Blake v Gale
| Jurisdiction | England & Wales |
| Date | 1885 |
| Year | 1885 |
| Court | Court of Appeal |
Following Assets - Claim by Mortgagee against Residuary legatees - Acquiescence - Lapse of Time.
The right of mortgagees of real estate whose security proves insufficient, to come against the residuary legatees of the mortgagor, amongst whom his personal estate has been distributed, is a purely equitable right, and the Court will not enforce it if there are circumstances which would make it inequitable to do so.
A testator devised his freehold farm to two of his sons upon trusts for his children and issue, and directed that his unmarried daughters should be at liberty to carry on his farming business upon it, paying a rent of £600. He gave his residuary personal estate, in the events which happened, equally among his six children, the above two sons (who were executors as well as trustees) and his four daughters. The testator had made a first mortgage for £12,000, and a second mortgage for £2400, and his personal estate was under £11,000. Shortly after the death of the testator in 1859, the solicitors of the mortgagees made inquiry as to his affairs, and the solicitor of the trustees informed them of the state of the assets, and stated that the two unmarried daughters would probably carry on the farm for a time, and that their shares of the personal estate would no doubt afford them sufficient means to do so. The solicitors of the mortgagees wrote back to say that they should be glad to hear that the daughters were able to continue at the farm. The two daughters carried on the farm till 1863, when one of them married, and the farm was then let by the trustees to her husband. The interest was duly paid till 1880, when, owing to agricultural depression, the security proved insufficient. The mortgagee for £2400 in 1882 commenced an action to enforce his security, and to prove for the deficiency against the mortgaged estate, seeking to charge the executors with a devastavit in distributing the personalty without providing for his mortgage debt. Bacon, V.-C., held the executors not guilty of devastavit, they were charged with their own shares of the residuary personalty as assets in hand, and the balance found due from them was applied in payment of the mortgage debt, without prejudice to any proceeding to make the other residuary legatees refund. The Plaintiff then brought this action against the four daughters to recover the shares of personalty which they had received:—
Held (affirming the decision of Bacon, V.-C.), that the Plaintiff could not recover, for that the mortgagees having assented to the distribution of the personal estate among the residuary legatees, could not, after this lapse of time, claim it back from them.
ON the 30th of August, 1843, William Gale mortgaged to Keith and Blake for £2400 advanced by them on a joint account, the equity of redemption of a farm called North Fambridge, belonging to him and in his own occupation, on which he had given a prior mortgage for £12,000. Gale died on the 9th of July, 1859, leaving a will by which he devised the farm to trustees (his two sons and his brother-in-law) upon trust to allow such of his daughters as might be unmarried to carry on the farming business, they keeping down the interest on the mortgages, repairing, insuring, &c., and in certain events upon trust to sell the farm and divide the proceeds among such of his children as should be living at the time of distribution, and the issue of such of them as should be then dead, the issue taking their parents' shares. He gave his residuary personal estate equally among his children living at his decease, and the issue of such of them as should be then dead, the issue taking their parents' shares, with a proviso for bringing into hotchpot sums already advanced to some of his children. The trustees were appointed executors. By a codicil he directed that the farm should not be sold until after the decease of all his children, that the daughters while occupying the farm should pay a rent of £600, and that in the event of the marriage of all his daughters or their declining to carry on the farm, his trustees should let it, pay the interest on the mortgages, and divide the surplus among his children equally, the issue of deceased children taking their parents' shares.
On the 26th of August, 1859, Messrs. Keith, Blake & Keith, the solicitors of both sets of mortgagees, wrote to one of the testator's sons, asking as to the nature of the dispositions made by Mr. Gale's will, stating that the mortgage moneys were considerable, and that the mortgagees felt some interest in knowing whether the farm was to be carried on, and to whom they must apply for interest. On the 1st of September, 1859, the solicitor of the Gale family wrote a letter to Messrs. Keith, Blake & Co., stating the effect of the will and codicil, and the state of the family — two sons, two married daughters, and two unmarried daughters. He then went on to say: “Whether the unmarried daughters will avail themselves of the power given them to carry on the farm is not finally decided, though it is most likely they will try it for a year or so, it having been their father's wish that they should remain at North Fambridge, and his belief that it would be to their advantage to do so. The valuation of the personalty for the legacy office has but just been completed, it amounts to between £10,000 and £11,000, and the shares of the two unmarried daughters of that sum, and of the sums already advanced to other members of the family, will afford them, there is no doubt, sufficient means to carry on the business should they determine to do so. In any case you will observe the executors, who are also trustees of the will, will be the persons to whom your clients will have to look for payment of the interest, and there is no reason to expect that that will be paid with less punctuality, or the business carried on less effectively, than it was by the late Mr. Gale. I will take care that you are duly apprised of the decision the young ladies may come to on the subject.” On the 3rd of September, Keith, Blake & Keith replied: “We are much obliged to you for your long and explanatory letter regarding our late friend Mr. Gale's affairs. We shall be very glad to hear that his daughters are...
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