Eyre v M'Donnell

• Jurisdiction: Ireland
• Judgment Date: 18 June 1864
• Court: Court of Chancery (Ireland)
• Date: 18 June 1864

Eyre

and

M'Donnell.

Chancery.

CHANCERY REPORTS,

BEING A SERIES OF

CASES ARGUED AND DETERMINED

IN THE

HIGH COURT OF CHANCERY,

COURT OF APPEAL IN CHANCERY,

Rolls Court, Landed Estates Court,

AND

COURT OF BANKRUPTCY AND INSOLVENCY.

This was a suit instituted by the personal representatives of Mr. Gerald Dillon (called the elder), for the purpose of setting aside, as fraudulent and void, a deed of assignment, dated the 31st of December 1852, by which Mr. Gerald Dillon assigned to the respondent Mr. Eneas M'Donnell an annuity charged on certain lands over which Mr. M'Donnell was at that time receiver under the Court of Chancery. The material facts of the case are as follows:—

By indenture of lease, bearing date the 10th of September 1789, William Naper demised to Redmond Dillon part of the lands of Cartronkeel, with other denominations, in the county of Westmeath, to hold for a term of 999 years, at a yearly rent of £204. 10s. 0d., late currency. The interest of Redmond Dillon having become vested in Mr. Gerald Dillon the elder, by deed dated the 13th of April 1841, and made between Gerald Dillon the elder of the first part, Gerald Dillon the younger of the second part, and Daniel Delany of the third part, Gerald Dillon the elder, for the considerations therein mentioned, granted and assigned all his interest in the lands before mentioned unto Daniel Delany, for the unexpired residue of the term, subject to the payment of the yearly rent, upon trust, after payment of the rent, that Gerald Dillon the elder should receive out of the premises, and the rents and profits thereof, a yearly rentcharge of £200 sterling during his life, to be paid by two equal half-yearly payments on the 1st day of May and the 1st day of November in every year; and also a proportional part of the said yearly rentcharge, to be computed from the commencement of any half year in which Gerald Dillon the elder might happen to die, up to his decease; and subject thereto upon trust for Gerald Dillon the younger, his executors, administrators and assigns. Mr. Gerald Dillon the elder was at this time a widower, and childless, and Mr. Gerald Dillon the younger was his first cousin, his nearest male relation, and presumptively his heir-at-law. The property conveyed by this deed consisted of about 573 statute acres, and was well situate and well circumstanced, being in the hands of solvent tenants, and yielding a rental of £470 a-year. From 1847 to 1850, owing to the generally prevailing distress in Ireland, this property became depreciated in value; the head rent of £200. 10s. 0d. late currency was not regularly paid, and the annuity of £200 secured to Mr. Gerald Dillon the elder by the above mentioned deed fell into arrear, £400 being due on account of it on the 1st of November 1849.

Mr. Gerald Dillon the younger, the owner of the lands subject to the annuity, became involved in difficulties, and in June 1849 was discharged as an insolvent debtor, his estate and effects being vested in assignees. On the 29th of December 1849, Mr. Gerald Dillon the elder filed a bill in the Court of Chancery against Daniel Delany, the trustee in the deed of April 1841, Gerald Dillon the younger, and the assignee in insolvency, for the purpose of raising the arrears of the annuity, and having the annuity of £200 per annum declared well charged on the lands; and praying that a receiver might be appointed over the lands for payment of the arrears and accruing gales of the annuity. A decree pro confesso was made on the 18th of April 1850, no answer having been filed; and the cause having been referred to the Master for the appointment of a receiver, Mr. Eneas M'Donnell, one of the respondents in the present suit, was duly appointed a receiver over the lands charged with the annuity, early in the year 1850.

Soon after the appointment of Mr. Eneas M'Donnell, owing to the distressed state of the country, the rents were abated, until the reduced rental amounted to about £350 per annum. These rents however were satisfactorily paid, and in about two years after Mr. M'Donnell became receiver, all the arrears of head rent were paid off out of the rents received by him.

In 1849, a sum of £180 had been borrowed from Mr. Eneas M'Donnell, which was secured by the joint and several bond of Mr. Gerald Dillon the younger and Mr. Gerald Dillon the elder, for the penal sum of £360, on which bond judgment was entered in the Court of Exchequer, as of Hilary Term 1849, against both the borrowers. It was alleged in the cause petition in the present case that Mr. Gerald Dillon the elder had joined in this bond only as a security for Gerald Dillon the younger, and that the £180 was applied by the latter to the discharge of the head rent and other charges on the lands. This however was denied by the answer of Mr. Eneas M'Donnell; and it was stated that this sum of £180 had been raised by Mr. Gerald Dillon the elder, for the purpose of buying stock for the lands of Coolock, which were not the lands charged with the annuity.

By deed bearing date the 10th of March 1849, Mr. Gerald Dillon the elder guaranteed and secured to Mr. Eneas M'Donnell payment of interest on a principal sum of £320, then due to him by Mr. Gerald Dillon the younger and secured by the bond of Mr. Gerald Dillon the younger, to Anne Dillon, dated the 30th of August 1841, and a judgment entered thereon, as of Easter Term 1841, of which judgment Mr. Eneas M'Donnell was the assignee.

In the course of the year 1852 Mr. Eneas M'Donnell began to press Mr. Gerald Dillon the elder for payment of the judgment debt of £180, and threatened to take legal proceedings against him for its recovery. Mr. Gerald Dillon the elder was at the time in very straitened circumstances, in consequence of the non-payment of the annuity of £200, which formed his principal and almost sole means of support; and on that account he was unable to satisfy Mr. Eneas M'Donnell's demand.

It appeared that a tenant of part of the lands, named John Doyle, had lent to Mr. Gerald Dillon the younger a sum of about £200, for the repayment of which Mr. Gerald Dillon the elder had been induced to become security; and a judgment was entered at the suit of John Doyle, as of Hilary Term 1850, against Mr. Gerald Dillon the elder for the penal sum of £398, to secure the payment of £199, with interest at the rate of £6 per cent.

According to the allegations of the petitioners, Mr. M'Donnell represented to Mr. Gerald Dillon the elder that the lands were inadequate to pay the annuity of £200, or the arrears, and led him to believe that £50 a-year was as much as could be regularly paid. Negociations were accordingly entered into between Mr. Gerald Dillon the elder and Mr. Eneas M'Donnell, for a sale of the annuity, which eventually led to the execution of the deed of assignment which the present suit sought to set aside. In these negociations (the petitioner stated) Mr. Gerald Dillon had not any independent solicitor; but Mr. John Smyth, who had acted for Mr. Gerald Dillon and for the receiver in the cause of Dillon v. Delany, acted for both parties in this transaction.

By deed dated the 31st of December 1852, made between Gerald Dillon the elder of the one part, and Eneas M'Donnell of the other part, after reciting the indenture of the 13th of April 1841, and the proceedings in the Chancery suit, and that there was then due to Gerald Dillon the elder £1000 arrears of the annuity of £200, up to the 1st day of November 1852, and that there was due by him to Eneas M'Donnell the sum of £180 on foot of the judgment for £360, entered on the joint and several bond of Gerald Dillon the elder, and Gerald Dillon the younger, with interest thereon and on another sum, amounting in all to £20; and that Gerald Dillon the elder was also indebted to John Doyle, a tenant on the lands, in the the sum of £200, on foot of a judgment for £398 debt, besides costs; and also that it had been agreed between the parties thereto, that in consideration of Eneas M'Donnell releasing Gerald Dillon the elder from the said judgment debt and obligations, and of his taking on himself the payment and discharge of the debt due by Gerald Dillon the elder to John Doyle, and indemnifying Gerald Dillon from payment of the same, and in consideration of his paying or sufficiently securing to Gerald Dillon, during his life, an annuity or yearly rentcharge of £50, parcel of the said annuity of £200, in manner thereinafter provided, he, Gerald Dillon the elder, should make over to Eneas M'Donnell, the annuity of £200, and all, the arrears thereof, and all powers for its recovery authorised by the said indenture and the decree; it was witnessed that in pursuance of the agreement, and for the considerations so recited, the full value of which was thereby stated to be estimated at £400, Gerald Dillon the elder granted to Eneas M'Donnell, his executors, administrators and assigns, the annuity or yearly rentcharge of £200, by the said indenture of the 13th of April 1841 charged on the lands therein mentioned, and all the arreas due in respect thereof, together with the said decree, and all remedies for recovery of the said annuity, subject to the payment of £50 sterling to Gerald Dillon the elder during his life, payable half-yearly on every 1st day of May and 1st day of November in each year.

This deed contained covenants and other provisions for carrying out the agreement; and, amongst others, a provision that the Chancery proceedings should be continued, and if necessary revived, in the name of Mr. Eneas M'Donnell, and that in case he should be desirous of presenting a petition to the Incumbered Estates Court for the sale of the said lands for the payment of the arrears of the annuity, Mr. Gerald Dillon the elder should permit his name to be used for that purpose, and the lands should be sold subject to the annuity of £50; and that on payment to Mr. Gerald Dillon by Mr. M'Donnell of the ascertained value thereof, Mr...