Leahy v De Moleyns

• Jurisdiction: Ireland
• Judgment Date: 29 June 1895
• Docket Number: (1891. No. 12,729.)
• Date: 29 June 1895
• Court: Court of Appeal (Ireland)

Leahy

and

De Moleyns.

M. R.

Appeal.

(1891. No. 12,729.)

CASES

DETERMINED BY

THE CHANCERY AND PROBATE DIVISIONS

OF

THE HIGH COURT OF JUSTICE IN IRELAND,

AND BY

THE COURT OF BANKRUPTCY IN IRELAND,

AND ON APPEAL THEREFROM IN

THE COURT OF APPEAL.

1896.

Following assets — Claim by mortgagee against devisees and residuary legatees — Statute of Limitations — Trustee Act, 1888 (51 & 52 Vict. c. 59, s. 8) — Acquiescence — Lapse of time.

A testator in the year 1855 mortgaged certain freehold lands of which he was absolute owner, and also his life estate in other freehold lands, to secure repayment of a sum of £3109, advanced by the mortgagees, who were trustees of a marriage settlement, with interest at the rate of five per cent. per annum.

The testator died in 1862, having by his will devised the mortgaged lands to his son A for life, with remainder to his first and other sons in tail male; and other freehold lands to his son B in like manner, and bequeathed his residuary personal estate to his executors upon trust for his daughters.

The mortgagees were aware of the death of the testator, but did not require payment of the mortgage debt. The executors paid the debts of the testator (other than the mortgage debt) and converted into money and set apart the residuary personal estate for the benefit of the residuary legatees. Part was afterwards paid over to them, and the remainder was invested by the executors, and the income paid to the residuary legatees. Two of the daughters married, and their shares of the residue were put in settlement. Interest on the mortgage was paid by the devisee of the mortgaged lands down to 1886, when it fell into arrear, and a receiver was appointed. In 1890 an order for sale of the lands was made on the petition of the mortgagees, which proceedings were pending in 1891 when the mortgagees, believing that the lands when sold would not realise sufficient to satisfy their claim for principal and interest, brought an action to administer the real and personal estate of the deceased mortgagor and claimed the right to follow the assets remaining in the hands of the surviving executor as trustee for the residuary legatees, or which had been paid over by him to them. No interest had been paid to the mortgagees since the death of the testator except by the devisee of the mortgaged lands.

The defendants pleaded (1) the Statute of Limitations; (2) The Trustee Act, 1888, s. 8; and (3) laches and acquiescence:—

Held, by the Court of Appeal (affirming the decision of the Master of the Rolls); (1) that the payment of interest by the devisee of the mortgaged lands kept alive the right of the plaintiffs to resort to the residuary personal estate or the other real estate of the testator in the event of the security of the lands being insufficient, and that therefore the Statute of Limitations did not apply; (2) that the residuary legatees were not persons “claiming through a trustee” within the meaning of the Trustee Act, 1888, sect. 8;

Held (3), by the Court of Appeal (reversing on this point the decision of the Master of the Rolls) that there were no special circumstances or action or conduct on the part of the plaintiffs to disentitle them to follow the assets, and that they were entitled to the relief sought.

Ridgway v. Newstead (3 D. F. J. 474), and Blake v. Gale (32 Ch. D. 571), distinguished.

Trial of Action.

This action was brought to administer the real and personal estate of Richard Chute. The plaintiffs sued as creditors of the deceased under a mortgage dated December 15, 1855, of certain lands in the county of Kerry vested in them as trustees, by which the testator covenanted to pay a sum of £3109 with interest thereon at the rate of 5 per cent. per annum. Richard Chute died in the year 1862, and interest on the mortgage was paid by his son T. A. Chute the devisee under his will of the mortgaged lands down to the year 1886. A receiver was appointed over the lands in 1888, and in 1890 a petition was presented by the plaintiffs to the Land Judge of the Chancery Division for the sale of the lands, and an order for sale made, but no sale had taken place at the time of action brought. The plaintiffs, believing that the proceeds of the lands when sold would be insufficient to pay the principal and interest due to them, brought this action against Edward De Moleyns, the surviving executor of, and devisee in trust under, the will of Richard Chute, and F. B. Chute, R. Chute, and T. A. Chute, devisees under the said will. After the action came on for hearing the proceedings were amended by adding as defendants the persons entitled to the testator's residuary personal estate, namely, his unmarried daughters, Dora Chute, and Emily Chute, and E. J. Saunderson, and F. B. Chute, the trustees of the settlement on the marriage of his daughter Marion Chute with Milhelm Shakoor, and J. H. Dudgeon, and T. C. Oliver, the trustees of the settlement on the marriage of his daughter Rose Chute with Henry Dudgeon; and the plaintiffs asked for a declaration that the residuary personal assets of the testator which at the commencement of the action remained in the possession of the said Edward De Moleyns as surviving executor, or which had previously thereto been transferred or paid over to the residuary legatees or any trustees for them, were liable to discharge the plaintiffs' claim as specialty creditors of the testator.

It was contended on behalf of the defendants that the plaintiffs' claim was barred, 1, by the Statute of Limitations, on the ground that payment of interest by the owner of the mortgaged estate did not keep alive their right as against the personal estate or the other real estate of the testator; 2, by the Trustee Act, 1888, section 8, which entitled the defendant De Moleyns as trustee, and the added defendants as persons “claiming through him” to the benefit of the Statute of Limitations; and 3, by laches and acquiescence after the lapse of so many years. The facts of the case and the arguments of counsel appear from the judgments.

P. F. White, Q. C., Matheson, Q. C., and Jefferson, for the plaintiffs.

T. P. Law, Q. C., Kenny, Q. C., and J. Herbert Shaw, for the defendant De Moleyns.

The Right Hon. John Atkinson, Q.C., and Morphy, for the defendants, F. B. Chute, and R. Chute.

Daniel Mahony, for the defendant, T. A. Chute.

Price, Q.C., and C. W. R. Brady, for the other defendants.

The Master of the Rolls (having stated the facts of the case which will be found recapitulated in the judgment of the Lord Chancellor, post p. 224), proceeded as follows:—

The first question is, as to the Statute of Limitations; is it a bar to the plaintiffs' claim?

There was no payment out of Richard Chute's personal estate, or from any other source than the mortgaged lands since his death in 1862.

But does this bar the claim to follow assets when the mortgaged premises are insufficient? In my opinion it does not. The statute is, 37 & 38 Vict. c. 57, s. 8, which is substituted for 3 & 4 Wm. 4, c. 27, s. 40. It provides that “no proceeding shall be brought to recover any money secured by mortgage but within twelve years next after a present right to receive the same shall have accrued to some person capable of giving a discharge for the same, unless in the mean time some part of the principal money, or some interest thereon, shall have been paid, or some acknowledgment of the right thereto shall have been given in writing by the person by whom the same shall be payable, or his agent, to the person entitled thereto, or his agent; and in such case no such proceeding shall be brought, but within twelve years after such payment or acknowledgment, or the last of such payments or acknowledgments, if more than one, was given.”

There is no doubt that payment by a mere stranger will not suffice—Homan v. Andrews (1). But payment by the person liable will, and payment by a tenant for life will, as a rule, bind the remainderman—Roddam v. Morley (2). Roddam v. Morley (2) was, no doubt, criticised in Coope v. Cresswell (3). But in Pears v. Laing (4), Roddam v. Morley (2), is referred to by Bacon, V.-C., as follows:—“The case of Roddam v. Morley (2), which, notwithstanding all that has been said of it in Coope v. Cresswell (3), or elsewhere, I conceive to be of unquestionable authority, has decided that payment of interest by the tenant for life of a devised estate keeps a specialty alive against the persons entitled in remainder. But the case is also of great value, by reason of the close and careful examination into the Statutes of Limitation, as well by the Common Law Judges, whose assistance was procured by the Lord Chancellor, as by Lord Cranworth himself. The Judges pointed out that the action to be brought could only be one and the same action on the specialty, and not on any new promise express or implied from the terms of acknowledgment, whatever it might have been. They held that a devisee, who might plead the bar, if it existed, could only plead it in such single action; and observing that he was capable of making the acknowledgment, and the

Statute of Fraudulent Devises (3 & 4 Wm. & Mary, c. 14, s. 7) having declared that the devisee should be liable and chargeable in the same manner as the heir, they concluded, without hesitation, that the devisee might, properly be said to be liable by virtue of the indenture, ‘as either the real or personal representative,’ and therefore that, by the acknowledgment, the action—the only action that could be brought—was set free generally, the statutes having nowhere said that it could be brought only against the party making the acknowledgment. Lord Cranworth, who concurred with the Judges, ‘not only in the result at which they arrived,’ but in the reasoning ‘which led them to their conclusion,’ and also after a thorough investigation of the case, gave very fully his reasons for the independent judgment which he pronounced, and was satisfied that the devisee for life...