tended over the whole property, became vested in the plaintiff; in 1860 he entered into possession; in 1869 he filed a bill. for foreclosure, there being then due 1,4567. 10s. 3d. Under a decree of the Court, the property was sold in the four lots already mentioned. The total purchase-money amounted to 2,3851., of which 7351. arose from lots 1 and 2, 1,1107. from lot 3, and 5401. from lot 4. The plaintiff was paid off, and there remained in Court a sum of 2381. 10s., and 5871. 1s. 9d. bank 3 per cent annuities, in which the purchase-money of lot 4 had been invested. It was contended on behalf of the testator's daughters and their children that the mortgage debt of the testator ought in the first place to be paid out of the produce of lot 4, so far as it would go, and the balance of the purchase-money for the other three lots ought to be divided in the proportion of 7351. to 1,1107., and the smaller part paid to the persons entitled to the interest of the testator's son under the will, and the larger proportion divided equally-one half to be paid for the benefit of one daughter and her issue; the other half for the benefit of the other daughter and her issue. On the other hand, it was contended that the whole of the mortgage ought to be paid out of the proceeds of the devised estates, and that the assignees of the son would be entitled to the whole of the 5401. and to a proportion of the balance. Mr. Kay and Mr. Lindley, for the petitioner, contended that the effect of the devise was to throw the burden of the mortgage on the descended estate so far as that estate would go. Mr. H. Giffard, for the mortgagee of the heir, contended that the testator had directed the whole mortgage debt to be paid out of the devised estate. If that was not so, the properties, independently of any expression of the testator, ought to bear the burden pari passu. The mortgagee of the heir being a purchaser for value, stood on higher ground than the heir himself. BACON, V.C., said-The devised estate is exonerated as against the descended estate, which must bear the burden of the mort Principal and Surety-Mortgage-Consolidation of Securities- MarshallingParties-Costs. H. was surety to an insurance company for a loan secured on policies on the life of the debtor. The office held another policy as security for another loan from the same debtor. The debtor became bankrupt, and the company sued H. H. paid part of the debt-Held, that on the falling in of the policies H. was entitled to have the secu rities marshalled so as to be paid in full including the costs of defending the action. The debtor's wife had paid H. part of the money he had paid as surety out of her separate estate-Held, she was not a necessary party to a suit by H. to obtain the benefit of his security. Mr. J. E. Tyrie effected three policies on his own life with the Sovereign Life Assurance Company, for the purpose of securing advances made by that company. The first policy, dated February, 1863, was for 2,000l. It was mortgaged to the office for 1,000l. The second policy dated October, 1863, was for 1,0007., and was mortgaged to the office for 500l. The third was dated January, 1865. The company advanced to Mr. Tyrie 1,500l. by way of mortgage on this policy and by way of further charge on the first policy. The plaintiff and one Captain Boyle joined in this latter security as sureties. Mr. Tyrie was adjudicated bankrupt, and Captain Boyle having previously become bankrupt, the company sued the plaintiff and recovered judgment for 1,5007. and costs. The plaintiff paid the company part of this sum. Some of this was recouped him by Mrs. Tyrie out of her separate estate, in order to prevent his losing through her husband. The third policy was allowed to drop. And on the falling in of the other two policies the plaintiff filed this bill against the assignee in bankruptcy of Mr. Tyrie and the Sovereign Life Assurance Company. He claimed the right to have the securities of the two policies marshalled, so that the company should be paid what was still owing to them out of the second policy, so far as it would go, and he claimed to be paid a sum of 24l. 38. 2d. for costs of defending the action in addition to what he had paid. Mr. Kay and Mr. Westlake, for the plaintiff, contended that he was entitled to stand in the place of the creditor in respect of all the securities held by the creditor. The company had a right to consolidate all the securities as against the assignee, and the surety would have a right to have the securities marshalled, so that he would be paid in full Drew v. Lockett, 32 Beav. 499; Wright v. Morley, 11 Ves. 12, 22; Newton v. Chorlton, 10 Hare, 646. Mr. Amphlett, for the assignees, took the objection that Mrs. Tyrie having paid the plaintiff part of what he had paid, was entitled, after him, to the benefit of the securities, and ought therefore to have been party to the suit. Mr. Kay said there was no trace of any arrangement to give her the benefit of the securities. She was in the position of a mere stranger— Walter v. James, 40 Law J. Rep. (N.S.) Exch. 104; s. c. Law Rep. 6 Exch. 124. Mr. Amphlett and Mr. J. Simmonds, for the assignees, contended that the surety had no right to the benefit of any securities but such as were pledged for the particular debt for which he was surety— Wade v. Coope, 2 Sim. 154; South v. Bloxam, 2 Hem. & M. 457; s. c. 34 Law J. Rep. (N.S.) Chanc. 369; Ex parte Rushworth, 10 Ves. 409; at any rate the plaintiff had no right to add his costs of defending the action Lamplough v. Braithwait, 2 Smith's South v. Bloxam (ubi supra). BACON, V.C., said: The plaintiff is entitled to the right claimed by him of having the securities marshalled, so as to be paid out of the balance of the policy moneys the sums which he has been compelled to pay under the judgment, including the costs of the action. Upon the other point the payment to the plaintiff out of her separate estate by Mr. Tyrie stands on the same footing exactly as a payment by an entire stranger under no liability whatever in order to reimburse the plaintiff for the loss he had been put to on account of her husband, and such payment cannot in any way affect the right of the plaintiff against the balance of the policy moneys. Solicitors-Messrs. Elmslie, Forsyth & Sedgwick, for plaintiff; Mr. Dubois, for assignee; Messrs. Davies, Son, Campbell, & Reeves, for the Insurance Company. LORD ROMILLY, M.R. Re CONTRACT CORPORA TION. 1871. Nov. 18. (HAKIM'S CASE). Companies Act, 1862, s. 115-Appointment of Special Examiner. A person summoned under section 115 of the Companies Act, 1862, is not entitled to be heard on the appointment of the special examiner, before whom he is to be examined. The above-named company being in liquidation, and the official liquidator deeming it probable that a Mr. Hakim could give "information concerning the trade dealings, estate, or effects" of the corporation, caused him to be summoned with a view to his being examined under section 115 of the Companies Act, 1862, and proposed to have such examination taken before a special examiner already appointed for the examination of other witnesses in the matter of the windingup. Mr. Hakim refused to go before him, insisting that he had a right to have a voice in the appointment of the examiner, suggesting that the examination was being taken with a view to hostile proceedings being taken against him by the liquidator 2 G after getting the information. He had no personal objection to the examiner. This was a summons to compel him to go before the examiner already appointed, and was adjourned into Court. Sir R. Baggallay and Mr. Chitty, for the official liquidator.-Mr. Hakim is a mere witness; his position here is entirely different from that in Re Smith, Knight & Co., 38 Law J. The Solicitor General (Mr. Jessel) and Mr. A. G. Marten, for Mr. Hakim. THE MASTER OF THE ROLLS held that the witness had no right to be heard as to who was to be the examiner, and must go before the one already appointed. Solicitors-Messrs. Linklaters & Co., for official liquidator; Messrs. Thomas & Hollams, for Mr. Hakim. MALINS, V.C. 1871. Nov. 22. EARL OF CORK AND OTHERS v. RUSSELL. Foreclosure Suit Parties-Judgment Creditors-1 & 2 Vict. c. 110-27 § 28 Vict. c. 112. The plaintiff in a foreclosure suit had made parties as defendants certain judgment creditors who had not taken the steps necessary to obtain a charge on the land under 27 & 28 Vict. c. 112. One of these, immediately on being served with a copy of the bill, wrote a letter saying he claimed no interest. The others disclaimed by answer:-Held, that they were not necessary parties. Mildred v. Austin (Law Rep. 8 Eq. 220), disapproved of. This was a foreclosure suit by first mortgagees, in which a question arose as to the propriety of making parties as defendants judgment creditors, who had not taken the necessary steps to obtain a charge on the land under 27 & 28 Vict. c. 112. The persons made parties as defend ants were Sir W. Russell, mortgagor, C. F. Kemp, trustee under a liquidation of Sir W. Russell's affairs, Jewsbury, who as public officer of the Gloucestershire Banking Company, held a judgment, S. Bowly, L. Winterbotham, and T. Marling, who as trustees of the same banking company, held a mortgage; the English Joint Stock Bank, judgment creditors, who had issued and registered a writ of execution on their judgment, but not, so far as appeared, obtained a return from the sheriff so as to obtain a charge on the land within the Act 27 & 28 Vict. c. 112. They claimed by answer the benefit of their judgment. Hon. A. Kinnaird, J. C. Murdoch, and P. P. Bouverie, judgment creditors, who had issued execution, but assigned the benefit of their judgments previous to the institution of the suit to a person not made a party. They admitted that they had issued execution; said that they had assigned their judgment previous to the date of the bill, and disclaimed, by answer, claiming their costs; C. C. Neilson, a judgment creditor, who had not issued execution, and disclaimed as soon as the bill was served upon him, by a letter from his solicitor, in the following terms "There is an error in the ninth paragraph of the bill, in stating that our client, Mr. Neilson, has issued and registered a writ of execution. We also take this opportunity of mentioning that he disclaims all interest in the property comprised in your clients' security." Neilson was afterwards required to answer, and he put in an answer making no mention of his judgment, disclaiming and declaring that he never had any interest in the property, and asking for his costs. J. B. Smith, C. R. Harford, and H. Sewell, then defendants, had held a mortgage, but had assigned their mortgage to the plaintiffs before the institution of the suit. Before the assignment they had obtained a judgment against the mortgagor, but had never issued execution. They were required to answer, and by their answer, not specifically mentioning their judgment, they disclaimed in the following terms: "We have not, and do not claim, and except during the time when we held the mortgage in the plaintiff's bill mentioned, and which was transferred to the plaintiffs before the institution of this suit, we never had or claimed to have any right or interest in the matters in question in this suit, and we disclaim all right, title, and interest, legal or equitable, in any of the said matters. And we say that if we had been applied to by the plaintiffs before the filing of their bill, we should have disclaimed all right, title and interest, and we submit that the bill ought to be dismissed as against us with costs." A. Lawrie, a third mortgagee, asked for the costs caused by being required to answer interrogatories as to which the plaintiffs knew he could give no information. All the judgments were subsequent in date to the statute 27 & 28 Vict. c. 112. It did not appear on the proceedings whether the writs of execution which had been issued were writs of fi. fa. or elegit. Mr. Glasse and Mr. A. Dixon, for the plaintiffs, contended, on the authority of Mildred v. Austin, Law Rep. 8 Eq. 220, that the judgment creditors, although they had not issued execution, would have a right to redeem if they acquired a charge upon the property within the words of 27 & 28 Vict. c. 112, before the expiration of the time for redemption fixed by the decree, and were therefore necessary parties, and that in the case cited, the Master of the Rolls, under similar circumstances, had himself suggested that judgment creditors, who had not issued execution, should be made parties. That as according to that deci sion the judgment creditors in question were properly made parties, they ought by their answer and disclaimer to have asked to be dismissed without costs, not having done this they were not entitled to have their costs. They also contended that the 27 & 28 Vict. c. 112, had not repealed 1 & 2 Vict. c. 110, so as to render judgment creditors who had not issued execution unnecessary parties. They cited Mildred v. Austin (ubi supra); Bellamy v. Brickenden, 4 Kay & J. Re Cowbridge Railway, 37 Law J. Guest v. Cowbridge Railway Company, Ablett v. Edwards, 10 Sim. p. 563 in note; 1 & 2 Vict. c. 110 and 27 & 28 Vict. c. 112. Mr. Raikes appeared for C. F. Kemp, trustee, for the mortgagor. No one appeared for Bowley, Winterbotham, or Marling, the second mortgagees; nor for Kinnaird, Murdoch, and Bouverie. Mr. Owen, for Neilson, who had disclaimed by letter upon being served with a copy of the bill, was stopped, the Court being of opinion that he was clearly entitled to his costs. Mr. A. T. Watson, for Smith, Harford, and Sewell, contended that judgment creditors acquired no charge on the land until they had issued execution and obtained a return from the sheriff, and therefore were not necessary parties; that the disclaimer made by the answer was in proper form, and asked for his costs, and cited Talbot v. Kempshead (ubi supra); Mr. Archibald Roberts, for Lawrie, contended that the plaintiffs must have known that the defendant Lawrie had no information to give, except respecting his own security, and that he ought not to pay costs incurred by reason of interrogatories applying to other matters. further contended that the costs of the judgment creditors ought to be paid by the plaintiffs, and not added to their security. He MALINS, V.C.-The question argued in this suit has been whether it is necessary to make judgment creditors, who have not acquired a charge according to the statute 27 & 28 Vict. c. 112, parties to a foreclosure suit. The same question was considered by me in Re Bailey's Trusts in 1869, Law Rep. Weekly Notes, p. 43, and by the Master of the Rolls in Mildred v. Austin (ubi supra). In that case judgment creditors of the mortgagor, who had not issued writs of elegit, had been made defendants by amendment at the suggestion of the Court. The usual foreclosure decree was made, and the Master of the Rolls held that any judgment creditor who should acquire a charge on the land before the end of six months from the date of the decree, must be allowed to redeem, and the mortgagor must have three months further for redemption. The ground of the decision. was that any judgment creditor might acquire a charge on the land before the time fixed for redemption, and thereby put himself in a position to redeem, but so might any other creditor. The Master of the Rolls in his judgment referred to my decision in Re Bailey's Trusts (ubi supra), and said that that was a case of immediate distribution of a fund in Court, in which the judgment creditors had not acquired any interest. He seems to have been misinformed as to the nature of my decision. I really decided that since the statute 27 & 28 Vict. c. 112, before any judgment affected any land the judgment creditor must have taken the proceedings necessary to give him a charge under that Act, which had not been done in that case, and that judgment creditors who had not issued execution had no interest in the land, and consequently were not necessary parties to a foreclosure suit. Under 1 & 2 Vict. c. 110, a judgment creditor had a lien on the land, and consequently was a necessary party to a foreclosure suit. To remedy the inconvenience caused by this the 27 & 28 Vict. c. 112 was passed. Its intention appears from the preamble, which recites that "It is desirable to assimilate the law affecting freehold, copyhold, and leasehold estates to that affecting purely personal estates, in respect of future judgments, statutes, and recognizances. first section enacts— Then the "No judgment, statute, or recognizance to be entered up after the passing of this Act, shall affect any land (of whatever tenure) until such land shall have been actually delivered in execution by virtue of a writ of elegit, or other lawful authority, in pursuance of such judgment, statute, or recognizance." Though there are no words expressly repealing the former Act, it is repealed by implication because the later enactment is directly inconsistent with it. I consider, therefore, that the judgment creditor who has not issued execution, has no interest in the land, and as the only object in a foreclosure suit is to bring before the Court parties interested in the land, it follows that judgment creditors who have not issued execution are not proper parties. This must settle the question of costs in the case of the judgment creditors who have not issued execution. It is quite clear that Neilson ought to have his costs, for before any costs were incurred he wrote and said that he disclaimed all interest in the suit. Then there are the other judgment creditors, Smith, Harford and Sewell, who disclaimed by their answer. If their case was simply that of judgment creditors who had not issued execution, but had been made parties in accordance with a decision of the Court that such judgment creditors ought to be parties, the plaintiffs might perhaps have been justified in making them defendants, but these defendants further say that they have disclaimed. This raises the question, what is a sufficient disclaimer. [The Vice Chancellor then read the paragraph from their answer, containing the disclaimer quoted above, and proceeded]: I think that they are entitled to their costs, as having made a sufficient disclaimer. As to the equitable mortgagee (Lawrie) he must of course pay his proper costs, and add them to his security in the usual way. He says that he ought not to pay all the costs because some were caused by his being compelled to answer interrogatories as to matters concerning which the plaintiffs knew he could give no information. On the other hand he need not have answered those interrogatories, therefore I think this makes no difference. |