Chapman v Michaelson
| Jurisdiction | England & Wales |
| Judgment Date | 1909 |
| Date | 1909 |
| Court | Court of Appeal |
Money-lender - Registration - Mortgage in favour of unregistered Money-lender - Validity - Declaratory Order - Equitable Relief - Imposition of Terms -
The trustee of a debtor under a scheme of arrangement with his creditors brought an action against an unregistered money-lender, who, in the course of his business, had taken a mortgage from the debtor to secure a loan, for a declaration that the mortgage was illegal and void under s. 2 of the Money-lenders Act, 1900:—
Held, that the Court had power to give a declaratory judgment, although no ancillary relief was claimed, and that it ought not to impose upon the plaintiff equitable terms as to repayment of the actual money-advanced as a condition of giving the declaratory judgment.
APPEAL from a decision of Eve J.F1
The plaintiff brought this action as the trustee of the property of L. R. W. Loyd under a scheme of arrangement with his creditors. The defendant was a money-lender who carried on business in partnership with S. J. Samuel under the registered trade name of “Sydney Mostyn” at the registered address of 3, Lower Church Street, Bath, and 41, Bridge Street, Bristol. The plaintiff alleged that a mortgage dated February 14, 1905, executed by Loyd in favour of the defendant was entered into by the defendant in the course of his business of a money-lender otherwise than in his registered name, and he claimed a declaration that the mortgage was illegal and void under s. 2 of the Money-lenders Act, 1900. The defendant alleged that on February 14, 1905, he lent to Loyd the sum of 2000l. on the security of a mortgage of that date, being the mortgage in question, upon his contingent interest in the estates of Baron Overstone, which were estimated to be of the value of 80,000l. a year. The mortgage was taken by the defendant in his own name and was to secure the sum of 4000l. with interest thereon at 20 per cent.
It appeared that on April 5, 1905, a receiving order had been made against Loyd. Thereupon a scheme of arrangement was brought forward by Loyd whereby it was proposed that all his property which would become divisible amongst his creditors if he were adjudicated a bankrupt should vest in the plaintiff as trustee under the scheme and be administered by him as if Loyd had been adjudicated bankrupt at the date of the approval thereof by the Court, and the trustee had been appointed his trustee in bankruptcy. By the scheme the property was to be applied (inter alia) in satisfaction and discharge of all incumbrances created by the debtor, particulars of which were set forth in a schedule, in payment of 20s. in the pound to all his unsecured creditors on the amount of their unsecured debts provable by them, and in payment to the debtor of any surplus remaining after...
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