any prior incumbrances, upon trust, first, to pay the costs of the deeds of conveyance and declaration of trust, and then upon trust for John Sadleir absolutely; and by a deed of assignment, dated the day following, Sadleir assigned to the same trustees all moneys, rents, interest, and produce to arise under the deed of the 7th of September, upon trust to pay first the expenses of the trust, and secondly the sum of 287,000l. then due from him to the bank. In December, 1855, Sadleir and the trustees of the bank transferred the bank's mortgage of the Castle Grace and Castle Hyde estates to Messrs. Backhouse, of Durham, for 36,000l., of which 10007. was paid to Sadleir, and the balance retained by the bank Messrs. Backtowards payment of Sadleir's debt. house afterwards sold the two estates in the Incumbered Estates Court in Ireland for 44,8501., of which 17,6947. was the purchase-money of the Castle Grace estate. John Sadleir died in February, 1856, and in the following month the bank appointed Mr. Kennedy receiver of the Kilcommon, Clonmore, and Castle Grace estates. The bill was filed against the banking company to recover the sum of 17,691., the purchase-money of the Castle Grace estate, and to make the bank account to the plaintiff for all rents received by them on account of the Kilcommon, Clonmore, and Castle Grace estates. W. M. James, Q.C., and E. Beales, for the plaintiff, referred to Eyre v. Burmester, 10 H. of L. Ca. 90. They argued, 1st. That the release had been fraudulently obtained by Sadleir for the benefit of the bank, and that, unless the release had been produced to the Messrs. Backhouse at the time of the sale, they would not have purchased. The bank claimed under the release, for which they had given no consideration; part of the loan of 95,000l. having been advanced in ignorance of the plaintiff's security, and the remainder on the faith of Sadleir's verbal promise to obtain the release: as there was no consideration for the release moving from the bank, the bank could not, by innocently dealing with Sadleir, acquire under the release any equity against the plaintiff, Bridgman v. Green, 2 Ves. sen. 627; Cockell v. Taylor, 15 Beav. 103 ; but that was no longer law, Ex parte Hennessy, 1 Con. & L. 563; Re Burmester, 9 Ir. Eq. Rep. 41. In dealing with Sadleir, the bank had acted with proper legal advice, and as if they were dealing with a stranger, and there was nothing apparent upon the face of the transaction to excite suspicion and bring the case within the rule of Kennedy v. Green, 3 M. & K. 699. 3rd. As to the rents. Kennedy was not receiver at the date of the deed of the 20th of October, 1854, nor was he a party to that deed he was a mere agent, and the plaintiff was in the position of a mortgagee out of possession, and had no claim for the rents. It was true that Kennedy had had notice from the Scholefield v. Templer, Johns. 155; 4 De G. & J. plaintiff not to pay over the rents during a suit then 429. 2nd. The case of, Blair v. Bromley, 5 Hare, 542; 2 Phil. 354, was stronger than the present one; there an innocent person was held liable for the fraud of his co-partner several years after the dissolution of the partnership. In the present case the bank were endeavouring to take advantage of a fraud committed by a partner in order to discharge his debt to the firm. 3rd. As to the rents, Kennedy, as receiver in possession, had paid 30007. a year to the bank out of the rents of the Kilcommon, Clonmore, and Castle Grace estates. Those rents belonged to the plaintiff within the principle of the decision of the House of Lords in the former case of Eyre v. Burmester (loc. cit.). pending, but the plaintiff had dismissed his bill against all the defendants without reserving any claim as to the rents. W. M. James, Q. C., in reply. 16 JAN. 1864. THE MASTER OF THE ROLLS said, that it was most important for the purposes of the present suit to consider the decision of the House of Lords in the former case of Eyre v. Burmester (loc. cit.). That suit related to the Kilcommon and Clonmore estates, which, unlike the Castle Grace estate in the present suit, had not been sold by the bank before Sadleir's death, and their Lordships had held that the deed of reconveyance of the 6th of October, 1855, by the plaintiff to Sadleir of the Kilcommon and Clonmore estates The Attorney-General, Sir H. Cairns, Q. C., and was absolutely void as between the plaintiff on the H. Stevens, for the defendants, contended, 1st. As to the purchase-money of the Castle Grace estate. The principles on which the former case of Eyre v. Burmester (loc. cit.) was decided were not applicable to the present case. In the former case, it was a question of priority between two mortgagees, but in the present one, the estate had passed into the hands of new owners who had priority over the plaintiff, and the plaintiff was endeavouring to recover money which had been paid by a debtor to his creditor, on the ground that the debtor and creditor were formerly in the position of mortgagor and mortgagee, and that the debtor's security was then posterior to the plaintiff's. The bank, without notice that the release had been fraudulently obtained, had bona fide transferred their mortgage for valuable consideration, and neither the estate in the hands of the transferrees, nor the purchasemoney in the hands of the bank, could be followed by the plaintiff, Thorndike v. Hunt, 3 De G. & J. 563. 2nd. The bank was not affected with constructive notice of the fraud. It had formerly been held that the knowledge of one shareholder or director was the knowledge of all, Duncan v. Chamberlayne, 11 Sim. 123; one hand and Sadleir and all persons claiming under him on the other hand; and that, unless the bank had advanced their money after the execution of the reconveyance to Sadleir and on the faith of the validity of that deed, their charge must be treated as being inferior to the plaintiff's security, which was the first incumbrance on the estate. In the present case the Castle Grace estate had been sold to a bond fide purchaser for value, and the sale had been effected by means of the release of that estate executed by the plaintiff to Sadleir, and, though Sadleir had joined with the trustees of the bank in the conveyance of the property to the Messrs. Backhouse, the estate had in reality been sold by the bank, who had received 17,6947. for it. The present contention, therefore, was not, in his Honour's opinion, the simple case of a prior and a puisne incumbrancer on an estate which the mortgagor had sold, and the purchase-money of which he had afterwards, without the consent of the prior mortgagee, applied in paying off the subsequent incumbrancer; but it was rather a question of this character, viz., it following from the decision of the House of Lords that, so long as the estate remained unsold in the hands of the bank, it was liable to the prior charge in favour of the plaintiff,-whether, the estate having been sold, the purchase-money in the hands of the bank was or was not impressed with the same trust in favour of the plaintiff, as that which attached to the land itself before the sale. It had also been decided by the judgment of the House of Lords that the conveyance of the legal estate by Sadleir to the bank would not have improved the position of the bank as against the plaintiff, for the legal estate in Sadleir was a nullity, which conferred nothing on any one except a subsequent purchaser for value without notice, who had advanced his money relying on the validity of the release. The incompetency of the legal estate to confer on the bank any better title to the estate than they had before, being thus established, his Honour was of opinion that the mere fact of the conversion of the estate from land into money did not alter the equities between the parties. But there was a still stronger argument applicable to the present case, arising upon the construction of the deed of the 7th of September, 1855. At the time of the sale of the Castle Grace estate, the plaintiff's incumbrance on it was prior to that of the defendants', and by the deeds of the 7th and 8th of September, 1855, the trustees of the bank held the Castle Grace estate upon trust in effect to sell the estate, and apply so much of the purchase-money as was not required to pay off prior incumbrances towards payment of Sadleir's debt to the bank. His Honour was, therefore, of opinion, that the trust in favour of the bank did not arise until all the prior incumbrances on the estate had been satisfied; but, independently of the terms of the trust deeds, his Honour would not, in the absence of authority, have held that a mortgagee by selling an estate could acquire a better position than he had before the sale. Supposing, for instance, that a man mortgaged an estate to A, concealing the fact of there being prior mortgages; A sold the estate under the power of sale in his mortgage deed, and a stranger, in whom the outstanding legal estate was vested, joined in the conveyance, and thereby made a good title to the purchaser, who paid the purchase-money to A. If, in such a case, the transfer of the legal estate to the puisne incumbrancer before the sale would have enabled him to exclude the prior incumbrancer, he would, of course, be entitled after the sale to retain the purchase-money; but if, from any peculiarity of circumstances, the vesting of the legal estate in the puisne incumbrancer would not, before the sale, have improved his condition, the sale itself could not give him a right to retain the produce of an estate to which, before such sale, he was not entitled. Peculiar circumstances rendering the legal estate inoperative, had occurred in the present case, and the House of Lords had determined that the legal estate so obtained, as in the present case it had been, by Sadleir, would not, if vested in the bank, have mended their position; if that were so, the same principle must apply to the produce of the estate when sold by the bank. for him to express any opinion on the other questions which arose in the case. His Honour held that the banking company was bound to repay the sum of 17,6947., that that sum must be invested, and the dividends applied towards the discharge of the 30007. per annum, payable to the plaintiff under the deed of the 20th of October, 1854, and the arrears due thereon. As to the rents received by the bank prior to the sale to Messrs. Backhouse, his Honour thought that the question was within the decision of the House of Lords in the former case of Eyre v. Burmester. The rents, therefore, must be accounted for to the plaintiff; but, in the absence of any authority to the contrary, he considered that the 3000l. a year should be treated as an annuity, and that the plaintiff was not entitled to interest on the arrears. 20 JAN. 1864. THE MASTER OF THE ROLLS said, that his judgment of the 16th instant might perhaps mislead the parties as to the grounds on which his decision was based. He had assumed that the legal estate was vested in Sadleir by the release of the 6th of October, 1855, whereas it was in fact outstanding in a prior incumbrancer. The defendants had contended that the receipt of the purchase-money had placed them in the position of a puisne incumbrancer, who had got in the legal estate, and thereby obtained precedence over a prior incumbrancer. His Honour had then proceeded to consider what would have resulted, even if the legal estate had been released, and to show that, on the principle of the decision in the House of Lords, the release was altogether void, whether it conveyed the legal estate or not. The fact that the deed only released an equity, made the argument against the bank still stronger, when coupled with the circumstance that 25,000%. had been advanced after notice of the prior incumbrance, and before the plaintiff's equitable claim had been released. The principle of his Honour's decision was, that the bank took the property on trust for sale; before the sale the plaintiff was a prior incumbrancer, and the bank only received the purchase-money from Messrs. Backhouse by means of the release, from which the bank could derive no benefit. Under these circumstances, the purchasemoney in the hands of the bank was subject to the same equities as the estate itself while the bank had possession of it, and moreover, under the deed of the 7th of September, 1855, the trust in favour of the bank did not arise, until the incumbrance in favour of the plaintiff had been discharged. Note. As to the effect of the decision of the House of Lords in the former case of Eyre v. Burmester, which, like the present one, was a question of conflicting equities, and whether, assuming the release by the plaintiff to have conveyed the legal estate to the bank, the plaintiff's claim would have remained The view which he had taken made it unnecessary paramount-quære. Master of the Rolls. 22, 23 JAN. 1864. JOPP v. WOOD. Rehearing after Enrolment-Misapprehension of Judge as to the real Interests of PartiesDomicil. A will was proved by different executors in England and India. The executor in India, where there were no assets, paid a legacy out of his own money. A suit was instituted in England to carry out the trusts of a deed, under which two children of the testator, who died while infants, had taken vested shares in a fund of personalty. On a petition being presented in the cause by the executrix in England, for the transfer out of Court of the shares of the infants, it was opposed by the Attorney-General, on the ground that the domicil of the infants was Scotch, and not Anglo-Indian, as alleged in the petition; and the Court, being of that opinion, ordered the payment of the legacy duty. The shares were transferred to a sister of the infants, as one of their next of kin under the Scotch law, on her taking out administration. It afterwards appeared that it was the interest of all the parties to the petition that the legacy duty should be paid, and the domicil declared to be Scotch: John Smith, the testator, a native of Scotland, went to India in 1805, and became a partner in the house of Fergusson & Co. Eleanor, his eldest daughter, was born in 1817, and died in 1818. In 1819 the testator went to Scotland, and returned to India the next year, and in 1823 his youngest child, Mungo, was born, but only lived a few months. The testator had four other children, who all survived their father, and attained 1830, and the same year his will was proved in India the age of twenty-one. The testator died in India in by three of the executors, of whom William Fergusson was at the present time the only survivor. The will was also proved in England in 1862 by Elizabeth Smith, who also took out letters of administration of the estate and effects of Eleanor and Mungo Smith. The suit of Jopp v. Wood was instituted to carry out the trusts of a bond entered into by the testator in 1816 in contemplation of his marriage, and by an order of the Master of the Rolls, dated the 13th of December, 1862, certain sums of stock then standing in Court in trust in the cause were ordered to be transferred to Elizabeth Smith, as the legal personal representative of the infants Eleanor and Mungo Smith. A stop order was put on these funds by the Comp trollor of Legacy Duties, and in April, 1863, a petition was presented in the cause by Elizabeth Smith for payment of the funds out of Court, free from legacy duty, on the ground that the domicil of the infants was Anglo-Indian and not Scotch. No affidavits were filed in support of this petition, and the only opposition made to it was on behalf of the AttorneyHeld, also, that as the shares of the infants would General, for the payment of legacy duty, and on the have fallen into the estate of the testator, as their next 5th of May, 1863, his Honour gave judgment, declarof kin, if their domicil had been declared to be Anglo-ing that the domicil of the infants was Scotch, and Indian, the executor in India had a locus standi to move the Court for leave to present a petition in the cause, praying that the petition for the transfer of the infants' shares out of Court might be reheard. Accordingly, the Court directed the petition to be reheard, the executor undertaking to abide by any order which the Court might make as to future costs. Held, that the Court would regard its order made on the petition with suspicion, and, semble, that, as the domicil of the infants was that of the father, the omission in the petition of the fact of the father having bought land for a grave in India was material: This was a motion on behalf of William Fergusson, one of the executors of the will of John Smith, that he might be at liberty to present a petition in the cause of Jopp v. Wood, praying that the petition of Elizabeth Smith, presented in the cause on the 27th of April, 1863, might be reheard by his Honour the Master of the Rolls, and that the order made on that petition might be reversed or varied, so far as it declared the domicil of Eleanor Smith and Mungo Smith at the time of their respective deaths to have been Scotch, and the sums of stock mentioned in the order to be subject to legacy duty, and that it might now be declared that the domicil of Eleanor and Mungo Smith was AngloIndian, and that such further or other order as might be necessary might be made in the premises accordingly. The facts of the case, so far as they were material to the present motion, were as follows: he ordered the legacy duty to be paid. On this order being made, the plaintiffs in another suit of Jopp v. Smith, relating to the same property, and to which Mr. Fergusson was a party, dismissed their bill. Mr. Fergusson by his answer in that suit had stated his belief that no part of a certain legacy of 30007. given by the testator's will had been paid. In consequence of the same order, and on the joint petition of Elizabeth Smith and Mrs. Jopp, the eldest surviving sister of the infants, the letters of administration of the estates of the infants granted to Elizabeth Smith were revoked, and new letters of administration granted to Mrs. Jopp. Mr. Fergusson, in his affidavit in support of the present motion, set forth the following facts, which were not previously before the Court:- The testator's property in India consisted entirely of his share in the partnership of Fergusson & Co., which became bankrupt shortly after his death, and Mr. Fergusson, as executor, advanced out of his own moneys the legacy of 30007. This fact was miss-stated in his first answer in Jopp v. Smith, but was fully set forth in a supplemental answer, which was ready to be filed, when, in consequence of the order of the 5th of May, 1863, the plaintiffs dismissed their bill. |