Gibson v Seagrim
| Jurisdiction | England & Wales |
| Judgment Date | 25 June 1855 |
| Date | 25 June 1855 |
| Court | High Court of Chancery |
English Reports Citation: 52 E.R. 741
ROLLS COURT
S. C. 24 L. J. Ch. 782.
[614] gibson . seagrim. June 23, 25, 1855. [S. C. 24 L. J. Ch. 782.] Two properties, X. and Y., were mortgaged to A., and afterwards X. alone was mortgaged to B. Held, that B. is entitled to have the securities marshalled, so as to throw A.'s mortgage, in the first instance, on estate Y. In 1851 Charles Seagrim mortgaged certain real estate to Henry Johnson, with a power of sale, to secure £1200. Afterwards, in 1852, Seagrim mortgaged the same estate to Godwin to secure £700, and by deed of even date transferred ten shares in the Winchester Gas Light and Coke Company, by way of additional security. In 1853 Seagrim mortgaged all his lands, including those in the former mortgage, to the Plaintiff, but the gas shares were not comprised in the security. On the 17th August 1853 the Plaintiffs instituted the present suit to realize their securities, and they registered the suit as a lis pendens, in pursuance of the Act (2 & 3 Viet. c. 11). On the 10th October 1853 Seagrim became bankrupt, and his assignees were made parties to the suit. On the 4th November 1853 the first mortgagees sold the real estate included in their mortgage for £1895, and, after paying themselves, they handed over the surplus to Godwin, who applied it in part payment of his mortgage debt, and he then, on the 13th December 1853, sold the gas shares, and having paid himself in full, handed over the balance (being about £206, LOs. Id.) to the assignees of Seagrim. The Plaintiffs claimed to have this sum applied in satisfaction of their debt, in lieu of the surplus of the proceeds of the real estate intercepted by Godwin. [615] The question was adjourned from Chambers for argument in Court. Mr. B. Palmer and Mr. Giffard, for the Plaintiff. Godwin had two securities, the estate and the gas shares, while the Plaintiff had one only, viz., the estate. The principle of marshalling is therefore applicable, and the Plaintiff is entitled to require that Godwin should be paid out of the gas shares alone, so as to exonerate the real estate for the Plaintiff's benefit. The principle is laid down by Lord Hardwicke in Lanoy v. The Duke of Athd (2 Atk. 446):-He says, " The duchess has two funds, real and personal assets, to answer her demands; the Plaintiff has only one. Is it not then the constant equity of this Court, that if a creditor has two funds, he shall take his satisfaction out of that fund...
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