O'Sullivan v Loughnan

JurisdictionIreland
CourtSupreme Court (Irish Free State)
Judgment Date29 Oct 1927

Supreme Court.

O'Sullivan v. Loughnan
EUGENE O'SULLIVAN
and
JOHN MAHER LOUGHNAN

Revenue - Stamp duty - Sufficiency - Mortgage - Security for future advances - Unlimited amount - Security "available for such an amount only as the ad valorem duty impressed thereon extends to cover" - Collateral security - Alteration of stamp duty - Stamp Act, 1891 (54 & 55 Vict. c. 39), sects. 1, 11, 15, sub-sects. (1) and (2), 86, 87, 88, sub-sect.(2), Sch. I - Revenue Act, 1903 (3 Ed. 7, c. 46), sect. 7.

Application to vary the certificate of the Chief Clerk.

The plaintiff, Eugene O'Sullivan, by originating summons applied for an account of the moneys due on foot of two mortgages, dated 12th July, 1910, and the 13th April, 1912, and made between the defendant, John Maher Loughnan, of the one part, and the National Bank, Limited, of the other part, whereof the benefit was transferred to the plaintiff by an indenture dated the 27th day of February, 1919, and made between the said National Bank, Limited, of the one part, and the plaintiff of the other part, and for the sale of the lands comprised therein. The usual primary decree had been made, and the Chief Clerk had certified the amount due to the plaintiff. The defendant moved to vary the Chief Clerk's certificate, 1, by declaring that"the total amount now or at any time due or payable under or secured by the mortgage of the 12th July, 1910, and the premises thereby charged, does not, and never did, exceed the sum of £500; and, 2, by declaring that the total amount now or at any time due or payable under or secured by the mortgage of the 13th April, 1912, and the premises thereby charged, does not, and never did, exceed the sum of £300." The further facts are fully stated in the judgment of Johnston J.

The defendant appealed to the Supreme Court (4).

Sect. 15, sub-sect. 1, of the Stamp Act, 1891, provides that, save where other express provision is made in the Act, any unstamped or insufficiently stamped instrument may be stamped after execution on payment of the unpaid duty and a penalty therein prescribed. Sub-sect. 2 requires that an instrument (unless written upon duly stamped material) shall be duly stamped with the proper ad valorem duty before the expiration of 30 days after it is first executed (except in certain cases).

Sect. 88, sub-sect. 1, enacts: "A security for the payment or repayment of money to be lent, advanced, or paid, or which may become due upon an account current, either with or without money previously due, is to be charged, where the total amount secured or to be ultimately recoverable is in any way limited, with the same duty as a security for the amount so limited." Sub-sect. 2: "Where such total amount is unlimited, the security is to be available for such an amount only as the ad valorem duty impressed thereon extends to cover, but where any advance or loan is made in excess of the amount covered by that duty the security shall for the purpose of stamp duty be deemed to be a new and separate instrument, bearing date on the day on which the advance or loan is made."

A defendant in proceedings which had been instituted against him for an account of the moneys due on certain mortgages and for the sale of the lands comprised therein (the mortgages being for unlimited amounts, to secure moneys then due by the defendant and future advances), contended, for the purpose of establishing that the mortgages did not exceed certain amounts, that when a further advance was made in excess of the amount covered by the stamp duty, the original mortgage must be stamped within 30 days from the advance with ad valorem duty in respect of the excess, and that, if it was not done within such 30 days, it could not be done afterwards, as sect. 15, sub-sect. 1, of the Act did not apply, the only remedy being the execution of a new mortgage.

Held, affirming Johnston J., that defendant's contention was unsustainable.

The second clause of sub-sect. 2 of sect. 88 is a provision extending the time from the date of execution of the mortgage itself within which it is to be stamped to cover the further advance, namely, to a period of 30 days from the making of the advance: that was to say, there is not a new notional instrument, but the original deed is for this purpose deemed to be executed on the day of the advance, and as if limited to the amount of the advance, and as if not previously stamped in respect of any other sum.

The stamp duty on certain mortgages held by the Supreme Court, affirming Johnston J., to be correct.

Cur. adv. vult.

Johnston J. :—

This case comes before me by way of appeal from the Chief Clerk, on an application to vary his certificate. The defendant seeks a declaration that "the total amount now or at any time due or payable under or secured by the mortgage of 12th July, 1910, and the premises thereby secured, does not, and never did, exceed the sum of £500." A similar declaration is asked with reference to a mortgage deed of April 13th, 1912.

These mortgages were originally impressed with stamp duty to the amount respectively of 15s. and 7s. 6d. The defendant's case is that these deeds, purporting, as they did, to be a continuing security for an unlimited amount, were, in the language of sect. 88, sub-sect. 2, of the Stamp Act, 1891, "available for such an amount only as the ad valorem duty impressed thereon extends to cover." Subsequently — namely, on March 3rd, 1916 — the deeds, the second of which, I may say, is indorsed on the back of the first, were impressed with an "as valorem duty paid" stamp to the amount of £4 2s. 6d. The argument on behalf of the defendant is that the deeds are valid for the amount only that the stamp duty as originally impressed would cover, and the case of Morgan v. Pike(1) is relied upon in support of that proposition.

It appeared that the defendant owed the National Bank, Limited, a large sum on foot of a current account, and accordingly he, on March 18th, 1910, assigned to the bank the Royal Victoria Hotel, Killarney, of which he was in occupation as tenant, to secure the total amount then owing and any further advances to an unlimited amount. This deed was impressed with stamp duty to the amount of £4 2s. 6d. (which more than covered the amount of the debt). Subsequently the defendant executed the two further mortgage deeds (which purported to be made by...

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