Jones v Smith
| Jurisdiction | England & Wales |
| Judgment Date | 11 May 1843 |
| Date | 11 May 1843 |
| Court | High Court of Chancery |
English Reports Citation: 41 E.R. 624
HIGH COURT OF CHANCERY
S. C. 1 Hare, 43; 11 L. J. Ch. 83; 12 L. J. Ch. 381; 6 Jur. 8. See West v. Reid, 1843, 2 Hare, 257; Dawson v. Prince, 1857, 2 De G. & J. 50; Brown v. Tanner, 1868, L. R. 3 Ch. 602; Turton v. Meacham, 1869, 19 L. T. 760; Maclmyde v. Eykyn, 1871, 24 L. T. 464; Shaw v. Foster, 1872, L. R. 5 H. L. 336; Agra Bank v. Barry, 1874, L. R. 7 H. L. 149; The Emilien Marie, 1875, 44 L. J. Adm. 15; Lee v. Clutton, 1875, 45 L. J. Ch. 46; Patman v. Harland, 1881, 17 Ch. D. 357; Williams v. Williams, 1881, 17 Ch. D. 442; Lloyds Banking Co. v. Jones, 1885, 29 Ch. D. 230; In re Mount Morgan (West) Gold Mine, Ltd. 1887, 56 L. T. 625; English and Scottish Mercantile Investment Co. v. Brunton [1892] 2 Q. B. 710; In re Valletort Steam Laundry Co., Ltd. [1903], 2 Ch. 659. See also notes to Le Neve v. Le Neve, 2 Wh. & T. L. C. (7th ed.) 201 et seq.
[244] jones v. smith. Dec. 9, 12, 1842; May 11, 1843. [S. C. 1 Hare, 43; 11 L. J. Ch. 83; 12L. J. Ch. 381 ; 6 Jur. 8. See Westv.Reid, 1843, 2 Hare, 257 ; Dawson v. Prince, 1857, 2 De G. & J. 50 ; Brown v. Tanner, 1868, L. R. 3 Ch. 602 ; Turtm v. Meacham, 1869, 19 L. T. 760; MaAryde v. Eykyn, 1871, 24 L. T. 464 ; Shaw v. Foster, 1872, L. R. 5 H. L. 336 ; Agra Bank v. Barry, 1874, L. R. 7 H. L. 149 ; The Emilien Maiie, 1875, 44 L. J. Adm. 15 ; Lee v. Cluttm', 1875, 45 L. J. Ch. 46; Pafmanv. Harland, 1881, 17 Ch. D. 357; Williams v. Williams, 1881, 17 Ch. I). 442; Lloyds Banking Co. v. Jonen, 1885, 29 Ch. D. 230; In re Mount Morgan (West) Gold Mine, Ltd. 1887, 56 L. T. 625 ; English and Scottish Mercantile Investment Co. v. Bnmton [1892] 2 Q. B. 710 ; In re Valletort Steam Laundri/ Co., Ltd. [1903], 2 Ch. 659. See also notes to Le Neve v. Le Neve, 2 Wh. & T. L. C. (7th ed.) 201 etseq.] Upon an assignment of an outstanding mortgage term, in consideration of a further advance, the assignee was informed that a settlement had been made upon the marriage of the mortgagor, but was assured by him and his wife that it related only to the fortune of the wife and did not include the mortgaged estate, although in fact it did. Upon a bill filed by the eldest son of the marriage, who was tenant in 1PH.JU. JONES V. SMITH 625 tail under the settlement, Held, that the assignee of the term was not affected with notice of the settlement, it appearing from the Plaintiffs own evidence that the assignee had really believed the representation so made to him to be true. By a settlement made on the marriage of David Jones, the Plaintiffs late father, dated the 31st of August 1820, David Jones, in consideration of 1000, the fortune of Sarah, his intended wife, conveyed a certain real estate (which was then vested in him in fee, subject to a mortgage term of 500 years, for securing 2000 to Samuel Bennett), to th& use of himself for life with remainder to a trustee to preserve contingent remainders; with remainder to the use and intent that Sarah his wife should receive out of the rents an annual sum of 100 by way of jointure, in bar of dower, with remainder to the first and other sons of the marriage in tail; with remainder to David Jones in fee. In the year 1823 Thomas Smith, who was an attorney at Chester, at the request of Jones, paid off Bennett and took an assignment of the mortgage term, and upon the faith of a representation by Jones, that the mortgaged estate was not included in the marriage settlement, made further advances to him from time to time upon the same security, by means of which advances the debt due upon the mortgage amounted, on the 28th February 1824, to 4000. Thomas Smith died in the year 1834 and David Jones in the year 1836. And in 1838 the bill was filed by the eldest son of the marriage against Esther Smith as the administratrix of Thomas Smith and other parties, praying amongst other things a declaration that Esther Smith might stand an [245] incumbrancer on the estate to the extent of 2000 only, on the ground that at the time of advancing the money Thomas Smith had notice of the settlement. The account given of the transaction by the Defendant coincided with the statement contained in the following letter, dated in October 1836, written by Thomas Smith after he had become acquainted with the contents of the settlement, and which was put in evidence by the Plaintiff. "At the times I made the advances both Jones and his wife solemnly assured me, and indeed offered to make oath, that no settlement was made of his estates on their marriage, but that a settlement was made of her fortune of 1000 only. I placed confidence in this statement.-Previous to the last Ruthin Assizes they applied to me for a further loan, which I consented to advance upon having a deed in trust to sell, and a fine levied by Jones and his wife, and I then required a sight of the settlement: this was at last brought to me; and, to my great surprise, I found it to be a settlement of his estates previous to his marriage; in consequence of which I declined advancing the money. Jones and his wife solemnly declare that they never gave instructions for the settlement, and that they never knew the contents until it was brought to me, which was a few days before the last Ruthin Assizes." In addition to that evidence the Plaintiff examined his mother, Sarah Jones r she having previously released her jointure under the settlement. Her evidence was as follows : " The first time I became acquainted with Thomas Smith was in the summer of 1823. He came to Acre House for the purpose of seeing the property of my late husband before he put a mortgage [246] upon it. I was present on that occasion, and no one else but my child. On that occasion Thomas Smith asked me a question as to the settlement made on my marriage with David Jones. The question he asked me was, ' How did you come to bestow your all on so needy a person 1' I replied, ' I have not been quite so improvident and simple as that.' He said, ' I understand you had a pretty good fortune.' I told him what I had, and that my friends had taken care of me before my marriage. He said, ' In what way 1 Had you a settlement 1' I replied, ' Yes, I had.' He then asked me where it was, and said, ' I must see it.' I said, ' It was with my brother.' This conversation took place before dinner. No other person except my said child was present at it. She is dead. After dinner, Thomas Smith, addressing my husband, said, ' I understand this good lady has taken care of herself, and I must see the settlement.1 My husband replied that he was afraid that he (Thomas Smith) could not see it without displeasing my aunt, who, he said, was a rich old lady, and it might be an injury to him (my husband), or words to that effect. Thomas Smith asked if he could not see it without her knowing it? More was said upon the subject which I do not exactly recollect: but my husband at length promised that he would try and get it from my brother for the said Thomas 626 JONES V. SMITH 1 PH. 247. Smith. There was no one else, excepting Thomas Smith, my husband, and myself, present when this last conversation took place. At that time, to the beat of my knowledge, Thomas Smith had not advanced my husband any money. When I last saw the settlement it was in the possession of Thomas Smith, who then refused to deliver it to me, saying that he would keep it with the deeds, where it ought to have been long ago ; and that neither Mr. Jones nor I had anything to do with the property, as it was entailed. I told him I was sorry [247] for it, that I did not know that it was entailed, or that there was any more than JlOO settled upon it. At the hearing of the cause before Vice-Chancellor Wigram, His Honour held that the Defendant was not affected with notice of the settlement; from which decision the Plaintiff appealed, and the appeal now came on to be heard. Mr. Bethell and Mr. Parry, in support of the appeal. The Vice-Chancellor, in stating the grounds of his decision in this case, (1) began by dividing the cases of constructive notice into two classes: the first, consisting of those cases in which the party charged has had actual notice that the property in dispute was, in fact, charged, incumbered, or in some way affected: the second, of those in which the Court has been satisfied from the evidence before it, that the party had designedly abstained from inquiry for the very purpose of avoiding notice ; and, in the passage of His Honour's judgment which immediately follows, he says that the proposition of law upon which the second class of cases proceeds is, not that the party had incautiously neglected to make inquiries, but that he had designedly abstained from such enquiries for the purpose of avoiding knowledge. (1) Now, the question upon this appeal is, whether this enunciation of the doctrine (upon which, be it observed, the whole of His Honour's subsequent reasoning proceeds), excluding, as it does, those cases in which the party has omitted to make enquiry, not with any fraudulent intent, hut merely from want of due caution, is warranted by the previous authorities on the subject. [248] We submit that it is not. In Hiern v. Mill (13 Ves. 114. See p. 120), Lord Erskine states the principle thus : " The law imputes that notice, which from the nature of the transaction every person of ordinary prudence must necessarily have." In Jackson v. Rome (2 S. & St. 472. See p. 475), Sir J. Leach says, "although he (the purchaser) may, in fact, have been ignorant of the settlement, according to the averment of the plea, yet in equity he must be fixed with all the knowledge which it was reasonable he should acquire." In Whitlreail v. Jordan (1 B. & C. 303), Baron Alderson is still more explicit. "A purchaser," he says, "is not indeed bound to use extraordinary circumspection : nor, on the other hand, do I apprehend it to be necessary to make out express fraud on his part. If he be grossly negligent in omitting to inquire, it is, at all events, sufficient to...
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