The Express.
London, England, 1860-07-27 00:00:00

csae, which wee argesd oe iii 14 Sad, iia-riid of March
lad.

The suit atom out of the frauds of Mr. Hughes, the soli.
titer, who, it will be remembered. was sentmo to ten years'
penal servitude at the Central Criminal Court a short time
since for fraud. The bill was filed by Mr. Ogilvie as against
the defendants, who were purchasers for value, without
notice, seeking toad aside a conveyance of certain property
which he bad been induced by Hughes to make by fraud
sad misrepresentation.

Mr.Be , Mr. Melina Q.C., Mr. Elmidey, Q.C.,
Mr. Craig, Q.C., Mr. G. Y. Galant, Q.C., Mr. W. D.
Lewis, Q.C., Mr. Greene, q.c., Mr. Wicketui, Mr. Poldis,
Mr. &wrap, mad Mr. Mastadale appeared far the several
parties.
_The Vios•Cliaaoullor—ls this case the court must decide

which of several innocent persons ought to bear the loss
resulting from gross frauds practised upon them all by a
solicitor. The plaintiff, who held • valid mortgage of the
leasehold property in question, was by a fraudulent con-
trivance procured to execute deeds by which he conveyed
the whole of the property which he held in mortgage. He
was made to believe that the deeds which he executed were
only leases at • rack net, which he was told it wee proper
be should grant, with a view to • sale. This grom fraud
was practised on him by his own solicitor. The defendants
claim to be purchasers of this property for valuable con-
sideration, and without notice, by a title derived under the
deeds which the plaintiff had been fraudulently procured
to execute. The solicitor employed by all the defendants
(except perhaps the defendant Neve) was the same who had
committed the fraud on the plaintiff. As might be ex-
pected, there was complete negligence on the part of the
defendants as to any inquiry on the points which required
investigation before they could safely advance their money,
and which, if investigated with moderate enmities, most
have produced • disclosure of circumstances 'efficient to
prevent them, or any person of ordinary sense, from ad-
vancing their money. Al urea] in cases of this kind, the
defendants retort upon the plaintiffs the charge of negli-
gence. But there is a distinction. When the plaintiff was
imposed upon the occasion was one in which no extisonli.
nury caution was necessary. But the fraud practised on
the defendants was on the occasion of their making an ad-
vance of money when they were bound to be on their
guard, and to proceed with that degree of caution, care, and
circumspection which the law imposes as a duty on every
purchaser. Since the decision of the case of " Kennedy r.
Green "by Lord Brougham on appeal, it has become usual
to treat such cases as depending on the question of negli-
gence rather than on the question of implied notice to the
purchaser by his employing the some solicitor who had prac-
tised the original fraud. But the whole doctrine of con-
structive notice depends so much on negligence in not
pursuing inquiries that an accurate examination of the prin-
ciple perhaps leads to the conclusion that there is not much
difference between them grounds of decision. Whoever, on
the occasion of lending money on mortg.age employs as his
solicitor the same person who is the solicitor of the bor-
rower does not show much caution or wisdom, because, ac-
cording to the view taken by Lord Chancellor Brougham in
" Kennedy r. Green," he employs a person who certainly
will not disclose any fraud which he may have committed,
or any neglect of which he has been guilty. In the case of
" Majoribanks r. Hovenden " (1 Drury, p. 21) Sir K Sugden
made this observation, which Deems not to have often met
with the attention which it deserves, for that great lawyer
there says—" It always occurred to me that • very good
answer could have been given to the argument that if
Kirby, the nwrtgage e, had looked at the deed he would
have discovered the ud—namely, why did not you, the
plaintiff, look at the deed yourself, and thus prevent the
occurrence of the original fiend, which bat for your own
culpable negligence would never have been committed r
After this remarkable observation on the ground in Lord
Brougham's decision, Lord St. Leopards goes on to say that
it rests on the circumstances under which the fraud was
committal, the mortgagee being considered as fixed by the
knowledge which the deeds would have imparted hal due
caution been used. In the present case the clear, concise,
and forcible arguments of Hr. Lewis for the plaintiff have
not been satisfactorily answered, notwithstanding the learn-
ing and ability with which the case of the defendants was
supported. Whether the cane of the defendants be consi-
dered on the ground of negligence or notice, there seems
insurmountable difficulty. All the defendants had notice
that the plaintiff was • mortgagee, and the title was said to
be derived through him. Where • purchaser is fastened
with notice of a fact which should have put him
on an inquiry which ho neglects to make, it
is his negligence in not pureeing the inquiry which
occasions his So in this case, the defendants being all
aware that the plaintiff had been mortgagee, were bound to
know all the particulars of his security, from which the
title offered to them was derived, and are also fixed with a
knowledge of all the unusual and suspicious circumstances
which appeared on the face of the deeds of April, 1856,
by which the estate which be held as mortgagee purported
to be conveyed to Mrs. Catherine Joins, the pretended
mortgagor del the defendants. No solicitor of reasonable
skill would examine the deeds of April, 1856, knowing that
the plaintiff was • mortgagee, without seeing that they dis- '
closed an unusual and extraordinary trensaction which, if it
had been investigated, would have prevented any prudent
man from advancing his money. On the principle of
Lord Brougham's decision in " Kennedy r. Green," the
circumstances of suspicion were sufficiently epee to the ob-
servatiou of the defendants to deprive them of any right to
the defence of purchasers for valuable consideration without
notice, even if they could he considenxl an purchasers front
Catherine Jones at all. Therefore, so far as there is any
real difference between the grounds of decision in " Ken-
nedy r. Green," between Sir John Leach and Lord
Brougham, it is immaterial to this case. The employment
of Hughes by ell the defendants, and the way
in which they conducted the transaction with
him, exposes them to all the consequences of notice
communicated through him as well as of negligence.
But there are other grounds on which the plaiutilla
right to relief seems unquestionable. The defence of pur-
chase for a valuable consideration without notice was stated
by Lord Roselyn in the case of "Strode r. Blackburn." (3
Yes. t.=), to be a shield to protect the possession of pro-
perty, and not to be available in any case except to pro-
tect the actual possession. Loot Eldon overruled that doc-
trine in " Walleyes r. Lee " (9 Veal, and held that posses-
sion by the purchaser was not necessary, provided he pur-
chased from an apparent owner who was actually in posses-
sion. In Gilberts Lex Prmtorie the equitable right of a
purchaser for valuable consideration is stated thee :—" If
B obtains a conveyance of land from A by fraud, and A
quits the possession to B, and B sells the land to C for
valuable consideration tool ode and without notice, A can
never obtaiu the hind spinet C, because the fraudulent
conveyance with the quitting the possession transfers=
interest, and then when C has obtained an interest at law
for his money bon! fide, a court of equity ought not to take
it from him." It is impossible, I appreheud, te ituestiou
the soundness of this statement of the principle which sus-
tains the defence of • purchaser for valuable consideration
without notke. In the rase of "donee r. Posies" (3 Mel.
and K.), the mortgagor who obtained hie title by
fraud and forgery of a will was in actual poi-
session of the estate, and the mortgagee, who
claimed by derivative title front him, was also iu possession.
Therefore the defence of purchaser for valuable conside-
ration by the mortgagee was sustained not only on the ex-
press ground that there woe no reasonable cause to suspect
that the will was forged, lint expressly because a long 11011-
snwion had followed the alleged devise, and no reasonable
diligence could have led to a discovery of the forgery. de-
conling to the doctrine now fully established by these cases,
unless Catherine Jones had taken ponession, end being in
possession as apparent owner hail sold mai conveyed to the
defendants for valuable consideration paid to her, they are
not such purchasers as can defend themselves against the
plaintiff's right to relief against the fraudulent conveyance
to Catherine Jones, and All those who claim by derivative
title from her. The defendants can only show that they
claim as purchasers for valuable consideration from Cathe-
rine Jones, who had no possession uor any apparent owner-
ship of anything, and who appears as a defendant in this
cause to disclaim end declare that she has not and never had
any ownership or estate in that property which the defen-
dants say she mortgu,sed to them. Moreover, the defendants
were total strangers to Catherine Jones. They dealt with
Hughes as her agent, and paid their money, not to
Catherine Jones but to Hughes. Payment to a person
as agent is at the peril of him who pays, and
who is bound before payment to satisfy himself that the
alleged agent had sufficient authority The defendant.,
therefore, cannot establish a ease of any purchase for vain.
able cousideration from Catherine Jones. On the whole
case it appears that the defendants claimed to be purchasen
I from one who was to possession of nothing, who was ap-
parent owner of nothing, who could convey nothing, sad
received anything ; who was merely named as grantee
in • deed, this execution of which was obtained by fraud
and imposture, and without say kuowludge by her that she
was acquiring anythingserwayintantien or wide as her pert
to have or acquire gee mach estate or istenet an the fraudu-
lent deeds affeel le convey to her. She never borrowed or
received any mosey from the defendant., and she never
had Possessioe even of the fraudulent and void deed which
without her knowledge purported to vest the property in
her. Now she appears as s witness to prove the fraud and
to disclaim egg declare that ahe has nut and sever lawny
estate or interest in the property which the defendants in-