Reviews
| DOI | http://doi.org/10.1111/j.1468-2230.1957.tb02725.x |
| Date | 01 November 1957 |
| Published date | 01 November 1957 |
REVIEWS
FRAUD
IN
EQUITY.
By
L.
A.
SHEBIDAN.
[London:
Sir
Isaac
pitman
&
Sons,
Ltd.
1957.
xliii
and
285
pp.
40s.
net.]
THIS
book is an abridged version of Professor Sheridan’s thesis for
the
degree of
PH.D.
The author has divided the work into four
parts,
but
it
falls
naturally into two main divisions. The
first
three parts, about two-thirds
of the book, are devoted to
a
careful examination of the cases on fraud in
equity, the classification being based on Lord Hardwicke’s judgment in
Earl
of
Chesterfield
v.
Jansuen
(1761)
2
Ves.Sen.
126:
the fourth
part
consists
Of
an analysis of what has gone before with
a
view to ascertaining
“
the meaning,
classification, and distinguishing features of equitable fraud.”
Part
I
deals with actual fraud, and contains
a
chapter on “fraudulent
dedings with property” which was thought by your reviewer
to
be the
least
satisfactory in the book. Apart from
‘‘
a
lexical note on
‘
surprise,’
”
this topic
is
dealt with under the heads of
“
Constructive Notice
”
and
“
Legal Owner’s
Loss
of Priority.” Under the
first
head, the question under consideration
is
whether
a
subsequent purchaser is bound by some prior equitable interest. The
relationship between the doctrine of notice, and the effect of fraud and gross
negligence is not made clear.
It
is
submitted that the basic principle
is
that
(apart from registry provisions)
a
subsequent purchaser
is
normally bound by
all
equitable interests of which he has notice, whether actual
or
constructive;
and that the question is not whether he has been fraudulent
or
grossly negligent
in making inquiries, but whether he has made the usual and proper inquiries in
the circumstances, a wider question which must,
I
think, include within
it
all
cases of fraud
or
gross negligence. The cases on fraud
or
gross negligence
are,
it
is submitted, an anomalous but settled exception in favour of the purchaser in
relation to dealings with title deeds. Where the matter involves failure on the
part of the purchaser to make any
or
sufficient inquiries as to the title deeds,
it
seems that only fraud
or
gross
negligence
will
postpone him, though there be
present circumstances which in any other type of case would be treated
as
giving
rise to constructive notice. This view of the matter may be mistaken, but there
are difficulties, and
a
discussion of them would have been useful.
Under the second head, the problem which is considered is what circum-
stances will postpone
a
person who not only has the legal estate but has
also
got priority in point of time
to
a
subsequent equitable incumbrancer. The
reference to
Hunt
v.
Ehes
(1860)
2
De
G.F.
&
J.
678
is
somewhat misleading:
the facts there were that the mortgagor was in fact, unknown to the mortgagee,
the mortgagee’s own solicitor, and the mortgagee was held not to be negligent
in relying on his own solicitor on the not unreasonable assumption that the
mortgagor was an independent third party. More generally it may be doubted
whether
Northern
Counties
of
Englam!
Fire
Zmrance
Co.
v.
Whipp (1884)
26
Ch.D.
482,
does in fact,
as
Professor Sheridan states, represent an ample
summary of the law on this subject. In
Whip’s
case, Fry,
L.J.
pointed out
that there were two types of case (i) where the legal mortgagee failed to obtain
the deeds and (ii) where, having obtained them he afterwards parted with
them, and he said that in both cases fraud alone would cause postponement.
As
to (i), owing to registration the case can hardly arise since
1926,
but it
is
submitted that there
is
no
real
doubt but that the law was settled that not
only fraud but also negligence in failing to obtain the title deeds would post-
pone even
a
legal mortgagee to
a
subsequent equitable incumbrancer.
(See
CoZyer
v.
Finch
(1866)
5
H.L.C.
905;
and
Walker
v.
Limm
[1907]
2
Ch.
104
applying the principle of
Oliver
v.
Hinton
[I8991
2
Ch.
264.)
As to (ii), which
665
666
THE
MODERN
LAW
REVIEW
VOL.
20
may still arise, as it is doubtful whether
a
mortgage with a deposit of deeds
is a puisne mortgage and registrable as such even after the mortgagee has
parted with the deeds, on general principles of precedent
Whipp’o
case should
still
represent the law: many writers have, however, adopted the view of
Parker
J.
in
Walker
v.
Lim
(oupra),
that the principle of
Oliver
v.
Ilintom
(mpra)
applies to
all
cases in which the postponement of
a
legal mortgage is
in issue,
i.e.,
gross negligence is sufficient in this case also.
Putting these criticisms in perspective, however, and looking at the broad
picture, the
first
three parts
of
this
work give
a
fuller and more accurate
idea of what is meant by the term “equitable fraud” than any other avail-
able source. Part
11
dealing with inequality of parties and unconscionable
bargains, which occupies
a
third of the whole book, is particularly valuable.
This part includes
a
consideration of undue influence, breach of fiduciary duty
and fraud on
a
power and an especially interesting chapter on catching bargains
with expectants.
Part
I11
is
the shortest part, and consists of
a
consideration
of the maxim that equity will not allow a statute to be used as an instrument
of fraud.
Turning briefly to the second main division, the most useful practicable
definition which is put forward is in effect
a
summary of the different classes
of case reviewed in Parts
I,
I1
and
I11
of the book. This id, perhaps,
description rather than definition
:
but it would be hard to improve upon
it
as
an explanation of the content of equitable fraud.
A
shorter alternative defini-
tion
is
submitted but, like definitions of negligence by reference
,to
a duty of
care,
it
is
not very satisfactory as it merely puts the inquiry one stage further
back.
As
Professor Sheridan says, the longer the definition the more useful
it
is.
I
only noticed one
misprint
:
the index
is
adequate
:
the tables of cases and statutes are
all
they
should be: and the table of law reports and abbreviations used contains also
the dates
of
the various reports-a good idea that has not previously come to
my attention.
On subsidiary matters the book deserves high marks.
PHILIP
H.
PETTIT.
THE LAW RELATING
TO
CHARITIEE
IN
IRELAND.
By
V.
T.
H.
DELANY.
[Dublin:
Alex Thorn
&
Co.,
Ltd.
1956.
xxxi
and
258
pp.
E8
net.]
A
HANDBOOK
ON
THE
ADMINIETRATION
OF
ESTATEE ACT (NORTHERN
IRELAND), 1955. By WILLIAM A. LEITCH. [Belfast: Incor-
porated Law Society
of
Northern Ireland. 1956.
xix
and
228
pp.
€2
5s.
net.]
ANYONE
who read Dr. Delany’s masterly survey of the development of the law
of charities in Ireland in the
International and Cmp~ative Law Qmrterly
a couple of years ago will know what to expect of his book.
The
Law Relating
to
Charities
in
Ireland
is
another masterly survey, of English and Irish law,
and will be of use on both sides of the channel. Dr. Delany has the technique
of combining concision and comprehensiveness. Within the covers of a fairly
small book, he has explored the mysteries of charity law from definition to
taxation, and from its speculative beginnings to its modern ramifications.
It
is, in fact, English law
emigrated, developing sometimes to suit the local conditions to which
it
has
bepn transplanted, yet constantly aware of developments in its domicile of
origin. In no branch of Irish law is it possible to practise
or
write or teach
without constant reference to English authorities. But sometimes the general
identity of English and Irish law has been allowed to obscure the existence of
Irish law is basically the same as English law.
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