CHARTER v. WATSON. Watson, his executors, administrators, or assigns, the sum of 350l., with interest at 51. per cent., on October 11, 1869, then Job Watson, his heirs or assigns, would reconvey or reassure the freehold hereditaments, free from all incumbrances created by him or them, to the like uses as the same were then vested, and release and discharge the copyhold hereditaments, and re-assign the policy of assurance. The deed contained the usual covenants and provisions, and included a covenant by Joseph Charter, during the continuance of the security, to pay the premiums on the policy of insurance, and in case the same should become void, to do all necessary acts for effecting and keeping on foot a similar insurance, and deliver to Job Watson the receipt for each premium on such insurance within seven days after it should have fallen due; in default whereof, Job Watson, his executors, administrators, or assigns, might keep on foot such insurance and recover the costs thereof with interest. The copyholds were surrendered in accordance with the covenant. No interest was paid by Joseph Charter or Sarah Charter after 1871; and in 1872 Job Watson entered into possession of the freehold and copyhold estates under the mortgage-deeds, and collected the rents. and profits. Previously to 1876 Joseph Charter made default in paying the premiums on the policy for 1007., and it had been kept on foot by and at the cost of Job Watson and his executrix. On September 16, 1881, Job Watson died, and the defendant, Charlotte Amelia Watson, was the executrix of his will, and remained in possession of the mortgaged property. Joseph Charter died intestate on July 27, 1897, leaving the plaintiff, Sarah Charter, his widow, and the plaintiff, George William Charter, his heir-at-law. Letters of administration to the estate and effects of Joseph Charter were subsequently granted to G. W. Charter. The Royal Insurance Company, who were also made defendants to the action, threatened to pay the 1007. secured by the policy to Charlotte Amelia Watson, unless restrained. There had been no acknow ledgment in writing of the mortgagor's title by the mortgagee, within the meaning of the Real Property Limitation Act, 1874 (37 & 38 Vict. c. 57), s. 7.1 The plaintiffs nevertheless claimed, as against C. A. Watson, the usual accounts and enquiries as against a mortgagee in possession, and redemption and reconveyance of the freehold and copyhold estates, and of the policy of 1007., upon payment to the defendant of so much (if anything) as should be found due to her. And against both defendants the plaintiffs claimed an injunction to restrain the defendant company from paying the 1007. to C. A. Watson until a proper account was furnished. The defendant C. A. Watson pleaded, in her defence, that Joseph Charter and Sarah Charter had abandoned all right to the equity of redemption in respect of the mortgaged premises, and she relied upon the Statutes of Limitation (3 & 4 Will. 4. c. 27, 3 & 4 Will. 4. c. 42, and 37 & 38 Vict. c. 57) as a defence to the action. The Royal Insurance Company did not appear at the trial, and were struck out as defendants. E. P. S. Counsel and R. Bertrand Jackson, for the plaintiffs.-There is no Statute of Limitations applicable to a mortgage of a policy of insurance, and the plaintiffs are entitled to redeem it. It is a new point, and there is no authority on it. The plaintiffs are entitled to redeem in equity, and cannot be deprived of their right unless by express Act of Parliament. The difficulty here has been created by the acts of the other side. If the policy (1) The Real Property Limitation Act, 1874 (37 & 38 Vict. c. 57), s. 7, provides: possession or receipt of the profits of any land "When a mortgagee shall have obtained the or the receipt of any rent comprised in his mortgage, the mortgagor, or any person claiming through him, shall not bring any action or suit to redeem the mortgage but within twelve years next after the time at which the mortgagee obtained such possession or receipt, unless in the meantime an acknowledgment in writing of the title of the mortgagor, or of his right to redemption, shall have been given to the mortgagor or some person claiming his estate, or to the agent of such mortgagor or person, signed by the mortgagee or the person claiming through him. . CHARTER v. WATSON. had been assured by a separate deed, there would have been no question about it. In effect the policy is assigned by way of collateral security, and the defendant must be held to have abandoned his right to the collateral security when he elected to take the freeholds and copyholds-Dyson v. Morris [1842]." Warrington, Q.C., and Ribton, for the defendant C. A. Watson.-The defendant is legal assignee of the policy. The plaintiffs cannot come after this lapse of time to recover money due on it. The Court of Chancery will, in cases of personal property, act by analogy to the Statutes of Limitations, and will apply the same limit of time and the same rules as the Legislature has provided shall be applied to the redemption of land. In the case of Hovenden v. Annesley (Lord) [1806] 3 Lord Redesdale said that Courts of equity were within the spirit and meaning of the Statute of Limitations, and act in obedience to them. A similar analogy was applied in the case of Harrison v. Hollins [1812],4 and in that of Hastings, In re; Hallett v. Hastings [1887]. The Court will in all cases discountenance a stale demand. If a different rule is to be applied to personal property than that applicable to real property, both comprised in the same deed, the difficulties would be inconceivable. The right to redeem the land having gone, the right to redeem the policy has also gone, and the defendant is entitled to receive the policy moneys. Even if not, the defendant has a lien on the policy for the money paid for premiums. E. P. S. Counsel, in reply.-The cases cited on the other side are distinguishable, for in them it was a question of drawing an analogy between legal and equitable interests; here it is a case of making a statute which is applicable only to real property apply to personalty. In the case of Mellersh v. Brown [1890], which was the case of a mortgage of personalty, the Court was asked to act upon the analogy of the statute applicable to mortgages of real estate, and declined to do so. (2) 1 Hare, 413. (3) 2 Sch. & Lef. 607. (4) 1 Sim. & S. 471. (5) 56 L. J. Ch. 631; 35 Ch. D. 94. (6) 60 L. J. Ch. 43; 45 Ch. D. 225. Kay, J., said, "I never heard that a Court of equity is under any obligation to follow, as regards personal estate, the analogy of a statute which applies to real estate." KEKEWICH, J.-The novelty of the question falling for decision is certainly somewhat strange, seeing that mortgages which include freehold, copyhold, and leasehold estates, some or one of them, and also chattels, and particularly policies of assurance, are extremely common. One would have thought that ere now the question had arisen and been discussed and decided respecting the lapse of the equity of redemption as regards chattels, or other like interests, when it was gone as regards freeholds, copyholds, or leaseholds. However, neither counsel has been able to produce any authority which bears at all directly upon the point, and there is none apparently to be found. Nor can I recall any case in my own experience or in the books where the precise point has ever arisen. The point arises very cleanly here. It cannot be denied that owing to the lapse of time and the Real Property Limitation Act, 1874, the plaintiffs are I now debarred from insisting upon their right to redeem the freehold and copyhold hereditaments comprised in the mortgage of July 1, 1869. It is not denied that more than twelve years have elapsed since possession was taken by the mortgagee, and there is no acknowledgment in writing within the terms of the statute to keep alive the equity of redemption. But the mortgage-deed contains this policy of insurance, and the question arises whether, as regards this policy also, the right to redeem is gone. I am asked to say that it is gone mainly on the ground that the Court ought to apply the analogy of the statute; and reference has been made to the well-known judgment of Lord Redesdale in the case of Hovenden v. Annesley (Lord),3 where he accepts the application of the analogy. The answer to that is the one which was given by counsel for the plaintiffs in reply-namely, that here I am not considering the application of a statute, which may be said only to affect legal interests, to equitable interests, but I am asked to apply by analogy a statute, CHARTER V. WATSON. which in distinct terms only touches land, to an entirely different property, such as a policy of insurance, which is personal estate; and I am asked to do that, notwithstanding the fact that it is also admitted that there is no statute touching such property as that. If I were to attempt to apply the statute by analogy, I should be doing something quite different from what Lord Redesdale did, and what has been done by the Courts of Chancery again and again. What Lord Redesdale said was substantially this that where a statute does not purport to bind equitable interests, it cannot be applied directly to such interests, but the Court will apply it by analogy, and so in dealing with equitable interests will treat itself as bound by the statute, which in terms only touches legal interests. It seems to me to be very difficult from that to argue that a statute which applies to land shall be applied by analogy to a policy of assurance. I do not see my way to act upon any such principle. I think I should be making an analogy of my own, and one which I do not say is ill founded; but, being fully aware of the great danger of analogies, I hesitate to create one on the present occasion. Then it is said that the plaintiffs' claim here is in the nature of a stale demand. [His Lordship then considered that defence, and said that he would be reluctant, on the facts before him, to decide against the plaintiffs on that ground, and proceeded:] I propose to deal with the case on a somewhat different footing, and to treat it as raising an entirely novel question, and endeavour to deal with it strictly on principle. On reflection, I think the principle on which I propose to deal with it is sound. This is a mortage of freehold and copyhold hereditaments and of a policy of insurance. The fact that there is copyhold property really makes no difference, except that it introduces a separate witnessing part. My conclusion would be the same if there were no copyholds, but only freeholds and the policy. The mortgage-deed is dated July 1, 1869, and conveys the freeholds to the mortgagee in fee in the usual way, "subject nevertheless to the proviso for redemption hereinafter contained." But the proviso does not follow, as there is another witnessing part which is a conveyance of the copyholds in the usual form of a covenant to surrender. These copyholds are also to be surrendered to the use of the mortgagee, "subject to the proviso for redemption hereinafter contained." Again the proviso for redemption is postponed, because there is a third witnessing part containing the assignment of the policy. That is assigned to the mortgagee, his executors, administrators, and assigns, and is "subject to the proviso for redemption hereinafter contained." Reading the deed up to that point, one sees, knowing what a mortgage-deed is, that all these three properties are intended to form one security. You may call one or other collateral, if you please, and you use the term with perfect accuracy, but all together constitute one security. Each is collateral to the other. There is no particular security with another as surety for it. You know that, before you come to the proviso for redemption, but that proviso makes it perfectly clear. If the money is paid, principal and interest, by the very day, then, according to the exigency of the contract, there is to be a reconveyance not of the freeholds, or of the copyholds, or of the policy, but of the freeholds, copyholds, and policy all together. It would be impossible for either party to say that redemption of the property could be complete without payment of the whole of the money secured by the mortgage, and a reconveyance of the whole mortgaged property. There is one indivisible security for one indivisible amount. I need not dwell upon the rest of the deed, because there are different provisions respecting different parts of the property, including provisions for keeping up the policy, and with power for the mortgagee to spend money for that purpose. How, then, is that proviso for redemption to be read? I always wish to avoid being pedantic, but one has to remind oneself that the clause which limits the time for payment, and which makes the conveyance absolute and the property conveyed the property of the mortgagee, unless payment be made on the particular day named according to the letter, has always been considered by CHARTER v. WATSON. Courts of equity as not fixing a particular day once for all, but as constituting the transaction a mortgage, and making the property a security only, and providing that, as long as the money is forthcoming when it is required and interest is paid in the meantime, the mortgagor is entitled to redeem. Before the passing of the Statute of Limitations in question a certain limit was laid down by the Court, but that was done away with by the Real Property Limitation Act, 1874, which provides that the right of redemption is not gone unless a certain time-twelve years-has expired, and there has been no acknowledgment. When that time has expired the right of the mortgagor has gone, and the mortgagee may retain the property strictly, whether at law or in equity. So that if the mortgagor has not paid the sum secured by a certain day, and there has been no subsequent acknowledgment by the mortgagee, the result is that the right of redemption is gone. I have already pointed out that the right of redemption is not as to one part of the property but as to the whole; the result is, the right is gone as to the whole, as much as regards the policy of insurance as it is as regards the land. And this is so, not because the right to redeem the policy is barred by the statute, or by applying the statute by analogy, but because, it being impossible that the mortgagor can now require a reconveyance of the land, it is equally impossible for him to require an assignment of the policy, because the policy and the land are together the security for the debt. That seems to me to be entirely consistent with the principles upon which mortgages have been administered in equity, and with what is intended in the books on equity. Upon that ground it seems to me that the plaintiffs fail. They cannot now redeem the policy without paying the principal, interest, and costs due in respect of the whole debt. They cannot make the mortgagee accept the money as regards the land because they are barred from their right of redemption as regards the land, and they cannot therefore redeem the policy either. It comes back to this, that where you have a case of land and a policy comprised in one Practice-Payment into Court on Motion - Admission by Defendant- Money Received by Defendant, but Paid Away. The plaintiff and defendant were cotrustees. In August, 1898, the plaintiff became absolutely entitled to the whole of the trust estate. Shortly afterwards the plaintiff and defendant transferred certain shares (forming part of the trust estate) into the name of the defendant. The defendant sold and transferred these shares to a purchaser, and received the purchasemoney. The plaintiff moved for an order that the defendant should pay the purchasemoney into Court (the defendant alleging, and the plaintiff denying, that it had ceased to be trust money). The defendant; in his affidavit in answer to the motion, said that, before any question was raised, he in good faith paid away all the purchase-money, and that he had no power over the shares; but he did not say that he had no power over the purchase-money. Held, that he must be ordered to pay the purchase-money into Court. Motion by the plaintiff, Richard W. Elletson, that the defendant, Ernest J. Pillers, might be ordered to pay into BENSON, IN RE. Court, to the credit of the action, the sum of 2,0751., being the amount received by him in respect of the sales of certain ordinary and preference shares in the Fishponds and Bedminster Brick and Tile Co., Lim., forming part of the residuary estate of William Benson, deceased. William Benson died in December, 1888, having by his will given all his property to his wife, Margaret Benson, for her life; and, after her death (in the events which happened), to the plaintiff absolutely. And he appointed the plaintiff and the defendant to be the executors and trustees of his will. Margaret Benson (the wife of the testator) died on August 21, 1898; and thereupon the plaintiff became entitled to have the whole of the residuary estate transferred to him. At the time of Mrs. Benson's death, these preference and ordinary shares were standing, in the books of the company, in the joint names of the plaintiff and the defendant. In September, 1898, a meeting took place between the plaintiff (who is a country gentleman living in Yorkshire) and the defendant (who is a solicitor). At this meeting six transfers were executed. They were all in the same form, and purported to be made in consideration of ten shillings paid by the transferee. By three of them, trust property to the amount of about 10,000l. was transferred by the plaintiff and defendant to the plaintiff. And, by the other three, the said preference and ordinary shares were transferred by the plaintiff and defendant to the defendant. It was admitted that these shares formed part of the residuary estate of the testator. The defendant was at this time the solicitor of the plaintiff. He alleged that the plaintiff had made him a present of these shares. This was denied by the plaintiff. The defendant, in his affidavit made in opposition to the motion, said that he had sold all the preference and ordinary shares, and had received the purchasemoney for them, and had transferred them to the purchasers thereof He also said, "All this was done before any proceedings were commenced against me, and before any intimation of any such proceedings was given, and before I was aware of any objection to the said transfers. The purchase-money did not amount to so much as 2,0751. Before any question was raised as to the said transfers, I, in good faith, paid away and disposed of all the said purchase-money in the belief that I was entitled thereto, and no part thereof is now in my hands; and I have no power over the said preference and ordinary shares or any of them." Vernon Smith, Q.C., and Ribton, for the motion. The sum of 2,025l., which we believe to be the total amount of the purchase-money received by the defendant in respect of these shares, should be paid into Court. "A man who has received money, which, if he had it in his hands to-day, he would be ordered to pay into Court," cannot " escape by stating that he paid the money away yesterday to some one, to whom he had no right to pay it"-Crompton and Evans' Union Bank v. Burton [1895]. The other side may rely upon Neville v Matthewman [1894] and Nutter v Holland [1894]3; but in each of those cases the facts were quite different. 2 Macnaghten, Q.C., and Christopher James, for the defendant.-The Court will not, upon interlocutory motion, order a defendant to pay into Court money which he admits to have been in his hands but which he has paid away-Neville v. Matthewman and Nutter v. Holland.3 The simple question here is, whether there was a gift of these shares to the defendant or not. The plaintiff by his notice of motion is really asking for execution first and judgment afterwards. Vernon Smith, Q.C., in reply.-In Crompton and Evans' Union Bank v. Burton there was clear and distinct evidence as to how the money (not ordered to be paid into Court) had been disposed of. There is no such evidence here. NORTH, J.-In this case I have come to the conclusion that the money ought to (1) 64 L. J. Ch. 811; [1895] 2 Ch. 711. |