Hibernian Bank v Yourell (No. 2)

• Jurisdiction: Ireland
• Judgment Date: 23 May 1919
• Date: 23 May 1919
• Court: Chancery Division (Ireland)

Hibernian Bank v. Yourell

HIBERNIAN BANE

and

YOURELL (No. 2)

Mortgage - Receiver - Payment of rents and profits to the mortgagees - Right of mortgagees to appropriate towards payment of arrears of interest more than six years due - Conveyancing and Law of Property Act, 1881 (44 & 45 Vict. c. 41), sect. 24, sub-s. 8.

A receiver appointed by a mortgagee pursuant to the powers of the 24th section of the Conveyancing Act, 1881, being for all purposes the agent of the mortgagor, commits a breach of duty if he pays arrears of interest on the mortgage which are statute-barred; and if he pays over the rents and profits to the mortgagees, they cannot legally appropriate them to the payment of such arrears. "Due" in sect. 24, sub-s. 8, of the Conveyancing and Law of Property Act, 1881, means due and legally recoverable.

Further Consideration of Action.

The facts of the case, and the questions raised in the action, are reported in [1916] 1 I. R. 312, and [1918] A. C. 372.

Accounts having been brought in by the plaintiff on the basis of giving credit against the principal moneys secured by the mortgage for all moneys credited by them as principal moneys in the current account of the defendant, W. J. Yourell, a further question arose as to certain moneys received by the plaintiffs from the receiver, and appropriated by them in discharge of certain arrears of interest on promissory notes, such arrears being more than six years due at the dates of such appropriations.

The defendants contended that the plaintiffs were not entitled to make such appropriations.

Cur. adv. vult.

O'Connor M.R.:—

On the taking of the accounts in this action a question has arisen as to the appropriation of certain moneys received by the receiver who was appointed by the plaintiffs as mortgagees over the property of the defendants.

It is unnecessary for me to give a general history of the facts which led up to the action. They are to be found in the judgment of this Court and the judgments of the House of Lords (2). Suffice it to say that at the times the moneys in question were received by the receiver there were owing to the plaintiffs large arrears of interest on certain bills of exchange or promissory notes, and a large part of these arrears was barred by the statute 3 & 4 Wm. 4,

c. 27, sect. 42, under which not more than six years' arrears of interest could be recovered.

The moneys received by the receiver were not appropriated by him. All moneys were paid by him to the plaintiffs, leaving to them the mode of appropriation.

On the 29th January, 1913, the plaintiffs appropriated £73 6s., on the 13th January, 1914, £156 10s. 1d., and on the 29th January, 1915, £206 14s. 7d. towards payment of arrears which admittedly were barred. The question...