Willes v Greenhill
| Jurisdiction | England & Wales |
| Judgment Date | 14 November 1861 |
| Date | 14 November 1861 |
| Court | High Court of Chancery |
English Reports Citation: 45 E.R. 1139
BEFORE THE LORD CHANCELLOR LORD WESTBURY.
S. C. 29 Beav. 376; 31 L. J. Ch. 1; 7 Jur. (N. S.), 1134; 5 L. T. 336; 10 W. R. 33. See Newman v. Newman, 1885, 28 Ch. D. 679; In re Wyatt [1892], 1 Ch. 197, and on appeal sub nom. Ward v. Duncombe [1893], A. C. 383; Lloyd's Bank v. Pearson [1901], 1 Ch. 871.
[147] willes v. greenhill. Before the Lord Chancellor Lord Westbury. Nov. 13, 14, 1861. [S. C. 29 Beav. 376; 31 L. J. Ch. 1; 7 Jur. (N. S.), 1134; 5 L. T. 336 ; 10 W. R. 33. See Newman v. Neumiw, 1885, 28 Ch. D. 679 ; In re Wyati [1892], 1 Ch. 197, and on appeal sub nom. Ward v. Duncombe [1893], A. C. 383; Lloyd's Bank v. Pearson [1901], 1 Ch. 871.] The husband of a legatee beneficially entitled under a will to a share of the testator's residuary estate was one of the trustees of the will and joined with his wife in mortgaging her share. The mortgagee served notice of the deed upon the /0*#.. 1140 WIIXBS;^., GREENHII/L mortgagor-trustee, but gave no other notice of the ;incumbrance. Held, that the notice was sufficient as against subsequent ineumbrancers, although the latter had given formal notice of their incumbrances to every trustee. These were appeals from the refusal of the Master of the Rolls to vary a certificate as to priority of incumbrances upon the share of one of the residuary legatees under the will of William Greenhill the testator in the cause. The testator by his will dated the 19th May 1831 devised and bequeathed to Henry Greenhill, Charles Sayer and William Greenhill, their heirs, executors and administrators his real and personal estate upon trust for his wife for life, and after her decease upon trusts for sale, and to pay the proceeds to the testator's sons John Greenhill and William Wickham Greenhill and Henry, Greenhill and his daughters Mary Ann Webb, Anna Maria Sayer, the wife of. the trustee Charles Sayer, and Sarah Dyer in equal shares^ the shares of his said daughters to be wholly independent of their then present or any future husbands. In answer to an inquiry directed by the decree as to incumbrances affecting the shares of the testator's children and the priorities of such incumbrances, the chief clerk certified as the third in point of priority of the incumbrances affecting the share of Mrs. Sayer, a mortgage dated the 14th April 1837, and made between her of the first -part, her husband (who, as has been already said, was one of the trustees of the will) of the second part, and John Ellerker Boulcott of the third part, and Frederick Lock of the fourth part, whereby Mrs. Sayer's one-sixth share was assigned to Mr. Lock by way of mortgage upon trust to indemnify Mr. Boulcott against any loss which he might sustain by reason of his having [148] become surety for Mr. Sayer, by indorsing certain promissory notes of Mr. Sayer to an amount not exceeding 3000 and interest. And the chief clerk certified as the fourth and fifth incumbrances two mortgages of the 5th August 1837 and the 10th November 1841, in favour of the Appellants. The Appellants took out summonses to vary the certificate by placing their charges above that placed third in the list, on the ground that the inoumbrancer claiming the benefit of the earlier charge so placed had not given sufficient notice of his incumbranee, the only notice given having been the service of a copy of the mortgage deed upon Mr. Sayer, the receipt of which he acknowledged by a letter dated April 14th, 1837, addressed to the mortgagee's solicitors. The case was argued before the Lords Justices,(l) and judgment was reserved, but [149] at their desire was: set down to be re-argued before the full Court. The arguments were commenced, but had not concluded before the death of Lord Campbell, and the appeal now came on to be heard before Lord Westbury. Mr. Lloyd and Mr. Prendergast were for one of the Appellants. Mr. Fischer, for the other. They referred to -.-Foster v. Blackstone (1 Myl. & K. 297) ; Foster v. Cockerell (9 Bligh, N. S. 332, on appeal, 3 Cl. & Fin. 456) ; Loveridge v. Cooper (3 Russ. 30) Dearie v. Hall (Id. 1); Brmvne v. Savage (4 Drew. 635; S. C. 5 Jur. N. S. 1020); Myall v. Rolk (1 Atk. 164 ; S. C. 1 Ves. sen. 348) ; Stevens v. Savage (1 Ves. jun. 154) ; Pwrdew v. Jackson (1 Russ. 1) ; Cooper v. Fynmore (3 Russ. 60) ; Smith v. Smith (2 Cr. & M. 231) ; Exparte Smtlton (1 De G. & J. 163) ; Timsm v. Ramsbottom (2 Kee. 35) ; Rice v. Rice, (2 Drew. 73) ; and Mem v. Bell (1 Hare, 86). [160] Mr. G. L. Russell and Mr. W. H. Bagshawe, for the Respondent, were not called upon. the lord chancellor. I do not intend to overrule or throw doubt upon any former decision, but to take the authorities as they stand. I am asked by the Appellants avowedly to extend the decisions, or to say that the present case comes within the reasons of policy upon which those decisions were founded. Now it is well established (whether rightly or wrongly) that upon assignments or mortgages of equitable interests in property held by trustees the duty devolves upon the assignee or mortgagee to give to the trustees notice of the assignment or incumbranee, I will assume that this duty has been wisely thrown upon him, because of the expediency of giving to trustees notice of dealings with the property and in order to prevent fraud. Bat the whole question depends upon the kind of notice required, and with regard to thia I entirely adopt what was decided in the case of Smith v. Smith (1 Y. 4iDEa.-F.A-i.in: willes , greenhill 1141 & C. Exch. 338), and the reasons laid down in that decision. It was there held that notice to one trustee was sufficient, because a subsequent: incumbrancer or assignee would be under an obligation to inquire of every one of the trustees, and therefore he-would-have'td inquire of the'one-to'whom notice had been given. In the present case,1-however,.'it-is objected that the trustee who received the notice was the husband of one of the beneficiaries, and that therefore, although he had necessarily notice of a transaction in which he was personally interested, he had nevertheless the power of aub-[151]-sequently dealing with the trust property in which he was thus personally interested, and that on this account, although still a trustee, he ought not only to have been the recipient of the notice, because of the possibility of his committing a fraud by making a subsequent assignment and suppressing the fact of his having received the notice. That argument, I think, cannot be adopted. I must assume as a general proposition that trustees will do their duty honestly, and I cannot therefore say that a person dealing with this trustee ought to have contemplated that he would commit a fraud. I cannot hold that the notice to Sayer, if otherwise sufficient (which it clearly was), became insufficient by the fact of his being interested in the subject of the trust. Uidess it can be held that his duty as trustee was suspended, it must be considered that the notice served on him was as effectual as if it had been served on one who had no interest. There has been nothing like a decision or diduin involving any principle upon which this appeal depends, and I have no hesitation in affirming the decision of the Master of the Bolls. I regret that the parties have been subjected to the expense of two hearings, which was the result of accidental circumstances, and in dismissing this appeal I shall give only the costs of the hearing before myself and incidental thereto. (1) The following note of the intended judgment of one of the Lords Justices was prepared for delivery after the conclusion of the argument before their Lordships:- the lord justice knight bruce. Upon authority which here at least cannot now I think be disputed, we are, in my opinion, bound to hold it to be generally true that where an equitable interest in property legally vested in a plurality of trustees is assigned by the owner of that equitable interest to a stranger, a notice of the assignment given on his part to one of the trustees is as effectual for every purpose of priority, that is to say, for every purpose with which the present contention is concerned, as if given to each of the trustees, at least as long as the trustee to whom the notice has been given continues a trustee. The able counsel for the Appellants before us have contended that if that position is generally true, the present case is one of exception upon the ground of special circumstances; the special circumstances being, as they say, the relation of husband and wife that existed between Mr. and Mrs. Sayer; the fact of the Respondent's security of April 1837 having been for a debt due to him...
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