Crampton v Walker

• Jurisdiction: Ireland
• Judgment Date: 03 August 1893
• Date: 03 August 1893
• Court: Chancery Division (Ireland)

V.-C.

CRAMPTON

and

WALKER.

Smithwick v. SmithwickUNK 12 Ir. Ch. Rep. 181.

Norris v. WrightENR 14 Beav. 291.

Duck v. MayeuELR [1892] 2 Q. B. Div. 511.

Harvey v. Chambers Not reported.

Blackwood v. Borrowes 4 Dr. & War. 475; 2 Con. & Lawson, 459.

Wankford v. WankfordENR 3 Salk. 162.

Godfrey v. FaulknerELR 23 Ch. D. 483.

Learoyd v. WhitelyELR 12 App. Cas. 727.

Speight v. GauntELR 9 App. Cas. 1.

Oxley v. ScarthUNK 51 L. T. (N. S.) 692.

Sutton v. WildersELR L. R. 12 Eq. 373.

Moore v. O'Connor Not reported.

Clements v. Alloway Not reported.

Lee v. MagrathUNK 10 L. R. Ir. 313, at p. 316.

Smithwick v. Smithwick 12 Ir. Ch. R. 181.

Smithwick v. SmithwickUNK 12 Ir. Ch. Rep. 181.

Duck v. MayeuELR [1892] 2 Q. B. Div. 511.

Investment of trust funds — Insufficiency of security — Liability of trustee — Appointment of cestui que trust as executor of trustee — Extinguishment of liability — Payment by one of two person jointly liable — Release.

VOL. XXXI CHANCERY DIVISION. 437 CRAMPTON v. WALTER. Y.-C. 1893. (1893. No. 31.) July 26, 27, 28. Investment of trust funds-Insufficiency of security-Liability of trustee- Aug. 3. Appointment of cestui que trust as executor of trustee-Extinguishment of liability-Payment by one of two persons jointly liable-Release. In 1877, C. and the defendant, who, as executors and trustees of the will of a deceased testator, held moneys in trust for C. for life, and after his death for the plaintiff, who was C.'s son, invested £2000, portion of the trust funds, on a, mortgage of certain lands in the Queen's County, on which there were prior charges, some of which were also held by them on the trusts of the will. The defendant and C. were both practising barristers. The same solicitor acted for both the mortgagor and the trustees. They acted, amongst other things, on the evidence of a valuation of the lands, made in 1871, for the Church RepreÂsentative Body, on the occasion of a proposed loan which was not carried out. In 1880, C. admitted liability to the plaintiff for loss sustained by reason of the security proving insufficient, and paid him £1000 on foot thereof. By his will C. appointed the plaintiff one of his executors, and died in 1889, when the plaintiff became entitled to the trust funds: Held, that under the circumstances of the case the investment was one which a reasonable and prudent man might have made, and that the trustees exercised an honest discretion, based on adequate information. There is no hard and fast rule laid down as to procuring a new and special valuation in every particular transaction in order to protect trustees. When the same solicitor is employed to act both for mortgagor and mortÂgagee, there is imposed on the parties concerned in such transactions the onus of proving, and upon the Court which has to investigate them, the duty of ascertaining with closer scrutiny, that the transaction has been a fair one, and that no advantage has been taken of one party by the other. Held, also, that where one of two joint debtors makes the creditor his execuÂtor, and the latter receives assets adequate to discharge the liability, the debt is extinguished. ACTION to have it declared that a mortgage, dated 10th February, 1877, made by George Ribton Crampton and the deÂfendant John Francis Walker, on certain lands belonging to Mr. William Edge, was an improper investment, and to have the defendant ordered to make good the sum of £1000, with interest, VOL. XXXI. 2 M 438 LAW REPORTS (IRELAND). [L. R. I. V.- C. being the loss sustained by the plaintiff by reason of the said 1893. investment. From the statement of claim it appeared that the CRAXPTON Right Hon. Philip Cecil Crampton, by his will, dated 14th Fe V. WALKER. bruary, 1861, devised and bequeathed all his estates and property to the use of his wife Margaret, for life, with remainder, after certain devises, which failed, to the said George Ribton Crampton, for life, with remainder to his first and other sons in tail male, with divers remainders over ; and the testator appointed the said George Ribton Crampton and the defendant executor of his will. The testator died on the 29th December, 1862, without having revoked or altered his said will, and the same was proved on the 17th January, 1863, by the said George Ribton Crampton and the defendant, executors therein named. On the death of the testator the said Margaret Crampton entered into possession of the trust premises, under the limitations in the said will contained. The said Margaret Crampton died on the 23rd December, 1882 ; and thereupon the said George Ribton Crampton entered into possession of the trust premises under the limitations in the said will contained. The plaintiff is the eldest son of the said George Ribton Crampton, and by disentailing deed, dated the 16th August, 1883, with the consent of the said George Ribton Crampton, disentailed the trust premises. The said George Ribton Crampton died on the 16th November, 1889, and the plaintiff entered into possession of the trust premises. While the said Margaret Crampton was in possession of the trust premises, a sum of £2000, portion of the assets of the tesÂtator, was invested by the said George Ribton Crampton and the defendant in a mortgage of certain lands called Oldleigh and TinÂnesragh, in the Queen's County, the property of a Mr. William Edge ; and in the year 1876 Messrs. Samuel Walker and Richard Crampton Walker, solicitors, who acted in the matter as solicitors for Mr. William Edge, the mortgagor, and also for the said George Ribton Crampton and the defendant, communicated with the said George Ribton Crampton and the defendant with reference to an intended sale of the said lands, with the result that the said George Ribton Crampton and the defendant concurred with the mortgagor, Mr. William Edge, in selling the said lands for the sum of £8250. The said. George Ribton Crampton and the de VOL. XXXT.] CHANCERY DIVISION. 439 fendant permitted the mortgagor to receive £2000, portion of the v.-C. said sum of £8000, and a puisne incumbrancer on the said lands-. 1893. a Mr. Adair-to receive the remainder of the said sum of £8000 ; CRA3IPT" and in lieu of payment of their said mortgage for £2000, accepted WALKER' a mortgage of certain other lands belonging to the mortgagor, which are known as Towlerton, in the Queen's County. The said mortgage of the lands of Towlerton was prepared by the Messrs. Walker, and settled by the defendant, who was at the time a pracÂtising barrister. The Government Valuation of the said lands of Towlerton was £536 2s. 6d., and the said lands were, at the time of the said investment, already subject to six prior incumbrances, amounting in all to the sum of £9600. The plaintiff relied on the circumstance that no surveyor or valuer was employed by, or on behalf of, the said George Ribton Crampton and the defendant at the time of making the said investment, and alleged that it was negligently and imprudently made, and was not a reasonable investment. The plaintiff also alleged that in the year 1886 he called the attention of the said George Ribton Crampton and the defendant to the said mortgage, and informed them that he would, on coming into possession of the trust premises, dispute their authority to make the said investment, and the propriety of the same. The said George Ribton Crampton acknowledged that the said investÂment was an improper investment, and paid the sum of £1000 on foot of his liability in respect thereof to the plaintiff. A petition for sale of the lands of Towlerton was presented by said George Ribton Crampton and the defendant, on the 20th June, 1882, in the Chancery Division, Land Judges ; but no sale had taken place, and the purchase-money would not, in any event, the plaintiff alleged, reach the said mortgage. The defence alleged that the mortgage for £2000 was a first charge on the lands of Oldleigh and Tinnesragh, which at the time produced an annual rental of £452 odd, the poor-law valuation being £272 odd. The said sum of £2000 was paid to the said George R. Crampton and the defendant out of the purchase-money of the said lands, but the said George R. Crampton and the defendant, requiring a fresh investment for the said sum, agreed to re-lend the same sum to the said William Edge, on the security 2M2 440 LAW REPORTS (IRELAND). [L. R. I. V.-C. of a mortgage of the said lands of Towlerton, subject to the sum of 1893. £9600 already charged thereon, of which a considerable portion CRAmprox was already vested in the defendant and said George R. Crampton. v. WALKER. The said. lands of Towlerton were held by the said William Edge in fee-simple, under a Landed Estates Court title, and consisted of 983 A. 3 R. 12 P., situate midway between the towns of Carlow and Castlecomer, of which 185 A., comprising the mansion house and demesne, were in the occupation of the owner, and the remainder was in the hands of thirty-three tenants, proÂducing an annual rental of £704 17s. 3d. There were coal-fields on the property, and the owner had opened three pits thereon, which for some time he worked with profit, and which at the time of the said loan were estimated to be of considerable value, if properly developed. The said sum of £9600, which was the amount of the prior charges on the said lands of Towlerton, consisted of a first charge of £4800, of which £3200 was vested in the defendant and said George R. Crampton, as executors and trustees of the will of the said Philip Cecil Crampton, another sum of £1000, which was in like manner vested in them, and intervening mortgages for £3800, vested in third parties. When the said sum of £2000 was advanced on the security of the said lands it made the total amount of the charges thereon a sum of £11,600. The defendant alleged that he and the said George R. Crampton at the time of making the said investment had before them the fullest information as to the nature and value of the property...