THE JURIST, VOLUME 9, PART 1, PAGES 1005-1006

Reports of Cases in the
HIGH COURT OF CHANCERY
and others during 1845.

VICE-CHANCELLOR SIR JAMES WIGRAM’S COURT.
HOLT v. DEWELL.— April 11 and 12; Nov. 22. [1845]

Notice—Priority of Incumbrancers.

A Sum of Stock, standing in Trustees’ Names, of which A. is the absolute beneficial Owner, is bequeathed by A. to B. One of the Trustees is the sole Executor of A. B. encumbers the Fund:— Held, that, before Assent, Notice of the Incumbrance must be given to the Executor, and Notice to the other Trustee alone is not enough.

Eliza Dewell, prior to the date of her will, purchased the sum of 333l. 6s. 8d. Consolidated Bank Annuities, which she invested in the names of Thomas Dewell and John Long as trustees, with a direction to them to pay the dividends thereof to Ann Kington for life, but without declaring any trust thereof after the death of the tenant for life. On the 9th December, 1826, Eliza Dewell made her will, containing (inter alia) the following bequest:— “The 10l. per annum in the 3l. per Cent. Consols, standing in the names of John Long, Esq., jun., and Thomas Dewell, in trust for Miss Ann Kington for her life, at her death to return to me, I give it after Miss Ann Kington’s death [1842] to Eliza Daniel for ever.” Upon the death of Eliza Daniel in the lifetime of the testatrix, the latter by a codicil to her will, dated the 30th October, 1828, gave and bequeathed the 10l. per annum which would revert to her by the death of Miss Ann Kington to her grandson, Philip Howe Daniel, and she appointed Thomas Dewell, one of the trustees of the fund, sole executor of her will and codicil, who, on the death of the testatrix, and in June, 1833, duly proved the same. In October, 1838, Philip Howe Daniel, the legatee of the fund, borrowed the sum of 200l. of the plaintiff, and, to secure that sum with interest, he executed a deed of assignment by way of mortgage, dated the 19th October, 1838, unto the plaintiff, his executors, administrators, and assigns, of the whole of his interest in remainder, under the codicil of Eliza Dewell, expectant upon the decease of Ann Kington, in the said sum of 333l.6s. 8d. 3l. per Cent. Consolidated Bank Annuities; and the deed contained a power of attorney to recover the said funds, and apply the same in payment of the mortgage-money, with interest. Previously to this mortgage, the plaintiff, [HOLT} by his solicitor, inquired of T. Dewell, one of the trustees of the fund, and also the sole executor of Eliza Dewell, whether any prior incumbrance existed upon the fund, and was informed in reply, that no such incumbrance had come to the knowledge of T. Dewell. Thereupon the mortgage was executed, and in November, 1838, notice thereof was given by the plaintiff’s solicitor to T. Dewell.

On the 17th November, 1842, Ann Kington, then Mrs. Taylor, the tenant for life of the fund, died, and soon afterwards the plaintiff applied to T. Dewell and J. Long for a transfer of the fund in payment of his mortgage debt; but the trustees refused to make the transfer, alleging that Philip Howe Daniel had in October, 1834, executed an assignment to the said J. Long and one R. Higgins of all his estate and effects, including the fund in question, upon certain trusts, for the benefit of his creditors. The plaintiff having thereupon filed his bill against T. Dewell, J. Long, R. Higgins, and Philip Howe Daniel, for payment of his debt and interest, and for a transfer of the fund, J. Long, by his answer, stated, that, on 26th June, 1834, a fiat in bankruptcy was issued against Philip Howe Daniel, under which he was adjudged a bankrupt, but that the fiat was afterwards annulled by consent of the creditors, in consideration of an agreement by the bankrupt to assign all his estate and effects to trustees for the benefit of his creditors; that, in pursuance of that agreement, and in consideration of the fiat having been annulled, Philip Howe Daniel, by indentures, dated 27th and 28th October, 1834, assigned the whole of his estate and effects to Long and Higgins, upon the trusts therein mentioned, for the benefit of P. H. Daniel’s creditors; that, in 1836, a suit was instituted to carry into effect the trusts of this indenture, and that such suit was still pending at the time Dewell received the notice of the plaintiff’s mortgage. Long also stated by his answer, that he had never acted as trustee of the fund of 338l. 6s. 8d. Consols, and admitted that Dewell had not received notice of the deed of October, 1834, till long after the plaintiff had given him notice of his mortgage; but submitted, that, inasmuch as he and Dewell were named as co-trustees of the fund, the latter must be held to have had notice in November, 1838, of the deed of October, 1834, which would, therefore, be entitled to priority over the plaintiff’s mortgage. At the hearing of the cause,

Temple and J. H. Palmer, for the plaintiff. —The notice which one of several trustees acquires from being himself the incumbrancer is not, in all cases, sufficient to give him priority, where he does not communicate it to his co-trustee. (Timson v. Ramsbottom, 2 Keen, 53). Dewell, being the sole executor of the testatrix, was the proper person to whom to give notice, although the fund remained in the names of Dewell and Long. The plaintiff, therefore, having given notice to Dewell, which Long had omitted to do, is clearly entitled to priority.

K. Parker and Saunders, for J. Long, contended, that the notice which Long had as a trustee of the creditor’s deed gave that deed priority over the plaintiff’s; (Smith v. Smith, 2 Cr. & M.231; Meuz v. Bell, 1 Hare, 73); and, moreover, that the suit for carrying out the trusts of the creditor was a ‘lis pendens’, [Latin - pending action] amounting to notice to Dewell, if necessary.

Bacon, for Higgins, said, that the plaintiff ought to have given notice to Long as well as to Dewell, in order to perfect his security.

Tinney and Bennett, for Thomas Dewell.

Parsons, for Philip Howe Daniel.

April 11.—Sir JAMES WIGRAM, V. C., said, that the question of assent did not appear to be raised upon the pleadings. In the absence of any assent, notice to the trustees, in whose name the fund stood, would not have been sufficient without notice to the executor. Were notice to the trustees sufficient, notice to one of them would be notice to all, so long as that one was alive. Lord Langdale, in Timson v. Ramsbottom, had certainly made some observations which might bear a contrary interpretation, but his judgment in that case proceeded entirely on the death of the trustee. With regard to the ‘lis pendens’, that being only a general suit, and not a claim for this specific legacy, did not amount to notice of the defendant’s charge. He would consider the point as to the assent.

April 12.—Sir JAMES WIGRAM, V.C., said, that, upon looking into the pleadings, he found that the allegations in the bill and answer did not state a case of assent by the executor. The order, therefore, to make would be, that, it not appearing that the legacy had been assented to at the time of the plaintiff’s mortgage, the notice which he gave to the executor Dewell was sufficient, and he must, therefore, be declared the first incumbrancer. — Decree for the plaintiff. Account directed. Further directions and costs reserved.

Nov. 22.—The cause came on for further directions on the Master’s report, finding that the plaintiff’s principal, interest, and costs exceeded the amount of the mortgaged fund; whereupon
HIS HONOR ordered the fund to be paid over to the plaintiff, who was to pay the costs of Dewell and Higgins in the first instance, and that the defendant Long was to repay such costs to the plaintiff, and also the balance of the plaintiff’s own costs.