M'Kay v M'Nally

• Jurisdiction: Ireland
• Judgment Date: 27 March 1879
• Date: 27 March 1879
• Court: Chancery Division (Ireland)

Appeal.

Before BALL, C., PALLES, C. B., and DEASY, L. J.

M'KAY

and

M'NALLY

Blencowe v. Bugby 2 Sir Wm. Blackst. 766.

Goodbehere v. BevanENR 3 M. & S. 353.

Pitt v. HoggENR 1 C. & P. 160; S. C. 4 Dowl. & Ry. 226.

Kennard v. FutvoyeENR 2 Giff. 81.

Ex parte Domvile, in re Fowler 14 Ir. Ch. R. 21.

Malone v. MinoughanUNK 14 Ir. C. L. 540, 568.

The Lord Buckhurst's CaseUNK 1 Rep. 1.

Harrington v. PriceENR 3 B. & Ad. 170.

Goode v. BurtonENR 1 Ex. 193.

Church v. Brown 15 Ves. 265.

Smith v. Chichester 2 Dr. & W. 393, 401.

Philips v. RobinsonENR 4 Taunt. 106.

Lord Ashtown v. White 11 Ir. Law Rep. 400.

Pryce v. BuryENR 2 Drewry, 42.

Casberd v. WardENR 6 Price, 411.

Whitworth v. GaugainENR 1 Phill. 728.

Earl of Pembroke v. BarklyENR 2 And. 20.

Parker v. Housefield 2 M. & K. 421.

Russell v. RussellENR 1 Bro. C. C. 269.

Pitt v. HoggHRC 4 D. & R. 226.

Parker v. Housefield 2 M. & K. 420.

Weatherall v. Geering 12 Ves. 511.

Nind v. MarshallENR 1 Brod. & Bing. 345.

Iggulden v. MayENR 7 East, 240.

Sadlier v. BiggsENR 4 H. L. C. 435.

Padwick v. WhitcombENR 4 H. L. C. 431.

The Dublin, Wicklow, and Wexford Railway Company v. SlatteryELR 3 App. Cas. 1201.

Landlord and tenant Construction of lease Covenant not to mortgage, assign or part with lease or demised premises Equitable mortgage Memorial executed by grantee alone Evidence Proviso for acceptance of reduced rent on performance of covenants in lease Payment of rent ad diem Repugnancy Literal meaning of covenant controlled by presumed intention.

438 LAW REPORTS (IRELAND). [L. R. I. 311C.A.Y v. 1PNALLY (1). Landlord and tenant-Construction of lease-Covenant not to mortgage, assign or part with lease or demised premises-Equitable mortgage-Memorial executed by grantee alone-Evidence-Proviso for acceptance of reduced. rent on performance of covenants in lease-Payment of rent ad diemÂÂRepugnancy-Literal meaning of covenant controlled by presumed intention. A covenant by a lessee not to "mortgage, sell, assign or otherwise part with this present indenture of lease, or the premises hereby demised, or any part or parcel thereof," is not broken by a deposit of the lease, accompanied. by a letter of agreement that the depositee shall have a lien thereon " by way of equitable mortgage "-more especially if, by reason of the lease also containing a coveÂÂnant against sub-letting, it may be inferred that the primary intention of the parties to it was to protect the landlord from having a new tenant imposed upon him. Where a Plaintiff relied on a letter of deposit by way of equitable mortgage s a breach of a covenant against mortgaging, and an office copy of the memorial of the letter of deposit, executed by the alleged depositee alone, was offered and admitted in evidence without being objected to by the Defendant:- Held, per PALLES, C. B., that in the absence of any admission by the Befell-1 dant that the memorial should be treated as evidence of the letter of deposit, it was open to him, upon a motion to enter a verdict for the Plaintiff (pursuant to leave reserved generally, in case the Plaintiff was entitled to a direction), to contend that, no foundation having been laid for the reception of secondary evidence, there was no proof of the alleged equitable mortgage. A lease made in 1853 reserved the yearly rent of 556, payable half-yearly, and contained a power of distress in case such rent, or any part of it, should be in arrear ; and also a covenant (among others) by the lessee to pay it on the gale days. Then followed a clause of re-entry, in ease such rent, or any part of it, should be thirty-one days in arrear, and a proviso that if the lessee should perform " the several covenants, clauses, conditions, reservations and agreeÂÂments " thereinbefore on his part contained, the lessor would accept the " yearly sum of 278" in full satisfaction of the "yearly rent of 556." An ejectÂÂment having been brought for non-payment of 556, as due for the year endÂÂing 1st November, 1877, claiming the higher rent on the ground that the lessee, had not kept his covenant to pay or tender it on the gale days :- Held (reversing the decision below); that the tender of rent ad diem was not (1) Before BALL, C., PALLES, C. B., and DEASY, L. J. YoL. IV.] Q. B., C.P,, & EX. DIVISIONS. 439 necessary to entitle the lessee to the benefit of the proviso for the acceptance of the reduced rent. APPEAL by the Defendant from an order of the Queen's Bench Division, of the 4th of July, 1878, whereby the verdict directed for him at the trial was ordered to be changed into a verdict for the Plaintiff, and judgment entered for the Plaintiff. The action was one of ejectment for non-payment of rent, for which the sum of 556 2s. 6d. was claimed as due for the year endÂÂing the 1st of November,1877. The Summons and Plaint was issued on the 9th of November, 1877. The Defendant pleaded that' the total amount of rent due by him in respect of the lands sought to be recovered was 278 ls. 3d. only, which he lodged in Court with an undertaking to pay the Plaintiff's costs up to the time of such lodgment, when taxed and ascertained. The case was tried before the Lord Chief Justice of the Common Pleas Division at Trim, on the 5th of March, 1878. It appeared that the Defendant held the lands of Kilmore, county Meath, the subject of the ejectment, as tenant to the Plaintiff under a lease dated the 11th of August, 1853, the material provisions of which are fully stated in the judgÂÂment of the LORD CHANCELLOR, p. 442. It was alleged that, in the year 1864, the tenant made a deposit by way of equitable mortgage of the lease, to secure 1500, accompanied by a letter of deposit, in the terms mentioned at p. 443. The only evidence of the letter given at the trial, however, was an attested copy of the memorial executed by the grantee alone. No objection was made by the Defendant to the reception of this evidence. On the part of the Plaintiff it was contended that the equitable mortgage was a breach of the covenant against mortgaging contained in the lease ; that the non-payment of, or the omission to tender, the rent on the day it fell due was a breach of the covenant for payment of rent ; and that, therefore, the Plaintiff was not bound to accept the reduced rent, but was entitled to the higher rent as claimed by him. His Lordship directed a verdict for the Defendant, reserving leave to either party to move for judgment as he might be advised. By the order appealed from it was ordered that the verdict had for the Defendant be set aside, and a verdict and judgment be entered for the Plaintiff for the recovery of the lands, and of the sum of 556 2s. 6d. for rent, together with his costs of suit. 440 LAW REPORTS (IRELAND). [L. R. I. ,Appeal. Diracdonogh, Q. C., and J. A. Byrne, Q. C. (with them A. J. Hicolls), for the Appellant : The Defendant did not, by the deposit of his lease, violate his covenant against mortgaging it : Crusoe d. Blencowe v. Bugby (1); Doe d. Goodbehere v. Bevan (2) ; Doe d. Pitt v. Hogg (3) ; Kennard v. Futvoye (4) ; _Ex parte Domvile, in re Fowler (5). The right to the title-deeds goes with the estate in the lands : Malone v. .111iÂÂnoughan (6), following The Lord Buckhurst's Case (7); 2 Dart. V. & P. 731 (ed. 1876), citing Harrington v. Price (8) ; Goode v. BurÂÂton (9). [PALLES, C. B. It has always been held that there cannot be foreclosure of an equitable mortgage.] The covenant against mortgaging must refer to a legal mortgage : Church v. Brown (10). Title-deeds are not chattels, but descend with the inheritance and pass with it by conveyance without being named : Sugd. V. & P. 433 (ed. 1862) ; Smith v. ChichesÂÂter (11) ; Harrington v. Price (8) ; Philips v. Robinson (12). An equitable mortgage operates only in equity, and the creditor's rights vary according as it does or does not amount to a contract for a legal mortgage : Fisher on Mortgages, Introd. lxxiii (ed. 1868) ; see p. 5, ed. 1876. Here the letter of deposit does not contain any covenant to execute a legal mortgage. The meaning of the word " mortgage " in the covenant in this lease may be gathered from the expressions with which it is associated : see Broom's Legal Maxims, 588-593 (ed. 1870), as to Noscitur a sociis. The clause of re-entry here is associated with the reddendum of the smaller rent. The real contract was : " fulfil all the covenants in the lease, and you will only have to pay the smaller rent of 278 is. 3d." S. Walker, Q. C., and P. L. Dames, Q. C. (with them E. T. Bewley), for the Respondent : The rent reserved by this lease is a rent-service : Lord Ashtown (1) 2 Sir Wm. Blackst. 766. (7) 1 Rep. 1. (2) 3 M. & S. 353. (8) 3 B. & Ad. 170. (3) 1 C. & P. 160; S. C. 4 Dowl. (9) 1 Ex. 193. & Ry. 226. (10) 15 Yes. 265. (4) 2 GM 81. (11) 2 Dr. & W. 393, 401. (5) 14 Ir. Ch. R. 21. (12) 4 Taunt. 106. (6) 14 Ir. C. L. 540, 568. VOL. IV.] Q. B., C. P., & EX. DIVISIONS. v. White (1). A mortgage is defined in 2 Day. Prec., 549 (ed. 1869), •citing 4 Com. Dig. tit. Mortgage A, to be, " where things moveable, or immovable, as goods or land, are pledged as a security for reÂÂpayment of nioney." Here the land was so pledged, for an equitaÂÂble mortgagee can sell in the Land Court to realize his advance. The transaction here points to a pledging by security so as to involve a sale. The equity of redemption only exists in contemÂÂplation of a Court of Equity. The position of an equitable...