« AnteriorContinuar »
this Court previous to the passing of the Common Law KNIGHT BRUCE, L.J., concurred. Procedure Act. In such matters as the present, this
Note.-Consider, Court had a jurisdiction purely ancillary to that of the
Isenberg v. East India House Estate Connpany Common Law Courts. It had not a concurrent jurisdic.
(Limited), ante, 344, tion, but a jurisdiction that could only be exercised in
which case was not referred to. those cases in which injustice would follow on the refusal of this Court to exercise its equitable jurisdiction. It is true that the Common Law Procedure Act has Lords Justices.
CRESSWELL V. DEWELL not, and cannot be held to have affected the jurisdic- 25, 27 JAN. 1864. tion of this Court, but it has changed the circumstances
In this case the defendants appealed from the deand narrowed the cases over which this Court will exer
cision of Stuart, V.C. (reported ante, 148), but, upon cise its remedial powers. It is evident that this Court the suggestion of the Court, the suit was compromised would have refused, under the circumstances attending
upon the terms that the defendant, Charles Goddani this case, an interlocutory injunction. On like prin- Dewell
, should pay to the plaintiff, Harriette Daniel
, ciples it will also refuse an injunction at the hearing.
2501. as the value of an annuity of 211. from the pre3rd. On the question of damages he referred to
sent time, and 601. for costs, and that all further pro21 & 22 Vict. c. 27 ;
ceedings should be stayed. 25 & 26 Vict. c. 42; Johnson v. Wyatt (loc. cit.).
IVillcock, Q.C., in reply.
Master of the Rolls.
EYRE v. BURMESTEE. TURNER, L.J., said, the two points for the Court to 16, 20 Jan. 1864. consider were : first, whether the plaintiff was entitled
Mortgage-Priority-Fraud-Annuityto an injunction, and secondly, if he was not, whether
Interest. this Court by the 21 & 22 of Vict. c. 27, in conjunction with 25 & 26 Vict. c. 42, was compelled to award him The plaintiff, in 1854, was mortgagee of real estatis damages. On the first point it was clear, that if the in Ireland; the next year the mortgagor, who is manure was properly carried by the company, the chairman of a banking company, mortgaged the same plaintiff would have no case ; but the plaintiff alleges estates to the defendants, the banking company, without the contrary. How then stood that question on the notice of the plaintiff's prior security. The defendants, evidence ? His Lordship thought, that the evidence before the loan to the mortgagor was completed, received showed that the manure had been occasionally left at notice of the plaintiff's incumbrance, but on the more the sidings for longer periods than was correct. The gagor's verbal promise to obtain a release of it, they canreal question, however, was, not whether the manure pleted the loan. The mortgagor afterwards obtained a had been detained occasionally at the station for the release to himself from the plaintiff in exchange for purpose of being carted, but whether there had been certain forged securities, but did not cxecute any further such a continuance of the detention of the manure as
conveyance to the defendants. Before the fraud us disto be prejudicial to the plaintiff. The case of the covered, the mortgagor and the defendants joined is o Attorney-General v. Sheffield Gas Consumers' Company transfer of one of the estates comprised in the defend(loc. cit.) showed, that it was not in every case that the ants' security to a bonâ fide purchaser for valuu, erke Court would interfere by injunction in lieu of leaving paid the purchase-money on the faith of the release. the plaintiff to obtain damages.
The release was allowed by the defendants to remain He did not think, on the whole, that there was here in the mortgagor's possession until his death in 1855. such a case as warranted the Court in interfering by The purchaser haring sold the estate in the Incumbres injunction.
Estates Court in Ireland, the plaintif filed a bill to It was, therefore, necessary for the Court now to recover from the defendants a sum of money equal to consider the question of damages—a question which that realised by the sale :they had previously occasion to consider in the case
Held, that as the defendants had given no consideriof Johnson v. Wyatt (loc. cit.). This Court had juris- tion for the release, they could not, though innodat, diction under the recent Acts to give damages where avail themselves as against the plaintiff of the advera bill was properly filed, and a point had arisen for tage which they had obtained by the fraud of tki decision. But it was not compulsory on the Court to mortgagor, and that, although the estate could not give damages. Here the evidence was conflicting as be followed in the hands of the last purchases, the to the amount of damage actually sustained by the purchase-money in the hands of the defendants knus plaintiff, and that question could be better decided by subject to the same equities as the estate had been subject a Court of Common Law, than by this Court.
to before the sale. The bill, therefore, would be dismissed, but without
A mortgage-deed contained a proviso that, so long as prejudice to an action at law, and without costs.
the mortgagor paid to the mortgagee the sum of 3000l.
a year, on account of the moneys intended to be thereby mortgage to the plaintiff was a collateral security, secured, it should be lawful for the mortgagor to receive and that the plaintiff liad agreed to release it, the the rents of the mortgaged estatcs :
balance of the loan was advanced. Held, that this sum was to be treated as an annuity, By an indenture dated the 6th of October, 1855, the so that no interest was payable on the arrears.
plaintiff released the three estates to John Sadleir.
No consideration was expressed in the deed, but the By an indenture, dated the 20th of October, 1854, release was in fact executed in exchange for other madde between John Sadleir of the one part, and the securities which Sadleir handed over to the plaintiff, plaintiff of the other part, Sadleir, who, as the plaintiff's and which, after Sadleir's death, were found to be solicitor, had involved him in considerable losses, forged and worthless. conveyed to the plaintiff, by way of security, the The release, after being executed and registered, Kilcommon, Clonmore, and Castle Grace estates, in was sent by Kennedy to Sadleir, and did not come into the county of Tipperary, subject to a prior mortgage, the possession of the bank until after Sadleir's death. and to a proviso for redemption on payment by Sadleir After the execution of the release, no further cou. of the whole balance which should, on the day of veyance was made by Sadleir to the bank in pursuance payment, be due to the plaintiff, with interest at of his covenant for further assurance contained in the 61. per cent. The indenture provided that, as long as indentures of the 1st of August, 1855. Sadleir paid to the plaintiff 30001. per annum, he
By a declaration of trust dated the 7th of September, should be at liberty, either himself, or by Mr. 1855, the three trustees for the bank, to whom the Kennedy, as his agent, to receive the rents of the estates comprised in the deeds of the 1st of August, estates thereby conveyed : and for more effectually 1855, were conveyed, declared that they would stand securing the payment of the 30001. per annum, possessed of the said estates upon trust to sell them, Kennedy was appointed receiver on behalf of both and stand possessed of the purchase-money, or so parties. Out of the rents Kennedy was to pay, first, much thereof as was not required to discharge any rates and taxes; secondly, costs and expenses, together prior incumbrances, upon trust, first, to pay the costs with 5l. per cent. commission for himself; thirdly, of the deeds of conveyance and declaration of trust, 30001. per annum to the plaintiff, and the residue, if and then upon trust for John Sadleir absolutely ; and any, to Sadleir.
by a deed of assignment, dated the day following, At the date of the indenture of the 20th of October, Sadleir assigned to the same trustees all moneys, rents, 1854, Sadleir was a shareholder and chairman of the interest, and produce to arise under the deed of the board of directors of the London and County Bank, 7th of September, upon trust to pay first the expenses and continued to be so till his death, in February, of the trust, and secondly the sum of 287,0001. then 1856. In June, 1855, he was indebted to the bank due from him to the bank. in more than 200,0001., and was negotiating a further In December, 1855, Sadleir and the trustees of the loan of 95,0001. on the security of large estates in bank transferred the bank's mortgage of the Castle Ireland. And on the 1st of August, 1855, to secure
Grace and Castle Hyde estates to Messrs. Backhouse, 15,0001., part of the 95,0007, which had been of Durham, for 36,0001., of which 10001. was paid alreadly advanced, and the balance which was to to Sadleir, and the balance retained by the bank be advanced, he executed twenty several indentures, towards payment of Sadleir's debt. Messrs. Backconveying certain estates (three of the indentures house afterwarıls sold the two estates in the Incumbered comprising the Kilcommon, Clonmore, and Castle Estates Court in Ireland for 44,8501., of which Grace estates, and a fourth the Castle Hyde estate) 17,6941. was the purchase-money of the Castle Grace to three trustees, who on the following day signed estate. a declaration of trust that they stood seised of all John Sadleir died in February, 1856, and in the the property conveyed to them by Sadleir, upon following month the bank appointed Mr. Kennedy trust to realise it and pay to the banking company all receiver of the Kilcommon, Clonmore, and Castle such sums of money as Sadleir then owed or might Grace estates. thereafter owe to the company.
The Lill was filed against the banking company to During the negotiations for the loan, Sadleir with- recover the sum of 17,691'., the purchase-money of held from the banking company all knowledge of the the Castle Grace estate, and to make the bank account deed of the 20th of October, 1854.
to the plaintiff for all rents received by them on Early in the same month of August, Mr. Stevens, account of the Kilcommon, Clonmore, and Castle the solicitor of the bank, went to Ireland to register Grace ostates. the twenty deals, and he then discovered for the first time that the Kilcommon, Clonmore, and Castle Grace Il'. V. James, Q.C., and E. Beales, for the plaintiff, estates were mortgaged to the plaintiil. He tele- referred to graphed to London, and the bank refused to complete Eyre v. Burmester, 10 II. of L. Ca. 90. the loan of 95,0001., of which 25,0001. then remained They argued, ist. That the release had been franduunpaid ; but on the assurance of Sadleir that the lently obtained by Sadleir for the benefit of the bank,
and that, unless the release had been produced to the but that was no longer law,
Re Burmester, 9 Ir. Eq. Rep. 41. The bank clainied under the release, for which they In dealing with Sadleir, the bank had acted with had given no consideration ; part of the loan of proper legal advice, and as if they were dealing with a 95,0001. having been advanced in ignorance of the stranger, and there was nothing apparent upon the plaintiff's security, and the remainder on the faith face of the transaction to excite suspicion and bring of Sadleir's verbal promise to obtain the release : as the case within the rule of there was no consideration for the release moving from Kennedy v. Green, 3 M. & K. 699. the bank, the bank could not, by innocently dealing 3rd. As to the rents. Kennedy was not receiver at with Sadleir, acquire under the release any equity the date of the deed of the 20th of October, 1854, against the plaintiff,
nor was he a party to that deed : he was a mere agent, Bridgman v. Green, 2 Ves. sen. 627;
and the plaintiff was in the position of a mortgagee Huguenin v. Baseley, 14 Ves. 273;
out of possession, and had no claim for the rents. It Cockell v. Taylor, 15 Beav. 103 ;
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.
pending, but the plaintiff had dismissed his bill against 2nd. The case of,
all the defendants without reserving any claim as to Blair v. Bromley, 5 Hare, 542 ; 2 Phil. 354, the rents. was stronger than the present one ; there an innocent
W. M. James, Q.C., in reply. person was held liable for the fraud of his co-partner several years after the dissolution of the partnership. 16 JAN. 1864. In the present case the bank were endeavouring to THE MASTER OF THE ROLLS said, that it was most take advantage of a fraud committed by a partner in important for the purposes of the present suit to conorder to discharge his debt to the firm.
sider the decision of the House of Lords in the former 3rd. As to the rents, Kennedy, as receiver in pos- case of Eyre v. Burmester (loc. cit.). That suit related session, had paid 30001, a year to the bank out of the to the Kilcommon and Clonmore estates, which, rents of the Kilcommon, Clonmore, and Castle Grace unlike the Castle Grace estate in the present suit, estates. Those rents belonged to the plaintiff within had not been sold by the bank before Sadleir's death, the principle of the decision of the House of Lords and their Lordships had held that the deed of recogin the former case of Eyre v. Burmester (loc. cit.). veyance 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 I. Stevens, for the defendants, contended,
one hand and Sadleír and all persons claiming under 1st. As to the purchase-money of the Castle Grace him on the other hand; and that, unless the bank estate. The principles on which the former case of had advanced their money after the execution of the Eyre v. Burmester (loc. cit.) was decided were not reconveyance to Sadleir and on the faith of the applicable to the present case. In the former case, validity of that deed, their charge must be treated as it was a question of priority between two mort- being inferior to the plaintiff's security, which was gagees, but in the present one, the estate had the first incumbrance on the estate. In the present passed into the hands of new owners who had case the Castle Grace estate had been sold to a bord priority over the plaintiff, and the plaintiff was en- fide purchaser for value, and the sale had been effected deavouring to recover money which had been paid by means of the release of that estate executed by the by a debtor to his creditor, on the ground that plaintiff to Sadleir, and, though Sadleir had joined with the debtor and creditor were formerly in the posi- the trustees of the bank in the conveyance of the protion of mortgagor and mortgagee, and that the perty to the Messrs. Backhouse, the estate had in reality debtor's security was then posterior to the plaintiff's been sold by the bank, who had received 17,6941. for The bank, without notice that the release had been it. The present contention, therefore, was not, in his fraudulently obtained, had bonâ fide transferred their Honour's opinion, the simple case of a prior and a mortgage for valuable consideration, and neither the puisne incumbrancer on an estate which the mortgagar estate in the hands of the transferrees, nor the purchase. had sold, and the purchase-money of which he had money in the hands of the bank, could be followed by afterwards, without the consent of the prior mortgages; the plaintiff,
applied in paying off the subsequent incumbrancer ; Thorndike v. Hunt, 3 De G. & J. 563.
but it was rather a question of this character, viz, is 2nd. The bank was not affected with constructive following from the decision of the House of Lords notice of the fraud. It had formerly been held that that, so long as the estate remained unsold in the the knowledge of one shareholder or director was hands of the bank, it was liable to the prior charge the knowledge of all,
in favour of the plaintiff,—whether, the estate having Duncan v. Chamberlayne, 11 Sim. 123 ;
been sold, the purchase-money in the hands of the bank was or was not impressed with the same trust in for him to express any opinion on the other questions favour of the plaintiff, as that which attached to the which arose in the case. land itself before the sale.
His Honour held that the banking company was It had also been decided by the judgment of the bound to repay the sum of 17,6941., that that sum House of Lords that the conveyance of the legal must be invested, and the dividends applied towards estate by Sadleir to the bank would not have improved the discharge of the 30001. per annum, payable to the the position of the bank as against the plaintiff, for plaintiff under the deed of the 20th of October, 1854, the legal estate in Sadleir was a nullity, which con- and the arrears due thereon. ferred nothing on any one except a subsequent pur- As to the rents received by the bank prior to the sale chaser for value without notice, who had advanced to Messrs. Backhouse, his Honour thought that the his money relying on the validity of the release. question was within the decision of the House of Lords The incompetency of the legal estate to confer on in the former case of Eyre v. Burmester. The rents, the bank any better title to the estate than they had therefore, must be accounted for to the plaintiff; but, before, being thus established, his Honour was of in the absence of any authority to the contrary, he opinion that the mere fact of the conversion of the considered that the 30001. a year should be treated as estate from land into money did not alter the equities an annuity, and that the plaintiff was not entitled to between the parties.
interest on the arrears. But there was a still stronger arguinent applicable to the present case, arising upon the construction of the
20 JAN. 1864. deed of the 7th of September, 1855. At the time of
THE MASTER OF THE Rolls said, that his judgment the sale of the Castle Grace estate, the plaintiff's of the 16th instant might perhaps mislead the parties incumbrance on it was prior to that of the defendants',
as to the grounds on which his decision was based. He and by the deeds of the 7th and 8th of September, had assumed that the legal estate was vested in 1855, the trustees of the bank held the Castle Grace Sadleir by the release of the 6th of October, 1855, estate upon trust in effect to sell the estate, and apply so
whereas it was in fact outstanding in a prior inmuch of the purchase-money as was not required to pay cumbrancer. The defendants had contended that the off prior incumbrances towards payment of Sadleir's debt receipt of the purchase-money had placed them in the to the bank. His Honour was, therefore, of opinion, position of a puisne incumbrancer, who had got in the that the trust in favour of the bank did not arise legal estate, and thereby obtained precedence over a until all the prior incumbrances on the estate had been prior incumbrancer. His Honour had then proceeded satisfied ; but, independently of the terms of the trust to consider what would have resulted, even if the deeds, his Honour would not, in the absence of autho- | legal estate had been released, and to show that, on rity, have held that a mortgagee by selling an estate the principle of the decision in the House of Lords, could acquire a better position than he had before the the release was altogether void, whether it conveyed sale. Supposing, for instance, that a man mortgaged
the legal estate or not. The fact that the deed only an estate to A, concealing the fact of there being prior released an equity, made the argument against the mortgages ; A sold the estate under the power of sale bank still stronger, when coupled with the circumin his mortgage deed, and a stranger, in whom the stance that 25,0001. had been advanced after notice outstanding legal estate was vested, joined in the con
of the prior incumbrance, and before the plaintiff's veyance, and thereby made a good title to the purchaser, equitable claim had been released. The principle of who paid the purchase-money to A. If, in such a case,
his Honour's decision was, that the bank took the the transfer of the legal estate to the puisne incum- property on trust for sale ; before the sale the plaintiff brancer before the sale would have enabled him to
was a prior incumbrancer, and the bank only received exclude the prior incumbrancer, he would, of course,
the purchase-money from Messrs. Backhouse by means be entitled after the sale to retain the purchase-money; of the release, from which the bank could derive no but if, from any peculiarity of circumstances, the vesting
benefit. Under these circumstances, the purchaseof the legal estate in the puisne incumbrancer would money in the hands of the bank was subject to the not, before the sale, have improved his condition, the
same equities as the estate itself while the bank had sale itself could not give him a right to retain the possession of it, and moreover, under the deed of the produce of an estate to which, before such sale, he 7th of September, 1855, the trust in favour of the was not entitled. Peculiar circumstances rendering bank did not arise, until the incumbrance in favour of the legal estate inoperative, had occurred in the pre
the plaintiff had been discharged. sent case, and the House of Lords had determined that Note.-As to the effect of the decision of the House the legal estate so obtained, as in the present case it had of Lords in the former case of Eyre v. Burmester, been, by Sadleir, would not, if vested in the bank, have which, like the present one, was a question of conmended their position ; if that were so, the same prin- flicting equities, and whether, assuming the release ciple must apply to the produce of the estate when by the plaintiff to have conveyed the legal estate to sold by the bank.
the bank, the plaintiff's claim would have remained The view which he had taken made it unnecessary paramount-quære.
John Smith, the testator, a native of Scotland, went Master of the Rolls. 22, 23 Jax, 1964. } Jopp v. Wood. to India in 1805, and became a partner in the house of
Fergusson & Co. Eleanor, his eldest daughter, was Rehearing after Enrolment — Bisapprehension born in 1817, and died in 1818. In 1819 the testator
of Judge as to the real Interests of Partics— went to Scotland, and returned to India the next year, Domicil.
and in 1823 his youngest child, Mungo, was born, but
only lived a few months. The testator had four other A will was proved by different executors in England children, who all survived their father, and attained and India. The exccutor in India, where there were
the age of twenty-one. The testator died in India in no asscts, paid a legacy out of his oun moncy. A suit 1830, and the same year his will was proved in India was instituted in England to carry out the trusts of by three of the executors, of whom William Fergusson a deed, under which two children of the testator,
was at the present time the only survivor. The will who died while infants, had taken vested, shares in a
was also proved in England in 1862 by Elizabeth fund of personally. On a petition being presented in Smith, who also took out letters of alministration of the cause by the cxccutrix in England, for the transfer the estate and effects of Eleanor and Mungo Smith. out of Court of the shares of the infants, it was opposed The suit of Jopp v. Wood was instituted to carry out by the Attorncy-General, on the ground that the domicil the trusts of a bond entered into by the testator in of the infants was Scotch, and not Anglo-India?, as
1816 in contemplation of his marriage, and by an alleged in the pctilion; and the Court, being of that order of the Master of the Rolls, dated the 13th of opinion, ordered the payment of the legacy duty. The December, 1862, certain sums of stock then standing shares were transferred to a sister of the infants, as one in Court in trust in the cause were ordered to be of their next of kin under the Scotch law, on her taking transferred to Elizabeth Smith, as the legal persenal out administration. It afterwards appeared that it was
representative of the infants Eleanor and lungo Smith the interest of all the parties to the petition that the A stop order was put on these funds by the Complegacy duty should be paid, and the domicil declırcd trollor of Legaey Duties, and in April, 1863, a petition to be Scotch :
was presented in the causo by Elizabeth Smith for Held, that the Court would regard its order made on
payment of the funds out of Court, free from legacy the petition with suspicion, and, semble, that, as the duty, on the ground that the domicil of the infants domicil of the infants was that of the futher, the omis
was Anglo-Indian and not Scotch. No affidavits sion in the petition of the fact of the father having were filed in support of this petition, and the only bought land for a grare in India was material: Held, also, that as the sharcs of the infants would General, for the payment of legacy duty, and on the
opposition made to it was on behalf of the Attorneyhave fallen into the estate of the testator, as thcir next 5th of May, 1863, his Honour gave judgment, declar
: of 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 he ordered the legacy duty to be paid. move the Court for Icare to present a petition in the
On this order being made, the plaintiffs in another cause, praying that the petition for the transfer of the suit of Jopp v. Smith, relating to the same property, infants' shares out of Court might be rehcard. Accord and to which Mr. Fergusson was a party, dismissed ingly, the Court directed the petition to be reheard, the their bill. Mr. Fergusson by his answer in that suit cxecutor undertaking to abide by any order which the had stated his belief that no part of a certain legacy Court might make as to future costs.
of 30001. given by the testator's will had been paid. This was a motion on behalf of William Fergusson, In
consequence of the same order, and on the joint one of the executors of the will of John Smith, that he petition of Elizabeth Smith and Mrs. Jopp, the eldest might be at liberty to present a petition in the cause of surviving sister of the infants, the letters of admiJopp v. Wood, praying that the petition of Elizabeth nistration of the estates of the infants granted to Smith, presented in the cause on the 27th of April, Elizabeth Smith were revoked, and new letters of 1863, might be reheard by his Honour the Master of administration granted to Mrs. Jopp. the Rolls, and that the order made on that petition
Mr. Fergusson, in his affidavit in support of the premight be reversed or varied, so far as it declared the sent motion, set forth the following facts, which were domicil of Eleanor Smith and Mungo Smith at the time not previously before the Court :of their respective deaths to have been Scotch, and the The testator's property in India consisted entirely sums of stock mentioned in the order to be subject to of his share in the partnership of Fergusson & Co., legacy duty, and that it might now be declared that which became bankrupt shortly after his death, and the domicil of Eleanor and Mungo Smith was Anglo. Mr. Fergusson, as executor, advanced out of his own Indian, and that such further or other order as moneys the legacy of 30001. This fact was miss-stated might be necessary might be mado in the premises in his first answer in Jopp v. Smith, but was fully set accordingly.
forth in a supplemental answer, which was ready to The facts of the case, so far as they were material to be filed, when, in consequence of the order of the 5th the present motion, were as follows :
of May, 1863, the plaintiffs dismissed their bill.