Munster and Leinster Bank Ltd, v McGlashan

CourtSupreme Court (Irish Free State)
Judgment Date26 October 1937
Date26 October 1937

Supreme Court.

Supreme Court.

Munster and Leinster Bank, Ltd., v. McGlashan

Vendor and purchaser - Vendor's lien for unpaid purchase money - Consideration, a sum in gross plus an annuity - Annuity in arrears - A charge upon the land - Title deeds in the possession of the purchaser - Subsequent equitable mortgage by deposit - Payment of rent by equitable mortgagee - Salvage payment - Priorities - Whether lien to rank before equitable mortgage by deposit - Abandonment of lien - Waiver.

Motion on Notice.

The plaintiffs, the Munster and Leinster Bank, Ltd., instituted a mortgage suit by summary summons issued on the 18th July, 1930, to enforce an equitable mortgage by deposit of the title deeds relating to certain leasehold lands and premises at Tallaght, County Dublin, made by Angela McGlashan with the plaintiffs to secure all moneys then due or thereafter to become due by Angela McGlashan to them. The primary order in the suit was made on 3rd November, 1930, and stated the amount then due to be £406 7s. 10d. for principal and £1 8s. 0d. for interest, and declared the same to be well charged on the lands. The usual order for sale in default of payment was made, and the usual accounts and enquiries were directed to be taken by the Examiner.

The lands and premises were sold by public auction to one, Martin Molloy, for £1,600 0s. 0d. Martin Molloy, by a requisition, asked that one, Mrs. Lydon, should join in the conveyance, she being a person who, upon the taking of accounts and enquiries by the Examiner, had made a claim that she was entitled to a lien and equitable interest and charge for unpaid purchase money on the said lands in priority to the plaintiffs' equitable mortgage. Mrs. Lydon refused so to join and the plaintiffs brought a motion before the Court to have the matter determined. On the hearing of this motion an order was made, Mrs. Lydon consenting, that her claim should be considered as against the purchase money instead of against the lands. The sale was completed and the purchase money lodged in Court.

Mrs. Lydon's claim arose in the following circumstances:—

On the 15th November, 1928, Mrs. Lydon was absolutely entitled to one moiety of the said leasehold lands. On that date she assigned by deed all her estate and interest in the lands to her sister, Mrs. McGlashan, the defendant, in consideration, partly, of the payment by Mrs. McGlashan of certain scheduled debts due by Mrs. Lydon to various people, amounting to approximately £420 0s. 0d., and, partly, of an annuity at the rate of £1 10s. 0d. per week to be increased to £2 0s. 0d. per week upon the happening of a certain event (which, in fact, did not happen). Mrs. Lydon handed over the title deeds to Mrs. McGlashan. The annuity was paid until the 9th June, 1930, when it began to fall into arrear.

In the meantime, after the execution of the deed of 15th November, 1928, Mrs. McGlashan had, on the 6th December, 1928, deposited with her bankers, the plaintiffs, the said title deeds, and the plaintiffs had brought this mortgage suit, and the premises had been sold, and the matter came before the Examiner.

The Examiner decided that Mrs. Lydon was entitled to a lien in respect of the arrears of annuity and the future gales thereof. The matter came before Meredith J. on a notice of motion by the plaintiffs to have determined (inter alia) whether the covenant by Angela McGlashan contained in the assignment of 15th November, 1928, to pay the said annuity, operated to create a charge on the lands in favour of Mrs. Lydon. The motion came before Meredith J. on 23rd August, sitting as Vacation Judge, and again on 19th October, 1933.

The plaintiffs appealed to the Supreme Court (2).

The appeal was heard on 6th and 7th June, 1934, and, by an order, dated 7th June, 1934, the Supreme Court

ordered that the matter be referred back to the Examiner to make certain further enquiries, and in particular into the nature, substance and priority of the claim of Mrs. Lydon to be entitled to a lien upon the funds in Court.

The Examiner made up his certificate dated 24th July, 1936, whereof the relevant portion is as follows:—

"Subject to . . . the claim of the plaintiff bank on foot of payments of rent made by them to save the said premises from eviction the said Teresa F. Lydon is entitled to a vendor's lien on the said premises for the unpaid arrears of the said annuity and for the future gales thereof."

The plaintiffs brought a motion to vary this certificate by placing Mrs. Lydon's claim after the plaintiffs' claim on foot of their equitable mortgage. The motion came before Meredith J. on October 26th, 1936.

The plaintiffs appealed to the Supreme Court (1).

A vendor's lien on lands sold to secure the unfulfilled obligation of the purchaser is independent of any contract between the parties and exists, whether the consideration is an annuity or a sum of money to be paid at the time of the transfer or subsequent to it.

The giving of some particular and special security for the payment of the purchase money may be a complete performance of the purchaser's obligation, but the mere insertion into the conveyance of a covenant for the payment of the purchase money is not a circumstance from which an agreement for the substitution of the security of the covenant for the usual vendor's lien can be inferred.

A vendor's lien will rank in priority to a subsequent equitable mortgage by deposit when the mortgagee had notice.

A payment of rent by such equitable mortgagee to avoid the eviction of the lands charged ranks as a salvage claim and in priority to a vendor's lien.

So held by Meredith J. and affirmed by the Supreme Court.

Cur. adv. vult.

Meredith J. :—

The conveyance of 15th November, 1928, states in clear terms the agreement in pursuance of which the lands therein described were assigned to the defendant, Angela McGlashan. The recital is as follows:—

"And whereas the said Teresa F. Lydon has agreed with her sister, the said Angela McGlashan, to sell and convey to her all her right, title, estate and interest, both in possession and reversion, including the licence attached to the said licensed house of the said Angela McGlashan, her executors, administrators and assigns, in...

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