This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
In Watts v. Porter (/), a majority of the Court of Queen's Bench held that a mortgage of an equitable interest in stock, where the mortgagee had omitted to give notice of the charge to the trustees, must be postponed to a charging order obtained under s. 14 of the Judgments Act, 1838, by a subsequent registered judgment creditor. This decision lias not been followed in later cases. Such a charging order is a mere process of execution, and the execution creditor can only ohtain what the judgment debtor can honestly give him (m).
Equitable mortgagee when postponed to judgment creditor.
(g) Arnold v. Mayor, §c. of Graves-end, (1856) 2 K. & J. 574 ; 25 L. J. Ch. 530, 776; but see Arnold v. Ridge, (1853) 13 C. B. 745 ; 22 L. J. C. P. 235.
(h) Whitwortlt v. Gaugain, (1846) 1 Ph. 728 ; 13 L. J. Ch. 288; 15 ib. 374 ; and cases cited inf. p. 1213 : see, too, Elpb. & C. 11.
(i) Mildred v. Austin, (1869) 8 Eq. 220.
(k) Earl of Cork v. Russell, (1871) 13 Eq. 210 ; 41 L. J. Ch. 226.
(/) (1854) 3 El. & Bl. 743 ; 23 L. J. Q. B. 345.
In a later case, it was held that a judgment entered up by an heir for his own debt, before any action by simple contract creditors of the ancestor, had no priority over their claims under the Administration of Estates Act, 1833, in respect of the descended real estate (n). So, an equitable assignee of stock, whose mortgage was subsequent to the judgment, but before the charging order, was held entitled to priority over the judgment creditor, though he had omitted to give notice of his security (o) ; and, in a later case, it was laid down, that where a judgment creditor had notice of a prior mortgage, or a mortgagee had notice of a prior unregistered judgment, each was equally postponed; in the former case, because the debtor had parted with his interest (p); in the latter, because the mortgagee, having notice of the prior incumbrance, could not, by contract, place himself in a better position than his mortgagor, who might not derogate from an interest which he had already created (q) ; hence the rights of a holder for value and in good faith of a debenture, which charges all (r) the property of the company, prevail over those of an execution creditor (s). But as between judgment creditors this principle has no application; the judgment creditor gaining his position by proceedings in invitum; so, notwithstanding notice of a prior unregistered judgment, bis judgment, if first registered, will have priority (t). Under the Judgments Act, 1864, the priority of judgment creditors inter se was regulated according to the times when the several writs were placed in the sheriff's hands (u). Where, however, the transaction though in form a judgment, is in truth a contract, as where money is agreed to be advanced upon the security of certain land, and the judgment is only the mode of carrying out the contract, the principle first stated would probably be held to apply (x). An execution creditor is not in the position of a purchaser, and the rule as to obtaining priority by notice does not apply to him (y).
Priorities of judgment creditors inter se ; under the Act of 1864.
(m) Re General Horticultural Co., (1886) 32 Ch. D. 512, 515 ; Re Marq. of Anglesey, 1903, 2 Ch. 727, 732.
(n) Kinderley v. Jervis, (1856) 22 Beav. 1 ; 25 L. J. Ch. 538.
(o) Scott v. Lord Hastings, (1858) 4 K. & J. 633 ; see V.-C. Wood's judgment; Haly v. Barry, (1868) 3 Ch. 452, and cases there cited; Brear-cliff v. Dorrington, (1850) 4 De G. & S. 122; 19 L. J. Ch. 331.
(p) See Usher v. Martin, (1889) 24 Q. B. D. 272; 59 L. J. Q. B. 11.
(q) Benham v. Eeane, (1861) 3 D. E. & J. 318 ; 31 L. J. Ch. 129; Neve v. Flood, (1864) 33 Beav. 666.
(r) See Wickham v. New Brims-wick, §e. Co., (1865) L. R. 1 P. C. 64 ; 35 L. J. P. C. 6.
(s) Duck v. Tower Galvanizing Co., 1901, 2 K. B. 314; 70 L. J. K. B. 625.
By s. 11 of the Law of Property Amendment Act, 1859, the release from a judgment of part of any hereditaments charged therewith, is not to affect the validity of the judgment as to the hereditaments remaining unreleased ; but this provision is not to affect the rights of persons interested in the hereditaments remaining unreleased (z).
Release of part of land charged not to affect judgment.
The remedies of the judgment creditor since September, 1838, when the Judgments Act, 1838, came into force, have depended upon the due registration of the judgment, until the Act of 1860 added registration of the writ of execution, and that of 1864 substituted delivery in execution, together with registration of the writ or other process, in cases where the judgment creditor desired a sale of the lands (a). Under the Judgments Act, 1838, judgments did not affect lands, etc, as against purchasers, mortgagees, or creditors, until they had been registered in the manner specified in the Act. By the Judgments Act, 1839, the old dockets (b) were closed; and judgments then docketed were not to affect lands, etc, as against purchasers, mortgagees, or creditors after the 1st of August, 1811, until a memorandum thereof was left for registration at Westminster under the Act of 1838 ; and as respects judgments registered at "Westminster, a new memorandum was required to be left for registration every five years.
Remedies depend upon registration.
(t) Benham v. Keane, sup. (u) Guest v. Cowbridge R. Co., (1868) 6 Eq. 619 ; 37 L. J. Ch. 909.
(z) Benham v. Keane, sup. ; and see Croft v. Lumlaj, (1858) 6 H. L. C. 672 ; 27 L. J. Q. B. 321.
(y) Arden v. A., (1885) 29 Ch. D. 702 ; 54 L. J. Ch. 655 ; Badclcy v. Consolidated Bank, (1S88) 34 Ch. D. 536 ; 57 L. J. Ch. 408 ; Re Marquis of Anglesey, 1903, 2 Ch. at p. 732 ;
72 L. J. Ch. 782; and see Ex p. Whitehouse, (1886) 32 Ch. D. 512 ; 55 L. J. Ch. 608, where the principle was applied to a garnishee.
(z) Cf. on the analogous 10th section, Booth v. Smith, (1884) 14 Q. B. D. 318 ; 54 L. J. Q. B. 119 ; the Irish Act (11 & 12 Vict. c. 48), B. 72; Handcock v. H., (1850) 1 Ir. Ch. R. 444.