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Decisions of the Superior Courts of New South Wales, 1788-1899

Doe dem. Irving v. Gannon [1847] NSWSupC 20

ejectment, land registration, priorities

Supreme Court of New South Wales

Dickinson J., May 1847

Source: Sydney Morning Herald, 21 May 1847, in Supreme Court Collection, Vol. 1, p. 117

DOE ON DEMISE OF IRVING v. JAMES GANNON AND ANOTHER.

Mr. Justice DICKINSON delivered the judgment of the Court, as follows.

This was an action of Ejectment, for lands situate in Sydney, tried before the Chief Justice, on the 29 th May, 1846. At the trial, the facts appeared to be that upon the 24 th June 1839, the Crown granted the land to John Jenkins Peacock; who on the 23 rd May 1844, mortgaged it to Michael Gannon, now an insolvent; and of whose estate the lessor of the plaintiff is the Official Assignee.

The mortgage was made, to secure Michael Gannon against indorsements, which he had made on Peacock's promissory notes, for the accommodation of the latter, to the amount of £15,000; against which, however Peacock had given to Michael Gannon his promissory notes, to the same amount, as a further security. Afterwards, Michael Gannon being in embarrassed circumstances, (but before his estate was sequestrated,) a deed was made between Peacock of the first part, Michael Gannon of the second part, and the defendants of the third part, by which Peacock, under the direction of Gannon, conveyed the mortgaged land to the defendants, on the trusts presently enumerated. The deed recited an alleged agreement, between Michael Gannon and his wife, that she should have £1500 for releasing her dower; and that she had joined in several of her husband's mortgages, on the faith of that agreement. The trusts of the deed were, first to Mrs. Gannon for her life, and then to her husband for life; unless he should become insolvent, have an execution against him, or should alien the land; in either of which events, it should pass to the trustees, for the children, and other purposes. After his own and his wife's death, the property was limited to the children in such proportions as Michael Gannon and his wife, or the survivor, should appoint.

The latter deed was made on the 1 st and registered on the 19 th July, 1844, and, on the former of these days, Mrs. Gannon executed a general release of her dower, in all her husband's lands. Previously to the execution of the trust deed, Michael Gannon had executed several mortgages of portions of his property, for sums amounting to £4800; and after the making of that deed, he executed mortgages of other portions for sums amounting to £3900. The marriage of Michael Gannon and his wife was proved. It appeared, that Michael Gannon was in 1843 and 1844 in embarrassed circumstances; and that his estate was ordered to be sequestrated, and the lessor of the plaintiff appointed his official assignee, on the 26 th day of February 1845.

In summing up the case, the Chief Justice told the Jury that, by reason of the Colonial Registry Act, the trust deed would prevail against the mortgage, if the former was made bona fide or for valuable consideration; but that the burden of proving either of these, lay upon the defendants. His Honor said, that he saw no proof of consideration for that deed, beyond the recitals in and indorsement on it; drawing attention to the fact, that the deed was executed by Peacock, and not by Gannon; and he left it to the Jury to say, whether there was any mala fides shown in the transaction. The Jury delivered their verdict for the plaintiff.

A new trial was moved for in the last term, on notice, on the following grounds. 1st. That the verdict was against evidence. 2nd. Because the Judge told the Jury that the burden of proving bona fides or valuable consideration, lay on the defendants. 3rd. Because his Honor said, that he saw no evidence of consideration, beyond the recitals in and the receipt upon the deed. 4th. Because his Honor did not negative Mr. Foster's assertion, that the promissory notes of Peacock were only waste paper.

The several points were argued by Mr. Windeyer and Mr. Broadhurst for the defendants. They cited Sugden V. & P. 295; Callaghan's Statutes, 1045; 1 Saunders 235 b.; Scott v. Surman, Willes R. 402; and Baker v. Dewey, 1 B. & C. 704. For the plaintiff, Mr. Foster and Mr. Fisher cited Doe v. Ball, 11 M. & W. 531; and commented on the wording of the Registration Act.

We have considered this case and the arguments urged; and we are of opinion, first, that the Jury should have been directed, that the trust would prevail over the mortgage deed, only, if made bona fide and for valuable consideration. As it was admitted in argument, that (whether the words "bona fide or for valuable consideration" in the Registry Act, ought to be construed "bona fide and for valuable consideration" or not, yet, by virtue of other enactments,) the direction should have been in this form, we need say no more on the point, but that we are satisfied the direction should have been as we have stated; although the words of that Act, taken by themselves warrant the instruction which was given.

Secondly. We are of opinion that it rested with the defendant to show, that the trust deed was made bona fide and for valuable consideration. The Act provides, in effect, that a subsequent registered before a prior deed, shall prevail against it if so made, but not otherwise. The plaintiff having established his case, by showing the mortgage, it was obviously for the defendant to show, not only that the subsequent trust deed was registered before, but that it was made under circumstances which would defeat the mortgage.

Thirdly. We are of opinion, that the recital in the trust deed, and the indorsement thereon, were not evidence against the plaintiff. Doubtless, when as statement is made in a recital, and a contract is made with reference to this statement, it is not competent to the parties, or their privies, to deny that statement. Carpenter v. Butler, 8 M. And W. 209. Co. Litt. 352, a. But, such recitals do not bind the Assignee of one of the parties, who has become insolvent; inasmuch as the Assignee comes in not under, or by, but over and in despite of, the party insolvent; and represents not him, but his creditors, (see Doe v. Ball, 11 M. And W. 531.) for whom, and not for the insolvent, he holds the property. We think, nevertheless, that as it was proved that Gannon's wife, on the day the trust deed was executed, released her dower in the lands thereby conveyed to the defendant, there was some evidence, dehors the deed, that a valuable consideration passed from her, who was to be benefitted by it.

In saying, that there was no other evidence of consideration than in the deed and indorsement, the Chief Justice referred to a consideration moving to Peacock, the party making and executing that deed. We are of opinion, however, that notwithstanding the words " made or executed for a valuable consideration," in the Registration Act, a valuable consideration moving from the party to whom the deed is made, or the party beneficially taking, is a sufficient consideration to support that deed. There was evidence, therefore, to go to the Jury, of consideration; and as his Honor's observation on this fact was consequently incorrect, we think it safer that there should be a new trial. Davidson v. Stanley 2 M. And G. 721. For the remark might, possibly, have induced the Jury hastily to infer fraud, without due consideration of the other circumstances.

We are of opinion, however, that the verdict was not against evidence; as the unusual way in which the deed was made, for the wife's benefit, - the limitations in that deed, for Gannon's personal benefit, - and the evidence as to his affairs, about the time when the deed was executed, - would warrant the Jury in inferring, that it was made in fraud of his creditors. That fraud would, moreover, prevent the joinder by Gannon, in the trust deed, from operating (as Mr. Windeyer contended it did) as a surrender of the mortgage.

Fourthly. - We are of opinion, that the Chief Justice was not bound to negative the assertion of fact made by Mr. Foster. We conceive that a case is properly left to the Jury, by the Judge explaining to them the questions for decision and the law which governs those questions; and then laying before them the evidence. We think, that the Judge is entitled to give his opinion on the facts; but is not called on to refute counsel's arguments, or to negative their assertions, unless he shall himself think fit to do so.

 

Dickinson and Therry JJ, 1 September 1847

Source: Sydney Morning Herald, 3 September 1847, in Supreme Court Collection, Vol. 2, p. 8

BEFORE their Honors Mr. Justice DICKINSON and Mr. Justice THERRY.

DOE DEM. IRVING v. JAMES GANNON AND ANOTHER.

Mr. Justice DICKINSON delivered the judgment of the Court.

This was an action of ejectment. The plaintiff claimed as the official assignee of Michael Gannon, an insolvent. The plaintiff proved a grant from the Crown to one Peacock, and a mortgage from him to Michael Gannon, and the insolvency of the latter, together with the appointment of the plaintiff as his assignee. The beforementioned mortgage was never registered.

The defendants claimed under a subsequent deed which was registered. That deed was from (not Gannon, the legal owner, but) Peacock, Gannon appearing by the second deed to be only an assenting or directing party. The question at the trial was, which of the two parties thus claiming under the same Peacock should prevail.

The defendants contended that they should prevail by reason of their prior registry. The plaintiff urged that he was entitled to the verdict, as the deed to Michael Gannon was executed before the other, and that the latter was not executed by Gannon bona fide, and for valuable consideration.

At the trial it appeared that the cestui qui trust (the wife of M. Gannon) of the second deed had in consideration of it executed a release of her dower in the land; and there was evidence, moreover, that when the second deed was executed, the affairs of Michael Gannon were much embarrassed. The Chief Justice directed the Jury that the second deed would prevail only if made by Peacock bona fide, or for valuable consideration. The Jury deliberated their verdict for the plaintiff.

There was a motion made at the Banco sittings after the last term for a new trial, and at the hearing we disposed of all the points in favour of the plaintiff, with the exception of one, viz., whether or not the bona fide execution mentioned in section 11 of the Registration Act, 7 Vic., No. 17, should be a bona fide execution by those to whom the deed was made? We have considered this point and we are of opinion that the Jury were rightly instructed. At common law a prior took effect against a subsequent deed. At this day it has the same power, unless there is some positive enactment which has altered this efficacy. The Legislature by its Registry Act has given priority to deeds, according not to their time of execution, but to that of registration, "of they are executed or made bona fide , &c." Now the execution of a deed is the act of the transferer, and vests the estate in the transferee immediately, whether he is cognizant of the transaction or not; see note (a) to p. 701. of 2 Man. and G., and therefore the bona fides mentioned in the 11 th section must be on the part of the transferor. If the Legislature intended that the good faith should exist in the other party to a deed, quod voluit non dixit.

By reference to the Statutes (13 Eliz., c. 5, and 29 Eliz., c. 5,) against fraudulent alienations, there will be found a special section, (viz., section 6) in favour of a purchasers bona fide and for valuable consideration. There is no such provision in the Colonial registry Act, and that absence affords us another reason for our opinion that the bona fides must exist in the transferer.

Had GANNON, before Irving acquired anything by the insolvency, conveyed to the defendants, there would still have been a question, under the Statute Elizabeth, whether they could retain:- for, the deed would have been a fraud on his creditors, if with intent to defeat or delay them. And so it might possibly have been, had PEACOCK had the title, and conveyed to the defendants by Gannon's directions.

But, here, Gannon conveyed nothing. He directed Peacock to convey; and Peacock purports to convey, accordingly. HE, however, had nothing to convey, and consequently conveyed nothing. And Gannon, who had the estate, and might have conveyed, did not assume to convey --- but only directed another to do so. So that, as a conveyance, it operated nothing.

Therefore, there is no conflict of titles under or dependent on the statute of ELIZABETH. If there were, the defendants might retain, (however dishonest Gannon's intentions,) --- if they acquired in ignorance of those intentions, and for value.

Gannon (without or in concert with Peacock) might have conveyed to the defendants bona fide:- and had he done so, their title would have been good.

But, were the innocency or bona fides of the recipient the test alone, disregarding the mala fides, and fraud of the party executing, (conveying,) --- frauds by the vendor of the property would have become much facilitated and encouraged.

We are therefore of opinion that the motion for a new trial must be refused.

Published by the Division of Law, Macquarie University