Waring (Lord) v London and Manchester Assurance Company Ltd
| Jurisdiction | England & Wales |
| Date | 1935 |
| Year | 1935 |
| Court | Chancery Division |
Mortgage - Power of Sale - Contract for Sale - Injunction to restrain Completion - “Sale” - Under-value - Good faith -
The Court will not grant to a mortgagor tendering the moneys due under the mortgage an injunction restraining the mortgagee from completing by conveyance a contract to sell the mortgaged property in exercise of his power of sale unless it is proved that the mortgagee entered into the contract in bad faith.
A company entered as mortgagee into a contract for the sale of the mortgaged property. The mortgagor had been given many opportunities to find the money due under the mortgage and, at his request and upon his undertaking to put the property up for sale by auction, the company had refused a good offer to purchase. When the mortgagor did put the property up for sale by auction (when the period within which he had undertaken to do so was past) no acceptable bid was received, and, after a long period during which he was to the company's knowledge negotiating with a third party for a fresh loan on the security of the mortgaged property, and during which the company, in order to help him as much as possible, had postponed selling, the company ultimately contracted to sell the property for an amount less than that which it had refused at his request and upon his undertaking. On a motion by the mortgagor for an injunction to restrain completion on the grounds that there was no sale until conveyance and that the contract had been entered into in bad faith at a gross under-value, and for leave to redeem the property upon paying into Court, as he claimed to be able to do, the moneys due under the mortgage:—
Held, (1.) that a mortgagee's exercise of his power under s. 101, sub-s. 1, para. (i.), of the Law of Property Act, 1925, to sell the mortgaged property by public auction or private contract is binding on the mortgagor before completion unless it is proved that be exercised it in bad faith:
(2.) that the fact that a contract for sale was entered into at an under value is not by itself enough to prove bad faith.
MOTION.
This was a motion in an action by a mortgagor for an injunction restraining the mortgagee and an intending purchaser from completing by conveyance a contract which had been entered into for the sale of the property comprised in the mortgage. The motion raised the question whether a mortgagor, on tendering the principal and interest due under the mortgage, is entitled to an injunction restraining completion by conveyance of a contract already entered into by the mortgagee, as mortgagee, for the sale of the property comprised in the mortgage, and to redemption of the property.
By an instrument of charge dated July 12, 1929 (and hereinafter called “the charge”), the Right Honourable Samuel James Baron Waring of Foots Cray (hereinafter called “the plaintiff”) demised to the London and Manchester Assurance Company, Ld. (hereinafter called “the company”), the property therein comprised by way of mortgage for securing payment to the company on November 12, 1929, of 180,000l. with interest thereon at the rate of 7 per cent. per annum, payable quarterly.
On May 12, 1930, the plaintiff made default in payment of interest due under the charge, and on August 6, 1930, when interest was more than two months in arrear, the company, in exercise of powers conferred on it by the charge, appointed a receiver of the property. In or about September, 1930, an offer of 180,000l. was made for the property. It was later increased to 200,000l., which amount was formally offered in December, 1930, but was refused. In July, 1932, the property was put up for sale by auction, on the plaintiff's instructions, at a reserve price of 220,000l. No bid approaching that price was received, and the property was not sold. From September, 1932, to July, 1934, the receiver made many attempts to sell it, none of which succeeded.
On July 4, 1934, the plaintiff was informed that there were negotiations for a sale and, by a letter dated August 2, 1934, he was informed that the intending purchaser under the contract the completion whereof he sought to restrain by this motion (hereinafter called “the purchaser”) was pressing for an immediate exchange of contracts. At this time the plaintiff was negotiating with the Yorkshire Insurance Company, Ld. (hereinafter called “the Yorkshire company”), for a loan of 200,000l. on the security of the property. The company knew of the negotiations. On or about August 11, 1934, the plaintiff sent to the company a letter received by him from a director of the Yorkshire company stating that a provisional survey of the property had been made by a gentleman who would be before the Yorkshire company's board on the following Wednesday. There could, however, be no completion until the director who had written the letter had returned, on September 5, 1934, from his holidays. By a letter dated August 14, 1934, the receiver informed the plaintiff that the company would not hold the matter open until September 5, 1934, unless it received direct from the Yorkshire company, after the board meeting referred to, a letter stating that, subject only to title, the loan of 200,000l....
To continue reading
Request your trial
-
Property & Bloodstock Ltd v Emerton ; Bush and Another v Property & Bloodstock Ltd and Others
...should be dismissed. LORD JUSTICE SACHS 47As regards the first point taken by Mr. Price in the course of his persuasive submissions - that Waring's case ( 1935 Chancery at page 310) was wrongly decided, I have but little to add to what has already been said by my Lord. In Waring's case ther......
-
Corbett and another v Halifax Building Society and Others
...is not suggested that the scope of the duty has changed. 25 Between contract and completion, the position is described in Waring v London & Manchester Assurance Co [1935] Ch 310, where in a passage subsequently approved by the Court of Appeal in Property & Bloodstock Limited v Emerson [1968......
- Forsyth v Blundell
-
Beckkett Pte Ltd v Deutsche Bank AG and Another and Another Appeal
...of the Pledged Shares unless the sale was in bad faith and/or improper (see Waring v London and Manchester Assurance Company, Limited [1935] Ch 310 (“Waring”) at 317–318 and also Fisher ([37] supra) at para 86 In the present case, even if Beckkett were able to prove that the sale of the Ple......
-
The barbados companies act, cap. 308 and receivers' duties
...AC 25, 48 per Lord Parker. 35 See, e.g. Kennedy v. De Trafford [1897] A.C. 180; Lord Waring v. London &Manchester Assurance Co. Ltd. [1935] Ch. 310. 36 10 L.T. (NS) 353, 354. See also Tomlin v. Luce (1888) 51 Ch D. 573; (1889)43 Ch.D 191. 37 [1913] A.C. 299, 311. 38 [1955] Ch. 634, 651 and ......