Butler v Butler

• Jurisdiction: Ireland
• Court: Supreme Court (Irish Free State)
• Judgment Date: 06 March 1925
• Date: 06 March 1925

Butler v. Butler.

BUTLER

and

BUTLER (1)

Supreme Court.

Equitable mortgage - Mortgagor in possession - Order appointing receiver - - Time from which mortgagee is entitled to rents and profits - Distinction in case of bankrupt mortgagor - Order referring to Chambers account furnished by mortgagor - Consent of mortgagor - Effect of order - Estoppel.

The Supreme Court held that the owner of an estate which is subject to an equitable mortgage or charge is not bound to account as a trustee from the date of the institution of proceedings by the owner of the incumbrance to raise the amount thereby secured, or from the date of the order for sale; but from the date of the appointment of a receiver.

Position of the equitable mortgagee when the estate of his mortgagor is in bankruptcy distinguished and commented on.

Defendant, the owner of an estate which was subject to certain charges, consented to an order being made ex parte by the Judge referring to Chambers the account of receipts and outgoings which he had furnished to the plaintiffs, the chargeants, they having taken proceedings to raise the amount of the charges:

Held, on the facts, that the defendant had not estopped himself from disputing his liability to account.

Appeal from an order of Meredith J., dated January 16th, 1925.

The following statement of facts is taken from the judgment of FitzGibbon J.:—

By his will, dated July 12th, 1870, Whitwell Butler, who died on November 16th, 1881, bequeathed the sum of £2,000 to each of his daughters, Mary and Elizabeth, and devised and bequeathed all the residue of his property, real and personal, to his son, Richard J. Butler, subject, inter alia, to these two legacies, and appointed R. J. Butler his sole executor.

R. J. Butler proved the will on January 25th, 1882, and went into possession of the property which he continued to hold until his death on October 14th, 1908.

By his will, dated 29th September, 1903, he appointed his son, the defendant, Richard John Butler, junior, his executor, but did not make any further disposition of his property. The defendant proved the will, and appears to have gone into possession of the real estate of his father—as to part, as heir at law, as to part, which was held pur autre vie, as special occupant, and as to the chattels real, as executor.

The interest upon the legacies to Mary and Elizabeth Butler was then in arrear, and a deed of family arrangement, dated April 29th, 1909, was entered into by which the arrears of interest were stated to have been capitalised, and the legatees agreed to accept annuities which were charged upon the lands, but without prejudice to their rights to proceed for recovery of the capital. That deed is not now forthcoming, but the parties admit that its contents do not affect the question which is now before the Court.

Upon the death of Elizabeth Butler, who was the last life in the lease of the lands which were held pur autre vie, the

defendant, who was also owner of the superior estate, became owner of the lands in fee-simple; and, desiring to sell some portion of the property upon which the legacies and annuities had been charged, applied to Mary Butler, the surviving legatee, for her consent to the sale free from incumbrances.

The deed of April 28th, 1909 could not then be found, and a new deed was executed on July 28, 1921, by the defendant and Mary Butler, specifically charging the lands with two sums of £2,500 in favour of Mary Butler.

Mary Butler died on October 14th, 1922, having bequeathed all the residue of her estate, which included these charges, to her nephews and nieces, the brothers and sisters of the defendant, and appointed the plaintiffs her executors.

Proceedings by way of originating summons were instituted by the plaintiffs on the 24th of January, 1923, for a declaration that the two sums of £2,500 were well charged upon all the lands of the defendant and to raise the amount by sale, and for a receiver, and for the usual accounts and other reliefs.

The summons was adjourned into Court, and came on for hearing before Dodd J., sitting for Powell J., on the 15th of May, 1923, when an order was made declaring that the plaintiffs were not entitled to any charge upon the lands of Staffordstown (the lands which had been held for an estate pur autre vie), and that, the defendant admitting the plaintiffs' right to a charge upon the lands of Gerrardstown the principal moneys secured by the said indentures, dated July 28th, 1921, April 28th, 1909, and the will of Whitwell Butler, were well charged upon the defendant's interest in the lands of Gerrardstown, and it appearing to the Court that there was due to the plaintiffs "on foot of the said indenture" the sum of £4,950 for principal together with interest from the 14th day of October, 1922, at the rate of £4 per cent. per annum, it was ordered that the defendant should be at liberty to dispute these amounts within a month, and in default of his doing so, and in default of payment within three months, that the defendant's interest in the said lands should be sold through the Court. Inquiries as to incumbrances were directed, and the plaintiffs were ordered personally to pay the defendant's costs so far as they related to the lands of Staffordstown. The Court was not asked at that time to appoint a receiver. The plaintiffs appealed against this order to the late Court of Appeal, which affirmed the order of Dodd J. on July 11th, 1923. Upon November 6th, 1923, the plaintiffs applied to Pim J., sitting as a Judge of the Chancery Division, for the appointment of a receiver over the lands of Gerrardstown, and on November 13th, 1923, Wylie J., before whom the application came on for hearing, appointed Mr. Joseph Lowry, of Kells, receiver over the lands in question.

The receiver upon taking up the duties of his office after his appointment, found that the lands had been let by the defendant for grazing upon the usual eleven months' system in the previous January, and that the defendant had received over £1,400 from the grazing tenants for the use of the lands which would continue until the following December. The payment was made by promissory notes due on September 9th, 1923, which had been discounted in the usual way, and there is no ground for suggesting that there was any attempt or desire on the part of the defendant to forestall the receiver.

On February 27th, 1924, Mr. Merrick, one of the plaintiffs, wrote to the defendant demanding an account of all rents and profits received by him out of the lands since January 24th, 1923, the date of the commencement of the proceedings for raising the amount of the charge, and, after some correspondence, an account of "receipts and outgoings in respect of the lands of Gerrardstown for the year 1923" was furnished by the defendant's solicitors, showing receipts amounting to...