Pelly v Wathen
| Jurisdiction | England & Wales |
| Judgment Date | 26 November 1851 |
| Date | 26 November 1851 |
| Court | High Court of Chancery |
English Reports Citation: 42 E.R. 457
BEFORE THE LORDS JUSTICES.
S. C. 7 Hare, 351; 18 L. J. Ch. 281; 14 Jur. 9; 21 L. J. Ch. 105; 16 Jur. 47. See Hallett v. Furze, 1885, 31 Ch. D. 313; Brunton v. Electrical Engineering Corporation [1892], 1 Ch. 440.
[16] pelly . wathen. Before the Lords Justices. Nov. 5, 6, 26, 1851. [S. C. 7 Hare, 351 ; 18 L. J. Ch. 281 ; H Jur. 9; 21 L. J. Ch. 105; 16 Jur. 47. See Hailed v. Furze, 1885, 31 Ch. D. 313; Srunton v. Electrical Engineering Corporation [1892], 1 Ch. 440.] A purchaser of property, subject to a mortgage, made, before the completion of his purchase, a second mortgage of it. He afterwards created a third mortgage, with respect to which the second mortgagee's conduct was such as to give it priority over his. Then the purchase was completed, the purchaser paying off the first mortgage, and taking a conveyance to a trustee for himself. On this occasion the title-deeds were handed to his solicitors, who afterwards took a transfer of the third mortgage. One of them was the trustee for the purchaser in the conveyance. The second mortgagee did not give them, nor had they any notice of his security. Held that, nevertheless, their lien, either for their general bill of costs, or for their costs relating to the conveyance, could not prevail against the second mortgagee, the rights of a solicitor in respect of his lien for his bill of costs being no greater than those of the client, and the circumstances of the case not exempting it from the scope of this rule. Qucere whether the lien of a solicitor is affected by his taking a partner. This was an appeal from an order of Sir James Wigram, made on the hearing of the cause on exceptions to the Master's report, and on further directions. The case is reported in the 7th volume of Mr. Hare's Eeports, page 351. The facts were very complicated, but they may be stated within a comparatively narrow compass so far as is necessary for the understanding of the questions decided upon the appeal. Previously to the month of September 1839 Mr. William Lewis had contracted to purchase the equity of redemption of certain property in Gloucestershire, which was designated as the Lyppiatt estate, and which was subject to two large mortgages for £18,000 and £6000. In order to enable him to raise money for completing the purchase, he agreed to sell part of the property to two gentlemen, who agreed to become purchasers. And, by an indenture of the 14th of September 1839, he conveyed to the Plaintiff all his real estates, including so much of the Lyppiatt estate as had not been so agreed to be sold, to hold the same to the Plaintiff by way of mortgage for securing a running account not exceeding £10,000. [17] By another indenture, dated the 14th of December 1840, Lewis mortgaged a part of the Lyppiatt property, comprised in the Plaintiff's mortgage, to Horatio James, to secure £3000; and afterwards, by another mortgage, dated the 8th of September 1841, he mortgaged the same property to Charles Barton, to secure £1000. The purchase of the property by Lewis had not, up to this time, been completed; but, in the month of January 1842, the transactions were brought to a, close in the following manner. The parts of the property which had been agreed to be sold were conveyed to the purchasers, and, by means of their purchase-money or otherwise, the two old mortgages of £18,000 and £6000 were paid off, and the legal fee in the parts not sold to the two sub-purchasers was conveyed to Thomas Bassett in trust for Lewis ; and an outstanding term of 1000 years was, at the same time, assigned to John Gurney in trust to attend the inheritance. At this time Thomas Bassett and John Gurney carried on business as attorneys and solicitors in partnership with the Defendant George Wathen, under the firm of Wathen, Bassett & Gurney ; and that firm acted as solicitors for Lewis in the matter of the purchase, Wathen having in fact so acted for many years previously. C. xxii.-15* 458 PELLY V. WATHEN 1DB 0. M. & O. IS. After the execution of these deeds, the only outstanding interests, exclusive of the Plaintiff's mortgage, were the two mortgages vested in James and Barton. And George Wathen agreed with Lewis to pay off those charges, and to take assignments thereof to himself. This was accordingly done by two indentures, both dated and executed on the 14th of February 1842, so that George Wathen became a mortgagee for the two sums of £3000 and £1000. [18] In the following month of August he advanced a further sum of £673 on security of the same premises, and thus became an incumbrancer for a principal sum of £4673. It waa taken as a fact not in dispute that the Plaintiff so conducted himself towards the parties to these securities, thus amounting to £4673, that his mortgage, though prior in point of date, would be postponed to theirs. He had actively assisted Lewis in obtaining the loans from James and Barton, and neither to them, nor afterwards to George Wathen, did he communicate the fact of the existence of his mortgage of September 1839, of which George Wathen had no notice till a few days before the institution of this suit, on the 19th of March 1843. Upon the completion of the purchase by Lewis in January 1842, the title-deeds were all handed over to Messrs, Wathen, Bassett & Gurney, as solicitors of Lewis, and they claim a lien on those deeds against the Plaintiff for the amount of their bills of costs against Lewis; and whether this claim is valid is the point we have to decide. Sir James Wigram decreed against the lien ; and against his decision the solicitors appealed. Mr. Rolfr, Mr. Follett and Mr. Bazalgette, in support of the appeal. In the first place the Respondent has neither legal estate nor possession of the title-deeds, and has no equity to take them out of the hands of the Appellants who acquired a lien upon them for valuable consideration without notice of the Respondent's charge. They advanced their money and gave their services upon the faith of [19] the lien, and without notice of anything to defeat it. Cases may be cited to shew that the solicitor of a tenant for life, or of the owner of a partial interest, has no lien on the property or the deeds, which he has received from his client, beyond the extent of his client's estate, and in that sense it may be said that the lien of the solicitor does not extend beyond the interest of his client. But the proposition does not apply to this case, for the solicitor of a tenant in fee having his client's deeds has, by means of them, a lien upon the fee. Moreover, the Vice-Chancellor did not advert to the distinction between the title to the deeds and the title to the estate. The legal title of the mortgagor to his deeds was assumed as clear by the Court of Queen's Bench in Davies v. Fernon (6 Q. B. Rep. 433), in which Lord Denman, in giving the judgment of the Court, says (speaking of a mortgage), "Now that conveyance of 1883 is silent as to the deeds, and though it be a mortgage in fee, yet, if the deeds remained with the mortgagors, they might lawfully retain them in respect of their equity of redemption as against the mortgagee." And in Wiseman v. Westlcmd (1 You. & J. 117) a mortgagee who had not obtained the title-deeds sought to foreclose the mortgagor, and an equitable mortgagee, to whom, subsequently to the Plaintiffs mortgage, the deeds had been delivered, and prayed that the deeds might be given up. The Court, however, not only refused so to order, but declared by the decree that the prior legal mortgagee had no title to have the deeds delivered up, the Lord Chief Baron observing, however, that it might have been otherwise if there had been a special contract for the delivery of the deeds. These cases shew that a mortgagor is, in the absence of special stipulation, the owner of the deeds, and remains so until [20] the mortgagee gets them, and may give a good lien upon the deeds as against a mortgagee, and especially as against a mortgagee who has not the legal estate. Moleswarth v. Robins (2 Jones & Lat. 358), Smith v. Chichester (2 Dru. & War. 393), and Blunden v. Desart (2 Dru. & War. 405), may be cited on the other side, but are inapplicable to the present case. In Smith v. Chichester the deposited lease recited the former lease, and was held to be a graft upon it, and subject to the mortgage, and the mortgagee had the legal estate. In Blwnden v. Desart the prior incumbrancer waa a judgment creditor, and had a title independently of any possession of title-deeds ; and Sir Edward Sugden said, " The solicitor's lien can hardly in any case out of this Court be rendered available against a judgment creditor, and the Court must follow the legal rule." In Molesworth v. Robins the estate descended to an heir, subject to a charge in 1 DE 0. M. ft 0. 21. FELLY V. WATHEN 459 which the heir was partially interested, and all that was there decided was, that the heir's solicitor had no lien beyond the heir's interest in the charge. In this case when the mortgage was made, Lewis had no title except a contract for a sale of an equity of redemption; the deeds never came in his possession, but passed directly into the hands of the solicitors, so as not to let in the Respondent's incumbrance. They would naturally take care that this should be the case, knowing that they had incurred much òexpense with respect to these transactions. In the next place the Respondent's conduct of itself, and independently of the general question, has not been such as to entitle him to priority over the solicitor's [21] lien. He permitted the mortgagor's solicitors to get possession of the deeds at the very time when he knew that the solicitors were engaged in extensive transactions for the mortgagor, for the costs of which they would look to the deeds as a security, and yet he never intimated to them that he claimed in respect of any incumbrance which would interfere with their right of lien. He allowed...
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