Baillie v McKewan
| Jurisdiction | England & Wales |
| Judgment Date | 01 January 1865 |
| Date | 01 January 1865 |
| Court | High Court of Chancery |
English Reports Citation: 55 E.R. 862
ROLLS COURT
Approved, R. v. Shropshire Union Company, 1873, L. R. 8 Q. B. 434.
[177] baillie v. m'kewan. Nov. 3, Dec. 8,1H65. [Approved, R. v. Shropshire Union Company, 1873, L. R. 8 Q. B. 434.] A. B., in whom a lease was vested, deposited it with his bankers by way of equitable mortgage. The bankers afterwards received notice (as the fact was) that A. B. was a mere trustee of the leasehold, but they subsequently obtained from him a formal mortgage of the legal estate. Held, that the cestuis que tntxt had priority over the bankers. In July 1861, by the settlement made on the marriage of the Plaintiffs (Mr. and Mrs. John Baillie), some East India stock and some 3 per cents, and Eailway stock, 38BEAY.178. BAILLIE V. M'KEWAN 863 which had been transferred into the name of Dr. James Baillie, as sole trustee, were settled upon the Plaintiffs and their children on the ordinary trusts. Shortly after this, in the month of November 1861, Dr. James Baillie suggested to the Plaintiffs the expediency of laying out 2100 (part of the trust property) in the purchase of a leasehold house, No. 9 Westbourne Square, which, as he alleged, belonged to him. Mr. and Mrs. Baillie seemed to have trusted to this representation, without making any further inquiry as to the value of the house. They assented to this disposition of the trust funds, and gave the authority required by the settlement for the change of the investment, On the 20th of December 1861 Dr. James Baillie, who had previously been only negotiating for the purchase, obtained a conveyance of the house to himself in consideration of 900 ; but the deed did not, on the face of it, shew that it was to be held on any trusts whatever. Two days previously to the conveyance, he had sold out 700 New 3 per cents, (part of the trust funds), which produced 630, and this sum he applied in part discharge of the purchase-money. In January 1862 he sold out 800 East India stock, and later in the same year he sold out and misappropriated a further portion of the trust funds. [178] About Christmas 1861, Mr. and Mrs. Baillie sent the whole of their furniture to the house, but they did not actually go to reside there until November 1862. But the Court came to the conclusion that they took possession at Christmas 1861, though it was alleged that the trustee continued to reside there. On the 25th February 1862 Dr. James Baillie deposited the lease with the London and County Bank, as a security for 1500 and the floating balance of his banking account, and the documents of title relating to the house were also, at the same time, deposited with the bank. Dr. James Baillie, at the same time, signed a written undertaking to execute to the bank, when required, a valid legal mortgage. The banking company, however, made no inquiry as to the ownership or possession of the house. Mr. and...
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Re Thomas Ryan, A Bankrupt
...BowersENR 4 De G. & Sm. 351. Forster v. Hale 5 Ves. 300. Jackson v. Jackson 9 Ves. 300. Stein v. Stein 16 W. R. 69. Baillie v. M'KewanENR 35 Beav. 177. Russel v. Russel 1 Wh. & Tud. 441. Thornton v. DixonENR 3 Bro. C. C. 199. Lake v. Gibson 1 Eq. Ca. Ab. 290. Jackson v. Jackson 9 ves. 596. ......