Samuel Kissock and Mary Currie, and The Vendor and Purchaser Act, 1874

• Jurisdiction: Ireland
• Judge: Barton J.
• Judgment Date: 17 February 1915
• Court: Chancery Division (Ireland)
• Date: 17 February 1915

In the Matter of Samuel Kissock and Mart Currie, and the Vendor and Purchaser Act, 1874

Barton J.

Appeal.

CASES

DETERMINED BY

THE CHANCERY DIVISION

OF

THE HIGH COURT OF JUSTICE IN IRELAND

AND BY

THE IRISH LAND COMMISSION,

AND ON APPEAL THEREFROM IN

THE COURT OF APPEAL.

1916.

Vendor and Purchaser — Agreement for Sale of Leaseholds — Title — Judgment Mortgage affecting the Premises registered after Registration of Purchase Agreement, but before Conveyance — Blot on Title.

A vendor agreed with a purchaser for the sale of leaseholds. The investigation of the title disclosed an unsatisfied judgment mortgage affecting the premises, and registered prior to the conveyance to the vendor. The purchase agreement, pursuant to which the conveyance to the vendor had been made, was registered prior to the registration of the unsatisfied judgment mortgage.

The purchaser having by his requisitions required that the vendor should procure a release or satisfaction of the judgment mortgage, and the vendor having declined to do so:

Held, by the Court of Appeal, O'Brien L.C. and Moriarty L.J., dissentiente Cherry L.C.J. (affirming the decision of Barton J. on a vendor and purchaser summons), that a good title had not been shown.

But held by O'Brien L.C. and Moriarty L.J., that the questions involved were not proper to be decided on a vendor and purchaser summons.

Position of judgment creditors prior to and since the Judgment Mortgage Act, 13 & 14 Vict. c. 29, where a vendor continues in possession between an agreement for sale and actual conveyance, discussed.

Summons under the Vendor and Purchaser Act.

By an agreement in writing, dated September 11th, 1914, the vendor agreed to sell to the purchaser a house, situate in Ballymena, held under lease, dated the 28th September, 1901, for a term of ninety-one years, from May 1st, 1901, subject, in conjunction with adjoining premises, to the yearly rent of £3 12s., for the sum of £150. It was agreed that a deposit of £20 should be paid by the purchaser, and that good title to the premises should be shown by the vendor from the date of this lease. The investigation of the title disclosed that the vendor had bought the premises from Minnie K. Hall, under an agreement, dated the 12th August, 1911, whereby he agreed to buy, at the price of £125, the premises, of which this house formed part, subject to a mortgage for £475. The conveyance from Minnie K. Hall to the vendor was dated the 28th August, 1911. The testatum witnessed that the assignment was made in pursuance of the agreement of the 12th August, 1911, and in consideration of the sum of £125, “on or before the execution of these presents paid,” the receipt of which was acknowledged. The agreement of the 12th August, 1911, was registered on the 15th August, 1911. The conveyance of the 28th August, 1911, was also registered. The hand searches disclosed that a judgment had been registered against Minnie K. Hall, on the 24th August, 1911, and remained unsatisfied. The present purchaser made the usual requisitions with reference to the judgment mortgage. The vendor replied: “This judgment having been registered subsequent to the registration on the 15th August, 1911, of the purchase agreement between Miss Hall and the vendor, of the 12th August, 1911, the vendor is advised that this judgment does not charge or affect his title to the property. Therefore, the vendor does not consider it an incumbrance, and declines to obtain a release, re-assignment, or satisfaction of same.” The purchaser thereupon issued the present summons for an order—1, that it might be declared that the objections of Mary Currie to the title to the premises comprised in the above-mentioned contract had not been sufficiently answered, and that a good title to the premises had not been shown; 2, that the vendor must procure the release or satisfaction of the judgment of the 21st August, 1911, registered in the Registry of Deeds on the 24th August, 1911; 3, that, in the alternative, Samuel Kissock be ordered to return the deposit of £20.

It appeared from the affidavits used at the hearing, that at the date of the agreement of the 12th August, 1911, Minnie K. Hall was indebted to the vendor in the sum of £136 7s. 4d., and that it was agreed between them that he should purchase for the sum of £125 the equity of redemption in the premises, which were subject to a mortgage for £475, and that the sum of £125 should be retained by him in part satisfaction of the debt due by her to him. The vendor also referred to an account stated between him and Minnie K. Hall, on the 23rd November, 1911, showing a number of items charged against her, and referring to a bill of sale, dated the 4th August, 1911, against her furniture. It also appeared that on the 9th July, 1912, the vendor paid off the mortgage debt of £475, and obtained a re-assignment from the mortgagees of the premises.

The purchaser, in a replying affidavit, stated that she was not aware until she read the vendor's affidavit that the sum of £125, the consideration in the deed of 28th August, 1911, was a debt due and owing by Minnie K. Hall to the vendor existing prior to the date of the assignment; that no notice thereof was given to her; that same was inconsistent with the terms of the deed of assignment; that, if the statement of the vendor to that effect was true, it would suggest that the assignment was for a past consideration, or that it was made to secure a fraudulent preference for the vendor against the other creditors of Minnie K. Hall.

Megaw, for the purchaser:—

The question is whether a judgment mortgage on a vendor's interest, registered after the registration of the agreement for sale of an equity of redemption in lands, but before completion, takes priority over the conveyance to the purchaser. The effect of a judgment mortgage is to take out of the debtor any beneficial interest in the lands that the debtor had in him: Tevlin v. Gilsenan (1). The vendor, Hall, up to completion had a substantial interest in the property agreed to be sold: Rayner v. Preston (2). The deed, Hall to Kissock, was apparently for cash, and not for a past debt. The purchase-money could not be regarded as appropriated to the past debt till completion. A vendor is entitled to the rents and profits till completion, and can keep the lands if the conditions are not fulfilled. The judgment mortgage is a blot on the title, which ought to be removed by the vendor: Heeney v. White (3).

H. R. Poole, for the vendor:—

Hall's interest in the lands being only equitable, the agreement for sale without any conveyance was sufficient to vest in Kissock the equitable estate: Fry on Specific Performance, p. 451, par. 911. A purchaser, who is at the time seised of the legal estate as mortgagee, is not bound by judgments subsequently entered up: Sugden, Vendors and Purchasers, p. 518. If the purchase-money is paid before the registration of the judgment mortgage, the purchaser has priority over the creditor's interest in

the land: Williams, Vendors and Purchasers, p. 558; Whitworth v. Gaugain (1); Finch v. Winchelsea (2). The subsequent evidence shows that there was no substance in the purchaser's objection, and the title is one which the Court will consider not to be doubtful: Fry, on Specific Performance, p. 440; Mogridge v. Clapp (3); Spencer v. Topham (4); Smith v. Death (5). Judgments against mere trustees are no objection to the title; Dobbs, Judicial Sales, p. 46, note q.

H. R. Poole, for the vendor:—

Barton J.:

This is a purchaser's summons to have it declared that the purchaser's objections to the title to the premises comprised in a contract of the 11th September, 1911, have not been sufficiently answered, and that a good title to the said premises has not been shown, and for a declaration that the vendor must procure a release or satisfaction of the judgment of 21st August, 1911, registered in the Registry of Deeds on the 26th August, 1911, and in the alternative that he be ordered to return the deposit of £20, with interest, from the date of the agreement.

The agreement was for the sale for £150 of a house in Ballymena, held, with other premises, under a lease for a term of years. The sale was to be completed on 1st October, 1914. The vendor was to make out good title to the premises from the date of the lease; and was to furnish hand searches in the Registry of Deeds affecting said property from the date of the lease to the date of completion.

The investigation of title disclosed that the vendor had bought the premises, of which the house formed part, from his cousin, Miss Minnie Knox Hall, under an agreement made 12th August, 1911, whereby he agreed to buy at the price of £125, the premises of which this house formed a part, subject to a mortgage for £475. The purchase was to be completed on 31st August, 1911.

The agreement was completed by deed, dated 28th August, 1911, the testatum of which witnessed that the assignment was

made in pursuance of the agreement of 12th August, 1911, and in consideration of the sum of £125, “on or before the execution of these presents paid,” the receipt of which was...