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		Equity - From: 1849 To: 1899 This page lists 143 cases, and was prepared on 21 May 2019. Â Attorney General v Brown (1849) 3 Ex 662 1849 Equity 1 Citers Â Parkin v Thorold [1851] EngR 542; (1851) 2 Sim NS 1; (1851) 61 ER 239 2 Jun 1851 Equity, Land, Contract A purchase was to be completed on the 25th October. Before that, day arrived the purchaser, at the vendor's request, extended the time to the 5th of November. The title, however was not completed on that day. Held, that the purchaser was at liberty to abandon the contract. 1 Citers [ Commonlii ] Â Maxwell v Maxwell (1852) 2 De G M and G 705 1852 Equity, Wills and Probate The court rejected a request to apply the doctine of election despite evidence that the testator might have disapproved of the result. 1 Citers Â Â Pyrke v Waddingham; ChD 1852 - (1853) 10 Hare 1; [1852] EngR 792; (1852) 10 Hare 1; (1852) 68 ER 813 Â Hoghton v Hoghton (1852) 15 Beav 278; [1852] EngR 446; (1852) 15 Beav 278; (1852) 51 ER 545 16 Apr 1852 CA Romilly MR Contract, Equity, Litigation Practice When a person has made a large voluntary disposition the burden is thrown on the party benefitting to show that the disposition was made fairly and honestly and in full understanding of the nature and consequences of the transaction. Romilly MR discussed the "sacred" nature of "without prejudice" negotiation and that he would disregard "admissions made solely for the purpose of compromise". 1 Citers [ Commonlii ] Â Horton v The Westminster Improvement Commissioners [1852] EngR 729; (1853) 7 Exch 911; (1852) 155 ER 1220 12 Jun 1852 Estoppel, Equity 1 Cites [ Commonlii ] Â Â Patching v Dubbins; 1853 - (1853) Kay 1; [1853] EngR 894; (1853) 69 ER 1 Â Â Boyse v Rossborough; 5-Dec-1853 - [1853] EngR 1056; (1853) Kay 71; (1853) 69 ER 31 Â Stone v Godfrey [1853] EngR 1085; (1853) 1 Sm and G 590; (1853) 65 ER 258 10 Dec 1853 Trusts, Equity The father of a female infant, who was himself tenant by the curtesy, but whose right was regarded as doubtful, became next friend of his daughter in a suit against the trustee of his late wife’s real estates, in which a decree was obtained for a partition, and conveyance of the infant’s portion to the father, until she attained twenty one, and then to the use of the infant in fee. The father received the rents and profits, and duly accounted to his daughter in respect of them ; but, on her marriage, filed a bill against her and her husband, for a declaration that his daughter’s interest in the estate might be declared, subject to his estate by curtesy. Held, that the Plaintiff, having relinquished what was regarded as a doubtful right, by an arrangement under which he derived a benefit, was not entitled to relief. Semble -A wife, entitled to real estate sested in trustees, who, under an erroneous impression of her rights, paid the rents to other persons, died, without having received the rents, leaving her husband and one daughter her surviving that; the husband was tenant by the curtesy. 1 Citers [ Commonlii ] Â Powys v Blagrave 43 ER 582; (1854) 4 De G M and G 448 1854 Lord Cranworth, L.C Equity, Landlord and Tenant The appellants were tenants in tail in remainder and were not able to proceed at law against their co-defendant since he was only an equitable tenant for life. They argued that he ought by analogy to have the obligation not to commit permissive waste imposed on him in the court of equity, and to be impeachable of waste in equity. Held: The application was refused. Even legal liability was very doubtful. 1 Cites 1 Citers Â Â Boyse v Rossborough; 11-Feb-1854 - [1854] EngR 252; (1854) 3 De G M and G 817; (1854) 43 ER 321 Â Â Jorden, And Louisa, His Wife v Money; HL 30-Jul-1854 - [1854] UKHL J50; [1854] 10 ER 868; (1854) HL 185; (1854) 5 HL Cas 185; [1854] EngR 787; (1854) 5 HLC 185; (1854) 10 ER 868; [1854] UKPC 22 Â Wallis v Woodyear (1855) 2 Jur (NS) 179 1855 Wood V-C Equity Wood V-C said that a first mortgagee has the right to have recourse to "any of his securities which first come to hand" and to "realise his securities in such manner and order as he thinks fit". 1 Citers Â Cobbett v Brock (1855) 20 Beav 524 1855 CA Sir John Romilly MR Equity Knowledge of the undue influence of a husband over his wife in securing her signature to a charge is required before a lender is bound by that undue influence. 1 Citers Â Mills v Drewitt (1855) 20 Beav 632 1855 Trusts, Equity A beneficiary cannot be divested of his beneficial interest in the capital of the trust by the operation of the doctrine of laches. 'A trustee who is in possession of property which he admits to be trust property cannot plead the laches of the cestui que trust in a suit to enforce the trust in respect of that property.' 1 Citers Â Â Wright v Vanderplank; 20-Jul-1855 - [1855] EngR 696; (1855) 2 K and J 1; (1855) 69 ER 669 Â Walker v Armstrong (1856) 8 De GM and G 531 1856 Equity The court considered a request for rectification of a document. 1 Citers Â Aiken v Short (1856) 1 HandN 210 1856 Pollock CB, Platt B, Bramwell B Banking, Equity The testator made one will under which C was to be a residuary legatee. He then made a second will under which C was only to take a defeasible annuity. After the T's death, S advanced £200 to C on the security of an equitable charge of C's interest under the first will. S died, the defendant being his executrix. Subsequently a bank (represented by the plaintiff) advanced money to C who conveyed to the bank his supposed interest under the first will subject to S's interest. The defendant applied to C for the payment of the £200 and interest. C referred the defendant to the bank by whom C's debt to S was paid. The second will was then discovered and the bank sought recovery from the defendant of the money paid to her. Held: Pollock CB said the defendant had the right to receive the money owed by C, and said that he thought that the bank must be considered to have paid that sum for C. He said that the case seemed to him to fall within the class of cases in which a man has paid money "in his own wrong". He continued: "It may, also, be put upon this ground, that the bankers paid this money rather as the agents of . . . C than as their own money. If so, it cannot be recovered back." Platt B referred to the defendant wanting the payment by C of his debt and applying to C for payment. He said: "He refers her to the bank. They, acting as his agents, upon being referred to, pay his debt. How can that be properly recoverable? Surely the debt is satisfied. The debt was due. It is not as though there were no debt due, and there was a mistake of fact; but here the debt was actually due, and the money was paid to satisfy that debt. It appears to me clear, beyond all question, that this money cannot be recovered back." 1 Citers Â Â Wright v Vanderplank; 8-Mar-1856 - [1856] EngR 331; (1856) 8 De G M and G 133; (1856) 44 ER 340 Â Brown v Oakshot (1857) 24 Beav 254 1857 Company, Equity A father devised his estate to trustees for a term, for them to pay a residue of rents from that estate to his sons as tenants in common; but the reversion of the estate he devised to his sons as joint tenants. The question was whether the joint tenancy of the reversion had been severed because the sons, during the term, had used the estate in their partnership trade as brewers. Held: They had not, and so the surviving son took the whole of the reversion, subject to the term. 1 Citers Â Â Knight Since Deceased And His Executors, Tomkinson v Bowyer etc; 1-Jul-1857 - [1857] EngR 716 (C); (1857) 23 Beav 609 Â Clarke v Dickson (1858) EL BL and EL 148 1858 Crompton J, Erle J Equity, Contract The plaintiff brought his claim for money had and received by the purchaser of shares in a company. He said that he had been induced to purchase the shares by a fraudulent misrepresentation but he had failed in his action at common law. Held: Erle J: "the plaintiff cannot avoid the contract under which he took the shares, because he cannot restore them in the same state as when he took them." Crompton J: "when once it is settled that a contract induced by fraud is not void, but voidable at the option of the party defrauded, it seems to me to follow that, when that party exercises his option to rescind the contract, he must be in a state to rescind it; that is, he must be in such a situation as to be able to put the parties into their original state before the contract . . . The plaintiff must rescind in toto or not at all; he cannot both keep the shares and recover the whole price. That is founded on the plainest principles of justice. If he cannot return the article he must keep it, and sue for his real damage in an action on the deceit." 1 Citers Â Bowes v The City Of Toronto [1858] EngR 365; (1858) 11 Moo PC 463; (1858) 14 ER 770; [1858] UKPC 10 15 Feb 1858 PC Local Government, Equity The mayor of a city who bought discounted debentures issued by the city was in the same position as an agent vis-a-vis the city, and was to be treated as holding the debentures on trust for the city. 1 Citers [ Commonlii ] - [ Bailii ] Â Birley v Birley [1858] EngR 441; (1858) 25 Beav 299; (1858) 53 ER 651 12 Mar 1858 CA Sir John Romilly MR Trusts, Equity An absolute appointment was made to an object of a power, under a prior "understanding" between the appointor and appointee, to hold in 'In trust ' for persons, some of whom were objects and some not. Held: The whole was void. 1 Citers [ Commonlii ] Â Â Knight v Bowyer; 7-May-1858 - (1858) 2 De G and J 421; [1858] EngR 673; (1858) 2 De G and J 421; (1858) 44 ER 1053 Â Â Ignatius Bonomi, And Caroline His Wife v Backhouse; 7-Jun-1858 - [1858] EngR 803; (1858) El Bl and El 622; (1858) 120 ER 643 Â Fowler v Fowler [1859] EngR 598; (1859) 4 De G and J 250; (1859) 45 ER 97 12 May 1859 Lord Chelmsford LC Contract, Equity Lord Chelmsford LC said that a party seeking rectification must establish clearly "that the alleged intention to which he desires" (the instrument) "to be made conformable continued concurrently in the minds of all parties down to the time of its execution, and also must be able to shew exactly and precisely the form to which the deed ought to be brought". [ Commonlii ] Â Falcke v Gray [1859] EngR 710; (1859) 4 Drew 651; (1859) 62 ER 250 13 Jun 1859 Contract, Equity The Court will enforce specific performance of a contract to purchase chattels, if damages will not be an adequate compensation. But where the contract, although not actually fraudulent, was one in which the parties were not on an equal footing, the Plaintiff knowing, and the purchaser being ignorant, of the value of the thing sold, and the price appeared to be inadequate, the Court refused relief. [ Commonlii ] Â The Bank of London v Tyrrell [1859] EngR 789; (1859) 27 Beav 273; (1859) 54 ER 107 30 Jun 1859 CA Sir John Romilly MR Legal Professions, Equity A solicitor is accountable to his clients for the benefits which he may have derived clandestinely in transactions in which he was professionally engaged. A solicitor was active in founding a banking company. Before its establishment he entered into a secret arrangement with a stranger, that the, latter should purchase some property eligible for the banking house on a joint speculation. After its establishment the company purchased part of the premises for their banking house, not knowing that their solicitor was interested in it. Held, that the solicitor must account to the company for all the profit made by him by the whole transaction ; but that the stranger was under no such liability. Sir John Romilly MR said that the solicitor had held on trust for the client both (i) his interest in (and therefore his subsequent share of the proceeds of sale of) the Hall, and (ii) with "very considerable hesitation", his interest in the adjoining land 1 Citers [ Commonlii ] Â Â Knight v Bowyer; 1-Aug-1859 - [1859] EngR 908; (1859) 4 De G and J 619; (1859) 45 ER 241 Â Imperial Gas Light And Coke Company v Broadbent [1859] EngR 915; (1859) 7 HLC 600; (1859) 11 ER 239 4 Aug 1859 HL Lord Campbell LC Litigation Practice, Equity, Nuisance If a Plaintiff applies for an injunction in respect of a violation of a common law right, and the existence of that right, or the fact of its violation is denied, he must establish his right at law, but having done that, he is, except under special circumstances, entitled to an injunction to prevent a recurrence of that violation. For such a purpose the award of an arbitrator is equivalent to a verdict. If between the time of the case being referred and the award being made there has been an alteration in the mode of carrying on the business complained of, it may, if in diminution of the cause of injury, be shown as an answer to the application for an injunction; but if in increase of the cause of injury, it need not be the subject of a fresh proceeding at law; that is matter for the discretion of the Court of Equity. A Plaintiff brought an action to recover damages for an injury to his business occasioned by the erection. of gas works; the action was referred to arbitration; nearly two years elapsed before the award was made, in the course of which time alteratione in the mode of carrying on the business complained of were effected; two months after the date of the award the injunction was applied for: Held, that there had not been any such. acquiescence as to deprive the Plaintiff of his right to the injunction. 1 Cites 1 Citers [ Commonlii ] Â Bright v Legerton (No 1) (1860) 29 Beav 606 1860 Equity The court will not listen to a claim by a cestui que trust trying to challenge accounts settled by his trustees where those accounts had been settled for more than twenty years and he had had ample opportunity to go into them. Lapse of time alone is not sufficient to bar such a suit. 1 Citers Â Lackersteen v Lackersteen (1860) 30 LJ Ch 5 1860 Page-Wood VC Equity The court has power to rectify a settlement notwithstanding that it is a voluntary settlement and not the result of a bargain, such as an ante-nuptial marriage settlement. 1 Citers Â Williams v Hensman [1861] 1 John and Hem 546; [1861] 30 LJ CH 878; [1861] 5 LT 203; [1861] 7 Jur NS 771; [1861] 70 ER 862; [1861] EWHC Ch J51 10 Jun 1861 Sir William Page Wood VC Equity, Wills and Probate A fund of money was bequeathed on trust to be invested so as to generate an income payable to A 'the principal to go to her children at her death'. Held: The will created a joint tenancy. The court set out three ways in which a joint tenancy may be severed. Where joint tenants indicated by their conduct that they treated their interests separately, the fact that they did not understand that their interests had been joint did not prevent such behaviour acting to sever the tenancy. 1 Citers [ Bailii ] Â Â Holland v Russell; 13-Jun-1861 - [1861] EngR 728; (1861) 1 B and S 424; (1861) 121 ER 773 Â Norris v Chambres (1862) 3 De G.F. and J. 583 1862 Lord Campbell LC Equity, Jurisdiction A company director had advanced part of a loan for the purchase of a mine in Prussia. He died, and because of lack of funds, his estate risked losing everything. His estate sought its recovery. Held: "With respect to this advance, I think that, upon the authority of Penn v. Lord Baltimore, which has often been acted upon, the Plaintiff would have been entitled to succeed if he could have proved that the claim for a declaration of the proposed charge or lien on the Maria Anna mine was founded on any contract or privity between him or the deceased [director] and the Defendants, the purchasers of the mine, and if there had not been a suit in the Prussian Courts, in which the same question was raised and had been decided in the Plaintiff's favour. But I agree in thinking with the Master of the Rolls that the Plaintiff has failed to shew any such contract or privity. Upon the evidence adduced the purchasers of the mine, whom he sues, are to be considered as mere strangers, and any notice which they may have had of the transactions between [the deceased director] and [the old company] (which has now ceased to exist) cannot give this Court jurisdiction to declare the proposed lien or charge on lands in a foreign country. An English Court ought not to pronounce a decree, even in personam, which can have no specific operation without the intervention of a foreign Court, and which in the country where the lands to be charged by it lie would probably be treated as a brutum fulmen. I do not think that the Court of Chancery would give effect to a charge on land in the county of Middlesex so created by a Prussian Court sitting as Dusseldorf or Cologne. But another objection is lis alibi pendens, a suit pending before the proper tribunal in Prussia, and that by this tribunal, a decree has actually been pronounced in favour of the Plaintiff, giving him what he seeks… We must suppose that the Court at Dusseldorf has ample means to enforce the whole of its decree, and that the Plaintiff will have the full benefit of that decree, which may be considered as creating a debt for which the opposite parties are personally liable and a charge upon the property sold." 1 Cites 1 Citers Â Â Dillwyn v Llewelyn; ChD 12-Jul-1862 - [1862] EWHC Ch J67; [1862] 45 ER 1284; (1862) 4 De GF and J 517; [1862] EngR 908; (1862) 4 De G F and J 517; (1862) 45 ER 1285 Â Â Milroy v Lord; CA 26-Jul-1862 - (1862) 4 De GF and J 264; [1862] EWHC Ch J78; [1862] EngR 951; (1862) 4 De G F and J 264; (1862) 45 ER 1185 Â Â Long v Lord Bishop of Cape Town; PC 13-Feb-1863 - [1863] EngR 277; (1863) 1 Moo PC NS 411; (1863) 15 ER 756 Â Holland v Russell [1863] EngR 546; (1863) 4 B and S 14; (1863) 122 ER 365 9 May 1863 Agency, Equity 1 Cites [ Commonlii ] Â Re Way's Trusts (1864) 2 De G J and S 365 1864 Trusts, Equity A gift was effected by a deed which was delivered. Held: The gift was effective. Â Swaine v The Great Northern Railway Company [1864] EngR 173; (1864) 4 De G J and S 211; (1864) 46 ER 899 25 Jan 1864 Nuisance, Equity, Litigation Practice Occurrences of nuisance, if temporary and occasional only, are not grounds for the interference of the Court of Chancery by injunction, except in extreme cases. Therefore, where a railway company carried down to and deposited on a siding to their line manure which was occasionally not proper manure, and they occasionally allowed it to remain there longer than it ought to have remained : Held, in a suit by a neighbouring landowner for an injunction to restrain the nuisance and for damages: 1. That the court would not interfere by way of injunction. 2. That the Court would not enter into the question of damages, the case being one which, in the judgment ofthe Court, could be more effectually disposed of at law than in equity, and Sir Hugh Cairns's Act (21 & 22 Vict. c. 27) only giving the Court of Chancery jurisdiction to give damages in any case where a bill is properly filed in it, while Mr. Rolt's Act (25 & 26 Vict. c. 42) does not make it compulsory on the Court so to do. [ Commonlii ] Â Pryor v Pryor [1864] EngR 412; (1864) 3 De G J and S 205; (1864) 46 ER 353 29 Apr 1864 CA Knight Bruce LJ Trusts, Equity Parents having a power of appointing an estate to all or any of their children appointed it absolutely to two of their sons, upon the understanding that the appointments should resettle the estate upon certain trusts for the benefit of all the children then living during their respective lives, and subject thereto for the benefit of the children of the sons. This resettlement was made by a contemporaneous deed. Held, that the transaction could not be supported by analogy to the common case of an appointment to a daughter in contemplation of her marriage, accompanied by a contemporaneous settlement of the appointed fund, but that the appointment was void in equity, as made upon a bargain for the benefit of persons not objects of the power, 1 Citers [ Commonlii ] Â Jones v Lock (1865) LR 1 Ch App Cas 25 1865 Lord Cranworth LJ Company, Equity A father put a cheque into the hands of his baby son of nine months saying ‘I give this to baby for himself’ and he then took back the cheque and put it away. The donor died and the cheque was found among his effects. Held: There had been no valid gift. There was no declaration of trust and no gift. 1 Citers Â Frith v Cartland (1865) 2 H. and M. 417 1865 Sir William Page Wood VC Equity ". . . If a man mixes trust funds with his own, the whole will be treated as the trust property, except so far as he may be able to distinguish what is his own." 1 Citers Â Pedley v Dodds LR (1866) 2 Eq 819 1866 Lord Bacon Equity Lord Bacon applied the maxim falsa demonstratio non nocet, so that Erroneous descriptions of property in documents should not be permitted to defeat the intentions of the parties. 1 Citers Â Â Ramsden v Dyson; HL 1866 - [1866] LR 1 HL 129; [1866] 12 Jur NS 506 Â Bovill v Goodier [1866] EngR 135; (1866) 35 Beav 427; (1866) 55 ER 961 18 Apr 1866 Intellectual Property, Equity [ Commonlii ] Â The Western Bank of Scotland v Addie (1867) 1 LR Scotch Appeals 145 1867 HL Lord Cranworth, Lord Blackburn Contract, Equity Rescission of a share purchase agreement was sought on the grounds of fraudulent misrepresentation. Held: Lord Cranworth said: "Relief under the first head, which is what in Scotland is designated restitutio in integrum, can only be had where the party seeking it is able to put those against whom it is asked in the same situation in which they stood when the contract was entered into. Indeed, this is necessarily to be inferred from the very expression, restitutio in integrum; and the same doctrine is well understood and constantly acted on in England." Lord Blackburn said: "a Court of Equity could not give damages, and, unless it can rescind the contract, can give no relief. And, on the other hand, it can take accounts of profits, and make allowance for deterioration. And I think the practice has always been for a Court of Equity to give this relief whenever, by the exercise of its powers, it can do what is practically just, though it cannot restore the parties precisely to the state they were in before the contract." 1 Citers Â Layard v Maud (1867) LR 4 Eq 397 1867 Malins VC Equity, Land Wood borrowed money from Austen to complete the purchase of an advowson, covenanting that he would within six months complete the purchase and give a legal mortgage to secure the loan. Two years later, Austen not having required the delivery of the title deeds or taken any other steps to perfect his security, Wood completed the purchase and obtained the deeds, and after another four months had passed he deposited the deeds with the defendants as security for a loan. The defendants had no notice of the prior equitable mortgage. Austen had taken no steps to possess himself of the deeds over a long period of time. Held: Though Malins VC did not found himself on this delay, saying, at 406: "I have not a shadow of doubt that where there is merely an equitable mortgage . . ., in every case where the equitable mortgagee either omits to get, or having got, gives up possession of the deeds, he must always be postponed." Where two equities are equal, possession of the title deeds gives priority. Â Hopkins v Worcester and Birmingham Canal Proprietors (1868) LR 6 Eq 437 1868 Equity The power to appoint a receiver is part of the court's auxiliary equitable jurisdiction and is one of the oldest remedies in the Court of Chancery. It is used in situations requiring interim protection of property (and the income of property), including disputes about partnerships, sales or mortgages of land, and administration of estates. Receivers could also be appointed by way of equitable execution. 1 Citers Â Brooke v Haynes [1868] 6 LR Eq 25 1868 CA Lord Romilly MR Equity, Estoppel Lord Romilly MR said: "A party to a deed is not estopped in equity from averring against or offering evidence to controvert a recital therein contrary to the fact, which has been introduced into the deed by mistake of fact, and not through fraud or deception on his part." 1 Citers Â Â Freeman v Jefferies; CE 1868 - (1868-69) LR 4 Ex 189 Â Re Kershaw's Trusts (1868) LR 6 Eg 322 1868 Sir Richard Malins V-C Equity In the particular circumstances a provision made for the benefit of the husband was for the benefit of the wife. 1 Citers Â McCormick v Grogan (1869) LR 4 HL 82; [1869] UKHL 1; (1869-70) LR 4 HL 82 1869 HL Lord Hatherley LC, Westbury L Trusts, Equity A secret trust was held to have created a constructive trust. Lord Hatherley LC said: "a person apparently taking property by devise or bequest from a testator with this knowledge of the existence of another instrument, which he actually or impliedly undertakes to carry into effect, will be fixed as trustee with the performance of such instructions and directions as are given in that other instrument. " Lord Westbury said: "the jurisdiction which is invoked here by the Appellant is founded altogether on personal fraud. It is a jurisdiction by which a Court of Equity, proceeding on the ground of fraud, converts the party who has committed it into a trustee for the party who is injured by that fraud. Now, being a jurisdiction founded on personal fraud, it is incumbent on the Court to see that a fraud, a malus animus, is proved by the clearest and most indisputable evidence. It is impossible to supply presumption in the place of proof, nor are you warranted in deriving those conclusions in the absence of direct proof, for the purpose of affixing the criminal character of fraud, which you might by possibility derive in a case of simple contract." 1 Citers [ Bailii ] Â Wollaston v King (1869) LR 8 Eq 165 1869 Equity Rectification for mistake 1 Citers Â Gossip v Wright [1869] 32 LJ Ch 653; [1869] WR 1137 1869 HL Kindersley VC Equity The House considered the right to redeem a mortgage. Kindersley VC said: "There is no doubt that the broad rule is this: that the Court will not allow the right of redemption in any way "to be hampered or crippled in that which the parties intended to be a security either by any contemporaneous instrument with the deed in question, or by anything which this Court would regard as a simultaneous arrangement or part of the same transaction." The rule in comparatively recent times was. unsettled by certain decisions in the Court of Chancery in England which seem to have misled the learned Judges in the Full Court. But it is now firmly established by the House of Lords that the old rule still prevails and that equity will not permit any device or contrivance being part of the mortgage transaction or contemporaneous with it to prevent or impede redemption. The learned Counsel on behalf of the Respondents admitted as he was bound to admit that a mortgage cannot be made irredeemable. That is plainly forbidden. Is there any difference between forbidding redemption and permitting it, if the permission be a mere pretence? Here the provision for redemption is nugatory. The incumbrance on the lease the subject of the mortgage according to the letter of the bargain falls to be discharged before the lease terminates, but at a time when it is on the very point of expiring when redemption can be of no advantage to the mortgagor even if he should be so fortunate as to get his deeds back before the actual termination of the lease. For all practical purposes this mortgage is irredeemable. It was obviously meant to be irredeemable. It was made irredeemable in and by the mortgage itself." 1 Citers Â In re Oriental Commercial Bank (1871) LR 7 Ch App 99 1871 Mellish LJ Equity, Insolvency The court considered the rule against double proof. Mellish LJ said: "This rule against double proof applies in the Court of Chancery as well as in the Court of Bankruptcy, and therefore would apply equally where companies are being wound up." After referring to the extent to which the principle should be carried, he continued: "But the principle itself – that an insolvent estate, whether wound up in Chancery or in Bankruptcy, ought not to pay two dividends in respect of the same debt – appears to me to be a perfectly sound principle. If it were not so, a creditor could always manage, by getting his debtor to enter into several distinct contracts with different people for the same debt, to obtain higher dividends than the other creditors, and perhaps get his debt paid in full. I apprehend that is what the law does not allow; the true principle is, that there is only to be one dividend in respect of what is in substance the same debt, although there may be two separate contracts." 1 Citers Â Clough v London and North Western Railway Co [1871] LR 7 Exch 26 1871 Mellor J Contract, Equity When considering an application for rescission the court must ask whether the representee has elected to affirm the contract, elected to rescind the contract or made no election. Mellor J said: "In such cases the question is, has the person on whom the fraud was practised, having notice of the fraud, elected not to avoid the contract? Or has he elected to avoid it? Or has he made no election? We think that so long as he has made no election he retains the right to determine it either way, subject to this, that if in the interval whilst he is deliberating, an innocent third party has acquired an interest in the property or if in consequence of his delay the position even of the wrongdoer is affected, it will preclude him from exercising his right to rescind. And lapse of time without rescinding will furnish evidence that he has determined to affirm the contract, and when the lapse of time is great, it probably would in practice be treated as conclusive evidence to shew that he has so determined. But we cannot see any principle, and are not aware of any authority for saying that the mere fact that one who is a party to the fraud has issued a writ and commenced an action before the rescission is such a change of position as would preclude the defrauded party from exercising his election to rescind." 1 Citers Â Wilson v Northampton and Banbury Junction Railway Co (1872) LR 14 Eq 477; (1874) LR 9 Ch App 279 1872 Lord Selborne LC Legal Professions, Evidence, Equity Lord Selborne LC said: "It is of the highest importance . . that all communications between a solicitor and a client upon a subject which may lead to litigation should be privileged, and I think the court is bound to consider that . . almost any contract entered into between man and man . . may lead to litigation before the contract is completed. Any correspondence passing between the date of the contract which afterwards becomes the subject of litigation and the litigation itself is, in my opinion, on principle, within the privilege extended to the non-production of communications between solicitors and clients . . it is absolutely essential to the interest of mankind that a person should be free to consult his solicitor upon anything which arises out of a contract which may lead to litigation; that the communications should be perfectly free, so that the client may write to the solicitor, and the solicitor to the client, without the slightest apprehension that those communications will be produced if litigation should afterwards arise on the subject to which the correspondence relates." Lord Selborne LC spoke about the discretion available under the law of equity, saying that equity sets out to "do more perfect and complete justice" than would be the result of leaving the parties to their remedies at common law. 1 Citers Â Â Pilcher v Rawlins; 1872 - (1872) LR 7 Ch App 259 Â Ambler v Bolton (1872) LR 14 Eq 427 1872 CA Lord Romilly MR Equity, Company An inalienable government contract held by one of the partners constituted a partnership asset. On the dissolution of the partnership, a value had to be given to it (since it could not be sold) and the partner who held it debited with that amount in the partnership accounts. Partnership Act 1890 20 1 Citers Â Shaw v Foster (1872) LR 5 HL 321 1872 HL Lord Cairns, Lord O'Hagan, Lord Hatherley LC Land, Equity As regards the trusteeship which arises for a vendor of land after exchange of contracts: "there cannot be any doubt of the relation subsisting in the eye of a Court of Equity between the vendor and the purchaser. The vendor was a trustee of the property for the purchaser; the purchaser was the real beneficial owner in the eye of a Court of Equity of the property, subject only to this observation, that the vendor, whom I have called the trustee, was not a mere dormant trustee, he was a trustee having a personal and substantial interest in the property, a right to protect that interest, and an active right to assert that interest if anything should be done in derogation of it". A purchaser of land obtains rights which are akin to ownership after exchange, and a purchaser had not only the right to devise the property (under the equitable doctrine of conversion) but also the right to alienate it or charge it. Lord O'Hagan said that the purchaser's interest could be the subject of a charge or assignment, and that the sub-assignee or encumbrancer could enforce his rights against the original vendor. Lord Hatherley LC referred to the "fiction of Equity which supposes the money to be paid away with one hand and the estate to be conveyed away with the other," 1 Citers Â Â Moule v Garrett; CA 1872 - (1872) LR 7 Exch 101 Â Best v Hill (1872) LR 8 CP 10 1872 Equity 1 Citers Â Robins v Goldingham (1872) LR 13 Eq 440 1872 Equity, Legal Professions Where a solicitor discharges himself in the course of an action, he should be subject to an order for the transfer of the papers subject to an order respecting his lien for any unpaid costs. 1 Citers Â Â Knox v Gye; HL 1872 - (1872) LR 5 HL 656 Â Â Lamare v Dixon; HL 1873 - (1873) LR 6 HL 414 Â Earl Beauchamp v Winn (1873) LR 6 HL 223 1873 HL Equity The rules in equity as to restitution after a payment made under a mistake of law apply as much to mistakes of fact as to mistakes of law. 1 Citers Â In re Dagenham (Thames) Dock Co; Ex parte Hulse (1873) LR 8 Ch App 1022 1873 CA Contract, Equity The Court of Appeal in chancery heard an appeal from the Master of the Rolls from his refusal of the Master of the Rolls to make a declaration in the winding up of the purchaser company. The purchaser had sought a direction that if the balance of the purchase monies were paid with interest it should be relieved from termination of the contract brought about by its not paying the purchase money by the due date. The Lord Justices held that the forfeiture was in the nature of penalty from which the court would relieve. Relief was to be granted, not against the forfeiture of the instalments, but against the forfeiture of the estate under a contract which involved the retention of the purchase money. The Court granted the purchaser, who had been in possession for five years and carried out improvements, further time to pay the second and final instalment of a purchase price on the ground that the clause requiring him to vacate and to forfeit the first instalment for not having paid the second instalment on time, was a "penalty". 1 Citers Â Dunne v English (1874) LR 18 Eq 524 1874 CA Sir George Jessel MR Equity, Agency, Company A partner had made a secret profit from the sale of partnership property. Held: The other partner sought and obtained relief "substantially in accordance with the first and second paragraphs of the prayer of the bill", which had sought "a declaration . . that the Plaintiff was entitled to share equally with the Defendant in the profits . . and that the Defendant was bound to make over to the Plaintiff one half of the profits . ." Because of the importance which equity attaches to fiduciary duties, "informed consent" to a fiduciary acting for two parties is only effective if it is given after "full disclosure". Sir George Jessel MR said of a partner: "The Defendant was not only in law the agent of the partnership to sell (being himself a partner, and every partner being an agent of the partnership), but he was in fact the agent who had been engaged in negotiating the sale." 1 Citers Â Â In re Condon, Ex parte James; 1874 - (1874) LR 9 Ch App 609; [1874-80] All ER 388 Â Lowther v Bentinck (1874) LR Eg 166 1874 Equity An exercise can be recognised as being for the benefit of a woman when an advance is made to set up her husband in business. 1 Citers Â Â Barnes v Addy; 1874 - [1874] 9 ChA 244 Â The Lindsay Petroleum Company v Hurd and Others (1874) LR 5 PC 221; [1873] 5 AC 221; [1874] UKPC 2 20 Jan 1874 PC Sir Barnes Peacock, Lord Selbourne LC Equity The court discussed the basis of the equitable doctrine of laches. Lord Selbourne LC said: "Now the doctrine of laches in courts of equity is not an arbitrary or technical doctrine. Where it would be practically unjust to give a remedy, either because the party has by his conduct done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted in either of these cases, lapse of time and delay are most material. But in every case if an argument against relief which otherwise would be just is founded upon mere delay that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantial equitable. Two circumstances, always important in such case, are the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy." Canada [ Bailii ] Â Richards v Delbridge (1874) LR 18 Eq 11 16 Apr 1874 CA Sir George Jessel MR Trusts, Equity The donor purported to make a voluntary gift of leasehold premises and stock in trade by endorsing on the lease "This deed and all thereto belonging I give to E from this time forth, and all the stock in trade." This document was delivered to E’s mother on his behalf. Held: No valid declaration of trust was made in favour of E. For a man to make himself a trustee, he must express an intention to become a trustee. Jessel MR said: "The principle is a very simple one. A man may transfer his property, without valuable consideration in two ways: he may either do such acts as amount in law to a conveyance or assignment of the property, and thus completely divest himself of the legal ownership, in which case the person who by those acts acquires the property takes it beneficially, or on trust as the case may be; or the legal owner of the property may, by one or other of the modes recognised as amounting to a valid declaration of trust, constitute himself a trustee, and, without an actual transfer of the legal title, may so deal with the property as to deprive himself of its beneficial ownership, and declare that he will hold it from that time forward on trust for the other person. It is true he need not use the words, "I declare myself trustee", but he must do something which is equivalent to it, and use expressions which have that meaning, for, however anxious the court may be to carry out a man's intentions, it is not at liberty to construe the words otherwise than according to their proper meaning." 1 Citers [ lip ] Â In re Morvah Consols Tin Mining Co, McKay's Case (1875) 2 Ch D 1 1875 CA Mellish and James LJJ and Brett J Agency, Equity A company bought a mine, and shares in the vendor were promised to the company's secretary. Held: The shares were held by him for the company beneficially. 1 Citers Â Bagnall v Carlton (1877) 6 Ch D 371 1877 CA James, Baggallay and Cotton LJJ Company, Equity, Agency Agents for a prospective company who made secret profits out of a contract made by the company were held to be "trustees for the company" of those profits 1 Citers Â Nant-y-glo and Blaina Ironworks Co v Grave (1878) 12 Ch D 738 1878 Sir James Bacon V-C Company, Equity Shares in a company had been given by a promoter to the defendant to induce him to become a director. Held: They belonged to the company. 1 Citers Â Whaley Bridge Calico Printing Co v Green (1879) 5 QBD 109 1879 Bowen J Equity, Contract A director of a company who negotiated a purchase by the company for Â£20,000 of a property was promised but did not receive Â£3,000 out of the Â£20,000 from the vendor. Held: The contract was to be treated as having been entered into for the benefit of the purchaser without proof of fraud. The vendor was liable to the company for the Â£3,000, because the company was entitled to treat the contract between the vendor and the director as made by the director on behalf of the company. Bowen J held that it "could not be successfully denied" that if the Â£3,000 had been paid to the director he would have held it on trust for the company. Â Â Hanley v Pearson; 1879 - (1879) 13 Ch D 545 Â Â Edinburgh Corporation v Lord Advocate; HL 1879 - (1879) 4 AC 823 Â Â Banco de Portugal v Waddell; HL 1880 - (1880) 5 App Cas 161 Â Duncan Fox and Co v North and South Wales Bank (1880) 6 AC 1; [1874-80] All ER Rep Ext 1406 1880 HL Lord Selborne LC Equity, Banking The case concerned a claim by an indorser of a bill of exchange that he was subrogated to securities provided by the acceptor to the holder of the bill. The court identified three kinds of cases in which rights of subrogation had been recognised and where suretyship principles apply: (1) where there is an agreement creating the relationship of principal and surety to which the creditor is a party; (2) where there is an agreement creating the relationship of principal and surety to which the creditor is not a party; and (3) where there is no agreement but that there is nevertheless a primary and secondary liability of two persons, the debt being 'as between the two, that of one of those persons only, and not equally of both, so that the other, if he should be compelled to pay it, would be entitled to reimbursement from the person by whom (as between the two) it ought to have been paid'. Lord Selborne LC did not however restrict the categories of cases in which the remedy of subrogation might be available so much as identify situations that were broadly analogous to those of the case before it. Â Protector Endowment Loan and Annuity Company v Grice (1880) 5 QBD 592 1880 Baggallay LJ Equity Baggallay LJ considered the equitable doctrine of relief: "where the intent is not simply to secure a sum of money, or the enjoyment of a collateral object, equity does not relieve". 1 Citers Â Â Willmott v Barber; 1880 - (1880) 15 Ch D 96 Â Metropolitan Bank v Heiron (1880) 5 Ex D 319 1880 CA Brett LJ, Cotton LJ, James LJ Equity A claim brought by a company against a director was time-barred: the claim was to recover a bribe paid by a third party to induce the director to influence the company to negotiate a favourable settlement with the third party. The bank failed in its argument that the claim was proprietary. Brett LJ said that: "[n]either at law nor in equity could this sum . . be treated as the money of the company". However he did consider that, once the company had obtained judgment for the money there could be a trust. James LJ thought that there was an equitable debt and applied the Limitation Acts by analogy. 1 Citers Â Durrant v Ecclesiastical Commissioners for England and Wales [1880] 6 QBD 234 1880 Baron Pollock Equity An action would lie against a recipient of money, paid under a mistake if fact, who (without notice of the mistake) had paid on the money in good faith as a principal to a third party from whom the recipient could not recover. The court rejected the existence of any general defence of change of position either at law or in equity. Baron Pollock said: "Calm v. Manterman and other similar cases proceed upon the ground of some mutual relations between the parties creating a duty on the part of the plaintiff, breach of which disentitles him from recovering." 1 Citers Â Â Barnes v Dowling; QBD 1881 - (1881) 44 LT 809 Â Â Haywood v The Brunswick Permanent Benefit Building Society; CA 1881 - (1881) 8 QBD 403 Â Â Grahame v Magistrates of Kirkcaldy; HL 1882 - (1882) 9 R (HL) 91 Â In re Cross (1882) 20 Ch D 109 1882 Trusts, Equity The court applied the doctrine of laches and delay to a claim against a trustee, not for the recovery of trust property, but for breach of trust. 1 Citers Â Walsh v Lonsdale [1882] 21 ChD 9 1882 CA Sir George Jessel MR Landlord and Tenant, Equity Lonsdale purported to grant to Walsh a seven year lease with rent payable in advance. The lease was not embodied in a deed, and when Walsh went into possession, an annual tenancy with rent payable in arrear was created. Walsh did not pay in advance, Lonsdale issued an execution against the premises, and Walsh sought damages. Held: Equity, as embodied in the maxim "equity regards as done what ought to be done", required that the lease should take effect on the terms originally intended. "He [Walsh] holds, therefore, under the same terms in equity as if a lease had been granted . . He cannot complain of the exercise by the landlord of the same rights as the landlord would have had if a lease had been granted." This was: "a case in which both parties admit that relief is capable of being given by specific performance." 1 Citers Â Â Maddison v Alderson; HL 1883 - (1883) 8 App Cas 467 Â In re Leslie; Leslie v French (1883) 23 ChD 552 1883 ChD Justice Fry Insurance, Equity The court gave guidance as to the circumstances in which an individual who had paid a premium on a policy belonging to someone else could claim an interest in the policy: "In my opinion a lien may be created upon the moneys secured by a policy by payment of premiums in the following cases: First. By contract with the beneficial owner of the policy. Secondly. By reasons of the right of trustees to an indemnity out of their trust property for money expended by them in its preservation. Thirdly. By subrogation to this right of trustees of some person who may at their request have advanced money for the preservation of the property. Fourthly. By reason of the right vested in mortgagees, or other persons having a charge upon the policy, to add to their charge any moneys which have been paid by them to preserve the property . ." And "except under the circumstances to which I have referred, no lien is created by the payment of the premiums by a mere stranger or by a part owner". 1 Citers Â Â Speight v Gaunt; HL 26-Nov-1883 - (1883) 9 App Cas 1; [1883] UKHL 1; (1883-84) LR 9 App Cas 1 Â Re Maddever (1884) 27 Ch D 523 1884 Equity, Land A specialty creditor who applied to set aside a conveyance as fraudulent under the statute 13 Eliz. c.5 was not barred by laches and could be brought at any time before his own claim as a creditor became statute-barred. 1 Citers Â Â Leigh v Dickeson; 1884 - (1884) 15 QBD 60; [1881-5] All ER Rep 1099 Â Knill v Prowse [1884] 33 WR 163 1884 Equity, Landlord and Tenant An assignee of land may sue the tenant for the rent. 1 Citers Â Northern Counties Fire Insurance Co v Whipp (1884) 26 ChD 482 1884 CA Fry LJ Equity The court was asked whether a company which had a legal mortgage, had lost its priority to a subsequent equitable mortgage which had been created because the company's manager, acting on his own account, had a duplicate key to the safe where the title deeds were kept. The Court had to decide whether the company's carelessness should be equated to equitable fraud. Held: "In the case of a person taking the legal estate, and not seeking for or obtaining the title deeds from the mortgagor [i.e. not inspecting the title], the question may arise between the legal mortgagee and either a prior or a subsequent incumbrancer or purchaser. But in such a transaction the fraud about which the Courts are most solicitous is that which is practised when a man takes the legal estate with knowledge of a prior equitable sale or incumbrance, and yet strives to place himself in a position to show that he took without notice – that kind of fraud which Lord Hardwicke explained in Le Neve v. Le Neve, when he said:- "The taking of a legal estate after notice of a prior right, makes a person a mala fide purchaser … This is a species of fraud, and dolus malus itself; for he knew the first purchaser had the clear right of the estate, and after knowing that, he takes away the right of another person by getting the legal estate." 1 Citers Â Re Turner's Settled Estates (1884) 28 Ch D 205 1884 Equity In the case of mixed motives the Court will apply a 'but for' test, namely whether the power to transfer would have been exercised but for the intent to achieve the ulterior purpose or whether the power would have been exercised in any event 1 Citers Â Plimmer v Mayor, Councillors and Citizens of the City of Wellington (1884) 9 AC 699 1884 PC Sir Arthur Hobhouse Equity, Commonwealth (New Zealand) Mr Plimmer had occupied land under a revocable licence from the Corporation's predecessor-in-title and at their request had made extensive improvements to it. He sought compensation when the land was to be vested in the defendant. The defendant denied that he had a sufficient interest. Held: A person having a reasonable expectation that his occupation would not be disturbed had an interest in land for the purposes of a compensation statute. He had incurred expense at the request of the Government, the owners of the land. These circumstances "were sufficient to create in his [Plimmer's] mind a reasonable expectation that his occupation would not be disturbed…" In effect, the owner of the land became estopped from asserting that the licence remained revocable. That was sufficient to constitute the licence an "estate or interest" for compensation purposes. Sir Arthur Hobhouse said: "the equity arising from expenditure on land need not fail merely on the ground that the interest to be secured has not been expressly indicated." The general aim of a court applying principles of equity is to “look at the circumstances in each case to decide in what way the equity can be satisfied”. 1 Citers Â Letterstedt v Broers [1884] UKPC 1; (1884) 9 App Cas 371; [1884] UKPC 18 22 Mar 1884 PC Lord Blackburn Trusts, Equity, Wills and Probate (Supreme Court of the Cape of Good Hope) Lack of harmony may be of itself a good reason for a trustee to resign or be dismissed. Lord Blackburn approved a passage in Story's Equity Jurisprudence, s 1289: "But in cases of positive misconduct, courts of equity have no difficulty in interposing to remove trustees who have abused their trust; it is not indeed every mistake or neglect of duty, or inaccuracy of conduct of trustees, which will induce courts of equity to adopt such a course. But the acts or omissions must be such as to endanger the trust property or to shew a want of honesty, or a want of proper capacity to execute the duties, or a want of reasonable fidelity." . . and "It seems to their Lordships that the jurisdiction which a court of equity has no difficulty in exercising under the circumstances indicated by Story is merely ancillary to its principal duty, to see that the trusts are properly executed. This duty is constantly being performed by the substitution of new trustees in the place of original trustees for a variety of reasons in non-contentious cases. And therefore, though it should appear that the charges of misconduct were either not made out, or were greatly exaggerated, so that the trustee was justified in resisting them, and the court might consider that in awarding costs, yet if satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate." The court set out the principles underlying a decision to remove a trustee. Lord Blackburn said: "The whole of the matters which have been complained of, and the whole that, if this judgment stands, may yet have to be done by the Board, are matters which they had to do, as having accepted the burthen of carrying out the trusts which on the true construction of the will were imposed upon them, and so become trustees. What they had to do as executors merely, such as paying debts, collecting assets, andc., have long ago been over, and by the terms of the compromise the plaintiff cannot now say they have not been done properly. There may be some peculiarity in the Dutch Colonial law, which made it proper to make the prayer in the way in which it was done to remove them from the office of executor; if so, it has not been brought to their Lordships' notice; the whole case has been argued here, and, as far as their Lordships can perceive, in the Court below, as depending on the principles which should guide an English Court of Equity when called upon to remove old trustees and substitute new ones. It is not disputed that there is a jurisdiction "in cases requiring such a remedy," as is said in Story's Equity Jurisprudence, s. 1287, but there is very little to be found to guide us in saying what are the cases requiring such a remedy; so little that their Lordships are compelled to have recourse to general principles. Story says, s. 1289, 'But in cases of positive misconduct, Courts of Equity have no difficulty in interposing to remove trustees who have abused their trust; it is not indeed every mistake or neglect of duty, or inaccuracy of conduct of trustees, which will induce Courts of Equity to adopt such a course. But the acts or omissions must be such as to endanger the trust property or to shew a want of honesty, or a want of proper capacity to execute the duties, or a want of reasonable fidelity' It seems to their Lordships that the jurisdiction which a Court of Equity has no difficulty in exercising under the circumstances indicated by Story is merely ancillary to its principal duty, to see that the trusts are properly executed. This duty is constantly being performed by the substitution of new trustees in the place of original trustees for a variety of reasons in non-contentious cases. And therefore, though it should appear that the charges of misconduct were either not made out, or were greatly exaggerated, so that the trustee was justified in resisting them, and the Court might consider that in awarding costs, yet if satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate. The reason why there is so little to be found in the books on this subject is probably that suggested by Mr. Davey in his argument. As soon as all questions of character are as far settled as the nature of the case admits, if it appears clear that the continuance of the trustee would be detrimental to the execution of the trusts, even if for no other reason than that human infirmity would prevent those beneficially interested, or those who act for them, from working in harmony with the trustee, and if there is no reason to the contrary from the intentions of the framer of the trust to give this trustee a benefit or otherwise, the trustee is always advised by his own counsel to resign, and does so. If, without any reasonable ground, he refused to do so, it seems to their Lordships that the Court might think it proper to remove him; but cases involving the necessity of deciding this, if they ever arise, do so without getting reported. It is to be lamented that the case was not considered in this light by the parties in the Court below, for, as far as their Lordships can see, the Board would have little or no profit from continuing to be trustees, and as such coming into continual conflict with the appellant and her legal advisers, and would probably have been glad to resign, and get out of an onerous and disagreeable position. But the case was not so treated. In exercising so delicate a jurisdiction as that of removing trustees, their Lordships do not venture to lay down any general rule beyond the very broad principle above enunciated, that their main guide must be the welfare of the beneficiaries." He referred to cases in which there was a conflict between trustee and beneficiary and continued: "As soon as all questions of character are as far settled as the nature of the case admits, if it appears clear that the continuance of the trustee would be detrimental to the execution of the trusts, even if for no other reason than that human infirmity would prevent those beneficially interested, or those who act for them, from working in harmony with the trustee, and if there is no reason to the contrary from the intentions of the framer of the trust to give this trustee a benefit or otherwise, the trustee is always advised by his own counsel to resign, and does so. If, without any reasonable ground, he refused to do so, it seems to their Lordships that the Court might think it proper to remove him; but cases involving the necessity of deciding this, if they ever arise, do so without getting reported." However: "It is quite true that friction or hostility between trustees and the immediate possessor of the trust estate is not of itself a reason for the removal of the trustees. But where the hostility is grounded on the mode in which the trust has been administered, where it has been caused wholly or partially by substantial overcharges against the trust estate, it is certainly not to be disregarded." 1 Citers [ Bailii ] - [ Bailii ] Â Standing v Bowring (1885) 31 Ch 282 1885 Company, Equity A gift of shares was made, but challenged. Held: Registration of the transfer was actually completed and so the gift was completely constituted. 1 Citers Â Plowright v Lambert (1885) 52 LT 646 1885 Field J Equity The courts of equity have recognised that a fiduciary relationship can exist 'in almost every shape'. 1 Citers Â Henderson v Folkestone Waterworks Co (1885) 1 TLR 329 1885 Lord Coleridge CJ Equity The plaintiff had paid water rates to the defendant calculated in accordance with the law as it was held to be by the Court of Appeal. After payment, the House of Lords in the Dobbs case changed the law, and if calculated under the changed law the plaintiff had overpaid, and he sought to recover the overpayments on the ground that he had paid under compulsion and under a mistake of law. Held: The Court accepted that if both compulsion and mistake of law were present, the overpayment could be recovered. Counsel having submitted that the payments had been made in ignorance of the law, Lord Coleridge CJ said: "Of what law? I was ignorant of it before the decision of the House of Lords. I had held to the contrary, and two eminent judges agreed with me. Can that be put as ignorance of law? Just see what consequences would follow--that wherever there has been a reversal of judgment all the money that has been paid under the previous notion of the law can be recovered back! Has that ever been held? Can it be that every reversal of a decision may give rise to hundreds of actions to recover back money previously paid?" Lord Coleridge dismissed the plaintiff's claim on the grounds both that there was no element of compulsion in the payment and that there was no relevant mistake of law, saying: "But here at the time the money was paid, which was before Dobbs case, the law was in favour of the company, and there was no authority to show that it could be recovered back on account of a judicial decision reversing the former understanding of the law." 1 Citers Â In Re Beetham, Ex parte Broderick (1886) 18 QBD 380 1886 QBD Cave, Wallis JJ Land, Equity The Court considered whether certain facts were sufficient to establish an equitable mortgage by deposit of title deeds. Cave J said: "The law on the subject . . forms a branch of the equitable doctrine of the specific performance of oral contracts relating to land based on part performance. It has been held that there is an inference from the mere deposit of title deeds that it was intended to give an interest in the land, and in that way there is something more than a mere oral contract, something in the nature of part performance, so as to take the case out of the Statute of Frauds." 1 Citers Â Falcke v Scottish Imperial Insurance Co (1886) 34 ChD 234 1886 CA Cotton LJ, Bowen LJ Equity The owner of a policy of life assurance mortgaged the policy to secure repayment of a loan. Subsequently the owner, now the owner of an equity of redemption in the policy, paid two annual premiums which became due under the policy. The policy was then sold and a question arose as to whether the proceeds of sale should be applied in repaying the owner the amount of the two premiums in priority to the claims of the mortgagee. Held: The owner had not acquired by the payments of the premiums any interest in the policy in priority to the claims of the mortgagee. Cotton LJ said: "if a stranger pays a premium on a policy that payment gives him no lien on the policy. A man by making a payment in respect of property belonging to another, if he does so without request, is not entitled to any lien or charge on that property for such payment." Bowen LJ said: "The general principle is, beyond all question, that work and labour done or money expended by one man to preserve or benefit the property of another do not according to English law create any lien upon the property saved or benefited, nor, even if standing alone, create any obligation to repay the expenditure. Liabilities are not to be forced upon people behind their backs any more than you can confer a benefit upon a man against his will." 1 Citers Â Â Coatsworth v Johnson; 1886 - (1886) 55 LSQB 22 Â Â Bank of Montreal v Sweeny; PC 1887 - (1887) 12 App Cas 617 Â Â Fairbanks v Snow; 1887 - (1887) 13 NE 596 Â Re Turcan (1888) 40 ChD 5 1888 CA Equity A man effected an insurance policy which contained a term that it should not be assignable in any case whatever. He had previously covenanted with trustees to settle after-acquired property. Held: The court will seek to protect the interests of those who are contractually entitled to have the benefit of an inalienable asset even before the fruits of the asset have been realised. Although he could not assign the benefit of the policy so as to give the trustees the power to recover the money from the insurance company, he could validly make a declaration of trust of the proceeds, which required him to hand over such proceeds to the trustees. 1 Citers Â Tailby v Official Receiver (1888) 13 App Cas 523 1888 HL Lord MacNaghten Insolvency, Equity A creditor can create for good consideration an equitable charge over book debts which will attach to them as soon as they come into existence. Lord Macnaghten: "It was admitted by the learned counsel for the respondent, that a trader may assign his future book debts in a specified business. Why should the line be drawn there? Between men of full age and competent understanding ought there to be any limit to the freedom of contract but that imposed by positive law or dictated by considerations of morality or public policy? The limit proposed is purely arbitrary, and I think meaningless and unreasonable." Future property, possibilities, and expectancies are all assignable in equity for value. 1 Citers Â Government of Newfoundland v Newfoundland Railway (1888) 13 App Cas 199; [1888] UKPC 7 7 Feb 1888 PC Lord Hobhouse Equity, Contract A railway company and its assignees brought action the Government. Under the contract the company was to build a railway subsidised by the government. The railway was not completed. The parties disputed whether the contract was "entire" and no part of the subsidy was payable unless the railway as a whole was completed. The company succeeded on that. The government counterclaimed for the non-completion, and sought a set off from the subsidies. Held. The Board emphasised the intertwined nature of the obligations, and said that it "had no hesitation in saying that in this contract the claims for subsidy and for non-construction ought to be set against one another." The set-off could not be made as against the assignees: that once notice of the assignment of the debt had been given, "the debt or claim is so severed from the rest of the contract that the assignee may hold it free from any counter-claim in respect of other terms of the same contract." However it distinguished between a set-off properly allowable under the contract itself, which bound an assignee of a debt due under that contract, and a cross-claim which might "arise from any fresh transaction freely entered into by [the government] after notice of assignment by the company." In the first case, "It would be a lamentable thing if it were found to be the law that a party to a contract may assign a portion of it, perhaps a beneficial portion, so that the assignee shall take the benefit, wholly discharged of any counter-claim by the other party in respect of the rest of the contract, which may be burdensome. There is no universal rule that claims arising out of the same contract may be set against one another in all circumstances . . Unliquidated damages may be set off as between the original parties, and also against an assignee if flowing out of and inseparably connected with dealings and transactions which also give rise to the subject of the assignment." 1 Citers [ Bailii ] Â Eden v Ridsdale Railway Lamp and Lighting Co Ltd (1889) 23 QBD 368 1889 CA Lord Esher MR and Lindley and Lopes LJJ Company, Agency, Equity The company was held to be entitled as against a director to shares which he had secretly received from a person with whom the company was negotiating. 1 Citers Â Lyell v Kennedy (1889) 14 App Cas 437 1889 HL Equity, Agency The true owner may recover money which was rightfully his from a person to whom the money in question had been wrongly paid by the collector of the money. A fiduciary is one who has undertaken, whether on request or without request, of his own motion to act on behalf of another in circumstances in which equity will not allow him ‘to enter into engagements in which he has, or can have, a personal interest conflicting, or which possibly may conflict, with the interests of those whom he is bound to protect’. 1 Cites 1 Citers Â Â Bolton Partners v Lambert; 1889 - (1889) 41 ChD 295 Â Re Cartwright; Avis v Newman (1889) 41 Ch D 532 1889 Kay J Landlord and Tenant, Equity A tenant for life is not liable in damages for permissive waste. "Since the Statutes of Marlbridge and of Gloucester there must have been hundreds of thousands of tenants for life who have died leaving their estates in a condition of great dilapidation. Not once, so far as legal records go, have damages been recovered against the estate of a tenant for life on that ground. To ask me in that state of the authorities to hold that a tenant for life is liable for permissive waste to a remainderman is to my mind a proposition altogether startling. I should not think of coming to such a decision without direct authority upon the point. Such authority as there is seems to me to be against the contention, and in opposition to the positive decisions in Gibson v. Wells, Herne v. Bembow, and Jones v. Hill 7 Taunt. 392, there are only to be found certain dicta of Baron Parke and the late Lord Justice Lush which seem to amount to this, that the words of the Statutes of Marlbridge and Gloucester are sufficient to include the case of permissive waste, at any rate where there is an obligation on the person who has the particular estate not to permit waste, whether that obligation does or does not exist at the common law in the case of a tenant for life. But at the present day it would certainly require either an Act of Parliament or a very deliberate decision of a Court of great authority to establish the law that a tenant for life is liable to a remainderman in case he should have permitted the buildings on the land to fall into a state of dilapidation. I therefore think that this claim must be disallowed." 1 Cites 1 Citers Â Â Strutt v Tippett; CA 1890 - (1890) LT 475 Â Lister and Co v Stubbs (1890) 45 Ch D 1 1890 CA Cotton LJ, Lindley LJ Equity, Litigation Practice, Employment It was alleged by the plaintiffs that their foreman had received secret commissions which he had invested in land and other investments. They sought interlocutory relief to prevent him dealing with the land and requiring him to bring the other investments into court. Held: The injunction was refused because the money was not that of the plaintiffs so as to make the defendant a trustee, but was money to which the plaintiffs would be entitled to claim in the action, i.e. "a debt due from the Defendant to the Plaintiffs in consequence of the corrupt bargain which he entered into" but (a) the money which he had received under that bargain could not be treated as being money of the Plaintiffs "before any judgment or decree in the action had been made" The court will not grant an injunction to restrain a defendant from parting with his assets so that they may be preserved in case the plaintiff’s claim succeeds. A claim relating to the acceptance of bribes was not within a proprietary claim. Lindley LJ discussed the relation between the employer and employee who was accused of betraying his trust in taking a bribe, saying the relationship: "is that of debtor and creditor; it is not that of trustee and cestui que trust. We are asked to hold that it is - which would involve consequences which, I confess, startle me. One consequence, of course, would be that, if Stubbs were to become bankrupt, this property acquired by him with the money paid to him by Messrs Varley would be withdrawn from the mass of his creditors and be handed over bodily to Lister & Co. Can that be right? Another consequence would be that, if the Appellants are right, Lister & Co could compel Stubbs to account to them, not only for the money with interest, but for all the profits which he might have made by embarking in trade with it. Can that be right? " 1 Citers Â In re Akerman [1891] 3 Ch 212 1891 ChD Kekewich J Trusts, Equity, Wills and Probate The court was asked whether in the division of the testator's residuary estate three of the testator's seven children had to bring into account statute-barred debts due to the estate. Held. They were bound to bring them into account. Kekewich J restated the rule in Cherry v Boultbee: "A person who owes an estate money, that is to say, who is bound to increase the general mass of the estate by a contribution of his own, cannot claim an aliquot share given to him out of that mass without first making the contribution which completes it. Nothing is in truth retained by the representative of the estate; nothing is in strict language set off; but the contributor is paid by holding in his own hand a part of the mass, which, if the mass were completed, he would receive back. That is expanding what the Lord Chancellor calls in Cherry v Boultbee 'a right to pay out of the fund in hand,' rather than a set-off." 1 Cites 1 Citers Â Saltv Marquess of Northhampton [1892] AC 1 1892 Equity A transaction was held to be of a security nature and to confer right to redeem even though it purported to be merely an agreement of a lender to assign a life policy in event of certain contingencies. A clause which allowed the mortgagor only a limited time period within which to redeem the mortgage was void as a fetter on the mortgagor's right to redeem. Â In re North Australian Territory Co, Archer's case [1892] 1 Ch 322 1892 CA Lindley LJ Equity A bribe had been paid to an agent. 1 Citers Â Re Lands Allotment Company [1894] 1 Ch 616 1894 CA Lindley LJ and Kay L JJ Company, Limitation, Equity A limited company is not a trustee of its funds, but their beneficial owner. However, the fiduciary character of the duties of its directors mean that they are treated as if they were trustees of those funds of the company which are in their hands or under their control, and if they misapply them they commit a breach of trust. The court contrasted the conduct of two directors (one of whom, Mr Brock, was also chairman) in determining their responsibility for an ultra vires investment made by the company. Neither was present at the meeting at which the investment had been approved. Attendance at a later meeting at which the minutes of that meeting were confirmed was held to be insufficient to make either director liable. On the other hand statements made by Mr Brock showing he had taken an active part in the decision to make the investment were sufficient to hold him responsible for it. However the other director had been "away on the sea" and "had nothing to do with the transaction at all" which was "past praying for" on his return. In a case of a company director being treated as a trustee within the limitation provisions of ss1(3) and 8(1) of the Trustee Act 1888 in respect of a claim that unauthorised investments had caused loss to the company. The court recognised the trustee-like nature of a director’s duties as very relevant to the statutory limitation periods for actions by beneficiaries against express trustees for breach of trust and for the recovery of trust property, whether those periods are applied directly or by analogy. In consequence of the fiduciary character of their duties the directors of a limited company are treated as if they were trustees of those funds of the company which are in their hands or under their control, and if they misapply them they commit a breach of trust. Directors are not regarded as trustees merely by virtue of their office; but they are treated as trustees "of money which comes to their hands or which is actually under their control" (per Lindley LJ); or "they are only trustees qua the particular property which is put into their hands or under their control" (per Kay LJ). Trustee Act 1888 1(3) 8(1) 1 Citers Â Howard v Fanshawe [1895] 2 Ch 581 1895 McMullen J Landlord and Tenant, Equity, Costs In equity a proviso for re-entry in a lease is to be treated as a security for the payment of the rent. A tenant applying for relief from forfeiture will normally be required to pay the lessor's costs of the forfeiture proceedings, save in so far as those costs have been increased by the lessor's opposition to the grant of relief, upon appropriate terms. 1 Citers Â Bonhote v Henderson [1895] 1 Ch 202; [1895] 1 Ch 642 1895 Equity The court refused to allow rectification of a voluntary settlement, since the mistake was demonstrated by a prior agreement. 1 Citers Â Â Dibbins v Dibbins; 1896 - [1896] 2 Ch 348; [1896] 65 LJ Ch 724; 75 LT 137; 44 WR 595; 40 Sol Jo 599 Â Bray v Ford [1895-99] All ER Rep 1011; [1896] AC 44 1896 HL Lord Herschell, Lord Halsbury LC Trusts, Equity, Litigation Practice, Damages, Defamation An appellate court's power to order a new trial is conditional on "some substantial wrong or miscarriage" being established. Lord Hershell said: "It is an inflexible rule of the court of equity that a person in a fiduciary position, such as the plaintiff’s, is not, unless otherwise expressly provided, entitled to make a profit; he is not allowed to put himself in a position where his interest and duty conflict. It does not appear to me that this rule is, as has been said, founded upon principles of morality. I regard it rather as based on the consideration that, human nature being what it is, there is danger, in such circumstances, of the person holding a fiduciary position being swayed by interest rather than by duty, and thus prejudicing those whom he was bound to protect. It has, therefore, been deemed expedient to lay down this positive rule. But I am satisfied that it might be departed from in many cases, without any breach of morality, without any wrong being inflicted, and without any consciousness of wrong-doing. Indeed, it is obvious that it might sometimes be to the advantage of the beneficiaries that their trustee should act for them professionally rather than a stranger, even though the trustee were paid for his services." Lord Halsbury LC: What ws required was something sufficiently serious to render the decision of the jury unsafe amounting to "a substantial wrong" in which "the defendant was not permitted to present his case to the jury with the argument that his original complaint was true". Lord Herschell discussed the approach to damages in defamation cases: "The damages cannot be measured by any standard known to the law; they must be determined by a consideration of all the circumstances of the case, viewed in the light of the law applicable to them. The latitude is very wide. It would often be impossible to say that the verdict was a wrong one, whether the damages were assessed at £500 or £1,000." 1 Citers Â Edwards v Walters [1896] 2 Ch 157; 65 LJ Ch 557; 74 LT 396; 44 WR 547; 12 TLR 359; 40 Sol Jo 477 1896 CA Lindley LJ Equity, Contract The holder of the promissory note gave a parol renunciation of all his rights. Further he delivered the promissory note back to a devisee of its maker, on whose real estate the obligations under the note were charged, and who had kept up the payments of interest. Held: This did not work to discharge the promissory note. Section 62(1) of the 1882 Act would probably operate to include the 'maker' and his executors and or dministrators, but could not be extended to include a devisee of his estate. At law, an exoneration before any breach need not be made under seal, but a release of the note has to be under seal to be effective unless it could be brought within one of the exceptions provided by the 1882 Act. Lindley LJ said, "A release in equity is often spoken of as something easy to establish. But I am not aware of any circumstances which amount to a release in equity and not at law except an agreement for valuable consideration to give a release or not to sue. Such an agreement, unless there is some reason for not enforcing it, has in equity the effect of a release." Bills of Exchange Act 1882 62(1) Â London and River Plate Bank Ltd v Bank of Liverpool Ltd [1896] 1 QB 7 1896 Mathew, J Equity, Banking Mathew J said: "when a bill becomes due and is presented for payment the holder ought to know at once whether the bill is going to be paid or not". And "it is manifest that the position of a man of business may be most seriously compromised, even by the delay of a day." and "It seems to me the principle underlying the decision is this: that if the plaintiff in that case so conducted himself as to lead the holder of the bill to believe that he considered the signature genuine, he could not afterwards withdraw from that position; and no single case has been produced in which, where payment has been made on a forged indorsement to the holder of it in good faith, the money has been recovered back. This case was followed by another case, Smith v. Mercer 6 Taunt 76, where it was said in the course of some of the judgments that, where a banker had paid a forged draft believing that it had been accepted by his customer, he ought to know his customer's signature. The same observations that I have made apply to that case. He may not be able by any amount of care to ascertain whether or not the acceptance was a forgery. That case, therefore, does not establish the principle for which Mr. Bigham contended. The true principle is developed in the clearest possible form in the case of Cocks v. Masterman. 9 B. & C. 902. There was an intermediate case of Wilkinson v. Johnson 3 B. & C. 428, which stands by itself, and which we need not discuss. In Cocks v. Masterman the simple rule was laid down in clear language for the first time that when a bill becomes due and is presented for payment the holder ought to know at once whether the bill is going to be paid or not. If the mistake is discovered at once, it may be the money can be recovered back; but if it be not, and the money is paid in good faith, and is received in good faith, and there is an interval of time in which the position of the holder may be altered, the principle seems to apply that money once paid cannot be recovered back. That rule is obviously, as it seems to me, indispensable for the conduct of business. A holder of a bill cannot possibly fail to have his position affected if there be any interval of time during which he holds the money as his own, or spends it as his own, and if he is subsequently sought to be made responsible to hand it back. It may be that no legal right may be compromised by reason of the payment. For instance, the acceptor may pay the bill and discover on the same day that the bill is a forgery, and so inform the holder of it, so that the holder would have time to give notice of dishonour to the other parties to the bill; but even in such a case it is manifest that the position of a man of business may be most seriously compromised, even by the delay of a day. Now that clear rule is one that ought not to be tampered with." 1 Citers Â Bloomenthal v Ford [1897] AC 156 1897 HL Lord Herschell Equity, Estoppel There is no need, and indeed it is wrong, to introduce into the common law notion of estoppel, the equitable doctrine of the bona fide purchaser for value without notice. 1 Citers Â Ogilvie v Littleboy (1897) 13 TLR 399 1897 CA Lindley LJ Equity Lindley LJ discussed the variation of a gift for mistake: "Gifts cannot be revoked, nor can deeds be set aside, simply because the donors wish they had not made them and would like to have back the property given. Where there is no fraud, no undue influence, no fiduciary relationship between donor and donee, no mistake induced by those who derive any benefit by it, a gift, whether by mere delivery or by deed, is binding on the donor . . In the absence of all such circumstances of suspicion a donor can only obtain back property which he has given away by showing that he was under some mistake of so serious a character as to render it unjust on the part of the donee to retain the property given to him." 1 Citers Â Â In re Gallard; 1897 - [1897] 2 QB 8 Â In re Auriferous Properties Ltd (No 2) [1898] 2 Ch 428 1898 Wright J Equity, Insolvency A claim was made in the liquidations by creditor, but the creditor also held shares in the company which were not fully paid up. Held: The creditor claimant could recover nothing as a creditor until all his liability as a contributory had been properly discharged. Wright J said: "There is no contract for a set-off, nor do the articles of association of either company appear to contain any provision for it, nor do the general statutes of set-off apply. Nor, as it seems, is the doctrine of set-off in bankruptcy . . applicable to this case . . But in my opinion this case is governed by the principle established in Grissell's case [In re Overend, Gurney & Co (1866) LR 1 Ch App 528] and is within the express terms of the Lord Chancellor's judgment in that case. If the creditor-contributory were allowed to take the dividend without paying the call, he would be receiving payment of part of the debt which the company owes to him without making his contribution to the fund out of which that debt, with the other debts of the company, was to be paid. 'If', Lord Chelmsford says, 'the amount of an unpaid call cannot be satisfied by a set-off of an equivalent portion of a debt due to the member of a company upon whom it is made, it necessarily follows in the last place, that the amount of such call must be paid before there can be any right to receive a dividend with the other creditors. The amount of the call being paid, the member of the company stands exactly on the footing of the other creditors with respect to a dividend upon the debt due to him from the company. The dividend will be of course upon the whole debt, and the member of the company will from time to time, when dividends are declared, receive them in like manner when either no call has been made, or having been made, when he has paid the amount of it.'" 1 Citers Â In Re Ritson [1898] 1 Ch 667 1898 ChD Romer J Equity, Company 1 Citers Â Paget v Paget [1898] 1 Ch 470; [1895-9] All ER Rep 1150 1898 CA Lindley MR, Rigby and Vaughan Williams LJJ Equity The plaintiff wife was "a lady of fortune", with the bulk of her property settled on her for life for her separate use without power of anticipation. They "moved in good society and, large as their income was, they lived far beyond it." They were "recklessly extravagant" and within five years were in desperate need of funds to meet the husband's debts incurred in maintaining their lifestyle. In 1882 the wife applied to court for an order under the 1881 Act to enable her to mortgage her life interest to secure a loan of 23,000 pounds to be applied in meeting her husband's debts. In her evidence in support of the application she referred to these debts as "our debts" and said that she had known of the growing financial problems since 1880 at the latest. Another application was made in 1887 to enable the wife to mortgage her life interest for a further loan of 22,000 pounds, to be applied in paying further debts incurred by her husband. Once again she referred to these as "our debts". The parties separated in 1893 and the wife brought an action against the husband for a declaration that he was liable to indemnify her against the two mortgages. Held: The equity of exoneration is a principle of equity which depends on the presumed intention of the parties. If the circumstances of a particular case do not justify the inference, or indeed if the circumstances negate the inference, that it was the joint intention of the joint mortgagors that the burden of the secured indebtedness should fall primarily on the share of that of them who was the debtor, then that consequence will not follow. "If a married woman charges her property with money for the purpose of paying her husband's debts and the money is so applied, she is prima facie regarded in equity, and as between herself and him, as lending him and not giving him the money raised on her property, and as entitled to have her property exonerated by him from the charge she has created. This doctrine is purely equitable, and the authorities which establish it shew that it is based on an inference to be drawn from the circumstances of each particular case; the prima facie inference being in such a case as that supposed that both parties intended that the wife's assistance should be limited to the necessity of the case and should not go beyond such necessity." Conveyancing Act 1881 1 Citers Â Ogilvie v Allen (1899) 15 TLR 294 1899 HL Lord Halsbury LC, Lord Macnaghten, Lord Morris Equity The plaintiff, a widow, had executed deeds founding two charities and devoting to them a considerable part of the large fortune which she had inherited from her husband, but later brought proceedings to set the deeds aside asserting that she had not been fully and properly advised and had not fairly understood the nature and effect of the documents. Held: Upheld. Lord Halsbury LC said that he agreed with the judgment of Lindley LJ, but he contemplated that there might be "circumstances when misunderstanding on both sides may render it unjust to the giver that the gift should be retained." 1 Cites 1 Citers Â In re Griffin [1899] 1 Ch 408 1899 Byrne J Equity, Banking The endorsement and delivery of a banker’s deposit receipt with the intention to make a gift operated as a good equitable assignment of the amount on deposit at the bank. The instruction had been handed to the donee. It did not matter that no notice had been given to the bank. 1 Citers Â In Re Ritson, Ritson v Ritson [1899] 1 Ch 128 1899 CA Chitty LJ, Lindley MR Equity, Company The joint debts of a partnership are payable out of the joint assets if sufficient even though secured on the separate property of one partner. Chitty LJ said of a deceased partner that his "interest in the joint assets [of the partnership] was only his share of the surplus after payment of the joint debts" 1 Cites 1 Citers Â In Re Carne's Settled Estates (1899) 1 Ch 324 1899 North J Landlord and Tenant, Equity A right to occupy for life, arising by settlement gives to the occupier an equitable interest in the land. 1 Citers Â Santley v Wilde [1899] 2 Ch 474 1899 Lord Lindley MR Equity, Land Lord Lindley considered the nature of a mortgage and said: "The principle is this: a mortgage is a conveyance of land or an assignment of chattels as a security for the payment of a debt, or the discharge of some other obligation for which it is given. This is the idea of a mortgage; and the security is redeemable on the payment or discharge of such debt or obligation, any provision to the contrary notwithstanding. That, in my opinion, is the law. Any provision inserted to prevent redemption on payment or performance of the debt or obligation for which the security was given is what is meant by a clog or fetter on the equity of redemption, and is therefore void. It follows from this that 'once a mortgage always a mortgage,' but I do not understand that this principle involves the further proposition that the amount or nature of the further debt or obligation, the payment or performance of which is to be secured, is a clog or fetter within the rule." Lord Lindley MR said: "a clog or fetter is something which is inconsistent with the idea of security; a clog or fetter is in the nature of a repugnant condition." 1 Citers Â Oliver v Hinton [1899] 2 Ch 264 1899 Equity The deposit of title deeds to secure the repayment of Â£400 was accompanied by a memorandum of the deposit, with an undertaking to execute a legal mortgage if asked to do so. Held: When, two years after the deposit of the title deeds, the owner executed a conveyance of the property to a purchaser, whose agent (a former solicitor's clerk) never asked to see the deeds, the equities of the case depended on whether the purchaser had acted with such with gross negligence that she had to be postponed to the equitable rights of the chargee. In order that a purchaser for value, who has acquired the legal estate without notice of a prior equitable mortgage of the property, may be postponed to that mortgage, it is not necessary to shew that he has been guilty of fraud, or negligence amounting to fraud; it is sufficient that he has been guilty of negligence so gross as to render it unjust to deprive the prior mortgagee of his priority. 1 Citers Â Chetwynd v Allen [1899] 1 Ch 353 1899 Romer J Equity A lender M advanced pounds 1,200 to pay off an existing mortgage held by T over a property owned by the plaintiff. M made the advance on the basis of certain misleading representations and non-disclosures by the plaintiff's husband. M was told that he would receive a transfer of T's mortgage. pounds 1,000 of the advance was applied in reduction of T's mortgage. T's mortgage was secured over two properties. The plaintiff was subrogated to the prior mortgage because otherwise the wife would have been unjustly enriched by the discharge of the debt which it secured. Held: The charge on both properties to the extent of pounds 1,000 was kept alive in equity in favour of M, so far as that could be done without prejudicing T or the plaintiff, with whom M did not deal. T was not prejudiced as the balance of his mortgage debt had priority over M's charge. The plaintiff was not prejudiced so long as no extra costs were thrown on the mortgaged properties by reason of the original mortgage debt being divided between T and M. 1 Citers Â
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