The Estate of William L. Bobbett and Joseph Bobbett, Owners; Agnes Nugent, Petitioner

• Jurisdiction: Ireland
• Judge: Ross, J.
• Judgment Date: 18 May 1904
• Court: Chancery Division (Ireland)
• Date: 18 May 1904

In the Matter of the Estate of William L. Bob-Bett and Joseph Bobbett

Owners

and

Agnes Nugent

Petitioner

Ross, J.

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.

1904.

Conflicting equities — Priority — Equitable mortgage — Subsequent legal mortgage — Lis pendens — Locke King's Act — Breach of trust not amounting to fraud — Cestui que trust bound by acts of trustees.

A died seized and possessed of lands, including a denomination X, and indebted to his Bank in a sum of £10,000, to secure which all his title deeds, including those of X, had been deposited with the Bank by way of equitable mortgage. A made a will, whereby, in effect, X became the property of his eldest son B. He left other lands to his two younger sons and pecuniary legacies of £1000 each to his three daughters, one of whom was the petitioner. He appointed B and two others executors and trustees, to whom probate was granted. Within nine months after his death the executors paid off the testator's debt to the Bank, and obtained the title deeds, giving a receipt to the Bank for them; but on the same day the title deeds of X were re-deposited by B with the Bank to secure a past debt of his own and future advances. Upon this large advances were made by the Bank to B, far more than sufficient to exhaust the value of X. A suit, instituted in the Chancery Division to establish the right of the legatees to be paid out of X, was registered as a lis pendens, and immediately afterwards the Bank took a legal mortgage of X from B:—

Held, that, under Locke King's Act, as each payment was made an equity arose in favour of the legatees in the nature of an equitable charge against X, to be recouped the amount necessary for payment in full of the legacies which the remaining personal estate was insufficient to discharge.

But held also, following In Re Ffrench's Estate (21 L. R. Ir. 283) And In Re Sloane's Estate ([1895] I I. R. 146), that the conduct of the trustees, though constituting a breach of trust, was not fraudulent, and that, irrespective of the legal mortgage, the Bank, as purchasers for value without notice, obtained by their equitable mortgage priority over the earlier equitable charge of the legatees.

Shropshire Union Railways And Canal Co. V. Reg. (1. R. 7 H. L. 496) Distinguished.

Objection by the petitioner to the draft final schedule of incumbrances which, as settled by the examiner, gave priority to the equitable and legal mortgages held by the National Bank on the lands of Navanstown, county of Meath, over the petitioner's claim under the judgment of the Right Honourable the Vice-Chancellor, dated the 8th May, 1901, in the action of Bobbett v. Bobbett.

William Bobbett, deceased, father of the owner and of the petitioner, was in his lifetime a farmer on an extensive scale in the county of Meath, and at the time of his death, which occurred on the 28th March, 1888, was possessed of, and entitled to, several valuable farms in the county of Meath, including the lands of Navanstown with which the objection in the present case was conversant. He also left considerable personal estate chiefly consisting of cattle, and a policy of insurance on the life of His Majesty King Edward VII. He had made a will dated the 21st August, 1884, and three codicils thereto, under which his eldest son, William Lawrence Bobbett, became entitled to Navanstown; other farms were devised to his younger sons, Joseph and Thomas Walter, and legacies of £1000 each, payable at twenty-one years of age or marriage, were bequeathed to three of his daughters, Elizabeth, Agnes (the petitioner in the present matter), and Helen. The three sons were named residuary devisees and legatees. The testator appointed his son, William Lawrence Bobbett, his son-in-law, Matthew Lee, and Hubert C. West, a solicitor, trustees and executors of his will, to all of whom probate was granted.

All the interest of Thomas Walter Bobbett was subsequently acquired by Joseph Bobbett.

The personal estate of the deceased was amply sufficient to have paid the pecuniary legacies and his unsecured debts, which were small in amount. The testator was, however, at the time of his death indebted to the National Bank in a sum of £10,000, as security for which they held the title deeds of all his lands, including Navanstown.

The executors realized all the testator's personal estate, except the policy of insurance, and out of the proceeds discharged, by instalments, the testator's debt to the Bank, the last instalment being paid on the Sth January, 1889. On the 13th November, 1890, the three executors called at the Bank, and got up all the title deeds. On the same day William Lawrence Bobbett redeposited the title deeds of Navanstown with the Bank to secure all sums then due by him personally to the Bank or thereafter to become due. At the date of the present proceedings, upwards of £15,000 was claimed by the Bank to be due on this security, far exceeding the value of the lands, which were estimated as worth, at most, about £5000. The only evidence forthcoming as to what occurred at this interview was the security book of the Bank. The then joint-managers, as well as Lee and West, were deceased; and William Lawrence Bobbett, who was in completely insolvent circumstances, was unable to give any coherent account of what precisely occurred, and was not examined.

The daughters of the testator were all under the age of twenty-one at the time of his death. When Elizabeth came of age in December, 1888, she asked for payment of her legacy, and was met with unsatisfactory excuses. She then commenced an action in the Chancery Division on the 16th June, 1891, against the three executors and Joseph and Thomas Walter Bobbett, seeking for the administration of the testator's real and personal estate, a special inquiry as to what portion of the personal estate was applied in discharging sums primarily payable out of the lands, and a special declaration that the lands were bound to recoup the personal estate in the amount so applied. Navanstown was specifically mentioned in the statement of claim as part of the lands against which relief was sought. The action was registered as a lis pendens on the 16th June, 1891, and duly re-registered. On the 6th July, 1891, William L. Bobbett executed a legal mortgage of Navanstown to the Bank. Defences were delivered in Bobbett v. Bobbett, and the action came on for trial, when the Vice-Chancellor on the 21st November, 1891, ordered the administration of the real and personal estate, and directed the special inquiry in the terms prayed for by the statement of claim. Before the accounts were taken at Chambers, the executors paid Elizabeth Bobbett her legacy with interest and costs, and no further proceedings were taken in the suit until Agnes Bobbett came of age in 1898. She married James Nugent, and they in turn applied to be paid, but without success. On the 3rd July, 1899, Mrs. Nugent applied for, and obtained, carriage of the proceedings in Bobbett v. Bobbett. The accounts were taken, and the Chief Clerk certified that William L. Bobbett and Hubert C. West, the surviving executors and trustees (Lee having previously died), were indebted to the testator's estate in respect of the personal estate in a sum of £5926 8s. 7d., and in respect of rents and profits of the real estate received by them in a further sum of £2928 6s. 1d., and that £10,000, primarily payable out of the real estate, or chattels real, specifically bequeathed, had been paid by the executors out of personal estate not specifically bequeathed.

By his judgment, on further consideration, dated 8th May, 1901, the Vice-Chancellor inter alia declared that the lands comprised in the equitable mortgage from the testator William Bobbett to the National Bank were bound to recoup the testator's personal estate for all sums paid thereout on foot of the said equitable mortgage, amounting to £10,000, and he ordered the said lands, including Navanstown, to be sold in the Court of the Land Judge. By consent of the Bank, who had a claim thereon as equitable mortgagees for executorial expenses, the policy of insurance was also ordered to be sold, the surplus proceeds of sale after satisfying the Bank's claim to be brought into Court. This was afterwards done, and the net surplus paid in part satisfaction of the legacies to Mrs. Nugent and Helen Bobbett, leaving about £700...