HESLOP. out of the proceeds of the sale, to the prejudice of the mortgagee, HEPWORTH must be, either that such costs are properly administration costs in the cause, or that the sale has been for the benefit of the mortgagee. Now, on what principle can I consider the costs of sale as administration costs, so as to affect the priority of mortgagee? The object of the suit is to administer the estate of the deceased debtor, subject to the mortgage. The equity of redemption only is the subject of administration in the suit. The plaintiff has, in the absence of the mortgagee, obtained the decree to sell the estate, subject to the mortgage, or free from incumbrances, with the consent of the mortgagee. The mortgagee consented that the estate should be sold free from incumbrances. How can such a consent have the effect of subjecting the security of the mortgagee to the costs of the sale ordered by the decree? I can see no ground for it. The consent of the mortgagee, that the mode of administering the equity of redemption shall be by a sale of the estate, free from incumbrances, is no waiver of his priority; although, where the sale is peculiarly for his benefit, it may possibly be otherwise,-which may explain some of the cases. If Kenebel v. Scrafton be an authority to the contrary, it will, as far as my experience goes, be found to have been overruled in practice; for which Upperton v. Harrison (1) and Aldridge v. Westbrook (2) are authorities. In Tipping v. Power (3), I had occasion to consider, but not to decide this point; and I *then satisfied myself that the mere circumstance that a mortgagee concurred in a sale would not deprive him of the ordinary rights of a mortgagee as to costs. There must be some special circumstances to produce that effect. It was said, that the mortgagee not being a party in the cause made a difference, and that Kenebel v. Scrafton turned upon that circumstance. Now I should have thought the present case stronger for the mortgagee: when he is a party in the cause, there might be some colour for saying his mortgage is the subject of an administration suit, but that clearly cannot be said where he is not a party. In neither case, however, does the mortgagee waive his priority by merely consenting to a sale. The plaintiff in this cause would have incurred the same expenses by attempting to sell the estate subject to the mortgage, as by selling it free from incumbrances. (1) 40 R. R. 175 (7 Sim. 444). (3) 58 R. R. 113 (1 Hare, 410). [*488] R.R.-VOL. LXIV. 25 1814. May 3, 8. [*504] OVERTON v. BANISTER. (3 Hare, 503-508; S. C. 9 Jur. 906.) Payment by a trustee to an infant cestui que trust, nineteen years of age, on the false representation by herself and her parents, that she had attained the age of twenty-one, held to be a discharge to the trustee for the sum so paid; but a release executed by the infant to the trustee of all demands in respect of the trust, held not to be a bar to a suit by the same cestui que trust against the trustee, although the suit was not brought until seven years after the cestui que trust had attained twenty-one. THE defendant John Banister, owing to the improper application of trust-funds by his brother James, who was a co-trustee with him, became liable to make good a sum of 600l., 41. per cent. Stock, and interest, to the three children of James, who were infants at the time of the breach of trust. The son of James, who was the eldest of his three children, came of age in 1817, and the defendant John Banister thereupon satisfied his claim on the trust-funds, and was released in respect of that share. The other two children were named Mary Ann and Sarah: Mary Ann attained twenty-one in December, 1833, and Sarah, in July, 1836. In November, 1832, a Mr. Cottle, a solicitor, applied to John Banister, by letter, stating, that Mary Ann would attain twentyone in the following month, and claiming thereupon a sum of about 4801. stock, as her share of the trust-funds. This letter was accompanied by a note written by James, her father, stating, that Mary Ann would be of age in December, 1832. John Banister, upon this representation, after some correspondence, agreed to pay Mary Ann 225l., the remainder to be accounted for by James, her father. This 2251. was accordingly paid, and Mary Ann executed an indenture of release, dated the 19th of February, 1833, reciting, that she had attained her age of twenty-one on the 13th of December, 1832, and thereupon became entitled to her third part of the trust-fund and accumulations; reciting also the said agreement that John Banister should pay 2251. and be released, and James should account for the residue; and witnessing, that, in consideration of such payment thereby acknowledged by the said Mary Ann, she thereby released and discharged John Banister from all claim or demand in respect of her share of the said trust-funds, and the interest thereof. In August, 1834, an application was made to John Banister by the same solicitor, stating that Sarah had attained her age of twenty-one. John Banister having made some question of this fact, James and his wife, the father and mother of Sarah, made affidavits of the truth of it; and, upon receiving such affidavits, John Banister entered into the same arrangement concerning Sarah's share as he had made with regard to Mary Ann's,-paid her the sum of 225l., and received a like release, executed by Sarah, dated the 18th of August, 1834. Neither the propriety of the payment, nor the validity of the release was questioned until several years after Mary Ann and Sarah attained their ages of twenty-one: James Banister, the father and co-trustee, was insolvent. In October, 1840, Sarah married the plaintiff Overton. In May, 1841, Sarah and her husband, and Mary Ann, filed their bill against John and James Banister, stating the trust, admitting that the plaintiffs had received 2257. each on account thereof, suggesting that the defendant John Banister pretended that the plaintiffs had executed some deed or deeds, and charging that they were ignorant of the contents thereof, and ought not to be bound thereby. The bill prayed, that an account might be taken of the trust-funds, and of the dividends and accumulations thereof, and that what should be found due to the plaintiffs on such account might be paid to them respectively by the said defendants. The answers admitted the facts as above stated. Cottle, the solicitor through whom the communications had taken place, had since died. Mr. Kenyon Parker and Mr. Faber submitted, that the decree was of course, unless the defendants, the trustees, could show that they had been discharged from their liability by some act of the cestui que trusts; and that an indenture executed by the plaintiffs during infancy could not be a bar to their claim. Mr. Perry, for James Banister. Mr. Romilly and Mr. Shadwell, for the defendant John Banister, argued, that the plaintiffs could not have joined in the transaction of 1832 and 1834, without being parties to the fraud committed upon their trustee; and that the Court would not permit them now, on a technical ground, to disavow their acts: they had represented themselves to be of age by the recitals in their deeds, and the Court would bind them by that representation. Lord Chancellor COWPER had gone farther than merely binding a party by deliberate acts which took place in his minority: he held, that, "if an infant was old enough and cunning enough to contrive and carry on a fraud, he ought, in a court of equity, to make satisfaction for it" (1). (1) Watts v. Cresswell, 9 Vin. Abr., tit. "Enfant," N, pl. 24, p. 415. OVERTON v. BANISTER. [ 505 ] OVERTON v. BANISTER. [ *506] May 8. [ 507 ] And, in a later case, Lord Chancellor KING decreed, that a defendant should either confirm a lease which he had made at seventeen years of age, or refund the fine, saying emphatically-"Infants have no privilege to cheat men" (1). In Cory v. Gertcken (2), Sir THOMAS PLUMER held, that the fraudulent conduct of an infant affected persons claiming under him. Mr. Kenyon Parker, in reply, said, that the cases cited would have been authorities for the defendant if the bill had sought to recover the monies which the plaintiffs had received during their infancy; but as the suit was only to recover the residue of the trust-funds, which there was no pretence had ever been paid, the cases referred to rather supported the case of the plaintiffs. THE VICE-CHANCELLOR : The plaintiffs in this case, giving credit for sums which have been received by them, are entitled to the decree for an account of what remains due to them in respect of their legacies. A case of more gross and deliberate fraud has never come under my observation. If the plaintiffs by their bill had asked payment over again of the 2251., they certainly would have failed in obtaining such a decree the cases cited at the Bar would have been sufficient authority for rejecting that claim. I am inclined also to think, that, if the plaintiffs had obtained any other benefit whatever from the defendant John Banister, the Court would not have given them relief in this suit except upon the terms of their giving up what had been so obtained. But, as the case stands, John Banister was liable to them for the whole of their respective shares of the trustfund and accumulations, and they have received no more than 2251. each. The question, therefore, is, whether the defence set up is an answer to a bill for an account of the remainder. The answer of John Banister relies on the release which was given for all demands. That would have been a bar at law if given by an adult, but the release of infants is worth nothing in law. The release, then, being void at law, the defendant cannot at the utmost do more than rely upon it as an agreement in equity; and the first question is, whether, if the releases had been executed after the plaintiffs had attained twenty-one, such releases could have been admitted in equity as a bar to the suit. John Banister was liable for the whole (1) Evroy v. Nicholas 2 Eq. Ca. Ab. (2) 17 R. R. 180 (2 Madd. 40). v. BANISTER. of the shares of the plaintiffs in the trust-funds; and the agree- OVERTON ment was, that, on payment of part of what was so due to them, the rest should be released. It has been decided in numerous cases at law, that payment of part of a debt, with an agreement simply to forbear the rest, is void, on account of the want of consideration Fitch v. Sutton (1). In this case I cannot say there was any consideration for the agreement at the time it was made; and, if the consideration is to be supposed to arise out of the delay which has since taken place, there are other circumstances, which, with reference to that point, must be taken into consideration. John Banister, as trustee to the parties, was, in a sense, bound to inform them what their interests were in the trust-funds; and, therefore, what their rights were as against the trustees. If Cottle could be shown to have acted for these parties as their solicitor, adversely to the defendant, I will not say the case might not have required a different consideration. It does not, however, appear in what situation Cottle stood with regard to the respective parties. The plaintiffs were infants at the time of the transaction, and the bill alleges that the release was not read over to them. Cottle is dead: his clerk, who was present as an attesting witness, has been examined, and the defendant has not sought to rebut the allegation of the bill, by asking him whether the release was read over, or not. I give entire credit to the statement of the defendant John Banister. Morally speaking, he is, no doubt, innocent. I look upon the whole transaction as the act of James. The result, however, as it appears to me, is, that this is not an agreement which would be binding in equity, unless the subsequent delay was such as to raise a consideration to support it; but no such case has been suggested. James is represented by all parties as having been insolvent from the beginning. I think I cannot refuse, according to strict law, to decree an account of what is due to the plaintiffs in respect of the capital stock and dividends, inserting in the decree a direction to allow the defendant the two sums of 2251. which he has already paid to the plaintiffs. No costs to be given to the hearing, further directions and the subsequent costs being reserved. (1) 5 East, 230. [ *508 ] |