analysis of the sixteenth edition of Snell’s Principles of equity

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AN ANALYSIS SNELUS PRINCIPLES OF EQUITY

TENTH EDITION B. B. BLYTH (EnrnpU Ham ^rl^nol ICtbrari}

Mar0l]aU lEquttg (EoUertton

mtt of 7i. ‘S. MarsljaU. ^J^-^- ^- 1394

CORNELL UNIVERSITY LIBRARY 3 1924 084 250

11

Cornell University
Library

The original of this book is in
the Cornell University Library.

There are no known copyright restrictions in
the United States on the use of the text.

http://www.archive.org/details/cu31924084250111

AN ANALYSIS OF
SNELL’S PEIJSCIPLES OF EQUITY

WITH NOTES THEEEON

AN ANALYSIS

OF
THE SIXTEENTH EDITION OF

SWELL’S

PRINCIPLES OF EQUITY

WITH NOTES THEREON

BY

E. E. BLYTH, B.A., LL.D. (Lond.)

SOLICITOR

INCORPORATED LAW SOCIETY’S

CUTFORD’S inn (first) prizeman, MICH. 1878

BRODERIP CONVEYANCING GOLD MEDALLIST, 1878, AND SCOTT SCHOLAR, 1878

AND FIRST IN FIRST CLASS HONOURS, LL.B., LONDON UNIVERSITY, 1885

STent^ (Stiittan

LONDON

STEVENS AND HAYNES

BELL YARD, TEMPLE BAR

1912

Feinted by
BALLANTYNE & COMPANY LTD
AT THE BALLANTYNK PRESS

TAVISTOCK SXBEET CoVEHT GARDEN

London

PKEFACE.

In presenting this Analysis, I have to acknowledge my
indebtedness to Messrs. Stevens and Haynes ‘for their
kindness in sanctioning it, as proprietors of ” Snell’s
Principles of Equity.” My further obligations to various
authors are apparent and duly acknowledged.

Having experienced in the course of my own reading the
advantages, of an analysis of this character, I venture to
hope that it may prove useful to all law students, especially
in preparing for examinations. This analysis is intended
as a companion to Snell’s work, with which it is to be read
chapter by chapter. Such being the object in view, it has
not been considered necessary, in quoting cases, to give
references or details, except where these particulars do not
appear in Snell.

E. E. B.

CONTENTS.

PART I..
INTRODUCTORY.

CHAP. PAGE

I. JURISDICTION IN EQUITY I

II. MAXIMS OF EQUITY 4

PART II.

EXCLUSIVE JURISDICTION.

I. TRUSTS GENERALLY 1 1

II. EXPRESS PRIVATE TRUSTS 1 5

III. EXPRESS PUBLIC TRUSTS 3 1

IV. IMPLIED AND RESULTING TRUSTS 35
V. CONSTRUCTIVE TRUSTS 38

VI. TRUSTEES 42

VII. DONATIONES MORTIS CAUSA 59

VIII. LEGACIES 62

IX. CONVERSION 64

X. RECONVERSION 7 I

XI. ELECTION 74

XII. PEKPORMANCE 80

XIII. SATISFACTION 82

Xrv. ADMINISTRATION OF A ETS ‘ 87

XV. MARSHALLING OF ASSETS 1 08

XVI. LEGAL MORTGAGES III

XVII. EQUITABLE MORTGAGES I37

XVIII, MORTGAGES AND PLEDGES OF PERSONALTY 1 39

XIX. LIENS 141

XX. PENALTIES AND FORFEITURES 1 43

vii

via CONTENTS.

CHAP. PAGE

XXI. MAREIED WOMEN 1 45

SEPARATE ESTATE PIN-MONEY AND PARAPHERNALIA

EQUITY TO A SETTLEMENT AND RIGHT OF SURVIVORSHIP

SETTLEMENTS IN DEROGATION OF MARITAL BIGHTS

XXII. INFANTS 169

XXIII. LUNATICS, IDIOTS, AND PERSONS OF UNSOUND MIND 174

PAKT III.

CONCUERENT JUKISDICTION.

I. ACCIDENT 176

II. MISTAKE 179

III. ACTUAL FRAUD 1 83

IV. CONSTRUCTIVE FRAUD 1 88

V. SURETYSHIP 19s

VI. PARTNERSHIP 200

VII. ACCOUNT 205

VIII. SET-OFF AND APPROPRIATION OF PAYMENTS AND SECURITIES 207

IX. SPECIFIC PERFORMANCE 2IO

X. INJUNCTIONS 221

XI. PARTITION 233

XII. INTERPLEADER 235

PART IV.

AUXILIARY JURISDICTION.

SECT.

i. discovery, bills to perpetuate testimony and evidence

“de bene esse” 237

ii. bills op ” quia timet ” and bills of peace 239

iii. cancelling and delivery up of documents 240

iv. bills to establish wills

v. writ of ” ne exeat regno ”

242
243

INDEX

24s

INDEX TO CASES CITED.

Abernethy v. Hutchinson, 229
Acheson i: Fair (3 D. & W. 512), 40
Ackroyd v. Smitlison, 69
Acton r. Woodgate, 23
Adams i: Kensington Vestry, 27
Adderley ». Dixon, 211, 212
Agar V. Fairfax, 234
Agar Ellis, In re, 1 72
Ainsworth v. Wilding, 120
Alderson v. Maddison, 5, 214
Aldrioh v. Cooper, io8, no
Aleyn v. Belchier, 194
AUcard v. Walker, 73, 165
Allen, Be, 159

— r. M’Pherson, 242

— r. Seokham, 124
Alton V. Harrison, 18
Ambler, Be (1905, i Ch. 695), 106
Ancaster v. iMayer (i Bro. Chan. Cas.

4S4), 100
Andrews r. City Benefit Building
Society (44 L. T. Rep. 641), 130

— V. Weall, 44
Ann, Be, 104
Antrohus i). Smith, 17
Armstrong, In re, 158
Ashburner v. Maoquire, 62
Atkinson, Be (1899, 2 Ch. i), 158

— -S«. 5.^

— V. Powell, 97, 107

Att.-Gen. v. Borough of Birmingham,
226

— V. Jacobs-Smith, 20

— V. Newcastle, 33
Avis and Newman, 225
Aylesford 11. Morris, 193
Ayres, Be, 160

Backhouse v. Charlton, 139
Bahiu’K. Hughes, 198
Bailey «. Barnes, 6, 125
Balls, Be (1909, i Ch. 791), 92
Barber v. Gregson {49 L. J. Q. B. 731),
149

— Mx parte, 207
Barnes v. Toye, 188
Barnet v. Howard, 157
Barret v. Beckford, 83

BaiTon V. Willis, 191
Barrow v. Barrow, 182

— V. Isaacs, 183
Basset f. Nosworthy, 7
Bastable, Re (1901, 2 Ch. 102), 13
Bate, Re, 104

Bateman ■;;. Faber, 56, 79, 152

— V. Willoe, 223
Bates ■!-. Johnstone, 127
Bath, Earl of, v. Sherwin, 240
Beale v. Symonds, 37

Beall !-. Smith, 174

Beck i: Pierce, 161

Beddoe, Be, 50

Bell V. Stocker, 92

Benson v. Paull (27 L. J. Rep. 78 ;

2 Jur. (N.S.) 425), 220
Bentinck, Be, 90
Benyon r. Benyon, 83
Beresford v. Browning, 204 j
Betjemanu v. Betjemann, 5, 203
Betts, ^,98

Beveridge, Be (80 L. T. 106), 43
Biggs V. Hoddinott, 113, 115
Bird V. Evans, 53
Biscoe V. Banbury, 124
Blaoket v. Lamb, 77
Blake v. Gale, 9, 98, 103
Bland, Be (1905, i Ch. 4), 81
Blandy v. Widmore, 81
Blookley v. Bleckley, 87
Bolton V. Currie, 55
Boswell V. Coaks, 48, 185
Bourne v. Bourne, 66, 202
Bovill V. Endle, 120
Bowker v. Bull, 200
Boyes v. Carrilt, 28
Boyse v. Rossborough, 242
Brace v. Duchess of Marlborough, 126
Brackenbuiy, In re, 107
Bradley v. Huish, 83

— «. Riches, 124
Brail, In re, 19, 22
Brandon v. Hughes, 153

— V. Robinson, 150
Brice v. Stokes, 49, 56

Briggs, In re (1894, W. N. 162), 105

— D. Chamberlain, 73, 165

X

INDEX TO CASES CITED.

Briggs V. Penny, 28

— V. Eyan, 158

— «. Spicer, 22
Bristow V. Warde, 76
Brittin v. Partridge, 25
Brodie v. Barry, 78
Brooke v. Fremlin, 160
Brown v. Cole, 115

— V. DimWedy, 151, 156

— V. Gellatly, 52

— V. Morgan (1893, W. N. 50), 200
Bruce, Jte, 108

Buckland v. Pocknel), 39
Bulli r. Osborne, 5
Bulteel V. Lawdeshayne, 45
Burchell v. Wilde, 203
Burgess v. Booth, 69, 71

— V. Burgess, 231

— f. Wheate, 37
Burrough v. Philcox, 29
Butcher v. Kemp, 78
Butler «. Butler, 157

Caballebo v. Henty, 124

Cainw. Moon, 60

Caloott V. Elvin, 122

Callaghan, In re (28 Ch. D. i86 ; 54

L. J. Ch. 292), 172
Calver’W. Laxton, 105
Cameron i>. Wells, 20
Campbells. Campbell, 105
Capell V. Winter, 124
Cap. & Co. Bank v. Khodes, 127
Carritt v. Bradley, 113
Carter v. Kenkerdine, 22
Cary and Lott, 100
Casborne v. Scarfe, 114
Caton V. Caton, 214
Catt v. Tourle, 223
Cavander v. Bulteel (L. E. 9 Ch. 79 ;

43 L. J. Ch. 370), 124
Cavendish v. Dace, 75
Cellular Clothing Co., iJe, 232
Chadwick v. Grange, 66
Chancey’s Case, 83
Chaplin, Ex /parte, 18
Chapman v. Browne, 46
Charles v. Jones, 133
Chesterfield v, Jansen, 193
Chesterfield’s Trusts, 52
Chesworth v. Hunt, 131
Chichester v. Bickerstaff, 74

— V. Coventry, 86
Chillingworth «. Chambers, 198
Christie v. Ovington (i Ch. D. 279),

160
Christmas «. Jones, 26
Clark -0. SeweU, 83
Clarke v. Franklin, 66, 68, 70

— V. Trelawnay (L. T. 1889, 293), 53

Clayson r. Leech, 217

Clayton’s Case, 209

Clements D.Ward, 157

Clementson v. Gandy, 78

Cloutte W.Storey (191 1, i Ch. 18), 195

Cochrane v. Willis, 181

Cocks V. Chandler, 231

— V. Chapman, 44
Cogan V. Stephens, 69
Cohen v. Mitchell, 219
Collingwood v. Eowe, 66

Colls V. Home and Colonial Stores,

226 ‘

Colombine v. Penhall, 20
Colson V. Williams (58 L. J. Oh. 539),

133
Comiskey v. Hanbury, 27
Cook, Ex parte, 207

— V. Gregson, 88

— V. Smith, 23
Cooper V. Cooper, 78

— V. M’Donald, 147, 151

— V. Phibbs, 180
Coulson, Re, 158

Courtier, Re (34 Ch. D. 136), 225
Cousins, In re, 125
Coventry v. Chichester, 84
Cradock v. Piper, 47
Crawford v. May, 106
Grawshay v. Thornton, 235
Crawterr. Marvin, 105
Crowder?). Stewart, 106
Croydon, Me (55 S. J. 632), 49
Cuddee v. Eutter (i L. C. Eq, 640),

212
Cummins v. Fletcher, 130
Cunliffe, Re (18 T. L. E. loi), 180
Curl II. Webster, 203
Curling v. May, 65
Curteis v. Wormald, 69

Dagnall, Re, 158

g alias. Re, 24
avenport v. Marshall, 81
David c. Matthews, 203
Davidson v. Illidge, 107
Davies v. Ashford, 73

— V. Davies, 191

— V. Parry, 107

— V. Petrie, 23

— V. Thomas, 40
Davis V. Davis, 56
Deakin v. Lakin, 157
Dearie v. Hall, 25
Debejiham ■». Sawbridge, 217
Deeley v. Lloyd’s Bank (1910, i Ch

640), 127
Delves r. Gray, 2:8
De Mestre v. West, 20
Dering <k. Winchelsea, 197

INDEX TO CASES CITED.

XI

Derry i;. Peek, 184

Devereux, Me (1902, L. T. 431 ; 46

S. J. 320), 46
Deverges c. Sacderman, 133
Devese v. Pontet, 83
Dewar v. Brooke (54 L. J. Ch. 830 ;

52 L. T. 489), 43
Dickenson, In re, 95
Dillon r. Parker, 75
Dingier. Coppen, 116
Diploek )’. Hammond, 24
Dixon i;. Brown, 55
Docwra, Re (29 Ch. D. 693), 160
Dodson, Re, 69, 71
Dowling r. Betjemann, 212
Downe v. Fletcher, 158
Dowson & Jenkin, Re, 31
Drake r. Kershaw, 102
Drant v. Yause, 67
Draycott v. Harrison, 158
Drew r. Martin, 36
Drover !’. Beyer, 243
Dummer r. Pitcher, 78
Duncan r. Dickson, 173
Duncuft v. Albrecht, 212
Durell V. Pritohard, 233
Durham v. Wharton, 85
Dursley !•. Fitzhardinge, 238
Dyer v. Dyer, 35
Dyson, Re (1910, i Ch. 750) 65, 69

Eable v. Kingscote, 157
Earlom v. Saunders, 65
Barp V. Briggs, 107
East India Co. r. Boddam, 177
Edmondson r. Copland, 115
Edwards v. Carter, 172

— V. Jones, 18, 60
Egerton v. Brownlow, 15
Eley ■;;. Bead (76 L. T. 39), 133
Elibank v. Montolieu, 164
Elliot V. Merryman, 29

Ellis r. Ellis, 81

— r. Johnson, 56, 152
Ellison T. Ellison, 17
Emuss T. Smith, 67
Eno V. Tatham, 102
Evans 1:. Rival Granite, 128
Ewart V. Fryer, 145

Ewing V. Orr Ewing (10 App. Cas.

4S3)> 10
Eyre r. Shaftesbury, 170, 172

FAEMAN r. Smith (57 L. J. Ch. 637),

60
Farmer v. Pitt, 131
Farquharson v. Cave, 60

— V. King, 188

Farrand v. Tork Bank, 6, 129
Farringdon ‘•. Forrester, 173

Fauntleroy r. Bebee, 71
Fearnside >: Flint, 116
Fettiplace r. Gorges, 147
Field V. Donoughmore, 23

— V. Evans, 151

— f. Hopkins, 113

— f. White, 106
Fitzgerald v. White, 23
Fletcher v. Ashburner, 65

— V. Bealey, 240

— V. Green, 198
Foley V. Hill, 207
Forbes v. Jackson, 196
Ford V. White, 7
Formbyf. Barker, 126
Forster p. Baker, 26

— V. Patteson, 116
Fortescue v. Barnett, 18
Foster i: Foster, 172
Fowler v. Att.-Gen., 33
Fox r. Buckley, 56

— 11. Hanks, 17

— c. Macreth, 47, 184, 192
Freeman v. Pope, 18
French o. Macale, 143
Friend v. Young, 205

Frisby, Re (60 L. T. Kep. 922 ; W. N.

1889, 186), 116
Fry r. Lane, 193

— V. Tapson, 44

Gall AND, In re, 142
Gallard v. Hawkins, 37
Garrard v. Lauderdale, 23
Garth «. Cotton, 224
George v. Millbanke, 20
Gibbs 11. Guild, 5
Gilbert, Re, 107

— V. Overton, 17

— V. Smith, 234
Gillies V. Longland, 72
Gillings r. Fletcher, 82
Gjers, Re, 225
Glegg’s Case, 1 14
Glenorchy v. Bosville, 16
Goldsmid v. Goldsmid, 81
Gordon v. Gordon, 180
Gore ij. Knight, 147
Green v. Marsh, 135
Greenwood v. Greenwood, 83
Gregg V. Holland, 214
Gretton v. Haward, 76
Griffin v. Griffin, 18
Griffith, Re, 89

— v. Owen, 47

— V. Eicketts, 66, 70
Grimthorpe, Re, 65
Grissel’s Case, 208

Gunston v. Maynard (L. T. June 1883,
102), 158

xu

INDEX TO • CASES CITED.

Haddington v. Huson, 33
Halifax Bank v. Gledhill, 19
Hall V. Hall, 171

— V. Hewai’d, 114

— v. HIU, 87

— V. Waterhouse, 147
Hall Dare v. Hall Dare, 183
Hallett, Re, 55, 210

— V. Hastings, 150
Hamilton v. Watson, 195
Hancock v. Pawson, 76
Handford, Re, 158

Hankey, Re (1899, i Ch. 541), 90
Hankinson v. Hayter, 157
Hansard v. Lethbridge, 199
Harding v. Glynn (2 L. G. Eq. 789),

28, 178
Harkness v. Alsop, 42, 160
Harper v. Eiley, 23
Harrison v. Bottomley (1899, i Ch.

465). 94

— V. Forth, 122

— V. Guest, 185
Harter v. Colman, 130
Hawkins v. Blewitt, 60
Hawthorne, In re, 10
Haynes v. Foster, 77
Head v.. Gould, 57

Heard v. Stanford (Cases Temp. Talbot

173). IS4
Helsby, Re (63 L. J. Q. B. 261), 158
Heneage, Re, 150
Henty v. Wrey, 195
Hetley v. Hetley, 28
Hetling and Merton,-iJe, 31
Hewison 1;. Negus, 20
Hewitt v. Loosemore, 123, 138
Hibbert v. Lloyd {1893, i Ch. 129), 47
Higinbotham v. Hblme, 22
Hill V. Bridges, 96

— V. Buckley, 217

— V. Cooper, 145, 150

— V. Eowlands, 115

— V. Schwartz, 211

— V. Walker, 106

— V. Wormsley, 102
Hilton, Re, 52
Hindson v. Weatherill, 191
Hirth, Re, 186

Hobson V. Howe (35 Ch. D. 668 ; 56

L. J. Ch. 445), 133
Holgate V. Shutt, 207
Holland, Re, 20.
HoUoway v. Eadcliffe, 72
Holmes, In re, A. D. 122

— V. P^nny, 18

Hone D. Gadstatter (53 S. J. 286), 219
Hood Barrs v. Cathoart, 93

V. Heriott, 156

Hoole V. Smith, 134

Hooley r. Hatton, 83

Hope V. Hope, 162

Hope Johnstone, Re, 59

Hopkins v. Hemswprth, 8

Hopton V. Dryden (Free. Ch. 179),

107
Horusby v. Lee, 166
Hosking r. Smith, 129
Hotham, Re (1902, 2 Ch. (C. A.) 575),

4S
How V. Winterton, 55
Howard v. Harris, 112
Howe V. Lord Dartmouth, 52
Howgate r. Osborn, 160
Huddersfield Bank v. Lister, 181
Hudson, Re, 61

— In re (W. N. 1885, 100), 214

— V. Cripps, 195
Huguenen r. Basely, 190
Hulme V. Tenant, 147, 149, 150
Humber v. Richards, 8
Humphries v. Brogden (L. R. 12 Q. B.

739)1 226
Hunt ■». Luck, 124

— V. Wenham, 90
Huntingdon ‘O. Huntingdon, 137
Hurrell v. Littlejohn, 48
Hussey v. Home-Payne, 213
Hyett V. Mekin, 69, 71
Hymen v. Van den Bergh, 226

Imperial Loan Co. v. Stone, 187

Imray v. Oakshette, 144

Ind V. Emmerson, 7, 238

Ind Coope, Re, 123

Ingram v. Papillon, 86

International Marine Co. -u, Hawes,

105
Isaacs V. Reginald, 66

Jackson v. Talbot, 172
James, Re, 97

— V. James, 139
Jared r. Clements, 122
Jarrah v. Samuel, 112
Jefferys v. Jefferys, 16
Jeffs 11. Day, 223

Jenner Fust i;. Needham, 1 36

Jennes, Re, io6

Jessop V, Watson, 69, 70

Johnsoni). Evans (W.N. 1889, 95), 115

— V. Gallagher, 149

— V. Johnson, 154

— V. Marks, 188

— V. Telfourd (i R. & M. 248), 78
Jones V. James, 23

— V. Pennefather, 106

— 11. Smith, 124
Joy V. Campbell, 43, 49
Joyce r. De Moleyns, 7

INDEX TO CASES CITED.

XUI

Kearslby v. Phillips, 135
Keat V. Phillips, 138
Keechv. Hall, 117
— , (‘. Sandford, 40, 47
Kekewich 1′. Manning, 17
Kemble i: Farren, 143
Kempster v. Kempster, 104
Kendall v. Hamilton, 181, 204
Kennel r. Ahbot, 182
Kent Gas Light Co., Me, 219
Keys V. Williams, 137
King V. Deuisou, 37

— V. Howell (27 T. L. R. 114), 192
Kinsman v. Rouse, 116

Kirk V. Eddowes, 87
Knapman v. Wreford, 26
Knox V. Gye, 48, 203

Lacy, Re, 38
Lake, Re, 6

— I’. Craddock, 9, 38

— V. Gibson, 9, 38

Lambert’s Estate, In re {39 Ch. D.

626), 148
Lancefield v. Iggulden, 104
Lane v. Lane, 90
Lansdowne v. LanSdowne {2 J. & W.

205), 180
Lawes v. Bennet, 66

— V. Lawes, 85

Le Neve v. Le Neve, 122
Leather-Cloth Co. ■». American Lea-

ther-Cloth Co. (D. P. 11 H. L.

523; .33 L. J. Ch. 199), 231
Lechmere v. Carlisle, 65, 80
Lee v: Binns, 106

— r. Nuthall, 105
Leek v. Driffield, 157
Legg V. Gold wire, 182

Legh V. Earl of Warrington, 93

Leneh v. Lench, 81

Leslie v. French, 41

Lester v. Foxcroft, 213

Lewis Bowie’s Case, 225

Lievre ‘o. Gonld, 184

Life Assoc, of Scotland v. Siddall, 165

Life, &c., r. Hand, 134 ‘

Liles B. Terry, igo

Lingley, Me (1904, 2 Ch. 785), 198

Lisle V. Reeve, 113

Lloyd V. Lloyd, 116

Lloyds Bank v. Pearson, 6, 25

Lockhart v. Hardy, 136

Loffus V. Maw, 5

London & C. Bank.’W. Goddard, 6, 138

— Pressed Hinge Co., Re, 139
Loveridge, Be (1902, 2 Ch. 859), 116
Lovett V. Lovett, 242

Lowe V. Bouverie, 53

— 1;. Fox, 162

Luddy, Re, 190
Lumley, Re, 150, 156

— f. Wagner, 211, 224
Lyell (‘. Kennedy, 238
Lynea, In re, 158

MaoGkath, In re, 172
Mackenzie v. Johnson, 205

— V. Robinson, 119
Mackreth v. Symons, 39
A’acMurdo, Re {1902, 2 Ch. 684), 96
Macpherson v. Watt, 191
Maddook, Be, 28

Malins v. Freeman, 215
Mallan v. May (11 M. & W. 653), igo
Manners 11. Maw, 129
Mannersman Tube Co., Be, 128
Marsh v. Joseph, 185

— V. Lee, 126

— V. Russell (3 My.& Cr. 31), 98
Marshfield, Be, 116
Martinson v. Clowes, 192
Marvin, Re (1905, 2 Ch. 490), io6
Mason v, Bogg, 95
Matthewman’s Case, 149

Miiy V. Roper, 73
Meinestzhager v. Walters, 84
Mellor V. South Australian Coy., 103
Meluish i>. Milton, 242
Mid Kent Fruit Co., Re, 208
Middlemas r. Stevens, 48
Midgeley v. Midgeley, io6
Miller v. Cooke, 195
Mills 0. Fowkes, 209
— ■ v. Jennings, 130
Milroy v. Lord, 17
Mitchell V. Hayne, 235

— V. Smith, 60
Moggridge v. Thackwell, 32
Molony v. Brook, go, 106
Monck V. Monck, 84
Montefiore v. Guedalla, 58, 85
Moore v. Darton, 60
Morgan v. Hill, ig7

— 1). Swansea, 160
Morley r. Bird, g, 38
Morris v. Griffiths, 65

Moss r. Gallimore (i S. L. C.604), 118
Mozley Stark v. samf (7g Ij. J. P. 98), 1 7 1
Miimford v. Collier, 135
Murray v. Barlee, 149

— 11. Elibank, 167

Nanny r. Morgan, 17
Nash, Re (1910, i Ch. i), 77

— r. Inman (1908, 2 K. B. i),
Neesom r. Clarkson, 224
Neville v. Snelling, 193

New Land Co. r. Gray, 2ig
Newlfinds v. Paynter, 222

XIV

INDEX TO CASES CITED.

Newmarch v. Storr, 103

Newstead v. Searles, 20

Newtou, Re, 172

New Zealand By Co., Ee, 114

Nicholson, Se, 50

Nicols ‘!). Pitman, 229

Nordenfelt ■». Maxim, 190

Norris, Re, 47

Northern Count. Fire Insurance f.

Whipp, 124, 129
Norton v. Compton, 107
Nugent v. Nugent, 192

Oakbs v. Turquand, 186
O’Connor v. Spaight, 206
Oldham r. Hughes, 73

— r. Stringer, 139
Oliver v. Brickland, 8z

— V. Hinton, 129
Onslow, Me, 158
Orrell v. Orrell, 78
Otter V. Vaux, 134
Overton v. Banister, 8
Owen V. Homan, 196
Oxenden v. Compton, 175
Oxford’s (Earl of) Case, 10, 222

Padwick v. Stanley, 196, 205
Paget V. Marshall, 180
Palliser v. Gurney, 157
Palmer v. Emerson, 45

— V. Hendrie, 136

— V. Johnson, 217
Papillon T. Voice, 16
Parkes v. White, 151

Parnell, In re (2 P. & M. 379), 170

Parrji v. Hopkin, 225

Patching v. IJarnett, 98

Patman v. Harland, 124

Pawley, Re, 41

Peaohey v. Duke of Somerset, 9, 143

Peacock 1). Monck, 147

Pearce Trusts, 130

Pease v. Jackson, 129

Peek r. Gurney, 184

Peel, Re (1910, i Ch. 389), 86

Pelton V. Harrison, 156

Pemberton v. Barnes (6 Ch. 685), 234

Penn v. Lord Baltimore, 10, 213

Pennell r. Franklin, 46

Pennington, In re (59 L. T. Eep. 774),

20
Perham v. Kempster, 124
Perks V. Mylrea (“W. N. 1884, 64), 158
Phelps, Stokes & Co. «. Comber, 210
Philips V. Philips, 7, 206
Phillips Trusts, 25
Phillips V. Caldcleugh (L. B. 4 Q. B. D.

I58),2i9
Picard v. Hine, 149

Pidcock V. Bishop, 196
Pigott V. Stratton, 195, 224
Pike V. Fitzgibbon, 149, 158
Pitcher r. Bawlins, 122
Pitman v. Pitman, 65
Pledge V. White, 129, 130
Plunket V. Lewis, 86
Ponsford v. Union Bk., 23
Pope, Re, 93

— !,-. Curl, 230
Potter V. Saunders, 122
Powell V. L. & P. Bank, 6
Powers, In re (30 Ch. D. 291), 116
Powvs V. Mansfield, 85
Preston’s Trustee v. Cooke, 219
Price, Re, 157

— 1). Jenkins, 19
Pride v. Bubb, 147
Proctor V. Ellis, 136
Proudley v. Fielder, 148
PuUen, Re (1910, i Ch. 560), 89
Pulsford V. Eichards, 184
Pulteney v. Darlington, 74
Purdew v. Jackson, 166
Pusey V. Pusey, 212

Pybus V. Smith, 150
Pye, Ux parte, 17, -84
Pym V. Lookyer, 84, 86

Qu^DB’s Tbusts (3 W. B. 816), 79
Queensberry «. Shebbeare, 229

Badcliffe v. Bewes, 194
Baggett, In re, 130
Ramsey v. Gilchrist, 33
Bamskill v. Edwards, 198
Eeddaway v. Sanham, 232
Bedgrave v. Hurd, 184
Eeed v. Norris, 197
Bees V. Berrington, 198
Eeeve v. Beveridge, 124

— V. Jennings, 223

Beg. V.London (Lord Mayor), 157

Beid ■». Eeid, i68

Reis, Re, 22

Rhodes, Re, 107

Rice V. Bice, 6, 39, 138, 194

— V. Noakes, 113

Richards v. Att.-Gen. Jamaica (6
Moore’s Priv. Co. Cas. 381), 70

— V. Delbridge, 17
Richerson, In re, 69
Richmond v. White, 105
Riddell v. Brington, 156
Ridler «. Ridler, 19

Ridley’s Trusts (1904, 2 Ch. 774), 106

Rimmer v. Webster, 6

Robbins r. Whyte, 118

Roberts, Re (1902, 2 Ch. 834), 104

Robinson, Se, 27

INDEX TO CASES CITED.

XV

Robinson ■!■. Lynes, 154, 158, 159

— r. Pett, 46

— 0. Pickering, 150

— V. Robinson, 53

— V. Wheelwright, 151
Rolt V. Hopkinson, 127
Roots v. Williamson, 6
Boose V. Chalk, 37

Rousillon V. Rousillon (iSSo, 14 Ch. D.

3S0. 190
Routledge, He, 58
Rowls V. Bebb, 52
Rudd V. Lascelles, 220
Rudge V. Richens, 136
Ruffin and Rowlinson, Ex parte (L. C.

Me:o. Law, 387), 203
Eumney v. Smith, 31
Russell V. Russell, 137

— In re. 182

Saffhon Waldbn Building So-
ciety V. Rayner, 124
Salaman, Re, 21
Saloman r. Saloman, 186
Salt r. Northampton, 112
Samson, i?«, 90
Sanguinetti i: Stuckey, 22
Saumarez, JRe, 23
Saunders r. Vautier, 34
Sass, l7i re, Ex parte N. P; Bank, 196
Scales v. HeyKoe, 69
Scanlan, In re, 172
Scott, Re (1903, I Ch. i), 85

— V. Alvarez, 219

— V. Coulson, 181

— i: Morley, 156, 159

— V. Tyler, 189
Seager Hunt, Re, 175
Searle i’. Law, 17
Seaton-K. Seaton, 79
Seeley 11. Jago, 72
Selby r. Pomfret, 131
Selwyn v. Grarfit, 134
Seroka «. Kattenbnrg, 157
Seton f. Sladej2i7. 218

Shafto, Re (1904, W. N. 203 ; L. T.

62), 86
Sharman, R^, 89
Sharp r. Jackson, 23, 55

— V. Richards, 130

Sharrod ‘•. N. W. Railway Co., 2
ShefSeld Waterworks v. Yeomans,

240
Shelley’s Case, 5, 13, 15, 16
Sherry, In re, 210
Shrager v. Marsh, 22
Shuttleworth r. Greaves, 78
Sidebottom, Re(i902, 2 Ch. 389), 34
Sidmouth v. Sidmouth, 36

Silk V. Prime, 93

Simon, Be, 158

Singer Manufacturing Co. r. Wilson

(L. R. 3 App. Cas. 376; 47

L. J. Ch. 148), 232
Skeats v. Allen (58 L. J. Ch. 656), 58
Skinner v. Skinner, 171
Slim V. Croucher, 194
Slobodinsky, Re (1903, 2 K. B. 517),

186
Sloman v. Walter, 143
Smart v. Tranter, 158
Smith V, Claxton, 68, 69

— V. Clay, 8

— V. Olding, 114

— V. Sibthorpe, 38

— V. Thompson, 44
Snowdon, Inre(iy Ch. D. 44), 197
Soar V. Ashwell, 48

— V. Foster, 36
Softlaw II. Welch, 157
Soloman r. Soloman, 102
Soltaut-. r)eHeld(2 Sim. (N. S.) 133),

216
Somerset v. Cookson,2i2
Somerville v. Turner, 41
Somes r. Somes, 194
Sowden v. Sowden, 10, 80
Spencer Cooper, Re, 64
Spencerr. Turner,’6i
Spirett V. Willows, 18
Staoey v. Hill, 198
Stanley v. Grundy, 135
Stapilton v. Stapilton, 180
Steed V. Preece, 69, 71 ,^
Steel V. Dixon, 197
Steele v. Walker, 17
Steers v. Rogers, 228
Stevens v. Theatres Ltd., 136

— (‘. Trevor Garrick, 162
Stocken r. Stocken, 86

Stockton Iron Furnace Company, In

re, 135
Stogden v. Lee, 150
Stokes, Re (37 L. T. 223), 104
Stone’s Will, Re, 25
Stooke r. Taylor (5 Q. B. D. 569 ; 49

L. J. Q. B. 857), 207, 209
Strathmore v. Bowes, 169
Streatfield r. Streatfleld, 79
Stubbins, Re, 55
Stuart, iJe(i897, 2 Ch. 583), 57
Sturge V. StaiT, 8
Sturgis V. Champneys, 165
Styles V. Guy, 50
Suisse •(‘. Lowther, 85
Sumner i’. Powell, 181
Surcomb v. Pinniger, 214
Surman «. Wharton, 148, 163′
Sutton V. Sutton, 116

XVI

Swaine v. Wall, 197
Sweetapple v. Bindon, 16

Tain v. Emmerson, 159
Talbot ». Fi-ere, 106

— V. Shrewsbury, 82
Tancred v. Delagoa Bay, 26
Tankard, Be, 21
Tanqueray, lie, 30
Tasker v. Tasker, 164
Taylor v. Blakelook, 6

— r. L. & C. Bank, 123

— V. Meads, 147

— -c. Taylor, 84
Thomas 0. Williams, 227
Thomasset ■». Thomasset, 171
Thomson?). Griffin, 173

— V. Judge, 190

Thorley’s Cattle Food Co. r. Massam,

227
Thornborough v. Baker, 41
Thorndyke v. Hunt, 6
Thorne i>. Gibbs, 61
Thynne v. Glen gall, 86
Tidd r. Lifter, 167
Tipping V. St. Helen’s Smelting Co.

(L. E. I Ch. App. 66), 226
Toilet v. Toilet, 178
Tomlin v. Luce, 133
Topham K. Portland, 194
Townley v. Bedwell, 66

— «. Sherborne, 49
Townsend Peerage Case, 226

— ti. Stangroom, 216
Travers v. Kelly. 61
Treasure, Be, 89
Trego «. Hunt, 203
Tremayne v. Rashleigh, 81
Trench v. Harrison, 81
Trevor v. Hutohins, 106, 107

— V. Trevor, 16
Trimmer v. Daaby, 60
Triquet 1). Thornton, 72
Trott 11. Buchanan, 92
Tuer V. Turner, 73, 165
Tulk c. Moxhay, 126
Tullett r. Armstrong, 150
TurnbuU v. Forman, 158

— V. Nicholas, 1 59
Turner, Be, 57

— v. Buch(i8 Eq. 301), 64

— V. Morgan, 234

— V. Turner, 108

— V. Watson, 55
Turton v. Benson 26

— V. Turton, 231
Tuther v. Caral,ampl, 144
Tyars w. Alsop, 191
Tyler v. Yates, 193

Tyrrell’s Case (L. C. Con v. 274), 12

INDEX TO CASES CITED.

Valentine*. Valentine (31 L. E. Ir.

488), 232
Valpyr. Valpy, 103
Vane v. Vane, 174
Vardon’s Trust, 79
Vaughan v. Vanderstegen, 149
Venn v. Furze, 30

Vetch V. Elder (1908, W. N. 137), 81
Verrel, Be, 31
Vinti;. Padget, 129
Vyse i: Foster, 56

Wales v. Carr, 1 14
Wallis, Be, 25
Wallrond v. Eosslyn, 74
Wallwyn v. Lee, 6

Walter v. Emmot (54 L. J. Ch. 1059),
230

— f. Howe, 230

— V. Lane, 229
Walwyn «. Coutts, 22

— r. Lee, 7

Want )■. Campion (1893, 9 T. 254), 46

Warde v. Duncombe, 25

Wardens of Cholmely School v. Sewel

(1894, 2 Q. B. 906), 144
Waring, Mx parte, 210

— v. Ward, 136
Warner v. Jacob, 133
Warren’s Settlement, Be, 152
Waterer v. Waterer, 203
Waters, JJe(42 Ch. D. 517), 64
Wathen v. Smith, 83

Webb 1}. Jonas, 46
Wedmore, Be,62
Weeding v. Weeding, 67
Weir Hospital, Be, 32
Wellesley v. Beaufort, 171

— V. Wellesley, 171
Wells D. Kilpin, 93
Weniger, Be, 123

West V. Gwynne (1911, 2 Ch. i), 145

— V. Williams, 127

— & Hardy, Be, 160

West Derby Union v. Met. Life, 115
West L. C. Bank v. Eeliance Building

Society, 133
Westley v. Clarke, 49
Wheelwrights. Walker, 48
Wheldale v. Partridge, 66, 70, 74
Whistler ■!). Webster, 75, 76
Whitaker, Be, 89, 95

— V. Barratt, 105
White V. Smith, 124
Whiteley v. Edwards, 156

— V. Learoyd, 44
Whittle*. Henning, 166
Wilcocks V. Wiloocks, 80
Wild V. Stanham, 61
Wilkes V. Spooner, 122

INDEX TO CASES CITED.

XVll

Wilkins V. Hogg’, 50
Williams, Br, 107.

— c. Kereliaw, 34, iii

— !’. Knight, 173

— V. Lambe, 7

— c. Morgan, 115

— V. Owens, 200

— (‘. Williams, 36
Williamson c. Baibour, 57
Willis, ^j;^ncie Kennedy. 135
Willoughby, JJfl, 171

— ■ V. Holyoake, 92
Wilson, In re, 90

— V. Ann, 104, 148

— r. Ghuroh, 43

— ti. Coxwell, 105

— i: Kelland, 128
Wingfield r. Erskine, 105
Wintour v. Clifton. 78
Wolmanshausen v. GulUch, 197

Wood i: Bryant, 86

— V. Eowclift’e, 212
Woodall r. Cliftou, 67
Woods, jRe, 52
Woolam t: Hearn, 216
Woolridge r. Woolridge, 77
Worthing v. Heather, 67
Worthington r. Abbdtt, 136
Wright !J. Castle, 191

— V. Maidstone, 178

— (‘. Rose, 66

— V. Wright, 151, 155
Wrigley v. Gill, 120
Wylie V. Pollen, 124

Teo v. Clemow, 5i, 89

York, Mayor of, v. Pilkingtun, 240

Yorkshire Wooleombers, Me (1903. 2

Ch. 284), 128
Young V. Ashley (1903, 2 Ch. 112), 145

TABLE OF STATUTES CITED.

13 Edw. I. stat. I, 0. 24 (Writ in conximili easv), 2

27 Hen. VIII. c. 10 (Uses), 12, 13

13 Bliz. c. S (Fraudulent conveyances), 18, 19, 20, 99, 168, 215

27 Eliz. c. 4 (Voluntary conveyances), 19, 22, 33, 123, 194

43 Bliz. 0: 4 (Charities), 31

21 Jac. I. 0. 3 (Patents), 228

21 Jac. I. c. 16 (Limitations), 93, 162

12 Car. II. c. 24 (Testamentary guardian), 170
29 Car. II. u. 3 (Frauds), 34, 106

s. 4 (.Agreement in writing), 20. 36, 68, 137, 172, 181, 211, 213,

214
ss. 7, 8, 9 (Trusts), 13, 14, 17

3 Will, and Mary, c. 14 (Fraudulent devises), 91

4 Anne, c. 17 (Set-off), 207
4 & 5 Anne, c. 16 (Bail), 24

2 Geo. II. c. 22 (Set-off), 207
8 Geo. II. 0. 24 (Set-oft’), 207

13 Geo. III. c. 63 (Evidence de dene esse), 239
47 Geo. III. c. 74 (Simple contract debts), 91
55 Geo. III. 0. 192 (Preston’s Act, 1815), 77

4 Geo. IV. c. 76 (Marriage of infants), 173
1 1 Geo. IV and I Will. IV. c. 47 (Debts), 91

I Will. IV. c. 22 (Evidence de bene esse), 239

c. 40 (Undisposed-of residue), 37

c. 46 (Illusory appointments), 195
I & 2 Will. IV. c. 58 (Interpleader), 235, 236

3 & 4 Will. IV. c. 27 (Limitations), 5, 93

e. 42 (Limitations), 93

c. 74 (Fines and recoveries), 73, 78, 165

c. 104 (Debts), 91, 107, 109, no

0. 105 (Dower), 78

5 & 6 Will. IV. c. 65 (Copyright lectures), 229

1 Vict. c. 26 (Wills Act), 67, 68, 77, 104, 170

2 & 3 Vict. c. 54 (Talfourd’s), 170

5 & 5 Vict. c. 69 (Perpetuation of testimony), 238

8 Vict. c. 18 (Lands Clauses), 66, 71, 134

8 & 9 Vict. c. 106 (Beal property), 24, 165
10 & II Vict. c. 96 (Trustee Relief), 58
13 & 14 Vict. c. 60 (Trustee Act, 1850), 57
15 & 16 Vict. c. 55 (Trustees), 57

c. 76 (Common Law Procedure Act, 1852), 2

17 & 18 Vict. c. 113 (Locke King’s Act), loi

c. 125 (Common Law Procfdure Act, 1854), 177, 212, 220, 223

18 & 19 Vict. c. 43 (Infants’ settlements), 173

cm (Bill of lading), 24

19 & 20 Vict. c. 97 (Sureties), 196

20,& 21 Vict. c. 57 (Malins’ Act), 79, 166, 167
c. 77 (Court of Probate), 242
xviii

TABLE OF STATUTES CITED. XIX

20 it 21 Vict. u. 85 (Divorce), 153

21 & 22 Vict. I,-. 27 (Cairns’ Act), 233

L-. 93 (Legitimacy declaration), 239
c. 108, s. 8 (Protection order), 153

22 & 23 Vict. c. 35 (Lord St. Leonards’ Act), 29, 50, 98, :44

23 & 24 Yict. c. 124 (Interpleader), 235, 236

c. 127, s. 28 (Solicitor’s lien), 142

c. 145 (Lord Cranworth’s Act), 30
25 i: 26 Viut. 0. 42 (Bolt’s Act), 240
27 i>^ 2S Yict. c. 112 (Judgments), 93

30 & 31 Vict. c. 48 (Puil’er at auction), 194

C-. 69 (Keal estate charges), 103

c. 144 (Assignment of life policies), 24

31 i 32 Vict. c. 34 (Reversions), 193

u. 40 (Pai’tition), 234

i;. 86 (Assignment of marine policies), 24

32 & 33 V’ict. c. 46 (Specialty debts), 90, 91, 105, 109

c. 62 (Debtors Act), 1 59, 243

33 it 34 Yict. c. 14 (Naturalisation), 42

c. 28 (Solicitor’s remuneration), 192
c. 93 (Married Women’s Property), 153
36 Vict. c. 12 (Infants’ custody), 168, 169, 170

36 ifc 37 Vict. c. 66 (Judicature Act, 1873), 3i Si ‘^1 ^4′ ^^’ 33^ 9^, 117, 170, 200,

218, 221, 225

37 & 38 Yict. c. 37 (Powers of Appointment Act, 1874), 195

c. 50 (Married Women’s Property Amendment), 154

u. 57 (Real Property Limitation), 92, 93, 115

c. 62 (Infants’ relief), 187

c. 78 (Vendor and purchaser), 129, 220

38 & 39 Vict. c. 55 (Public Health, 1875), 220

c. 77 (Supreme Judicature Amendment Act, 1875), 94i 95i 9^, 105
c. 87 (Land Transfer), 129

39 A: 40 Vict. c. 17 (Partition Act, 1876), 234

40 & 41 Vict. c. 34 (Locke King’s Further Amendment Act), 102, 103

41 A: 42 Vict. V. 31 (Bills of Sale Act, 1878), 20, 134, 140

c. 38 (Innkeepers’ lien), 142

44 & 45 Vict. c. 41 (Conveyancing Act, 1881), 112

s. 10 (Leases), 117
s. 14 (Relief of lessees), 144
8. 15 (Transfer in lieu of foreclosure), 115
s. 16 (Mortgagee’s production of tiile-deeds), 121
s. 17 (Consolidation of mortgages), 131
s. 18 (Leases of mortgaged estates), 118, 121
ss. 19-24 (Sales, &o., of mortgaged estates), 119, 120, 132
8. 25 (Sale by court), 132, 139

a. 30 (Descent of legal estate of trustee or mortgagee), 41
ti. 39 (Alienation by married women), 79, 151, 156
8. 50 (Husbands and wives), 61
8. 56 (Receipts and receipt clauses), 31
c. 44 (Solicitor’s remuneration). 192

45 & 46 Vict. c. 38 (Settled Land Act), 30, 40, 48, 67

c. 39 (Conveyancing Act, 1882), 115, 124, 125, 151
c. 43 (Bills of sale), 21, 135, 141
0. 61 (Bills of Exchange Act, 1882), 24, 177
c. 75 (Married Women’s Property Act, 1882), 8,42, 73,77, 104, 14S.
151, 152, 154, iss, 156, 160, 173, 189

46 & 47 Vict. c. 52 (Bankruptcy Act, 1883), 21, 22, 54, 95, 96, 97, 107, 140, 159.

168, 188, 208, 215, 221, 243
c. 57 (Patents, designs, and trade-marks), 227

47 & 48 Vict. u. 14 (Married women, 1884), 154, 161

XX TABLE OF STATUTES CITED.

47 & 48 Vict. c. 54 (Yorkshire registries), 8, 40, 122, 129

c. 71 (Intestates’ estates), 37, 68

48 & 49 Vict. c. 26 (Yorkshire registries), 122

49 & 5c Viet. c. 27 (Guardians of Infants), 163, 170

50 & 51 Vict. c. 57 (Arrangements with creditors), 23

c. 73 (Copyholds), 41

51 & 52 Viet. c. 42 (Mortmain Act, 1888), 31

c. 45 (Factors), 140

c. 51 (Land charges), 94 ^ ^„„ ,

c. 59 (Trustee Act, 1888), 33. 46, 48- 55. 56, 9^. i33. 2°?

0. 62 (Preferential payments), 95, 96

52 & 53 Vict. c. 49 (Arbitration), 206

53 Vict. c. 5 (Lunacy), 72, 174, 175

53 & 54 Vict. c. 39 (Partnership), 9, 118, 200, 201, 204

c. 57 (Tenants’ compensation), 117

54 & 55 Vict. c. 3 (Custody of children), 171

c. 73 (Charities), 34, III

55 & 56 Vict. c. II (Mortmain), 34

c. 13 (Conveyancing Act, 1892), 144, 145
c. 57 (Private Street Works), 220

56 & 57 Vict. u. 5 (Regimental debts), 108

u. 21 (Voluntary conveyances), 19, 20, 33, 123, 194
u. 53 (Trustee Act. 1893), 3. 3i, 43. 44. 45. 49. 5°. SL 52. 5°. 5/.
58, 139, 152, 160, 218
■ c, 63 (Married women, 1893), 56, 152, 156, 157, 179. i»»
c. 71 (Sale of Goods Act, 1893), 140, 160, 212, 214

57 & 58 Vict c. 10 (Trustees), 51

c. 46 (Copyholds), 41

c. 60 (Merchant shipping), 141

58 & 59 Vict. c. 25 (Solicitor-Mortgagee’s costs), 47

c. 39 (Married women), 153
c. 40 (Parliamentary libels), 227

59 & 60 Vict. c. 35 (Judicial Trustees), 43, 46, 47, 56

c. 51 (Vexatious litigation), 240

60 & 61 Vict. c. 19 (Preferential payments), 95

c. 65 (Land transfer, 1897), 30, 41, 54, 91, 92. 97. 98, 107, no
113, 127, 242
63 & 64 Vict. c. 51 (Moneylenders}, 27, 193

4 Edw. VII. c. 15 (Children), 170

i;. 23 (Licensing), 134

5 Edw. VII. c. 15 (Trade Marks, 1905), 231, 232

6 Edw. VII. c. 41 (Marine Policies), 24

c. 55 (Public Trustee), 59

c. 58 (Workmen’s Compensation), 96, 128

7 Edw. VII. c. 18 (Married women’s property), 42, 160, 162

c. 24 (Limited Partnership), 26, 204
0. 29 (Patents and Designs), 227, 228

8 Edw. VII. c. 25 (Married women, 1908), 161

c. 28 (Agricultural Holdings) 117

c. 47 (Lunacy), 175 .

c. 67 (Children, 1908), 171

c. 69 (Companies Consolidation), 112, 128, 184, 185, 186, 205, 211,

244
I & 2 Geo.V. c. 37 (Conveyancing, 1911), 31, 41, 45, 46, 58, 79, ii8, 126, 133,
134, 151, 156
c. 38 (Moneylenders), 27
c. 46 (Copyright, 191 1), 229, 230

ANALYSIS

OP

SNELL’S PRINCIPLES OF EQUITY,

WITH NOTES THEEEON.

PART I.— INTRODUCTORY.

CHAPTER I.

THE JURISDICTION IN EQUITY.

Definition of Equity.

Putting out of consideration all that part of natural equity
sanctioned and enforced by, or by virtue of, legislative enact-
ments. Equity may be defined as that portion of natural
justice which, though of such a nature as to admit of being
judicially enforced, was omitted to be enforced by the
common law courts, an omission which was supplied by
the equity courts.

The distinction between law and equity is a matter of
form and history rather than of substance or of principle.

The old definitions claim a far wider jurisdiction, which is
to be explained by remembering that the principles of equity
have varied from time to time. Only extensive principles
of jurisdiction could have originated the equity system.

A court of equity is now bound by settled rules and pre-
cedents as completely as a court of law, and there is no
difference between them in the rules of interpreting laws.

* Origin of Jurisdiction.

In the early periods of English history, ecclesiastics were
the expounders and administrators of the law, who, being

3 THE JUEISDICTION IN EQUITY.

well acquainted with the Koman law, were naturally largely
influenced both by its principles and practice.

The growth of equity-jurisdiction may be traced to the
following causes : —
( I .) The common law became a system positive and inflexible

too early.
(2.) The general discouragement of the Koman law; its

being deprived of authority in the courts.
( 3 . ) The inflexible and cramping system of procedure adopted
by the common law courts.

According to the common law, every kind of civil

wrong was supposed to fall within some particular

class, and for each class an appropriate writ or breve

(which was the first step in every action) existed.

The evil effects of this system were chiefly two : —

(a.) Where the wrong to be redressed actually fell

within one of the classes recognised at common

law, the suitor might select the improper writ,

and fail on that account. Sharrod v. N. W. JR. Coy.

This cause of injustice removed by

Common Law Procedure, Act, 1852.
(&.) Where the wrong did not fall within any of the
recognised classes, the suitor was without remedy.
(4.) ” The statute in consimili casu,” 13 Edw. I., stat. i, pro-
vided a remedy by giving a larger discretion to the
clerks in Chancery (by whom all writs were drawn up
at that time) in the drawing up of writs, so that they
might be adapted to meet all cases. This enactment
proved inadequate for two reasons : —
{a.) The common law judges were the sole judges of
the validity of the adapted writs, and were jealous
of innovations.
(6.) New .and unusual circumstances constantly occur-
ring, increased the difficulty of the clerks in
Chancery in adapting the writs, which had to be
based on the Roman law. Further, new forms of
defence arose, for which no provision had been made,
(5.) Where no relief could be obtained at common law,
suitors applied to the King in Par^^nient {i.e., in hift

THE JUEISDICTION IN EQUITY. 3

Council), who referred the matter to the Chancellor.
Edward III., by an ordinance (22 Edw. III.), referred
all such matters as were ” of grace ” to the Chancellor:
from that time, application by petition or bill was made
to the Chancellor direct without any preliminary writ,
and notwithstanding complaints the Chancery process
became an established procedure by the reign of
Edward IV. Modern Equity is generally dated from
the Restoration.

Fusion of Law and Equity.

By virtue of the Judicature Acts, 1873 to 1907, and the
rules and orders made thereunder, one uniform system of
procedure has been established in the courts of law and
equity. The fusion between law and equity is merely in
administration ; the principles of equity remain as before.

The Judicature Act, 1873, provided that law and equity
shall in every case be administered concurrently ; and that,
where there is any conflict between the rules of equity and
law, the former are to prevail. But the distinction between
legal and equitable remedies has not been abolished, and the
advantage to be derived from the possession of the legal
estate remains untouched.

The following matters are, however, assigned to the Chan-
cery Division exclusively : —

1 . Administration of estates of deceased persons.

2. Dissolution of partnerships, and taking of partner-

ship and other accounts.

3. Eedemption and foreclosure of mortgages.

4. Raising of portions and other charges on land.

5. Sale and distribution of proceeds of property subject

to any lien or charge.

6. Execution of trusts, charitable and private.

7. Rectification, setting aside, and cancellation of deeds

and other written instruments.

8. Specific performance of contracts between vendors

and purchasers of real estate, including contracts
for leases.

9. Partition or sale of real estates.

4 THE MAXIMS OF EQUITY. •

TO. Wardship of infants, and care of infants’ estates.
1 1. Proceedings under tlie Trustee Act, 1893.

Classification of Equity -Jurisdiction.

(i.) The originally exclusive jurisdiction; the court pro-
ceeded on equitable principles and gave equitable
remedies.

Although nominally abolished by the Judicature
Acts, it is practically retained.
(2.) The originally concueeent jurisdiction ; the court pro-
ceeded on legal principles, but gave only an equitable
remedy.

EqidtaUe rights are enforced in the originally eoe-
clusive jurisdiction. Legal rights are enforced in the
originally concurrent jurisdiction. This distinction
is still of importance.
(3.) The obsolete auxiliaey jurisdiction.

Abolished (both practically and nominally) by the
Judicature Acts. This jurisdiction existed where
COMMON LAW litigants required the aid .(aioxilium) of
equity in the assertion of their legal rights ; e.g., the
discovery of title-deeds. All such aid can now be
obtained in the King’s Bench Division itself.

CHAPTER II.

THE MAXIMS OF EQUITY.

I. No wrong without a remedy. Equity will not, by reason of
a merely technical defect, suffer a wrong to be without
a remedy.

This maxim forms the foundation of equity-juris-
prudence. Must be understood as referring to wrongs
recognisable at law or capable of being judicially
redressed.

THE MAXIMS OF EQUITY. 5

To it may be referred Uses and Trusts.
Illustration —

Equity allowed a mortgagor to sue for land or rent
although not possessed of the legal estate. By the
Judicature Act, 1873, this rule of equity is now
made a rule of law.

II. ^quitas sequiter legem. Equity follows the law.
Two applications —
(i.) As regards legal estates, rights, and interests, equity
is strictly bound by the rules of law.

Thus all the canons of descent {e.g., the rule of
primogeniture) must be observed in equity, although
productive of greatest hardship and injustice ; but
equity may avoid the law in effect even while follow-
ing it. Alderson v. Maddison ; Loffus v. Maw.
(2.) As regards equitable estates, rights, and interests,
equity, although not, strictly speaking, hound by the
rules of law, yet acts in analogy thereto whenever an
analogy exists.

Thus the rule in Shelley’s case applies to executed
trusts.
Illustration of the maxim in loth applications —

In dealing with the statutes of limitations, as re-
gards legal estates (that is to say, in its originally con-
current jurisdiction), equity never either exceeds or
abridges the limit of time prescribed by law; while
on the other hand, as regards equitahle estates (that
is to say, in its originally exclusive jurisdiction), equity
often abridges {e.g., on the ground of laches), yet
never exceeds, the prescribed limit.

Time runs both at law and in equity from the dis-
covery, and not from the perpetration of concealed
fraud. 3 & 4 Will. IV. c. 27, s. 26.

Gibbs V. Guild ; Betjemann v. Betjemann.

And ignorance of one’s right induced by fraud will
prevent the statute running. Bulli v. Osborne

The fraud must be that of the person setting up
the statute as a defence.

6 THE MAXIMS OF EQUITY.

III. Qui prior est tempore, potior est jure. Where equities

are equal, the first in time shall prevail.
Explanation —

As between persons having only equitable interests, if
such equities are in all other respects equal, then Qui
prior est tempore, potior est jufe ; i.e., equity will not
prefer one to the other on the ground of priority of
time only, until it finds there is no other sufficient
ground of preference between them. For example,
as between equitable mortgagees, negligence on the
part of an equitable mortgagee, first in order of date,
will deprive him of his priority.

Farrand v. Yorkshire Bank ; Bice v. Bice ;
Bimmer v. Webster.
But if the equitable interest involved is personalty,
then the question will turn upon the priority in point
of time of the notice of the assignments given to the
trustees of the fund, and not on the dates of the
assignments themselves.

Lloyds Sank v. Pearson ; Be Lake.

IV. Incequali jure melior est conditio possidentis. Where

there is equal equity the T.aw must prevail.
Explanation —

If the defendant has a claim to the passive protec-
tion of the court equal to the claim which the plaintiff
has to call for the active aid of the court, he who has
the legal estate will prevail.

Thorndyke v. Hwnt ; Taylor v. Blakelock ;
London and County Bank v. Goddard.
But such legal title must be absolutely complete,
and not merely inchoate.

Powell V. Land. & P. Bank ; Boots v. Williamson.

This maxim is not confined in its operation to the

tacking of mortgages. It applies in favour of all

equitable owners or incumbrancers for value without

notice of prior equitable interests. Bailey v. Barnes.

The last two maxims (III. and IV.) formerly found their

principal application in cases where the defence set up was

THE MAXIMS OF EQUITY. 7

purchase for valuable consideration loithout notice. As to when
this defence can still be successfully pleaded the following
rules have been settled : —

( I .) Where the defendant has both legal and equitable estate,
the plaintiff having equitable estate only ; the defence
is good.

And this whether the defendant —
(a.) Obtains legal estate at the time of purchase.
(b.) Gets in legal estate subsequently without becoming

party to a breach of trust.
(c.) Although without the legal estate, yet has the best
right to call for it.
(2.) Where the plaintiff has the legal estate, the defendant
having equitable estate only. A distinction formerly
existed between the auxiliary and concurrent jurisdiction,
(a.) In the obsolete auxiliary jurisdiction this used to
be a good defence to an application for relief, and
no aid was given to the possessor of the legal title
where it was set up.

Basset v. Nosworthy ; Wallwyn v. Lee;
Joyce V. De Moleyns.
If, however, the plaintiff could make out his case
by independent evidence without the aid of equity,
his title prevailed.
{b.) In the originally concurrent jurisdiction this de-
fence was never any answer. Williams v. Lambe.
But NOW, in consequence of the fusion of law and
equity brought about by the Judicature Acts, this
defence no longer affords any protection, and complete
relief must be given, and defendant’s title-deeds dis-
covered. Ind V. Emerson.
(3.) Where neither plaintiff nor defendant has the legal estate
or the best right to call for it, each having an equitable
estate only, the rights of the parties are determined by
their respective dates. Philips v. Philips.
In cases falling under this rule it is immaterial as
regards real estate whether the subsequent incum-
brancers had or had not notice of prior incumbrance.

Ford V, White.

8 THE MAXIMS OF EQUITY.

And a puisne mortgagee of real estate without
notice will not gain priority, merely by giving notice
to the person having the legal estate.

Hurriber v. Richards ; HopMns v. Hemsworth.

But if the property subject to the incumbrances

be situate in Yorkshire, the priorities of the several

incumbrancers will be determined, inter se (in the

absence of actual fraud), exclusively by the dates of

the registration of the incumbrances.

Yorkshire Registries Act, 1884 (47 & 48 Vict. c. 54).

(4.) Where the defendant has both legal and equitable

estates, the plaintiff having a mere equity or right and

not an equitable estate, this defence is available.

Sturge v. Starr.
V. He who seeks equity must do equity.

That is to say, in the transaction in which relief is
sought.

Where the plaintiff had legal rights, there was no
necessity for him to come to courts of equity for relief.
Illustrations —

(a.) Married women’s equity to a settlement under
law prior to the Married Women’s Property Act,
1882.
(&.) Acquiescence. Person standing by must give com-
pensation.

VI. He who comes into equity must come with clean hands.

That is to say, so far as the subject-matter of the
litigation is concerned ; the claim must not be
tainted with illegality or fraud.

Overton v. Banister.

VII. Vigilantihus non dormientibus, cequitas subvenit. Delay
defeats equities.

” Nothing can call forth a court of equity into
activity but conscience, good faith, and reasonable
diligence.” Sviith v. Clay.

So far as legal claims are concerned, the delay
must be such as to constitute a bar under the

THE MAXIMS OF EQUITY. 9

Statute of Limitations, but equitable claims may be
barred by the plaintiff’s laches or unreasonable
delay. Make v. Gale.

VIII. ^qualitas est summa ceqidtas. Equality is equity, or

equity delighteth in equality.
Illustrations —

Equity leans against joint-tenancy ; thus the survivor
is a trustee for the representative of the deceased in
proportion to the sum advanced by him (notwith-
standing the legal estate is vested in the survivor)
in eases of —

(rt.) Joint-purchases, where money advanced in unequal
shares, as appears by the deed.

Lake v. Gibson ; Lake v. Craddock.

(&.) Joint-mortgages, whether money advanced in equal
or unequal shares. Morley v. Bird.

IX. Non quod dictum sed quod factum inspiciendum est.

Equity looks to the intent rather than to the form.
Illustration —

Relief against penalty or forfeiture.

Peachy v. Somerset.
To this maxim we owe the equitable doctrines
governing Mortgages.

X. Equity looks on that as done which ought to have been done.
Explanation —

Equity will treat the subject-matter of a contract
as to its consequences and incidents in the same
manner as if the act contemplated in the contract
had been completely executed — that is to say, in
favour of persons who can enforce the contract.

To this maxim may be referred the equitable
doctrine of Conversion.

XI. Equity imputes an intention to fulfil an obligation.
Explanation —

Where a man, being bound to do an act, does

lO THE MAXIMS OF EQUITY.

something capable of being considered as in fulfil-
ment of his obligation, it will be so construed.

Sowden v. Sowden.
Under this maxim come the equitable doctrines
of Satisfaction and Performance.

XII. ^quitas agit in personam. Equity acts in personam.

The only remedy originally to be obtained at
common law consisted in damages, but equity com-
pelled the wrongdoer to actually do what he had
contracted to do.

The principal application is in procedure ; equity
will enforce specific performance of a contract even
where the subject-matter of the suit is beyond the
jurisdiction of the court, because it acts by process
in personam.

Hiving v. Orr Swing ; Penn v. Baltimore.

But such an action cannot be entertained if the
title itself is in question, for that must be decided
by the lex loci rei sitae. In re Hawthorne.

To this maxim the former jurisdiction of equity
to restrain actions at law by Injunction is to be
referred. Uarl of Oxford’s Case.

1 1

PART II.— THE ORIGINALLY EXCLUSIVE
JURISDICTION.

CHAPTER I.

TRUSTS GENEKALLY.

The Statutes of Mortmain having prohibited gifts of lands
for religious purposes, the practice grew up (about the time
of Edward III.) of making grants or feoffments to third
persons to the vse of the religious houses. At common law the
estate vested in the grantee only was recognised, and the
use engrafted upon it was totally disregarded. But in
equity the Chancellor — an ecclesiastic — held that the con-
science of the grantee was charged with the declaration of
the use, .although it did not attach to the land itself, and so
compelled him to hold as trustee for the benefit of the
persons in whose favour the use was declared. From this
period it is clear that the owner of the use (eq uitable owner)
was the real beneficial owner, the original grantee being
merely the legal owner. The religious houses were speedily
deprived of the benefits gained by such a result, a further
statute of mortmain being passed in the reign of Richard II.
which extended the prohibition to uses, whether direct or
indirect. Meanwhile the advantages to be derived from the
newly estabhshed Kses had been perceived by others, and in
respect of persons other than religious houses the system of
uses remained in active operation.

The advantages resulting from possessing a mere use in
land instead of the legal estate therein were these —

( I .) Uses were not subject to the law of escheat.

(2.) Uses were free from feudal burdens, e.g., wardship
and marriage.

12 TRUSTS GENERALLY.

(3.) Uses were not liable to be taken in execution under

an elegit.
(4.) Uses were devisable, while the land itself could
not be dealt with by will.
The Statute of Uses (27 Hen. VIII. c. 10) was passed for
the express purpose of abolishing these uses, this dual
ownership of land. It enacted that where any person should
stand seised of land to the use of anothei’, such other (the
person having the use) should be deemed in lawful seisin
and possession for such estate as he had in the use. That
is to say, the use became converted into the land.
Examples —

(a.) Express use. Conveyance to A and his heirs to the

use of B and his heirs. A, who before the statute

took the fee-simple, now takes nothing, the whole

estate, both legal and equitable, being at once

vested in B.

(h.) Resulting use. Voluntary conveyance by X to A

and his heirs simply. Before the statute X would

have been deemed in equity the beneficial owner

for want of consideration to pass the estate to A.

So after the statute X becomes also the legal

owner, and the effect of the conveyance is nil, the

whole estate, both legal and equitable, at once

resulting to X the grantor.

This statute led to the establishment of the modern

system of settlement.

The object of the statute was defeated by the common law
doctrine that there cannot be “a use upon a use,” on the
ground that ” the use is only the liberty to take the profits ;
but two cannot severally take the profits of the same land ” :
a doctrine upon which the famous Tyrrell’s case was based.
Example —

Conveyance to A to the use of B to the use of C.
It was held B took the whole estate, but that C’s
interest was a use upon a use, which the statute had
no energy to reach.
Just as Equity, before the statute, had upheld uses, so in
the course of years it began to hold that the use upon a use

TKUSTS GENERALLY. I 3

ought to be recognised, and to give effect to such use, which
became known as a trust.

In the example above given, A takes the estate

under the old law, B takes it under the statute, but,

nevertheless, as trustee for C, in whom at equity

the whole beneficial interest is deemed vested.

In all such conveyances there are therefore two estates to

be considered —

(i.) The estate recognised at common law under the statute,

i.e., the legal estate.
(2.) The estate, the use upon a use, recognised at equity
only, i.e., the equitable estate or trust.
It must be remembered that trust estates are for the
most part subject to all the rules applicable to legal estates.
Thus a conveyance unto and to the use of A and his heirs
to the use of or upon trust for B and his heirs, or the heirs
of his body, gives to B either an equitable estate in fee-
simple or fee-tail. And where the estates in possession and
remainder are both equitable, the rule in Shelley’s case is
applicable ; and equity follows the law to this extent, that
a grant by deed of an equitable estate in land to the grantee
simply, without words either of limitation or indication to
pass the fee, will confer an estate for the grantee’s life only.
An equitable estate in fee-simple belongs to a purchaser
of freehold property immediately after the purchase contract
is completed. Consequently, if the vendor become bankrupt
before completion of purchase, the trustee in bankruptcy
cannot disclaim the contract, as the purchaser has an estate
in the land. Re Bastable.

The Statute of Uses does not apply to — ■
(i.) Pure personalty. The statute speaks of lands, tene-
ments, and hereditaments only.
(2.) Impure personalty orl The statute speaks of ” seisin,”
leaseholds. \ a term applicable to freeholds

(3.) Copyholds. ) only.

(4.) Active as opposed to passive uses, even in respect of free-
holds : thus, when the grantee to the use of another has
active duties to perform, the legal estate remains in the
grantee.

14 TRUSTS GENERALLY.

Formerly trusts of all kinds might have been created or
transferred by word of mouth, but the Statute of Frauds
(29 Car. II. c. 3) requires —

(i.) All declarations or creations of trusts of lands, tene-
ments, or hereditaments to be evidenced by writing.

(Sect. 7.)
(2.) All grants and assignments of any trust to be in
writing. (Sect. 9.)

With two exceptions —

{a.) Trusts arising or resulting from any conveyance of

lands by implication or construction of law.
(&.) Trusts transferred or extinguished by act or opera-
tion of law. (Sect. 8.)
This statute applies to freeholds, copyholds, leaseholds,
and (with the exception of sect. 7) also to personalty.

Defi/)iition and Classification of Trusts.

A TRUST when used in the sense of an equitable interest is
a beneficial interest in or a beneficial ownership of real or
personal property unattended with the possessory and legal
ownership thereof.

A trust has been defined as —

An equitable obligation imposing upon a person (who is
called a trustee) the duty of dealing with property over
which he has control (which is called the trust property)
for the benefit of persons (who are called the beneficiaries
or cestuis que trust), of whom he may himself be one, and
any one of whom may enforce the obligation.

{Underhill’s Trusts.)

Also as —

A confidence reposed in some other, not issuing out of
the land, but as a thing collateral, annexed in privity to the
estate of the land, and to the person touching the land, for
which cestui que trust has no remedy but by subpoena in
Chancery.

Observe, it is —

(i.) A confidence.

(2.) A confidence reposed in some other.

EXPKESS OR DECLARED PRIVATE TRUSTS. I 5

(3.) Not issuing out of the land, but collateral to it.

(4.) Annexed in privity to the estate.

(5.) Annexed in privity to the person.

(6.) No remedy for cestui que trust but in equity.

{Lewin on Trusts.)
Trusts are classified as follows : —
(i.) Express or declared trusts.

(«.) Private trusts.

(&.) Public (or charitable) trusts.
(2.) Implied or presumptive trusts.
(3.) Constructive trusts.

CHAPTER II.

EXPRESS OR DECLARED PRIVATE TRUSTS.

An express or declared trust is a trust which is clearly
expressed by the author thereof, whether verbally or by
writing, or may fairly be collected from a written document.
Express or declared trusts are of various kinds.

Firstly, Trusts Executed or Executory.

A trust is said to be executed when no act is necessary to
be done in order to constitute it, the trust being finally
declared by the instrument creating it.

A trust executory or directory is a trust raised either by a
stipulation or by a direction, in express terms or by necessary
implication, to make a settlement or assurance to uses, or
upon trusts which are indicated in, but do not appear to be
finally declared by, the instrument containing such stipula-
tion or direction.

A test question in distinguishing the two is. Has
the author of the trust been his own, conveyancer ?

Egerton v. Brownlow.

J. Where trust executed, the maxim ” Equity follows the

1 6 EXPRESS OR DECLARED PRIVATE TRUSTS.

law ” is always applicable, e.g., the rule in Shelley’s case
is followed.

II. Where trust executory, this maxim is or is not applicable
according as a contrary intention on the part of the
author of the trust is or is not expressed or implied in
conformity with the rules of equity.
Executory trusts arise in two ways —
(i.) Marriage articles or settlements, the object of which is
deemed to be provision for the issue of the marriage.

In these instruments, therefore, an intention con-
trary to the rule laid down in Shelley’s case is always
implied. Trevor v. Trevor.

(2.) Wills, in which the intention must appear from the
instrument itself: they are construed —
(a.) According to the legal effect of the words used,
unless a contrary intention is expressed on the face
of them. Sweeta’pfle v. Bindon.

(&.) According to the contrary intention whenever that
is expressed or indicated.

Fapillon v. Voice ; Glenorchy v. Bosville.

Secondly, Trusts Voluntary or for Valuable
Consideration.

In order to render a voluntary gift or settlement valid
there must be what amounts to either ( i ) a complete transfer
of the property beneficially or in trust, or (2) a valid declara-
tion of trust.

General Rules —
(i.) The court will not execute a voluntary contract, for
no action lies upon a contract without consideration.

Jefferys v. Jefferys.
(2.) An IMPERFECT voluntary conveyance will not be enforced.
(3.) An EXECUTED trust is binding although voluntary.

Ellison V. Ellison.
The test question is, Has the trust been completely
constituted ?
These rules are exemplified in the following manner : —

EXPRESS OR DECLARED PRIVATE TRUSTS. 1 7

I. Voluntary trusts will be enforced

Where the author of the trust has done everything
■which, according to the nature of the property com-
prised in the instrument, is necessary to be done in
order to transfer the property and render the instru-
ment binding upon him.

Milroy v. Lord ; Richards v. Delhridge.
This may be effected —

(i.) Where the donor is both legal and equitable owner —
(a.) By actual conveyance to the donee or a trustee
for him. Ellison v. Ellison.

(b.) By donor’s declaration of trust for donee.

Ex parte Pye ; Steele v. Walker ; Fox v. Hanks.
(2.) Where the donor is equitable owner only —

{a.) By direction to trustees to hold on trust for
donee.

Except in the case of pure personalty, this
direction must be in writing.

Statute of Frauds, s. 7.

(h.) By conveyance of the equitable interest by deed.

Gilbert v. Overton ; Kehewich v. Manning ;

Nanney v. Morgan.

Voluntary trusts in favour of charities or arising under

wills are enforced, although executory.

II. Voluntary trusts will not be enforced

Whether the donor is legal or equitable owner, where
there is no declaration of trust, or the instrument
creating the trust is in any way imperfect.

Wherever the facts show an intention to transfer

property and not to declare a trust, equity will not

give effect to an imperfect transfer by treating it as

a declaration of trust.

The rule formerly was that a trust would not be

enforced where the instrument was imperfect

( I .) If the property comprised in it was assignable at law.

Antrobus v. Smith ; Searle v. Law ;
Richards v. Delbridge.
(2.) If the property was not assignable at law, but the

B

1 8 EXPRESS OR DECLARED PRIVATE TRUSTS.

donor had left something imperfect which it was in
his power to render more nearly perfect.

Fortescue v. Barnett ; Edwards v. Jones.

The test is whether anything remains to be done by

the donor, not by the donee. Gi-iffin v. Grifm.

But since the Judicature Act, 1873, the distinction between

properties assignable and not assignable at law has become

unnecessary; the sole question now being whether the

property has been completely and legally assigned or not.

Thirdly, Trusts Fraudulent.

Under the provisions of various statutes and otherwise.

I. By 13 Eliz. c. 5, avoiding as fraudulent against creditors
all covinous conveyances and gifts of lands or goods
tending to defeat or delay creditors, except where
made on good consideration and hond fide to a person
without notice of such covin. The conveyance will
be fraudulent unless made both upon good considera-
tion AND land fide.

A VOLUNTARY settlement is void under this
statute when it can be shown that its effect was
to deprive the settlor of the means of paying
certain then existing debts ; or where there is
an express intention of defeating one particular
creditor. And creditors subsequent to the settle-
ment may impeach it on this ground. The
death of the settlor makes no difference.

Freeman v. Pope ; Spirret v. Willaius ;
Holmes v. Penny.
It can be avoided without proof of actual in-
tention to defeat or delay creditors if the circum-
stances be such that it must necessarily have
that effect.

A conveyance for value (whether a conveyance
by way of mortgage or on sale) is not void under
this statute unless an express fraudulent intent or
express mala fides can be shown.

Ex parte Chaplin ; Alton v. Harrison.

EXPKESS OR DECLAKED PRIVATE TRUSTS. 1 9

And a post-nuptial settlement is regarded as
voluntary unless made in pursuance of an ante-
nuptial agreement.

But even if the conveyance be void within this
statute, a purchase for value from a person entitled
thereunder before it is set aside is good.

Halifax Bank v. Gledhill ; In re Brail.

II. Formerly by 27 Eliz. c. 4, avoiding as fraudulent against
subsequent purchasers for valuable consideration
(whether with or without notice) voluntary convey-
ances of lands of every tenure. The doctrine rested on
the ground that by selling for value, the vendor so
repudiated the former voluntary conveyance that it
must be taken against him and the voluntary
grantee that such intention existed when he made
the voluntary conveyance, and accordingly that it
was made in order to defeat the purchaser for value.
This statute has now been practically repealed by
the Voluntar}’ Conveyances Act, 1893, which pro-
vides that no honA fide voluntary conveyance, whether
made before or after the Act, shall be deemed
fraudulent within the statute of Elizabeth by reason
of a subsequent purchase for value. In future,
therefore, to defeat a voluntary conveyance it must
be shown to be maid fide.
With regard to the statute 27 Eliz. c. 4, note — –
(i.) It had no application to chattels personal.
(2.) Where a voluntary assignee of leaseholds under-
took to observe covenants contained in the lease
of an onerous nature, the assignment was not
avoided thereby. Price v. Jenhins,

But such an assignment might be void under
the 1 3 Eliz. c. 5 . Bidler v. Ridler,

(3.) Only purchasers direct from the voluntary
settlor himself could claim the benefit of the
statute, and mortgagees and lessees were deemed
purchasers pro tanto.
(4.) It did not avoid a purchase for valuable con^

20 EXPRESS OR DECLARED PRIVATE TRUSTS.

sideration from a person entitled under a
voluntary conveyance hefore it was set aside.

George v. Milhanke.
5ojMi _^(^e purchasers are such as take bond fide and for
valuable consideration.

Meritorious (or good) considerations are such as blood or
natural affection.

Valuable considerations are money, marriage, forbearance,
or the like.

ANTE-nuptial agreements must be in writing
(Statute of Frauds, s. 4), and when followed by the
marriage, the wife becomes a purchaser within the
27 Eliz. c. 4.

But in absence of fraud a post-nuptial settlement
made in pursuance of an ante-nuptial verbal agree-
ment recited in the settlement will satisfy the
Statute of Frauds. Be Holland.

Bond fide POST-nuptial settlements were supported
on very slight considerations, so as not to be void
by this statute. Hewison v. Negus.

Maid fide ANTE-nuptial settlements were and will
continue to be void within the 13 Eliz. c. 5, the
marriage being in such cases no real consideration.
Be Pennington ; Columbine v. Penhall.
The Voluntary Conveyances Act, 1893, affords no pro-
tection to maid fide settlements.

As to the question who are within the scope of the mar-
riage consideration, so as to prevent a settlement being
voluntary, it was formerly considered that the children of
wife by a former husband were within it.

Newstead v. Searles.

And, on the other hand, that the children of husband by

a former wife were not. Cameron v. Wells.

But now it appears to be settled that in both cases the

settlement will be deemed voluntary.

Be Btcestre v. West ; Att.-Gen. v. Jacobs-Smith.
In family arrangements all persons within the scope of them
are deemed purchasers for value.

EXPRESS OR DECLARED PRIVATE TRUSTS. 21

III. By the Bills of Sale Acts, 1878 and 1882, avoiding as
fraudulent bills of sale of personal chattels remaining
in the possession of the grantor, unless duly registered
within seven days from the date thereof, and the other
provisions of the Acts duly complied with.

The consideration must be truly stated in the bill
of sale. A bill of sale given by way of security is
void under the Act of 1882 if it is given for less
than ;^30, or if it be not substantially in the form
specified in the schedule to that Act.

Ante-nuT^tial settlements or agreements for a
settlement, and assignments made in pursuance
of ante-nuptial agreements, are exempted from the
operation of these Acts. Personal chattels com-
prised in such agreements would only require
delivery to complete the title of the settlement
trustee. JEx parte Salaman.

IV. By the Bankruptcy Act, 1883, avoiding as fraudulent

against the trustee in bankruptcy POST-nuptial settle-
ments (other than property accruing to the settlor
after marriage in right of his wife) —
( I .) If settlor becomes bankrupt within two years.
(2.) If settlor becomes bankrupt at any subsequent
time within ten years, unless the parties claiming
thereunder can prove that settlor was, at the time
of the settlement, able to pay all his debts without
the aid of the settled property, and that his interest
therein had passed to trustee of settlement on its
execution.

All agreements to settle future acquired
property (even ante-nuptial) are void under this
Act against the trustee upon settlor’s bankruptcy
(except where acquired in right of his wife), un-
less prior to the bankruptcy such property has
been both acquired and paid, or transferred or
delivered pursuant to the agreement.
It was formerly considered that a purchaser for
value deriving title under a voluntary settlement

2 3 EXPRESS OK DECLARED PRIVATE TRUSTS.

could not get an unimpeachable tjtle until ten years
had elapsed since the date of the settlement.

Briggs v. Spicer.

But it has now been settled that the word ” void ”

in the Act should be read ” voidable,” so that any

bond fide, alienation for value jrrior to bankruptcy of

the settlor will be good.

In re, Brail ; In re Carter & Kenherdine ;

Sang^i,inette v. Stuchey.

And a declaration of trust is enough to make the

property pass. Shrager v. March.

But it has been doubted whether a purchaser

would be absolutely safe until the expiration of

three months from such alienation. Re Reis.

Note — A man cannot settle his own property so

as to take an interest determinable on his hanlc-

rwptcy, such a settlement being deemed a fraud upon

creditors. Higinbotliam v. Holme.

The Bankruptcy Act also avoids as fraudulent

preferences every conveyance or transfer of property

made within three months of his bankruptcy by a

person unable to pay his debts in favour of a creditor

with the view of giving him a preference.

This, however, does not prevent the preference of a
surety by the debtor, as a surety is not a creditor.

Fourthly, Trusts in Favour of Creditors.

Voluntary trusts of personalty are irrevocable, and
were never affected by the 2 7 Eliz. c. 4. But trusts in
favour of creditors form exceptions to this rule, as being
illusory trusts, merely dispositions made for the benefit
or convenience of the settlor. Garrard v. Lauderdale.
( I .) When a debtor conveys property to trustees for payment
of his debts, the debtor alone (not the creditors) is
thereby constituted cestui que trust. Walwyn v. Goutts.

As a general rule, therefore, the debtor may vary or re-
voke the trusts at pleasure ; but this right of revocation
is strictly personal to the debtor. Fitzgerald v. White.

EXPRESS OR DECLARED PRIVATE TRUSTS. 23

And if the relationship of trustee and cestuis que
trust has been actually constituted the deed is
irrevocable. Sharp v. Jackson.

(2.) A trust in favour of creditors is irrevocable aftee com-
munication to the creditors, if they have thereby been
induced to a forbearance in respect of their claims
Tvhich they would not have otherwise exercised, or if
they have in any way assented to and acquiesced in
the deed creating the trust, or acted under its pro-
vision and complied with its terms.

Acton V. Woodgate ; Garrard v. Lauderdale ;
Field V. Donoughmore.
Should the trust-deed contain no provision as to
surplus after payment of debts in full, there is no result-
ing trust in favour of the debtor, but the surplus (if
any) will belong to the creditors. Cooke v. Smith.

(3.) Where a creditor is party to a trust-deed and has
executed it, or been instrumental in causing its
preparation, as to him the deed is irrevocable.
(4.) A creditor, ignorant of the existence of the trust-deed,
cannot claim the benefit of its provisions.

JoTies V. James.
(5.) Trust-deeds in favour of creditors must be registered
under the Deeds of Arrangement Act, 1887.

But a trust-deed for the benefit of specified creditors
only, and not the whole body of creditors, does not fall
within the Act. Be Saumarez.

(6.) Such a deed is an act of bankruptcy, and therefore no
payment can safely be made to the trustee under the
deed until three months have elapsed.

Davis V. Petrie ; Ponsford v. Union Bank.
(7.) The trustee is entitled to be indemnified out of the
assets, his title being paramount to the creditors.

Harper v. Biley.

Fifthly, Equitable Assignments.

Choses in action were formerly not assignable at common
law, although assignments of equitable choses in action for
valuable consideration have always been enforced in equity.

24 EXPRESS OR DECLARED PRIVATE TRUSTS.

The following exceptions have, however, been engrafted
upon the ancient common law rule, which is now practically
abrogated —

(i.) Contracts with the sovereign.
(2.) Negotiable instruments, formerly by the law mer-
chant, but now by the Bills of Exchange Act, 1882.
(3 .) Where the debtor assented to the transfer of the debt.
(4.) Contingent interests in real estate, by 8 and 9 Vict.

c. 106.
(5.) Bail bonds, by 4 & 5 Anne, c. 16.
(6.) Bills of lading, by 18 & 19 Vict. c. iii.
(7.) Policies of life assurance, by 30 & 31 Vict. c. 144.
(8.) Policies of marine assurance, by 6 Edw. VII. c. 41
(repealing and re-enacting in this respect 31 & 32
Vict. c. 86).
(9.) Debts and other legal choses in action where the
assignment is absolute, by Judicature Act, 1873.
In equity the mode or form of assignment is absolutely
immaterial provided the intention of the parties is clear ; so
a mere order given by debtor to creditor upon a third person
is deemed a binding assignment or appropriation.

Biplock v. Hammond.
But a mere revocable mandate is insufficient ; and no
appropriation or assignment is effective unless the fund, from
which payment is to be made, be indicated. The bankruptcy
cf the debtor revokes a mere mandate, as such a mandate is
only agency.

The assignee of a chose in action must give notice to the
holder of the fund assigned in order to obtain a right in rem ;
without notice he has merely a right in personam against
the assignor, .and third parties will not be bound. When the
fund is in court, a stop-order must be obtained, which has
all the effect of notice. This doctrine relating to assign-
ments of equitable interests in pure personalty is known
as the

Rule in Dearie v. Hall.

That is to say, where a fund is legally vested in trustees,
an assignee who (not having had at the time of taking his

EXPRESS OK DECLARED PRIVATE TRUSTS. 2$

security notice of any prior incumbrance) gives notice to the
trustees has a better title in equity than an assignee of an
earlier date who has not given notice. The question of
priority between such incumbrancers depends solely upon
priority of notice.

Notice should be given to each trustee, as although notice
to one of several trustees is notice to all, yet, if the trustee
to whom notice is given die without having communicated
the notice to his co-trustees, and after his death the ceshci
que trust creates an incumbrance, and the assignee gives
notice to the surviving trustees, then the subsequent incum-
brancer might have priority over the previous incumbrancer.

Warde v. Duneombe.

Where the assignor is himself one of the trustees notice

should be given to his co-trustees. Lloyds Bank v. Pearson.

If notice be. given to all the trustees who are such at the

date of the assignment priority is preserved even though

all the trustees die and new ones are appointed who have no

knowledge of such notice : and there is no obligation on the

incumbrancer to renew his notice upon a change of trustees.

Se Phillips Trusts ; Brittin v. Partridge.

The rule applies even to a trustee in bankruptcy, who

must give notice in order to preserve his priority.

Be Stone’s Will.
But a trustee in bankruptcy takes the debtor’s choses in
action subject to existing equities and cannot obtain priority
over an incumbrancer antecedent to the bankruptcy by giving
notice. Be Wallis.

The rule is not applicable to shares in registered companies,
or to equitable or chattel interests in real estate, although it
is applied to proceeds of sale of real estate.

Lloyds Bank v. Pearson.

The assignee of a chose in action takes subject to all

equities subsisting against the assignor ; e.g., assignee of a

residue takes subject to payment of costs of administration

action. Turton v. Benson ; Knapnan v. Wreford ;

Christmas v. Jones.
Except in the case of negotiable instruments or deben-
tures payable to bearer.

26 EXPRESS OK DECLARED PRIVATE TRUSTS.

By the Judicature Act, 1873, s. 25, debts and other
legal choses in action are rendered assignable at law
suhject to all equities affecting the assignor, provided the
assignment —

(i.) Is absolute, not purporting to be by way of

charge,
(2.) Is in writing under hand of assignor, and
(3.) Express notice in writing thereof be given to the
holder of the fund.
A mortgage of a chose in action is within the terms of this
section, provided there is an actual assignment of it and not
a mere charge. Tancred v. JDelagoa Bay.

The assignment must extend to the whole debt.

Forster v. Baker.
Upon the assignment of a chose in action notice is
necessary

(i.) To prevent the debtor paying the assignor.

(2.) To prevent a subsequent assignee gaining priority

by notice.
(3.) In the case of debts due to the assignor in the way
of his trade, to take them out of his order and
disposition under the Bankruptcy Act.
(4.) In the case of legal choses in action, to enable the
assignee to sue in his own name under the pro-
visions of the Judicature Act, 1873.
Equity will not, as a general rule, enforce the following
assignments, on the ground that they are contrary to public
policy : —

(i.) Assignments of ahmony, or of pensions and salaries

of public officers, unless office is a sinecure or

duties have ceased and pension or salary is not

expressly rendered inalienable.

(2.) Assignments affected by champerty, maintenance,

or other corrupt considerations.
(3.) Assignments of mere lites pendentes, hnt a purchase

from defendant is always valid.
(4.) Assignments by incapacitated persons, e.g., pur-
chase by solicitor of subject-matter of action in
which he is retained.

EXPRESS OR DECLARED PRIVATE TRUSTS. 2″]

The assignment of a debt illegal in its conception to a
purchaser for value ionti fide and without notice will not get
rid of the illegality ; so the transferee of a mortgage taken
by a moneylender not in his registered name (as provided
by Moneylenders Act, 1900) obtains no rights under the
transfer. Eg Bohinson.

But now under Moneylenders Act, 191 1 (unless transac-
tion is invalid apart from the Act of 1900), such a security
will be valid in favour of a bond fide assignee.

A partner cannot assign his partnership share so as to give
the assignee the right of interfering in the management ; but
an assignment by a limited partner with the consent of the
general partners will give the assignee all the rights of the
assignor, under the Limited Partnership Act, 1907.

Sixthly, Precatory Trusts.

A trust which may fairly be collected from a written
instrument is an express trust : thus where property is given
absolutely to any person who is by the donor recommended,
entreated, or wished to dispose thereofinfavour of another, a
trust termed a Precatory Trust is held to be created, provided
there are present the following requisites, known as the

Three Certainties

which are essential to every express trust.

(i.) The words in question are so used that on the whole
they ought to be construed as imperative or certain.
No technical words are necessary.

The present tendency of Equity is strongly against
construing recommendatory words (e.g., in full con-
fidence) as imperative so as to create precatory
trusts. Ill re Adams v. The Kensington Vestry.

But they may be so construed where there is a
gift over. Gomishey v. Hanbury.

And

(2.) The subject-matter of the recommendation or wish
be certain.

2 8 EXPRESS OR DECLARED PRIVATE TRUSTS.

The subject-matter is never certain where the first
taker has a discretionary power to withdraw any inde-
finite part of it from the objects of the recommenda-
tion or wish.
And

(3.) The objects or persons intended to have the benefit
of the recommendation or wish be certain.

Harding v. Glyn.

If any one of these ” three certainties ” be wanting no

valid trust is ever held to be created. If (i) be wanting, no

trust is created; and if (2) or (3) be wanting, although a

trust may be constituted, it is void for uncertainty.

Whenever it is clear that a trust is intended (although
not validly created), the devisee or legatee cannot take
beneficially, but is excluded for the benefit of the heir or
next of kin. Briggs v. Penny.

Seventhly, Seceet Trusts.

Where a will makes no disposition of the beneficial
interest in property, which is thereby given to a trustee or
vests in the executor, and nothing appears on the will sug-
gesting the inference that the trustee or executor is to take
beneficially, .no secret trust will be enforced ; and the
trustee or executor will take for the benefit of the heir or
next of kin.

Where it does so appear that the trustee or executor is
to take beneficially, no secret trust affecting it Avill bo
enforced :

Except on the ground of fraud, in which case the trustee
or executor will be compelled to disclose the trust,
and, if lawful, to execute it.

In order to bind the devisee or legatee by a secret trust,
it must be communicated to him in the testator^s lifetime,
and he must accept that particular trust, otherwise he is
entitled to hold beneficially.

Boyes v. Carritt ; Hetley v. Hetley.

And if necessary the memorandum embodying the secret
trust will be treated as part of the will. Re Maddock.

EXPRESS OR DECLARED PEIVATE TRUSTS. 29

Eighthly, Powers in the Nature of Trusts.

Powers are not imperative, and, as a general rule, equity

will not execute an unexecuted power.
Trusts are always imperative, and equity will execute

them.
Poivers in the nature of trusts combine the qualities of the two
in such a manner that equity will enforce their execu-
tion, but there must be a true trust power or equity
will not interfere.

Where there is a general intention in favour of a class,
and a particular intention in favour of individuals of that
class, who are to be selected by another person, and the
particular intention • fails from that selection not being
made, the court will carry into effect the general intention
in favour of the class. Burrough v. Philcox.

Ninthly, Purchaser’s Liability to see to Application of
Purchase- Money ivhere there are Cestuis que trust.

Prior to the statutes hereinafter referred to, a purchaser

was bound to see that his purchase-money was applied in

fulfilment of the trust, unless expressly exonerated by the

author thereof. In cases of —

(i.) Personalty

Purchaser from executor was exonerated from this

liability, except in case of his fraud.

(2.) Realty

(a.) Trust or charge for payment of

Debts generally 1 Purchaser was

Debts and legacies generally) exonerated.

{h.) Trust or charge for payment of

Specified debts \ t^ ,
T . Purchaser was not

Legacies, or )■ , ,

° .^. , exonerated.

Annuities only J

Elliot V. Merryman.

Lord St. Leonards’ Act (22 & 23 Vict. c. 35, now styled

“The Law of Property Act Amendment Act, 1859”),

and Lord Cranworth’s Act (23 & 24 Vict, c, 145), contain

30 EXPRESS OR DECLARED PRIVATE TRUSTS.

provisions exonerating purchasers and mortgagees under
instruments made subsequent to their respective dates of
commencement.

The Trustee Act, 1893, s. 20 (56 & 57 Vict. c. 53), re-
peating a similar provision in the Conveyancing Act, 1881,
applies to all trusts whenever created, and makes the
written receipts of trustees sufficient discharges in every case.
The Settled Land Act, 1882, which is also retrospective,
contains similar provisions as regards moneys arising there-
under. But purchasers from a tenant for life to be exone-
rated from liability must see that the purchase-money is paid
either into court or to at least two trustees of the settlement,
as the tenant for life may direct.

The implied power given to executors by a charge of
debts would appear to be paramount to that of the
tenant for life under the Settled Land Acts, so that his
consent would not be necessary to the sale.

The Land Transfer Act, 1897, vests realty as well as per-
sonalty in the personal representatives, so that it would
appear in future realty will be on the same footing as
personalty in respect to this question.

Generally, therefore, a hondfide purchaser is now exonerated
in every case, not only in respect of debts, but also legacies
and annuities.

Where, however, land is devised subject to a specified
charge, the purchaser must still see to the application of
the purchase-money.

It is important for purchasers to see that the person
professing to sell as trustee is in fact the person authorised
for that purpose by the instrument creating the trust, and
also, that the power or trust for sale still exists.

Note that in the case of real estate a presumption arises
after the lapse of twenty years that debts have been paid,
in which event the power of sale may be gone.

He TaTiqueray Willaume.
But this presumption does not arise in respect of lease-
holds. Be Venn and Furze.
Unless the purchaser knows all the debts have been paid.

Re Verrel,

EXPRESS PUBLIC (OR CHAKITABLe) THUSTS. 3 1

And by the Conveyancing Act, 191 1, s. 10, for the
purchaser’s protection the trustees’ power of sale continues
until the trust property has been actually conveyed to the
beneficiaries.

So where the transferee of a mortgage is sellinar, it must be
seen that the power of sale is exercisable by an assign of the
mortgagee. Buniney v. Smith.

The provisions of the Conveyancing Act, 1881, that a
receipt, in the body of or indorsed upon a purchase-deed,
shall be sufficient authority for paying the purchase-money
to the solicitor of the vendor, did not apply to the case of
vendors who were trustees, and they had no power to authorise
one of their number to receive the purchase-money.

Now the Trustee Act, 1893, has placed trustee-vendors
in the same position as other persons in this respect.

But a trustee-vendor cannot authorise his attorney to
appoint a solicitor to receive purchase-money on his behalf.

Re RefMng and Merton.

And a power of attorney to sell land does not empower
the attorney to sell land of which the principal is mortgagee
only. Be Boivson and Jenldn.

CHAPTER III.

EXPRESS PUBLIC (OR CHARITABLE) TRUSTS.

Charities, in the legal acceptation of that term, are and

comprise —

Firstly, Charitable Uses recognised as such by 43 Eliz. c 4
(now repealed, but practically re-enacted by the Mort-
main and Charitable Uses Act, 1888), namely: every
disposition having for its object relief of the poor,
advancement of learning or the Christian religion, or
any other useful public purpose.
Secondly, Charitable Uses similar to those specified in the
statute and which have been held to be within its
spirit, e.g., repair of church monuments, foundation of
lectureships.

32 EXPRESS PUBLIC (OE CHARITABLE) TRUSTS.

Charities must be of a public character, and objects
merely for the benefit of individuals are not charitable in
the legal sense, but a gift to the vicar and churchwardens
for the time being is charitable.

The court usually settles a scheme for administration of
charitable legacies. The Charity Commissioners may also
settle schemes, but a charity supported entirely by voluntary
contributions is not liable to be controlled by the Com-
missioners. An eleemosynary charity is administered without
regard to religious beliefs of recipients unless it be an
ecclesiastical charity.

A sale or mortgage of the land of a charity liable to be
controlled by the Charity Commissioners requires the consent
of the Commissioners to validate it.

I. Charities are treated with more favour than private indi-
viduals in the following respects :
(i.) A GENEEAL intention of charity will be effectuated,
(a.) A gift to a charity will be upheld as valid, no
matter how uncertain the objects may be, pro-
vided the intention be distinctly charitable. The
nomination of the objects will be treated as the
mode, and the gift to charity as the substance of
the disposition.

If the gift be for purposes other than those
distinctly charitable, e.g., for charitable or religious
purposes, it will be void as not exclusively chari-
table. Philanthropic purposes are not charitable
in the legal sense.
(6.) Where the literal execution of the trusts becomes
inexpedient or impracticable, the court will execute
them cy-pres, i.e., as nearly as possible in conformity
with the original intention, which must be a general
intention of charity. Moggridge v. Thachwell.

But the cy-pres doctrine is not to be applied until
it is established that the directions cannot be
carried into effect. Ee Weir Hospital.

Note — The cy-pres doctrine is not appUcable unless
there was a general charitable intention ; it cannot

EXPRESS PUBLIC (OK CHARITABLE) TRUSTS. 33

be applied on failure of intention to carry out a
particular object. Foiuler v. Att.-Cfen.

In both (a.) and (5.) a private individual would
receive no help from equity.
(2.) Defects in conveyances supplied. A private indi-
vidual AYOuld receive no help from equity to perfect
an imperfect voluntary gift.
(3.) No resulting trusts.
(a.) Where there is a general intention of charity there
■will be no resulting trust to the settlor, for the
court will execute the intention.
{l.) Where the increased revenues of a charity give
rise to an excess of income beyond the specified
objects, the court will apply the surplus in con-
formity with the original intention.

Exception in both cases. — Where the settlor

merely appropriates part only of the capital or

income to the charity, the residue will result to

him.

(4.) Charities are not within the rule against perpetuities,

i.e., a charitable trust remains binding for ever.
{5.) Even prior to the Voluntary Conveyances Act, 1893,
a purchaser who purchased with notice of a chari-
table gift, or without notice from a person who had
notice, took subject to it, and derived no benefit
from 27 Eliz. e. 4.

Att.-Gen. v. Newcastle ; Ramsay v. Gilchrist.

II. Charities are treated on a level with private individuals
in the following respects : —

( I .) Want of executor or trustee supplied.

(2.) Lapse of time a bar. But the Judicature Act, 1873,
s. 25, provides that as between an express trustee
and his cestui que trust, no lapse of time is a bar,
except in so far as the Trustee Act, 1888, applies.

(3.) Separation of legal from illegal objects, where the
charitable purposes are legal and the properties
appropriated thereto are ascertainable.

{4.) Trusts for accumulation of income disregarded when

c

34 EXPRESS PUBLIC (OR CHARITABLE) TRUSTS.

the capital has vested absolutely, the rule in
Saunders v. Vautier being applicable.

III. Until recently charities have been treated with less
• favour than private individuals in the following
particulars : —
(i.) Assets were not marshalled in favour of a charity in
the absence of an express direction to that effect in
the will ; for to do so would have been to contravene
the provisions of the Mortmain Acts.

The rule of the court adopted in all such cases
was to appropriate the fund as if no legal objection
existed as to applying any part to the charity
legacies, and then holding so much of the legacies
to fail as would in that way fall to be paid out of
the prohibited fund. Williams v. Kershaw.

But the Mortmain and Charitable Uses Act, 1891
(54 ^ 55 Vict. c. 73), has now practically swept
away the restrictions on gifts by will of real estate
to charities by making such gifts valid, while com-
pelling the charities to sell within a year. The court,
however, may authorise the retention or purchase of
land when required for actual occupation by the
charity. This Act applies to wills of testators dying
after its passing, whenever made.

Proceeds of sale of land subject to an immediate
trust for sale do not fall within the Act, and the
trustees may therefore retain the land unsold with-
out the leave of the court, but they may not postpone
the sale indefinitely. Be Sidehottom.

And the Mortmain Act, 1892 (55 & 56 Vict.
c. II), makes valid gifts of land by deed to a Local
Authority for any charitable purpose for which
such authority is empowered by statute to acquire
land.
(2.) Charitable gifts of a superstitious character are void
as contrary to pubhc pohcy ; e.ff., saying masses for
the dead. But if the purposes of the gift are legal,
the trust is valid ; so trusts for the support of animals

IMPUKD AND RESULTING TRUSTS. 35

or maintenance of the settlor’s tomb in a church-
yard are valid if they do not tend to perpetuities.

By the Charitable Trusts Acts, 1 853-1894, con-
siderable powers are vested in the Charity Com-
missioners with reference to the administration of
charities, They are empowered to appoint and
remove trustees, to make vesting orders, and to
authorise sales and leases, and to settle schemes for
the administration of the charity, but such schemes
should be cy-prcs the original objects of the trust.
The jurisdiction of the Commissioners, however, only
arises where there are endowments ; and where a
charity is only in part supported by voluntary con-
tributions, it is to that extent exempt from the
control of the Commissioners.

Charitable trusts can only be enforced by or
through the Attorney-General.

CHAPTER IV.

IMPLIED AND RESULTING TRUSTS.

An implied or presitmptive trust is a trust which is founded
on an unexpressed but presumed {i.e., implied) intention of
the party creating it.

A resulting trust is a trust which is implied in favour of
the person creating it, or his representatives.

All resulting trusts are implied trusts, but not

every implied trust is a resulting trust, strictly so

called.

Distinguish a resulting trust from a resulting use. In

the former it is the beneficial interest, but in the latter it

is the legal estate, which results.

The chief instances of implied trusts are — •

I. Resulting trust to person who advances the purchase-
money for property which is conveyed to a third
perspn. Dyer v. Dyer.

36 IMPLIED AND RESULTING TEUSTS.

(i.) Parol evidence is always admissible to show the
actual purchaser, notwithstanding the Statute of
Frauds. For —
(a.) It is a trust resulting by operation of law.
(&.) The parol evidence is merely for the purpose of
proving that the nominal purchaser is but the
agent of the actual purchaser.
(2.) No resulting trust where the law would be infringed.
{‘3.) Resulting trusts may be rebutted — •

(a.) By parol evidence showing that the nominal pur-
chaser was intended to take the whole beneficial
interest.
(b.) By the contrary equitable presumption of advance-
ment which will be raised in favour of —
(a.) A legitimate but not illegitimate child of the
purchaser, includiag now child of second
wife, sister of deceased first wife.
(/8.) A person to whom the purchaser has placed
himself in loco parentis, even an illegitimate
child,
(y.) Wife of purchaser, but not a woman with
whom he has contracted an illegal marriage.
Brew v. Martin ; Soar v. Foster.

But in general there is no presumption of ad-
vancement when the purchaser above mentioned is
the mother, as a married woman is not primarily
liable for the maintenance of her children.

The equitable presumption of advancement
(being only a, primd facie presumption) maybe again
rebutted by parol evidence to the contrary, such
as the contemporaneous acts and declarations of the
purchaser, which are receivable in evidence both
for and against him. Williams v. Williams.

The subsequent acts and declarations of the pur-
chaser are evidence against him, but not for him.

On the other hand, the subsequent acts and
declarations of the child are evidence for the pur-
chaser against the child. Sidmouth v. Sidmouth

IMPLIED AND EESULTING TRUSTS. 37

II. Resulting trust of unexhausted residue.

(i.) A trustee is excluded, by the very fact of being
named trustee, from benefiting by a resulting trust.
A devisee suhjed to a charge merely, takes beneficially ;
but a devisee tupon trust takes no benefit even after
satisfaction of the specified purposes of the trust.

King v. Denison.
(2.) Where a trust of property has been created, and
there is no one in whose favour it can result,
(a.) As to real estate, where the cestui que trust dies
intestate and without heirs. Prior to the Intes-
tates’ Estates Act, 1884 (47 & 48 Vict. c. 71), the
trustee, being seised in fee, would have held the
lands discharged from the trust.

Burgess v. Wheate.

So also in the case of a mortage in fee, on the

death of the mortgagor intestate and without heirs,

the equity of redemption would have belonged

to the mortgagee, and no escheat taken place.

Beale v. Symonds.
Copyholds in all these respects were like free-
holds. Gallard v. Hawkins.
Under the Intestates’ Estates Act, 1884, how-
ever, the rule is altered, and there would now be
an escheat to the Crown or the lord in all cases.
(i.) As to personal estate where the cestui que trust dies
intestate and without next of kin, the Crown takes
it as lona vacantia. If, however, it vests in the
executor virtute officii, he may (unless he. is also
appointed trustee) retain it as against the Crown.

Boose V. Chalk.
This is not affected by the Intestates’ Estates
Act.
(3.) Formerly executors took undisposed-of residue of
testator’s personal estate, unless excluded by tes-
tator’s express or implied intention.

By the i Will. IV! c. 40, executors were made
trustees for the next of kin in respect of any such
undisposed-of personalty, in the absence of any

38 CONSTRUCTIVE TRUSTS.

contrary intention in the will, which intention would
be inferred from an express legacy given to them ;
but the executors can still retain beneficially as
against the Crown if there are no next of kin.

In re Lacy.

I [I. Resulting trusts, under head of Conversion, vide infra,
chap. ix.

IV. Implied trusts arising out of joint-tenancies. Joint-
tenancy is not favoured in equity, and very slight
circumstances will be considered sufficient to treat such
a tenancy as one in common, and the surviving joint-
tenant will be deemed a trustee for the representatives
of the deceased,
(i.) Joint-advance of purchase-money in MmegMaZ propor-
tions, appearing on the deed itself, will be deemed to
create a tenancy in common.

Ldlte V. Gibson ; Lake v. Craddock.
(2.) Joint-advance on mortgage in equal or unequal pro-
portions will be treated as a tenancy in common.

Morley v. Bird.
Equity will not treat the mortgage as joint, even
though it contain an express declaration that
advance was made on a joint-account.

Smith V. Sibthorpe.
(3.) Joint commercial purchases are deemed tenancies in

common.
(4.) Land devised to joint-tenants who treat it as partner-
ship assets will be deemed to be held in common.

CHAPTER V.

CONSTEUCTIVE TRUSTS.

A CONSTRUCTIVE TRUST, as dis’tinguished both from express
and implied trusts, is a trust which is raised by construction
of equity in order to satisfy the demands of justice without

CONSTEUCTIVE TllUSTS. 3^

reference to ani/ presumable intention of the parties, either
express or implied.

The chief instances of constructive trusts are —

I. Lien ox land sold. This constitutes a charge in equity

upon the lands irrespective of possession.

(i.) Vendor’s lien for unpaid purchase-money ; it arises at

the time fixed for completion, and may be enforced

against —

(«.) The purchaser and all volunteers taking under

him.
(b.) Subsequent purchasers for value with notice.
(c.) Trustee in bankruptcy although without notice.
(d.) Subsequent purchasers for value even without
notice, if they have not obtained the legal estate.

Mackreth v. Symmons.
Unless the vendor has been guilty of negligence.

Bice V. Bice.
But this lien cannot in any case be enforced against
a bond, flcle purchaser for value without notice who
has the legal estate.

The lien will not be lost merely by the vendor’s’
taking collateral security ; the question of abandon-
ment depends upon the nature of the security, as
amounting to evidence of intention to rely upon
such security solely. Mackreth v. Symmons.

(«.) A -personal security will notper se prove an intention

of waiver.
(&.) The question to be considered in every case will
be — Is the security substitutive of, or only cumula-
tive with, the lien ? Buckland v. Bockjiell.
The vendor’s lien is assignable, even by parol.
Not being an express trust, the vendor’s right to
recover the unpaid purchase-money may be barred
by the Statutes of Limitation.

The receipt of the vendor in the body of or in-
dorsed upon the conveyance protects a bond fide
purchaser.
(2.) Vendee’s lien for prematurely ^ paid purchase-

40 CONSTRUCTIVE TRUSTS.

money, which may be enforced generally against

the like persons as the vendor’s lien ; so when

deposit paid and sale goes off without purchaser’s

default, he has an equitable lien on the land for

deposit paid.

As regards lands (not of copyhold tenure) in Yorkshire,

a hen arising since 31st December, 1884, will not prevail,

unless it be registered ; and priority of registration will

determine priority of title except in cases of actual fraud.

Yorkshire Registries Act, 1884.

The law as to vendor’s and purchaser’s lien applies to

personalty as well as real estate. Davies v. Thomas.

11. — Renewal of lease by trustee in his own name.

A trustee renewing a lease in his own name, even
after refusal of the lessor to grant a new lease to the
cestui que trust, will be held a constructive trustee for
the benefit of the cestui que trust.

Keech v. Sandford {the Romford Market Case).
The same rule applies to all persons standing in a
fiduciary relation in respect of the property affected,
e.g., a tenant for life exercising powers conferred on
him by the Settled Land Act or a partner renewing
a lease.

Where a lease renewed by a trustee in his own
name contains other lands in addition to those
demised by the old lease, the constructive trust will
apply to the latter lands only. Acheson v. Fair.

HI. Allowance of expenditure for improvements, where
same are necessary and permanently beneficial.

Where a part-owner, acting bond fde, permanently
benefits an estate by necessary repairs or improve-
ments, a constructive trust may arise in his favour
in respect of his expenditure.

Improvements by a tenant for life should now be
made under the provisions of the Improvement of
Land Act, 1864, Settled Land Act, 1882, and Agri-
cultural Holdings Act, 1908.

CONSTRUCTIVE TKUSTS. 4 1

Trustees have a lien on trust funds for expenses
properly incuri-ed by them.

Where payments have been made to prevent the
lapse of a policy of insurance, the payer (not being
a volunteer) has a lien on the policy or its proceeds,
but not on the footing of salvage moneys.

Leslie v. French.

IV. Formerly the heir of mortgagee in fee dying intestate
was held a constructive trustee of the estate for the
benefit of the personal representatives.

Thornborough v. Balcer.
Now under the Conveyancing Act, 1881, s. 30,
upon the death of the mortgagee (testate or in-
testate) the legal estate devolves upon the personal
representatives.

But this provision does not apply to legal estate
in copyholds. Go-pyhold Act, 1894, s. 88.

And under the Land Transfer Act, 1897, real
estate (other than the legal estate in copyholds)
devolves upon the legal personal representatives like
chattels real, and they become trustees for the
persons beneficially entitled.

Ue Sonierville v. Turner.

The legal estate was held to vest in all the

executors (both proving and non- proving) except

such as renounced. Be Pawley.

But now under the Conveyancing Act, 1 9 1 1

(which applies to all dispositions since 19 10), the

proving executors alone are empowered to pass

the legal estate.

As to equity’s mode of constructing trusts —

The inquiry is first made — Who has got the legal
estate ? Then equity builds or constructs upon
such LEGAL ESTATE the trust in question. The
rule being in all cases to construct a trust upon
the legal estate only.

42 TRUSTEES AND OTHERS STANDING IN A FIDUCIAKY EELATION.

CHAPTER VI.

TRUSTEES AND OTHERS STANDING IN A FIDUCIARY
EELATION.

A TRUSTEE should be a person capable of taking and holding
the legal estate, and possessed of natural capacity and legal
ability to execute the trust. A corporation may be trustee ;
indeed, the Public Trustee is a corporation.

An infant, although not incapable, is unsuited for the
office of trustee on account of disability, by reason of
which (i) his power of conveying trust property vested
in him is limited ; (2) he is unable to execute a trust
involving the exercise of a discretion; and (3) he is
free from liability for breach of trust during minority
except in cases of fraud.

Since the Naturalisation Act, 1870, and Married
Women’s Property Act, 1882, there is no legal objection
to an alien or married woman being a trustee, but the
court will not appoint a person not resident within the
jurisdiction.

Formerly it was necessary for the husband of a married

woman trustee (other than a bare trustee) to concur in

her conveyance of real estate, which must have been

duly acknowledged. Be Harhness and Alsop.

But this disability has now been removed by the

Married Women’s Property Act, 1907.

Trustees have been classified as passive or active :

passive when by the trust instrument they are simply

directed to hold the trust property for the cestui que trust,

and active when special duties or powers are given involving

actual dealings with the trust property.

Where once a trust exists, equity never wants a trustee,
but will follow the legal estate, and declare the person in
whom it is vested to be a trustee. The lapse of the legal
estate in no way affects the beneficial interest, for the court
will provide a trustee or assume the office in the first

TRUSTEES AND OTHERS STANDING IN A FIDUCIARY RELATION. 43

instance. Under the Judicial Trustees Act, 1896, a judicial
trustee may be appointed.

A trustee is the servant of his cestui que triuit, embracing
under that term the aggregate body of persons (born and
unborn) having beneficial interests ; but the controller of his
cestui que, trust, when that term refers to a person having
only a partial interest in the trust-fund. The majority of
the cestuis que trust may, upon the total failure of the pur-
poses of the trust, demand back the trust-fund.

Wilson V. Church.
Trustees may be compelled to perform any particular duty.
A trustee cannot renounce after accepting the trust, and
the taking of probate by an executor-trustee is an accept-
ance of the entire trust. The only methods by which
trustees could formerly be released were —
(i.) By the court.

(2.) Under a special power in the trust instrument.
(3.) By consent of all parties, being sui juris.

But now, under the Trustee Act, 1893, s. ix, a
trustee may retire by deed from the trust, provided
two trustees remain, who, with the person authorised
to appoint new trustees, consent to such retirement.

If, however, a trustee retire without a proper and
adequate reason, he must do so at his own expense.

Be Beveridge’s Trusts.

And under the Judicial Trustees Act, 1896, a

judicial trustee may retire on giving notice to the

court and reporting what arrangements have been

made for the appointment of his successor.

Delegation hy Trustees.

Delegatus non potest delegare — a trustee cannot delegate his

office, which is one of personal confidence, in the absence of

express authority ; that is to say, as long as he remains a

trustee. Dewar v. Brooke.

Such delegation is, however, permitted where

there is a moral necessity (which includes regular

course of business) for it. Joy v. Campbell.

44 TRUSTEES AND OTHEKS STANDING IN A FIDUCIARY RELATION.

But this rule does not extend to protect trustees
where the delegation is to an agent who is not
reasonably fitted by character or calling properly to
perform it, e.g., leaving bearer bonds indefinitely
with solicitors; they may, however, safely deposit
such with their bankers. Fry v. Tapson.

Under the Trustee Act, 1893, a trustee may
depute his solicitor to receive purchase-money for
an estate or policy moneys.

Diligence, Required of Trustees.

(i.) As regards duties — Exacta diligentia. The utmost dili-
gence is the only protection against liability, as a
trustee is bound to do the thing prescribed and has no
discretion. Breaches of duty are such as permitting the
trust-fund to remain unnecessarily in the power of a third
person, or mixing the trust-fund with his own moneys.

(2.) As regards discretions. Diligence such as usually
exercised by men of ordinary prudence in the manage-
ment of their own affairs is sufficient. There is no rule
of law that a trustee is liable to make good loss sus-
tained by retaining an authorised security in a falling
market if he acted prudently, believing it was to the
interest of all parties. A trustee having a discretionary
power of investment must not invest in securities in
which he would not place his own moneys. He must
exercise a just discretion. Gocks v. Chapman;

Whiteley v. Zearoyd ; Andrews v. Weall,
Nothing will justify a dishonest exercise of the
discretion. Smith v. Thompson.

When lending money upon the security of any
property, a trustee must see that the security is one
authorised by the trust instrument, and take care not to
lend more than two-thirds of the value, as ascertained
by the report of a properly qualified valuer specially
employed hy him for the purpose ; and further, he
should require the advice of the valuer as to the loan,
to be expressed in his report. The so-called two-

TRUSTEES AND OTHERS STANDING IN A FIDUCIARY RELATION. 45

thirds rule represents the normal risk and minimum
protection — i.e., the trustee must properly exercise his
discretion.

If, however, the loan exceed this limit and loss arises,
the trustee was formerly liable for the whole, taking
over the improper security, but now he will only be
liable for the excess, provided the investment is in all
other respects proper. Trustee Act, 1893, ss. 8, 9.

Prior to this Act the rule was that trustees must
not advance more than two-thirds of the value of land,
or one-half of the value of house property. There is,
however, no hard-and-fast rule that trustees must not
advance more than half the value of business premises.

Palmer v. Emerson.

In case of loss, it is no defence that the trustees
believed the borrower to be well able to pay the loan on
his personal covenant.

An executor or administrator is a trustee within the
meaning of the Trustee Acts.

When a tenant for life exercising his powers under
the Settled Land Acts directs capital money to be
invested on mortgage, the trustees are not bound to do
so unless all the precautions required by the Trustee
Act, 1893, have been complied with. Be Hotham.

The tenant for life in giving directions is in the
position of a trustee, and may be restrained from
directing investments not suitable for trust-funds,
although falling within the actual words of the Act.

Bulteel V. Lawdeshayne.

And by the Conveyancing Act, 1 9 1 1 , the tenant for
life is empowered to direct the trustees not to sell land
vested in them on mortgage discharged from right of
redemption but to make it subject to the trusts of the
settlement.

The sohcitor to a trustee concerned in the matter of
an unauthorised investment is not liable as constructive
trustee for loss arising therefrom.

It is a breach of trust to invest trust-moneys on a
contributory mortgage. Wehh v. Jonas.

46 TRUSTEES AND OTHERS STANDING IN A FIDUCIARY RELATION.

A mortgage upon which trustees advance should be
a first mortgage and a legal mortgage ; for upon a
second mortgage they neither get the legal estate
nor the title-deeds, and they may not have funds
available to redeem the prior mortgage if foreclosure
is threatened.

But it has been said there is no fixed rule that a
.trustee lending trust-funds on second mortgage is
liable for loss, the onus being on the trustee to show it
was a proper investment. Want v. Campion.

Under the Judicial Trustees Act, 1896, the court
may relieve a trustee from all liability for a breach of
trust where the court is of opinion that the trustee
has acted honestly and reasonably in the matter and
ought fairly to be excused, which appears to mean in
such a way as the court would have authorised if
applied to for directions. Chapman v. Browne.

Where the right of redemption of property mortgaged
to trustees is barred by Statute of Limitations, fore-
closure, or otherwise, the mortgagee holds the same on
trust for sale with power of postponement.

Conveyancing Act, 1 9 1 1 , s. 9.

Remuneration of Trustees.

The general, rule is that no remuneration can be allowed
to trustees, for they must not profit by their trust.

Robinson v. Rett.
Trustees may, however, receive remuneration
( I .) Under an express or implied provision in the trust
instrument.

But the authority given by a testator to a solicitor-
trustee to charge costs is a legacy, and so, if the
estate prove insolvent, such costs are not recoverable.

Rennel v. Franklin.

And such an authority extending to professional

and other charges does not authorise non- professional

work unless expressly employed by the trustees to

do it. Re Devereux.

TRUSTEES AND OTHERS STANDING IN A FIDUCIARY RELATION. 47

(2.) Under an express contract between the trustee and

cestui que trust, being sui juris.
(3.) Where expressly allowed by the court.
(4.) Under the provisions of the Judicial Trustees Act,

1896.
(5.) Where a person is a constructive trustee merely through
having employed the money of another in his business.
(6.) A solicitor-trustee may be employed by his co-trustee
to defend legal proceedings instituted against the
trustees, and will be entitled to his ordinary costs.

Gradoch v. Piper.
But this rule did not extend to mortgages, so
that a solicitor-mortgagee employed by his co-mort-
gagees to bring foreclosure proceedings or defend a
redemption action was not entitled to profit costs.

Hihhert v. Lloyd.
But now the Mortgagees’ Legal Costs Act, 1895,
enables solicitor-mortgagees to make the same
charges as if acting for a client, including the scale
fee for negotiation. It is conceived the Act does’
not apply where the solicitor-mortgagee is a trustee.

Be Norris.
Further, trustees may not derive any advantage
out of the trust ; for example, they are not allowed
to charge more than they gave for incumbrances on
the trust estate, nor to employ trust-funds in busi-
ness while merely paying interest thereon. In fact,
all profits made by trustees by virtue of their office
belong to the beneficiaries. This rule applies also
to constructive trustees, and generally to all persons
clothed with a fiduciary character ; e.g., agents,
directors, company promoters.

Keech v. Sandford ; Fox v. Mackreth ;
Griffith V. Oive7i.

Purchases hy Trustees.

A trustee for sale, that is, a trustee who is selling, is
absolutely disabled from purchasing the trust estate.

48 TRUSTEES AND OTHERS STANDING IN A FIDUCIARY RELATION.

A trustee will not, as a general rule, be allowed to
purchase the trust estate from the cestui que trust. The
exceptions to this rule are where —
(i.) Trustee gives a fancy price.

(2.) The offer to sell proceeds from cestui que trust, and
trustee gives market price, keeping him at’ arm’s-
length.
(3.) The sale is by public auction, and trustee has leave
of court to bid. Boswell v. Goahs.

(4.) The trustee is only a bare trustee, or has retired

from the trust for a considerable time.
And a tenant for life exercising powers conferred by the
Settled Land Act is bound to have regard to interests of all
parties under the settlement and is deemed a trustee for
those parties, and so in exercising his statutory power he
cannot sell to himself.

Wheelwright v. Walker ; Middlemas v. Stevens^
But the mere fact that a bond fde sale by him is at an
under-value will not per se invalidate the sale.

Hurrell v. Littlcjohn.

A sale, void within this rule, may by lapse of time

become impossible of rescission, although in general the

Statute of Limitations is no bar ; but damages may be given

where rescission would be inequitable.

A Constructive Trustee

is not liable to the same extent as an express trustee ; for
example, a vendor, although called a constructive trustee for
the purchaser, is only a trustee to the extent of his obligation
to perform the purchase agreement, an obligation which
may be barred by lapse of time. The rule has hitherto
been that time is no bar in, the case of an express trust, but
that it bars a constructive trust.

Soar V. Ashwell ; Knox v. Gye.

Now, under the Trustee Act, 1888, trustees (whether

express or constructive) have the full benefit of Statutes of

Limitation exactly as if they were not trustees, except in

pases of fraud ; but as against beneficiaries the statutes only

TRUSTEES AND OTHEKS STANDING IN A FIDUCIARY RELATION. 49

run from possession, so tenant for life may be barred and
the reversioner not.

If trustees pay the wrong person propeedings must be
taken by the right person within six years. Ba Croydon.

Licibilitij of Trustee for Co-trudcc.

Trustees must all join in giving receipts, their power
being a joint one.

A non-receiving trustee who has joined in a receipt is
guilty oi neglect of duty in subsequently leaving moneys
in the hands of the recipient trustee, and will be
liable for such co-trustee. Townley v. She7’borne.

(a.) A non-receiving trustee who joins in a receipt for
sake of conformity is not by that act alone rendered
liable for co-trustee; and the Trustee Act, 1893,
recognises this principle.

(b.) A trustee, although joining in receipt for con-
formity only, will be liable for neglect of duty in
allowing money to remain in power of recipient
trustee longer than the circumstances reasonably
require, as it is the duty of trustees to have trust-
money as soon as reasonably possible placed under
their joint control. Brice v. Stokes.

Liahility of Executor for Co-executor.

Executors need not all join in receipts, their power being
joint and several.

{a.) An executor joining in a receipt is prima facie
liable for co-executor since he does an unnecessary
act and is not fulfilling a duty merely as in the case
of a trustee. Bricc v. Stokes,

(b.) This PRIMA FACIE liability may, however, be dis-
placed by the executor proving that he did not in
fact receive. Westley v. Clarke.

The real test appears to be whether the money,
although not actually received by all the executors,
was under their control. Joy v. Campbell.

D

50 TRUSTEES AND OTHERS STANDING IN A FIDUCIARY RELATION.

But where a non-receiving executor is proved to
have been guilty of wilful default he will be held
liable even for money which he has not received.

Styles V, Guy.
Note that, although the appointment of debtor as executor
operates in law as a merger of the debt, equity would
compel the debtor-executor to pay the debt for benefit of
creditors and legatees/but not for residuary legatees or next
of kin.

Contribution and Recoupment.

Where trustees are held liable for breach of trust, and
there is a judgment against all, the trustee making good the
breach (unless he is also a beneficiary) may, by independent
action, have contribution against his co-trustees ; but as
regards the costs of the action for the breach, a trustee
paying the whole has no such right, either for recoupment
or contribution, but the court may make an order therefor
in the action itself ; and the Statutes of Limitation do not
begin to run against the trustees’ right to contribution until
judgment has been obtained.

When the breach is fraudulent and all the trustees are
parties to the fraud there is no right of contribution.

Trustees have a right to be reimbursed out of the trust-
estate the costs and expenses of actions properly instituted
or defended for the protection of or with reference to the
estate, but in all cases of doubt trustees should obtain the
opinion of the court as to the propriety of instituting or
defending proceedings, ^ as otherwise the onus is on the
trustees to show that the costs incurred were properly
incurred. Be Beddoe.

Usual indemnity clauses are now implied by the Trustee
Act, 1893 (repeating similar provisions in Lord St.
Leonards’ Act). Such clauses, whether express or im-
plied, do not extend to protect a trustee from neglect
of duties. This protection can only be obtained by the
insertion of special clauses exempting trustees from
liability for acts which would otherwise be breaches of
trust. Wilkins v. Hogg.

TRUSTEES AND OTHERS STANDING IN A FIDUCIAKY RELATION. S I.

The Primary Duties of Trustees

are to carry out the directions of the author of the trust and
to secure the trust-fund : thus —

I. Trustee must be active in reducing choses in action

into possession or quasi-possession.

II. Trustee must realise moneys outstanding on personal

security, in the absence of express authority to the
contrary.

III. Trustee must invest trust-fund in authorised

securities.

The investments open to trustees, executors, and adminis-
trators are now regulated by the Trustee Act, 1893.

Under the provisions of this Act (which applies to trusts
created before as well as after the Act), a trustee, unless
expressly forbidden by the trust instrument, is authorised to
invest in the following securities : — -Parliamentary stocks
or public funds, or Government securities of the United
Kingdom ; real securities in Great Britain or Ireland ; stock
of the Bank of England or of Ireland ; India 3 \ and 3 per
cent, stocks ; securities the interest of which is guaranteed by
Parliament ; colonial stock listed by the Imperial Treasury ;
consolidated stock of the London County Council ; stock of
railway and other companies under restrictions specified in
the Act ; and in any of the stocks, funds, or securities for
the time being authorised for the investment of cash under
the control of the court. And, unless expressly excluded,
a power to vary investments is implied by the Act.

And by the Trustee Amendment Act, 1894, trustees are
allowed to continue an investment which, since the date of
investment, has ceased to be an authorised investment.

Under the term “trustees,” executors, administrators, and
constructive trustees are included.

” Real securities ” do not comprise a purchase of lands ; but
include first legal mortgages and (unless expressly forbidden

52 TRUSTEES AND OTHERS STANDING IN A FIDUCIAKY RELATION.

by the trust instrument) leasehold property held for an
unexph-ed term of not less than 200 years at a rent not
exceeding one shilling, not being subject to any right of
redemption or condition for re-entry except non-payment of
rent. Trustee Act, 1893, s. 5.

IV. Trustee must (in the absence of directions or in-

dications of testator’s contrary intention) convert
terminable and reversionary property comprised
in residuary bequest, and so protect remainderman
and tenant for life respectively. This rule, known
as the Howe v. BaHmouth Rule, is based on the
presumed intention of testator that both tenant for
life and remainderman should enjoy the same thing
successively : it does not apply to a deed. The
conversion should be effected within a year from the
testator’s death. Brown v. Gellatly.

The rule does not apply if testator has indicated
an intention that the property should be enjoyed in
specie ; and power given by testator to retain existing
investments is evidence of such intention whether
such investments be wasting or hazardous and the
tenant for life is entitled to the whole income.

Be Nicholson.
If the trustee fail to exercise any discretion at all
the tenant for life will be enabled to claim for loss
of income so occasioned. Bowlls v. Bell.

Where there is a trust for conversion with power to
postpone, unless all trustees agree to postponement
the trust for sale prevails. Be Hilling.

V. Trustee must, Avhen outstanding inconvertible secu-

rities fall in, distinguish between capital and income.

In re Chesterfield’s Trusts.

In calculating interest the rate is now to be 3
instead of 4 per cent. In re Woods.

Where the security is authorised, principle as to
the apportionment to be made between capital and
income when there has been a loss appears to be

TRUSTEES AND OTHEKS STANDING IN A FIDUCIARY RELATION. S3

that the amount realised is to be divided between
capital and income in the proportion which the
capital sum originally invested bears to the actual
arrears of simple interest at the date of realisation.

Re Atkinson.
If, however, there is a loss of capital on realisa-
tion of a security which was an unauthorised invest-
ment, the tenant for life is not entitled to share in
the amount realised without bringing into account
all the past income he has received from the
security. In re Bird.

VI. Trustee must give reasonable information as to the
trust-estate to his ceshd qjie triist, and furnish him
with accounts ; but he need not answer the inquiry
of a third party as to whether the cestui que trust
has incumbered his interest. If he does answer
the inquiry, he must give what he believes to be
a true answer. Low v. Bouverie.

Liability of Trustee for Non-investment.

(i.) Where trustee has power to invest in Government or
real securities, and neglects to do either, he is answerable
only for the principal money and interest, upon the principle
that he is only liable for what the cestui que trust must in
any event have been entitled to. Robinson v. Robinson.

(2.) Where trustee has power to invest in Government
securities only, and neglects to do so, it appears that
he is answerable, at the option of the cestui que trust,
for the principal money and interest at £i\ per cent.,
or the stock which might have been purchased at the
time when investment should have been made, with
subsequent dividends.

(^3.) Where trustee sells trust securities for the purpose of

making an improper investment, he is bound to replace

the stock sold or pay the proceeds of sale at the option

of the cestui que’ trust. Clark v. Trelawnay,

Trustees cannot mortgage the trust-estates without an

54 TRUSTEES AND OTHERS STANDING IN A FIDUCIARY RELATION.

express power, but such a power by implication authorises
the insertion of a power of sale in the mortgage.

And under the Land Transfer Act, 1897, the legal
personal representative may in the course of administration
sell or mortgage the deceased’s real estate before he has
assented to any beneficial devolution thereof.

Trustee carrying on trade of testator by directions in his
will is personally liable for debts incurred in so doing, but
has a right of indemnity against so much of the estate of the
testator as he directed to be so employed. As a consequence,
the trade creditors are entitled to stand in the place of the
trustee and by means of this right of suhrogaiion to claim
the benefit of such indemnity ; but they have no lien on
the assets of the testator which were outstanding at his
death.

This rule does not apply where the trustee is in default
to the specific trust-estate devoted to the trade.

Where the trustee is not authorised by the testator to
carry on his trade, the trustee has no such right of indemnity,
nor can the creditors have any such right of subrogation.

A receiver and manager appointed by the court on the
winding up of a company or in a debenture-holder’s action
has a similar right of indemnity out of the estate, extending
even to money properly borrowed to carry on the business.

Remedies of Cestui que trust u;pon a Breach of Trust.

(i.) Right of action against trustee.

A breach of trust constitutes a simple contract
debt only.

The personal liability of trustees is a joint and
several liability.

In certain cases, solicitors to trustees and third
parties in respect of the breach of trust may be held
liable.

A bankrupt trustee who has obtained his discharge
is now released from his liability for a breach of
trust unless it be of a fraudident character.

Bankrwptcy Act, 1883, s. 30.

TRUSTEES AND OTHERS STANDING IN A FIDUCIARY RELATION. S 5

And a trustee who has committed a breach of
trust is entitled to the protection of the Statutes
of Limitation as if proceedings for breach of trust
were enumerated therein, except when —
(a.) He has been guilty of fraud ;
(b.) The trust property remains under his control; or
(c.) He has converted it to his use.

Trustee Act, 1888, s. 8; How v. Uarl Winterton.
The action therefore must be brought within six
years from the breach.
(2.) Right of following trust-estate into the hands of any
alienee, except a bond Jide purchaser for value with-
out notice having the legal estate. A purchaser or
mortgagee cannot protect himself by taking a volun-
tary conveyance of the legal estate after notice of
the trust.

If a defaulting trustee when bankruptcy is impend-
ing makes good the breach out of his own property,
the transaction is not a fraudulent preference.

lie Stubhins; Sharp v. Jackson.
(3.) Right of following the property into which the trust-
estate has been converted, so long as it can be traced
or, in other words, as it is ear-marked.

Where a trustee mixes trust-money with his own,

and the trust-funds are still in his hands, the cestui

que trust will be entitled to all which the trustee

cannot prove to be his own. Be Hallett’s Ustate.

(4.) Right of impounding beneficial interest.

Where a trustee, who has committed a breach of

trust, is entitled to any beneficial equitable interest

under the trust instrument, such interest will be

impounded by the court until the default has been

made good. Dixon v. Brown.

The equitable interest of any beneficiary who has

participated in a breach of trust may in like manner

be impounded, and the right of impounding will rank

before a mortgagee of such equitable interest, and also

before the trustee in bankruptcy of the beneficiary.

Bolton V. Currie ; Turner v. Watson.

S6 TRUSTEES AND OTHERS STANDING IN A FIDUCIARY RELATION.

This rule does not apply if the interest be legal
and not equitable. Fox v. Buckley.

Where a trustee is liable for interest in default of invest-
ment, the rate is usually £4. per cent., but he will be charged
with a higher rate where he —

(i.) Ought to have received njore, e.g., if he has improperly
called in a mortgage bearing 5 per cent.

(2.) Has actually received more.

(3.) Must be presumed to have received more, e.g., if ho
has traded with the money, when cestui que trust has
the option of claiming the trade profits or 5 per cent,
interest. Vyse v. Foster.

(4.) Guilty of direct breaches of trust or gross misconduct.

Davis V. Davis.

Remedies of cestui que trust against trustee for breach of
trust may be barred by —

(«..) Concurrence. Persons under disability (who have
not been guilty of active fraud) are not barred by
concurrence; and (prior to the Trustee Act, 1888)
even in the case of active fraud, the concurrence of
a married woman would not have been a bar when
the trust was for her separate use without power of
anticipation. Fllis v. Johnson ; Bateman v. Faber.
But now under the Trustee Act, 1893, where the
breach has been committed at the instigation or
request (which need not be in writing), or with the
written consent of the beneficiary, the court may
(even in the case of a married woman restrained
from alienation) impound the interest of a beneficiary
in order to recoup the trustee.

And under the Married Women’s Property Act,
1893, a married woman’s separate estate, although
restrained from alienation, may be made liable for
cost of litigation instituted by her.

(&.) Acquiescence | With full knowledge of all the facts

(c.) Release y of the case, unless under disability.

(d.) Confirmation ) Brice v. StoJces.

(e.) Under the Judicial Trustees Act, 1896, the court may
relieve a trustee from liability where he has acted

TKUSTEES AND OTHEES STANDING IN A FIDUCIARY RELATION. 5 7

honestly and reasonably and ought fairly to be excused.

But the onus lies on the trustee to satisfy the court

as to the reasonableness of his action. In re Stuart.
And a trustee who allows his co-trustee to conduct

the business of the trust without inquiry is not acting

reasonably. Re Turner.

In all matters of doubt and importance the trustee
should apply to the court for directions.

A trustee who has retired will not be responsible
for subsequent breaches of trust, unless the retirement
was with a view of facilitating a contemplated breach.

Hmd V. Goidd.

A new trustee is not liable for breaches of trust
occurring before his appointment, but his duty is to
recover, if possible, the outstanding damages for such
breaches.

Rendering and Settlement of Accotcnts.

A trustee is bound to render proper accounts, and is
entitled to have them examined, and the cestui que trust, if
satisfied and sui juris, ought to close the account or have
the accounts taken.

Usually settled accounts are not opened, liberty being
given to ” surcharge and falsify.”

A surcharge is the showing an omission for which

credit ought to have been taken.
A falsification is the proving an item to be wrongly
inserted.
As a general rule, it need not be shown that the entries or
omissions are the result of fraud. Williamson v. Barhour.

The Trustee Act, 1893 (containing similar provisions to
the Trustee Act, 1850, and the Trustee Extension Act,
1852), empowers the Chancery Division to appoint new
trustees wherever it is inexpedient, difficult, or impracticable
to do so without its aid. It will seldom be necessary to
resort to these provisions, as ss. 10-12 of the same Act
provide very fully for the appointment of new trustees, and
enable separate sets of trustees to be appointed for separate
parts of the trust property.

58 TRUSTEES AND OTHERS STANDING IN A FIDUCIARY RELATION.

The principal points for consideration by the court oji
application to appoint new trustees are whether it is ( i ) ex-
pedient, and (2) inexpedient, difficult, or impracticable to
make the appointment without the aid of the court. If
satisfied on these points, the court will as regards the persons
to be appointed consider —

(a.) The wishes of the author of the trust ;

(b.) Whether the proposed trustees would be likely to

act impartially ; and
(c.) The nature of the trust.

The donee of a power of appointing new trustees cannot
in general appoint himself, because he is deemed to be in a
fiduciary position. Skecits v. Allen.

But there is no absolute rule precluding him from
doing so, and in exceptional cases such an appoint-
ment would be sanctioned by the court.

Montefiore v. Guedalla.
It has been held that the representatives of a last surviving
trustee may execute the trusts until ousted by the appoint-
ment of new trustees. Be Routledge.
And now under the Conveyancing Act, 1 9 1 1 , in the
absence of any contrary provision in the trust instrument
the personal representatives of sole or surviving trustee may
execute the trust until the appointment of new trustees.

The court has an inherent jurisdiction to remove trustees
and to appoint new ones in their place where in the opinion
of the court the interests of the beneficiaries require it.

Hitherto when a trustee became lunatic, although a new
trustee could be appointed by the Chancery Division, any
vesting order required had to be made in Lunacy, but now
by the Lunacy Act, 191 1, the Chancery Division has
jurisdiction to deal with the whole matter.

Further, the Trustee Act, 1893, s. 42 (repeating like pro-
visions in the Trustee Relief Act, 1847), empowers trustees to
transfer the trust-fund into court, to be administered there ;
but recourse should not be had to this section unless there is a
real difficulty in the administration of the trust. The trustee
should at once give notice of the transfer to the beneficiaries.

DONATIONES MORTTS CAUSA. 59

Under the term ” trustees,” executors and administrators
are included, so that legacies and shares of residue will be
payable into court under this section.

The Public Trustee Act, 1907, constitutes the office of
Public Trustee. When the Public Trustee is appointed
trustee by the trust instrument his position is that of an
ordinary trustee ; but when appointed only as custodian
trustee then the trust property will be vested in him and
the trust securities held by him, but the other or general
trustees (called ” managing trustees “) will execute the trust
in the ordinary way. The Pubhc Trustee may, on being
required so to do, accept the trusteeship of small estates not
exceeding -^looo in value at the time of application, and he
is precluded from accepting the administration of any trust
involving management of a business or the trusteeship of
insolvent estates or under a deed of arrangement, or any
trust exclusively for religious or charitable purposes. He is
empowered to hold land, but, being a corporation, cannot be
admitted to copyholds.

An executor or administrator may at any time transfer
to the Public Trustee the whole future administration of
the estate, and in this way discharge himself from future
liability ; but before appointing the Public Trustee he
should try to obtain some members of the family to accept
the trust. Re Hope Johnstone.

The court can appoint the Public Trustee to be sole trustee
although the trust instrument provides there shall never be
less than two.

CHAPTER VII.

DONATIONES MORTIS CADSA.

“A DONATIO MORTIS CAUSA is a gift of • PERSONAL property
made by one who apprehends that he is in peril of death,
and evidenced by a manual delivery by him, or by another
person in his presence by his direction, to the donee or
some one else for the donee, of the property itself, or of the

6o nONATIOKES MOETIS CAUSA,

means of obtaining possession of the same, or of the writings
by which the ownership thereof was created, and conditioned
to take effect absolutely in the event of his not recovering
from his existing disorder and not revoking the gift before
his death.” (Sm. Man.)

The essentials of a valid donatio mortis causd are —

I. It must be made in expectation of death.

II. Conditioned to become absolute only on the donor’s
death by his existing disorder.

III. Actual delivery.

(a.) Writing without delivery will be construed as testa-
mentary, and therefore void unless the Wills Act
complied with. It will not operate as a declaration
of trust in favour of a volunteer.
(b.) Intentional testamentary gift, if imperfect, will not
be supported as a donatio mortis causd.

Mitchell V. Smith.
(c.) Intentional gift inter vivos, ineffectual as such, will
not be supported as a donatio mortis causd.

Edwards v. Jones.
As to what is a sufficient delivery —

( I .) It must be made to the donee or donee’s agent.

Farquharson v. Gave.

There must be an actual transfer of the property,

and a mere delivery to the donor’s agent as such will

be insufficient. Trimmer v. Banby.

Where the donor retains control over the property,

the donee will be considered as the donor’s agent.

Hawkins v. Blewitt.

(2.) It must be actual, or of some effective means of

obtaining the property. Moore v. Barton.

But the delivery {traditio) may precede the actual

gift. Gain v. Moon.

It is not absolutely essential that corroborative evidence

of the gift should be produced by the donee.

Farman v. Smith

DONATIONES MORTIS CAUSA. 6 1

The following have been held good subjects of donationes
mortis causd : —

A promissory note, bill of exchange, or cheque of a
third person payable to order though not indorsed,
banker’s deposit note, Post Oflfice Savings Bank deposit
book, mortgage deeds, bond, policy of assurance.
The following have not been so allowed : —

Kailway stock, money for which donor’s own cheque
drawn unless cashed or negotiated in his lifetime, title-
deeds.
A donatio mortis causa differs from a Legacy, and
resembles a gift inter vivos, thus : it —

(i.) Takes effect sub modo from delivery in donor’s life-
time.
(2.) Requires no assent on the part of the executor.
It differs from a gift INTER vivos, and resembles a legacy,
thus : it is —

(i.) Revocable during donor’s lifetime.

(2.) Good between husband and wife independently of

Conveyancing Act, 1881, s. 50.
(3.) Liable to donor’s debts on deficiency of assets.
(4.) Subject to legacy and, in effect, to estate duty.

The expression ” testamentary expenses ” includes
estate duty payable in respect of personalty, which
therefore falls on the general residuary estate.

Yeo V. Clemow ; Wild v. Stanham.
But estate duty on the subject-matter of a donatio
mortis causd is not a testamentary expense, and
therefore falls on the donee.

lie Hudson; Spencer v. Turner.
So also settlement estate duty if payable at all
must come out of the donatio mortis causd itself.

Travers v. Kelly ; Thome v. Gibbs.

62 LEGACIES.

CHAPTER VIII.

LEGACIES.

A LEGACY is ” a gift by will of a chattel.” At common law-
no action could be brought against an executor for a legacy
unless he had assented thereto. Equity, however, exercised
an exclusive jurisdiction over legacies in the absence of the
executor’s assent, and a concurrent jurisdiction where such
assent had been given, upon the ground that the executor
was a trustee for the benefit of the legatees.

Legacies have been classified as —
(i.) General. A legacy payable only out of the general

assets of the testator; e.g., £ioo, a diamond ring.
(2.) Specific. A legacy of a particular or specific part of the

testator’s personal estate ; e.g., my diamond ring.
(3.) Demonstrative. A legacy which is in its nature
general, but there is a particular fund pointed out
to satisfy it ; e.g., ;^iooo out of my reduced 2^ per
cents. Ashhurner v. Maguire.

Note the following distinctions between them : —
(i.) Upon deficiency of assets a general legacy is liable to
abatement, but a specific legacy is not ; the forgiveness
of a debt is a specific legacy, and therefore not liable
to abatement. Be Wedmore.

A mere direction that a legacy is to be paid first will
not save it from liability to abatement.
(2.) A specific legacy is, however, always liable to ademption,
and therefore fails upon an alienation thereof in the
testator’s lifetime ; but if the specific legacy exists,
though notionally altered, the legacy remains good.

A specific legatee takes all profits accrued since
testator’s death, and must also bear all expenses
incurred ; e.g., for upkeep and preservation.
(3.) A demonstrative legacy is the most beneficial for a
legatee, since it is not liable to —

(a.) Abatement with general legacies until the fund
out of which it is payable is exhausted.

LEGACIES. 63

(b.) Ademption by its alienation, the fund pointed out
being deemed only the primary fund for payment.

In general a legacy given in satisfaction of a debt is not
entitled to priority, but a legacy given in lieu of dower (if
testator died seised of lands out of which his widow can
claim dower) has priority.

A gift of an annuity is a legacy, and it is payable from
death in absence of contrary direction. If the trustees of
the will are directed (instead of authorised) to purchase an
annuity, the annuitant may claim the purchase-money in
lieu of the annuity, unless the purchase is directed to be
made in the names of the trustees and there is a gift over
on alienation.

In the case of a legacy of shares, an accretion belongs to
the legatee, if declared after the testator’s death, not other-
wise. As between tenant for life and remainderman accre-
tion declared out of capital will be capital, and out of profits
(whether accumulated or not) income (the company’s de-
cision determining the question), but where shares are sold
cum div. no apportionment will be made.

Legacies Purely Personal.

In construing these, equity follows the rules of the civil
law as acted on in the old ecclesiastical courts ; thus
they —

(i.) Do not lapse by death of legatee before time of
payment.

(2.) Carry interest at £^ per cent, as from one year after
the testator’s decease. General legacies given in
satisfaction of a debt which carries interest, or to
an infant child not otherwise provided for, carry
interest from the death of testator. A specific legacy
carries all income and profits accruing upon it after
testator’s decease. A demonstrative legacy, like a
general legacy, is payable one year after testator’s
decease, and carries interest from that date. If,
however, a legacy is payable exclusively out of re-
versionary property, and is not made payable until

64 CONVERSION.

such reversion falls in, interest will only run from
the time of such falling in.

Legacies Charged on Land.

In construing these, equity follows rules of common law ;
thus they —

(i.) Although vested, sink for the benefit of the land on
death of legatees before time of payment.

(2.) Carry interest at ^4 per cent, from testator’s decease;
or if given subject to a life interest, from the death
of the tenant for life.

Where a legacy is given to an infant contingent on
attaining twenty-one (but only if the contingency is the
attainment of full age or some event occurring before then),
the income of the investment is available for the interim
maintenance of the infant.

A general direction to pay legacies out of a mixed fund
of real and personal estate charges them rateably on the
portions attributable to realty and personalty, and so far
as they are attributable to realty they are real estate, and
must bear their own estate duty. Re Spencer Cooper.

But notwithstanding being payable out of proceeds of
realty, interest does not run on the legacy or any part of it
until expiration of one year from testator’s death.

Turner v. Buck ; Re Waters.

CHAPTER IX.

CONVERSION.

Conversion has been defined to be ” that change in the
nature of property by which, /or certain purposes, real estate
is considered as personal and personal estate as real, and
transmissible and descendible as such.”

The doctrine depends on the intention of the testator,
settlor, or other author of the trust. When once intention

CONVERSION. 65

is sufficiently expressed, it does not matter whether conver-
sion has actually been made, for equity considers that done
which ought to be done. The test is — Has the author of
the trust absolutely directed the real estate to be turned
into personal or the personal estate to be turned into real ?
Metclicr v. Ashhurner ; Lechmere v. Carlisle.

Aye or No, was there an enforceable trust for sale ?

Re GrimtlwTTpe.

Conversion may be said to arise either by act of the
parties, or by title or authority paramount.

Conversion by Act of Parties.
Conversion arises in two ways —
I. Under wills,

II. Under deeds or other
instruments inter vivos,

Either in reference to con-
version of land into money
or money into land.

In every case there must be considered —

1. What words are sufficient to produce conversion.

2. From what time conversion takes place.

3. The general effects of conversion.

4. The results of a total or partial failure of the

objects and purposes for which conversion has
been directed.
What words are sufficient to produce conversion. The direc-
tion to convert must be clear and imperative — in other
words, there must be an obligation under a trust or
contract to make an actual conversion. The direction
may be —

( I .) Express. Curling v. May.

(2.) Implied. As where (notwithstanding the trustee
has apparently an option) the trusts and limita-
tions are exclusively applicable to land, or vice
versd. Earlom v. Saunders; Morris v. Griffiths.

A mere power — as distinguished from a trust — to
convert is not imperative.

Pitman v. Pitman ; Re Dyson.

E

66 CONVERSION.

2. Time from which conversion takes iilace. The general rule
is that conversion takes place — •

I. Under wills, from death of testator.

II. Under deeds or other instruments inter vivos, from date
of execution.

” The principle is the same in the case of a deed as in
the case of a will, but the application is different, by
reason that the deed converts the property in the life-
time of the author of the deed, whereas in the case of
a will the conversion does not take place until the
death of the testator.” Griffiths v. Bichetts.

The rule is the same, notwithstanding the trust for
sale contained in the deed is not to arise until after
the settlor’s death. Clarke v. Franklin.

And this whether it be a case of conversion of land
into money or money into land. Wheldale v. Partridge.
The rule is not applicable where conversion is not the
intention, as in the case of mortgage deeds ; in such
cases there is no notional conversion.

Wright v. Rose ; Bourne v. Bourne ;
Chadvjich v. Grange.
Or where a notice to treat is given under the provisions
of the Lands Clauses Consolidation Act, 1845, but not
duly followed up.
Cases of conversion depending upon a future option to purchase
vested in some third person must be specially considered :
where —

(i.) Option is created by testator previously to his will.
In the case of —
(a.) General devise. The property is deemed converted
into personalty as from the date of the instru-
ment creating the option.

Lawes v. Bennett ; Gollingwood v. Row.
Until the option is actually exercised, however,
the rents will go as realty. Townley v. Bedwell.
The rule applies even if the option be not exercis-
able until after testator’s death. Isaacs v. Reginald.

CONVERSION. 6^

(b.) Specific devise. The property is deemed converted
into personalty only as from the exercise of the
option ; the principle being that where the testator,
knowing of the existence of the option, devises the
specific; property without reference to such option,
he indicates an intention that the devisee should
have all his interest therein ; either the property
or the purchase- money.

Brant v. Vause; Umuss v. Smith,

(2.) Option is created by testator subsequently to his will.

In the case of —

(a.) Specific devise. The property is deemed converted

into personalty as from the exercise of the option.

Weeding v. Weeding,
(b.) General devise. The same rule will a fortiori apply ;
a specific devisee being always more favoured than
a general one.
Where the option is created after the will, there is a
suspensory conversion, and a suspensory ademption from
the devisee, which subsequently operates or not as a
complete conversion and complete ademption, according
as the person possessing the option does or does not
exercise it. Such options fall within the Perpetuity
Rule. Woodall v. Clifton.

But although, owing to this rule, the option may be
unenforceable, yet damages may be recovered for breach
of contract. Worthing v. Heather.

As to the effects of conversion. To make real estate per-
sonal and personal estate real, although no actual
conversion takes place,
(i.) Converted realty devolves on personal representatives
and is subject to legacy and estate duty (formerly
probate duty) ; while converted personalty goes to
the heir, or if entailed to the heir in tail.
(2.) Converted personalty is subject to curtesy and dower.
(3.) Although prior to the Wills Act an infant under
twenty-one had power to make a will of personalty,
he could not dispose of converted personalty by
will.

68 CONVERSION.

(4.) It would appear that before the Wills Act a will of
converted personalty must have been executed with
the formalities prescribed by the Statute of Frauds
for wills of realty.
(5.) Converted realty would not formerly have gone to
the Crown, either by way of escheat or as bona vacantia,
nor would converted personalty have escheated. It
appears that under the Intestates’ Estates Act, 1884,
there would now be an escheat in all such cases.
4. Results of total or partial failure of purposes for which
conversion directed.

” A total failure occurs where no beneficial trusts are
declared concerning the converted property, or if such
trusts are declared and they are all incapable of taking
effect. A partial failure occurs where the trusts de-
clared do not exhaust all the converted property, or if
the trusts exhaust all the interest, but some of them
are incapable of taking effect.”

TOTAL FAILUEE.

The universal rule is, that where there is a total failure
before the instrument directing the conversion comes
into operation, no conversion will take place, but the
property will result to the testator or settlor with its
original form unchanged.

Clarice v. Franldin ; Smith v. Claxion.

PARTIAL PAILUEK.

When there is a partial failure a sale is always necessary.
Three questions will generally arise, namely :

First, To what extent is the trust for conversion

still in force ?
Second, Who is to benefit by the failure ?
Third, In what character (I’ealty or personalty) will
the benefit accrue ?
These questions may be considered under the following
heads : —

CONVERSION. 69

I. Under wills : the conversion is only for the purposes of
the -will, and not ” out and out,” therefore all that is
not wanted for those purposes must go to the person
who would have been entitled but for the will,
(i.) Land into money.

The undisposed- of or lapsed surplus lands or proceeds
of sale result to the heir of the testator. There must
be a gift over to exclude the heir.

AcJcToyd V. SmitJison.
But this doctrine, in the absence of special circum-
stances, does not apply to sale by the court.

Buyers v. Booth ; Steed v. Preece ; Hyett v. Mekin ;

Re Bodson.
As to the character in which it is taken —
The true rule appears to be, ” Where there is a
partial undisposed-of interest of real estate directed
to be sold, that interest results to the heir of testator,
and it becomes personal estate in his hands” and the
heir ” takes the property in the state into which it
is converted by the will.”

Jessop V. Watson ; Smith v. Claodon ;
Be Bicherson ; Scales v. Heyhoe.
If there is no trust for sale, but merely an absolute
power, the exercise of the power after the death of
the heir will not alter the devolution ; the proceeds
will devolve as realty. Be Dyson.

If, however, the trust for conversion is not
directed absolutely for all the purposes of the will,
but merely for a particular purpose, such as the
payment of debts, then the undisposed-of or lapsed
surplus lands or proceeds of sale result to the heir
as land, just as if the conversion had entirely failed.
(2.) Money into land.

The undisposed-of or lapsed money results to the
next of kin of the testator. Gogan v. Stephens.

As to the character in which it is taken —

It appears to belong to the next of kin as
realty whether the money has actually been
invested in land or not. Curteis v. Wormald.

70 CONVERSION.

The blending of realty and personalty does not
exclude tlie principles above laid down.

Jessop V. Watson.

II. Under deed or other instruments inter vivos : the con-
version is always ” out and out.”

(i.) Land into money “1 The property results to the
(2.) Money into land J settlor in its converted form.

Griffiths V. Bicketts ; Wheldcde v. Partridge ;
Clarke v. Franklin.

It will be remembered that the reason of the distinction
between the result of a partial failure under a will and a
deed is, a will operates from the death of the testator ; but
a deed takes effect in the settlor’s lifetime.

Conversion by Title or Authority Paramount.

In the consideration of conversion by act of parties the
question at issue has been, What was the intention of the
author of the trust 1 Under this head, however, conversion
takes place without reference to any wish or intention on the
part of the owner of the property. The question to be
considered being. Is the property, though de facto con-
verted, to be treated to any and what extent as not
converted ?

The chief instances are —

I. Lands taken under 2Mwers conferred hy Act of Parliament, in
which the point is, What is the intention, i.e., what are
the words of the Statute ? Statutes must, however,
be construed so as to vary as little as possible the
rights of third persons.

Bichards v. Attorney-General of Jamaica.
Persons whose lands are taken from them by Parliamen-
tary authority may be classified thus : —

( I .) Absolute owners who, under Parliamentary compulsion,
contract for the sale of their land. The land is con-
verted from date of contract.

EECONVERSION. 7 I

(2.) Absolute owners who refuse to contract. In spite of
such refusal the sale is completed and purchase-money
.paid into the Bank of England under the 76th section
of the Lands Clauses Consolidation Act, whereby a
conversion is effected forthwith.
(3.) Limited owners and persons under disability. The
purchase-money is paid into court under the 69th
section of the Lands Clauses Consolidation Act, until
a reinvestment in land can be effected, and meanwhile
there is no conversion.

In the consideration of this head, note the provi-
sions of the Settled Land Acts, whereby full power
is given to limited owners while in possession to
effect sales; the purchase-money, however, being
still considered land in the contemplation of equity.

II. Lands sold under the authority of the Court.

When lands have been sold by direction of the
court, there is a conversion out and out from the
date of the order, even though the purposes of
the sale do not exhaust all the proceeds. ” The true
principle is this, that the moment a sale is ‘properly
made conversion follows, and there is no equity to
reconvert the surplus.” Be Dodson ; Steed v. Preece ;
Hyett V. Mekin; Burgess v. Booth; Fauntleroy v. Bebee.

CHAPTER X.

RECONVEESION.

Reconversion is that notional or imaginary process by
which a prior constructive conversion is annulled and taken
away, and the constructively converted property restored in
contemplation of a court of equity to its original actual
quality.

7 2 EECONVERSION.

Reconversion may take place in two ways : —

A. By the act of the parties.

B. By operation of law.

Rkconveesion by Act of Parties.

The principle of this doctrine is the right of every absolute
owner to elect to dispense with the execution of any trust
in the performance of which he alone is interested.

Reconversion, therefore, depends upon the right
of election, and may be considered under the two
following heads. {Haynes^ Eq.)

I. Who may elect so as to effect a reconversion, and to what
extent,
(i.) Absolute owner may reconvert; but onus of proof

will be on those who allege that he has done so.
(2 .) Owner of undivided share of —

(a.) Money to be converted into land : undivided owner
may reconvert. Seleij v. Jago.

(b.) Land to be converted into money: undivided
owner may not reconvert, for the sale of an
undivided share would be less beneficial than
share of proceeds of entirety.

Holloway v. Baddiffe.
(3.) Bemainder-va&Q. may reconvert to the extent of his
own interest only, that is to say, as between his
own real and personal representatives.

Triquet v. Thornton ; Gillies v. Longland.
(4.) Infant cannot reconvert usually. If matter won’t
wait, the court will elect, but without prejudice to
the diverse rights of the real and personal representa-
tives of the infant dying under age.
(5.) Lunatic cannot reconvert. His committee may do
so with sanction of court, but without prejudice to
the rights of lunatic’s representatives. Under the
Lunacy Act, 1890, property of a lunatic may be
ordered to be sold, but unapplied purchase-moneys
will devolve under the order as real estate.

RECONVERSION. 7 3

(6.) Married women, independently of the operation of
the Married Women’s Property Act, 1882, cannot
elect by ordinary deed. As to —
(a.) Money to he converted into land.

(a.) Formerly a married woman effected a recon-
version hy being examined in open court.

Oldham v. Hughes,
Or by making sham purchases of land, and
then levying a fine with concurrence of her
husband.
(/3.) Now she reconverts by means of a deed
acknowledged. 3 & 4 WiU- IV- c. 74.

Or without acknowledgment if entitled for
her separate use.
(6.) Land to be converted into money.

(a.) Formerly a married woman effected a recon-
version by levying a fine with concurrence
of her husband. May v. Roper.

(yS.) Now she reconverts by means of a deed
acknowledged under 3 & 4 Will. IV. c. 74.

Briggs v. Chamberlain.

Even if her interest be in reversion or

remainder. Tuer v. Turner.

But not if it be a mere expectancy or spes

successionis. Alleard v. Walker.

And if she is entitled to the property as

separate estate, an acknowleged deed is not

necessary.

Since the Married Women’s Property Act, 1882, it

would appear that a married woman has the same power

to elect so as to effect a reconversion of her separate

property as if she were a feme sole.

II. Mode in which the election may be made,
(i.) By express direction.

(2.) By implied direction, from conduct. As to —
(a.) Land to be converted into money, slight cir-
cumstances are sufficient to effect a recon-
version. Davies v. Ashford-

74 ELECTION.

(i.) Money to be converted into land. Slight cir-
cumstances are insufEcient, but it is enough
if the court is satisfied the party means the
money to be taken as such.

Eeconversion by Operation of Law.

There are two essentials to this reconversion.

(i.) The property must be in the actual posses-
sion of the person who had in himself both
the executors and the heirs.

And

(2.) That person must have made no declaration
of his intention concerning it.
When these two things are proved, the onus of
proof to the contrary rests on the party denying
reconversion.

Chichester v. Bickerstaff ; Pulteney v. Darlington.
Where the property is at home, that is to say, in the
possession of the person under whom both executor and heir
claim, the heir cannot take it ; but if it be outstanding in
the hands of a third party, or if any outstanding partial
interest stand in the v,’ay, he possibly may do so.

Wheldale v. Partridge ; Wallrond v. Bosslyn.

CHAPTER XI,

election.

Election has been defined as ” the choosing between two
rights where there is a clear intention that both were not
intended to be enjoyed.” The doctrine originates in two in-
consistent alternative donations, the one of which the donor
has no power to make without the assent of the donee of
the other.

ELECTION. 7 5

The commonest application of the doctrine is where a
person, having by any instrument in terms disposed of the
property of another, has by the same instrument given pro-
perty of his own to that other ; in such a case a condition is
impUed that the donor’s gift of his own property is to be
absolute only upon the donee’s ratification of the attempted
disposition of his (the donee’s) property to a third person.

The FOUNDATION of the doctrine is the intention of the
author of the instrument, and its characteristic is the effectua-
tion of a gift made by a donor of property not belonging to
him. Billon v. Parker.

The doctrine, although professing to be based on
intention, seems to be really independent of it, for
an intention is presumed ” on the part of the author
of every instrument that all persons deriving benefits
under that instrument shall be bound to give effect
to all dispositions thereby made of their own property,
and no evidence will be allowed to be given to show
that such presumed intention could not really have
existed.” {Haynes’ JEq.)

The doctrine of election is doubtless derived from
the civil law, from which, however, it differs in one
important particular, namely, in applying the prin-
ciple to those cases in which the author of the
instrument disposes of property under the erroneous
impression that it is his own. Whistler v. Webster.
The principle on which the doctrine is based is that
a man is not allowed to approbate and reprobate,
and if he approbates he must do all in his power to
confirm the instrument which he approbates.

Cavendish v. Dace.
In order, therefore, to raise a case of election two essential
circumstances must concur.

1. Property which belongs to one person (A) must be
given to another by the author of the instrument.
And

II. The donor must at the same time give property of
his own to A.

76 ELECTION.

In such a case of concurrence, A will be put to his
election, and will have two courses open to him —

(i.) Election under the instrument, and consequent

submission to all its terms.
(2.) Election against the instrument, in which case the
question arises as to whether compensation or for-
feiture on the part of the refractory donee is to
result. The rule has been settled thus —
{a.) Equity sequesters the benefits intended for the
person electing against the instrument in order
to compensate him whom this election has dis-
appointed.

When the election arises under a will the
amount of such compensation is to be ascer-
tained as at date of testator’s death, not at date
of election. Hancock v. Pawson.

(b.) The surplus after compensation is restored to
the refractory donee. Gretton v. Haward.

No case for the doctrine of election arises where testator —
(i.) Simply makes two dispositions of his own property

in the same instrument.
(2.) Does not dispose of some property actually his own
so as to furnish a fund from which compensation
can be made.

Bristow V. Warde ; Whistler v. Wehster.

Cases of Election under Special Poivers.

These cases may be summarised —

(i.) Person entitled in default of appointment is put to
his election.

(2.) Person entitled londer the power is not put to his
election, for no property helonging to him has been
given to another, since the person entitled in
default of appointment is the owner of the property
improperly appointed to another not an object of
the power. Whistler v. Wehster.

(3.) Where directions modifying the appointment are
appended —

ELECTION. y]

(a.) When modification is contrary to law (e.g., in-
fringes the rule against perpetuities), it is
altogether invalid, and no case of election is
raised. Woolridge v. Woolridge ; Be Nash.

{h.) When modification is not contrary to law, and
clear and imperative so as to amount in effect
to a trust, a case of election is raised.

Blackett v. Lamh

Cases of Election arising from Attempts of Testator to dispose
of his own Property iy Ineffectual Instrmnciit.

(i.) Infancy. Previously to the Wills Act, an infant could
by will dispose of personal estate, but not real
estate ; under such a will there was no case of
election.
(2.) Coverture. Where testatrix is incompetent to make a
will through coverture ; there is no case of election.
Since the Married Women’s Property Act, 1882,
these cases can seldom arise.

But where a married woman is entitled to
property, which she is restrained from anticipat-
ing, she is exempted from the obligation to elect,
and it makes no difference if she become a widow
before the necessity for election arises.

Haynes v. Foster.
Under old law before Wills Act —
{a.) Where will not properly attested to pass freeholds ;

the heir was not bound to elect.
{h.) Where will properly attested but testator attempted
thereby to dispose of after-acquired property ; the
heir was put to his election.
(4.) Under law previous to Preston’s Act (55 Geo. III.
c. 192), copyholds must have been surrendered to
the use of his will before a testator could thereby
dispose of them. Where devise was made of un-
surrendered copyholds, the heir was put to his
election.
(5.) Scotch property. Where will is not properly executed

7 8 ELECTION.

to pass Scotch property, the Scotch heir will be put to
his election. Brodie v. Barry ; Orrell v. Orrell.

The same rule will apply to foreign lands generally.
(6.) Derivative interest. Where a person is only deriva-
tively entitled under another who was bound to elect
and has done so ; there is no case of election.

Cooper V. Cooper.

Cases of JElection in respect of Dower

where the Dower Act (3 & 4 Will. IV. c. 105) does not
apply, for under that Act dower raises no case of election.
The widow will be put to her election —
(i.) At law. By express words.
(2.) At equity.

(a.) By express words.

(6.) By necessary implication, to constitute which the
provisions of the instrument must be clearly in-
consistent with her dower being assigned by metes
and bounds. Butcher v. Kemp.

And conversely a husband may be put to
election under his wife’s will.
In all cases, in order to raise a case of election, there must
appear on the instrument itself a clear intention on the part of
the testator to dispose of property not his oivn. Where,
therefore, a testator has a limited interest, he is presumed
to have given his own property only, and any general words
used will be deemed to apply to such property as he is
capable of disposing of by his will.

Wintour v. Clifton ; Johnson v. Telfourd ;

Shuttleworth v. Greaves ; Dummer v. Pitcher.

The intention must in all cases appear on the instrument

itself, and extrinsic evidence will not be admissible to raise a

case of election. Clementson v. Gandy.

Mode of Election.

(i.) By married women.

{a.) As to realty, by deed acknowledged under 3 & 4
Will. IV. c. 74.

ELECTION. 79

(b.) As to personalty, by direction of the court after
inquiry made, except as to reversionary interests,
in respect of which election may be made by
deed acknowledged under Malins’ Act (20 & 21
Vict. 0. 57).

So far as her separate property is concerned,
she can elect in the same way as if she were a
feme sole. lie Qumde’s Trusts.

Except where she is restrained from anticipa-
tion, in which case she can only elect with the aid
of the court under s. 7 of the Conveyancing Act,
191 1 (replacing s. 39 of the Conveyancing Act,
1 881), which can only be given when the election
would be for the benefit of the married woman.

In re Vardon’s Trust.
So practically in such a case it appears no
election would ever be made, as without it the
married woman can have both benefits.

If no restraint, she may elect by conduct under
the doctrine of estoppel.

Seaton v. Beaton; Bdtemdn v. Fdber.
(2.) By infants.

(d.) Generally by direction of the court upon inquiry

made.
(J.) In other cases the election is deferred until the
infant comes of age. Streatficld v. Streatfield.

(3.) By lunatics. By direction of the court upon inquiry

made.
(4.) Generally.

(a.) By express words.

(b.) By implication, as a result of conduct and dealing

with the property. But acts to be binding must

be done with intention of electing.

Persons bound to elect may previously ascertain the

relative values of the two properties between which they

are called upon to choose.

Neglect to elect within a limited time will generally
imply an election to take against the instrument.

Observe the different sense in which the word election is

8o PEEFOEMANCE.

used, as regards the doctrine of election, to that in which it
is used in treating of reconversion. Here it is ” the obligation
to elect between two species of property or benefit, while in
reconversion it is the right to elect to take, in lieu of the
proceeds or fruit of any given property, the property itself.”

{Haynes Eq.)

CHAPTER Xn.

PEEFOEMANCE.

The doctrine of performance is based upon the maxim,
” Equity imputes an intention to fulfil an obligation.”
Two classes of cases occur —

I. Where there is a covenant to purchase and settle realty,

followed by a purchase but no settlement is made.

II. Where there is a covenant to leave personalty, and the

covenantee receives a share under the intestacy of
covenantor.

I. Covenant to purchase and settle. This class is well illus-
trated by the cases Lechmere v. Carlisle and Wilcocks v.
WUcocks, under which four points have been estab-
lished —
(i.) Performance may be good pro tanto where lands

purchased are of less value than covenanted.
(2.) Lands purchased before covenant entered into — no

performance.
(3.) Lands purchased which do not answer description of

covenant — no performance.
(4.) Absence of trustees’ consent immaterial.

Sowden v. Sowden.
Note, a covenant to settle creates a mere specialty
debt, and not a lien upon the lands.

This class must be distinguished from cases
depending upon the right of cestui que trust to

PERFORMANCE. 8 1

follow trust-fund into any subject-matter into
■which it has been wrongfully converted. In such
cases all turns on the circumstance that the pur-
chase has been in fact made with triost-money.

Trench v. Harrison ; Lench v. Zench.
As to agreements for settlement of wife’s after-
acquired property.
Although often inserted in marriage settlements, the
covenant is not a usual one.

Unless the covenant contains express words showing
a contrary intention —
(i.) It is limited to property acquired “during the
coverture,” and so does not extend to property
vested in wife before marriage or acquired by her
after a judicial separation.

lie Bland ; Davenport v. Marshall,
(2.) It covers gifts from husband to wife.

Mlia V. Ellis.
(3.) Life interests and life annuities are not caught

by it.
(4.) It does not extend to general powers of appointment,
for a power of appointment is not property, although
property may be created by its exercise.

Tremayne v. JRashleigh ; Vetch v. Elder,

II. Covenant to leave. Where husband, having covenanted
to leave his wife money, dies intestate, so that she
becomes entitled to a share under the Statute of Dis-
tributions, the question arises whether such share is a
performance of the covenant, or whether she can claim
in addition the money due thereunder. Two rules
apply—
(i.) When the husband’s death occurs at or lefore time
covenant ought to be performed, so that during
husband’s lifetime there is no breach of covenant
and no debt — distributive share is a performance
either in tola or pro tanto.

Blandy v. Widmore ; Goldsmid v. Goldsmid.
(2.) When husband’s death occurs after time covenant

F

S2 SATISFACTION.

ought to be performed, i.e., after a breach, whereby
the obligation becomes a debt — distributive share
is no performance. Oliver v. Brichland.

CHAPTER XIII.

SATISFACTION.

Satisfaction has been defined as ” the making of a dona-
tion with the intention, express or implied, that it shall be
taken as an extinguishment of some claim which the donee
has on the donor.”

The doctrine rests upon intention, but must not be con-
founded with performance, in which the identical thing agreed
to be done is considered to have been done, while in satis-
faction the thing done is something different from and
substituted for the thing agreed to be done.

Cases on this doctrine may be considered under four
heads, viz., satisfaction of —

I. Debts by legacies.
II. Legacies by subsequent legacies.

III. Legacies by portions.

IV. Portions by legacies.

I. Satisfaction of debts by legacies.

The general rule is that a man must be just before he is

generous, the maxim being Debitor non presumitur donare.

But equity leans against this presumption of satisfaction,

and the following special rules have been laid down :

(i.) A legacy imports a bounty.

(2.) Legacy equal to or greater than debt and given simpli-
citer — satisfaction. Talbot v. Shreiosbury.

A legacy exactly equal to a debt is adeemed by the dis-
charge of the debt. Gillings v. Metcher.

(3.) Legacy less than debt — no satisfaction, even pro tanto.

(4.) Debt contracted after will — no satisfaction.

SATISFACTION. 8 3

(5.) Slight circumstances rebut the equitable presumption
of -satisfaction ; such as —

(a.) Where the will contains an express direction for
payment of debts and legacies,

Ghancey’s Case \
or debts only, j- no satisfaction.

Bradshaw v. ffuishj
(b.) When legacy is made payable after debt — no satis-
faction. Clarke v. Sewell.
But when payable before debt— a satisfaction.

Wathen v. Smith.
(c.) Where legacy is of residue or otherwise contingent
or uncertain — no satisfaction.

Barrett v. Bechford ; Devese v. Pontet.
Using the term less in the sense familiar to the civil law,
it may be said generally, there is no satisfaction when the
legacy is less than the debt.

II. Satisfaction of legacies by subsequent legacies.

Two cases occur according as the legacies are given
by the same or by different instruments.

Firstly, Under the same instrument.

( I .) Equal legacies given to the same person simpliciter

are substitutive. Greenwood v. Greenwood.

(2.) Unequal legacies are cumulative. Hooley \ . Hatton

Secondly, Under different instruments.

(i.) Equal or unequal legacies given to the same
person simpliciter are -primd facie cumulative.

(2.) Where legacies are not given simpliciter, but a
motive is expressed, then when in each instru-
ment there is both the same motive and the same
sum, they are substitutive. Bcnyon v. Benyon.

As to extrinsic evidence, it is; —

(rt.) Admissible in suppoH of will where the court itself
rccises the presumption of satisfaction.

(b.) Not admissible to contradict will where the court
jdoes ^lot raise such presumption.

84 SATISFACTION.

III. Satisfaction or ademption of legacy hy PORTION, e.g.,
where father first gives his child a legacy arid sub-
sequently makes other provision for it.

IV. Satisfaction of PORTION hy legacy, e.g., where father
agrees to make provision for a child and afterwards
gives it a legacy. ” In each of these cases the rule
of the court is, that benefits given to the child by the
second instrument, settlement, or will, as the case
may be, are to be viewed as a satisfaction of the
benefits conferred by the first, whether will or settle-
ment.” For the court leans against double portions.

The foundation of the doctrine is the parental
relation or its equivalent.

Note, where a father gives a legacy to a child
simpliciter, the court underststnds him as giving a
PORTION. Fym V. Lockyer.

A portion means ” something given to establish a
child in life.” Taylor v. Taylor.

A portion given to a child during his father’s life-
time is called an advancement.

When the will comes first and the settlement
afterwards, the term ademption is used instead of
satisfaction. Coventry v. Chichester.

With regard to both these cases (III. and IV,) the fol-
lowing points should be noted : —

( I .) In the case of double provisions, the doctrine of satis-
faction only applies where the parental relation, or its
equivalent, exists. But

{a.) An illegitimate child is a stranger in the eye of the
law, and will therefore be entitled to both pro-
visions. JEx parte Pye.
Where, however, the case is a mixed one of chil-
dren and strangers, the shares of the strangers will
not be increased by the satisfaction of the chil-
dren’s shares. Meinerizhager v. Walters,
(b.) Even between strangers, where both provisions are
expressed to be made for the same particular pur-
pose, there is a satisfaction. Monck v. Monck.

SATISFACTION. 8 5

The presumption against double provisions
is said to be founded on good sense. If the
parental relation exists, the court, from its
knowledge of the ordinary dealings of mankind,
concludes that the parent does not mean to
provide doubly for any one of his children.
As between strangers, there is no reason within
the knowledge of the court for regarding the
second benefit to be a satisfaction of the first.
Suisse V. Lowther ; Lawes v. Lawes.
(2.) Although the doctrine does not, as a general rule, apply
between strangers, yet it does apply where the donor
has placed himself in loco parentis towards the bene-
ficiary.

As to what is putting one’s self in loco parentis,
the expression may be taken to mean “a person
meaning to put himself in loco parentis with reference
to the office and duty of the parent to make pro-
vision for the child.” Powys v. Mansfield.
Under this rule an illegitimate child may be
deprived of the double benefit to which he might
otherwise be entitled as a consequence of the first
rule.
(3) Equity leans most strongly against AovAAq provisions and
in favour of satisfaction. In the case of debts and
legacies the leaning was in the contrary direction.

Consequently, slight circumstances will not rebut
the equitable presumption of satisfaction : e.g., the
doctrine applies even though the sums be different
in amount or payable at different times. The doc-
trine even applies where there is a difference in the
mode of limitation for the benefit of the child, and
also where the benefit conferred by the second instru-
ment is not of any distinct or definite sum, whether —
(a.) The will precedes the settlement.

Durham v. Wharton ; Montefiore v. Guedalla.
But a codicil confirming will made before settle-
ment rebuts the presumption. Be Scott.
or

86 SATISFACTION.

(6.) The settlement precedes the will.

Thynne v. Glengcdl.
But there is no satisfaction when there is a sub-
stantial difference. When the settlement pre-
cedes the will it must always be remembered —
(a.) The parties claiming under the settlement are
quasi-purchasers, and, as such, cannot be deprived
of their rights upon any presumed intention of
the testator. At the utmost, they can only be
put to their election whether to take under the
settlement or the will.

Chichester v. Coventry ; Be Shafto.

(/3.) The question of satisfaction cannot arise as

regards advances actually made or property

actually transferred upon a settlement, but only

in respect of those agreed to be made.

But where under a special power an appointment is

made by will to all the members of a class, and

afterwards an appointment is made by deed to one

member of a part of the fund if appointed by the mother

— there is no satisfaction, as the amount appointed

would not be a ” portion.” Ingram v. Papillon.

But if appointed by the father the appointed funds

would be portions for the purpose of the doctrine,

and — there is satisfaction. Be Peel’s Settlement.

(4.) Where the sum given by the settlement is less than

that previously given by the will, the less sum is a

satisfaction pro tanto only. Pym v. Lochyer.

Where the settlement precedes the will, the

question cannot in practice arise, for the parties

claiming under the first instrument are purchasers.

(5.) Where a, parent makes provision for a child to whom he

is already indebted —

(a.) ” A legacy does not (except when it would do so

between strangers) operate as a satisfaction of the

debt.” Stochen v. Stocken.

(&.) An advancement made upon marriage or otherwise

vi’iiM primd facie be considered a satisfaction.

Wood V. Briant ; Plunhett v. Lewis.

ADMINISTRATION OF ASSETS. 87

And e converso where a child is indebted to his
father and the father forgives the debt, such a trans-
action will be deemed an advancement.

BlockUy V. Blocldey,
(6.) The doctrine is not confined to marriage settlements,
but applies equally to all gifts made by a parent with
the object of advancing the child in life.

But small sums paid by a father are not construed
as advances.
(7.) As to extrinsic evidence, the rule as to satisfaction, being
merely a presumption of law, may be rebutted by
evidence not contained in the written instruments
themselves. Such evidence is admitted only for the
purpose of ascertaining whether the presumption which
the law has raised be well or ill founded. Thus
(a.) Where no presumption of law against double pro-
visions is raised in the first instance, such evidence
is not admissible to vary or contradict the plain
effect of the instruments. Hcdl v. Hill.

(&.) Where such presumption of law is raised, such
evidence is admissible to rebut or support it.

Kirk V. Edilowes.

CHAPTER XIV.

ADMINISTEATION OF ASSETS,

The word ” assets ” is derived from assez, enough. ” The
primary meaning of ‘ assets ‘ was not that so much property
was applicable for the payment of the debts, but that the
personal representative as to the personal estate and the
heir as to the descended real estate were respectively held
personally liable for the debts at the suit of the creditors,
the amount of the personalty vested in the one and the
value of the realty descended to the other being the
measure of their respective liabilities.” {Edclis on Assets.)

Assets have accordingly been divided into ” real assets,”

88 ADMINISTRATION OF ASSETS.

or ” assets by descent,” and ” personal assets,” or assets entre
main of an executor. From the primary meaning, the word
“assets” has now come to mean “all property available for
the payment of the debts of a deceased person ” ; and by
administration of assets is meant the application of such
assets to the payment of the deceased’s funeral and testa-
mentary expenses and debts.

Assets are subdivided into two great classes — legal assets
and equitable assets.

Legal assets denote ” property which creditors might make
available in a court of law for the payment of debts
as having devolved upon or been recoverable by the
executor or administrator, as such, for that purpose
simply by virtue of his office, even though the property
might be of an equitable nature, and he had conse-
quently been obliged to resort to a court of equity to
vest it in himself.”
Equitable assets denote property which creditors could
make available only in a court of equity for payment
of debts by virtue of an express disposition of the
property, or, from its peculiar nature, which must have
been carried into effect or administered by a court of
equity. (Sm. Man.) Cook v. Gregson.

It is therefore the eemedy of the creditor which deter-
mines whether the assets are legal or equitable.

The distinction between the two was formerly important
and consisted in this — that out of legal assets specialty debts
were properly payable before the simple contract debts, while
out of equitable assets both classes of debts were payable pari
passu.

This distinction has lost most of its importance since
1869, as will hereafter appear. It is still of moment in
questions as to

( I .) Executors’ or administrators’ right of retainer.
(2.) Remedy of creditor against executor in an action at law.
Prior to 1870, the following was the

ADMINISTRATION OF ASSETS. 89

Order in ivhieh Debts were Payable out of Legal Assets.

Reasonable funeral and testamentary expenses are payable

first of all. Be Griffith.

Estate duty payable in respect of personalty falls
within the expression ” testamentary expenses.”

He Clemow ; Re Treastire ; Be Pullen.
But estate duty in respect of realty does not.

Re Sharman.

(i.) Debts due to the Crown by record or specialty.

(2.) Debts to which particular statutes give priority: e.g.,
debts owing to building or friendly societies by their
officers, income-tax, poor-rates.

(3.) Judgments duly registered against the deceased, and
unregistered judgments if recovered against the per-
sonal representatives. The reason for the necessity of
registration is to prevent the risk which the personal
representatives would otherwise run of committing a
devastavit by paying debts of inferior degree without
being aware of judgments.

(4.) Recognisances duly enrolled.

(5.) Specialty debts for valuable consideration, whether the
heir be or be not bound, arrears of rent, even though
reserved by parol, ranking equally with specialties.
This last priority is said to have arisen from what is
called in law privity of estate.

(6.) Simple contract debts and unregistered judgments
against the deceased. But debts due to the Crown by
simple contract would be paid first.

(7.) Voluntary bonds or covenants ; but a voluntary bond
assigned for value without notice in the lifetime of the
deceased ranks equally with specialty debts, i.e., in the
fifth group.

If the estate is insolvent, voluntary bonds now rank

equally with the specialty debts, following the rule in

bankruptcy. Re Whitaker.

The order in which the different species of debts have

always been payable out of equitable assets is obtained by

go ADMINISTRATION OF ASSETS.

bracketing together groups 5 and 6 ; and Hinde Palmer’s
Act (32 & 33 Vict. c. 46, now styled ” The Administration
of Estates Act, 1869″) abolished the priority of specialty
over simple contract debts in the administration of the legal
assets of persons dying on or after ist January, 1870, thus
putting both on the same footing wherever the Act applies.
This statute does not deprive the Crown of its priority, so
where the Crown is simple contract creditor, the assets must
be divided rateably between the specialty and simple con-
tract creditors, and then the Crown will be paid first out of
the proportion allocated to the simple contract debts.

lie Bentinck.
As the result of this statute an executor can prefer a
simple contract to a specialty creditor.’

In re Samson (overruling Me Hanhey).
The above is the ” due order of administration ” ; but an
executor lefore judgment in administration action, when no
receiver has been appointed or injunction obtained, may
prefer one creditor to another, or even pay a statute-barred
debt. To prevent this, it is necessary to obtain

(a.) An injunction,
or (6.) Appointment of receiver before judgment; but a
receiver will not be appointed by the court merely
to prevent an executor exercising this right.

Molony v. Brooke.
or (c.) Speedy consent judgment for administration, but
this can only be obtained with great difficulty.

Lane v. Lane: In re Wilson.

But the issue of an originating summons will check the

executor’s action so far as regards any question raised by

the summons. Hunt v. Wenham.

Administration of Heal Estate.

It may be well to trace here the gradual process by which
real estate was rendered liable to the payment of debts, and
the following points should be noted : —

(i .) In early times creditors by simple contract or specialty
not binding the heir had no remedy against real

ADMINISTEATION OF ASSETS. 9 1

estate, and even if the heirs were bound, the debtor
might devise his lands to another, who would be
under no liability to pay the debt ; or the heir
might dispose of the descended lands before action
brought against him by the creditor, who would in
that event have no claim either on the lands or the
purchase-money.

(2.) The Statute of Fraudulent Devises (3 Will. & Mary,
c. 14) made devises void against specialty creditors
where the heirs were bound, and gave such creditors
an action of debt against the heir awfZ devisee jointly.

(3.) Sir Samuel Romilly’s Act (47 Geo. III. c. 74) enacted
that the fee-simple estates of a deceased trader
within the Bankruptcy Laws should be assets to be
administered in equity for payment of his simple
contract as well as specialty debts.

(4.) The 1 1 Geo. IV. and i Will. IV. c. 47, repealed the
former Acts, but re-enacted them with variations ; in
particular, providing that creditors might bring an
action of debt or covenant against the heir or devisee.

(5.) The Administration of Estates Act, 1833 (3 &4
Will. IV. c. 104), provided in effect that all the real
estate of any deceased person (trader or non-trader)
should be assets to be administered in equity for
payment of his simple contract as well as specialty
debts ; but preserved the priority of creditors by
specialty, in which the heirs were bound over the
creditors by simple contract, or specialty in which
heirs were not bound.

(6.) The Administration of Estates Act, 1869, in effect
abolished the distinction between specialty and simple
contract debts, and thus the priority preserved by the
Administration of Estates Act, 1833, disappeared.

(7.) It should be noted that none of the foregoing
statutes interfered with testamentary dispositions
providing, either by way of trust or charge, for pay-
ment of debts.
(8.) Under the Land Transfer Act, 1897, the adminis-
tration may be wholly out of court.

92 ADMINISTRATION OF ASSETS.

Such dispositions constituted the lands apdtahle

assets out of which the creditors were paid pari passu.

It seems that the equitable doctrine of conversion

is not recognised in settling the order of application

of assets for payment of debts. Trott v. Buchanan.

Legal assets include- lands not charged with the payment

of debts, estates pur autre vie, equity of redemption

of leaseholds, as well as freeholds.

Equitable assets have been classified as of two kinds —

Firstly, Equitable assets which are so by virtue of their

own nature, not attainable by executor virtute

officii, consisting of

(a.) Property actually appointed by testator under

a general power, to the extent the power is

exercised.

Where the appointor is a married woman
such assets will be liable for her post-nuptial
as well as her ante-nuptial debts, if contracted
with reference to her separate estate.

Willoughly v. Holyoahe ; Bell v. Stoker,
(h.) Separate estate of a married woman.
Secondly, Equitable assets so created by the act of the
testator charging or devising his land for payment
of debts.
Note —

(i.) The distinction between a charge and a trust. A
trust imposes a duty on the trustee to look after the
creditor, who will not be barred by lapse of time.

Judicature Act, 1873, s. 25, subject to the
Trustee Act, 1888 {vide ante, pp. 48 and 55).
Whereas a creditor who has only a charge in his
favour must look after himself, and will be barred
after lapse of twelve years. 37 & 38 Vict. c. 57.

The Land Transfer Act, 1897, has not altered the
rule, so that the creditor still has twelve years instead
of six in which to sue. Ee Balls.

But a trust oi personal estate (which is primarily
liable for debts), created by will only, does not pre-
vent the Statute of Limitations running.

ADMINISTRATION OF ASSETS. 93

Observe, the Statutes of Limitations, 21 Jac. I.
c. 16, and 3 & 4 Will. IV. c. 42, bar the remedy
only, but do not extinguish the right ; while the
statutes 3 & 4 Will. IV. c. 27, and 37 & 38 Vict,
c. 57, not only bar the remedy but extinguish the
right or debt itself. When once a debt is barred
under these last-named statutes, no acknowledgment
will revive it, and an executor must not pay a debt
which has been wholly extinguished under the last-
mentioned statutes.

An executor is not bound to plead the Statute of
Limitations, but must not pay a statute-barred debt
after judgment for administration.
(2.) What amounts to a charge.

A mere general direction by a testator that his
debts should be paid was held to constitute a charge
upon the real estate.

Silh V. Prime ; Legh v. Warrington.
To this rule there were two exceptions —
(a.) Where a particular fund specified by testator

for payment of debts.
(&.) Where executors, to whom real estate had not
been devised, were directed to pay debts.
A specific lien upon real estate will not be affected by a
general charge of debts, but neither specialty nor simple
contract debts constitute such a lien. If, however, an action
for administration, has been commenced and registered as a
lispevdens, a purchaser would not be safe in completing.

By the Judgments Act, 1864 (27 & 28 Vict. e. 112),
judgment debts, although duly registered, do 710^ constitute
a lien or charge upon the debtor’s land tmtil such lands
shall have been actually delivered in execution by virtue of
a writ of elegit, or other lawful authority. The appointment
of a receiver would amount to an equitable execution, i.e.,
such a delivery by a legal authority as the subject-matter
admits of ; Hood Barrs v. Catheart ; Wells v. Kilpin.

and this is so even where the subject-matter is a legal
interest, and as such capable of being delivered in execution
under a writ of elegit. In re Pope,

94 ADMINISTRATION OF ASSETS.

But a legal remainder appears to be incapable of being
delivered in execution. Harrison v. Bottomley.

And under the Land Charges Act, 1888, the writ of
elegit or receivership order must be registered in order to
affect purchasers.

Ejff-ect of Judicature Acts.

By the Judicature Act, 1875, s. 10, it is enacted that
in the administration by the court of the assets of any
person dying insolvent after the Act the same rules shall
prevail as to the respective rights of secured and unsecured
creditors, and as to debts and liabilities provable, and as to the
valuation of annuities and future and contingent liabilities
respectively, as are in force in bankruptcy.

Accordingly the rules in bankruptcy, instead of the pre-
viously existing rules of equity, are adopted whenever the
insolvent estate of a deceased person is administered by the
court, in three particulars —

(i.) As to the respective rights of secured and un-
secured creditors.
(2.) As to debts and liabilities provable.
(3.) As to the valuation of annuities and future and
contingent liabilities.
With reference to this section, note that it only applies to —
(a.) Insolvent estates. If an estate being administered
as an insolvent estate turns out to be solvent, the
section will not apply.
(&.) Estates administered by the court,
(c.) A limited extent, not importing all the rules of
bankruptcy, but only those relating to the ad-
ministration of the estate of the deceased — that is,
practically the three particulars above specified.
Apparently the order for payment of debts in bankruptcy
must be followed in Chancery, except that the Crown still
retains priority for debts of record or specialty, and the
personal representative still has a right of retainer against
creditors of equal degree.

ADMINISTRATION OF ASSETS. 95

( I .) As to Secured and Uiisecured Creditors.

The Bankruptcy Act, 1883, s. 168, defines a secured
creditor to be “a person holding a mortgage charge or lien
on the property of the debtor, or any part thereof, as
security for a debt due to him from the debtor.”

The rule in equity as to secured creditors prior to the
Judicature Acts was that the creditor might, in addition to
his rights under his security, prove for the whole amount of
his debt against the estate. Mason v. Bogg.

In bankruptcy the rule was the reverse, and under the
Bankruptcy Act, 1883, the secured creditor may either —
(a.) Prove for his whole debt on surrendering his

security, or
(b.) Prove for the balance due after realising or giving
credit for the value of his security.

As to the precise effect of sect, i o of the Judicature Act,
1875, it does not mean the respective rights of the classes
of secured and unsecured creditors as against each other,
but the respective rights of the members of the classes
inter se : as regards these rights inter se the rules in bank-
ruptcy are now applicable. Be Whitaker.

A judgment creditor does not become a secured creditor
merely by obtaining the appointment of a receiver.

In re Dickinson.

The execution (whether legal or equitable) must be duly
followed up to render the judgment creditor secure.

(2.) As to Deits and Liabilities Provable.

Under the Bankruptcy Act, 1883, all debts and liabilities,
present or future, certain or contingent, to which the debtor
is subject, are provable in the bankruptcy, but any provable
debt or liability may be declared by the court to be incap-
able of fair estimation, in which case it ceases to be a prov-
able debt. The Preferential Payments in Bankruptcy Act,
1888, provides that on a winding up or a bankruptcy (in-
cluding in this term the administration of the estates of

96 ADMINISTRATION OF ASSETS.

deceased insolvents, whether by the Bankruptcy or Chancery
Divisions) the following classes of debts to the extent speci-
fied in the Act are given priority over all others : —
(a.) Parochial and local rates and assessed taxes.’
(&.) Wages and salaries of clerks and servants, to which
is now added workmen’s compensation under the
Workmen’s Compensation Act, 1906.
(c.) Wages of labourers and workpeople.
But the Judicature Act, 1875, in speaking of the ” debts
and liabilities provable,” said nothing about their ” priori-
ties ” inter se ; and the rules of bankruptcy limiting the
landlord’s right of distress, or as to reputed ownership or
the avoidance of voluntary settlements, have no application
to administration by the Chancery Division.

A creditor, however, can now come in and^prove at any
time if there are assets still undistributed, and his proof
does not interfere with a prior distribution, just as in bank-
ruptcy. In re M’Murdo.
Voluntary bonds are no lotiger postponed and rank pari
passu with the debts for valuable consideration.

By the Preferential Payments in Bankruptcy Amend-
ment Act, 1897, the debts mentioned in the Preferential
Payments Act of 1888 are given preference over the
claims of debenture-holders on the winding up of a com-
pany or the appointment of a receiver for debenture-
holders.

(3.) The Valuation of Annuities and Future and
Contingent Liabilities.

By the Bankruptcy Act, 1883, the trustee is to make an
estimate of the value of any provable debt or liability which
does not bear a certain value ; and the rules in force in
bankruptcy as to such estimate apply in the administration
of assets in equity. Hill v. Bridges.

Insolvent estates of deceased persons may now, under the
125th section of the Bankruptcy Act, be wholly woundup in
bankruptcy, and proceedings for administration commenced
in the Chancery Division may be transferred to the Bank-

ADMINISTRATION OF ASSETS. 97

ruptcy jurisdiction, even after decree, either on the applica-
tion of a creditor or without any such application ; but not
as a matter of course. Atkinson v. Powell.

Creditor’s Action for Administration of Deceased Debtor.

Under Order Iv. r. lo, the court has a discretion as to
granting or refusing general administration, and now, as a
rule, makes an order for limited administration, restricting
the accounts and inquiries to what is indispensable.

I. Personal estate.

(i.) In ordinary cases; an account is directed of debts
and funeral expenses and of the personal estate received
and outstanding. The executor is allowed in his account
testamentary expenses and all just allowances, and so
they are not specified in the judgment.

After judgment the executor should not exercise his
powers without sanction of the court. The judgment
operates for the benefit of all the creditors of the
deceased who prove under it. When the estate is
insolvent, interest is only allowed in accordance with
the rule in bankruptcy.

(2,) In partnership cases ; the judgment would commence
with a declaration that all the creditors of the deceased
are entitled to the benefit of the judgment, and that
the surplus (after payment of funeral expenses and
separate debts) is liable to the joint debts. It would
proceed to direct an account of the funeral expenses,
of the separate debts, and the joint debts, and an
inquiry as to the amount of the personal estate of the
deceased.

II. Real and personal estate.

Formerly a creditor had to sue on behalf of all
creditors of deceased, or deceased’s realty would not bo
available for administration, but since the Land Transfer
Act, 1897, this is no longer necessary. Be James.

u

98 ADMINISTRATION OF ASSETS.

After the usual accounts the judgment would direct
(in case the personal estate should prove insufficient)
an inquiry to be made as to the real estate of the tes-
tator, and the incumbrances affecting the same, and
then order a sale thereof, the proceeds to go in aid of
the personal estate in payment of debts, &c.

A judgment for administration is a judgment against
the estate whenever realised, and enures for the benefit
of all creditors who come in under it.

The costs exclusively occasioned by the administra-
tion of the realty are thrown upon the realty, and this
rule is not altered by the Land Transfer Act, 1897.

Patching v. Barnett ; Re Belts.
If an executor administer the personal estate either under
the direction of the court or the provisions of 22 & 2 3 Vict,
c. 35, he is not personally liable to any claims of creditors
of which he has no notice that may be made subsequently ;
but if otherwise, he remains liable to any unpaid creditor,
having the right, however, of calling upon the residuary
legatees or next of kin to refund.

But such right is purely equitable and will not be enforced
if, in the circumstances, it would be inequitable so to do.

Blake v. Gale.
And a creditor can also follow the assets into the hands
of beneficiaries whether the executor is entitled to follow
them or not and whether the executor can be made liable
to the creditor or not. Marsh v. Russell.

As the right arises in equity only, the beneficiary is
entitled to set up any equitable defence.

Legatees and devisees are postponed to creditors, but, being
express objects of the testator’s bounty, are preferred to the
next of kin and heir-at-law ; and among legatees, the resi-
duary legatees are regarded as the least favoured objects of
the testator’s generosity.

The next important point to be considered is the

Order of Application
of the different assets (as between such assets themselves

ADMINISTEATION OF ASSETS. 99

only) for payment of debts. This order of liability to debts
has been settled as follows :- —

I. The general personal estate, not bequeathed at all,
or by way of residue only.

II. Real estate devised in trust to pay debts.

III. Real estate descended and not charged with debts.

IV. Real or personal estate charged with the payment of
debts, and devised specifically or by way of residue,
or suffered to descend or specifically bequeathed,
subject to that eharge.

V. General pecuniary legacies, including annuities and
demonstrative legacies which have become general.

VI. Specific legacies (including demonstrative legacies
that so remain), specific devises and residuary •
devises, not charged with debts.

VII. Real or personal estate subject to a general power
of appointment which has been achoally exercised by
deed in favour of volunteers (if fraudulent under 13
Eliz. c. 5) or by Avill.

VIII. Paraphernalia of widow.

The Land Transfer Act, 1897, provides that in the
administration of the estate of a person dying after
1st January, 1898, his real estate shall be administered in
the same manner as if it were personal estate, but not so as
to alter or affect the order in which real and personal assets
respectively are now applicable for payment of funeral and
testamentary expenses, debts, or legacies : the residuary
personal estate will therefore still remain the primary fund
for payment. And where personal representatives convey
real estate to the devisee or heir subject to a charge for any
money which the personal representatives are liable to pay,
the creditors cannot follow the real estate into the hands of

100 ADMINISTRATION OF ASSETS.

a purchaser ; and if the usual statutory notices have been
given and the personal representatives have no notice of
any outstanding claims, and they convey or assent, the
remedy of the creditors will be against the heir or devisee
only. -K« Gary and Lott,

Of these in their order —

I. The general personal estate not bequeathed at all, or
by way of residue only, and which is generally legal
assets, constitutes the primary and natural fund for the
payment of debts except —
(i.) Where there are express words or a plain intention
of the testator to exonerate his personal estate ; and
to constitute such intention, it must be shown that
it was meant not merely to charge the real estate,
but so to charge it as to discharge the personal
estate. As to which note — Ancaster v. Mayer,

(a.) If the real estate is directed to be sold for pay-
ment of debts, and the personal estate is expressly
bequeathed to legatees, the personal estate will
be exonerated by necessary implications. Neither
of these circumstances alone is sufficient ; nor is
it sufficient if the real estate is devised subject to
and charged with debts, funeral and testamentary
expenses and legacies.
(b.) Where the testator gives his personal estate as a
whole, and not as a residue, by way of specific
legacy to one who is not executor, and another
fund is supplied for payment of debts, &c., the
personal estate is exonerated,
(c.) Where the testator converts his real and personal
estate, and creates a mixed fund out of the pro-
duce, and appropriates that fund for payment of
debts, &c., the two estates are applicable pro ratd.
(d.) Where a devise is made subject to the payment of
an existing incumbrance, or the residue of pro-
ceeds of real estate after payment of debts is
devised, the personal estate is exonerated.

ADMINISTRATION OF ASSETS. lOI

(2) Where the charge or incumbrance is in its own
nature real, as in the case of a jointure or pecuniary
portions to be raised out of lands. A mortgage debt
is not considered as in its own nature real.

(3.) Where the debt was not contracted by the person
who died last seised or entitled, but by some other
person from whom he took it by descent or devise,
or by some other person from whom he purchased
it, or from Avhom his vendor derived it. {Sm. Man.)

(4) Cases coming under Locke King’s Act (17 & 18 Vict.
c. 113, now styled “The Real Estate Charges Act,
1854″) and its amending Acts. Apart from statu-
tory enactments, mortgage debts, like any other
debts, are primarily payable out of the personal
estate of the testator, unless devised cum onore, or
the personalty otherwise exonerated, or the mortgage
debt is an ancestral debt which has not been adopted
by the testator as his own. For equity, following
the Eoman law, regarded a mortgage as only a
collateral security for the debt.

The Real Estate Charges Act, 1854, however,
provided ” that when any person shall die seised of
or entitled to any estate or interest in any land or
other hereditaments, which shall at the time of his
death be charged with the payment of any sum or
sums of money by way of mortgage, and such person
shall not by his will, or deed, or other document,
have signified any contrary or other intention, the heir
or devisee to whom such lands or hereditaments shall
descend or be devised shall not be entitled to have
the mortgage debt discharged or satisfied out of the
personal estate or any other real estate of such
person, but the land or hereditaments so charged
shall, as between the dijff^erent persons claiming, through
or under the deceased person, be primarily liable to
the payment of all mortgage debts with which the
same shall be charged.” The Act does not prejudice
the right of mortgagees to enforce payment out of
personal estate.

I02 ADMINISTRATION OF ASSETS.

A mortgage by a deceased partner of his separate
property to secure a partnership debt is not within
these Acts, at any rate when the partnership assets
will satisfy all partnership liabilities.

As io the Effect and Constmction of this Statute.

(a.) Freeholds, copyholds, and equitable mortgages were
within its provisions ; but not leaseholds.

Solomon v. Solomon ; Hill v. Wormsley.

Leaseholds are now, however, included by the
second Amending Act (40 and 41 Vict. c. 34), which
applies to any testator or intestate dying after 31st
Decenmber, 1877, seised or possessed of lands of any
tenure. Notwithstanding that, strictly speaking, the
word tenure is not applicable to leaseholds.

Drake v. Kershaw.

Pure personalty remains unaffected by these Acts,
so where a speciBc legacy is subject to a charge
created by testator the charge must be paid out of the
residuary estate.
(h.)> The Act refers only to specified charges, ” sums by
way of mortgage,” and does not apply to a vendor’s
lien for any unpaid purchase-raoney.

.The first amending Act (30 & 31 Vict. c. 69) pro-
vided that the word ” mortgage ” in the Act should
be deemed to extend to any lien for unpaid pur-
chase-money upon any lands or hereditaments pur-
chased by a testator.

The second amending Act (40 & 41 Vict. c. 34)
extended the application of the previous Acts to any
mortgage or equitable charge or lien for unpaid pur-
chase-money in the case of either a testator or
intestate.

Where the mortgage comprises both real and per-
sonal estate, the liability must be borne pro raid.
(c.) As to a ” contrary or other intention.”

In order to take a case out of the Act, it is only
necessary to show a “contrary or other intention.”

ADMINISTEATION OY ASSETS. IO3

It is therefore sufficient to charge the personal estate
without at the same time discharging the real estate,
but a mere general direction for payment of debts
is not sufficient. Eno v. Tatham.

By the 30 & 31 Vict. c. 69, it is provided that a
general direction for payment of debts out of personal
estate shall not be sufficient to indicate a contrary
intention unless mortgage debts are expressly or by
necessary implication referred to ; and

By the 40 & 41 Vict. c. 34, it is further provided
that a contrary intention shall not be indicated by a
charge of or direction for payment of debts upon or
out of residuary real and personal estate or residuary
real estate.

Such intentions therefore can only be shown by
words referring to mortgage debts.

Newmarch v. Stwr ; Valpy v. Valpy.
A direction that the mortgage be paid out of
proceeds of sale of an estate which proves in-
sufficient does not show such intention.

Executors are bound to provide for payment of
the mortgage debts of their testator before distri-
buting the assets, and if they neglect to do so, will
be liable as for a devastavit. They may, however,
be protected by the Statutes of Limitation com-
bined with the acquiescence of the mortgagee, in
which case the only remedy for the mortgagee for
the recovery of his debt will be the equitable one
of calling upon the distributees to refund : and
even then, the mortgagee may be barred by his
own laches. Blake v. Gale.

But in a distribution under the direction of the
court no provision will be made for a mere con-
tingent liability and the executors are protected
by the order of court.

Mellor V. South Australian Coy.

II. Lands devised for payment of debts are equitable assets.

III. Keal estates descended are legal assets.

I04 ADMINISTRATION OF ASSETS.

IV. Real or personal estate charged with debts are equit-
able assets and contribute jiro raid. The heir taking
a lapsed devise takes it as devisee, and not in his
character as heir, and in respect thereof will there-
fore stand in the fourth line of liability. A residuary
devise before the Wills Act was deemed specific, and
this has been held to be still the case.

V. All general legacies, &c., contribute pro ratd.

A doubt was cast upon the order of application
of the assets classified under the last two heads
by the decision of In re Bate, which transposed
that order ; but this case has not been followed
and is treated as overruled.

Be Stokes; Be Boberis.

VI. Specific legacies, specific devises, and residuary devises
not charged with debts, contribute pro ratd.

It has been settled that residuary devises are to
be deemed specific, and to be ranked among specific
devises for all purposes of administration.

Lancefield v. Iggulden.
And the Land Transfer Act, 1897, does not
affect this or any other rule of administration.

Kempster v. Kempster.

VII. Appointed property. The appointed ))roperty is
treated as assets, so far as the appointment extends,
because by the actual exercise of the power the
appointor has virtually made it his own.

And under the Married Women’s Property Act,
1882, the same rule applies where the appointor is
a married woman. Be Ann : Wilson v. Ann.

VIII. Paraphernalia of widow. This ranks last because,
though liable to husband’s debts, it cannot be dis-
posed of by his will without concurrence of wife.

The foregoing order regulates the administration of the

ADMINISTKATION OF ASSETS. IO5

assets only as between the testator’s own representatives,
devisees, and legatees, and does not affect the rights of
creditors.

EXECUTOK S EIGHT OF RETAINER.

The right of an executor to retain his own debt out of
his testator’s assets is said to have arisen from the executor’s
inability to sue himself in a court of law for the recovery of
his own debt. It arises out of the possession of the assets
by the creditor.

With regard to this right note the following points : —
(I.) It exists in respect of legal assets only, and not
equitable assets, but applies to equitable as well as
legal debts.
(2.) It has not been abolished by the Administration of
Estates Act, 1869 ; Wilson v. Coxwell.

or the Judicature Act, 1875, s. 10. Lee v. Nuthall.
(3.) It is a right inter pares only, i.e., as against creditors
iu an equal degree with the executor, e.g., an executor
simple contract creditor cannot retain as against a
specialty creditor or a judgment creditor notwith-
standing Hinde Palmer’s Act.

In re Briggs ; Wilson v. Coxwell ; Graivter v. Marvin.
But he can retain against a specialty of which he
has no notice. Wingfield v. Erskine.

(4.) It is not lost by an administration decree.

Gamphell v. Gamphell.
Or an order for account under R. S. C. xv. r.

Whitaker v. Barrett.
Or by the making of a ” balance order ” in the
winding up of a company.

International Marine Go. y. Hawes.
Or the payment of assets into court.

Bichmond v. White.

(5.) As the right depends upon possession it is taken

away by the appointment of a receiver ; but is allowed

in respect of the legal assets recovered by the executor

before the receiver is appointed. Calver v. Laxton.

I06 ADMIKISTRATION OF ASSETS.

A receiver will not, however, be appointed on
purpose to defeat the executor’s right.

Molony v. Brooke.
Nor will money in court be paid out to give the
executor the right. Trevor v. Hutchins.

The right cannot be set up after a creditor has
obtained judgment. Re Marvin.

(6.) It exists in favour of a married woman in respect of
loan to her deceased husband for purposes of his
business. Be Ambler ; Crawford v. May.

(7.) It exists although the debt is a joint-debt, but
cannot be exercised by one joint-creditor to the pre-
judice of another. Orowder v. Stewart.
Nor can an executor exercise the right to the
prejudice of his co-executor, if a creditor of equal
degree.

An executor can retain a simple contract debt

due to firm in which he is a partner. Be Jennes.

(8.) It exists notwithstanding the debt is statute-barred ;

Hill V. Walker.
provided the court has not adjudged the debt to be
irrecoverable ; Midgeley v. Midgeley.

but does not extend to a debt not enforceable by
the Statute of Frauds. Field v. White.

It exists where the claim of the executor is as
surety only ; Jones v. Pennefather.

in respect of debts, but not of mere liabilities.

Lee V. Binns.

A cestui que trust cannot compel an executor

who is a trustee of a debt due by his testator to

retain. Be Bidley’s Trusts.

(9.) It does not exist in respect of moneys which executor

holds as trustee only for the estate of the testator.

Talbot V. Frere.

But it does extend to a debt of which the executor

is only a trustee.

(10.) There is no retainer except out of assets come to

the executor’s own hands. The right is limited to

assets recovered by the executor in his lifetime ;

ADMINISTRATION OF ASSETS. 10/

but if, as to sucli assets, the executor has in his
lifetime asserted the right, his representatives may
insist upon it. Norton v. Gompton.

The retainer may be of the estate in specie-
Re Gilbert.
(ii.) It extends not only to an executor, but also to an
administrator (who takes out administration as 7icxt
of l-iii), to an administrator de bonis non and to the
executor of an executor, but not the executor of one
of several executors, one or more of whom is still
living. Trevor v. Hutcliins ; Hopton v. Bryden.

But an administrator who is an undischarged
bankrupt cannot retain a debt duo to him from
deceased.

But an administrator Avho takes out administration
as CREDITOR Avas formerly considered to be entitled
to the right, as he was only prohibited by the bond
from exercising undue preference, but the terms of
the bond now expressly prevent any retainer.

Davies v. Perry ; Re Brackenbury.
(i2.) It does not exist when the estate is being adminis-
tered in Bankruptcy, and is lost by the transfer
from the Chancery Division to Bankruptcy on an
administration order under sect. 125 of the Bank-
ruptcy Act, except as to assets previously received
by executor.

Re Rhoades ; Atldnson v. Powell.

But such transfer will not be made merely for the

purpose of defeating the right. Earp v. Briggs.

An heir-at-law or devisee has no right of retainer out of

lands made assets by 3 & 4 Will. lY, c. 104, nor, generally,

out of any lands whatsoever. Davidson v. Illidge.

An executor has no right of retainer against real estate ;

and the Land Transfer Act, 1897, does not alter the law in

this respect. In re Williams.

The right of retainer produces inequality, and will not be

assisted by the court.

A lega.tee indebted to testator’s estate can receive nothing
from testator’s bounty until he has brought into account

I08 MAKSHALLING ASSETS.

the amount of his debt, even if the debt be. statute-barred ;
but this principle does not apply where the debt is owed by
a firm of which legatee is a member.

Be Bruce ; Turner v. Turner.

An executor’s liability extends not only to the assets
which he has received, but also to what^ but for his ” wilful
default,” he might have received.

Actions for administration can only be brought by persons
whose claims to recover are not barred by any Statute of
Limitations ; such claims as regards personal estate can be
kept alive by the acknowledgment of any one of the
executors.

The estates of officers and soldiers in actual service are
administered under the provisions of the Regimental Debts
Act, 1893.

CHAPTER XV.

MAESHALLING ASSETS.

The general doctrine has been defined as ” such an arrange-
ment of the different funds of the common debtor of two
or more creditors as may satisfy every claim, so far as without
injustice such assets can be applied in satisfaction thereof,
notwithstanding the claims of particular individuals to prior
satisfaction out of some one or more of these funds.”

The principle of the rule is, ” that a person having two
funds to satisfy his demands shall not by his election disap-
point a party who has only one fund.” Aldrich v. Cooper.
” There are two essentials to marshalling : —

” (i.) The creditor who has been paid out of one fund
must have had the right of recourse to the other.
” (2.) The creditor or other person who has been dis-
appointed must have had a right to the fund out
of which the other creditor has been paid.
” A person is said to ‘ marshal ‘ against those assets which

MARSHALtiNG ASSETS. tOp

he is entitled to have applied in priority to his own par-
ticular fund.” (Mdis” Assets.)
It is clear that there can be no marshalling except as
between creditors of the same debtor. Consider —

I. Marshalling as between creditors.
II. Marshalling as between beneficiaries under a will.

I. Prior to 3 & 4 Will. IV. c. 104, simple contract
creditors could marshal against the real assets to the
extent the specialty creditors might have exhausted
the personal assets. This Act and the Administration
of Estates Act, 1869, have rendered marshalling be-
tween creditors of little importance. The same prin-
ciple has been applied to the case of securities.

The doctrine of marshalling of securities has been
stated thus : —

” When two properties belonging to the same
owner have been mortgaged by him to the same
mortgagee, or are otherwise subject to some para-
mount charge affecting both, and he has subsequently
assigned over one of them for valuable consideration,
whether on sale, mortgage, or settlement, then if the
paramount incumbrancer satisfy the security out of
the property so assigned, the assignee is entitled in
equity as against the owner, the trustee in bankruptcy
and his representatives taking by succession after his
death and subject to any agreement to the contrary
to have the securities marshalled, that is, to stand in
the place of the paramount incumbrancer with
regard to the other property to the extent of the
value of the property taken to satisfy the paramount
charge.” (W. V. & P. p. 483.)

II. As between beneficiaries under a will, questions of mar-
shalling arise chiefly from the disturbing action of
creditors in taking some part of the assets out of their
usual order ; for it must be remembered that the order
of application of assets does not affect the right of

I I O MARSHALLING ASSETS.

creditors to resort in the first instance to any of the
funds to which their claims extend. Aldrich v. Cooper.
The principle of marshalling in these cases is derived
from the order of application of assets. Substitute for
each of the properties specified on p. 99 ante the persons
to whom they would go in the absence of debts.
Thus :—

1. Next of kin or residuary legatee.

2. Devisee upon trust (really heir-at-law).

3. Heir-at-law.

4. Charged devisees (specific and residuary) and

charged specific legatees.

5. Pecuniary legatees.

As to 4 and 5, however, note the former
doubt mentioned on p. 104 ante.

6. Devisees (specific arid residuary) and the specific

legatees contribute rateably inter se.

7. Voluntary appointees by deed or will.

8. Widow.

If any of the above beneficiaries is deprived of his benefit
by creditors appropriating the fund intended for him, then
he may recoup himself by appropriating in his turn the
fund intended for any one or more of the beneficiaries prior
(but not subsequent) to himself in the above list.

Marshalling arises not only iii consequence of the disturb-
ing action of a creditor, but also from the presumption that
a testator leaving legacies wishes that if possible they should
be paid. Legacies are not payable out of real estate unless
in some way charged upon it by the testator, for no statute
has ever done for legatees what 3 & 4 Will. IV. c. 104, did
for creditors.

The Land Transfer Act, 1897, which vests realty in the
personal representatives, expressly enacts that the existing
order of application is not to be altered or affected thereby.

As to what will amount to a charge of legacies on realty
note —
(i.) The intention must be manifest.

MORTGAGES. I I I

(2.) An implied charge arises when a testator, after a
general gift of legacies, gives all the residue of his
real and personal estate to specified persons.
Observe further —

(*.) If legacies clmrgcd on real estate should be paid out
of personal estate so as to leave insufficient personalty
to pay other legacies not so cliarged, then equity will
marshal the assets, so that the legacies payable out
of the personal estate only will be thrown on the
real estate to the extent they have been deprived of
the personal estate.

(&.) When a legacy charged on real estate fails, equity
will not marshal assets so as to throw it upon the
personal estate and render it transmissible.

(c.) Assets, if not marshalled by the testator himself,
were formerly never marshalled in favour of charities,
for a court of equity would not support a bequest
contrary to law. The rule adopted was laid down in
Williams v. Kershaw, for Avhich vide ante, p. 34-

But now under the Mortmain and Charitable Uses
Act, 1 89 1, real estate may be lawfully given by will
to charities, so that the necessity for marshalling no
longer exists.

CHAPTER XVI.

MORTGAGES.

A LEGAL mortgage is a debt secured on lands or other
property ; the legal ownership is vested in the creditor, the
equitable ownership remains in the debtor.

There are some species of property which are unmort-
gageable, e.g., the profits of an ecclesiastical benefice, an
interest in property which is defeasible on an attempt to
mortgage it, and the separate property of a married woman
which she is restrained from anticipating.

A limited company has no power to borrow unless autho-
rised by its constitution so to do either expressly or impliedly.

I I 2 MORTGAGES.

Accordingly in taking securities from limited companies it
should be ascertained that the company —

(i.) Has power to borrow, and is not exceeding such
power.

(2.) Is not borrowing for an unauthorised purpose.

(3.) Has power to validly charge the property in question.

And specific mortgages by a company of its land or book
debts must now be registered under the Companies
Consolidation Act, 1908.

In the interpretation clause of the Conveyancing Act, 1 88 1 ,
the term mortgage is stated to include ” any charge on any
property for securing money or money’s worth.”

At law a mortgage was strictly an estate upon condition,
the estate being forfeited upon the condition being broken,
or, in other words, ” an absolute conveyance subject to an
agreement for a re-conveyance on a certain given event.”
In equity, however, ” a mortgage debt is a sum of money
the payment whereof is secured, with interest, on certain
lands, and being money, is personal property, subject to all
the incidents which appertain to such property ” ; in fact,
a mortgage was regarded merely as a security or pledge. As
a necessary result, it was held that after the day fixed in
the mortgage for payment of the money had passed, the
mortgagor (notwithstanding the estate of the mortgagee had
become absolute at law) had still a right to redeem his estate
on payment within a reasonable time of all principal, interest,
and costs, due upon the mortgage to the time of actual pay-
ment. This right still exists, and is known as the mortgagor’s
equity of redemption. {Vide Wms. R.F.)

Courts of equity went on to hold that the maxim Modus
et conventio vincunt legem did not apply to mortgages, and
accordingly that the debtor could not by any agreement
entered into at the time of the loan part with this right to
redeem ; and further, that the principle universally applied,
” Once a mortgage, always a mortgage,” i.e., that an estate
could not at one time be a mortgage and at another time
cease to be so hy one and the same deed.

Howard v. Harris ; Salt v. Northampton ;
Jarrah, cfec, v. Samuel.

MORTGAGES. I I 3

But the niortgagor and mortgagee may by an independent
transaction subsequent to the mortgage make an agreement
which will deprive the mortgagor of his right to redeem.

Lisle V. Reeve.
The equity of redemption must not be clogged by any
restrictive provisions. Field v. Hopkins.

But collateral advantages may be stipulated for, provided
the equity of redemption is not really clogged or fettered, e.g.,
in the mortgage of a public-house to a brewer it may be
validly agreed that the mortgagor shall take all beer from
the mortgagee during the continuance of the mortgage.

Biggs v. Hoddinott ; Rice v. Noakes.
Note, that any stipulation for enjoyment of a collateral
advantage by the mortgagee after the mortgage is paid off,
although no fetter is put upon the redemption of the mort-
gage, is determined as soon as the mortgage is paid off.

Carritt v. Bradley.
As regards redemption a mortgage must be distinguished
from a hand fide sale and conveyance with option of re-
purchase ; thus

{a.) On such a sale the time limited for repurchase must
be strictly observed, for no relief will be given
by equity.
{h.) In case of the option being exercised after death of
purchaser, the purchase-money went to the real
representative, whereas mortgage money went to
the personal representative of the mortgagee.
Under the Land Transfer Act, 1897, realty now
vests in the personal representative, but the ulti-
mate benefit will be as before, i.e., in the former
case for the heir or devisee, and in the latter for
the next of kin or residuary legatee.
Three old forms of mortgage may be noticed —
(i.) Vivum vadium, an absolute conveyance of land by a
debtor to his creditor, to be held by him until he was repaid
principal and interest out of the rent and profits.

(2.) Mortuum, vadium, a feoffment of land by a debtor to
his creditor, to be held by him until payment of a given
sum, he meanwhilie receiving rents and profits without account.

H

114 MORTGAGES.

(3.) Welsh inortgac/e, a conveyance similar to the last, the
estate being redeemable at any time, and the creditor
receiving the rents and profits in lieu of interest.

The mortgagee had no right to foreclose or sue for his
money under any of the foregoing securities.

As to Redemption.

In all the old forms of mortgage the estate was never lost,
but in a modern mortgage the mortgagor’s equity of redemp-
tion may be barred, e.g., by an order of foreclosure absolute,
or sale by the mortgagee under his power.

The equity of redemption is not a mere right, but an
estate in the land, and Avill consequently devolve as the land,
e.g., it is subject to curtesy. Casbortu v. Scavfe.

Any person entitled to any estate or interest in the equity
of redemption has a right to redeem before foreclosure, e.g.,
heir, tenant for life, &c.

When a mortgage comprises real and personal propei’ty,
and the mortgagor dies intestate, and the heir-at-law is not
known, the legal personal representatives of the mortgagor
may redeem the whole. JTall v. Heward.

And every person entitled to redeem may redeem any
prior incumbrance on payment of principal, interest, and
costs, which is called- ” tbe price of redemption.” The costs
connected with the creation of the mortgage form no part
of the price of redemption. Wales v. Garr.

But the costs of protecting the security and of redemp-
tion or foreclosure do. Re New Zealand Ry. Co.

The rule in foreclosure actions is to offer to redeem all
incumbrances prior in date to the plaintiff, and to claim to
foreclose all incumbrances subsequent in date, and is thus
expressed : ” Redeem up, foreclose down.” In ordinary
cases the rule now is to give only one time for redemption
to all the puisne mortgagees, including the mortgagor, and
not, as formerly, successive times to each.

Glegg’s Case; Smith v. Olding.

If the mortgagee has refused an offer rightly made to

MORTGAGES. I I 5

redeem him, he will have to bear the costs of the redemp-
tion action thereby occasioned.

Under the Conveyancing Act, 1881, s. 15, a person
entitled to redeem may compel the mortgagee, instead of
reconveying, and on the terms on which he would be bound
to reconvey, to transfer the mortgage to a third person ;
and by the Conveyancing Act, 1882, s. 12, this right is
extended to each incumbrancer or the mortgagor, notwith-
standing any intermediate incumbrance.

No redemption is allowed before the time appointed for
payment in the mortgage,

West Derby Union v. Metropolitan Life; Brown v. Cole;
Williams v. Morgan.
even though it be stipulated the loan shall continue for a
number of years. Biggs v. Hoddinott.

After the time fixed for payment has passed, the mort-
gagor cannot redeem without giving the mortgagee six
months’ notice, or six months’ interest in lieu thereof,
unless the mortgagee has taken possession or has demanded,
or commenced proceedings to recover payment ; but this
rule does not necessarily apply to equitable mortgages. A
mortgagee having once demanded payment cannot with-
draw his demand and claim notice, and if punctual payment
be not made on expiration of notice, the mortgagee cannot
upon tender being made demand fresh notice or interest in
lieu. Bdmondson v. Copland.

A mortgagor having once given notice cannot withdraAV
it without the mortgagee’s consent.

The mortgagee is bound to accept the six months’ interest
in lieu of notice. Johnson v. Evans.

A mortgagor having given notice to pay off must punc-
tually pay or tender the money at expiration of notice, or the
mortgagee will be entitled to fresh notice.

When a certificate has been made in a foreclosure action,
the mortgagor cannot redeem without paying interest up to
the date fixed for redemption in the certificate.

Hill V. Rowlands.

Under the Keal Property Limitation Act, 1874 (37 & 38
Viet, c. 57), no redemption will be allowed after the

I I 6 MORTGAGES.

expiration of twelve years from the time when the mort-
gagee took possession, or from the last written acknowledg-
ment of the mortgagor’s title ; this term is not extended by
reason of the mortgagor’s disability.

Forster v. Patteson ; Kinsman v. Souse.
The estate of a mortgagee in possession of realty is per-
sonalty until the mortgagor is barred, and then it becomes
realty. He Loveridge.

The mortgagee’s remedy on the mortgagor’s covenant in
the mortgage deed or collateral bond is barred after twelve
years. Sutton v. Sutton ; Fernside v. Flint.

But this rule is not to be extended beyond the case of an
action against the mortgagor himself, e.g., to a surety.

Be Powers ; Be Frishy.
Or to mortgages of property other than land, e.g., rever-
sionary personal estate.

On the principle of these cases a mortgagee suing on the
covenant or bond can recover six years’ arrears of interest
only, and the same rule applies when a mortgagee forecloses.
But in a redemption action or when the mortgagee has sold
under his power and has a surplus, all arrears of interest are
recoverable. Be Marshfield ; Dingle v. Copper ;

Lloyd V. Lloyd.
It will be remembered that these Statutes of Limitation
relating to land not only bar the remedy but also extinguish
the title.

But the payment of interest by the tenant for life keeps
alive the debt against the remainderman and also, when the
tenant for life is liable to pay the interest, against the resi-
duary estate of the original mortgagor ; and the payment of
interest by a specific devisee of part of a testator’s real estate
may keep alive the mortgagee’s right of action against specific
devisees of other parts of the real estate.

Mortgagor— Ris Bights and Duties.

{a.) Equity regards the mortgagor as the owner of the
mortgaged estate ; and now, to a great extent, the
position of the mortgagor is ^he same at law as in

MORTGAGES. I I 7

equity. Under the Judicature Act, 1873, s. 25, a
mortgagor entitled for the time being to possession
or receipt of rents of land as to which no notice of
his intention to take possession or to enter into
receipt of rents shall have been given by the mort-
gagee, may sue in his own name for possession or
recovery of rents ; and by virtue of the Conveyancing
Act, 1 88 1, s. 10, he may sue for breach of covenant
or re-enter. The mortgagor while in -possession is
not the bailiff of the mortgagee, and therefore not
accountable for rents and profits, although the
security be insufificient.

(&.) The mortgagor, although owner, will be restrained
from waste and prevented from dealing with the
estate so as to injure the mortgagee, if the security is
insufficient.

(c.) For the purpose of eviction after default, the mort-
gagor is a tenant at will to the mortgagee if he has
attorned tenant, and a tenant at sufferance if he has
not.

(d.) Formerly a valid lease could not be made by the
mortgagor without the concurrence of the mortgagee
who had the legal estate; such a lease would, however,
have been good by estoppel against the mortgagor ;
and so the tenancies created by the mortgagor sub-
seqtient to the mortgage could be avoided by the
mortgagee. Keech v. Hall.

In such cases, if the mortgagee give notice to the
tenants to pay rent to him, they will, on complying
with such notice, become tenants from year to year
to the mortgagee, notwithstanding their leases may
be for terms of years.

In agricultural holdings under the Tenants’ Com-
pensation Act, 1890, or the Agricultural Holdings
Act, 1908, the tenant will be entitled to six months’
notice if the mortgagee wishes to take possession,
and also to any compensation for improvements, &c.,
he would otherwise be entitled to from the mort-
gagor at the end of the tenancy.

II 3 MORTGAGES.

Under the Conveyancing Act, i88i,s. i8, a mort-
gagor in possession (unless specially precluded by
the mortgage deed or otherwise) has power to lease
for twenty-one years in the case of an agricultural
or occupation lease, and for ninety-nine years in the
case of a building lease, on complying with the
requirements of the Act in that behalf, and such a
lease will remain valid after foreclosure.

A surrender of a lease created by the mortgagor
was formerly invalid unless made to the mortgagee.

Eohhins v. Whyte.

Now, by the Conveyancing Act, 191 1, a mortgagor
in possession, for the purpose of granting a new lease,
is empowered to accept the surrender of a lease
authorised under the Conveyancing Acts or by the
mortgage deed.
(«.) If when a receiver is appointed the mortgagor is in
possession he can be made to pay an occupation rent.

Mortgagee — -His Bights and Liabilities.

(a.) The mortgagee is the legal owner of the land, and as
such entitled immediately to the rents, and may
give notice to the tenants to pay rents to him, and
enforce payment by distress. 3£oss v. Gallimore.

But if a tenant pay rent in advance and subse-
quently the reversion is mortgaged, the mortgagee
cannot claim payment again although he has no
notice of the transaction.

The mortgagee is entitled to his proper expenses
attending collection of rents, but he cannot charge
for any personal trouble, and if he give notice to
tenants to pay rents he will be deemed to have taken
possession. To avoid being deemed in possession he
should appoint a receiver, either by virtue of express
agreement with the mortgagor, or under his statutory
power. The possession of the receiver is deemed to
be that of the mortgagor, for the receiver appointed
by the mortgagee is deemed the agent of the mart-

MORTGAGES. II9

gagor, but cannot be interfered with by him ; and the
mortgagee will thus obtain the advantages without
the responsibilities of possession. Under the Con-
veyancing Act, 1881, s. 19, a mortgagee, when the
mortgage is made by deed, has power, at any time
after the mortgage money has become due, to appoint
a receiver whenever he is entitled to exercise the
statutory power of sale.

The receiver is entitled to ail rents in arrear and
unpaid at his appointment ; and after a receiver has
been appointed under the Act, the mortgagor cannot
distrain without the authority of the receiver.

As soon as a mortgagee has actually entered, his
possession relates back to the date he was legally
entitled to possession.

A mortgagee who has once taken possession
cannot go out of possession for the purpose of
obtaining a receiver.

The mortgagee is in no way entitled to any benefit
bej’ond principal, interest, and costs.

So a mortgagee renewing a lease holds the renewed
lease subject to the same equity of redemption as the
lapsed one.

And although the mortgagee of an advowson is the
person to present on a vacancy, he must present
the nominee of the mortgagor.

Mackenzie v. Robinson.

As to West India estates, a mortgagee may stipu-
late for payment of commission for his personal
trouble as long as he is not in possession,
{h.) A stipulation for the mortgagee to receive interest
at a loicer rate than that actually reserved, if
punctually paid, is good, but not vice versd. The
fines and penal payments incident to mortgages to
Building Societies are, however, recoverable in full,
(c.) Mortgagee in possession must keep estate in necessary
repair, but is only bound to do so to extent of surplus
rents.

And a receiver appointed under the statutory

1 20 MORTGAGES,

power is only entitled to expend in repairs surplus
rents.
(d.) Mortgagee in possession is liable to account for the
rents, not according to actual value of estate, but
only for what he actually receives, or might have
received, but for his wilful default. To a limited
extent, therefore, a mortgagee in possession is a
trustee for the mortgagor, and if he transfers the
mortgage without the mortgagor’s consent or the
direction of the court, he will continue liable to
account for rents subsequently received. He is
not bound, however, to make the most of another’s
property, as it is in consequence of the laches of the
mortgagor the land lapses into the hands of the
mortgagee.

And whether the mortgagee is in possession or
not, a transferee without the privity of the mort-
gagor takes subject to the state of account between
the mortgagor and mortgagee at the time of the
transfer.

The receipt of rents and profits will not per se
make a mortgagee chargeable as mortgagee in pos-
session. The question depends upon whether he
has done anything which practically deprives the
mortgagor of the management or control of the
estate.

A mortgagee in possession may add to his mortgage
debt any moneys properly expended in maintaining
his title and for insurance and necessary repairs.

Where there are successive mortgages, the first
mortgagee in possession is accountable to the second
mortgagee.

A mortgagee in possession cannot claim any
notice or interest in lieu of notice if the mortgagor
offers to redeem. Bovill v. Undle.

(«.) When the receipts of the mortgagee in possession
exceed the interest, the annual surplus will be
applied in reduction of the principal money, which
is called taking the account “with annual rests.”

MORTGAGES. I 2 I

As a general rule, annual rests will not be directed
if the interest is in arrear, or some other danger
overhanging the security when the mortgagee takes
possession ; and this is so even if the receipts of the
mortgagee comprise not only rents, but also purchase-
moneys on sale of part of the mortgaged property.
Wriglei/ v. Gill ; Ainsworth v. Wilding.

(/.) Formerly a mortgagee could not be compelled to
produce his title-deeds without payment of all
moneys due on the security ; but under the Con-
veyancing Act, 1 88 1, s. 1 6, a person entitled to
redeem can require the production of the deeds on
payment of the mortgagee’s costs. Upon redemp-
tion the mortgagee must hand over all title-deeds,
and will be liable in damages for any missing.

{g.) A lease from the mortgagor to the mortgagee is
under no circumstances valid. Formerly a mort-
gagee even in possession could not make a valid
lease without the concurrence of the mortgagor,
but only one liable to be avoided on redemption.
The Conveyancing Act, i88i, s. i8, gives to a
mortgagee while in possession (unless barred by the
express provisions of the mortgage deed or other-
wise) the same power to make valid leases as the
mortgagor ; and by the Conveyancing Act, 1 9 1 1 ,
the power is continued after the appointment of a
receiver during the existence of the receivership.

{h.) A mortgagee cannot purchase the mortgaged property
under the power of sale contained in the mortgage
deed ; but a second mortgagee may purchase from
the first mortgagee.

(i.) Mortgagee in possession must not commit waste. As
a general rule, unless the security were insufficient,
he could not formerly fell timber, and if he did so
he was subject to an onerous account. But under
the Conveyancing Act, 1881, s. 19, a mortgagee in
possession, where the mortgage is made subsequent
to the Act, has power to cut and sell timber other
than ornamental timber.

122 MORTGAGES.

THK EQUITABLE DOCTRINE OF NOTICE.

A person who purchases, although for vakiable considera-
tion, AFTER notice of a prior claim, becomes a maid fide
purchaser, and cannot ly getting in the legal estate defeat
such prior claim, but will be deemed a trustee to the extent
of such claim, and will take subject to it quite irrespective
of the question of negligence.

Be Holmes ; Potter v. 8andars ; Jared v. Clements.
Registration is not constructive notice to a purchaser
who has omitted to search a Registry, nor will regis-
tration defeat a prior unregistered claim of which the
person registering bas express notice.

Le Neve v. Ze Neve.
But as regards land in Yorkshire, the Yorkshire
Registries Act, 1884, provides that registered assur-
ances shall rank inter se according to date of registra-
tion, and shall not be affected by actual or construc-
tive notice, except in cases of actual fraud. The Act
contained a provision constituting registration actual
notice, which however was repealed by the 48 & 49
Vict. c. 26.

Where a document is incapable of registration its
priority is not affected by registration of subsequent
incumbrances. Be Galcutt & Elvin

A purchaser ivith notice, if his vendor bought without
notice, and a purchaser without notice although his
vendor bought with notice, may respectively protect
their title, provided that in each case such purchaser
obtained the legal estate, or the best right to call for
it, at the time of his purchase.

Harrison v Forth; Pitcher v. Rawlins.

The purchaser of land from one who bought for

value without notice, actual or constructive, of a

restrictive covenant is not bound by the covenant

although he himself has notice of it.

Wilkes V. Spooner.
Notice of a voluntary conveyance of land never

MORTGAGES. I 2 3

affected a subsequent purchaser for valuable considera-
tion under 27 Eliz. c. 4 ; and now by the Voluntary
Conveyances Act, 1893, any such subsequent sale
would be inoperative.

As regards choses in action or other personal estate
a second mortgagee with notice of a first mortgage at
time of making his advance will not acquire priority
by giving notice. Re Ind, Goo’pe, & Co. ; Be We^iiger.

NOTICE IS ACTUAL OR CONSTRUCTIVE.

Actual notice, in order to be binding, must be given by a
person interested in the property and in the same transac-
tion, or in the course of the negotiations.

Notice may be either written or verbal, except
where required by statute or otherwise to be in
writing.
Constructive or imputed notice has been defined as know-
ledge which the court imputes to a person upon a presump-
tion, so strong that it cannot be allowed to be rebutted,
that the knowledge must have been communicated.

Hewitt V. Loosemore.
It has also been well described as consisting ” in
those circumstances under which the court con-
cludes either that notice must be imputed on
grounds of public policy to an innocent person, or
that the party has been guilty of such negligence
in not availing himself of the means of acquiring it,
as, if permitted, might be a cloak to fraud, and
which, therefore, the common interests of society
require should, in its consequences, be treated as
equivalent to actual notice.” {Dart, V. & P.)

A purchaser is not affected with constructive
notice of that which no possible inquiries or in-
spection would have brought to his knowledge.

Taylor v. L. & C. Bank.
Constructive notice is of several kinds —
(f.) Actual notice of a fact which would have led to notice
of other facts, so

124 MOKTGAGES.

Notice of a deed is notice of its contents, except in
mercantile transactions : Bisco v. Banbury.

Where the deed might have been inspected.

Beeve v. Beveridge ; White v. Smith.
A lessee has constructive notice of his lessor’s title.

Fatman v. Harland.
In order to be fixed with notice, a fair opportunity
must be given of discovering what the provisions of
the deed are.

(2.) Purposely avoiding inquiry will not save a party from
being fixed with notice. Jones v. Smith.

(3.) Third party in possession, or appearance of property
such as to put a party upon inquiry.

Cahallero v. Henty ; Allen v. Seckham ;
Gavander v. Bulteel.
But although notice of a tenancy is notice of all the
rights of the tenant, it is not notice of the title of
the tenant’s lessor. Hunt v. Luck.

Notice that a beneficiary is also trustee of the fund
his share of which is being dealt with, fixes the
purchaser or mortgagee with notice of all trusts
affecting it, and the legal estate obtained from such
trustee affords no protection.

Perham v. Kempster ; Capell v. Winter.

(4.) Notice to agent is notice to principal, in cases where the

knowledge of the agent is so material to the particular

transaction as to render it the duty of the agent to

communicate it to the principal.

Wyllie v. Pollen ; Bradley v. Bitches.

But where the agent is party to a fraud notice is

not imputed ; and so under the Partnership Act,

1890, notice to a partner designing a fraud does not

operate as notice to the firm.

Notice to solicitor of trustees or mortgagees is not
notice to the trustees or mortgagees, unless com-
municated. Saffron Walden v. Baynor.
Under the Conveyancing Act, 1882, s. 3, in order
to affect the principal with notice, counsel, solicitor,

■Will not lose his priority.

MORTGAGES. I 2 5

or agent must have obtained his knowledge in the

same transaction.

Notice that title-deeds are in the possession of another,

may constitute notice of any claim that other may have :

thus a legal mortgagee or purchaser, who has not obtained

the deeds where

rWill be postponed to a prior

(i.) He made no inquiry for I equitable estate or subse-

them, I quent equitable owner who

used due diligence.
(2.) He made proper inquiries’
and received reasonable
excuses for their non-
delivery,
(3.) He received some deeds,
reasonably believing them
to be all.

Northern Counties v. WMpp.

But now all questions of constructive notice are

settled by the Conveyancing Act, 1882, under which

constructive notice may be classified as follows : —

( I .) Notice which would have come to the purchaser

indirectly, as the result of reasonable inquiries and

inspections.

(2.) Notice which comes directly to his counsel, solicitor, or

agent ccs such in the same transaction.
( ^.) Notice which would have come to his solicitor or other
agent as such in the same transaction indirectly as the
result of reasonable inquiries and inspections.

The effect of the words ” as such ” is, that a pur-
chaser will only be affected with notice which has
come to the agent, as agent for him, the purchaser.

In re Cousins.

Reasonable inquiries and inspections are such as

would usually be made by business men under

similar circumstances. Bailey v. Barnes.

Purchasers with notice (actual or constructive) of

restrictive covenants can be restrained by injunction from

breach thereof, independently of the question whether

126 MORTGAGES.

the covenants run with the land or not. This rule,
known as the Tulk v. Moxhay rule, applies to negative
covenants only. Restrictive covenants may be enforced
against every person in possession of the land affected
by them, unless he obtains the legal estate for value
without notice.

But the covenant must have been entered into for the
benefit of neighbouring land and not be merely personal
to the original vendor. Formby v. Barker.

And now, under the Conveyancing Act, 1911, s. 11, a
purchaser can insist upon notice being put on some
material deed retained by his vendor giving notice of
restrictive covenants affecting the land to which the
deed relates.

Tacking.

lacking may be described as the union of two incum-
brances on the same property by the mortgagee who has the
legal estate, so as to postpone an intermediate incumbrance
which is prior in point of date to the one tacked, and of
which he had no notice at the time of making his subse-
quent advance.

The doctrine depends upon the maxim, ” Where equity is
equal the law shall prevail.”

The leading principles or rules for this doctrine appear
for the most part in the leading case of Brace v. Duchess of
Marlborough, and may be stated thus : —
(i.) Third mortgagee making advance without notice of
second, although he subsequently obtains the first mort-
gage with notice of second, may tack. But note

(a.) He cannot tack unless he has obtained either
the legal estate or the best right to call for it.
(b.) He is allowed to tack notwithstanding he has
notice of the second mortgage, because he had
no notice when he made his advance, and is there-
fore an honest creditor. Marsh v. Lee.
(c.) The legal estate must be outstanding in person

having no privity with prior incumbrancers.
id.) Fo tacking allowed where the first mortgage

MORTGAGES. I 2 7

has been paid off and third mortgagee has
notice before he obtains transfer, as, when paid
off, the first mortgagee becomes a trustee for
the second mortgagee. Bates v. Johnson.

The foregoing rules seem to apply equally to land
subject to registration under the Land Transfer
Act, 1897. Gap., &c., Bank v. Rhodes.

(2.) Judgment creditor buying in the first legal mortgage
cannot tack, for he is not a ■purchaser, and did not lend
his money in contemplation of the land.

(3.) First mortgagee making a further advance upon a
judgment or another mortgage may tack. But

{a.) He must have the legal estate or the best right

to call for it.
(&.) He must make the advance without notice of
mesne incumbrance, although his first mort-
gage was to secure further advances.

Bolt V. Hopkinson.
Even if he be under a legal obligation to make
such further advances. West v. Williams.

If there be co-mortgagees, the fact that any
one of them has notice of a mesne incumbrance
will prevent tacking.
But when a bank overdraft is secured by mortgage and
notice of a second mortgage is given to the bank the rule
in Claytons case (vide 2Jost, chapter on Set-off) will not be
applied so as to give the second mortgagee priority
over the bank. Deeley v. Lloyds Bank.

A floating charge on the property of a company is a
security which takes effect as a present effective charge
on the property, both present and future, of a company,
but with power for the company to deal with its pro-
perty for the time being in the ordinary course of its
Isusiness until a receiver is appointed or a winding up
commences.

To constitute a floating charge it is not necessary
for all the assets of the company to be included in the
security, and an assignment of all present and future

I 2 8 MORTGAGES.

book debts of the company is a floating charge and
requires registration. Be Yorkshire Woolcombers.

All floating charges, debentures, and specific mort-
gages of land or book debts created by a company
must now be registered under the Companies
Consolidation Act, 1908.

Debentures creating a floating charge over the assets
of a company leave the company at liberty to create
specific mortgages over any part of the property charged,
and such specific mortgages will rank in priority to the
debentures ; unless the floating charge prohibits the
creation of prior incumbrances and the specific mort-
gagee has notice of the terms thereof.

But registration of the charge under the Act of 1908
is not notice of any such prohibition.

Wilson V. Kdland.

Floating securities are subject to payment of debts
made preferential by the Bankruptcy Act and Work-
men’s Compensation Act, 1906, but are entitled to be
recouped, as against the unsecured debts, the amount
thus taken by preferential creditors.

Re Mannersman Tube Co.

The floating charge gives no right to claim any
specific item of the company’s property until the
charge has crystallised ; the mere existence of a floating
charge does not prevent a judgment creditor from
enforcing his ordinary rights against the company’s
property. Evans v. Rival Granite Quarries.

But property specifically mortgaged by debenture
trust-deed would have priority.

(4.) Where legal estate is outstanding, incumbrancers rank
in order of date, according to the maxim, Qtii prior est
tempore, fotior est jure, unless one of them has a better
title to call for the legal estate.

(5.) Building Society mortgages were formerly considered
an exception to the general rule, on the ground that
when a Building Society, being first mortgagee, is paid
off’ by third mortgagee, and endorses the statutory

MORTGAGES. I 2 9

receipt, the legal estate vests for the benefit of all the
mortgagees according to the priority of their dates.

Pease v. Jackson.
But it has now been decided this opinion is erroneous
except as to revesting the legal estate, and that
Building Society mortgages are within the general
rules as to tacking. Hosking v. Smith.

(6.) Bond or simple contract debts cannot be tacked during
the life of the debtor, and even after his death only as
against volunteers, so as to avoid circuity of action.

(7.) By the 7th section of the Vendor and Purchaser Act,

1874, an attempt was made to abolish tacking; but
this section was repealed by the Land Transfer Act,

1875, as from the date at which it came into operation,
except as to anything duly done thereunder.

(8.) Tacking is practically abolished, so far as lands in
Yorkshire are concerned, by the Yorkshire Kegistries
Act, 1884.
(9.) Priority may be lost by a mortgagee’s fraud or gross
negligence, but not by mere carelessness on the part
of the mortgagee.

Manners v. Maw ; Northern Fire Insurance v. Whipp ;

Farrand v. Yorkshire Bank ; Oliver v. Hinton.
A solicitor is usually liable for negligence in not
discovering a mesne incumbrance.

Consolidation.

” If one person should have mortgaged lands to another
for a sum of money, and subsequently have mortgaged other
lands to the same person for another sum of money, the
mortgagee was placed by the rules of equity in the same
favourable position as if the whole of the lands had been
mortgaged to him for the sum total of the moneys advanced.
. . . This rule, known as the doctrine of the consolidation of
securities, was extended to the case of mortgages of different
lands made to different persons by the same mortgagor
becoming vested by transfer in the same mortgagee.”

(Wms. R. P.) Vint v. Fadyet ; Pledge v. White.

I

130 MORTGAGES.

But the doctrine has no application when the mortgages
were created by different persons, notwithstanding that both
equities of redemption may have subsequently become
vested in the same mortgagee ; and the fact that one of the
original mortgagors was trustee of the property mortgaged
by him for the other mortgagor, would make no difference.

Sharp V. Richards.

Shortly, the right of consolidation is the right of the
holder of two mortgages to refuse to be redeemed, as to one,
without the other being redeemed also.

Consolidation will be applicable —

(i.) Where at the date when redemption is sought
all the mortgages are united in one hand, and
redeemable by the same person ;

(2.) Or where, after tliat state of things has once
existed, the equities of redemption have become
separated. Pled-ge v. White.

The right of consolidation does not attach —

(i.) Where in one of the mortgages in respect of
which it is claimed there has been no default.

Cuvimins v. Fletcher.
(2.) Where one of the properties originally mortgaged
has ceased to exist. Be Raggett.

(3.) Where the mortgage of one of the properties was
created subsequently to the assignment of the
equity of the other property to the person seeking
to redeem. Hartery. Colman; Mills v. Jennings.
Unless he had notice at the time of assignment
that the mortgage contained a power to consoli-
date. Andrews v. City Building Society.
And the bankruptcy of the mortgagor does not
enable the mortgagee to consolidate, if he would
not otherwise have the right. Be Pearce Trusts.
The doctrine applies when the mortgagee is foreclosing as
well as when the mortgagor is seeking to redeem, and an
equitable mortgage may be consolidated with a legal mort-
,ge.
The doot’tine applies to equitable as well as legal mort-

MORTGAGES. I 3 I

gages and to mortgages of personalty as well as realty, biit
bills of sale and mortgages of realty cannot be consolidated.

Ghesworth v. Hunt.

A mortgagee exercising his power of sale may apply the
surplus proceeds of sale of one estate toward satisfaction of
an insuflScient security over another if the mortgagor be
alive. Selby v. Pom/ret.

But not in payment of arrears of interest due on the
other.

The right of consolidation is further curtailed by the
Conveyancing Act, 1881, s. 17, which applies where any one
of the mortgages sought to be consolidated is made after
1 88 1, unless the effect of the Act is expressly excluded or
varied in the mortgages, or one of them, and provides that
a mortgagor seeking to redeem any one mortgage may do
so without redeeming any other mortgage. A clause in a
mortgage excluding the operation of this section is not to be
deemed a usual one. Farmer v. Fitf.

Note, restrictions on the right of consolidation, however
arising, have no application to the case of two or more
distinct properties included in the same mortgage.

Tacking distinguished from Consolidation.

(i.) Tacking is the right to throw together several debts

lent on the same estate, while consolidation is the right

to throw together on one estate several debts lent on

different estates.
(2.) Tacking depends entirely on the protection afforded by

the legal estate, while consolidation does not.
(3.) Tacking is based on the maxim, ” Where the equities

are equal, the law must prevail ” ; consolidation, on

” He who seeks equity must do equity.”
(4.) Notice is fatal to the right of tacking, but, except as

above appears, immaterial in consolidation.

Special Eemedies of Mortgagee.

(i.) Foreclosure,

The mortgagee can c«ll in his money without notice at

1^2 MOETGAGEe.

any time after default, and, failing payment, will not be
always liable to account, but after a reasonable time equity
will hold the mortgagor to have lost his equity of redemp-
tion, i.e., to be foreclosed, and the estate will become the
absolute property of the mortgagee. A judgment for fore-
closure may also direct possession of the mortgaged pro-
perty to be given to the mortgagee. The first or any
jmisne mortgagee can bring a foreclosure action, which
must be assigned to the Chancery Division. Foreclosure
actions must be brought within twelve years from the
accrual of the action, or the last written acknowledgment,
or the last payment of any part of the principal or
interest.

The strict right of a legal mortgagee is foreclosure and
not sale.

The remedy of a debenture-holder is usually the ap-
pointment of a receiver, but in a proper case he may have
a winding-up order, or even a sale of the company’s under-
taking may be decreed.
(2.) Sale.

{a.) By order of the court. Under the Conveyancing
Act, 1 88 1, s. 25, on the request of the mortgagee the
court has power to direct a sale on such terms as it
thinks fit, even upon an interlocutory application.
(I.) Under power in mortgage deed. The surplus pro-
ceeds under sale must be paid to persons who (but
for sale) would have been entitled to redeem.
(c.) Under statutory power. By the 19th section of
the Conveyancing Act, 1881, a power of sale (unless
expressly excluded) is rendered incident to every
mortgage of any property, where made by deed after
the mortgage money has become due; but by the
20th section is not exercisable until after —

(a.) Three months’ default after notice in writing.
This notice may be waived.
or (/3.) Some interest in arrear for two months.
or (y.) Breach of some provision (other than payment
of money) in mortgage or Act.
An equitable mortgagee by deed may sell under

MORTGAGES. I 3 3

this section, but lie cannot convey the legal estate
to the purchaser. Re Hohson and Howe.

And now under the Conveyancing Act, 1911,
s. 4, the statutory power includes power for the
mortgagee to impose restrictions or reservations
with respect to the user of the land or the bene-
ficial working of mines and minerals, and also
power to sell with a grant or reservation of rights
of way or other easements.

A mortgagee of stocks or shares can sell without
relying iipon any express or statutory power of
sale : as soon as the day appointed for payment is
passed, the mortgagee may sell, the rule being
founded on mercantile custom.

Deverges v. Saiiderman.

A mortgagee hond fide exercising his power of
sale is not bound to make the most possible of
the mortgaged property, as he is not deemed a
trustee for the mortgagor. Mere inadequacy in
price is no ground for setting aside sale.

Colson V. Williams ; Warner v. Jacob ;
Haddington v. Hasan.

But a mortgagee who has received notice of a

second mortgage is a trustee for such puisne

mortgagee to the extent of any balance arising

from a sale, whether by himself or the mortgagor.

W. L. C. Bank v. Reliance B^dlding Society.

And as such trustee he is within sec. 8 of the
Trustee Act, 1888, and can plead the Statute of
Limitations.

And a mortgagee who on a sale misdescribes the
property is liable to aecovmt to a second mort-
gagee for compensation for such misdescription
reducing the purchase-money. Tomlin v. Luce.

And a mortgagee who has realised a surplus by
a sale under his power is liable (in the absence of
special circumstances) to pay interest at 4 per
cent, thereon as long as he retains it.

Charles v. Jones; Eley v. Read.

134 MORTGAGES.

A mortgagor may purchase from the mortgagee
selling under his power of sale, but such a pur-
chase Avill operate only as a redem^piion of the
mortgagee if there be subsequent incumbrancers,
and cannot be set up against themi, that is to say,
a sale by a first mortgagee to the mortgagor lets
in a second incumbrancer. Otter v. Vmtx.

But a mortgagee cannot purchase under the
power of sale in the mortgage ; although a second
mortgagee may purchase from the first.

Where notice is required before power can be
exercised, apparently it should be given not only
to the mortgagor, but also to subsequent incum-
brancers of whose charges the mortgagee has
notice. Hoole v. Smith.

But a hond fide purchaser is not affected by such
notice not having been given unless he has express
notice that the selling mortgagee has not given
the mortgagor the requisite notice of sale.

Selwyn v. Garfit.

Although he is entitled to evidence that due
notice has been given, if he require it.

Life and Reversionary v. Hand.

And now under the Conveyancing Act, 19×1,
s. 6, when a mortgagee sells in professed exercise
of the statutory power, the purchaser cannot
require evidence that the power of sale has arisen,
or that requisite notice has been given, or that the
power is otherwise properly exercised.

Where mortgaged property is taken under the
Lands Clauses Consolidation Act compensation
moneys go to the mortgagee, and where licensed
houses are in mortgage compensation awarded
under the Licensing Act, 1904, is payable to the
mortgagee.
(3.) Attornment clause.

Formerly it was usual, when the mortgagor was in
actual possession at the date of the. mortgage, to insert
therein an attornment clause, whereby the mortgagor

MORTGAGES. I 3 5

attorned tenant to the mortgagee at an annual rent
(generally equivalent to the interest), so as to give the
mortgagee a power of distress. If the rent reserved
exceeded the interest, the mortgagee could apply the
surplus towards satisfaction of principal money.

The mortgagee exercising a valid attornment clause
is in the position of landlord, so as to have power to
distrain on a stranger’s goods found on the premises.

Kearsley v. Fhilips.

The mere insertion of an attornment clause in a
mortgage which has not been acted upon will not
render a mortgagee liable to account as if he were in
possession. Stanley v. Grundy.

But a mortgagee who has achially distrained under an
attornment clause will be liable to account as mortgagee
in possession. In re Stockton Iron Furnace Co.

Under the Bills of Sale Act, 1878, unless the mort-
gage deed containing an attornment clause be registered
as a bill of sale, the mortgagee will not be able to
distrain under it.

Be Willis, ex parte Kennedy; Green v. Marsh.

And as a bill of sale to secure money must be
drawn in the statutory form provided by the Bills
of Sale Act, 1882, the attornment clause cannot in
future be rendered available at all for the purposes of
distress.

An attornment clause, however, is still good for the
purpose of creating the relationship of landlord and
tenant, and the mortgagee may determine the tenancy
and issue a specially endorsed writ for recovery of the
mortgaged land, and proceed summarily for judgment
under Order xiv. Mumford v. Collier.

But the tenancy determines upon the death of the
mortgagor.

Generally.

A mortgagee has three remedies : (i) foreclosure, (2) sale,
and (3) action on the covenant; and he may, as a general

136 MORTGAGES.

rule, pursue all of them concurrently. Thus if he obtains
part payment under the covenant or bond, he may go on
with his foreclosure for non-payment of the balance.

If a mortgagee selling under his power of sale obtains part
only of the money due, he may sue on the covenant for any
balance. Budge v. Bichens.

To this general rule there is one exception, namely, the
case of a mortgagee who forecloses first. If a mortgagee after
foreclosure sues the mortgagor on his covenant or bond, he
will by so doing open the foreclosure, and give the mortgagor
a fresh right to redeem. Lockhart v. Hardy.

He will also do so if he receive any rents of the mortgaged
property subsequent to the judgment for foreclosure (not
being yet absolute), but before the day fixed for redemption.

Jenner Fust v. Needham.

And after foreclosure order nisi the mortgagee’s power of
sale is suspended and cannot be exercised without the leave
of the court. Stevens v. Theatres Ltd.

If a mortgagee after foreclosure has sold the estate, he
will be restrained from suing the mortgagor, since he no
longer retains the mortgaged estate in his power, ready to
be redeemed. Palmer v. Hendrie.

But a second mortgagee who has submitted to foreclosure
order absolute in an action by the first mortgagee may sue
the mortgagor on his covenant. Worthington v. Allot.

Although the equity of redemption may be barred, upon
the death of the mortgagee intestate, the mortgage will still
be deemed a security only and pass to the next of kin.

Proctor V. Ellis.

The purchaser of an equity of redemption, in the absence
of express contract to the contrary, is bound to indemnify
his vendor against personal liability for the mortgage debt.

Waring v. Ward.

A mortgagee will in some cases be restrained from pur-
suing his remedies concurrently, e g., if he has neglected to
furnish proper accounts to the mortgagor, or refused a valid
tender of moneys due on his security.

When the mortgaged property consists of a railway or
canal, the proper remedy of the mortgagee is to obtain the

EQUITABLE MORTGAGES OF REALTY. I 3 7

appointment of a receiver, and he will be restrained from
foreclosure or sale.

Where by the mortgage the equity of redemption is sub-
jected to limitations different from those subsisting prior to
the mortgage, it will, unless a contrary intention be manifest
from the deed, follow the limitations of the original estate.
Thus in a mortgage of the wife’s estate by the husband and
wife, reserving the equity of redemption to the husband
and his heirs, the equity nevertheless results to the wife.

Himtingdon v. Huntingdon.

In any case, the proviso for redemption should always be
strictly followed.

CHAPTER XVII.

EQUITABLE MORTGAGES OF REALTY.

An equitable mortgage — a mortgage recognised as such in
equity only — may be created by a formal mortgage of the
equity of redemption, or by a written agreement whereby
the property is charged or agreed to be made a security for
the advance, or by a mere deposit of deeds without any
writing.

Nearly all property which can be legally mortgaged can
be made the subject of an equitable mortgage by deposit.

Notwithstanding the 4th section of the Statute of Frauds,
providing that ” no action shall be brought upon any contract
or sale of lands unless the agreement or some memorandum
or note thereof be in writing,” a bare deposit of deeds has
been held to constitute an equitable mortgage of real estate,
such deposit being of itself evidence of an agreement executed
for a mortgage. Russell v. R-iissell.

The statute was construed not to affect mere pledges of
deeds to secure borrowed money, for courts of law would
not assist a depositor to recover his deeds without payment
of what was due, and to this, it is said, the doctrine owes
its origin. Keys v. William/i.

138 EQUITABLE MORTGAGES OF EEALTY,

With regard to these mortgages by deposit, note : —

(i.) They carry interest at £^ per cent, and extend to
future advances, if such was the original inten-
tion.

(2.) Deposit for purpose of preparing legal mortgage
constitutes an interim equitable mortgage.

(3.) If the deeds deposited are material to the title, it
is sufficient, although all such are not deposited.
In case of registration the land certificate must
be deposited, just as a certificate of shares.

(4.) They are not a breach of a covenant against
alienation, and in the case of a lease the- de-
positee is not liable on the covenants, and cannot
be made to take a legal assignment.

(5.) If made by a tenant for life, they affect his interest
only.

(6.) They have priority over subsequent legal mort-
gages made with notice. And the mere absence
of the deeds is generally sufficient to affect the
legal mortgagee with notice, unless he has made
land fide inquiry after them, or can show that he
has not been guilty of gross negligence with
regard to them. Hewitt v. Loosemore.

If he make no inquiry, he will be postponed to
the prior equitable mortgagee.

(7.) If an equitable mortgagee parts with the deeds to
the mortgagor, he may be postponed to any sub-
sequent dealings of the mortgagor therewith.

Rice V. Bice ; Keat v. Philips.

(8.): If the memorandum of deposit contains a declara-
tion that the mortgagor holds the property in
trust for the mortgagee, he will be a trustee
within the meaning of the Trustee Act, 1893,
s. 12, so that the mortgagee will be able to
appoint a new trustee in his place and secure the
advantage of the legal estate.

L. & C. Bank v. Goddard.

MOKTGAGES AND PLEDGES OF PEESONALTY. 1 39

Remedies of Equitctble Mortgagee of Ecalty.

The proper remedy is foreclosure and nob sale, in what-
ever way the mortgage is made.

James y. James ; Backhouse v. Charlton.

But now under sec. 25 of the Conveyancing Act, 1881, a

sale may be ordered whether there is an agreement to execute

a legal mortgage or not. Oldham v. Stringer.

The court will not appoint a receiver on the application

of an equitable mortgagee except for good cause shown.

Re London Pressed Hinge Go.
Amongst the numerous objections to equitable mortgages
are : —

(i.) They are subject to all the equities affecting the

mortgagor.
(2.) They are without the benefits afforded by the

protection of the legal estate.
(3.) They cannot be enforced except through the

court.
(4.) They are in various ways liable to be postponed to
subsequent incumbrances created without notice.

CHAPTER XVIII.

MORTGAGES AND PLEDGES OF PERSONALTY.

A MORTGAGE of personal property has been defined as a
” transfer of the ownership itself, subject to be defeated by
the performance of the condition within a certain time.

“A PLEDGE only passes the possession, or at most a
special property, to the pledgee, with a right of retainer till
the debt is paid or the engagement is fulfilled.”

{Sm. Man.)

A Mortgage differs from a Flcd.gc.

( I .) In their nature, as appears from definitions.
(2.) In respect of remedies.

140 MORTGAGES AND PLEDGES OF PERSONALTY.

(a.) If no time is fixed for payment, the pledgor has his
whole Hfe to redeem (unless called upon by the pledgee),
except in cases to which the Pawnbrokers Act, 1872,
applies.

(h.) Pledgor’s remedy is generally at law and not in equity.

(c.) Pledgee, after default and upon due notice, may sell
without any order for sale, but payment should be
demanded before sale.
(3.) The right of the pledgee is not complete without
possession.

A Mortgage of Realty differs from a Mortgage or Pledge of
Personalty.

(i.) As regards remedies. ‘

(a.) After default, mortgagee or pledgee of personalty can

sell upon due notice : he need not foreclose.
(&.) Before default, pledgee can sell or sub-pledge a
negotiable instrument and thereby bind the pledgor ;
but in the case of a non-negotiable instrument the
pledgor is only bound to the extent of the pledgee’s
right.
(2.) As regards tacking.

A more extensive right appears to be enjoyed in
mortgages and pledges of personalty than of realty.
There is no need to prove any distinct agreement
for that purpose.

A mortgagee of personalty may under special
circumstances apply the surplus on a sale in satis-
faction of a subsequent judgment debt, e.g., in case
of mortgagor’s bankruptcy under the “mutual
credit ” clause of the Bankruptcy Act ; this being
a right of set-off or retention as distinguished from
tacking.
(3.) As regards form.

Mortgages of personal chattels must in all respects
conform to the provisions of the Bills of Sale Acts,
1878 and 1882. A pledge is not a bill of sale. And
under the provisions of the Factors Act, 1889, and

LIENS. 1 4 1

Sale of Goods Act, 1893, factors and others in pos-
session may pledge goods of which they are not
beneficial owners to hovA fide lenders.
It may be noted that a legal mortgage of a ship need not
be registered under the Bills of Sale Acts, but must be made,
transferred, and discharged in the form prescribed by the
Merchant Shipping Act, 1 894, and registered by the Registrar
of Shipping. The registered mortgagee has an absolute
power of sale. An unregistered mortgage is good generally
against all persons (including trustee in bankruptcy) other
than a subsequent duly registered mortgagee. The Act also
provides that equities may be enforced against mortgagees
and owners of ships, just as against mortgagees and owners
of other personal chattels. Notwithstanding the registered
mortgage, the mortgagor still remains legal owner until
the mortgagee takes possession, and the mortgagee cannot
repudiate his contracts.

CHAPTER XIX.

LIENS.

A LIEN, as a general rule, gives a mere passive right of
retainer or possession without any axitive right, and is thus
distinguishable from a mortgage or pledge.

Liens, by their nature, or by giving rise to matters of
account, are often involved in uncertainty, and thus become
subjects of equity jurisdiction. They exhibit the following
diversities : —

(i.) On goods either,

(a.) Particular, confined to particular charge during

retention of possession by vendor.
(J.) General, extending to general balance of accounts.
(2.) On lands, commencing when possession delivered to

purchaser. Lien for unpaid purchase-money,
(3.) Solicitor’s lien.

142 LIENS.

{a.) Particular, on fund or property recovered for his
costs of the suit, which may be actively enforced
under the 23 & 24 Vict. c. 127.
(6.) General, on deeds and documents other than a
will; a passive protection only, a mere equitable
right to withhold from his client such things as
have been entrusted to him as a solicitor, and with
reference to which he has expended skill or labour.
This lien is commensurate only with the client’s
right at the time of deposit, and extends merely
to costs, and not to general debts. In re Galland.
But the lien for costs in any particular matter
ranks subject to a set-off between the parties in
that matter.

And there is no lien for general costs on a fund
placed in a solicitor’s handsfor a particular purpose.
(4.) Banker’s lien. General, on securities deposited, ex-
tending to general balance of account, unless
precluded by special contract, but the lien only
extends to the securities of the customer and not
to those of other persons.

Quasi liens are rights in equity, equivalent to

liens, such as legacies charged on land, vendor’s

lien for advances for improvements, joint-tenant’s

lien for cost of renewing lease.

(5.) Company’s lien. If articles of association so provide,

a company may have a lien on the shares of any

member for any debt due from him to the cojn-

pany; and this lien may extend to the secret

profits of a director.

Liens exist at law as well as in equity, but it should be

noted that liens in equity are wholly independent of the

possession of the property, and are enforced by sale by

order of court. Liens at common law depend on retention

of possession, and any right to sell must be derived from

statute. Under the Innkeepers Act, i87«, innkeepers have

a power of sale over goods left in their custody after six

weeks’ possession upon giving due notice in London and local

newspapers.

PENALTIES AND FORFEITURES. 1 43

CHAPTER XX.

PENALTIES AND FORFEITURES.

Whenever a penalty or a forfeiture is inserted in an instru-
ment merely to secure the performance of some act, or the
enjoyment of some right or benefit, equity regards such
performance or enjoyment as the j^rincipal, and the penalty
or forfeiture as a mere accessory, and will give relief by
ordering compensation in lieu.

Sloman v. Walter ; Peachy v. Somerset.

The test as to whether relief will be given depends upon

another question — Can compensation be made ? If so,

relief will be afforded, on payment of principal and interest,

or ascertained damages, as the case may be.

On the other hand, a person will not be allowed to avoid
his contract by pajing the penalty inserted to secure its
performance. But where, by the contract, a person has
an option to do one of two things, paying higher for one
alternative than the other, he may do so. French v. Macale.
Relief will be given against a forfeiture where it is in the
nature of a penalty, but not where it is in the nature of
liquidated damages. As to whether a sum stipulated to be
paid on breach of an agreement is a penalty or liquidated
damages, the following rules have been laid down : — .

(i.) Smaller sum of money secured by larger — a

penalty.
(2.) Agreement to do several things, and one sum for
breach of any or all, which sum would in some
instances be too large, and in others too small —
a penalty. Kemhle v. Farren.

(3.) Where sum to be paid is proportioned to the
extent of the particular breach, or where damages
on breach of one or several stipulations cannot be
measured — liquidated damages.
(4.) Where only on« event on which sum to be paid
and no means of measuring damage — liquidated
damages.

144 PENALTIES AND FORFEITURES.

(5.) Mere use of either term is not conclusive.
(6.) Equity leans towards construing sum to be a
penalty.
In the case of deposits on sales, however, the contract
must be carried out or the deposit may be forfeited.

In the case of a mere money bond the obligee cannot
issue a specially endorsed writ to recover the penalty.

Tuther v. Caralampi.

Forfeitures.

The same general principles apply, except in cases of
leases, as to which equity had power to relieve from for-
feiture for non-payment of rent, but apparently not for
other breaches of covenant, e.g., to repair or insure.

Under the 22 & 23 Vict. e. 35, equity was empowered to
relieve against forfeiture for non-insurance, and now, by the
Conveyancing Act, 1881, s. 14, which applies to all leases
whenever made, and notwithstanding any stipulation to the
contrary, relief may be given upon such terms as the court
thinks fit, in every case of forfeiture for breach, except —
(a.) Covenant against assigning or underletting.
(6.) Condition of forfeiture on bankruptcy or execution,
(c.) Covenant to permit inspection in a mining lease.

The Conveyancing Act, 1892, extends the benefit of the
foregoing section to under-leases, and agreements for leases
where the lessee has become entitled to have his lease
granted ; and relief may be obtained by an under-lessee even
if forfeiture be for non-payment of rent. This Act further
provides that relief may be given in Case (6.) within one year
from the bankruptcy or execution, except in the case of
agricultural leases and leases of mines, public-houses, dwell-
ing-houses with use of furniture, and property with respect
to which the personal qualifications of the tenant are of
importance.

Note, the relief to which under-lessees are entitled under
the Act of 1892 is not restricted to cases in which the
original lessee could have claimed relief.

Imray v. Oakshette; Wardens of Gholmeley School v. Sewell.

When by way of relief an order is made vesting the lease

MARRIED WOMEN. 1 45

in the under-lessee he will have to pay the costs of any
inquiry which may be necessary. Ewart v. Fryer.

No relief is given under the Conveyancing Acts after
actual entry by the lessor for forfeiture ; nor is any relief
afforded by equity against statutory penalties or forfeitures.

Where a lease contains an option to purchase which is
exercised before the lessor enters for forfeiture, the lessee
will be considered a purchaser and the power to forfeit may
be gone.

When a lease contains a covenant against assignment
without consent, which is not to be unreasonably withheld,
the lessor cannot impose conditions. Young v. Ashley.

And a lessee may apply to the court for a declaration that
consent has been unreasonably withheld.

The Conveyancing Act, 1892 (in the absence of express
contract to the contrary), engrafts upon a covenant in a lease
against assignment without lessor’s consent a proviso that
no money is payable for such consent, and if consent is
refused except upon payment, the lessee can assign without
consent and may apply to the court for a declaration that he
is entitled to do so and obtain costs of action.

West V. Gwynne.

CHAPTER XXI.

MAEKIED WOMEN.

At common law the husband on marriage became entitled
to the rent and profits of the wife’s realty during their
joint lives, and after issue born, during his whole life, if he
survived her, as tenant by the curtesy. He also became
entitled to the wife’s personalty absolutely, subject to the
necessity for reducing her choses in action into possession.

The husband is said to have acquired this interest in his
wife’s property in consideration of the obligation of main-
Jiaining her, which he undertook upon the marriage. Although

146 MARRIED WOMEN.

the rule may have worked no practical wrong so long as this
duty was duly performed, yet its injustice became manifest
in cases where the husband failed to do so or beeame bank-
rupt or otherwise impoverished, so as to leave his wife
destitute, no matter how extensive a fortune he might have
derived from her. As a result, equity began to recognise a
right in a married woman to enjoy property apart from her
husband, notwithstanding the common law doctrine that
she was unable so to do, her very existence being deemed
merged by the marriage in that of the husband.

Firstly, Of the Wife’s Separate Estate.

I. The Equitable Doctrine of Separate Estate

APART

FROM Legislation.

The wife’s separate estate may exist in property of every
kind, and arises principaJly by—

(I.) Ante-nuptial agreement.

(2.) Special post-nuptial agreement, or on desertion, or

by virtue of a separation deed.
(3.) Absolute gift to wife’s separate use by husband,
(4.) Absolute gift to wife by stranger.
(5.) Wife’s separate trading.
(6.) Express limitation to separate use.

It was usual to interpose trustees, in whom the legal
property was vested ; indeed, such trustees were formerly
considered indispensable ; but this has now long been settled
not to be so. la the absence of trustees, the husband, in
whom the legal estate vests, will be deemed a trustee for
the wife.

No particular form of words is necessary to create a sepa-
rate use, so long as an absolute intention appears to exclude
the husband’s marital right. The words most usually
adopted are “for her sole and sepai-ate use,” or “for her
separate use.” only.

MAEEIED WOMEN, 1 47

Married Woman’s Povxr of Disposition over Separate Estate,
Irrespective of Legislation.

It has been laid down that a “feme covert acting with
respect to her separate property is competent to act in all
respects as if she were & feme sole.”

Peacock v. Monk ; Huhne v. Tenant.
I.) As to personalty. She may dispose of it, whether in
possession or in reversion, in the same manner in
every respect as if she were a feme sole.

Fettiplace v. Gorges.
(2.) As to realty.

(rt.) Life estates. She has the same power of disposition

as if she were a, feme sole.
(6.) Fee-simple or fee-tail estates. She cannot dispose of
the legal estate without the concurrence of her hus-
band and a duly acknowledged deed ; but it has now
been settled that she may dispose of the equitable
estate either by will or instrument inter vivos, without
the concurrence of her husband and without acknow-
ledgment, Taylor v. Meads ; Pride v. B^ibb.
and whether trustees are interposed or not,

Hcdl V. Waterliouse.
which disposition will bar the husband’s right to
curtesy. Cooper v. Macdonald.

(3.) As to all separate estate.

(a.) It is liable for her breaches of trust (where she is an

” actual actor “), unless subject to a restraint against

alienation.

(b.) The savings of income are also separate estate, and

she has the same power of disposition over them as

over the capital. Gore v. Knight.

(c.) The income which she permits her husband to receive

cannot, as a rule, be recalled ; and even where she

is entitled to an account, it is for one year only.

(d.) Upon her death without having exercised her power

of disposition the separate use drops off, and the

property (whether separate property by express

148 MAKEIED WOMEN.

limitation or by virtue of the Married Women’s
Property Act, 1882) devolves as at Common Law;
that is to say,

1 . If personalty, goes to the ^

husband

Jure mariti, as to personal Subject to

chattels and chattels wife’s debts

real. where her
As administrator, as to \ separate

choses in action. estate would

Proudly v. Fielder, be liable if

2. If realty, goes to the wife’s wife living.

heir; subject to the hus-
band’s right to curtesy.

Note, the Married Women’s Property Act, 1882, has not
altered the devolution of the undisposed-of estate of a mar-
ried woman, and the right of her husband accrues just as if
separate use had never existed. In re Lamherfs Estate.

Nor has that Act rendered it necessary for husband to
take out administration in respect of wife’s chattels in pos-
session. Surman v. Wharton,
Nor apparently in the case of chattels real ; but the
purchaser should see that estate and succession duties have
been paid although no letters of administration have been
taken out.

Property subject to a general power of appointment of a
married woman actualh/ exercised by her in favour of volun-
teers was formerly held not to be assets for payment of her
debts, the rule being directly the reverse of that existing in
the case of a man ; the reason being the distinction which
existed between separate estate and powers of appointment,
the latter having been always recognised at common law.

But now under the Married Women’s Property Acts, the
appointed property is made assets for payment of a married
woman’s debts, wherever her separate estate would be assets ;

Wilson V. Ann.
whether the debts were contracted before or after the Act
came into operation.

MARRIED WOMEN. 1 49

If, however, the power has not been exercised, the debts and
engagements of a married woman cannot prevail against the
parties entitled in default of appointment.

Contracts of a Married Woman.

Formerly a married woman could not contract so as to bind
her separate estate. This disability has been removed by
slow degrees. Thus her separate estate was held bound
by—

(i.) Instruments under seal. Hulme v. Tenant.

(2.) Bills or notes. Miirray v. Barlee.

(3.) Ordinary written agreements. Piclcard v. Mine.

(4.) Ordinary simple contracts even by _2jaroZ, where it is
clear that the married woman is contracting, not for
her husband, but for herself.

Matthewmaiis Case ; Johnson v. Gallagher ;

Vccughan v. Vanderstegen.

This last result was attained only after a prolonged

struggle. The distinction drawn between written

and verbal contracts is said to have arisen from

viewing the engagements of a married woman aa

operating either as the execution of a power which

could not be effected by parol, or by way of charge or

disposition, which must be in writing. As soon as it

was clear that such engagements operated by way of

contract and not of disposition, all reason for the

distinction vanished.

With regard to the liability of a married woman’s

separate estate for her general engagements or contracts,

note —

(i.) Such engagements only bound separate estate belonging
to her at date of entering into them.

Pike V. Fitzgihhon ; Barher v. Qregson.
(2.) They only bound separate estate not subject to restraint
on alienation, and which so remained at date of judg-
ment.
(3.) The court has no power to restrain a married woman

ISO MAKRIED WOMEN.

from disposing of her separate estate between dates of
contract and judgment. Hobinson v. Pickering.

(4.) No personal judgment was made against a married
woman, and she could not therefore be made bankrupt
in respect of her separate estate. Be Hetieage.

(5.) Such engagements bound the corpus of her separate
personalty, but only the rents and profits of her separate
realty. Hitlme v. Tenant.

But this restriction in respect of her realty no longer
exists, the execution extending to all separate estate
which the married woman is not effectually restrained
from alienating.

A claim against a married woman possessed of sepa-
rate estate is capable of being barred by the Statute
of Limitations. Hallet v. Hastings.

Restraint on Anticipation.

In order to protect a. married woman’s separate estate
against the undue influence of her husband or others,
Equity allowed her to be restrained from anticipating or
alienating it. Fylus v. Smith.

Such a restraint is invalid in the case of a man, being
void for repugnancy ; Brandon v. Bdbinson,

but is allowed to a married woman, since it is consistent
with, and in furtherance of, the very object of a separate
estate, and it may be attached to the income only or to the
absolute interest. Apparently the restraint against aliena-
tion is within the Perpetuity Kule.

With regard to this restraint on alienation, note —
(i.) It gives the married woman the present enjoyment of

an inalienable estate independent of her husband.
(2.) SepS/rate estate, whether with or without restraint,

exists only during covert^(,re.
(3.) It depends on, and is a modification of, separate estate,
and has no independent existence.

Property not vested in a married woman for her
separate use cannot be restrained from anticipation.

Stogden v. Lee.

MAERIED WOMiaSf. IJI

Butproperty which is constituted separate property by

the Act of 1882 will support a restraint. Be Lamley.

(4.) It is inoperative or disattaches during disooverture, but

reattaches on every subsequent marriage if apt words

are used. Tulld v. Armstrong.

It is not rendered inoperative by a protection order

or decree for judicial separation. Hill v. Cooper.

It does not disattach by the termination of the

coverture so as to benefit a creditor whose debt was

contracted during coverture. Brown v. Dimhledy.

(5.) No particular form of words is necessary, provided the

intention be clear. Thus the words ” not to be sold

or mortgaged ” have been held to be suificient ;

Field V. Evans.
but a right to receive ” with her own hands from time
to time,” and her receipts alone, ” for what should be
actually paid to be good discharges,” not so.

Parkes v. Whyte.

(6.) When discovert, a woman may so deal with her estate

as to absolutely determine the trust for her separate

use, and thus acquire it unfettered, by selling it and

receiving the purchase-money. Wright v. Wright.

And now, upon her re-marriage, she holds the

property in respect of which she has determined the

restraint as h«r separate property under the Married

Women’s Property Act, 1882.

(7.) Equity had no power to dispense with the restraint, even

for the benefit of the married woman ;

Robinson v. Wheelwright.

but the restraint did not prevent her barring an estate

tail. Cooper v. Maedonald.

When the fund to which a married woman is entitled for

her separate use without power of anticipation is in eourt, it

may be paid out to her during coverture if such restraint is

not a continuing one, but otherwise only the income will be

paid to her, whether the fund is an income-bearing one or

not.

And now, by the Conveyancing Act, 1911,8.7 (replacing
s. 39 of the Conveyancing Act, 1 88 1 ), the eourt may ,where it

152 MARRIED WOMEN.

appears to be for the benefit of a married woman, with her
consent, make a judgment or order binding her separate pro-
perty (even interests derived under her own marriage settle-
ment) and notwithstanding she is restrained from, anticipa-
tion.

The Act does not give the court a general power of
removing the restraint, but only a power to remove the
fetter in respect of a particular disposition.

Re Warren’s Settlement.
The court will not exercise this power unless satis-
fied that to do so will be for the benefit of the married
woman herself; it will not consider her husband or
children.

If harassed by her creditors, the court may remove the
restraint on the request of a married woman, so as to enable
her to pay her debts, but not, in general, where such debts
have been incurred by extravagance ; and the court will not
remove the restraint where, by so doing, there is a risk of
the life-interest being forfeited.

The consent required by the Act need not be given by an
acknowledged deed.

The doctrine of estoppel does not apply so as to enable a
married woman to deprive herself of income of property sub-
ject to restraint. JBateinan v. Faber.
Independently of the Married Women’s Property Act,
1882, the court has no jurisdiction to charge the costs
of an action improperly instituted by a married woman
upon the future income which she is restrained from
anticipating. Ellis v. Johnston.
But under the Married Women’s Property Act, 1893, the
court may order the costs of litigation instituted or initiated
by a married woman to be paid out of her separate estate
which she is restrained from alienating.

And by the Trustee Act, 1893, her separate estate,
although subject to restraint, may be impounded to make
good losses arising from a breach of trust committed by the
trustee at her instigation or request or with her written
consent ; but the court will not readily lift off the restraint
for such a purpose.

MAEEIED WOMEN. 153

II. LEGISLATIVE

ExTE?;sio>’y of the Doctrine of Separate Estate.

First, The Divorce Ads.

By the Divorce Act, 20 & 21 Vict. c. 85 (now styled
” The Matrimonial Causes Act,” 1857, amended by 21 & 22
Vict. c. 108), a Vfiie judicially separated is deemed, a, feme sole
as regards her property acquired suhsequently to the separation,
and for purposes of contracts, torts, suing and being sued ;
and in case of subsequent cohabitation she will hold her
property to her separate use. Further, a wife deserted by her
husband may obtain a protection order, whereby her earnings
and subsequently acquired property would in effect belong
to her for her separate use. But a restraint on anticipation
annexed to separate estate, to which a married woman is
entitled before the protection order or judicial separation,
still attaches although a protection order or judicial separa-
tion has been obtained. Hill v. Cooper ; Br andony. Hughes.

By the Summary Jurisdiction (Married Women) Act,
1895, ^judicial separatimi may in effect be decreed by order
of magistrates where the husband is convicted of an aggra-
vated assault upon the wife, or of persistent cruelty to her,
or of wilful neglect to maintain her, and the order may pro-
vide for a weekly allowance to be paid by the husband to
the wife, after proof of means has been given.

The effect of an actual divorce is to make the wife a feme
sole as to all her unsettled property.

In Equity, independently of these statutes, a deserted
married woman is deemed to hold her subsequently acquired
property for her separate use.

Second, The Married Women^s Property Acts, 1870 and 1874, wow

eepealed.

By the Act of 1870 (33 & 34 Vict. c. 93), which came
into force on August 9, 1870, in effect —
( I .) Wages and earnings of any married woman trading

154 MAEKIED WOMEN.

separately from her husband, acquired after the Act,
were made her separate property.
(2.) In the case of a woman married after the Act, personalty
to whatever extent, and rents and profits of realty
devolving upon her ah intedato, and any sums not
exceeding ;^2 00 coming to her under a deed or will,
were made her separate property.

As to such real estate, she could not dispose of it
except by deed acknowledged. Johnson v. Johnson.

(3.) The husband of a woman married after the Act was
exempted from all liability for her ante-nuptial debts,
and she was made exclusively liable therefor to the
extent of her separate property.

Prior to this enactment, a man by marriage
rendered himself liable for all his wife’s ante-nuptial
debts, a liability, however, which ceased on the wife’s
death, unless he took out administration to his wife’s
choses in action. Heard v. Stamford.

A married woman is personally liable at common
law for her ante-nuptial debts, and this liability is
not affected by the Married Women’s Property Acts.

Bohinson v. Jyynes.
By the Act of 1874 (37 & 38 Vict. c. 50) this provision
was repealed so far as any woman married after July 30, 1874,
was concerned, and it was provided that the husband
and wife might be sued jointly for any such debts, but
that the husband should only be liable therefor (or for his
wife’s ante-nuptial torts) to the extent of any property of
the wife in which he had acquired an interest by the

Third, The Married IFomen’s Property Acts, 1882, 1884,
1893, and 1907.

The Married Women’s Property Act, 1882 (45 & 46
Vict. c. 75), came into force on January i, 1883, and
repealed the Acts of 1870 and 1874, without prejudice,
however, to any acts, rights, and liabilities done, acquired,
or incurred thereunder.

MARRIED WOMEN. 155

Under this Act —
(i.) All property whatsoever, whether real or personal,
including the wages and earnings of any separate em-
ployment, belong to a married woman as her separate
property, provided, in the case of a woman married —
(«.) On or after January i, 1883, it belongs to her at

time of marriage or comes to her afterwards.
{b.) Before January i, 1883, her title to it accrues a/ifer
that date.

The title which accrues under exercise of a

power is deemed to accrue from the date of the

operation of the appointment.

(2.) Deposits, Consols, Government annuities, stocks, shares,

debentures, &c., in the sole name of a married woman,

or her name jointly with that of any other person than

her husband, are to be deemed her separate property

in the absence of proof to the contrary, and any liability

in respect thereofjwill be incident to her separate estate

only. Investments made in fraud of the husband or

his creditors will be deemed to remain his property.

Formerly investments of cajntal, the separate
estate of a married woman, did not always remain
her separate property ; Wright v. Wright.

but under this section they will always be so.
(3.) Under sec. i a married woman may hold and dis-
pose of her separate property without the intervention
of trustees, and in respect and to the extent thereof is
capable of contracting and of suing and being sued,
either in contract or tort, or otherwise, as if she were a
fcvie sole, and without her husband being made a party
to any proceedings by or against her. And by the Act
of 1893, her contracts (otherwise than those entered
into as agent) are rendered binding on all separate
property belonging to her either at the time of con-
tracting or subsequently (whether she has any at the
date of the contract or not), and also on all property
she is for the time being entitled to, both during cover-
ture and subsequent widowhood.
(il) A married woman is now able to convey even the

IS6 MARRIED WOMEN.

legal estate of her separate real estate without
the concurrence of her husband and without an
acknowledged deed. Riddle v. Erington.

(l.) The Acts of 1882 and 1893 expressly provide that
nothing therein contained shall interfere with or
render inoperative any restraints on alienation.
The separate property of a married woman which
is subject to restraint is therefore placed beyond
the reach of her creditors, except with her consent
and for her benefit, by an order of court under the
Conveyancing Act, 191 1, s. 7 (replacing s. 39
of the Act of 1 881).

But under the Married Women’s Property Act,
1893, when a married woman institutes proceed-
ings or initiates litigation, the court may order
payment of the costs of the opposite party out of
her separate property, subject to restraint.
• The income of separate estate is protected only

so long as it remains subject to restraint, and the
restraint is gone immediately an instalment of in-
come becomes payable ; so income actually accrued
due at or before the date of the judgment, which
has not been in fact paid over, is free from restraint
and is liable to be taken in execution.

Hood Barrs v. Heriott.
But judgment cannot be enforced against income
accrued due after judgment.

In re Lumley ; Whitely v. Edwards.
Even if the coverture has ceased when the judg-
ment is obtained on a contract made during cover-
ture. Brown v. Dimbledy.
(c.) A married woman is, for the future, rendered liable
upon all her contracts to the extent of her separate
property, contracting a proprietary liability.

Pelton V. Harrison ; Scott v. Morley.
Under the Act of 1882, in order that her con-
tracts might bind separate property acquired sub-
sequently to the contract, it was absolutely neces-
sary for her to have some separate property at the

MARRIED WOMEN. I 5 /

time with reference to which she might be reason-
ably deemed to contract, and the ornos of proving
this was on the plaintiff.

Deakiii v. Lahin ; Pcdliser v. G-urney ;

Leek v. Driffield.

And now, as has been noted, the Act of 1893

enables the creditor of a married woman to

obtain payment out of any property (not subject

to restraint) she may possess at time of execution.

But the debt must be created after the Act, and

a mere acknowledgment by a married woman after

the Act of a pre-existing liability is insufficient.

Hankinson v. Hayter.
And property subject to restraint at the time of
contract cannot be made available even after the
coverture has ceased.

Softlaw V. Welch ; Barnett v. Howard.

A married woman may enter into a contract

with her husband. BvMer v. Butler.

{d.) The husband remains liable for the torts of his wife

committed during coverture ;

Seroka v. Kattenherg ; Earle v. Kingscote.
but is not liable to be sued by her for a defamatory
libel. Reg. v. Lord Mayor of London.

(e.) As regards the will of a married woman, the Act of
1882 applied only to property acquired during the
coverture, and so property acquired after or in
consequence of the husband’s death did not pass
under her will executed during his lifetime.

In re Price.
This is no longer so, as the Act of 1893 pro-
vides that the will of a married woman made
during coverture is to be construed with reference
to the property {i.e., separate property) comprised
in it as speaking from death of testatrix.
(/.) These Acts do not enable a married woman to
dispose of property by will in cases where she is
prohibited by statute from so doing ;

Clements v. Ward.

I 5 8 MARRIED WOMEN.

nor of property whicli is not separate property;
and if she attempts to deal by will therewith and
probate is granted, the executor is merely a trustee
for the husband ; S7nart v. Tranter.

unless he has assented, but the mere fact that
probate has been granted to him in general form
is not sufficient evidence of assent. Be Atkinson.

(g.) Final judgment on default or undet R.S.C. Ord.
xiv. may now be signed against a married woman,
but execution can only issue against separate
property, and after judgment a receiver can be
appointed of her separate property which is not
subject to restraint on alienation.

Perks V. Mylrea ; Ounston v. Maynard ;
RdbiTison v. Lynes.

(h.) It will be observed the rule laid down in Pike v.
Fitzgibbon as to non-liability of after-acquired pro-
property {ante, p. 149) is now reversed in respect
of contracts entered into subsequently to the Act.

Turnbull v. For man.

(4.) A married woman cannot be made bankrupt unless
she is trading separately from her husband.

Fx parte Coulson,
But she need not possess separate property in order
to be liable to bankruptcy.

He Simon, overruling lie Helsby.

And the mere fact that the husband manages the

business does not prevent her being a married woman

trading separately if the business belongs exclusively

to her.

Although so trading, a bankruptcy notice cannot be
issued against her. Re Lynes.

Even if she trade under the name of a firm.

Re Handford.

But she may be made bankrupt after she has ceased

to so trade in respect of debts incurred whilst trading.

Re Dagnall.
A spinster trader against whom a bankruptcy pe^tion

MAKEIED WOMEN. I 59

has been presented cannot be made bankrupt if she
marry before the hearing.

A general power of appointment vested in her will
not pass to her trustee in bankruptcy, as it is not
deemed included under the term ” separate property,”
nor can she be ordered to exercise such a power in
favour of the trustee under sec. 44 of the Bankruptcy
Act, 1883. Re Armstrong.

But property settled to her separate use without
restraint on alienation passes to the trustee in bank-
ruptcy. Re Onsloiv

And property subject to restraint at the time of the
bankruptcy will, if the coverture determine during the
continuance of the bankruptcy, pass to the trustee free
from the restraint. R’>”iggs v- Ryan.

A committal order under the Debtors Act, 1869,
cannot be made against a married woman, even after
proof of means, as a judgment against her is not a per-
sonal one, but only a charge on her separate estate,

Draycott v. Harrison.
although she may be carrying on a trade separate from
her husband ; Scott v. Morley ; Down v. Fletcher.

except as to debts, enforceable by committal under
specific statutes, such as rates, Re Allen.

or ante-nuptial debts. Robinson v. Lynes.

But a married woman trustee may be attached for
non-payment into court of trust money in her posses-
sion. Turnhull v. Nicholas.

If a married woman lend money to her husband for
the purpose of his business, and he becomes bankrupt,
although entitled to prove, she will be postponed to all
his other creditors for value.

And the same rule applies if the husband die insol-
vent and his estate is being administered in Chancery.

TaAn v. Emmerson.

But this rule has no application to a loan made by
the wife to a firm in which her husband is a partner,
or to the husband for other purposes than his business,
or to money paid by her as surety for her husband.

l6o MAKEIED WOMEN.

(5.) A married woman may be an executrix, administratrix,
or trustee without the consent or concurrence of her
husband, and in that capacity sue or be sued and
transfer property ; and will be alone liable for her
breaches of trust and devastavits, unless her husband
has intermeddled.

The husband, therefore, need not be a party to the
administration bond where his wife is administratrix.

Be Ayres.

Formerly a married woman trustee could not convey
real estate by an unacknowledged deed ;

Re Harkness and Alsop.
unless she was a bare trustee, in which case she could
convey freeholds and copyholds, but not leaseholds.

Trustee Act, 1893, s. 16 ; Be Docwra.

The expression ” bare trustee ” appears to mean a
trustee having no other duty than to convey the trust
estate to or by the direction of the cestui que trust.

Christie v. Ovington ; Morgan v. Swansea ; Re .Docwra.

A married woman mortgagee of real estate could (as
a bare trustee), by an unacknowledged deed and with-
out the concurrence of her husband, convey the legal
estate in the mortgaged property to a purchaser from
the mortgagor, Re Brooke v. Fremlin.

or reconvey the legal estate on the mortgage being
paid off; Re Howgate v. Osborn.

except as to leaseholds vested in her as mortgagee when
she is trustee of the mortgage money,
and when a mortgage of realty to a married woman
has been transferred by an unacknowledged deed, and
there is nothing on the face of the title to show she
was a trustee, a purchaser is not entitled to inquire
whether such was the case. Re West & Hardy.

And now, by the Married Women’s Property Act,
1907, an acknowledged deed is no longer necessary
for the conveyance of a married woman’s trust real
or personal estate, and this alteration in the law is
retrospective;
(6.) A woman married after 1 882 is liable for her cswfe-nuptial

MARRIED WOMEN. l6l

debts, contracts, and torts ; and the law as to the

liability of the husband for his wife’s antCTnuptial

debts is entirely altered.

(a.) He can now be sued without her, whether she be
living or dead.

(b.) He can be sued with her, if the plaintiff seeks to
establish his claim in whole or in part against
both husband and wife.

(c.) His liability is no longer unlimited as at common
law ; it is limited to the value of the wife’s pro-
perty which he may have acquired.

(d.) As between him and her, he is entitled to be
indemnified out of her separate property.

Bech V. Pierce.

(7.) A married woman has the same remedies, civil or
criminal, for the protection of her separate property as
if she were a feme sole, in enforcing which husbands
and wives are competent witnesses against each other.
But no rriminiil proceedings can be taken by husband
or wife against the other except when living apart, nor
even then, in respect of any act done whilst living
together, unless done at the time of desertion.

And in any such criminal proceedings the Act of
1884 enacts that the husband and wife shall be
competent and admissible witnesses, and, except
where defendant, compellable to give evidence.

(8.) A married woman, to the extent of her separate pro-
perty, is liable for the maintenance of her pauper
husband, and (concurrently with her husband) for her
children and grandchildren. And now by the Married
Women’s Property Act, 1908, she is made as liable for
the maintenance of her parents as & feme sole.

(9.) A policy of assurance may be effected by either husband
or wife on the life of the husband for the separate use
of the wife, or so as to create a trust for wife and
children, and for any such insurance a pecuniary
interest in the life assured need not be shown. The
wife may also insure her own life for the same purpose.

L

1 62 MARRIED WOMEN.

If fraudulent against creditors, the policy will be so tar
void.

Under a policy effected for the benefit of wife and
children, they take as joint-tenants ; and a second wife
may or may not take thereunder according to the
terms of the policy, but all the children would take.

If no trustee be appointed either by the policy itself
or otherwise the legal personal representative of the
assured is made the trustee, or the court may appoint
a trustee.

(lo.) Existing and future settlements made before or
after marriage, and the operation of restraints upon
alienations, are not in any way affected by these Acts,
and must be construed as if they had not been passed.
So that an infant married woman cannot on attain-
ing twenty-one repudiate the settlement she made on
marriage of property which but for the Act of 1882
would upon the marriage have become the property of
her husband. Stevens v. Trevor-Garriek.

But now under the Married Women’s Property Act,
1907, a settlement by the husband subsequent to that
Act respecting property of the wife is invalid unless
executed by her if of full age, or confirmed by her
after attaining full age ; and if she die under age,
any covenant by the husband in the settlement will
bind any property of the wife to which he becomes
entitled on her death.

But no restraint against alienation imposed by a
woman ^l’pon herself is valid against her ante-nuptial
debts ; and settlements that would be fraudulent against
creditors if made by a man will be equally fraudulent
against her creditors. A restraint imposed by the
husband or a third person is of course unaffected.

(11.) A married woman becomes “discovert” within the
meaning of the Statute of Limitations (21 Jac. I. c. 16)
at the date of the commencement of the Act.

Lowe V. Fox.

(12.) Upon the death of his wife the husband’s right to
curtesy remains as before the Act ; Hope v. Hope.

MARRIED WOMEN. I 63

but her creditors may have her separate estate
administered by the court. Surman v. Wharton.

Secondly, Pin-money and Paraphernalia.

I. Pin-money.

Pin-money has been defined as a yearly allowance settled
upon the wife hefore marriage for the purchase of clothes or
ornaments, or otherwise for her separate personal expendi-
ture suitable to her husband’s rank.

It presents the following peculiarities, to explain which
the object for which it is given must be remembered. The
wife can claim —

(i.) Only one years arrears on her husband’s death.

(2.) All arrears where it appears that she has complained
and all has been promised.

(3.) Xo arrears where the husband has paid for all her
apparel and private expenses.

(4.) Her execntws can claim no arrears.

II. Paraphernalia.

The wife’s paraphernalia (Trapa<pspvrf), things to which she
is entitled over and above {irapa) her dower ((pepvri), consist
of apparel and ornaments suitable to her rank and condition,
given to her as ornaments of her person ; but such gifts
may be made by the husband to the wife absolutely and for
her separate use. With regard to paraphernalia, note —
(i.) Jewels and trinkets (except old familj’ jewels) given
to wife by husband are generally considered as
paraphernalia.
(2.) Gifts to the wife by a relation or friend, before or
after marriage, will be considered gifts to her sepa-
rate use.
(3.) Wife cannot dispose of it during husband’s lifetime ;
but husband may do so by act inter vivos, although
not by will.
(4.) It is subject to the husband’s debts, but assets will
be marshalled in the widow’s favour so as to rank
her claim next to creditors.

164 MARRIED WOMEN.

(5.) “Where husband pledges it, the wife can have it

redeemed out of his personal estate.
(6.) The Married Women’s Property Acts have not

abolished paraphernalia, Tasker v. Tasher.

Thirdly, The Wife’s Equity to a Settlement and
HEB Right of Survivorship.

By marriage the husband becomes (apart from the Mar-
ried Women’s Property Acts) primd facie entitled to all his
wife’s personal property not being separate property. Where,
however, being unable to recover at law, the husband was
compelled to resort to equity in order to retain the property,
equity would only lend its aid and allow him to receive it,
subject to his making a fair settlement on the wife out of
it ; that is to say, subject to the wife’s equity to a settlement,
unless indeed she had waived it or was otherwise debarred.

This equity to a settlement does not depend upon any
right of property in the wife, for the amount is in the dis-
cretion of the court, and can only be claimed for herself and
children. It arises from the maxim, ” He who seeks equity
must do equity”; the court refusing its aid to the plaintiff
husband till he has made proper provision for his wife:

The right of the wife, which was originally against the
husband only, was extended to his trustee in bankruptcy
and to purchasers from him for valuable consideration.
Finally, it was established that the wife may actively assert
her right as plaintij: Mibank v. Montolieu.

The wife’s right was only recognised, as a general rule, in
respect of property of an equitable nature, to the entirety of
which the wife would not have been entitled by survivorship,
and which there was a possibility of the husband obtaining
wholly for himself. Thus in respect of —

(I.) Leaseholds — wife had an equity out of her equitable, but
not, as a rule, out of legal interest therein.

(II.) Pure personalty — of a legal nature, wife had w equity,
but where of an equitable nature, if

MAERIID WOMEN. 16$

(i.) An absolute interest, wife had an equity which, as has
been stated, prevailed against purchasers from her
husband.
(2.) A mere life interest, the Avife had no equity as a
general rule, for no provision in such a case could
be made for her children ; that is to say,
(«.) While husband properly maintained his wife, she

had no equity ;
(b.) On his failure so to do, her equity arose,
(c.) Purchaser not bound to inquire as to maintenance,
and wife had no equity against a purchaser with-
out notice previous to husband’s desertion or bank-
ruptcy.
(d.) Wife had an equity against trustee in bankruptcy,
for such trustee had notice ex hypothesi that hus-
band was incapable of maintaining wife,
(e.) No equity arose in respect of arrears of income.

(III.) Eealty.

(i.) Oi inheritance — whether of a legal or an equitable
nature — wife had no equity, because she had some-
thing better, namely, the estate itself, the equity
attaching on what the husband takes in right of the
wife, not what the wife takes in her own right.

Life Association of Scotland v. Siddall.

(2.) Life estate, wife had an equity — if of an equitable

nature, but not if legal. Sturgis v. Champneys.

The equity of the wife might be defeated by alienation in

the following manner : —

(I.) As to realty — married woman might validly alienate
by means of a duly acknowledged deed, with the con-
currence of her husband, whatever its nature ;

3 & 4 Will. ir. c. 74; 8 & 9 Viet. c. 106.

Tuer V. Turner ; Briggs v. Ghaniberlain.

but not a mere spes successionis. Allcard v. Walker.

(II.) As to personalty— if in possession, husband might dispose
thereof; but if in reversion, the power of disposition

1 66 MAKRIED WOMEN.

(except so far as Malins’ Act, 20 & 21 Vict. c. 57,
applied) was in abeyance, and the court had no power
to assist such a disposition. The wife’s choses in action
belonged to the husband or his assignee, if, and only
if, he reduced them into possession. Thus —

The wife, if she survived her husband, became en-
titled, by right of survivorship, to all her equitable
EEVEESiONAEY interests in personalty which the
husband had not reduced into possession, and no dis-
position thereof made by husband or wife, or both, was
of any avail to defeat this right.

Purdew v. Jackson ; Whittle v. Henning.
The wife’s equity to a settlement and her right of
SURVIVORSHIP are two entirely different things. The
former had no application where the fund was rever-
sionary, but arose only when the fund was ready for
reduction into possession and might be waived by the
wife ; but the latter the wife could not by any means
during coverture deprive herself of except so far as
Malins’ Act would enable her to do so. The wife had
no equity to a settlement of reversionary interests whilst
they continued reversionary ; her equity being in fact
a right attached not upon the property, but upon the
right to receive it. The right existing in respect of
reversionary interests was a right of survivorship, and
not to an equity.

The possible effects, therefore, of an assignment
by the husband of the wife’s reversionary interest
were —

(i.) If husband died before wife and before rever-
sionary interest fell in, purchaser took nothing.
(2.) If it fell in during their joint lives, purchaser took

it subject to wife’s equity.
(3.) If wife died before husband, and then it fell in,
purchaser took it absolutely.
The question of what amounted to a reduction into
possession depended on the circumstances of each case,
but a mere assignment was not sufficient ;

Hornsby v. Lee.

MARRIED WOMEN. 1 6/

nor transfer by husband of title-deeds where his wife
was equitable mortgagee ; but an order of court to pay
wife’s income to a receiver has been held to be suflS-
cient. Tidd v. Lister.

By Malins’ Act (20 & 21 Vict. c. 57), however, it was pro-
vided that a married woman might, by acknowledged
deed, dispose of her reversionary interests in personalty,
but the Act did not apply to interests acquired under
her marriage settlement or property subject to restraint
on alienation.
The settlement to which a wife’s equity extended must
have been made on wife ami children, notwithstanding the
right of the wife to waive it and thus deprive her children.
Equity recognised no original right in the children to claim
any settlement. Note, therefore —

(i.) During her life, wife (unless an infant) might waive
her right at any time before the settlement was
complete. After completion children’s right was
established.
(2.) After wife’s death, if she died —

{a.) Before asserting her equity by action, 1 Children
(Jb.) After action brought, but before judg- J- had no
ment, J right,

(c.) After judgment, children’s right established.
(d.) Apart from the judicial proceedings, if the husband
was bound by contract, children’s right could he
enforced.
The wife’s equity might be defeated involuntarily, as well
as voluntarily waived by her, viz. :

(i.) By receipt of fund by husband or his assignees.

Murray v. Mibank.
(2.) Where wife’s ante-nuptial debts exceeded the fund.
(3.) Where adequate settlement already made on wife.
(4.) By wife living in adultery apart from husband, unless

he also was doing so.
(5.) By wife’s fraudulent suppression of her coverture.
As to the amount of settlement, the general rule was for
one half to be settled on wife and children ; but where fund
was very small, or the husband had deserted his wife and

1 68 MARRIED WOMEN.

was not maintaining her, the whole of it was settled. Where,
however, the husband was solvent and maintaining the wife,
the court would only settle the fund so as to give the wife
a chance of taking it by survivorship. In framing a settle-
ment, the court directed the ultimate limitations, in default
of issue, to be to the husband absolutely, whether he survived
his wife or not.

With regard to the validity of settlements made in con-
sideration of the wife’s equity, note —

(i.) A settlement made by husband Ojter redmtion of
property into possession must conform to 13 Eliz.
c. 5. As to the effect of the Bankruptcy Act, 1883,
vide ante, pp. 21, 22.

(2.) A settlement ordered by the court will be supported
as based on valuable consideration.

(3.) A settlement made by husband of wife’s property
which trustees otherwise refuse to part with, is also
good.

Having regard to the Married Women’s Property Acts,
the whole of this section dealing with a wife’s equity to a
settlement and her right of survivorship must be understood
as having no application when the marriage has taken place
or the property has been acquired since 1882.

Practically, therefore, the wife’s equity to a settlement is
now OBSOLETE, or rapidly becoming so ; for it is clear that
the equity attaches upon what the husband takes in right
of the wife, and not upon what the wife takes in her own
right ; and only those interests of a married woman falling
into possession on or after January i, 1883, and her title to
which accrued before that date, are excluded from its opera-
tion. A reversionary interest which became vested in a
married woman before, although falling into possession after,
the Act, does not belong to her as separate property under
the Act. Reid v. Beid.

FoDETHLY, Settlements in Derogation of
Marital Rights.

The former rule being that a husband upon marriage be-
came thereby entitled to her property, any acts done by her

INFANTS. 169

secretly or in fraud of these marital rights, so as to dis-
appoint the just expectations of her husband, were deemed
null and void. Stnitlniun-e v. Bowes.

The following points were established : Alienations or
settlements made by a woman in the course of a treaty
for marriage were deemed fraudulent and void against the
husband —

(i.) If made without his knowledge of property to which
she had represented herself to him as entitled,

(2.) If made without his knowledge, although he did not
know her to be possessed of the property aliened.

(3.) If made secretly, although meritorious.

(4.) If, and only if, made during treaty of marriage with

HIM.

(5.) If, and only if, he had no notice thereof before
marriage.
They were, however, not void —

(i.) When made in favour of a purchaser for valuable

consideration without notice.
(2.) Where the husband had seduced the wife before

marriage.
This branch of the law has been rendered obsoletk by
the operation of the Married Women’s Property Act, 1882,
under which it appears that no alienations made by a
woman during a treaty of marriage can be in derogation of
marital rights, such rights having been practically aboHshed
by the Act.

CHAPTER XXII.

INFANTH.

GiKcrdians.

(i.) Natural guardian. The father is the natural guardian
of his infant children ; but the mother is the natural
guardian of her illegitimate infant child.

By the Custody of Infants Act, 1873 (36 Vict.

170 INFANTS.

c. 12), the court may, on her appUcation, grant to the
mother the custody of her infant children until they
attain the age of sixteen, where that is for the benefit
of the infants.

This Act extended the operation of Talfourd’s Act
(2 & 3 Vict. c. 54), which only empowered the court
to give the mother the custody of infants under
seven.

By the Guardianship of Infants Act, 1886 (49 &

50 Vict. c. 27), the motlier if she survive is constituted

the guardian of her infant children, either alone or

jointly with any guardian appointed by the father.

(2.) Testamentary guardian. By 12 Car. II. c. 24, the father

may by deed or will appoint a guardian for his infant

unmarried children. But not by will if he is himself

a minor, for under the Wills Act (i Viet. c. 26) the will

of a minor is void. And by the Guardianship of

Infants Act, 1886, the mother may by deed or will

appoint a guardian of her infant unmarried children

to act after the death of herself and the father, either

alone or jointly with any guardian appointed by the

father.

The father may delegate the power of appointing
guardians after his death to another person.

lie Parnell.

(3,) Guardian appointed by stranger standing m loco parentis

cannot be set aside by the father, who has thus

waived his own natural rights.

(4.) Guardian appointed by the court. The protection of

infants belonged to the Crown as parens patriae. This

prerogative was delegated to the Court of Chancery,

and the jurisdiction is exercised in Chancery as a branch

of its general jurisdiction. Eyre v. Shafteshu^ry,

By the Judicature Act, 1873, s. 34, the wardship

of infants and the care of infants’ estates are assigned

to the Chancery Division exclusively.

And under the Matrimonial Causes Acts the
Divorce Division may make an order as to the
Tiiaintenance of children during the whole period of

INFANTS. I 7 I

minority, but as to custody only up to age of fourteen
for males and sixteen for females, except with the
consent of the minor.

Thomasset v. Thoiutsset ; Mozley Stark v. Muzhi/ Stark.
An infant who is under a guardian appointed by
the court is a ward of court, and the guardian is
considered to be an officer of the court. The com-
mencement of an action in the court relative to an
infant’s person or estate, or the making an order
for maintenance on summons at chambers, or under
the 36 Vict. c. 12, constitutes the infant (unless an
alien) a ward of court. But an infant is never con-
stituted a ward of court unless possessed of some
pfoiiertij. Wellesley v. Beaufort.

The court may appoint a guardian, even if the child be
resident abroad, and has no property here.

Iii re Willoughhy.
The court exercises jurisdiction over all guardians, and
will even remove a father from beina: sjuardian where there
is any serious and proximate danger to the infants arising
from his guardianship, e.g., where he is insolvent or neglect-
ing their education, upon the principle that prevention of
injustice is better than punishment. Wellesley v. Wellesley.
A divorced father may be declared unfit to continue the
guardian of his children. Skinner v. Skinner.

And under the Guardianship of Infants Act, 1886, any
Division of the High Court may, if satisfied that it will be
for the welfare of the infant, remove any guardian and
appoint another in his place.

And now, under the Custody of Children Act, 1891 (54&55
Vict. c. 3), the court has power to refuse to order the delivery
up of a child even to its parent, if satisfied that the parent
has deserted the child or is otherwise an unsuitable guardian.
And by the Prevention of Cruelty to Children Act, 1904,
and the Children’s Act, 1908, even when an infant has no
property the court can give protection.

These statutes do not affect the ancient equity jurisdiction.

The guardian selects the mode and place of education of

his ward. Sail v. Hall.

172 INFAKTS.

But the infants must be brought up in the religion of
their father, irrespective of their guardian, however appointed ;

In re Scanlan.
unless the father has indicated otherwise, In re Agar Ellis.
or by his indifference or otherwise waived his right to control
the religious education of his children, Be McGrath.

or has abdicated his rights. Re NewtorCs Infants.

A guardian on taking a ward of court out of the jurisdiction
must give security ; and in deciding whether leave should
be given, the court must consider —

(i.) Whether it is to the interest of the ward.

(2.) What security there is that the order of the court

will be obeyed. In re GallagJian.

A guardian must not change the nature of the property

except when such change is necessary for the benefit of the

infant, for such conversion may not only affect the rights of

the infant, but also the relative rights of his representatives.

Where conversion is allowed, the representatives who would

have taken before the change still take notwithstanding the

change, if, but only if, the infant dies under age.

Foster v. Foster ; Jackson v. Talbot.

Wards of Court.

(i.) Ward must not marry without permission of the court,

notwithstanding parents or guardians may be living.

Persons conniving at such a marriage will be guilty of

contempt of court, even if ignorant that the infant is

a ward.
(2.) Guardian on being appointed must give recognisance

that ward shall not marry without leave of the court.

Fyre v. Shaftesbury.
(3.) The court will restrain by injunction an intended

improper marriage, and also communications from

admirers.
(4.) Upon a marriage with consent, a settlement must be

made, to be approved by the court.
(5.) Award who has ceased to be so by coming of age, and

INFANTS. 173

wishes to waive a settlement, will be protected by the
court if possible.

Under the Marriage Act (4 Geo. IV. c. 76) a settle-
ment may be decreed where minor has married without
guardian’s consent.

Under the Infants’ Settlement Act, 1855 (18 & 19
Vict. c. 43), binding settlements may be made by infants
of their property with the leave of the court, where such
infants are not under twenty if male, or seventeen if
female.

Where an infant makes a settlement without leave of
the court, the settlement is not void, but voidable at the
option of the infant on attaining twenty-one ;

Duncan v. Dickson.
but that option must be exercised within a reasonable
time. Edwards v. Carter ; Farringdon v. Forrester.

And when a married woman after attaining twenty-
one, by unacknowledged deed, affirms a settlement exe-
cuted by her before marriage whilst an infant and with-
out leave of the court, such settlement is binding on
her. Williams v. Knight.

The father is bound to maintain his children irre-
spective of any property belonging to them, but where
he is not able to give them an education suitable to
the fortune they expect, maintenance will be allowed.
He will always be entitled to an allowance for mainten-
ance where there is an express contract to that effect.

Thomson v. Griffin.

Under the Married Women’s Property Act, 1882, a
married woman to the extent of her separate property
is bound to maintain her children in case her husband
be unable to do so.

In allowing maintenance the court almost always
confines it to the income of the fund. Regard will
be had to the condition of the family, and a liberal
allowance will be made where parents are in’ distress,
or other children are numerous and destitute. In all
eases it is the infant’s benefit alone which is considered ;

174 LUNATICS, IDIOTS, AND PERSONS OF UNSOUND MIND.

and the guardian will not be called upon to account for
any surplus, provided he properly maintains the infant.

CHAPTER XXIII.

LUNATICS, IDIOTS, AND PERSONS OF UNSOUND MIND.

Although the Court of Chancery is the legal guardian of

infants, it is not the curator of the person or estate of a

person non compos mentis. Beall \. Smith.

The jurisdiction in lunacy was originally vested in the

Court of Exchequer on its revenue side, from which it was

early transferred to the Lord Chancellor, and subsequently

vested in the Lords Justices concurrently with the Lord

Chancellor. The Judicature Acts preserved to the Lords

Justices not only their jurisdiction in lunacy (which is

expressly continued by the Lunacy Act, 1890), but also

their original jurisdiction in Chancery. Appeals formerly

lay to the King in Council, but now to the Court of Appeal.

Unsoundness of mind, per se, gives equity no jurisdiction

whatever. It is not by reason of such incompetency,

but in spite of it, that equity exercises its jurisdiction,

and after inquisition found, proceedings in Chancery

would be a contempt on the lunacy jurisdiction. The

committee of a person non compos is an officer of the

Court of Lunacy only, and must act under its direction

even in making applications to the Court of Chancery.

Beall V. Smith; Vane v. Vane.

But upon the death of the lunatic the lunacy jurisdiction

comes to an end and the Chancery jurisdiction is

restored. Re Seager Hunt.

The Lunacy Act, 1890, makes special provision for the

management and administration of lunatics’ estates.

When the entire estate of the lunatic is below ;i^2ooo in
value, or the income thereof does not exceed ^100 per
annum, the jurisdiction in lunacy is summary, and a receiver
is appointed.

LUNATICS, IDIOTS, AND PERSONS OF UNSOUND MIND. 1 75

The rights of the creditors of a lunatic are subordinated
to the needs of the lunatic; and if the lunatic become
bankrupt his property vests in the trustee in bankruptcy,
subject to his maintenance.

The allowance made for the maintenance of a lunatic is
in the discretion of the court, and occasionally the near
relations of the lunatic are indirectly benefited, the same
principle applying as in the case of allowances made to infants.
The court will only allow the conversion of a lunatic’s
property where the change will be for the benefit of
the lunatic himself; his interests alone will be con-
sulted, and his representatives must take the fund
according to its actual state. Oxendon v. Compton.

But, as a rule, the court protects the rights of the
representatives.
In respect of the maintenance of a person of unsound mind
not so found, the Chancery Division has no original or
inherent jurisdiction, unless there are trusts to execute
or the fund is paid into court.
Under the Lunacy Acts, 1890 and 1908, application may
be made to the Masters in Lunacy for directions as to
the management and administration of the property of
a person of unsound mind not so found, and they are
empowered to authorise the receiver to exercise any
powers which a duly appointed committee could
exercise.

( 176 )

PART HI.— THE ORIGINALLY CONCURRENT
JURISDICTION.

The concurrent jurisdiction of equity extended to cases
where, although some remedy, yet no plain, adequate, appro-
priate, and complete remedy existed at law, and the aid of
equity was invoked to give the exact relief required. Under
the Judicature Acts, the jurisdictions at law and equity are
throughout concurrent ; but notwithstanding this, the Chan-
cery Division is still the appropriate jurisdiction in cases
where, previous to those Acts, relief would have been sought
in equity.

The concurrent jurisdiction embraces two branches. Cases
in which —

Firstly, The ground of action itself constitutes the
principal foundation for the jurisdiction, viz.,
accident, mistake, fraud.
Secondly, The peculiar remedies afforded by equity
constitute that foundation, viz., suretyship, part-
nership, account, set-off, specific performance,
injunction, and the like.

CHAPTER I.

ACCIDENT.

Accident, as remediable in equity, has been defined to be an
unforeseen and injurious occurrence, not attributable to
mistake, neglect, or misconduct.

To give equity jurisdiction, there must be or have been
no adequate remedy at law, and the party must have a
conscientious title to relief. Note, equity does not lose the
jurisdiction it has always possessed merely because common
law courts have been empowered to relieve.

ACCIDENT. 177

Firstly, equity will give relief against accident in cases of —

I. Lost and destroyed documents.
II. Imperfect execution of powers.
III. Erroneous payments.

I. Lost and destroyed documents.

(i.) Lost bonds or other documents under seal.

There was originally no remedy at law, because
there could he no ‘profcrt and oyer of the instrument.
Further, equity alone could grant adequate relief by
requiring an indemnity. Where discovery only with-
out relief was sought, equity would grant it without
any affidavit of loss or offer of indemnity : now an
affidavit and indemnity are always required.
(2.) Lost title-deeds.

The mere loss of a deed does not give equity juris-
diction, for law gave and gives relief. There must be
in addition special circumstances irremediable at
law. Thus, where it was uncertain whether title-
deeds were lost or concealed by the defendant,
equity gave relief.
(3.) Lost negotiable instruments.

Here the proper remedy was in equity, because no
remedy originally existed at law ; and further, equity
possessed the power of ordering an indemnity. The
plaintiff should offer a sufficient indemnity before
suing. By the Common Law Procedure Act, 1854,
courts of law are empowered to order the loss not to
be set up, and to give an indemnity. But equity is
not thereby deprived of its jurisdiction.

East India Company v. Boddam.
(4.) Lost non-negotiable instruments.

Here equity has jurisdiction, but it is doubtful
whether there is a legal remedy.

The Bills of Exchange Act, 1882, specially pro-
vides for the case of lost bills and notes, whether
negotiable or not.

M

1 78 ACCIDENT.

(5.) Destroyed negotiable and non-negotiable instruments.

No relief is given in equity, because there is an
adequate remedy at law. Wright v. Maidstone.

(6.) Destroyed bonds.

Relief may apparently be had in equity.

II. Imperfect execution of powers.

(i.) Defective execution of simple powers.

Where there is the ability to exercise a power and
a distinct intention to exercise it in favour of a cer-
tain class, equity will aid the defective execution of
it by compelling the person having the legal interest
to transfer same in accordance with the defective
appointment.

Equity will give relief in these cases in favour
of—

(a.) Purchaser for value, including mortgagee,
(&.) Creditor, (c.) Charity, (d.) Wife, (e.) Intended
(but not actual) husband, (/.) Legitimate (but
not natural) child,
where, but only where, the defect is not of the
very essence of the power, or not made irre-
mediable by statute, e.g., equity will supply the
want of a seal or witness, or allow an execution
by will which should have been by deed, but not
vice versd. Tollett v. Tollett.

(2.) Unexecuted powers.

Equity gives no relief in the case of wo»i-execution
of powers except where

(a.) Execution is prevented by fraud.
• (6.) Power is coupjed with a trust.

Harding v. Glynn.
Trusts are always, but powers never, imperative; con-
sequently where a trust-power is left wholly un-
executed, equity will relieve.

II. Erroneous payments.

In the case of accidental payments by executors or
administrators acting in good faith, equity afforded

MISTAKE. 179

protection ; but there was originally no relief at
law. No relief, however, will be given in case of
mistake of law on the ground of accident.

Secondly, No relief will be given in equity against accident,

I. In matters of positive contract.

For injury is not 11 n foreseen, and might have been
provided for ; thus no relief is given from an absolute
covenant to pay rent or to repair where the demised
premises are destroyed.

II. In contracts where the parties are equally improvident
against contingencies.

III. Where accident arose through gross neglect of party
seeking relief.

IV. Where party seeking relief has no vested right, but a
mere expectancy only.

V. Where party seeking relief has no greater title to pro-
tection of the court than the party against whom
relief is sought, e.c/., a bond fide purchaser for value
without notice.

-CHAPTER II.

MISTAKE.

A MISTAKE, as remediable in equity, may be defined to be
an act which would not have been done, or an omission
which would not have occurred, but from ignorance, forget-
fulness, inadvertence, mental incompetence, surprise, mis-
placed confidence, or imposition.

Mistake is either in respeot of law or of fact. Equity can
relieve against mistakes in law as well as against mistakes
in fact, if there be any equitable ground for such relief.

1 8 b MISTAKE.

I. — Mistake of Law.

It is a general rule both at law and equity that ignorance
of law is no excuse, the maxim being, Ignorantia legis haud
excusat.

This maxim, however, only applies to the general law
of the country, and not to a mere private right.

Be Ounliffe ; Cooper v. Phibhs.
Accordingly money paid under a mistake of law {e.g.,
an erroneous construction of a document) may in
general, and money paid to an officer of the court
{e.g., a trustee in bankruptcy or liquidator involuntary
winding up) under this kind of mistake may always, be
recovered back.

Relief will be given, notwithstanding this rule, where

(i.) A party acts in ignorance of a plain and well-known
rule of law, upon the principle of fraud or undue
influence. Lansdoivue v. Lansdowne.

(2.) Mistake of law is combined with surprise.

Where the mistake arises from ignorance of a
doubtful point of law, a compromise, if entered into
with honest intention and full disclosure, will be
supported. Upon this ground family compromises
are upheld, but there must always be full disclosure,
and neither suppressio veri nor suggestio falsi.

Stainltmi v. Stapilton ; Gordon v. Gordon.

Equity will not relieve against a lonA fide purchaser for
value without notice, nor in respect of a compromise where
the position of parties has been altered, in the absence of
gross ignorance or imposition.

Any question of foreign law is a question of fact, and
accordingly a mistake of foreign law is deemed a mistake
oi fact.

II. — Mistake of Fact.

As a general rule, equity gives relief against mistake of
fact where the fact is

MISTAKE. I 8 I

(i.) Material, ^vhether mistake be unilateral or mutual ;

even if the agreement has been sanctioned by the

court; Paget Y . Marshall ; Cochrane y. Willis;

HiuWcrsfieJd Banle v, Lister ; Scott v. Coulson.

And (2.) Such as party could not ascertain by inquiry;

And (3.) Such as contracting party having knowledge is

under a legal obligation to disclose.

Where, however, the means of information is equally
open to both parties, and there is no confidence reposed, no
relief will be given. And where the mistake is unilateral,
relief after completion will only be given, as a rule, if it
would be a fraud in the other party to retain the advantage
of the mistake.

Oral evidence is admissible, notwithstanding the Statute
of Frauds, to show that by accident, mistake, or fraud a
written agreement is not what the parties intended. The
mistake must not be of law, and must be admitted or
expressly established or fairly implied from the nature of
the case.

Thus a partnership debt, though joint at law, is con-
sidered in equity to be joint and several.

Kendal v. Hamilton.
But where there is no inference of an original several
liability, no relief will be given in equity without evi-
dence of mistake. Sumner v. Powell.
Mistakes of fact are either unilateral or mutual, and in
the latter case the remedy is rectification. To obtain recti-
fication of a written instrument

(i.) There must be a definite intention which the
instrument fails to carry out ;

(2.) Such intention must exist at the time of execu-
tion of the instrument ; and

(3.) Such intention must be strictly proved.

Belief will he given in Equity against Mistakes of Fact
in the folloiuing particular Cases :, —

I . Rectification of mistakes in marriage settlements.

I 8 2 MISTAKE.

(i.) Where both marriage articles and a definitive

settlement exist before marriage.

(a.) As a general rule the settlement is the binding
instrument. Legg v. Goldwire.

(b.) If the settlement purports to be, or can be
shown by admissible evidence to have been
intended to be, in pursuance of the articles,
and there is a variance, the settlement will
be rectified according to the articles.

(2.) When the settlement is made after marriage, it
will in all cases be controlled by the ante-nuptial
articles.

In no case will the true contract of the parties
be varied. Barrow v. Barrow.

The mistake in marriage contracts must be mutual
or no relief will be given.

2. Instrument delivered up or cancelled under a mistake
will be set up again.

3. Defective execution of powers. Relief is given on the
same general principles as in cases of accident.

4. Mistakes in wills. In order to relieve, the mistake
must be apparent on the face of the will, but parol
evidence is admissible to remove a latent ambiguity.

(i.) Mere misdescription of legatee will not defeat
legacy unless given to legatee under a character
which he has falsely assumed.

(2.) Revocation of legacy on mistake of fact (where
such mistake constitutes the sole reason given
by testator for the revocation) is a ground for
relief. Kendall v. Abbott.

No Relief will be given against any Defects or Mistakes.

(i.) Where party claiming relief has not a superior
equity.

(2.) Between volunteers.

(3.) Where defect is declared fatal by statute ; provided

ACTUAL FRAUD. I 83

the statute expressly or necessarily excludes the
equitable remedy.

Burrow v. Isaacs ; Hall-Bare v. Hall-Bare.

CHAPTER III.

ACTUAL FRAUD.

Fraud is infinite, and equity has always refused to lay down
any general rule beyond which it will not go in affording
relief. Although it is a rule both at law and in equity that
fraud is not to be presumed, yet positive proof of fraud is
not absolutely necessary, and equity practically acts upon
weaker evidence than law in inferring it. Fraud is divided
into two sections — actual fra.ud and constructive fraud.

An actual fraud has been defined as something said, done,
or omitted with the design of perpetrating what the party
must have known to be a positive fraud.

Actual frauds may be considered under two heads —
I. Frauds which receive that denomination from a con-
sideration of the conduct of the guilty parties, irre-
spective of any peculiarity in the condition of the
injured parties.
II. Frauds which receive that denomination mainly or in
a great measure from a consideration of the peculiar
condition of the parties upon whom they are
practised. (Sin. Man.)

I. — Frauds arisiwj irrespective of any Pecnliarity in the
Position of the Injured Party,

(i.) Misrepresenta,tion, or suggestio falsi.

A misrepresentation of a material fact intentionally
made to mislead another amounts to a positive fraud,
even when the person making the representation does
not know it to be true or false, or believes it to be true
if he ought to have known it to be false.

184 ACTUAL FRAUD.

It is equally a fraud where, the misrepresentation
being made to another, a third party acts upon it, and
by so doing is injured or damnified; provided the
misrepresentation was made with the intent that it
should be acted upon by the third party in the manner
that occasions the injury or loss.

PvXsfwd, V. Richards ; Berry v. Peek.
The case of Berry v. Peek overruled all the old cases,
abolished the doctrine of constructive fraud, and
settled that a man cannot now be sued for misrepre-
sentation without dishonesty. Lievre v. Gould.
A misrepresentation, to be a ground of relief, must
(a.) Be a false representation. Falsity is essential ;
and there must be a representation or state-
ment of fact, not of law, made by some party
to the contract, or his agents, not by a third
person.

(5.) Be of some material fact inducing the con-
tract.

(c.) Be of something in which there is a confidence
reposed, at least in case of vendor and pur-
chaser ; and not be a mere matter of opinion.

{d.) Mislead the party to his prejudice.

Redgrave v. Surd.

Under the Companies Consolidation Act, 1908, in
respect of misrepresentations in prospectuses, &c., the
presumption is against the directors.

A company is responsible to the extent of the profits
it has made thereby for the misrepresentations of its
directors, but otherwise the remedy is against the
directors personally, and the fraudulent directors are
liable jointly and severally. No action lies against
the executors of a deceased director further than the
extent his estate has profited by his fraudulent mis-
representation. Peek V. Qurney.

If a misrepresentation can be made good, the injured
party has the option of compelling it to be done.

A person can derive no benefit from the fraud of

ACTUAL FRAUD. I 85

another unless he is both free from any participation in
it and has given a valuable consideration.

Marsh v. Joseph,
The defrauded party may deprive himself of relief by
his subsequent acts amounting to ratification.

(2.) Concealment, or supprcssio veri.

Like misrepresentation, the concealment must be to
the injury or prejudice of another, and the fact con-
cealed must be one which the party was under a legal
or equitable obligation to disclose.

Fox v. Maikreth ; Boswell v. Coalcs.
With regard to the sale of personal chattels, the rule
is caveat emptor, unless there be some misrepresentation,
or artifice, or warranty, or vendor is under an obligation
to disclose.
Nam qui tacet nonindetur affirmare, but in exceptional cases,
such as insurance, silence is tantamount to direct affir-
mation ; and the insured is bound to communicate to
the insurer all facts and circumstances material to the
risk within his knowledge.

(3.) Inadequacy of consideration.

Mere inadequacy of price does not by itself constitute
a ground of relief ; but inadequacy will be evidence of
fraud where it is of such a character as to shock the
conscience, or when it is coupled with other suspicious
circumstances.

Apparent inadequacies may, however, be explained
away. Harrison v. Gvest.

No relief is given where the parties cannot be placed
in statu quo, or where the rights of third parties have
intervened.

(4.) Frauds by force of statute merely.

Under the Companies Consolidation Act, 1908, pro-
moters are liable for concealment as well as misrepre-
sentation ; and any conveyance or disposition which
would amount to a fraudulent preference in the case of
the bankruptcy of an individual is constituted a fraudu-
lent preference in the winding up of a company.

I 86 ACTUAL FRAUD.

And any clause in the prospectus -waiving the right of
applicants for shares to full disclosure is void.

Generally payment out of capital as if it were a
profit is a fraud in the nature of a misfeas^ance for
which directors are answerable to shareholders, unless
the payment can be justified under the Companies
Consolidation Act, 1908, sec. 91. A company may
not buy its own shares, although under the Act of
1907 it may reissue redeemed debentures.

A company is not fraudulent merely because it is
what is known as ” a one-man company,” i.e., a private
company absolutely controlled by one person who holds
all the shares except six, which are held by his own
nominees. Saloman v. Salomayi.

But if a man is insolvent when he transfers his
business to a company, the transfer may be set aside as
fraudulent under the Bankruptcy Act, 1883.

Be Hirth ; Be Slohodinsky.
(5.) Refusal of consent to marriage.

Gifts and legacies on condition of marriage with

consent will not be defeated by the fraudulent or

corrupt withholding of such consent.

Note that contracts affected by fraud are in general not

void, but only voidable at the option of the defrauded

party, and such avoidance will be impossi”ble after the

rights of third parties have intervened. Oahes v. Turquand.

No repudiation is necessary where the contract is actually

void, and there is no rescission against innocent third parties.

//. — Frauds arising chiefly from the Peculiar Condition of
the Injured Parties.

Full and free consent is necessary to every agreement.
Such consent, from the nature of the case, is impossible in
contracts entered into with the following classes of persons : —
(i.) Persons of unsound mind.

These contracts are usually void, but contracts
entered into with them in good faith and for their
benefit, as for necessaries, will be upheld.

ACTUAL FRAUD. I 87

It appears, however, that the onus is on the
defendant to prove that the plaintiff knew him to
be so insane as not to know what he was about.

Imi>erial Loans Go. v. Stone.
(2.) Intoxicated persons.

To obtain relief, the party must have been so far
intoxicated as to be utterly deprived for the time
being of the use of his understanding, otherwise
both parties will be left to their remedy at law.

But relief will be given where there has been any
contrivance to draw the party into drink, and so
obtain an advantage.
(3.) Imbecile persons.

The burden of proof is on the other party in con-
tracts with persons of weak understanding to show
that no unfair advantage has been taken of such
weakness.
(4.) Persons who are not free agents, being imder undue
influence.
(a.) Under duress or fear.
(b.) In extreme necessity.
(5.) Infants.

The contracts of infants, except for necessaries, are
as a general rule not binding on them. They differ
from contracts of a person non compos mentis in this
respect — these latter are ah initio void, while the
former used to be only voidable, but some are now
wholly void. Where, however, a contract can never
be for the benefit of an infant, it is utterly void.

Under the Infants’ Relief Act, 1874 (37 & 38
Vict. c. 62), all contracts for loans of money or sale
of goods (except necessaries) to, and all accounts
stated with infants, are absolutely void and incap-
able of confirmation; and all other contracts are
void against the infants, who may, however, sue on
them.

Certain contracts by infants remain binding on
them after they have attained majority, unless
within a reasonable time thereafter they repudiate

I 88 CONSTEUCTIVE FEA.UD.

same. Of this character are contracts by which a
permanent interest in property is immediately con-
ferred on the infant, and he himself is laid in return
under a continuing obligation to be performed partly
or wholly after he has attained full age.

( W7ns. V. & P.)
Infants are not liable even for necessaries if they
are already fully supplied.

Johnstone^. Marks; Barnes v. Toye.
And the onus is on the plaintiff to prove the
infant is not so supplied. Nash v. Inman.

And marriage articles appear to be good as a con-
tract for necessaries.
(6.) Married women.

Although formerly protected because of her dis-
ability, yet, by virtue of the Married Women’s
Property Acts, 1882 and 1893, a married woman
is now, so far as her separate property is concerned,
fully capable of entering into contracts of every kind,
except so far as she may be_. restrained from aliena-
tion.
The doctrine that where one of two innocent persons has
to suffer through fraud of another that one must suffer who
has enabled such other to commit the fraud, does not apply
where nothing has been done by one of the innocent parties
which has misled the other. Farquharson v. King.

CHAPTER IV.

CONSTRUCTIVE FRAUD.

Constructive frauds are acts, statements, or omissions
which operate as virtual frauds on individuals, or, if
generally permitted, would be prejudicial to the public
welfare, and are not clearly resolvable into mere accident
or mistake, and yet may have been unconnected with any
selfish or evil design, or may amount in the opinion of the

CONSTRUCTIVE FKAUD. I 89

persons chargeable therewith to nothing more than what is
justifiable or allowable.

These cases may be divided into four classes —

I. Constructive frauds, so called because they are contrary
to some general public policy or to the policy of the law.

II. Constructive frauds which arise from the abuse of
some peculiar, confidential, or fiduciary relation between
the parties.

III. Constructive frauds in the case of persons peculiarly
liable to be imposed on.

IV. Constructive frauds which operate as virtual frauds on
individuals, irrespective of any fiduciary relation or any
peculiar liability to imposition. {Sm. Man.)

I. — Frauds on Public Polici/.

(r.) Marriage brokage coijtracts — incapable of confirma-
tion.

(2.) Contracts to promote marriage — by means of rewards.

(3.) Secret contracts in fraud of marriage — whereby open
marriage agreements are rendered inoperative.

(4.) Contracts to influence testators — for they encourage
scheming.

(5.) Contracts or conditions in general restraint of mar-
riage — as tending to promote immorality, &c.

Scott V. Tyler.
Conditions in restraint of marriage, whether pre-
cedent or subsequent, are good if annexed to gifts
in favour of a widow or widoiver. All limitations
until marriage with a gift over are good, and cease
on marriage.

Conditions imposing particular restraints on mar-
riage are good, e.^., any particular person, or a native
of any particular country, or a domestic servant.
(6.) Contracts or conditions in general restraint of trade —
as tending to discourage industry. But particular

1 90 coNSTEtrcTivE fraud.

restraints are good where the restraint is nothing
more than what is necessary for the reasonable pro-
tection of the party; in fact, the only criterion
is reasonableness, and it is not necessarily invalid
because unlimited in point of time, in point of space,
or in respect of persons. The contract requires con-
sideration, but the court will not inquire into its
adequacy. Nordenfeltv. Maxim; Mallan v. May;

Rousillon V. Rousillon.

(y.) Contracts in violation of public trust or confidence —
as for public offices, suppression of criminal proceed-
ings, champerty or corrupt considerations, or in
relation to a bill in Parliament.

(8.) Frauds in relation to transfer of shares in joint-stock
companies. Thus a transfer subject to reservation
in favour of transferror, so as to get rid of liability
for calls, is fraudulent. As between trustee and
cestici que trust the trustee whose name is on the
register is liable.

It should be noted that all these contracts against public
policy are void, and not voidable merely. It is a general
rule that where parties are concerned in an illegal agreement,
no relief will be given to any of them; but where the agree-
ment is illegal as agaJmst public jwUct/, relief will be given on
the ground of the public interest.

//. — Frauds in the Case of Persons in Fiduciary Relations.

The general principle underlying all these cases is that
where influence is acquired and abused, or confidence reposed
and betrayed, equity will give relief. It is independent of
any admixture of imposition, being based upon a motive of
general public policy. Voluntary donations inter vivos to
persons standing in some confidential, fiduciary, or other
relation towards the donor in which dominion may be
exercised by them may be set aside. Influence is presumed
until the contrary is shown. Huytienin v. Basely.

CONSTRUCTIVE FRAUD. I9I

(i.) Parent or person in loco parentis or relative having
influence, and child.

Gifts from latter to former void, unless made in
perfect good faith, and reasonable under the circum-
stances. Davies v. Davies.
To support such a gift it must be proved that—
(«.) The deed in question is the actual deed of the
child, and intended by him to operate as it does.
{h.} Such intention was fairly produced.

The child should have independent and disin-
terested advice.
(2.) Guardian and ward.

Incapable of dealing with each other whilst rela-
tion continues, and dealings shortly after it has
terminated will be viewed with suspicion.
(3.) Quasi guardians, medical and confidential advisers,

ministers of religiou.
(4.) Solicitor and client.

Gift from client to solicitor pending that relation
cannot be sustained ;

Thomson v. Judge ; In re Luddy.
or even to the wife or any member of the family of
the solicitor ; Liles v. Terry ; Barron v. Willis.

and can even be impeached by the legal representa-
tives of the client after his decease. Tyars v. Alsop.
Lapse of time will not make such gifts good, and
the employment of an independent solicitor makes
no difference if the relationship in fact continues.

Wright v. Castle.
Gift from client to solicitor by will is good.

Hindson v. Weatherill.
Purchase is good if there is perfect lona fides, but
the whole onus of proving the fairness of the trans-
action is thrown on the solicitor ; and the fact that
the client has not been separately advised will be
taken into account.

Purchase by solicitor from client made in name of
another can under no circumstances be maintained.

McPherson v. Watt.

192 CONSTRUCTIVE FRAUD.

Agreements to pay a solicitor a gross sum for past
or future services, although formerly void, are now
good if in writing, but every such agreement is sub-
ject to taxation.

In re Russell ; 33 & 34 Vict. c. 28 /
44 & 45 Vict. c. 44.
(5.) Trustee and cestui que trust.

The rule is, not that a trustee cannot buy from
cestui que trust, but that he shall not buy from him-
self. A trustee may purchase from cestui que trust
where there is a clear and distinct and perfectly fair
contract that the latter intended the former to pur-
chase; he may also purchase from cestui que trust
who is sui juris, and has discharged him, but the
onus is upon the trustee to prove the fairness of the
bargain and of his conduct.

Trustee for sale cannot purchase without leave of
tli.e court. Fox v. Mackreth.

Gift to trustee by cesttd que trust only supported if
it would be good between guardian and ward, i.e.,
the relation and the influence arising from it must
have ceased.
(6.) Principal and agent.

The utmost good faith and full disclosure are re-
quired in dealings between them ; no secret profit
may be made by the agent out of his agency.

An agent instructed to buy shares cannot himselt

sell to his principal. King v. Sawell.

(7.) Miscellaneous fiduciary persons, such as counsel,

auctioneers, and others who have been consulted as

to sale, or a receiver appointed by the court.

Martinson v. Clowes ; Nugent v. Nugent,
(8.) Debtor, creditor, and surety, between whom entire
good faith is required.

///. — Frauds in the Case of Persons Peculiarly Liable
to he Imposed on.

(i ) Bargains with heirs and expectants.

CONSTRUCTIVE FEAUD. 1 93

Such bargains will be set aside unless purchaser,

on whom onus rests, can show that the transaction

is reasonable and bond fide.

Neville V. Snelling ; Aylesford v. Morris.

If confirmed by expectant after death of ancestor,
will not be relieved against. Chesterfield v. Jansen.

But there can be no ratification by acquiescence
until the reversion falls in. Frii v. Lane.

The Act 3 i Vict. c. 34, enacts that no purchase
made bond fide without fraud of a reversionary interest
shall be set aside merely on the ground of undervalue.
This Act does not aftect the equity jarisdiction, for
undervalue is in itself evidence of fraud, and will
always be a material element where it does not con-
stitute the sole ground for relief.

Miller V. Cook; Tyler v. Yates;
Aylesford v. Morris.

Where relief is granted, it is upon payment of the
sum actually advanced with interest.

Under the Moneylenders Act, 1900, every money-
lender must be registered or the loan is void and
no repayment can be claimed.

Knowledge of the transaction by the father or
other person in loco parentis renders ib privid faeie
good.
(2.) Post-obits, &c., upon similar principles, are set aside

when made by heirs and expectants.
(3.) Common sailors are treated on same footing as ex-
pectants, irrespective of the provisions in their favour
contained in the Merchant Shipping Acts.
(4.) Tradesmen selling goods at extravagant prices to ex-
pectants are liable to have their claims reduced by
a court of equity.
(5.) Dispositions by persons shortly after attaining majo-
rity.

N

194 CONSTRUCnvE FRAUD.

IV. — Virtual Frauds on Individuals irrespective of any Fidu-
cia/ry Helation or any Peculiar Liability to Imposition.

(i.) Statute of Frauds not allowed to be used as an engine
of fraud.

(2.) Knowingly producing a false impression so as to mis-
lead another, or enabling another to commit a fraud,
or making representations in forgetfulness of one’s
own title. Slim v. Croucher ; Rice v. Rice.

Thus a company which has issued certificates to
the effect that shares are fully paid will be estopped
from saying this is not the case.

(3.) Frauds on auctions.

Agreements between parties not to bid against
each other are void. The employment of a puffer,
whereby bidders are misled, avoids the auction. But
by 30 & 31 Vict. c. 48, the vendor of real property
may bid if he reserve the right in the particulars or
conditions of sale and strictly adheres to the limits
therein laid down, otherwise the sale is voidable ;
and sales under the direction of the court are not to
be reopened in the absence of fraud. The Sale of
Goods Act, 1893, has similar provisions in respect
of personal property.

(4.) Frauds upon consenting creditors to a composition
deed.

(5.) Frauds in case of voluntary gifts; the donee being

always obliged to prove bona fides.
(6.) Frauds under 2,7 Eliz. c. 4, now practically abolished

by the Voluntary Conveyances Act, 1893.
(7.) Fraudulent appointments.

A power of appointment must be exercised hond
fide for the end designed by the donor. .

Topham v. Portland ; Aleyn v. Belchier,

A power may, however, be validly released even

though the effect of the release is to benefit the donee

of the power, Radcliffe v, Beives ; In re Somes.

SUBETYSHIP. 195

Appointments by father in favour of sickly children
not in need are usually set aside. Hcnty v. Wrcy.

And a void appointment may be good as to part,
if that part be free from fraud and severable.

Where a contract is entered into with the ap-
pointee to dispose of the property for the benefit of
some person not an object of the power, then the
appointment is fraudulent and void, and an appoint-
ment which is a fraud on a power can be set aside
against a bond fide purchaser without notice if he
does not get the legal interest in the property.

Gloutte V Storey.

Formerly the appointment of merely nominal
shares to one or more objects of the power (although
valid at law) was set aside as an illusory appointment.

By I Will. IV. c. 46, illusory appointments were
in effect made valid in equity as well as at I9.W, and
under 37 & 38 Vict. c. 37, in the absence of a con-
trary intention in the instrument creating the power,
any object of the power may be altogether excluded.
(8.) A man cannot derogate from his own representations
which formed the inducement to contract.

Eigffott v. Stratton ; Hudson v. Cripps.

CHAPTER V.

SUBETYSHIP.

CoNTBACTS of Suretyship require the utmost good faith
between all parties.

It has been laid down that the concealment by creditors
from a surety of facts which go to increase his risk releases
the surety ; but this requires qualification thus. The fact
concealed must either —

(i.) Be one which the creditor is under an obligation
to discover ; Hamilton v. Watson.

Or

196 SUKETYSHIP.

(2.) Form an integral part of the immediate transac-
tion. Pidcoch V. Bishop.
Creditors, although not bound, as a general rule,
to inquire into the circumstances of the suretyship,
yet must do so if there is reasonable ground to
suspect fraud. Owen v. Homan.
The rights of a creditor against the surety are wholly
regulated by the instrument of suretyship ; In re Sass.
and apparently a surety cannot compel the creditor to pro-
ceed against the debtor.

Remedies of Surety.

(i.) Surety cannot force creditor to take action against
debtor, but may himself institute proceedings in the
nature of quia timet against debtor to compel him to
pay creditor, as soon as the latter has a present
right to sue and refuses to do so.

Padwick v. Stanley.

(2.) Action for judicial declaration of discharge.

(3.) Action for reimbursement after payment.

This right has been based upon an implied con-
tract. The contract being one of indemnity, the
surety can only recover from the debtor what he
has actually paid.
(4.) Action for delivering up of securities by creditor to
surety on payment.

The surety has always been entitled to all securi-
ties held by the creditor, except such as were actually
extinguished by the payment, and now by the Mer-
cantile Law Amendment Act (19 & 20 Vict. c. 97,
s. 5) a surety is entitled to every security held by
creditor, whether deemed at law to be satisfied or
not.

Further advances made by the creditor to the
debtor will be subject to this right of the surety, for
the creditor knows of the surety’s interest in the
securities. Forbes v. Jackson.

(5.) Action for contribution against co-sureties.

SURETYSHIP. 197

One of several sureties paying the debt has a right
to reimbursement or contribution from his co-sure-
ties ; for Qui sentit commodum, seniire debet et onus.

This right of contribution does not spring from
contract, but is founded on general principles of
equity and justice. Bering v. Winchelsea.

The right exists whether the sureties are bound
jointly or severally, in the same or in different
instruments, and though ignorant of their mutual
relation, provided they are bound for the same
debtor and in the same transaction, i.e., there must
be a common liability.

No contribution can be required beyond the
amount for which a surety has agreed to be bound ;
for the right, although not founded on, may be
qualified by, contract, and any surety can limit his
liability by express contract. Swain v. Wall.

The right of a surety to contribution from a co-
surety arises —

(i.) When the surety is liable to pay or has paid
either the whole or more than a just proportion
of the debt ;

(2.) When the surety has not paid, but has had
judgment against him for the full amount of
the debt ;

(3.) Where the claim of the creditor against the
deceased surety has been allowed.

He Snowdon ; Re Wolmershausen.

When a surety becomes bankrupt, his co-surety
is entitled to prove for the whole debt, and not
merely the proportion the bankrupt ought to have
paid, but he cannot actually recover more than such
proportion. Morgan v. Hill.

Co-sureties are entitled to the benefit of all securi-
ties obtained by one of their number, whether they
knew of such securities or not. Steel v. Dixon.

A surety can only charge the debtor what he has
actually paid to discharge his obligation.

Beed v. Norris.

1 9« SURETYSHIP.

Co-directors and co-trustees also (in the absence
of fraud) are, as a general rule, entitled to this
right to contribution.

Barfiskill v. Hdivards ; Fletcher v. Oreen.

But if one of them is a cestui que trust, and has
authorised the breach which has been satisfied out
of his beneficial interest, he cannot claim contribu-
tion. CMllingworth v. Chamlers.

But one trustee has no right of indemnity or
recoupment against his oo- trustee except where there
are special circumstances. Bahin t. Hughes.

As, for example, where the co- trustee is the
solicitor to the trust, and derived a personal benefit
from the breach, or has acted unreasonably although
not dishonestly. Be Lingley.

Under R.S.O. Order xvi., provision is made for a
surety who is sued to obtain indemnity and contribu-
tion from principal or co-sureties in the same action
by means of a third party notice.

Di^erences ietvjeen Law and Equity as regards Suretyship
abolished hy the Judicature Acts.

(i.) In base of insolvency or death of a co-surety, the
solvent or surviving sureties could be compelled to
contribute for the deficiency at equity, but not at
law.

(2.) Parol evidence was admissible to show that an
apparent principal was a surety only at equity, but
not at law.

Circumstances Beleasing Sureties.

(i.) If creditor varies contract with debtor to the
prejudice of the surety without his privity.

(2.) If creditor gives time in a binding manner to debtor

so as to prejudicially affect the remedies of the surety

without his consent. Bees v. Berrington,

The surety will not be discharged, however, where

SURETYSHIP. 199

the creditor, on giving time, reserves his rights against
the surety ; for the surety cannot be prejudiced by
such an arrangement.

The agreement to give time must be made with
the debtor, in order that the surety may be released.
(3.) If creditor actually releases the principal debtor or a
co-surety.

But the surety is not discharged —

(rt.) If the release can be construed as a eovenan

not to sue.
(b.) If in the case of a mere purported release,
or a covenant not to sue, the creditor
reserves his rights against the surety.
The reservation should appear on the face
of the release, parol evidence being in-
admissible.
Where, however, there is a novation of the
debt, the surety is discharged even if rights
against him are reserved.

And a surety may contract with a creditor to
remain liable although the principal be released.
(4.) If the principal debtor is otherwise released, e.g., if a
lessee become bankrupt, and the trustee in bank-
ruptcy disclaim the lease, the term is determined
and the surety for the rent is released.

•Stacey v. Hill.
(5.) If creditor loses securities, or allows them to go back
into debtor’s hands, or fails in making them perfect,
the surety is pro tanto discharged.
(6.) If a surety executes an instrument in the belief that
certain other parties named therein as sureties will
also do so, and all such parties do not execute, he is
discharged from the suretyship.

Hansard v. Lethbridge.
When the liability of the surety does not arise until after
default by the debtor, he is discharged by the death of the
debtor before default.

When a surety is discharged, the securities given by him
are discharged also.

200 PAETNEESHIP.

The doctrines of marshalling and consolidation apply as
against sureties.

In ascertaining the liability of sureties in mortgage deeds,
it is necessary to distinguish sureties who are mere covenant-
ing parties from those who are co- mortgagors.

Williams v. Owen ; Bowker v. Bull.

Where a mortgagor and his surety covenant to pay
mortgage money on demand, the Statute of Limitations
runs from time of demand made, and not from the date of
the deed. Brown v. Morgan.

And where the principal debtor is discharged by the
statute the surety is generally also discharged.

CHAPTER VI.

PAETNEESHIP.

In matters of partnership, equity exercises a practically
exclusive, although nominally concurrent, jurisdiction, the
relation between partners being a quasi-fiduciary one ; and
by the Judicature Act, 1873, s. 34, the dissolution of part-
nership and the taking of partnership and other accounts are
assigned to the Chnncery Division exclusively.

At common law, as a general rule, no action lay by one
partner against another in respect of partnership accounts
except —

(i.) Where an account had been stated between them,

and a, final balance struck.
(2.) Where money had been received by one partner for
the separate use of the others, and wrongfully
carried to the partnership account.
(3.) Where one partner had improperly used the partner-
ship name in making a promissory note for his
private debt, and it had been paid by the others.
(4.) Where the cause of action accrued before the com-
mencement of the partnership. {Chit. Gout.)
The Partnership Act, 1890 (53 & 54 Vict. c. 39), has

PARTNERSHIP. •> 20I

practically codified the law of partnership, but does not
(except where expressly so provided thereby) affect the
rules or jurisdiction of equity. The Act defines partnership
as ” the relation which subsists between persons carrying on
a business in common with a view of profit.”

A partnership is constituted by agreement, express or
implied.

An agreement to enter into partnership will not be
enforced unless —

(i.) A definite term has been fixed.
And

(2.) There have been acts of part performance.

During the continuance of the partnership, injunctions
against the breach of partnership articles will be granted in
cases of —

(i.) Omission of name of a partner when resulting from

studied delay.
(2.) Carrying on another business.
(3.) Destruction of partnership property.
(4.) Exclusion of partner.

Neither specific performance nor any injunction will be
decreed
(i.) Where remedy at law is perfectly adequate.
(2.) Where there is an agreement to refer to arbitration ;
in which case a stay of proceedings is generally
ordered : but after the award either party may for
sufficient reason apply to have it set aside.

A Partnership viay he Dissolved hy

(i.) Operation of law in cases of (a) death, (&) bankruptcy,

(c) conviction for felony of a partner.
(2.) Mutual consent.
(3.) Any partner at any time, if a partnership at will,

unless irreparable mischief would ensue.
(4.) Effluxion of time.

{5.) Judgment of Chancery Division in cases of —
(«.) Partnership induced by fraud.

202 . PARTNERSHIP.

(6.) Gross misconduct and breach of trust in rela-
tion to partnership^
(c.) Continual breaches of contract, resulting in
substantial failure by defendant to perform
agreement,
(d) Wilful and permanent neglect of business.
(e.) Disagreements or incompatibility of temper

preventing the carrying on of business.
(/.) Permanent insanity of an active partner.
(g.) Generally, under the Partnership Act, 1890,
whenever it is “just and equitable” so
to do.
Subject to the provisions of any partnership agreement,
the Partnership Act, 1890, provides that on dissolution —
(i.) Partnership losses are to be made good.
(2.) Assets are to be applied in paying

(a.) Partnership debts and liabilities other than

to partners.
(&.) Advances made by pattsiers.
(c.) Capital of partnets.

(d.) Surplus to partners in proportions in which
they are entitled to share in profits.
The share of a partner is a right to money after the
partnership has been wound up. A limited account will
sometimes be decreed where no dissolution is intended, but
a manager or receiver will never be appointed except with a
view to dissolution, ot to a sale where there has been dis-
solution by notice.

The representatives of a deceased partner have no lien on
any specific part of the partnership assets ; and it is the duty
of the surviving partner to realise all the partnership assets,
including real estate, for the purposes of winding up the
partnership . affairs, and the survivor has for this purpose
full power not only to mortgage but bo sell such real estate.

Bourne v. Bourne.
The purchaser of a share in a partnership must indemnify
the vendor against liability in respect of the share and
expressly covenant so to do.

The relation between surviving partners and representa-

PARTNERSHIP. 203

tives of deceased partners is not a fiduciary one, and the
right of the latter to an account may be barred by the
Statute of Limitations, except in cases of fraud.

Knox V. G-ije.

And the statute does not run until discovery of the
fraud. Betjemann v. Bdjemann.

Land forming an asset of the partnership, or ” substan-
tially involved in the business,” whether purchased or
devised, is money, for equity regards partnership realty as
held by the partners on an implied or constructive trust
for sale ; as such it goes to the personal representative,
and was liable to probate duty, now estate duty.

Waterer v. Waterer.

The goodwill of a business is, in general, a partnership
asset, and on the death of a partner is to be valued as such.

Ee David & Matthews.

Upon the retirement of a partner the assignment of his
share should expressly include the goodwill.

And when, upon the determination of the partnership,
the goodwill goes to one of the partners, the other partner,
although entitled to carry on a rival business, may not
solicit the old customers of the firm.

Curl V. Webster ; Trego v. Hunt.

And further, in the absence of agreement to the contrary
in the partnership articles, each partner may use the part-
nership name after dissolution, provided such user does not
expose the outgoing partner to liability. Burchell v. Wilde.

On the death of a partner, creditors of the partnership
may sue the surviving partner, or, at their option, institute
proceedings in equity for payment of their debts out of the
assets of the deceased partner. Notwithstanding this, joint
creditors are not ranked equally with separate creditors, but
can only claim the surplus remaining after satisfaction of
the separate debts. On the other hand, the separate creditors
are not entitled to be paid anything out of the joint estate
until all the joint creditors have been satisfied.

Ex parte liiiffin and Bowlandson.

The liability of partners in equity has been stated to be
joint and several — that is to say, where there is in equity

204 PARTNERSHIP.

no survivorship of property there is no survivorship of
Hability. Beresford v. Browning.

A partnership, although dissolved by death, is, in equity,
taken to be still subsisting for every purpose of liquidation,
so that what was before joint becomes several by the disso-
lution and by the exclusion in equity of the survivorship
which takes effect in law. Kendall v. Hamilton.

And the Partnership Act, 1890, provides that every
partner is liable jointly with the other partners for all debts
of the firm while he is a partner, and after his death his
estate is also severally liable in a due course of administration
for the same, so far as they remain unsatisfied, subject to
the prior payment of his separate debts.

Partnership firms having a common partner, although
formerly not able to sue one another at law, could always
do so at equity.

As a general rule, no partner can prove in competition
with the creditors of the firm except

(i.) Where two firms having a common partner, or a firm
and one of its partners, carry on distinct trades and
have business dealings together, but only in respect
of debts which have arisen in the ordinary course of
business.

(2.) Where separate property of a partner has been
fraudulently converted to the use of the firm or
vice versd.

Under the Limited Partnership Act, 1907 (7 Edw. VII.
c. 24), persons may now enter into a limited partnership,
which would have to be registered with the Kegistrar of
Joint Stock Companies, and any change in such a partner-
ship would also have to be duly registered. The ” limited
partner ” will only be liable for the partnership debts to the
extent of the capital contributed by him, but there must be
at least one ” general partner ” who will remain fully liable
for all the debts and obligations of the partnership. A
limited partner cannot withdraw any portion of his capital
nor take any part in the management of the business, and
his death, lunacy, or bankruptcy will not dissolve the partner-
ship. With the consent of the general partners a limited

ACCOUNT. 205

partner may assign his share, and the assignee will become
a limited partner. The Act contains certain provisions for
winding up a limited partnership by the court like a limited
company under the Companies Consolidation Act, 1908.

CHAPTER VII.

ACCOUNT.

Actions of account, although always recognised at law, were
dilatory and inconvenient, and practically confined to cases
( I .) Where privity between the parties, of deed or of law.
(2.) Between merchants.
Equity jurisdiction was preferred mainly for two reasons :
(i.) Discovery could not formerly be obtained at law.
(2.) Courts of law possessed no proper machinery for
taking accounts, and, as a consequence, frequently
referred actions of account to arbitration. Equity
courts, on the other hand, provided ready means for
this purpose.
The cases in which an account might be had at equity,
and in which the Chancery Division is still the more appro-
priate tribunal, may be classified thus —
(i.) Principal against agent.

On the ground of the fiduciary relation between
the parties. Mackenzie v. Jolinson.

But not agent against principal, in which case
there is no such relation. PadvAck v. Sianlci/.

Agent can set up Statute of Limitations unless
relation between them amounts to trustee and cestui
que trust. Friend v. Young,

Accounts will also be decreed in favour of —

(a.) Patentee against infringer, and assignee

against licensee.
(6.) Cestui que trust against trustee,
(c.) Mortgagor against mortgagee.

206 ACCOUNT.

(2.) Where there are mutual accounts between plaintiff
and defendant.

Mutual accounts are “where each of two parties
has received and also paid on the other’s account.”

Phillips V. Phillips.

There is no action of account if it is a mere
question of set-off.
(3.) Where there are circumstances of special complica-
tion.

The test as to what amount of complication would
give equity jurisdiction has been stated to be — Can
accounts be examined on a trial at Nisi prius ?

O’Connor v. Spaight.

But this test has not been universally followed, and
the difSculty of examining accounts at Nisi prius will
only amount to a strong circumstance in favour of
equity jurisdiction.

Under the Judicature Acts, as modified by the
Arbitration Act, 1889, matters of account maybe
referred to official or other referees.

Chief Defences to Actions of Account.

(i.) Stated or settled account.

An open account is one of which the balance is not
struck, or which is not accepted, by both parties.

A stated account is one that is accepted, either
expressly or impliedly, by both parties.

A settled account is one which has not only been
accepted by both parties, but discharged.
In reply to this defence the plaintiff —
{a.) As a general rule, has only liberty to surcharge and
falsify {vide ante, p. 57), the onus probandi being
on him.
(h.) Where fraud or mistake is proved, may have the
whole account opened and taken de novo.
(2.) Laches and acquiescence.

Except where the parties occupy a fiduciary relation,
and mci,la fides is alleged. Forrneriy the Statute of

SET-OFiP. 207

Limitations did not apply where a fiduciary relation
existed betweeji the parties, but the Trustee Act, 1888,
provides that except in cases of fraud the statute shall
in future apply just as if the parties were not in a
fiduciary relation.

Note that the relation between
(a.) Broker and client is a fiduciary one.

Ux parte Cook, in re Strachan.
(b.) Banker and customer is not a fiduciary one, but
merely that of debtor and creditor.

Foley V. Hill.

In the absence of fraud, accounts, however irregularly

taken, are, as a general rule, to be treated as ” settled

accounts,” if they appear to have been so intended by the

parties. Hx parte Barber ; Holgate r. Shutt.

CHAPTER VIII.

set-off and appeopriation of payments and of
securities.

Set-off,

Set-off has been defined as a defence which the defendant
in an action sets up against the plaintiffs claim, counter-
balancing such claim in whole or in part.

Stooke V. Taylor.
No set-off was originally allowed at common law in cases
of mutual unconnected debts. This was remedied by the
Statutes of Set-off (4 Anne, c. 17; 2 Geo. II. c. 22; 8
Geo. II. c. 24), which provided that the right of set-off
should exist first of all in the case of bankrupts only, but
finally in all oases of mutual debts. In the case of mutual
connected debts the balance only was recoverable, both at laW’
and in equity, thus allowing the right of set-off.

20 8 SET-OIF.

Equity allowed tlie right of set-off

(i.) In all cases of mutual independent debts where there
was mutual credit or the debts had a common origin,
and this apart from the Statutes of Set-off, upon the
ground either of presumed intention of the parties or
natural equity.

(2.) In the case of mutual equitable debts, or of legal debt
on one side and an equitable debt on the other, where
there was a mutual credit as to such debts.

(3.) In the case of cross demands, where some equitable
ground existed for claiming relief.

Now, in all these cases, under the Judicature Acts and
rules, there would be a set-off both at law and in equity.

No set-off was or is allowed

( I .) In cases where there is an intervening equity, e.g., in
the winding up of a company, a debt cannot be set off
against calls unless both the company and the share-
holder are insolvent. GrisseVs Case.
(2.) In cases of debts accruing in different rights or of in-
trinsically different qualities, e.g., joint against sepa-
rate debts (unless under special circumstances such as
fraud) or statute-barred debt against one not so
barred.
A legacy may in general be set off against a debt owing by
the legatee to the testator’s estate, even though statute-
barred or the legatee has become bankrupt since the testator’s
death.

Set-off is allowed under the Bankruptcy Act, 1883,8. 38,
in cases where there have been mutual credits, debts, or other
mutual dealings ; the rule extending not only to liquidated
damages but even to unliquidated damages, if arising in
connection with a contract. Re Mid Kent Fruit Co.

But money paid for a specific purpose cannot be applied to
any other purpose.

Note that even under the Statutes of Set-off mutual (

SET-OFF. 209

only could be set off; but now under the Judicature Acts a
defendant may set off or set up a counter-claim, whether
such set-off or counter-claim sound in damages or not.

A counter-claim is to be distinguished from a set-off,
being the assertion of a separate independent demand, not
answering or destroying the claim of the plaintiff!

Stoolce V. Taylor.

Appropriation {or, as termed in Roman Law, Imputation)
OF Payments.

Where a debtor, owing several debts to the same creditor,
makes a payment to him, the question arises. In respect of
which debt was it paid ? As ‘ to this the following rules
have been established by

Clayton^s Case.

(i.) The debtor has the right, in the first instance, to
appropriate the payment to which debt he chooses,
provided he does so at the time of making the pay-
ment, either expressly or by implication.

(2.) The creditor, on the debtor failing, has the next right
of appropriation, which he may exercise at any time
before action brought.

The creditor may even appropriate the payment
towards satisfaction of a statute-barred (but not an
illegal) debt.

Such appropriation will not, however, revive a debt
already barred ; Mills v. Fowlces.

but a general payment will take a debt not already
barred out of the statute.

(3.) On both debtor and creditor failing to exercise this
right, the law will appropriate the payment to the
debt earliest in point of date, commencing with the
liquidation of any interest which may be due. The
account is not to be taken backwards and the balance
struck at the head instead of the foot of it.

Clayton’s Case,
o

2IO SPECIFIC PEEFORMANCE.

This rule is only a presumption of law, and may
therefore be excluded : thus it does not apply between
a guaranteed account and one not so secured, or
between trustee and cestui que trust.

In re Sherry ; In re Hallett’s JEstate.

Appropriation of Securities.

Where securities are appropriated by a debtor to specific
debts, then to the extent the creditor disposes of the securi-
ties they go in discharge of such debts, whether there be
only one debt or successive debts.

In the case of the bankruptcy of loth debtor and creditor,
this rule is known as the rule in Waring’s Case. In such a
double bankruptcy the securities remaining in specie are to
be applied according to their appropriation ; and the rule
applies even to third party holders. It has no application,
however, if neither party be bankrupt.

The rule in Waring’s Case is only applicable where there is
a double bankruptcy; and the appropriation must in all
cases be proved. Phelp Stokes & Oo. v. Comber.

CHAPTER IX.

specific performance.

The doctrine of specific performance is based on the principle
that in equity the plaintiff is entitled to have the specific
thing for which he has contracted. While at law the only
remedy for breach of contract was an action for damages, in
equity the actual contract might be compelled to be carried
out ; the absence or inadequacy of the legal remedy con-
stituting the ground for the interposition of equity. It is,
therefore, a general principle in these cases that equity will
not interfere where damages would amount to a complete
compensation.

SPECIFIC PERFORMANCE. 311

Equity will not, however, interfere to compel specific
performance in the following cases :—
(i.) Illegal or immoral agreements.
(2.) Voluntary or revocable agreements.

An agreement for a mere tenancy from year to
year will not be enforced.
(3.) Agreements which are incapable of being actually
enforced by the court, such as agreements —

(a.) Where personal skill or knowledge is involved,
e.g., a contract to write a book or sing at a
theatre. Lumley v. Wagner.

Even negative stipulations will not be
enforced by injunction and notwithstanding
being reasonable, if the result would be in
effect to force a person to give personal
service to another. Be W. Bohinson.

(&.) For sale of the goodwill of a business without

the premises,
(c.) To build or repair, as being too uncertain.
(4.) Agreements wanting in mutuality.

The remedy mii,st be imdual, or action for specific
performance will not be entertained ;

Adderley v. Dixon.
so an infant cannot sue for specific performance,
although he may have his remedy for damages.

The Statute of Frauds, s. 4, creates no exception

to this rule, for the plaintiff, although he has not

signed the agreement, makes the remedy mutual by

suing.

(5.) Agreements for loan of money, as damages afford

adequate remedy ; but an agreement to take the

debentures of a company may now be enforced

under the Companies Consolidation Act, 1908,

(6.) An agreement by donee of a power to make a

particular appointment. Hill v. Schwartz.

When a contract comprises several matters, some of

which — standing alone — would be susceptible of being

specifically enforced, specific performance may be obtained

of such part of the contract, if clearly severable and a piece-

212 SPECIFIC PERFORMANCE.

meal performance of the agreement is consistent with the
intention of the parties.

There must, of course, be a complete agreement ; and with
regard to agreements by correspondence, it may be noted
that an offer to sell may be withdrawn before acceptance
without formal notice ; and the post-office is the common
agent of both parties, so that as soon as a letter of accept-
ance is delivered to the post-office the agreement is com-
plete.

The subject may be divided into two heads :• —

I. — Agreements respecting Personal Chattels.

As a general rule, agreements of this character will not be
enforced, for damages at law would afford an adequate com-
pensation ; where, however, this would not be the case, specific
performance may be decreed : Guddee v. Butter.

As in the case of agreements —

( I .) For the sale of sliares in a private undertaking.

Duncuft V. AlhrecM.
(2.) For sale of assigned debts under a bankruptcy.

Adderley v. Dixon.
And specific delivery instead of damages will be decreed —
(i.) In cases of articles of unusual beauty or rarity, when
damages would not compensate.

Bowling v. Betjemann.
■(2.) In cases of heirlooms and chattels of peculiar value.
Somerset v. Cookson ; Pusey v. Fusey.
(3.) Where a fiduciary relation exists between the parties.

Wood V. Bowcliffe.
By the Common Law Procedure Act, 1854, courts
of law were empowered to order specific delivery of
chattels in actions of detinue ; and now, under the
Judicature Acts, the powers of courts of law and equity
are co-extensive.

And under the provisions of the Sale of Goods Act,
1893, the court may, if it think fit, in any case of

SPECIFIC . PERFORMANCE. 213

breach of contract to deliver specific goods, decree
specific performance instead of damages.

11. — Agreements respecting Lands.

These agreements are generally enforced specifically, for
land may have a peculiar value in the eyes of the purchaser,
so that damages ‘vvill not be a sufficient remedy, since they
would not, as in the case of personal chattels, enable him to
go and buy other property of exactly the same description
and value to him. This jurisdiction of equity extends to
lands out of the jurisdiction, if the parties are within it, for
the jurisdiction is against the defendant personally.

Penn v. Lord Baltimore.

The term ” specific performance ” is used in a double
sense, namely, in the sense of

(i.) Turning an executory agreement into an executed
one by ordering execution of document stipulated for.

(2.) Carrying out in specie the subject-matter of the agree-
ment.

The 4th section of the Statute of Frauds does not avoid
the agreement, but only prevents its being proved ; and not-
withstanding the provisions of the statute, equity will decree
specific performance of a parol agreement in the four follow-
ing cases, on the ground that it would be inequitable to allow
the statute to be set up as a bar to relief :’ —

1. Where the sale is by the direction of the court.

2. Where it is fully set forth by the plaintiff in his state-

ment of claim, and admitted by the defendant in his
defence, and the defendant does not set up the statute
as a bar.

In such a case the defendant may be deemed to
have waived his right, the rule being Quisque renun-
tiare potest jure pro se introducto.

3. Where it was intended to be reduced into writing, but

this has been prevented by the fraud of the defen-
dant.

4. Where it has been partly performed by the plaintiff.

Hussey v. Rome Payne; Lester v. Foxcroft.

2 14 SPECIFIC PEKFOEMANCE.

In order that an agreement may be taken out of
the statute by acts of part performance, there must
be a valuable consideration on the part of the person
seeking to enforce it. In re Hudson.

As to what acts will be deemed a

Part Peeformance.

(i.) Acts introductory or ancillary only to the agree-
ment do not aisQount to part performance, e.g.,
delivering abstract of title.

(2.) Acts, to be deemed part performance, must be
exclusively and unequivocally referable to the
agreement, e.g., where possession is delivered
and obtained solely under the agreement.

Alderson v. Maddison.

(3.) Acts of part performance, in order to take a parol
agreement out of the statute, must be of such a
nature that specific performance could be decreed
if it were in writing ; and must be such that it
would amount to fraud in the defendant to take
advantage of the contract not being in writing;
acts of part performance will not of themselves
supply the want of jurisdiction.

(4.) Acts, to be deemed part performance, must not be
capable of being undone. Thus

Payment of purchase- money, in whole or in part,
is no act of part performance, for on repayment the
parties will be in the same position as before.

Compare as to part payment, sec. 4 of the
Statute of Frauds, and sec. 4 of the Sale of Goods
Act, 1893.

(5.) Marriage is no\iper se deemed a part performance,
but acts in furtherance of the agreement indepen-
dently of the marriage are.

Surcomhe v. Pinniger ; Gaton v. Gaton.
And a return to cohabitation may be a sufficient
act of part performance.

A post-nuptial written agreement in pursuance

SPECIFIC PERFORMANCE. 215

of a pre-nuptial parol agreement is enforceable as
between the parties, but such an agreement may
be impeached by third parties either under 1 3 Eliz.
c. 5, or the Bankruptcy Act, 1883. Gregg ^r. Holland.
In marriage as well as other agreements, parol
representations intended to influence the conduct
of the other party, and on the faith of which he
acts, will be enforced, but not representations of
a mere intention. It must be a representation of
some state of facts alleged to be at the time
actually in existence, i.e., representation of existing
facts.
(6.) The parol ei^idence must prove the agreement.

Grounds of Defence

to an action for specific performance apart from the
Statute of Frauds.

(I.) Misrepresentation by plaintiff in relation to the agree-
ment, even where misrepresentation would not be a
ground for rescission by the defendant : and a mis-
representation by an agent would be deemed the
misrepresentation of the principal, if made for
principal’s benefit.

(II.) Mistake rendering specific performance a hardship,

and this whether the mistake be mutual or unilateral.

Parol evidence of mistake is admissible in equity,

for the Statute of Frauds merely provides that an

unwritten agreement shall not bind.

(III.) Error of defendant even if arising from his own negli-
gence ; for defendant may be answerable for damages
at law without being liable to specific performance.

Malins v. Freeman.
With regard to mistake or parol variation, evidence
of it was wholly inadmissible at law, and as a general

2l6 SPECIFIC PEEFORMANCE.

rule is only allowed to be offered in equity by a
defendant resisting specific performance, and not by
a plaintiff seeking to compel such performance, on the
ground that if one seeks to enforce a written contract
he is bound by the words used in the writing in which
it is expressed, and extrinsic evidence is not admis-
sible to show that the real intention of the parties
is different from that expressed in writing.

Parol evidence may, however, be gone into by the
plaintiff.

(i.) Where the parol variation is in favour of the
defendant, and the plaintiff offers to perform the
agreement with the variation.

(2.) Where the defendant sets up a parol variation,
and the plaintiff seeks specific performance of the
agreement with the variation.

Woollam V. Hearn ; Townshend v. Stangroom.

(3.) Where there have been such acts of part per-
formance of the parol portion as would justify a
decree for specific performance in the case of an
original agreement.

(4.) Where an omission has occurred by fraud.

(Sm. Man.)
As to the effect of a mistake or parol variation
when set up as a defence.

(i.) Where the error arose, not in the original
agreement, but in its reduction into writing,
specific performance decreed with the parol
variation.

No relief will be granted where the error arose
from a misunderstanding in the original agreement,
as the parties were never ad idem.

(2.) Evidence of a parol agreement subsequent to a
written agreement is inadmissible unless there
have been such acts of part performance as
would enable it to be enforced if an original
agreement.

SPECIFIC PERFOEMANCE. 2X7

(IV.) Misdescription. This defence may be classified under

two heads —

Cases where the misdescription

(i) Is of a substantial character so as not fairly
to admit of compensation ; a purchaser ought to
have what he bargained for.

(2.) Is of such a character as fairly to admit of
compensation. . Seton v. Slade.

A. In cases where Vendor seeks Specific Performance.

(i.) Purchaser is not compelled to take —
(a.) Freehold instead of copyhold.
(6.) Under-lease instead of original lease,
(c.) Compensation where there has been fraud.

(2.) Purchaser will be compelled to take, with
compensation, where the difference is slight, as a
mere deficiency in acreage.

Where there is a provision for compensation
in the agreement, a claim for compensation for
misdescription will be allowed even after con-
veyance ; unless expressly barred by the agree-
ment. Palmer v. Johnston; Glayson v. Leech.
But this does not extend to cases of defect of
title. Debenham v. Saiuhridge.

B. In cases where Purchaser seeks Specific Per-
formance.

(i.) Purchaser can compel specific performance with
an abatement in price. The vendor must sell
what interest he has. Sill v. Buckley.

(2.) But where partial performance would be un-
reasonable or prejudicial to third parties it will
not be enforced.

Where the terms of the agreement exclude
compensation in case of a deficiency of acreage,
and there is a considerable deficiency, the rule
is that the purchaser cannot enforce specific
performance with compensation, nor can the
vendor without compensation. The vendor may,
however, annul the agreement under the usual
condition.

21 8 SPECIFIC PEEFOEMANCB.

(V.) Lapse of time.

At law, time used to be always of the essence of

the contract, but in equity tiine is deemed to be

primd facie non-essential. Seton v. Slade.

And under the Judicature Act, 1873, the rule in

equity now prevails at law.

Time is, however, deemed to be of the essence of
the contract, and its lapse will therefore be a bar to
relief even in equity in the following cases,
(i.) Where originally of the essence of the contract by
(a.) Express agreement.
(b.) The nature of the case.
(2.) Where made of the essence of the contract by sub-
sequent reasonable notice.
(3.) Where its lapse is such as to constitute laches or
abandonment.

(VI.) The agreement is tainted with fraud ; and the person
defrauded or prejudiced may also rescind the contract.
Formerly in the case of sales by trustees under
depreciatory conditions, specific performance would
not be enforced; but now the Trustee Act, 1893,
expressly deprives the purchaser of the right of
making any objection or requisition on this ground.

(VII.) Where the agreement would work great hardship,
or involve an unlawful act or breach of trust : e.g.,
where trustees contract to sell and the purchaser
resells to one of them, the contract for subsale wUl
not be enforced while the original contract remains
executory. Delves v. Chuy.

(VIII.) The agreement is not established ; that is, if it be
not a complete agreement as such, because some
term wanting or some condition unfulfilled.

(IX.) The vendor cannot deduce a title.

But the purchaser can only require such a title
as is stipulated for in the agreement. In the

SPECIFIC PBEFOEMANCE. 219

absence of stipulation the purchaser can insist on a
good title, and he will not be compelled to accept a
“good holding title,” nor to take land subject to
restrictive covenants.

Freehold property means unencumbered freehold.

Philips V. Caldeclough.

And if there are restrictive covenants the vendor
must disclose them, and if he fails to do so the
purchaser is entitled to be released from the contract.

Hone V. Gadstatter.

Although precluded by the agreement from
objecting to the vendor’s title, the purchaser will
not be compelled to complete if the vendor cannot
give a holding title, e.g., if the purchaser might be
turned out of possession at once.

Scott V. Alvarez.

If the vendor makes title through, or is himself,
an undischarged bankrupt to property acquired after
the bankruptcy, then, if the trustee has not inter-
vened, the title is good in the case of leasehold
property, a legacy or share of residue, or partnership
realty, whether the purchaser has or has not know-
ledge of the bankruptcy. Cohen v. Mitchell ;
Hunt V. Fripp ; Be Kent Gas Light Go.

But as regards real estate or equitable estates in
realty, even though the trustee has not intervened a
good title cannot be made without the concurrence
of the trustee.
Be New Land Co- v. Gray ; Preston’s Trustee v. Cooke.

The taking of possession by the purchaser is
generally, and under a sale by the court always,
deemed an acceptance of the title.

Bepudiation and Besciseion.

The purchaser may repudiate the agreement on any one
of the grounds above mentioned as constituting a good
defence to an action for specific performance and will be en-
titled to return of his deposit ; but if he repudiate without

2 20 SPECIFIC PBKFORMANGE.

sufficient ground he will be liable in damages, and his deposit
will be forfeited even in absence of express stipulation.

In respect of restrictive covenants not disclosed to him,
the purchaser’s remedy is rescission and not specific perform-
ance with compensation. Rudd v. LasceHles.

The vendor may rescind the agreement when he has
specially reserved to himself a right so to do ; but in the
exercise of the power he must act reasonably, and not
arbitrarily.

Where vendor rescinds for purchaser’s default, deposit,
although forfeited, must be allowed against deficiency on
resale.

The expenses for improvements executed under the
Public Health Act, 1875, or the Private Street Works Act,
1892, are, as between vendor and purchaser, a charge on
the property which takes effect from the completion of the
work or from the time some one becomes personally liable
to execute or pay for it. Under an open contract the
charge in general falls on the vendor.

Under the Vendor and Purchaser Act, 1874, s. 9, a
summons may be issued for the decision of any question
arising out of an agreement for the sale of land. Under
this Act — where the contract as regards its initial validity
is not disputed — the parties may have many questions
decided which could otherwise only be decided in an action
for specific performance, but damages properly so called
cannot be awarded under such a summons.

Under the Common Law Procedure Act, 1854, courts of
law had power to compel the specific performance of con-
tracts by means of a mandamus. This power, however, was
restricted to contracts relating to some public duty.

Benson v. Paull.

INJUNCTIONS. 2 2 I

CHAPTER X.

INJUNCTIONS.

An INJUNCTION is a judicial order (formerly a writ), the
general purpose of which is to restrain the commission or
continuance of some wrongful act of the party enjoined.

The jurisdiction of equity arose from the fact that at law
there was either no remedy at all, or else only an imperfect
and inadequate remedy. The object of an injunction is
usually preventive rather than restorative. The purpose ot
the majority of injunctions is the protection of proprietary
rights. They are either prohibitive or mandatory.

A prohibitive injunction is an order granted to restrain
the commission or continuance of some wrongful act or the
continuance of some wrongful omission.

A mandatory injunction is an order calling upon a person
to do some act.

Injunctions have been generally divided into two classes —

I. Common injunctions, to prevent the inequitable in-

stitution or continuance of judicial proceedings.
Under the Judicature Act, 1873, s. 24, the power of
equity courts to restrain proceedings actually pending
in other courts is practically abolished, and the court
before which the action is pending may itself direct a
stay of proceedings in a proper case ; and since the
Bankruptcy Act, 1883, the Court of Bankruptcy, having
become an integral part of the High Court, has lost its
power of restraining proceedings in other courts by
injunction. Now, therefore, instead of injunctions of
this class, there is an order to stay proceedings.

II. Special injunctions, to restrain wrongful acts uncon-

nected with judicial proceedings.
Under the Judicature Act, 1873, s. 25, an injunc-
tion may be granted by an interlocutory order of the
court in all cases in which it appears to the court just
or convenient, either conditionally or unconditionally.

2 22 INJUNCTIONS.

But this provision does not give the court any new
power to issue an injunction where no court had such
jurisdiction prior to the Judicature Acts.

I. — Order to Stat Proceedings, or other like Bemedial

Orders.

Equity, in issuing the old injunction to restrain pro-
ceedings at law, did not interfere with the jurisdiction
of common law courts, but merely acted in personam,
operating on the conscience of the party enjoined.

Earl of Oxford’s Case.

Upon the same principle, when the parties were

within its jurisdiction, equity restrained them from

proceeding in a foreign court, and any division of the

High Court may now do the like.

The old injunction was granted in cases where the

remedy at law would be complete if proofs could be

had and in cases of purely equitable rights. In similar

cases now, an order to stay will be granted.

Formerly proceedings at law were restrained by equity, and

now a stay of proceedings will be directed by the court before

whom the action is pending in cases —

(i.) Where an instrument has been obtained by fraud or

undue influence.
(2.) Where assets have been lost by an executor or
administrator without his default ; or in lieu of a
stay of proceedings, the court may order a transfer
of the action into the Chancery Division.
(3.) Where a person has only a bare legal title, as
against one possessing an equitable title.

Newlands v. Paynter.
(4.) Where a creditor has obtained judgment in an action
for administration, or a transfer of the action into
the Chancery Division may be directed.
(5.) Where more than one action is brought for the same
purpose, and even in the formerly excepted case of
a mortgagee the whole relief sought must now be
claimed in one action.

INJtJNCTIONS. 223

(6.) Equity will protect its officers who execute its own

processes.
Equity would not grant injunctions to stay proceedings
at law —

(i.) In matters criminal, or not purely civil, unless the

parties seeking relief were also plaintiffs in equity.
(2.) Where defence was equally available at law, in the

absence of special equitable grounds for relief.

(3.) Where the matter has been duly adjudicated upon

at law. Bateman v. Willoe.

The Common Law Procedure Act, 1854, provided

that equitable defences should be allowed at law, but

this was confined to cases in which equity would grant

an unconditional and perpetual injunction.

Jeffs V. Day.
This provision was optional; but now, under the
Judicature Acts, the defendant at law must plead every
kind of defence of which he intends to avail himself.

Where there is a subsisting agreement to refer to
arbitration, an order staying proceedings may be made.

II. — Special Injunctions to Resteain Weongful Acts
UTiconnected with Judicial Proceedings.

Consider these under two heads —

Firstly, Injunctions to enforce a contract (express or
impHed), or to forbid a breach thereof.

Secondly, Injunctions to prevent a tort.

Firstly, Injunctions in cases of contract.

(i.) This jurisdiction is supplemental to that of enforcing
specific performance ; for, as a general rule, what
equity will compel to be done it will restrain from
being left undone ; and even where it cannot enforce
performance, it will frequently restrain acts contrary
to the tenor of the agreement. Gatt v. Tourle.

But if agreement is not in writing, Statute of
Frauds may be a defence. Eeeve v. Jennings.

Equity will only grant an injunction to indirectly
compel specific performance where damages would

2 24 INJUNCTIONS.

be an absolutely inadequate remedy. A purchaser
who, before completion, has notice of restrictive
covenants will be compelled to observe them.
(2.) Negative contracts are specifically enforced by means
of injunctions, unless covenantee disentitled to relief.
(3.) The breach of part of an agreement may be restrained
although specific performance of the remainder can-
not be enforced ; Lu.mley v. Wagner.
but not, as a general rule, where the court cannot
secure performance by the plaintiff on his part.
(4.) Breaches of implied contracts resulting from the mis-
representations or acts of the parties are restrained,
unless there has been acquiescence,

Piggott V. Stratton ; Neesom v. Glarkson.
(5 .) Breaches of statutory contracts will be restrained with-
out proof of actual damage, but there must be no
laches.
Secondly, Injunctions against torts, i.e., wrongs indepen-
dent of contract. Wherever’ there is a right, there is a
remedy for its violation. To afford sufficient grounds
for an injunction, there must be something more than
a mere inconvenience — there must be a legal injury.

The more important cases are —

(I.) Waste;

Waste is a material alteration of things forming an
integral part of the inheritance. Waste, as* distin-
guished from trespass, could only be committed by a
limited owner, between whom and the party aggrieved
there was a privity of estate. Waste is either Volun-
tary, e.g., the destruction of buildings, or Permissive,
e:g., permitting buildings to fall out of repair.

The remedy at law was the old writ of waste under
the statutes of Marlbridge, Gloucester, and Westminster.
In many cases the law provided no effective remedy,
and the jurisdiction of equity arose from the incom-
petency of the law. Thus equity would restrain —

(i.) In cases not within the statutes ; e.g., where the party
had not the inheritance. Garth v. Cotton.

INJUNCTIONS. 22 5

(2.) Tenants without impeachment of waste from com-
mitting equitMe waste, such as pulling down the
family mansion-house or felling ornamental timber.

Lewis Bowie’s Case.

Tenants in tail after possibility of issue extinct,

and tenants in fee with executory devise over, are

on same footing as tenants expressly stated to be

without impeachment of waste.

(3.) Where the title of the aggrieved party is purely
equitable.

(4.) Where waste is only apprehended.

(5.) In cases of mortgages, if the mortgagor should fell
timber and thereby render the security insufficient.

Permissive waste by a legal tenant for life was not
remediable in equity, on the ground that the party aggrieved
could obtain damages at law, and equity will no longer
interfere to stay ameliorative waste, or to prevent or remedy
permissive waste.

A remainderman has no remedy against a tenant for life
in respect of permissive waste, unless the tenant for life is
subject to an obligation to repair.

Avis V. Newman ; Parry v. Hopkin.

An equitable tenant for life of leaseholds is not bound to
put same into better repair than they were at testator’s
death. Be Courtier.

But is liable to perform the continuing obligations under
the lease during his life interest. Re Gjers.

Under the Judicature Act, 1873, the distinction between
legal and equitable waste is practically abolished ; for by
sec. 25 it is provided that an estate for life without im-
peachment of waste shall not give the tenant for life any
legal right to commit equitable waste in the absence of inten-
tion to confer such right in the instrument creating the estate.

Ecclesiastical waste. A rector or vicar is in the same
position as an ordinary tenant for life, and has no right to
fell timber, except for necessary repairs to the parsonage
and premises.

226 INJUNCTIONS.

(II.) Nuisances.

Pvhlic nuisance — remedy, indictment at law, or in-
junction or information at the suit of the Attorney-
General in equity. Where a public nuisance causes
special damage to a private person beyond that suffered
by the rest of the public, he may himself have his
remedy by action. Soltau v. De Meld.

Where the nuisance is directly authorised by statute,
there is no remedy either at equity or law.

PriDate nuisance — remedy, action at law for damages
or injunction in equity; also by abatement or removal
of the nuisance by the party injured.

As a general rule, equity does not interfere by injunc-
tion where damages would be an adequate compensa-
tion ; e.ff.., a mere trespass, where temporary and without
claim of right.

Equity will, however, interfere wherever the injury
is not susceptible of being adequately compensated by
damages or is irreparable. Thus equity will grant an
injunction to prevent or remedy such nuisances as —
(a.) Darkening ancient lights.

But to obtain an injunction it must be proved that
sufficient light is not left for the ordinary purposes
of inhabitancy or business, according to the ordinary
notions of mankind. Colls v. Some and Colonial Stores.
A right to light is not rendered indefeasible even
by twenty years’ enjoyment unless and until action is
brought in which the right is called in question ; and
a tenant in occupation may give a consent which
will prevent the landlord acquiring a right.

Hymen v. Van den Bergh.
(h.) Disturbance of rights to lateral support indepen-
dently of prescription. Humphries v. Brogden
(c.) Pollution of streams ^’uring riparian owners.

Att.-Gen. v. Birmingham,
(d.) Smoke or noxious fumes visibly diminishing the
value of property.

Tipping v. St. Helen’s Smelting Co.
Where the property from which the nuisance proceeds

INJONCTIOI^’S. 227

is in lease, the reversioner may be liable equally
■\vifch the occupying tenant.

(III.) Libels, slanders, &c.

Equity will restrain by injunction the utterance or repe-
tition of libels, slanders, injurious trade circulars, &c.

Thorley’s CaitleFoocl v. Massam ; Thomds v. Williams.

Under the 58 & 59 Vict. c. 40, the repetition of libellous
statements at elections may be restrained.

Under the Patents and Designs Act, 1907 (7 Edw. VII.
c. 29), re-enacting like provisions in the Patent Designs
and Trade-Marks Act, 1883, an injunction may be obtained
against any person who by circular or otherwise threatens
proceedings as for infringement of a patent or design unless
action be commenced forthwith.

(IV.) Patents, designs, copyrights, and trade-marks.

Equity exercises jurisdiction and grants injunctions in
these cases wherever there is a primd facie title founded
upon long enjoyment to prevent irreparable mischief and to
suppress multiplicity of suits. It is clear that damages
would be no adequate compensation for infringement, and
that actions at law would give no sufficient remedy.
1. Patents.

A patent has been defined as a grant from the Crown
by letters patent of the exclusive privilege of making,
using, exercising, and vending some new invention.
The law of patents is now regulated by the Patents
and Designs Act, 1907, which provides that the dura-
tion of a patent shall be fourteen years, which may be ex-
tended by the court for a farther seven or even fourteen
years, on proof that the patentee has been inadequately
remunerated by the patent. Unless a patent has been
registered under the Act, no injunction can be obtained
in respect thereof; but the Act does not interfere with
the jurisdiction in equity.

Formerly it was immaterial whether the infringer of
a patent was aware of the existence of the patent, but
now under the Act^ tio damages can be recovered

2 28 INJUNCTIONS.

from an innocent infringer where the patent has been
granted since 1907.

Formerly joint patentees might grant licences sepa-
rately, but now, under the Act, a licence can only be
granted with the consent of all the patentees ; but joint
patentees need not account for profits made by working
the patent. Steers v. Rogers.

Under the Act of 1907, upon application for a patent
an official search is made to ascertain whether the in-
vention has been previously claimed.

Prior publication is usually fatal to the application for
a patent, but the Act protects the patentee from being
prejudiced if he can prove that such publication was
made without his knowledge, that the matter published
■was derived from him, and that he has made his
application with reasonable diligence.

Upon a motion for an interlocutory injunction three
courses are open to the court in acceding to the appli-
cation —

{a.) Injunction simply.
(6.) Interim injunction, plaintiff undertaking as to

damages,
(c.) Injunction directed to stand over until trial, defen-
dant keeping an account.

The plaintiff must deliver particulars of breaches
and the defendant particulars of objections to the
patent.

It may be noted that the first statute defining patent
rights is the Statute of Monopolies (21 Jac. I. c. 3),
patent rights being originally a privilege granted by
the Crown as restrained by legislative enactments ; and
by the Act of 1907 “invention” is declared to mean
any manner of new manufacture the subject of letters
patent within the Statute of Monopolies.

A foreign patent, to be effective in England, must be
worked, or honA fide attempted to be worked, here.

When a design is registered under the Patents and
Designs Act, 1907, the registered proprietor has copy-
right in the design for a period of five years, which

INJUNCTIONS. 229

period can be extended for a further five years on pay-
ment of the prescribed fees ; and the Comptroller has
power to grant a third period of five years.
Copyrights.

Irrespective of the Copyright Act, 1 9 1 1 , which comes
into force July i, 19 12. The copyright in a book
endures for the life of the author and a further seven
years, or the period of forty-two years, whichever period
is the longer.

Copyright comprises both
(a.) The right of the author to publish or not, and to
restrain others from publishing.

And the publication of unpublished manuscript
may be restrained.

Duke of Queensherry v. Shehbeare.
(&.) The right after publication of republishing, and
restraining others from doing so.
The plaintiff must in the first place make out his
title by registration and otherwise, and this done, the
principal question at issue is whether or not there has
been an infringement, i.e., piracy or no piracy ; and
(a.) Quotations, abridgments, use of common materials
will not constitute any infringement if lond fide,
otherwise if mcdd fide,
{b.) Copyright exists in orally delivered lectures, and
publication by hearers is an infringement.

Abernethy v. Hutchinson.
Even if the publication be in shorthand only.

Nicols V. Pitman.
By 5 & 6 Will. IV. c. 65 (repealed by Copyright
Act, 191 1 ), a lecturer, in order to obtain copyright
in his lecture, must give two previous days’ notice
thereof to two justices of the peace residing within
five miles of the place proposed for delivery. The
statute does not affect lectures delivered in a univer-
sity or public school.

The reporter of a lecture or speech acquires copy-
right in his report. Walter v. Lane.
There is no copyright in the title of a book or news-

330 INJUMOTIONS.

paper, although there may be in its mere external
appearance. Walter v. Mmmott ; Walter v. Howe.
And there is no copyright in libellous or immoral
works,
(c.) As to private letters, literary or otherwise—

(i.) The writer may restrain their publication.

Pope V. Ourl.

(2.) The party written to may restrain their pub-
lication by a stranger.

(3.) Publication may, however, be permitted on
grounds of public policy.

As to dramatie pieces and ynvsioal compositions,
there are two rights of property : {a.) The copyright;
(J.) the right of representation or performance.

And these rights may be separated, and the right
of representation will not pass by the assignment of
the copyright unless so expressed.

Copyright is in the description and not in the
thing described, whereas patent is in the thing
desovibed.

Under the Copyright Act, 1 9 1 1 ( i & 2 Geo. V.
0. 46), the privilege of copyright is given throughout
our dominions so far as the Act extends in respect
of every original literary, dramatic, musical, and
artistic work, if, in case the work is published, it was
first published within such parts of our dominions,
or, in case it is unpublished, the author was at
the date of making it a British subject or resident
within such parts ; and copyright is defined as the
sole right to produce or reproduce the work or any
substantial part thereof in any material form what-
soever, to perform, or in the case of a lecture to
deliver, the work or any substantial part thereof in
public ; if the work is unpublished, to publish the
work or any substantial part thereof. Under the
Act copyright will endure (except as otherwise
expressly provided in the Act) for the life of the
author and a further period of fifty years.

INJUNCTIONS. 231

And (i.) Dealing fairly with a work for review,
study or summary ;

(2.) Eeproductions in school books of short
passages from published works, limiting the
number of passages to two from same
author ;

(3.) Reports of lectures, except where a report
is prohibited by conspicuous notice,
are not to be deemed infringements.

(3.) Trade-marks.

A trade-mark has been defined as the symbol by
which a man causes his goods or wares to be identified
and known on the market. The law on this sub-
ject is now regulated by the Trade-Marks Act, 1905
(5 Edw. VII. c. 15), under which a” trade-mark ” sig-
nifies a mark used in connection with goods for the
purpose of indicating that they are the goods of the
proprietor of such trade-mark by virtue of manufac-
ture, dealing with, or sale, and “mark” includes a
name or signature as well as a device. But in order
that a word may be registered as such it must be an
invented word or a word having no direct reference
to the character or quality of the goods, and not
being a geographical name or surname.

The registration of a trade-mark is for a period
of fourteen years, but may be renewed from time to
time in accordance with the Act.
Prior to the Trade-Marks Begistration Acts, 1875-
1876, the right of equity to protect from infringement
of trade-marks was based not upon a,ny property in them,
for it was said there is no property in a trade-mark,
but upon the fraudulent misrepresentation.
Turton v. Turton ; Bv/rgess v. Burgess; Cocks v. Chandler.
Some doubt, however, existed as to whether this
jurisdiction was not founded upon property in the sole
application of the symbol.

LeatJier-Gloth Go. v. American Leather-Cloth Co.
At any rate, it was laid down that it was not

232 INJUNCTIONS.

necessary to prove fraud in order to entitle a party

to relief. Singer Machine Manufrs. v. Wilson.

But now, if a trade-mark has been duly registered
under the Trade-Marks Act, 1905, the owner has a
true property in it, to the extent the trade-mark is
used in connection with goods, but not further, and
may restrain the use of it by others.

A duly registered trade-mark can only be assigned
in connection with the goodwill of the business con-
cerned in the goods for which it has been registered,
and is determinable with that goodwill.

Under the Act no person can sue for infringement
of a trade-mark unless it is duly registered; the re-
gistered proprietor is entitled to the exclusive right to
use it. Registration is primd facie, and after seven
years is practically conclusive, evidence of right to the
trade-mark, unless the registration was obtained by
fraud or would be otherwise disentitled to protection
in a court of justice.

An injunction will only be granted if defendant’s
mark is so similar to the plaintiffs as to be calculated
to deceive. But notwithstanding the Act, a distinctive
symbol applied to goods may by user become a trade-
mark, and things incapable of registration may be
protected by injunction in an action for ” passing off.”

The principle of law is that nobody has any right
to represent his goods as the goods of somebody
else. Beddaway v Banham.

And if the effect of the use of a person’s own name
is to mislead the public, although there is no fraudulent
intention, an injunction will be granted.

Valentine v. Valentine.

All that has to be proved is that the natural result
of the conduct complained of will be to pass off goods
as the goods of another. Cellular Clothing Company.

(V.) Breach of contract.

An injunction will be granted to restrain the breach of a
restrictive covenant of which the purchaser of land has notice.

PARTITION. 233

By Lm^d Caims’s Ad (21 & 22 Vict. c. 27) power was
given to equity courts to award damages, wherever they
have jurisdiction to grant an injunction or specific perform-
ance, either in addition to or in substitution for such injunc-
tion or performance. It is now repealed, but the right of
the Chancery Division to award damages in lieu of or in
addition to an injunction is preserved.

And now, under the Judicature Acts, as has been stated,
all courts are upon the same footing in respect of granting
injunctions, although relief is generally sought in the Chan-
cery Division, whenever before these Acts the aid of equity
would have been invoked.

A mandatory injunction is one which directs the per-
formance of a positive act, and generally requires a much
stronger case to be made out than a prohibitory injunction,
especially if interlocutory. Diwrell v. Pritchard.

CHAPTER XI.

PARTITION.

Three kinds of co-owners are recognised at law —

(I.) Coparceners — where a person leaves several co-
heirs. These alone could originally compel par-
tition ; hence their name, parceners.
(2.) Joint-tenants — where property is limited to two or

more persons without words of division.

(3.) Tenants in common — where property is limited to

several, with words defining the aliquot shares

each is to take. {Haynes’ Eq.)

Courts of law, however, had power given them by statute

to compel partition in every case by means of a writ of

partition.

Equity assumed jurisdiction wherever the title was purely
equitable, so that partition could not be directed at law, and
generally in all cases on the ground of the inadequacy of the

234 PARTITION.

legal remedy ; for courts of law could not effectuate a parti-
tion by mutual conveysinces, or order any other than an eqv,al
partition. The procedure in suits for partition was to issue a
commission to be completed by mutual conveyances. Now,
a reference to chambers is made to ascertain what would
be a proper division. Agar v. Fairfax.

No suit for partition could be maintained by a reversioner
or a person claiming under a disputed title.

Equity had no power to order a sale in lieu of partition ;
great inconvenience and difficulty consequently occurred
where property small. Turner v, Morgan,

Now, however, by the Partition Act, 1868 (31 & 32 Vict, c,
40), amended by the Partition Act, 1876 (39 & 40 Vict.
c. 17), the Court (Chancery Division) —

(i.) Has power, on request of any interested party,
notwithstanding the dissent or disability of any
others, to order a sale in lieu of partition, in the
event of special circumstances rendering it more
beneficial, and also notwithstanding the majority
dissent, and are ready to purchase the shares of
those requesting a saie. Gilbert v. Smith.

(2.) Is hound; on request of parties interested to extent
of a moiety, to order a sale, unless good reason
to the contrary. Pemberton v. Barnes,

(3.) Has power, on request of any interested party, to
order a sale unless the other interested parties
undertake to purchase his share.
Although the sale is usually carried out under the direc-
tion of the court, it may for good reason be ordered to be
made altogether out of court, the proceeds being in that case
paid into court.

If any one of the parties beneficially interested be an
infant or of unsound mind, the proper court will effectuate
the decree for partition or sale by making an order vesting
their shares or directing a conveyance thereof.

INTERPLBADEK, 2 3 S

CHAPTER XII.

I

INTEEPLEADEE.

An interpleader lias been defined as a proceeding by
whicb a person from whom two or more other persons, whose
rights he cannot readily determine, have claimed the same
thing, wherein he himself claims no interest, other than for
charges or costs, can compel them to contest the matter
between themselves, without involving him in any vexatious
litigation respecting it. {Sm, Man.)

Interpleader, although it existed at law, had a very
limited application, being (prior to the i & 2 Will. IV. c. 58,
and 23 & 24 Vict. c. 124) restricted to cases of joint bail-
ments.

To enable a party to interplead in equity, it was essential
that

(i.) He should have no personal interest in the
subject-matter. Mitchell v. Hayne.

(2.) The whole of the rights claimed by the defen-
dants should be finally determined by the liti-
gation, and the plaintiff therefore be under no
personal liability. Crawshay v. Thornton.

But the court may direct an interpleader,
reserving the question of liability.
(3.) The titles of the claimants should be derived
the one from the other, or both from a common
source.
No interpleader was allowed in equity, as a general rule,
in cases of

(i.) Adverse independent legal titles.

(2.) Agent against principal, unless the latter had

created a lien in favour of a third party.
(3.) Tenant against landlord, and a stranger claim-
ing by a paramount title, unless the same rent
was claimed by persons in privity of contract
or of tenure.
(4.) Sherifif against claimants, for by the seizure

236 INTERPLEADER.

he became a wrongdoer, unless there were
conflicting equitable claims.

Under the i & 2 Will. IV. c. 58, and 23 & 24 Vict,
c. 124, courts of law acquired more extensive jurisdiction,
the former statute extending the benefit of interpleader
to sheriffs, and the latter to parties whose titles were not
derived from a common source. These statutes, however,
only extended this benefit to defendants in an action, while
in equity it was not necessary that proceedings should have
been actually commenced.

Now, the whole procedure in interpleader cases is governed
by Order Ivii. under the Judicature Acts, whereby the old
distinctions between law and equity in this respect have
been practically abolished, and a sheriff empowered to inter-
plead immediately after seizure. It is provided by this
order that the applicant for relief must satisfy the court that — r

(a.) He claims no interest in the subject-matter.

(&.) He does not collude with other claimants.

(c.) He is willing to pay or transfer the subject-matter
into court.

When amount in dispute does not exceed ;£5oo pro-
ceedings may be transferred to county court under the
Judicature Act, 1884.

( 237 )

PART IV.— THE AUXILIARY JURISDICTION.

NOW OBSOLETE AS A SEPARATE JURISDICTION.

Section I. — Discovery and Bills to perpetuate Testimo7iy and to
take Evidence de bene esse.

A. Discovery,

A BILL of discovery sought no relief, but merely discovery,
usually of facts in the knowledge, or documents in the
possession or power, of the defendant. Every such bill was
in aid of proceedings already commenced in another court.
The jurisdiction of equity arose from the former inability
of the common law courts to admit the evidence of litigants
themselves, or of interested parties, or to compel the pro-
duction of material documents in the custody of parties.

Defence to a bill of discovery rested upon the following
(among other) grounds, which, with comparatively slight
modifications, may still be raised as objections to discovery.
( I .) The subject was cognisable in a judicial court.
(2.) The plaintiff was disentitled by his disability.
(3.) The plaintiff had no interest in the subject.
(4.) The defendant was not bound to discover his own

title.
(5.) The defendant was protected from making discovery.
(6.) The defendant would thereby expose himself to

criminal proceedings or forfeiture.
(7.) The defendant was a mere witness.
Thus—

{a.) An heir at law could not, while an heir in tail
could, obtain discovery of title-deeds during
ancestor’s lifetime, for the latter had, but the
former had not, a present title.

238 PERPETUATION OF TESTIMONY.

(h.) No discovery -was granted in aid of matters not
purely civil, or where it would involve a forfei-
ture,
(c.) No discovery from a married woman of facts where-
with to charge her husband, or from any one in
breach of professional confidence.
(d.) A defendant who was a bond fde purchaser for
value without notice could formerly object to dis-
covery ; but he cannot do so now.

Lyell V. Kennedy ; Emnerson v. Ind.

Courts of law subsequently acquired jurisdiction, so that

the aid of equity was no longer needed ; and under the

Judicature Acts the peculiar jurisdiction of equity to grant

discovery in aid has become obsolete.

B. Bills to perpehcate Testimony and to take Evidence

DE BENE ESSE.

I. Bills to perpetuate testimony.

Their object was to preserve evidence in danger Of being
lost before a question could be litigated.

A great objection to these bills was that the depositions
were not published until after the death of witness. Equity
refused to perpetuate testimony if the mattet could at once
be litigated.

The doctrine of equity as to these bills has been thus
stated — –

(i.) Any interest, however small and rem’ote, and

although contingent only, is sufficient tiy sustain it.

(2.) Equity will not perpetuate evidence of a right

which may be immediately barred.
(3.) A mere expectancy or spes successionis was not

enough.
(4.) It was only allowed where right to property inVttlted.
Diordey V. Fitzhardinge ; Townshend Peerage Case.
By the 5 & 6 Vict. c. 69—

{a.) The right to perpetuate Was extended to persons
claiming titles, dignities, or Offices.

BILLS QUIA TIMET. 239

(6.) A person who would, under the circumstances
alleged by him, become entitled upon the
happening of any future event, may perpetuate
testimony.
So that by this Act points 3 and 4 above enumerated
were altered and no longer exist.
Under the Legitimacy Declaration Act, 1858, the Divorce
Division has power to perpetuate testimony by making
decrees declaratory of the legitimacy of the petitioner, or
of the validity of his marriage, or that of his parents or
grandparents, and vke versd.

The Judicature Acts do not specifically deal with this
subject, and under them an action in the nature of a bill to
perpetuate testimony may still be brought.

2. Bills to take evidence de hens esse.

These bills were distinguished from those to perpetuate
testimony by the fact that the former related to matters
involved in an existing action, while it was a fatal objection
to the latter that they might be subjects of immediate
litigation.

These bills would be allowed for the purpose of taking
evidence of important witnesses, too aged or infirm to travel,
or in a precarious state of health, or resident abroad.

Courts of law were sufficiently empowered in this respect
by the 13 Geo. III. c. 63, and 1 Will. IV. c. 22, and now,
under the Judicature Acts, in lieu of any bill or action there
would be a mere order to examine de bene esse, obtained on
a summary application in the pending cause or matter under
Order xxxvii. r. 5.

Section II. — Bills QUIA timet and Bills of Peace.

A. Bills quia timet.

In the nature of writs of precaution in order to
prevent wrongs, as by appointment of receivers,
directing security to be given or granting injunctions.
Actions in the nature of bills quia tintet may still be

240 CANCELLATION OF DOCUMENTS.

brought, but in general seek other substantive relief.
No such action will lie unless the plaintiff prove the
apprehended danger to be both imminent and of a
substantial kind, or the apprehended injury to be
irreparable. lletcher v. Bealey.

B. Bills of peace.

Distinguished from bills quia timet by the circum-
stance that they were most generally brought after
the right had been tried at law.
A bill of peace has been defined as a proceeding filed
to establish and perpetuate, in favour of or against a
number of persons, some general private right, which
from its nature is likely to be sought to be established
or overthrown by different persons at different times
and by different actions; or to conform and perpetuate
a right which has been satisfactorily established by two
or more trials, but is in danger of being again con-
troverted. {Sm. Ma.)
They were thus brought to prevent —
(i.) A multiplicity of suits.

Sheffield Waterworks v. Yeomans ; Mayor of
York V. Pilkington.
(2.) Oppressive litigation. Uarl of Bath v. Sherwin.

Prior to Bolt’s Act (25 & 26 Vict. c. 42), equity
would direct the right of the plaintiff to be established
by a trial at law, but under that Act it had power to
determine the right itself.

Actions in the nature of bills of peace may still be
brought, and under the Judicature Acts the court
before whom the action is pending will both establish
the right and grant an injunction in the same judgment.
And by the 59 & 60 Vict. c. 51 vexatious litigation
may be suppressed.

Section III. — Cancelling and Delivering up Documents.

Courts of equity have jurisdiction in certain cases to direct
the cancellation, rescission, or delivery up of instruments
which have answered their purpose or are voidable or void,

CANCELLATION OF DOCUMENTS. 24 1

upon the principle of quia timet, for fear such instruments
should be subsequently vexatiously used when evidence has
been lost. This relief is in discretion of the court, and not
granted as a matter of right.

Voluntary instruments are not, as a rule, relieved against,
and even where relief is granted, the plaintiff is put upon
terms. The mere fact that no power of revocation is
reserved does not amount to proof that he did not know what
he was doing.

Relief was generally granted to a plaintiff who had a good
defence in equity not available at law ; although all defences
are now available at law, the equity jurisdiction remains
practically exclusive.

The following rules have been laid down : —

I. Voidable instruments :
(i.) Cancelled, where

(a.) Defendant guilty of actual or constructive fraud,

in which plaintiff has not participated.
(h.) Constructive fraud on public policy, in which,
plaintiff has participated, if public policy
defeated by allowing instrument to stand,
(c.) Constructive fraud in both parties, but both not
actually in pari delicto.
(2.) Not cancelled, where

(a.) Plaintiff sole guilty party.

(b.) Plaintiff has participated equally in the fraud.

(c.) Instrument is founded on illegality.

II Void instruments.

(i.) Delivered up — where the perpetration of further

wrong would be thereby prevented.
(2.) Not delivered up — where the illegality appears on
the face of the instrument ; for in such a case
there can be no fear that lapse of time will deprive
a party of his defence.
The Judicature Acts have not altered the grounds of this
jurisdiction, and have assigned it to the Chancery Division
exclusively.

242 BILLS TO ESTABLISH WILLS.

Section IV. — Bills to Establish Wills.

Formerly ecclesiastical courts had cognisance of wills of
personalty, and common law courts of wills of realty, the
jurisdiction of equity only existing where a will came inci-
dentally before it ; in which case, if the parties did not admit
the validity of the will, and it had not been established else-
where, equity would either itself establish the will, proving it
jper testes, and enjoin the heir, or direct an issue to be tried for
that purpose.

Under the Probate Act (20 & 21 Vict. c. 77) the Court
of Probate (Probate Division) is the proper court having juris-
diction over wills of personalty, and also of realty upon cita-
tion of the heir and devisee.

A devisee in possession, whether legal or equitable, might
have had a will of realty established in equity against the
heir, even though the heir had not brought ejectment.

Boyse v. Bossborough.

And not only against the heir, but against all other
opposing parties. Lovett v. Lomtt.

But the heir could only come into equity to have the will
established by consent, for he had a legal remedy by ejectment.

Now under the Probate Act a will proved in common form
is primd facie proof of the will ; but if in solemn form, is not
only sufficient, but conclusive proof.

When wills (whether dealing with realty or not) deal
w