Re Stewart

• Jurisdiction: Ireland
• Judgment Date: 09 December 1925
• Date: 09 December 1925
• Court: Supreme Court (Irish Free State)

Supreme Court.

In re Stewart

In the MATTER of MOSES STEWART, A Bankrupt (1)

Land Purchase Acts - Holding subject to land purchase annuity - Restriction on mortgaging or charging - Charge in excess of permitted amount - Irish Land Act, 1903 (3 Ed. 7, c. 37), sect. 54, sub-s. 3 - Repeal of restriction by the Land Act, 1923 (No. 42 of 1923), sect. 78 - Effect of repeal - Repeal not retrospective - Interpretation Act, 1889 (52 & 53Vict. c. 63), sect. 38, sub-s. 2 (a), (b), (c) - Vendor's lien - Other security taken - Abandonment of lien.

Appeal from an order made by Murnaghan J. on July 18th, 1924, by which he held that the appellants' charge on certain registered lands was subject to the restriction contained in sect. 54, sub-s. 3, of the Irish Land Act, 1903 (3 Ed. 7, c. 37).

The appellants, William Allison and Robert J. Allison, had been the owners of three farms of land in Derryvane, County

Donegal. One of the farms, containing 27 a. 3 r. 27 p., was held under a fee-farm grant at the yearly rent of £14 1s. 3d. The other two farms were held in fee-simple subject to annuities payable to the Irish Land Commission. One of these farms contained 15a. 3 r. 30 p. and was subject to an annuity of £7 14s. 8d. the other contained 14a. 3r. 30p. and the annuity was £6 10s. 8d..

On November 4th, 1921, Moses Stewart purchased the three farms from the appellants for a bulk sum of £1,510. The purchaser paid £560 in cash, leaving the balance of £950 to remain outstanding on the security of a mortgage and a deed of charge on the purchased lands. This £950 was apportioned by securing £550 thereof by a mortgage on the lands held under the fee-farm grant and £400 by a charge on the lands which were subject to the Land Purchase annuities.

On October 31st, 1923, Moses Stewart was adjudged bankrupt on his own petition. On January 2nd, 1924, the appellants, acting under their powers of sale as mortgagees, sold all the three farms of land by public auction for the sum of £950. The Official Assignee submitted that as to £400, part of the proceed of the sale, being the amount appropriated and retained by the appellants in satisfaction of their charge on the two farms which were subject to the Land Purchase annuities, they were only entitled to a valid charge on these lands for £142 13s. 4d., a sum representing ten times the combined amounts of the two purchase annuities, and that the balance should be made available for the benefit of the bankrupt's general estate. By motion dated July 5th, 1924, the Official Assignee asked the Court for a declaration to this effect. By his order of July 18th, 1924, Murnaghan J. made the declaration sought. The appeal was from that order.

Sect. 54, sub-s. 3, of the Irish Land Act, 1903 (3 Ed. 7, c. 37), provides that the proprietor of a holding, for the purchase of which the Land Commission have made an advance under the Land Purchase Acts, shall not, without the consent of the Land Commission, mortgage or charge the holding for any sum or sums exceeding in the aggregate ten times the amount of the purchase annuity, and that every instrument of mortgage or charge by which the holding is charged with any larger sum shall be null and void as to the excess. By sect. 78 of the Land Act, 1923 (No. 42 of 1923), passed on August 9th, 1923, sect. 54, sub-s. 3, of the Irish Land Act 1903, is repealed.

In 1921 the purchaser of three farms, of which one was held under a fee-farm grant, and the other two had been purchased under the Land Purchase Acts, and were held subject to Land Purchase annuities aggregating £14 5s. 4d., paid therefor £560 in cash, and the balance of the purchase-money, amounting to £950, was secured, as to £550 thereof by a mortgage on the farm held under the fee-farm grant, and as to the remaining £400 by a charge on the two farms held subject to the Land Purchase annuities. On October 31st, 1923, the purchaser was adjudged bankrupt. On January 2nd, 1924, the vendors, acting under their powers of sale as mortgagees, sold the three farms for £950, and appropriated £400 in satisfaction of their charge on the two farms subject to the Land Purchase annuities. It was submitted by the Official Assignee in Bankruptcy that, as regards the charge for £400, the vendors were entitled to retain only £142 13s. 4d., a sum representing ten times the amount of the annuities. On behalf of the vendors it was contended that the repeal effected by the Land Act, 1923, removed the restriction on the amount of their charge, and that they were entitled to retain the full amount. Alternatively, they relied upon a vendor's lien.

Held (affirming Murnaghan J.), that the instrument of charge being, by virtue of sect. 54, sub-s. 3, of the Irish Land Act, 1903, null and void from the moment of its creation as to the excess over the permitted amount, the repeal of that sub-section by sect. 78 of the Land Act, 1923, did not make valid the charge for such excess.

Held also that the effect of sect. 54, sub-s. 3, of the Irish Land Act, 1903, upon the vendor's charge was preserved by sect. 38, sub-s. 2, of the Interpretation Act, 1889.

Held further, that the transaction did not give rise to a vendor's lien for unpaid purchase money. And that even if this view were incorrect, the vendors, by taking the mortgage securities, evidenced their intention of abandoning their lien.

Accordingly the vendors were only entitled to a valid charge for £142 13s. 4d. on the farms subject to the Land Purchase annuities, and they were ordered to lodge with the Official Assignee in Bankruptcy the balance of their charge for £400.

Kennedy C.J. :—

Moses Stewart, described as a farmer of Knowhead, Derryvane, in the County of Donegal, was, on the 31st day of October, 1923, adjudged bankrupt on his own petition. The Official Assignee in Bankruptcy is the respondent in this appeal.

At the date of his said adjudication Moses Stewart was seised or possessed and in occupation of three parcels of land, viz.:—

(a) Part of the lands of Derryvane, in the Parish of Templemore, Barony of Inishowen and County of Donegal, containing 27 a. 3 r. and 27 p., Statute Measure, held under a fee-farm grant, dated the 20th February, 1900, from the Earl of Shaftesbury to William Allison and Robert James Allison, subject to the yearly fee-farm rent of £14 1s. 3d..

(b) Part of the said lands of Derryvane in the same Barony and County, containing 15a. 3 r. and 30 p., Statute Measure, held in...