Daly and Another v. Kelly [1816] UKHL 4_Dow_417

UKHL
Daly and Another v. Kelly
[1816] UKHL 4_Dow_417
REPORTS OF APPEAL CASES IN THE HOUSE OF LORDS, During the Session , 1816.56 Geo . III.IRELAND.APPEAL FROM THE COURT OF CHANCERY.

No. 21

Daly and Another Appellants v. Kelly Respondent

May 10 , 1813 .Feb . 7 , 15 , 25 ; May 21 , 1816 .Subject_ MORTGAGEE, PENDING A SUIT, &C.effectual according to the rights of the parties.a. A. then compromises the suit, and refuses to appeal; and the whole property sold and purchased in trust forb. B. for a less sum than that reported due to him.a. A. andb. B. claim under separate wills as devisees of C., and upon suit at the instance of A. the will in favour of B. set aside, and that in favour of A. established. B. then sets up a bond of the devisor for 40,000 l ., being more than the value of the whole property, on which bond he brings action at law and obtains judgment, whereupon A. amends his bill, and prays and obtains injunction to restrain execution.?A., after the will in his favour had been established, and before action on the bond, gives to D., his solicitor and attorney, a mortgage of the lands devised as a security for past and future costs in the proceedings, and for money advanced by D. to A. D. does not make himself a party, but suffers the suit to proceed in the name of A. as the sole Plaintiff.Decree in 1800 for payment of the sum in the bond, with interest from the time of the devisor's death instead of from its date, so that the bond was partly relieved against; and per Lord Redesdale afterwards in Dom. Proc. the bill must be understood as having submitted to have the relief made

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D. files his bill against A., B., and another, charging collusion and fraud, and praying that the decree of 1800 might be declared void as against him, and that lie might be at liberty to appeal from it in the name of A. if that should appear to be for his advantage. Decided that the mortgage was valid as between D. and A., and that D. had a right to appeal in A.'s name. Appeal accordingly by D. in A.'s name in the cause A. v. B ., and appeal against the decree authorizing that appeal.The House of Lords, without deciding whether D. had a right to appeal in this way, refer back D.'s cause to the Court below for re-hearing, that the Court might decide whether D. might not impeach the decree in the cause A. v. B . to the extent of his claims, by bill in the nature of a bill of review or otherwise, though the same remained in force against A.Bond, April 5, 1777, by Denis Daly to his son Michael.Denis Daly , of Montpleasant, in the county of Galway, was seized of a considerable settled real estate, and also seized and possessed of a large property, real and personal, unsettled. He had two sons, Denis and Michael, and three daughters. Previous to, and from the year 1777 till the time of his death in 1791 he was in a state of animosity with his first son Denis, and on April 5, 1777, executed a bond conditioned for payment of 40,000 l . to his son Michael, a sum larger than the amount of his whole unsettled property. The bond was made payable in May following, but appeared not intended to be really payable till the father's death; and the father afterwards gave a bond for 5000 l . to a favourite, and dealt in all respects with the property as if the bond to Michael had not existed:

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First will of D. Daly, Feb. 13, 1778, in favour of Michael.In Feb. 1778, the year after the execution of the bond to Michael, Denis the father made a will, and thereby devised and bequeathed all his unsettled, real, and personal estates to his son Michael and his (Michael's) children.July 20, 1790. Will in favour of Arthur Henry Daly, a younger son of Michael.In 1790, he made another will, by which he devised and bequeathed all his real and personal estates to his grandson, Arthur Henry Daly, a younger son of Michael, subject to the payment of his debts and legacies.

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Mar. 13, 1791. Will in favour of Michael.On March 13, 1791, the day before his death, he made a third will, devising and bequeathing all his unsettled real estates and personal property to his son Michael, who took possession accordingly, and possessed himself, among other things, of the 40,000 l . bond.Solicitor advances money to his client to carry on his suit, and to maintain him in the interim.Arthur Henry Daly, being led to believe that the will of 1791 had been obtained by undue means, was desirous to assert his right; but, having no funds to carry on the necessary proceedings, application was made to Kelly, a solicitor, who agreed to advance money to prosecute the suits, and to maintain A. H. Daly and his family in the mean time; and A. H. Daly, to secure Kelly, gave him bonds from time to time for the money advanced, on which judgments were entered up.Will of 1791 set aside in the Prerogative Court.In 1792, A. H. Daly proceeded in the Prerogative Court to have the probate granted to M. Daly under the will of 1791 revoked, to set that will aside, and to establish that of 1790. He prevailed in the suit, and the sentence was finally affirmed by the Court of Delegates in 1797.1792. Bill in Chancery.Answer.Issue.Verdict against will of 1791.In the same year 1792, A. H. Daly filed his bill in Chancery against Michael Daly and others, impeaching the will of 1791 on the ground that the testator, at the time of its alleged execution, lay dying, and in a state of insensibility; and praying, among other things, that the will might be set aside and that of 1790 established, and also that the bond for 40,000 l . might be declared void, and delivered up to be cancelled, on the ground that the testator did not sign it with intent that it should be obligatory on him in the event of his making a will.

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1795. Mortgage by client to the solicitor, for securing the payment of costs and money advanced.Registered.In this state of the proceedings A. H. Daly, by deed of mortgage, or what seems intended to have been, and was considered as a mortgage, of the date September 14, 1795, conveyed and assigned to Kelly all the personal property, and the rents and profits of the real estates, devised and bequeathed to him by the will of 1790, to secure the payment of 6,336 l . the amount of the judgments, and such other sums as should be advanced by Kelly, or become due to him for costs. This deed was duly registeredAction on the bond, H. T. 1797.Action bond not defended.The bond, which had been in the custody of the Court of Chancery during these proceedings, was delivered to Michael Daly, who, in Hilary Term, 1797 (stated to be in 1791 in one of the cases), brought his action on the bond on the Pleas-side of the Exchequer; and the fact of the execution of the bond not being contested, A. H. Daly, after having filed a general demurrer to the declaration, was advised not to proceed in defence, and judgment by consent was entered up for the Plaintiff. A. H. Daly then amended his bill, and prayed and

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Injunction.Decree, Mar. 7, 1800.No interest allowed till testator's death.The cause having been heard before Lord Chancellor Clare, his Lordship, on March 7, 1800, decreed that the bond should stand as a security for the principal sum of 40,000 l . and interest from March 14, 1791, the time of the testator's death, and that the Master should take an account accordingly. The cause was re-heard, and in Nov. 1800, Lord Clare affirmed the original decree.Sale-purchase by Richard Gore in trust for M. Daly.In May 1801, A. H. Daly executed a power of attorney, authorizing Kelly to lodge an appeal to the House of Lords; but, very soon afterwards, directed Kelly not to proceed with the appeal. Kelly then ceased to act for A. H. Daly. A report was made by consent that a sum of 55906 l . was due on the bond; and by a final decree, Feb. 17, 1802, this sum was decreed a charge on the real and personal estates of the obligor, which were directed to be sold. The property was accordingly put up to sale, and purchased by Richard Gore for 35,000 l . in trust for Michael Daly.Nov. 1804. Bill by Kelly praying that the decree of 1800 might be declared void as to him, and for liberty to appeal from it in A. H. Daly's name.Answer.Order, 1805, giving permission to enter appeal.In 1804 Kelly exhibited his bill in Chancery against A. H. Daly, M. Daly, and R. Gore, stating these circumstances, and that a sum of 10,493 l . was now due to him for costs and advances, and that A. H. Daly had, by a fraudulent and collusive compromise with M. Daly, declined to prosecute the suit by appeal to the House of Peers; and praying that the decree of March 7, 1800, and all subsequent proceedings thereon might be decreed and deemed void as against Kelly, and his right and title under the aforesaid mortgage and assignment,

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Appeal, 1813. Order that Kelly's cause be heard below.Kelly did not speed his own cause to a hearing, but suffered it to rest, and entered an appeal in “ Daly v. Daly ,” in the name of A. H. Daly, according to permission. M. Daly, and A. H. Daly,

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Decree, Jan. 30, 1813. Mortgage valid as against A. H. Daly.Decree below that Kelly might appeal in name of A. H. Daly.Appeal.The Court, by decree of June 30, 1813, declared Kelly entitled as against A. H. Daly to the benefit of the mortgage of Sept. 14, 1795, for payment of the costs and advances; and that as it appeared that the mortgage security would be unavailable, in case the decree of March 7, 1800, in “ Daly v. Daly ” should stand and be in force; and as the only question to be determined was the validity and effect of the bond of April 5, 1777, being the point decided by the decree of March 7, 1800, from which an appeal had been lodged in the name of A. H. Daly; it was ordered that Kelly should be at liberty to prosecute the said appeal in the name of A. H. Daly; and that the account on the foot of the mortgage should be stayed till the appeal should be decided. From this decree A. H. Daly, and Sutherland representative of Mr. Daly, appealed.The causes came on again for hearing in the House of Lords on Feb. 7, 1816.For the Appellants (Daly and Sutherland) it was contended that the prosecution of an appeal from a decree in equity by one in the name of another, could not be defended on principle, and as to precedent there was none. This right of suing in the

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The case of a solicitor advancing money for his client, and taking a security of this kind, without disclosing the interest which he had in the cause, was always regarded with suspicion, and not one

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For the Respondent Kelly it was contended that, as it had now been decided that Kelly held a valid security, the compromise under the circumstances must have been fraudulent. Lord Redesdale, in 1805, had given permission to Kelly to appeal in A. H. Daly's name. ( Lord Eldon , C. The difference is that the order of 1805 gives permission to enter the appeal, leaving to the Lords to decide the right; whereas the decree of 1813 decides that Kelly had the right to appeal. Could A. H. Daly have appealed on account of the alleged compromise,

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In reply it was contended that Lord Redesdale carefully avoided deciding the right to appeal. The whole foundation of Kelly's claim to appeal was the compromise. The answer had put him on proof of the fraud and collusion in that transaction. He had not proved it, and could not stir a step. The Court would say, You had a right to make yourself a party; and so it would in the case of a cestui que trust . The case of a creditor not proceeding with diligence did not at all apply. On the same principle that Kelly was bound to indemnify the other parties against the costs of the appeal, he ought to indemnify them also against the costs of all the proceedings since 1800.Counsel: Sir S. Romilly, Mr. Leach, and for Appellants; Mr. Hart and Mr. Johnstone for Respondent.Feb. 7, 1816.Where a real estate is in the heir at law or devisee of one dying indebted by bond, and the estate is aliened before action brought on the bond, the land is not affected, but the alienor is liable for the value.Mortgage by client to solicitor or attorney, of land in litigation in the cause, regarded by Courts of Justice with jealousy.Lord Eldon (C.) If I had not thought that a noble Lord (Redesdale), who usually attends here at the hearing of causes, would have been present this day, I would have advised your Lordships not to proceed so far with these appeals now, as I

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Feb. 15, 1816.If land is aliened pending a suit in equity about it, though this will not prejudice the Plaintiff, the alienee ought to be brought before the Court.In conveyances by lease and release, it seems not to be the practice in Ireland to make a lease for a year; but the recital in the release is evidence of the lease.Lord Eldon (C.) The order of 1805 was made by the then Chancellor, to enable the party to enter his appeal in time, in case it should appear that he had merits, and had a right so to appeal. Then the cause came on here, in 1813; and the question was, whether Kelly had a right to appeal in the name A. H. Daly, and if he had, whether he had any merits: and the order made on that occasion, according to the impression on my mind, was, that the Court of Chancery below should decide both questions, whether he had merits, and whether he had a right to appeal in this form. One of the difficulties which occurred to me in this case was, whether there was not an alienation of this property before any suit on the bond. It was likewise a singularity in the case, that this was a bill for an injunction to restrain proceedings at law on a bond;

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Feb. 25, 1816.Judgment.Registration in Ireland gives a preference in law and equity against all subsequent deeds.4 Anne, c. 5.3 Gul. Mar. c. 14.Lord Redesdale . I shall state the circumstances of this case, as it appears to me they have not been exactly understood. The first bill was filed in 1792, to establish the will of 1790, and set aside that of 1791; and, an issue having been directed, a verdict was, in 1794, given against the will of 1791; the consequence of which was understood to be the establishment of the will of 1790, and there was an end of all dispute on that subject. Then, the will of 1790 being established, the mortgage to Kelly was made in September 1795, which mortgage was of an extraordinary nature, as he wasionly to enjoy the rents and profits till he was paid; so that the mortgage was made before there was any question as to the 40,000 l . bond. The mortgage was registered in September 1795; and the effect of the registration is different in Ireland, from what it is in England in those instances in which it is used; as in Ireland the effect is to give a preference, both in law and equity, against all subsequent deeds whatever. The effect then was to give a prior right to the mortgagee, as this was an alienation by the devisee prior to the action on the bond. The action was brought after the alienation; and by the statute of Anne in Ireland, which is the same as the statute of William here, the alienation is not affected by the judgment, but the demand is personal against Arthur H. Daly for the value. This seems

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Bond payable in 1777. Obligor dies in 1791. Obligee brings action on the bond, and injunction to stay proceedings upon it. Bond is considered as valid, and decree for payment, but with interest only from the time of the obligor's death. This is correct, as the bond is relieved against to a certain extent, and the bill must be considered as having submitted to have the relief made effectual according to the rights of the parties.Then the cause came to a hearing in March 1800, and the decree was of this description, that the bond should stand as a security to Michael Daly for the principal sum of 40,000 l . with interest, from March 14, 1791, the day of the testator's death, instead of from the date in The bond, which, I presume, was founded on evidence that the bond was not intended to operate, unless in the event of no provision being made for Michael Daly by will. I do not see on what other ground it could be. Then an account is directed to be taken of what was due to M. Daly under the bond; and the Master was ordered to set off the amount of such sums as M. Daly had received. In November 1800, the cause was reheard, and the decree was affirmed. Now this decree supposes that the bond was to be relieved against to a certain extent, and is therefore so far correct; for whereas the bill prayed relief against the bond, the decree did relieve to a certain extent, but ordered payment of the bond according to the nature of the relief, and the bill

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This decree was followed up by an order in the common way, that the estates should be sold, and that all necessary parties should convey. That however did not bind Kelly. The real estates were sold to Gore in trust for M. Daly, and conveyed to him by A. H. Daly: so that Gore took only what A. H. Daly could give, and no more; and that was subject to the mortgage to Kelly.Then Kelly filed his bill to establish his own mortgage, and charged collusion between the parties to defraud him (Kelly); and that inconsequence of such collusion, A. H. Daly had abandoned an appeal from the decree, which he once intended, and that he (Kelly) was in danger of losing the benefit of his security. That bill was against M. Daly, A. H. Daly, and against Gore, and was properly so filed. Afterwards he moved the Court to be allowed to present an appeal in the name of A. H. Daly, in the cause of “ Daly v. Daly, ” as the time was almost out. An order was accordingly made under the restrictions therein mentioned, and Kelly was also directed to speed his own cause to a hearing; but instead of that, he let it rest. It was material, however, that he should have speeded his own cause, as the decree in the other cause was still open to review in the Court of Chancery; and this bill was against Gore, who might dispute the validity of the mortgage.Then the cause came here, and the Lords saw that there was an impeached mortgage, and that

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The only way of proceeding therefore is to send this again to Ireland, that the Court below may try the question between Gore and Kelly, and whether Kelly cannot still have satisfaction out of the real estate of the testator Denis Daly. If that can be done, the consequence will be that the appeal in Daly v. Daly ” may drop, if Kelly may have a decree against the lands in the hands of Gore, which I think he may; and then A. H. Daly would be personally answerable to the others. We cannot proceed in these appeals as they stand.If there are vexatious alienations pending a suit, the Court will restrain them.Lord Eldon (C.) I concur in this view of the case, which is as I before stated, with the exception of my not having noticed the circumstance of the registration. But even now I cannot see the necessity of giving Kelly liberty to appeal against the decree in “ Daly v. Daly ”. If the alienation was prior to the action on the bond, and the statute of Anne in Ireland is the same as the statute of

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Sir S. Romilly . The estate was devised by the testator Denis Daly, subject to the payment of his debts.Lord Redesdale . That is a new question. If the testator devised the lands charged with payment of his debts, that puts an end to Kelly's security, unless he can impeach the bond.Sir S. Romilly . It was not thought material to press that point, until the view now taken of the case by Lord Redesdale.Formal Order, May 21, 1816.The formal order of the House, after the common recitals, with the addition that, as the decree of 1813 had not been made up, the Lords could not hear an appeal from it; and that the minutes would only have warranted a decree establishing the right of Kelly to the benefit of the mortgage against A. H. Daly, and not against the other parties claiming the property comprised in the mortgage, by force of the decree of March 7, 1800, proceeded thus:—and to bring before the said Court on such rehearing, or in such other manner as to the said Court shall seem fit, all proper parties for the purpose of enabling the said Court to decide whether the said Thomas Kelly is entitled to the benefit of the said indenture of mortgage, of the 14th day of Sept. 1795, against the several persons claiming the benefit of the said decree of the 7th day of March, 1800, notwithstanding such decree remains in force against the said Arthur Henry Daly; and whether the said Thomas Kelly has a right to impeach the said decree of the 7th March, 1800, being no party thereto, to the extent of his claims under the said indenture of mortgage, either by bill in the nature of a bill of review, or otherwise. And it is further ordered, that the said appeal in the name of the said Arthur Henry Daly in the first-mentioned cause, and the appeal against the order made in that cause, and in the said cause of Kelly against Daly, for liberty to present such first appeal, do stand over until the further order of their Lordships.”
“ It is ordered , &c. that the said cause, in which the said Thomas Kelly is Plaintiff, and the said Arthur Henry Daly and others are Defendants, be referred back to the said Court of Chancery in Ireland, and that the said Thomas Kelly do apply to the said Court for leave to re-hear the said cause,

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Solicitors: Agents for Appellant, Hanrott and Metcalfe.Agent for Respondents, Keane.