THE MARQUIS OF

v.

such cases, choses in action (except bank notes) are not considered as having the locality of the places where the securities are. Being HERTFORD of opinion that, in that sense, the certificates and bordereaux are choses in action-evidences of title to property elsewhere-I think that they did not pass by the codicil, and that the exception to the Master's report must be allowed.

NOTE. The parties appealed to the LORD CHANCELLOR, [who affirmed the judgment of the MASTER OF THE ROLLS, Dec. 20, 1845. No report of this appeal can be found.]

YOUNG v. ENGLISH.

(7 Beav. 10-18; S. C. 13 L. J. Ch. 76.)

A. B., an equitable mortgagee, lent the title deeds to C. D. the mortgagor, to enable him to arrange a sale of the property. C. D. was indebted to A. B., both on the mortgage and on a trade account. C. D. paid to A. B. a part of the produce of the sale; but there was no evidence of his having made any express appropriation of that payment. Held, that it must be understood that the payment was made on the mortgage account, and that A. B. had no right to appropriate it to the trade account.

A mortgagor, who had borrowed the title deeds from an equitable mortgagee, to enable him to sell the property, handed them to his solicitor, in order to complete. The mortgagee acquiesced in the sale: Held, that the solicitor had a lien on the deeds for his costs of the transaction only, but not for his other claims for costs against the mortgagor.

In the year 1835, the defendant English, who was entitled to a leasehold house and premises in St. James's Street, borrowed 8001. from the plaintiff Young, on the security of certain promissory notes, a warrant of attorney to confess judgment, and an agreement that English would, at a future time, deliver up to him the lease and other deeds belonging to the premises. Pursuant to the agreement, the lease and deeds were actually delivered to the plaintiff in the year 1837, and 2001., part of the debt, being afterwards paid, the plaintiff remained equitable mortgagee of the premises for the

sum of 6001. and interest.

The defendant English carried on the business of an hotel keeper upon the premises, and the plaintiff, being a wine and spirit merchant, supplied English with goods, in respect of which, a debt became due to him in addition to the mortgage. In 1840, the plaintiff having the lease and other deeds as equitable mortgagee for 6001. and interest, and being also a creditor of English for goods sold and delivered, the trustees for the Conservative Club, who were defendants, by their solicitors, applied to English to dispose

LORD LOWTHER.

See Addenda to 7 Beav.]

1843. Nor. 6. Dec. 22.

Rolls Court.

Lord LANGDALE M.R.

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YOUNG

v.

ENGLISH.

[11]

[12]

of his interest in the lease, and give up his business as an hotel keeper, in order that the house might be converted into a club house; *and after some treaty, English agreed to this, in consideration of the sum of 1,150l. to be paid him.

Upon the terms being agreed to, English desired the defendant Mr. Henry Walker, whom he employed on other occasions as his solicitor, to act for him in completing the sale. Mr. Walker stated that he should want the lease and title deeds; English undertook to procure them, and he accordingly applied to Mr. Farrell, an agent of the plaintiff, in whose possession the deeds were, for a loan of them for two or three days; and the plaintiff having consented to lend them on terms, they were, on the 3rd day of November, 1840, placed in the hands of English, upon his signing and delivering to Farrell a memorandum dated on the same day, and in these words: "I hereby acknowledge to have received from you the different deeds hereafter specified, relating to my house, the 'St. James's Royal Hotel,' 88, St. James's Street, which I undertake to return safe, on or before Friday next, the 6th of the present November." At the foot of the memorandum was a list of the deeds, and to the list was subjoined this note: "The whole of the above documents being in deposit with Mr. Young (the plaintiff), as securities for monies advanced to me (English), and yet remaining unpaid."

English having thus obtained the deeds, carried them to Walker, and gave him instructions to do what was necessary for carrying the sale into effect.

Mr. Walker, by his answer, which had not been replied to, said positively, that at the time when the deeds were so delivered to him, English did not inform him, nor did he know, or in any way suspect, that the plaintiff, or any other person, had any equitable or other mortgage on *the premises, or any lien or claim on the deeds relating thereto.

Mr. Walker prepared the abstract of title from the deeds, communicated with the solicitors of the purchasers, and on the 16th day of November, 1840, the agreement in writing for the sale was settled and approved.

In the mean time, English had not performed his undertaking to return the deeds to the plaintiff; and having stated (when he was applied to on the subject) that he had delivered them to Walker, the plaintiff became alarmed, and on the 13th of November, Messrs. Wood and Ellis, his solicitors, wrote to Walker as follows: "We find that Mr. Young has allowed Mr. English of the 'St.

James's Hotel,' to have the deeds of that house, for the purpose of enabling you, as his solicitor, to prepare and settle an agreement for the disposition of the residue of the term therein. Under these circumstances, it is right that Mr. Young should have your acknowledgment that you hold them for him, subject to immediate return to him on demand, in order that no doubt or difficulty may hereafter arise, by reason of the special accommodation so offered to Mr. English. We shall be obliged, therefore, by the receipt of such acknowledgment and undertaking, in due form, at your earliest convenience."

Mr. Walker did not, upon the receipt of the letter, appear to have made immediate enquiries into the foundation of the plaintiff's claim. If he had done so, he would then, at least, have known that the plaintiff was clearly entitled as equitable mortgagee, and that the purchase money ought to be applied in satisfaction of his debt.

Instead of making such enquiry, Mr. Walker returned a very unsatisfactory answer to the letter of Wood and Ellis. English misrepresented the real facts of the case, and apparently misled Mr. Walker as well as the plaintiff, by telling the former that he had satisfied the latter. Mr. Walker, notwithstanding the letter of the 13th of November, and another letter, dated the 16th of November, which he received from Wood and Ellis, proceeded to the completion of the agreement with the trustees of the Conservative Club, without paying any regard to the claim of the plaintiff. The agreement was engrossed; it was executed by English; the sum of 3001. was paid to English in part of the purchase money, and the purchasers were let into possession on the 18th day of November. By the agreement, the sum of 300l., further part of the purchase money, was to be paid on the 20th of January, 1841, and the remainder, being 550l., on the 29th of September, 1841, and Mr. Walker signed an undertaking to deliver up the title deeds on the execution of the assignment. English, notwithstanding his having misrepresented some of the facts, called on the plaintiff and paid him the 300l. which he had received as the first instalment of the purchase money; but on the 23rd of January, 1841, English received the second instalment of 300l. and then absconded.

This bill was filed on the 2nd of March, 1841, and prayed that the plaintiff might be declared to have a lien upon the unpaid purchase money, for the amount of what is due to him; and that he might be declared to have been entitled to apply 300l. (part of the purchase money which had been paid to him) towards the

YOUNG v.

ENGLISH.

[13]

YOUNG ".

ENGLISH.

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[ 15 ]

discharge of a book debt; that accounts might be taken of the purchase money unpaid, and of what remained due to him; that the purchasers might be declared not to be entitled to a sum of 671. 2s. 5d., which they claimed in *respect of rent; and that as against the plaintiff's claim, the defendant, Mr. Walker, had not any lien on the lease and title deeds, for his general bill of costs against Mr. English. Walker, as before stated, by his answer, denied all notice of the plaintiff's claim, and he thereby claimed such a lien as the Court should consider him entitled to. A replication was filed to his answer, which was afterwards withdrawn, and he was examined as a witness on behalf of the plaintiff.

In January, 1842, English became bankrupt, and his assignees were brought before the Court by supplemental bill.

Mr. Pemberton Leigh and Mr. Bagshawe for the plaintiff : The defendant, Walker, who claims merely an equity, is entitled to such interest only as English himself had; English had expressly undertaken to return the deeds, which in equity both he and his solicitor are bound to perform. Walker, therefore, has no lien. whatever.

As no appropriation was made by English of the 300l. paid by him, the plaintiff has a right to attribute it to the trade account (1), thus leaving the equitable mortgage undischarged.

Mr. G. Turner, for the trustees of the Conservative Club, claimed to be entitled to deduct from the purchase money 671. 2s. 5d., being such portion of the ground rent due at Lady Day, 1841, as accrued due before possession was given up.

Mr. Kindersley, for the assignees, claimed to be entitled to the unpaid purchase money, on the ground that the deeds were in the order and disposition of the bankrupt; secondly, that the plaintiff had no right to make the appropriation of the 300l. which he contended for, as that sum formed part of the produce of the mortgaged premises, and must be taken to have been paid in part discharge of the mortgage thereon; thirdly, that a great portion of the purchase money was the consideration for the good will of the business, on which neither the plaintiff nor Walker could have any claim.

(1) See Devaynes v. Noble (Clayton's case), 15 R. R. 131 (1 Mer. 605, 606).

Mr. Pemberton Leigh, in reply.

THE MASTER OF THE ROLLS :

Four questions are made.

First. The assignees claim to be entitled to the remaining purchase money, on the ground that the deeds were in the order and disposition of the bankrupt. For this claim there is no foundation.

Secondly. The plaintiff, being creditor in respect of his mortgage debt, and also in respect of a book debt, claims to be entitled to the sum of 300l., which he received on the 19th of November, 1840, in satisfaction of the book debt. In support of his claim, in that respect, he alleges, that nothing was said as to the application of the money which he received, and he insists, that in the absence. of express direction, he has a right to make the application most beneficial to himself. But it appears to me, from the nature of the transaction, that English paid this money only in respect of the plaintiff's right to the mortgage, and that it must, from the circumstances, be understood, that English meant the payment to be applied towards satisfaction of the mortgage.

Thirdly. The purchasers claim to be entitled to deduct from the purchase money the sum of 671. 2s. 5d., being such portion of the ground rent due at Lady Day, *1841, as accrued due before possession was given up. The agreement however affords no foundation for this claim, and I am of opinion that it cannot be sustained.

Fourthly. Mr. Walker claims to have a lien on the deeds, not only for the costs of completing the purchase, but also for a general bill of costs, which he states that he has against English.

The replication to his answer was withdrawn, and the plaintiff has examined him as a witness. The consequence of which is, that his answer must be taken to be true, and the plaintiff must pay him his costs of the cause. He has further contended, that he is entitled to have his claim allowed to its fullest extent; but any question on the subject is, in this case, precluded by the form of the answer, in which Mr. Walker says that he claims such a lien as the Court shall consider him entitled to; and having considered what he is entitled to, I am of opinion that his lien extends only to the costs incurred in completing the purchase for which the deeds were placed in his hands.

The plaintiff is now seeking the benefit of the purchase in which he acquiesced from the beginning, and he cannot have the remaining

YOUNG

v.

ENGLISH.

Dec. 22.

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