■;■.'■,'. A A ! (= I 7 HERNf ' ■'.:■ ^=^= c ',"'■" '■'■'■ 9 MAL ' .1 8 •~ n 5 ARY ; 7 -, ; ;. T UNIVERSITY OF CALIFORNIA LOS ANGELFS SCHOOL OF LAW LIBRARY UAL PRINCIPLES OF EQUITY. A CONCISE AND EXPLANATORY TREATISE INTENDED FOR THE SPECIAL USE OF STUDENTS, JOHN IXDERMAUR, SOLICITOR, AUTHOR OF '* PRINCIPLES OF THE COMMON LAW," "MANUAL OF PRACTICE,' t' EPITOMES OF LEADING CASES," &c., &c. LONDON: GEO. BARBEE, "LAW STUDENTS' JOUENAL " OFFICE, 16, CURSITOE STEEET, CHANCERY LANE. 1886, LONDON : PHINTED B\ OEO. nARIIER) CCnSITdR STREET) CllANCEHY LANE. T PREFACE. I HAVE in this work endeavoured to present students with a concise, and at the same time explanatory, Elementary Treatise on the Principles of Equity. If I have, as I hope, succeeded in doing so, I think I shall have supplied a real want. I have drawn the material for the work to a great extent from Messrs. White and Tudor's "Leading Cases in Equity," and from Mr. Justice Story's "Commentaries on Equity Jurisprudence," to both of which works considerable reference will be found to have been made throughout, and I desire to here make my acknowledgments to the Authors and Editors of those valuable treatises. I have drawn but little from smaller text-books, but I may say that I have carefully considered and com- pared all of them, in my desire to present my readers with what was most important, and that in the clearest manner. I only profess this to be an ele- mentary treatise, but I think that the careful student of it, will gather from its pages a fair general know- ledge of the Principles of Equity; and I trust that, by the references I have given to the works before referred to, I have furnished those who desire much greater knowledge, with the direct means of obtaining it. With regard to authorities beyond the recognised " Leading Cases," I have, at any rate, striven conscientiously to give a selection of the most useful ones, a by no means easy task, when one considers the ever increasing 761489 iv PREFACE. bulk of case law ; find, if some may think I have not referred to enough, I would ask them to remember the design of the work, and my desire to teach, not to confuse, a point which it appears to me is often somewhat forgotten by modern writers of students' text-books, in their desire to l)e " complete," and to omit nothing. Though some may be much gratified to see the comparative smallness of this work, others may be somewhat alarmed by that very feature, at which I have designedly aimed. I wish to say something to each of these two classes. I recommend to all some reference to the established " Leading Cases " during the perusal of this work. Those who are unable to refer to ""White and Tudor,^' should at least fully refer to my "Epitome of Leading Conveyancing and Equity Cases"; and, to those who are able to, I heartily recommend a thorough reference from time to time to, and study of, " White and Tudor." Those who will thus 3t will, I am sure, attain a good and sound knowledge of the Principles of Equity. One word more, and that is with reference to my division of the subject. It is, at any rate, somewhat novel; I do not profess that it is scientific. I do, however, think that it is a clear and plain one, and, if this is so, I care little for any criticism with regard to it. J. L 22, Chancery liANE, W.C., December, 188G. TABLE OF CONTENTS. PAGE Index to Cases cited vii Index to Statutes cited xiii Editions of Text-Books referred to . . . . xv PAET I. THE ORIGIN AND SCOPE OF THE OLD COURT OF CHANCERY, ITS GROWTH, AND ITS MODERN SUBSTITUTE. CHAP. PAGE -^ I. The Court of Chancery as it was ... I ^ II. The General Maxims of Equity .... 7 ( III. The Chancery Division of the High Court of Justice 17 PAET 11. MATTERS SPECIALLY ASSIGNED TO THE CHANCERY DIVISION OF THE HIGH COURT OF tjstICE BY THE JUDICATURE ACT, 1873. CHAP. PAGE I. Of Trusts 20 II. Of Trustees 37 III. Of the Administration of the Estates of Deceased Persons 53 IV. Of the Dissolution of Partnershii's, and the taking of Partnership and Other Ac- counts 72 V. Mortgages 80 VI. The Rectification and Setting Aside of Written Instruments, and herein op Acci- dent, Mistake, and Fraud .... 102 VII. Of Specific Performance op Contracts, and Specific Delivery Up of Chattels . . 130 VIII. The Jurisdiction of the Court in respect of THE Persons and Estates of Infants . . 151 IX. Partition, etc. . 165 VI TABLE OF CONTENTS. PART III. Equity, therefore, has long been a fixed Equityafixed system ; a Court in which relief is given on prin- ^''^ ^^' ciples as well established as at Common Law; not acting in opposition to the Common Law, but, rather following it as far as possible, yet somewhat tem- pering its harshness, and giving relief in matters 1 unknown to the Common Law, or in which the Common Law powers were defective. The two systems have generally harmonized well. Modern times have, however, brought about a fusion, and the beneficient influence of the doctrines of Equity may be felt throughout the whole of the Supreme Court of Judicature. \ What, then, is Equity as distinguished from law ? Definition of It is certainly not natural justice. To attempt to ^^^ ^' deal out that kind of justice is too much for our frail (/) story, 34, 35. THE COUKT OF CHANCERY AS it WAS. humanity. There must always be left a large class of cases to be dealt with in the forum of conscience. Equity may shortly be defined as a portion of justice not originally recognized at Common Law, yet not existing in opposition to it, but rather following it so far as consistent with justice, and administered where the Courts of Common Law could not give all neces- ; I sary relief. Wc see thus the Court of Chancery as it was prior to the passing of the Judicature Act, 1873, that is with regard to its powers and general scope. As to divisions It has bccu customary for writers on Equity to of Equity. (livifie the jurisdiction of the Court in some way, the most usual division being into three heads, viz. :— (1) The exclusive jurisdiction of the Court; (2) The concurrent ; and (3) The auxiliary — the first head comprising those matters left entirely untouched by Common Law, c.//., Trusts ; the second those in which the Common Law only gave some insufficient relief, or in which, though it originally gave no relief, it afterwards acquired such a power by statute, e.g., fraud, or the granting of injunctions ; and the third where the Court gave a helping hand to Common Law, in fact assisted it in exercising a jurisdiction which it possessed, e.g., granting discovery. Such a division since the fusion of Law and Equity is clearly useless, and need only be referred to now as matter of history. We have in these pages only aimed at a practical division in accordance with matters as they stand now. ( ^ ; CHAPTER II. THE GENEKAL MAXIMS OF EQUITY. In the last chapter we have made incidental reference to the Maxims of Equity, and we now proceed to deal with the chief of these in detail. 1. Equitii u-ill not suffer a right to he icithout a i. No right ^ „ , . . , . . ■ •, without a remedy .—^hiB is a rule or maxim forming as it were remedy. the very foundation stone of Equity jurisprudence, for the idea of the origin of the Court was the fact of rights being in existence for which there was no power of giving relief at Common Law. The maxim is sometimes expressed : " There shall be no wrong without a remedy." The same thing is meant ; no wrong without a remedy for its redress ; no right without a remedy to enforce it. To this maxim we owe our modern doctrine of uses and trusts {g), and, in fact, it is the key note to all cases coming within the old head of the exclusive juris- diction of the Court. It must, however, be remem- bered, that in the same way that Equity is not a Court of conscience, and that there are many matters of a moral nature only not within the cognizance of that Court, so this maxim must not be construed in its literal sense, but must be regarded as referring only to rights and wrongs which come within a class of rights or wrongs generally dealt with at law, although as to the particular right or wrong there was no remedy iji). (g) See post, p. 21. (A) Smith's Manual of Eq., 13, 1 4. 8 THE L.ENERAL MAXIMS OF EQUITY. 2. Equity 2. Equity follows the laic. — In other words Equity ^o ows t c ^g ^^^ ^ body of jurisprudence acting in antagonism to Law. "Whenever legal estates and interests are under the cognizance of the Court of Chancery, that Court has always put the same construction upon them as the Court of Law would. Thus, a grant to A, and his heirs, confers a fee simple estate both at law and in equity. So also statutes receive the same construction in Equity as at law. Yet to construe this maxim literally would be an absurdity, for it would be as much as to say that Equity is the same as law. The difference is that when equitable estates, rights, and interests are involved, Equity does not hesitate to depart from the strict construction and put a construction more in accordance with the true meaning of the parties. The real meaning of the maxim is best shown by reference to the doctrine of the Court with regard to executed and executory trusts (<")• To quote from Mr. Josiah Smith's Manual of Equity : *' The true meaning of this maxim would seem to be " that Equity is governed by legislative enactments " and the rule of law in regard to legal estates, " rights, and interests ; and that it is regulated by " the analogy of such legal estates, rights, and " interests, and the legislative enactments and rules " of law affecting the same in regard to equitable " estates, rights, and interests, where any such " analogy plainly subsists, if in each case there are " no peculiar circumstances rendering it absolutely ** necessary to deviate from this rule, or creating an " equitable obligation in one of the litigant parties, "' and an equitable correlative right in favor of " another litigant party, and requiring a different " course to be taken in the particular case, without " overturning or destroying the general application (t) iSec post, pp. 2.S, '2'J. and sec Lord Glenorchy v. lios'illv. 1 \\h, iind Tu.. 1. THE GENERAL MAXIMS OF EQUITY. 9 " of any legislative enactments or rules of law that " may in terms or by analogy apply to the case " (k). 3. Equity reaards the spirit and not the letter. — This 3. Equity re- . fards the signifies that Equity looks more to the real intent of spirit and not the parties than to the actual form of the transaction ^^^ better. in question. Thus the form of a mortgage is that of an absolute conveyance with a right of redemption on a certain given day, and the construction at law was according to the words used, and it was necessary that the day named should be strictly observed, otherwise the mortgagor lost his estate. But Equity has always regarded the transaction as being one simply for the securing of money, and has always allowed to the mortgagor his right or equity of redemption, although the day named has gone by (0- So, also, the Court of Chancery in very early times gave relief on this same principle against penalties and forfeitures (?«). 4. Where the Equities are equal the laiv pre- vails. • ' 5. Qui prior est tempore potior est jure. These two maxims are placed together because, un- less the one is considered in connection with the other, they would appear to clash. Equity does not pay any great respect to the mere accident of time, and the fifth maxim must be taken as entirely subservient to the fourth, which may be shortly explained thus : When on either side in point of conscience the equitable rights are equal, then the Court will give the pre- ference to that person who is possessed of the legal 4. Where the Equities are equal the law prevails. 5. Qui prior est tempore potior est jure. Comparison of these two maxims. (A:) Smith's Manual, 16. {I) Sec hereon, post, p. 81. (m) See hereon, post. Part. III.. Chap. 5; and Peachcij v. Somerset, 2 Wh. and Tu., 1245 ; Sloman v. Walters. lb., 1257. 10 THK UENEHAL MAXIMS Ol' EQUITY. estate. He has a legal title, aud as against bim the Court will not interfere, for there is no reason why it should, the scale is evenly balanced on the equities, and the Court therefore lets the law weigh the scale down. Thus, suppose a trustee possessed of the legal estate in property conceals the trust and represents himself as the legal and beneficial owner of the pro- perty, and on that footing sells and conveys to a bund Jide purchaser for value, this purchaser has surely an equal Equity with the defrauded cestui que trust. Battel V. and ousts him. The case of Bassd v. Nufiworthi/ (n) liosworthy. -^ g^metimes quoted as illustrative of this maxim. It is not really so, but simply shows that, irrespective of the ownership of the legal estate, the Court pays respect to the defence of hund fide purchaser for value to the extent that the Court will not give any assistance against a person occupying that position beyond what could be obtained against him at Common Law. In that case a bill was filed by an heir-at-law against a person claiming, as purchaser from the devisee under the will of his ancestor, to discover a revocation of the will. The defendant pleaded that he was a purchaser for valuable con- sideration, bond Jide, without notice of any revocation, and this was held a good plea. Now, if the plaintiff's contention was right, the legal estate was in him and not in the defendant, and all the Court decided was that he must succeed, if at all, by the force of his legal title, and that against such a defendant it would not give a special relief peculiar to Equity, viz., Discovery. It may be noticed, however, that now that Law and Equity are fused, and Discovery is not peculiar to one Division of the Court more than to another, the principle of this decision is not fully applicable. Thus, in a very recent case, a devisee under a will brought an action of ejectment against (m) 2 Wh. aud Tu., 1. THE GENERAL MAXIMS OF EQUITY. 11 the defendant, who was a purchaser from the tes- tator's heir-at-law. The testator was a fee simple owner and was supposed to have died intestate, and the defendant bought of his heir and was in posses- sion under that title. The plaintiff now alleged that a will had, subsequently to the sale, been discovered under which he took the lands. The defendant pleaded (1) that he was in possession, and (2) that he was a bond fide purchaser for value ; and on this latter ground he resisted the giving of discovery. The Court held that the defendant could not success- fully resist discovery, for the action was not like a Bill of Discovery in aid of an action at Common Law, but was really an action of ejectment, and that the discovery being only sought as an incident in the action the plaintiff was entitled to it (o). Perhaps a better illustration of the force of the Tacking. maxim now under consideration is furnished by the doctrine of Tacking (jj). Now, in both the instances we have given the respect shown to the possession of the legal estate is plainly visible, and it is also equally plain that this maxim altogether overrides the mere point of priority of time. The second mortgagee is prior to the third, but the third mortgagee, having advanced his money without notice of the second mortgage, is allowed to clothe himself with the legal estate by getting in the first mortgage, and then he ousts the second mortgagee. But yet the maxim Qid prior est tempore ptotior est When the jure, is of importance, applying as it does to cases not ^^^ j^^j involving the ownership of the legal estate. Where importance, there are several persons having equal equities, that (o) Emmcrson v. Ind, Coope and Co. ; W. N., 1886, p. 146 ; L. S. J., 1886, p. 224 (now under appeal to House of Lords). (p) As to which see post, pp. 96, 97, and Marsh v. Lcc. 1 Wh. and Tu., 696. 12 THE GENERAL MAXIMS OF EQUITY. is equal moral rights, and none of them has posses- sion of the legal estate, then the question of time governs. Thus, take the case of several equitable charges given on the same property, here, in the absence of any special circumstances, they take in order of date. f). Equity fi, Equitif looks upon thdt (iR done iclnch oufjht to he looks on that , mi • • tie ^ l ^ • as done which doiic. — Ihis maxim must not, 01 course, betaken in ought to be ^jjg ^rj^eand literal sense thatEquitv acts as a Court done. 1 - . of conscience and makes a person do that which is right. It only means that where a person has in- curred an obligation to do something then the Court looks on it as done, and produces the same substantial results as if it were actually done. Thus, if land is contracted to be sold the contractor is deemed already to have sold it, so that were he to die the purchase- money is the thing to be considered, and that goes to his next-of-kin. This introduces us to the doctrine of Conversion, a subject which is dealt with here- after {q). 7. Equity im- 7. Equity wiputes an intention to fulfil an ohliga- tention°to° ^ion. — Equity is a Court established to do right, and ^"^^^^ ^^} it seems, therefore, only natural that it should impute obligation. ' . . , , x i i . • to persons an intention to themselves to do what is right. A person is under an obligation to do some act, and he does one which though not exactly of the kind agreed to be done, yet bears much resemblance to it, or it is of such a kind that it may fairly be taken to have been his design to satisfy his obligation by what he has done. Thus, A agrees to buy and settle land, he buys some land and dies without settling it. This will generally be deemed to be an act done by him in performance or part performance of his cove- nant, and such a presumption is but putting a favor- (9) Post, Part III., Chap. :t ; and see Fletcher v. Ashhvufr. 1 Wli. and Tu., 968. THE GENERAL MAXIMS OF EQUITY. 13 able coDstruction on the acts of others, and taking it that a man will first apply himself to doing what he is bound to do. This is what is known as the doctrine of Performance, and closely allied to it is also the doctrine of Satisfaction, both of which matters are specially dealt with hereafter (r). 8. He who seeks Equity must do Equity. — It seems 8. He who but a natural principle that if a person comes to the ^ust S?"^*'^ Court to obtain Equity and fairness, the Court should Equity. require him to act equitably and fairly himself. This is all that the maxim means. Eemember, that if a per- son has legal rights, he has never had to seek the assist- ance of Equity. What he could get at law he has always been allowed to get, but when he could not succeed there but has had to seek the assistance of Equity to obtain what he desired, then surely there was nothing out of the way in the Court saying to him, " We will '•' give you what you ask, but you must yourself do " what is right." Thus, take the case of a bargain with an expectant heir (s). An expectant has borrowed £\,000 on terms that he will pay £2,000 on his father's death. He now comes to the Court to set the transac- tion aside, and the Court will do so, but only on the terms of his repaying the £1,000 with fair interest (t). The doctrine of a wife's Equity to a settlement pro- vides us with another illustration of the meaning of this maxim {u). 9. He who comes into Equity must come with clean 9. He who hands.— This means that the party coming to the E™^ity muet Court for its assistance, must not himself have been come with . 1 , •. J.1 i. T clean hands. guilty of wrong conduct with regard to it, so that it a person seeks to cancel or set aside some fraudulent (r) See Part III., Chap 2 ; and see Lechmere v. Lechmere, 2 Wh. and Tu., 412 ; Blandy v Widmore, lb., 428 ; Ex parte Pye, lb., 364. (.s) As to which see post, chap. 6. {t) See Earl of Ai/lesford v. Morris, 8 Ch. Apps., 484. (m) See post, "Part III., Chap. G, and Ladi/ Elibanh v. Moniolieu, 1 Wh and Tu., 48^. 14 THE (GENERAL MAXIMS OF EQUITY. deed, and be himself has been guilty of wilful pcirti- cipation in the fraud, the Court will not generally assist him unless the fraud is against public policy, and public policy would be defeated by allowing it to stand (w). 10. Equality 10. Equality is Eqiiiti/, or, in other words. Equity iqui y. favors a true equality between parties rather than a merely techinal one. This is best explained by re- ference to the leaning of the Court against a joint tenancy and in favor of a tenancy in common. True, if an estate is simply granted to two or more without other words they become joint tenants both at law and in Equity, for there is no reason why Equity should not here follow the law (.r). But if there are any cir- cumstances which can justify the Court in doing so, the Court will depart from the legal rule and hold them to be tenants in common, considering that to be a truer equality than the equal chance of taking by survivorship. The Court acts thus when property is purchased on some joint undertaking, e.g., as a speculation for building purposes ; also in all cases where the purchase-money has been contributed in unequal shares ; and also in the case of mortgages, although this last point is now subject to a provision in the Conveyance Act, 1881, (ij) to the effect that unless the money is expressed to be advanced in shares the surviving mortgagee can, on payment off, give a valid receipt for the mortgage money. This, however, does not alter the fact that, as between themselves, the mortgagees are hy force of this maxim tenants in common (r). 11. Equity 11. Equiti/ (icts ill 'pcrsonam. — The Courts of Law acts ia per- sonam. ^^^.^ Smith's Manual, 26. (.r) Morley v. Bird. Lead. C. Convg.. 87C. \y) 44 & \:> Vict, c. 41., soc (11. (c) See hereon Lake v. Gibson, Lake r, C'raddock ; 1 Wh. o,n(\ Tu., 210. THE GENERAL MAXIMS OF EQT'TTY. 15 always enforced their judgments In rem., ('.(]., by writ of Ji'-fa. or elegit, but the Court of Chancery could always enforce its decrees in personam, e.g., by attach- ment. Equity acts in fact directly on the person, a matter which is well shown by the case of Penn v. Baltimore (a). In that case the plaintiff and defen- dant, being in England, had entered into articles for settling the boundaries of two provinces in America — Pennsylvania and Maryland — and the plaintiff sought a specific performance of the articles. The principal objection was that the property was out of the juris- diction of the Court, but it was held that the plaintiff was entitled to specific performance of the articles, for though the Court had no original jurisdiction on the direct question of the rights as to the boundaries, the property being abroad, yet that did not matter as the suit was founded on the articles and the Court acted in personam. 12. Vigilantihus non dormientibus wquitas suhvenit, 12. Vlgilanti- which means that the Court discountenances laches, ^leniibuT' and, irrespective of the Statutes of Limitation, will (Bquitas sub- refuse to give relief where the party seeking relief has lain by for a long time without attempting to enforce his rights. It is specially important to understand this maxim properly, otherwise confusion will exist in the reader's mind between its application, and the rules laid down by the Statutes of Limitation. Now, legal rights are governed by the Statutes of Limita- tion, and proceedings to enforce such legal rights must be taken within the time laid down by those statutes ; but there must be some guiding rule to regulate equitable rights to which those statutes do not apply, e.g., claims by a cestui que trust against his trustee. Again, although a person may have a legal right capable of being enforced at law, yet he may come to Equity to get that better relief which (a) 2 Wh. and Tu., 1047. Ifi THE GENERAL MAXIMS OF EQUITY. happens there to be given, e.g., he may prefer to come to Equity to get specific performance of a contract rather than bring his action at law for damages. Now, in all these cases the Court says that the person seeking its special assistance must have been active in his movements ; there is no hard and fast rule as to the time within which he must come, all that must depend on the circumstances of each particular case, but if the Court is of opinion that, with his rights before him, he has been guilty of sloth or laches, the Court will refuse to extend to him the assistance which would otherwise be afforded him by the general principles of Equity, and will leave him to the remedy — if any — which the rules of law accord to him. The maxims In concluding this chapter we ought to point out h^yetir^ to the student that, as Common Law and Equity considered in ^y.Q jjq^ fused, the principles embodied in any of any division . . • i. i • of the Court, these maxims may possibly come into play in any division of the Court. The question is not the divi- sion in which relief is being sought, but the prin- ciple upon which it is sought. It may be that the matter is one involving strict legal rights, and if so, reference to these original maxims of Equity is not necessary, but it may be that equitable principles are involved, and then these maxims and the general rules of Equity must be regarded. It must be re- membered also that where the rules of Law and Equity clash, the rules of Equity prevail ih). (b) 36 & 37 Vict., c. 66. sec. 25. ( IT ) CHAPTER III. THP! CHANCERY DIVISION OF THE HIGH COUBT OF JITSTTCE. The Court of Chancery as a separate and distinct The modem Court now no longer exists, its modern substitute the old Court being the Chancery Division of the High Court of «* Chancery. Justice, and it will be well to shortly consider the constitution of that Court and some of the provi- sions made by the Act affecting the fusion — the Judicature Act, 1873 (c). Many steps had been taken prior to the Judicature Act, 1873, towards the fusion of Law and Equity, but complete unison was only accomplished by that Act. The previously existing Courts are moulded into one called the Supreme Court of Judicature, consisting of two parts, the High Court of Justice and Her Majesty's Court of Appeal. The High Court is now divided into three sections : — (1) The Chancery Division, (2) the Queen's Bench Division, and (3) the ^ Probate D^jsjccaand Admiralty Division ; and, in the /^ tocrv-^-^:/ first of these Divisions, are specially meant to be con- sidered and adjudicated upon all such matters as were formerly specially dealt with in the Court of ~f-. Chancery. S ection 34 of the Judicature Act, of 1873, in fact assigns to the exclusive jurisdiction of the Chancery Division the following matters : — (1.) All causes and matters pending in the Court Matters now of Chancery at the commencement of this theexcUisive J^q{, jurisdiction of the Chan- " eery Division. (c^ 36 & 37 Vict., c. fi6. 18 THE CHANCERY DIVISION OF THE (2.) All causes and matters to be commenced after the commencement of this Act, under any Act of Parliament by which exclusive juris- diction in respect to such causes or matter has been given to the Court of Chancery, or to any Judges or Judge thereof respectively, except appeals from County Courts. ( 3.j All causes and matters lor any of the following purposes : The administration of the estates of deceased persons ; The dissolution of partnerships or the taking of partnership or other ac- counts ; The redemption or foreclosure of mort- gages ; The raising of portions, or other charges on land ; The sale and distribution of the pro- ceeds of property subject to any lien or charge ; The execution of trusts, charitable or private ; The rectification or setting aside or cancellation of deeds or other written instruments ; The specific performance of contracts between vendors and purchasers of real estates including contracts for leases ; The partition or sale of real estates ; The wardship of infants and the care of infants' estates. This is an But If't it be bome in mind that this is a regulation for^clfn"^"^ made for the sake of convenience only, so as to have venience. particular classes of matters dealt with in particular HIGH COURT OF JUSTICE. 19 Courts. To commence an action in the wrong Divi- sion is not in any way fatal, it may be retained in that Division or transferred to the right Division (d) a very different thing to what prevailed before the Judicature practice, for then it was fatal to go to the wrong Court. To complete the idea of fusion it was also necessary to go a step further and meet the conflict that existed in certain cases between the rules of Law and Equity. The Judicature Act, 1873, therefore, provided that in every civil cause or matter commenced in the High Court of Justice, Law and Equity shall be administered concurrently by the High Court and the Court of Appeal, and that these Courts shall recognise and take notice of all equitable estates, titles, and rights, and all equitable duties and liabilities, in the same manner in which the Court of Chancery would formerly have done(e). This statute The rules of also provided that, in various instances in which ^j^y^n""^^ there had previously been a conflict between the rules of Law and Equity the rules of Equity should hence- forth prevail, and there is, in addition to tiie particular instances, a general provision to that eftect CO. In the following pages of this work we have adopted, as will be seen, a division under which we bring before the reader firstly, those matters specially referred to the exclusive jurisdiction of the Chancery Division by section 34 of the Judicature Act, 1873, and, secondly, other particular doctrines of Equity. (d) 36 & 37 Vict, c. 66, sec. 11. (e) Sec. 24. (/) Sec. 25. as amended by 38 and 39 Vict., c. 77, sec. 10. '^ ( -20 ) PART II. MATTERS SPECIALLY ASSIGNED TO THE CHANCERY DIVISION OF THE HIGH COURT OF JUSTICE BY THE JUDICATURE ACT. 1878. CHAPTER I. OF TRUSTS. Definitions of ^ Trust is Capable of bein<]r defined in a double sense a trust. for, firstly, you may regard it and define it with reference to the position and interest of the cestui que trust, and, secondly, with reference to the position of the trustee. Regarded in the first way it may be defined as the beneficial interest in or ownership of real or personal property unconnected with the possessory and legal ownership thereof (_r/). Regarded in the second way, it may be defined as an obligation ^' under which a person, in whom property is vested, is bound to deal with or to supervise the dealing with the beneficial interest in that property in a particular manner and for a particular purpose, either wholly in j favour of another or others, or partially in favour I of another or others conjointly with himself (//). The person creating the trust is styled the jett lor, the person having the duties to perform the trustee, and the person for whose benefit it is intended the cestui que trust or beneficiary. Trusts may be created either by act, inter vivos, or by will, and are divided Division of generally into (1) Express trusts ; (2) Implied trusts ; *™°*^' and (3) Constructive trusts. The most important of (ff) Smith's Manual, 132. (A) UndfiliiU's Trusts. 1. OF TRUSTS. 21 these three classes are naturally those of the first description, and in a prefatory way it is necessary to first consider shortly the history of the modern doctrine of trusts. Prior to the passing of the Statute of Uses it had History of the 1 1 i. modern doc- tor a long time been common to convey lands to uses, trine of trusts. for great advantages were gained thereby. Thus, a will could not be made of lands, but it could be made of the use ; the land itself was liable to be forfeited for treason, but a mere use was not ; the land could not be conveyed to a charity, but a use could ; and, bearing these prominent points in mind, it is not to be wondered at that the greater part of the lands throughout the country were conveyed to uses. The owner of a use in land, therefore, at that time was the beneficiary. Personal property was then comparatively of little importance, and trusts of personalty need not, therefore, at present, be con- sidered. Now the object and design of the Statute of Uses (i) was to put an end to the practice of con- veying lands to uses — in other words, to prevent one man holding lands simply for the benefit of another, and that statute attempted to carry out this design by a bare enactment that when one man held lands to the use, or confidence of another, he who had the use should be deemed in lawful seisin and possession of the actual estate. It was thought that the natural result would be, that the owner of the use or benefit would be thus rendered the absolute owner in every sense. This statute, of course, only applied to real estate, for it was not necessary to legislate as to personalty through its little importance, nor, indeed, could there be any objection to one man holding personalty in trust for another, the chief objection as to land being, indeed, the defrauding of the lords of their dues. (i) 27 Hen. VIH., c. 10. OF TIU'STS. Tyrrell's case. EtTocl of Statute of rscs. The Statute of Uses turned out to be an insufficient enactment. Tyrrell's ease (A) decided that there could not be a use upon a use, that is to say, that where land was given to A, to the use of B, to the use of C, the statute only executed the first use and no other, so that upon this case in the instance just given, B would hold for all purposes, although it was manifest that C was meant to benefit. It was this decision which really gave rise to our modern idea of trusts, for upon this the Court of Equity stepped in and held that, though the owner of the first use did take the legal estate, yet he held it but for the benefit of the person who had the last use, so that in the above instance B would be consti- tuted a trustee for C. This is the true state of the case at the present day. In a certain sense, there- fore, it is not altogether inaccurate to state that the efi'ect of the Statute of Uses was simply to cause to be added to every instrument the words " to the " use of," for, whereas, before the Statute if A was meant to hold for the benefit of B, A Avould have been enfeoffed to the use of B, all that was afterwards required to be done was to make the feoffment unto and to the use of A to the use of B, and the same result was arrived at. Practical explauation. From what has been stated it will be gathered that, as a general rule, the owner of the first use has the legal estate ; if there is no subsequent use he gene- rally has the beneficial interest also, but if there is a Bubsoquent use, then the person taking that sub- sequent use is the beneficiary. If there are several uses the first has the legal estate and the last has the beneficial interest, any intermediary ones being simply, as it were, struck out. But. though all this is correct generally, yet it is not always so, for, (k) T-. C. C'onvg., ;}3o. OF TRUSTS. 2S though land is given to one to the use of another, and therefore primarily it would appear that this latter person has the legal estate, yet if the first person named has an active duty to perform the legal estate is in him. Tor as regards active uses, the Statute has been always held to be inoperative. Thus, if land is given to A in trust to collect the rents and hold them to the use of B, here A has the legal estate, and B the equitable. There is little to explain in the first origin of trusts Trusts of of personalty. As to these the Statute of Uses has P"''°'^^ ^' no application, and it is always simply a question of whether property has in express terms or by necessary implication been vested in one person to hold for another. If it has, then there is a trust. Having thus somewhat explained the early position Defiuition of -, . • n 1 n -L- £ an express With regard to trusts, we now give the definition oi an ^^^^^^ express trust as one which is clearly expressed by the author thereof, or may fairly be collected from a written instrument {I). The latter part of this defini- tion needs some explanation. It means that where a person has used words ambiguous in themselves, but recommending or desiring a certain thing, then (1) Three essen- tiRls to coH" if the subject matter is certain, (2) the object is stitnte a trust. certain, and, (3) upon a construction of the entire instrument, the intention appears to have been to use Precatory the words in an imperative sense, and not merely in a discretionary sense, then a binding trust is created which is styled a precatory trust {m). The three points above mentioned must be carefully observed, for if one of them is wanting there is no binding trust {n). The cases on the subject of precatory trusts are numerous, and it is difficult, if not im- (l) Smith's Manual, 133. (to) Underhill's Trusts. 2.5-29. (m) Knight v. Knight. 3 Beav., 1 11. 24 t)l' TIU'STS. possible, to recoucile all of them, but there is no doubt but that the tentleucy of modern decisions is af:;ainst construing precatory words as binding trusts, and rather to leave them as a wish or desire and nothing more {o). vvhcu writiug To Create a trust it is always advisable to have necessary to writing, and, in the case of lands (including lease- CFLate a trust. o' ' \ o holds), writing is absolutely necessary under the 7th section of the Statute of Frauds (p) ; but writing is not necessary to create a trust of purely personal property. An assignment of any existing trust must, however, under the 9th section of the Statute of Frauds always be in writing. This, however, has no application to trusts arising merely by implication or construction of law. Voluutary Any trust arising under a will is naturally a volun- "^"^ ''■ tary trust, that is the cestui que trunt is merely an object of the testator's bounty, but a trust created by act inter vivos may be either of a voluntary nature or it may be based on value. With regard to voluntary trusts arising by act inter virus, the principle of the E/.lisoii V ^^'^^1 known case of Klliaon v. Elliso)i (7), must be ob- EUisoii. served, and that is, that such a voluntary trust must, to be complete and binding, be a perfect trust, and that if it is in any way imperfect, the creator can draw back from it. This rule applies not only to trusts properly so called, but also to all voluntary dispositions made otherwise than by will, for, any such disposition to be binding must be made in one of the three following ways : (1) The donor or settlor must actually transfer the property to the beneficiar}'', (0) Sncirs Ppls. of K(i . 1)9. 100 : Muxxom-ic Bank v. Ra//)ier, I,. K., 7 App. Cas., 1521 ; '>l L. J., I'. C, 72 ; MvLonuick v. Grogau, L. K.. •I H. L., 82 : In re Adams and Kensington Vestry, 'lA Oh. D., 199 ; 54 I.. J., fh., H7. (;>) 2;» Car. II., c. :{. {(j) 1 Wh. and Tu., 291. Jcfferys v. OF TRUSTS. or (2) He must actually transfer it to a trustee for him, or (3) He must declare that he himself holds the property in trust for him (r). Thus, in one case, a father executed a settlement in which he voluntarily settled certain freeholds by convey- ing them to trustees in trust for his daughter, and '^'^ff'^^v^ he covenanted to surrender certain copyholds on the same trusts. He died without having ever surrendered the copyholds, and it was held that the settlement was only effectual as regarded the freeholds (s). In another case a father, desiring that his daughter should have a certain share in a company, indorsed upon a receipt which he had for his subscription a memorandum as follows : "I hereby assign to my " daughter all my right, title, and interest," &c., &c. It was held that this was only an imperfect gift and could not be enforced by the daughter ; there was in fact a locus pocnitentice still existing in the donor (t). Yet here it may be remarked, that had the father simply declared himself a trustee for the daughter a binding and effectual trust would have been created. 25 Aiitrohus V. Smith , But a trust though merely voluntary, if completely Ways in created, is absolutely binding and irrevocable in the yoiuQ^aiy absence of a clause enabling the settlor to revoke it. trust is liable Til L J.1 • to be de- Ilowever, the beneficiaries are liable to lose their feated. benefits in either of the following ways: (1) Under the provisions of 13 Eliz. c. 5., that Statute pro- i3Eliz., c. 5. viding that all dispositions made for the purpose of hindering, defeating, or defrauding creditors shall be void unless made bona Jide for good considera,tion. (2) Under 27 Eliz., c. 4., which provides that all I'Z Eliz., c. i. voluntary trusts of land, (which includes leaseholds), shall be void against a subsequent bond fide purchaser (»■) Milro// V. Lord, 4 De G. ¥. & J., 264. (n) Jcffcri/s V. Jefferys, Cr. and Ph., 138. (t) Antrobus v. Smith, 12 Ves., 39. V r 26 .^^ OK TRl'STS. What credi- tors can upset a settlement under the provisions of 13 Eliz., c. 5. Position of creditors claiming subsequent^ to date of settlement. ► l^ . Ex imrtc Kxtssdl, In re Ih/tierworth. for value. (3) Under the Bankruptcy Act, 1883 (u), which enacts that if the settlor becomes bankrupt within two years the settlement shall be void, and even after two but within ten years, unless complete solvency on the part of the settlor at the time of maldng the- settlement can be «hown. s i - 4 /•cT' K-V^ In considering the effect of the Statute, 13 Eliz., c. 5, a distinction must be drawn between the position of persons who are creditors at the time of the making of the settlement and those who only become creditors afterwards. Practically, the former can always successfully call in question any voluntary settlement, for, if they do not get paid, then plainly as they might have been paid by means of the property comprised in the settlement, they have been hindered and delayed by it (v). But what primary right have creditors to complain of a settlement made before they became creditors ? Ordinarily none, but to this rule there are two exceptions, that is to say, two cases in which creditors may call in question a volun- tary settlement made antecedently to their becoming creditors, viz. : (I) Where they can show that their .money has been applied in paying oft" debts which were existing at the date of the settlement, for here they have an equity to be allowed to stand in the shoes of such prior creditors for the purpose of upsetting the settlement (w) ; and (2) Where the settlement was made on the eve of the settlor entering on some enterprise, for here there is in his direct contemplation possible debts and dilljeulties and a delaying and defrauding of creditors (r). This last rule was forcibly applied in the somewhat recent case of Kx parte Russell. In re Butte ncorth (//). There a (m) 46 & 47 Vict., c. 52. sec. 47. (f) Spircit V. Willow-i, 34 L. J., Ch., .367 ; see, however, Ex parte Jlerccr, In re "Wi^e, 17 Q. B. D., at p. 290. («•) FrrrMan r. Pope. L. 11.. .". Ch.. .5.SS : 89 L. .J., Cii., 689. (.r) Mackai/ v. Douqlas. L. 1!., IH. E*!.. IOC: 41 li. J.. Ch., 539. (y) 19 Ch.'U.. .-.8S| .'51 I.. ,1.. Ch.. f.'Jl. OF TRUSTS. 2i baker, who bad carried on business for some years, being about to purchase a grocery business which he intended to carry on together with his own trade, executed a voluntary settlement of nearly the whole of his property upon his wife and children. He afterwards bought the grocery business, and, having lost money by it, sold it and continued to carry on his baking business, and he became insolvent. It was held that the settlement was void against creditors under the 13 Eliz., c. 5, on the ground that it was evidently executed with the view of putting the settlor's property out of the reach of his creditors in case he should fail in the speculation on which he was about to enter in carrying on a new business of / which he knew nothing. / It has been mentioned that the provision of 27 Voluntary Eliz., c. 4, applies to leaseholds. This, however, is 'eaJhSand only true in a limited sense, for it has recently been efiEect of held that a settlement of leaseholds to which liability ' to pay rent and perform covenants is attached, is, from the very nature of the property, based on value, for the cestui que trusts take upon themselves the liability to pay the rent and to perform the cove- nants (z). It has, however, been held that such value as this is not sufficient to prevent a settlement being considered voluntar}' and bad against creditors under 13 Eliz., c. 5 (a). Although a settlement may, as regards certain of Volunteers in the beneficiaries, be one based on value, yet, as ba^ed on regards others, it may be a voluntary settlement, '^^'"e. Thus, an ante-nuptial settlement is based on value, viz., the marriage, but a limitation therein in default of issue to a stranger, or even to the settlor's next- (j) Price V . Jenkins. 5 Ch. D., 619 • i6 L. J.. Ch.. 805. (a) ITe llidra', HiTler v. Bidler, 22 Ch. D., 74 ; 52 L. J.. Ch. 343. 28 OF TRUSTS. of- kin is ordinarily voluntary, such persons not being presumed to be within the scope of the con- sideration (h). Trusts exe- cuted and executory. An express trust may be either a trust executed, or a trust executory. A trust executed is one which is fully and finally declared by the instrument creating it, one in which the creator of the trust may be said to have been his own conveyancer ; but a trust executory is one which, whilst containing an indica- tion or idea of the trust intended, is yet incomplete in its character, and requires some other instrument to perfect it. Thus, A by his will gives property to B to hold in trust for C, this is a trust executed ; but if it were given in trust to be settled on C for life and then for his children this would be a trust executory. So also a trust contained in a marriage settlement is always an executed trust, but one contained in mar- riage articles is a trust executory, for there is another instrument, viz., the settlement in the contemplation of the parties, and the articles only contain an indica- tion of what is intended (c). Construction of such trusts. Apart from the difference in the idea or definitions of trusts, executed and executory, there is a wide distinction between the construction placed upon each. The maxim " Equity follows the law," has been already explained (d), and it has been there stated that the true meaning of that maxim is best shewn by the doctrine of the Court with regard to this subject. It is now clearly established that Equity will construe limitations in the nature of executed trusts in the same manner as legal limitations, so that, for instance, if an estate is devised to trustees in trust for A for life with an ultimate remainder in (h) Clarke v. Wrii/Ji/. fi H. Sc N., 840. (c) Lord Glciiorchij V. Bosville. 1 Wli. niid Tu.. 1. (d) Ante, p. S. OF TRUSTS. 29 trust for the heirs of A's body, here the trust being an executed one, the rule in Shelley's case (e) governs the matter, and A takes an estate tail. But executory trusts are left to be executed in a more careful and accurate manner, and the Court is not bound to con- strue technical expressions with legal strictness, but will mould the trusts according to the intent of those who create them ( f). The great thing in trusts executory is to arrive at Distinction the intention of the creator, for, having arrived at the execntorv"*'^^ intention, then the construction is such an one as will existing 'in give effect to it. Hence there is often a material articiel^nd distinction between a trust executory arising in mar- i" ^iiis. riage articles and one arising in a will ; for, in the former you have the intention from the very nature and w^ell-kncwn design of the instrument, whilst in the latter you can only gain the intention from the words made use of. The design of marriage articles is to benefit the children of the marriage, so that though the limitation therein is to the husband and the heirs of his body, yet he will always take only a life estate, but with the same words in a will, though by trust executory, he would take an estate tail, un- less an intention could be gained from the context that his interest was to be limited to a life estate only (g). Implied and constructive trusts are sometimes implied and classified under the one common head of constructive t^°gt*/"°*^^^ trusts, and in a sense this is correct, for they are trusts raised by construction of the law and not by express words. Still it is preferable to distinguish between them, and using the words in their strict {e) L. Cas. Convg., 589. C f) 1 Wh. and Tu., 19. {g) See Blackburn v. Stables, 2 V. & B., 369 ; Magrafh v. Morehead, T>. R., 12 Eq., 49 : 41 L. .1. Ch.. 120. 30 01-" TKUSiTS, Definitions of sense the distinction is plain enough. An implied constructive ti'ust may he defined as one founded on an unex- trusts. pressed hut yet presumahle intention (/<). A con- j structive trust may he defined as one raised hy ! construction of Equity to satisfy the demands of justice without reference to any presumahle inten- tion (?^. That is to say, that whilst an implied trust arises from a consideration of the prohahle intention, a constructive trust arises from a con- sideration of what is right and just irrespective of intention. Dyer v. Dyer. The principle involved in the leading case of Dijer V. Dyer {k) furnishes us with an apt instance of an implied trust. Without dealing with the exact facts and decision in that case the principle is this : A huys property, and instead of having it conveyed to himself has it conveyed to B, and the result is that, without anything heing said, in the absence of any evidence to show the contrary, B holds as a trustee for A. The reason is simple, it is unnatural to suppose that A paid the purchase-money to benefit B, tbe Court in fact says there is an unexpressed, hut yet under the circumstances fairly to be pre- sumed, intention that B w'as meant to hold in trust for A. If, however, in this instance B was a wife or a child of A's, or one towards whom he had placed himself in loco paroitis and not otherwise provided for, the Court would consider that it was probably meant that 13 should benefit, and would not primarily raise a trust. This is purely on the point of probable Parol evi- intention. But, as such a trust arises merely by liresumpt^ion" presumption, evidence can be given to rebut it (/) ; of trust. and, so also, even if the above-mentioned relationship (h) Sm.'s Manual, 169. (i) Sm.'s Manual, 192. (k) 1 Wh. .and Tu., 230. (/) (irorrti V. (irnvrs. L' Y". nn V Ttii^^^\^ (_;_ C'oUVg.. !>8fi. (,'()')^^^ k \r. vict.rc. 4i,"'sec. ao. (h) 44 & \:, Vict., c. 41, sec. 36. (0 1 \Vh. and Tu., 72. OF TRUSTEES. 39 where the property was vested in trustees in trust to sell for payment of debts generally, the trustees' receipts were good discharges, but not when the trust was to raise money for payment of specific amounts, for here any purchaser from the trustees was bound to see to the application of the money. The first enactment altering this position was Lord St. Leonard's Act (A;), which made the receipts of trustees in all cases sufficient for any purchase or mortgage \ money. This enactment was followed by a wider one contained in Lord Cran worth's Act (0 — now repealed — and the rule now stands, as already stated, by force of the Conveyancing Act, 1881. It may be Trustees com- mentioned also that, under this same Statute (»i), P^'omisi^?' "^c. two or more trustees acting together, or a sole acting trustee where authorized to act by himself, can accept a composition or take security for debts, or submit matters to arbitration or release, or settle the same. Power of The Conveyancing Act, 1881 («), provides that in trustees! trusts coming into operation on or since 1st January, 1882, any powers given to trustees jointly may be exercised by the survivor or survivors. There may be certain cases in which it is the duty Conversion of of a trustee to convert the trust property. If trustees trustees^ ^ are directed to invest certain moneys in the purchase of land, or to sell certain land, and in either case to stand possessed of the result for a cestui que trust, it is manifestly their duty to carry out these directions as soon as they conveniently can. It must be observed, however, that even before they do so the nature of the property is deemed to be changed by reason of the maxim, " Equity looks on " that as done which ought to be done." This (k) 22 & 23 Vict., c. 35, sec. 23. (l) 23 & 24 Vict., c. 145, sec. 29. (m) Sec. 37. (m) Sec. 38. ^0 OK TKUSTEEt>. Wasting property. Hoirc V. Earl of Dartmouth. is styled the doctrine of conversion, a matter which is dealt with hereafter (o). But it may be the duty of a trustee to convd^t pro- perty even though there is no direction to that effect. Thus, in the leading case of Houh' v. Earl of Dart- mouth {p), the rule is laid down that where p ersona l property, being either of a wasting nature or of a kind jiot yielding a present income, is given in trust as a whole, and not specifically, for one for life with re- mainders over, it is to be converted and properly invested, so that thus, for instance, short leaseholds may be preserved for the remainder-man, and the tenant for life may gain a benefit from reversionary property. This rule, however, only applies where property is given thus as a whole and not specifically, for, when either wasting or reversionary property is given to persons specifically in the strict sense of the word, then there can be no reason for converting it, for there is evidently no intention that it should be converted — the parties must take their chance as to their benefits. Duties oi' trustees in selling jiroperty. Whenever trustees sell the trust property they must take care to sell it properly and to use their utmost endeavours to sell it to the best advantage. They should select the best place, and the best time for selling, and the best person to sell, taking indeed every reasonable precaution, and acting as prudent men would in the management of their own affairs. They should sell under proper conditions of sale and not on an open contract, for to do that might be to Inirthen their trust estate with costs which it ought not to have thrown upon it ; but, at the same time, the conditions must not be too strict, for if they are unnecessarily so they may tend to frighten away in- {u) l'05t, I'art III.. Cii. I!. (^) 2 White and Tu., 321. OF TRUSTEES. 41 tending purchasers and seriously injure the sale. They must steer a prudent middle course, and, in so far as they do not, they are liable for a breach of trust (q)' Trustees must take great care that the trust pro- Trustees perty is properly invested, and if it is not they should p^^^^l^ at once convert it and effect a proper investment. As investmeut. to trustees' investments, in the absence of any express direction they may, under the provisions of Lord St. Leonard's Act (r) and 30 & 81 Vict., c. 132., invest 22&23 Vict., in, generally, any stock the interest of which is ^- ^°' guaranteed by Government, and on mortgage of real securities in the United Kingdom. By 34 & 35 Vict., 34 & 35 Vict., c. 47., they are also allowed to invest in Consolidated Stock of the Metropolitan Board of Works. By the Debenture Stock Act, 1871 (s), it is provided that 34 & 35 Vict., where trustees have a power to invest in the mort- gage or bonds of any company they shall, unless the contrary is expressly declared by the trust instrument, have the power of investing in the debenture stock of such company (0* In addition to the above-mentioned investments it must be borne in mind that with regard to capital moneii under the Settled Land Act, 1882 (a), Settled Land r. . •, 1 i. • i- 1 Act, 1882. that Statute prescribes also certain exceptional securities, viz.: debentures and debenture stock of any railway company in Great Britain or Ireland incorporated by Act of Parliament, and having for ten 3'ears next before the date of investment paid a dividend on its ordinary stock or shares, the dis- charge of any incumbrance on the settled land, the payment for any improvements authorised by the Act, the purchase of the seignory or reversion of the settled estate, and the purchase of lands whether fee (q) Dunn v. Flood, 28 Ch. D., 586 ; 54 L, J., Ch., 370. (r) 22 & 23 Vict., c. 85, amended by 23 Vict, c. 38. («) 34 & 35 Vict., c. 27, sec. 1. {t) See further as to trustee investments, 3? & 39 Vict., c. 83. sec. 27 and 43 Vict, c, 10. («) 45 & 46 Vict., c. 38. sec. 21. 42 OF TRUSTEES. simple or leaseholds if not less than 60 years yet to run. Exercise by trustees of discretion as to invest- ments. But the trust instrument most usually prescribes the investments the trustees may make, and then, if acting houd fide, they arc safe if they invest in accordance with it. Still, trustees must, in the ex- orcise of any discretion, act reasonably and prudently, so that if they have a discretion to invest in certain specific investments, comprising good and bad secu- rities, and they choose a bad securitj^, then they will be liable upon the ground that a prudent man would not have invested his own money in such a security. And they are not justified in investing in personal security, or in anything of a manifestly or probably risky nature {v). Trustees are not, indeed, in cases in which even they have an absolute dis- cretion given them, justified in doing just as they choose, and the opinion has been expressed that in such cases the discretion of the trustees is limited to a discretion as to which of the several forms of security authorized by law they shall invest in, and does not give them power to invest in securities not so authorized (/r). Although, however, no doubt it would be wisest for trustees to act on this view of the question, yet it would seem that a discretion of a perfectly general nature means more than this, and, probably, the more correct rule is that where trustees have an absolute discretion, then, if they exercise that discretion fairly and make reasonable invest- ments, though not strictly trustees' investments, they will not be held liable, but that if they act with imprudence, making rash and hazardous investments, then they will be liable {x). (ti) I'otts V. Britton, L. R., 11 Eq., •13;5 ; Bdhell v. Abraham, L. K., 17 Eq., 24. («•) Sec Underhill's Trusts, 205. (x) See Re Brown. Brown v. Broirti. -".• Cli. 1).. 88!t : ol L. T., t'h., 1134. OF TRUSTEES, 4^ With regard to investments on mortgage, the strict Duties in rule is said to be that trustees should not advance mortgage. more than two-thirds of the value of freehold land, or more than one-half of the value of freehold houses (y). But this is not a hard and fast rule, and is not enforceable with exact strictness, the true test of liability now being whether the trustees have acted as prudent men would have acted in dealing with their own property (z) ; and if they fail in prudence, and neglect any due precautions, then they may find themselves liable. Thus, where trustees employed a surveyor who was ignorant of the locality, they were \^ '^*^ held not to have acted prudently and to be liable (a) ;^x "T-Ut^/V? ^c-- and, in another case, trustees were held to be liable for a deficiency on a mortgage chiefly because they had left the choosing of the surveyor to their solicitor, instead of exercising their own discretion, and the solicitor employed the borrower's own surveyor {b). It has also been laid down that trustees are prac- tically never justified in investing on mortgage of property not at the time producing income, and that if they do, it is at their own risk (c). The Court of Appeal have recently, in a case of R^ JVlilteley, Whiteley Be WhiteUy, V. Learoyd (d), laid down several points in connection Ymrovd^' with this subject in an extremely clear manner. The facts there were that trustees, having power to invest in real securities, in the year 1877 advanced £3,000 on mortgage of freehold brickworks, having before lending the money employed a valuer who estimated the property as a going concern to be a good security more than the advance, the details of his valuation being— land worth £2,000, buildings £2,400, and (y) See 2 Wh, and Tu., 1006. (z) Inre Gcdfrey, Godfrey y. Faulkner, 23 Ch. D., 48; 52 L. J., Ch., 820. (a) Budge v. Gummow, L. R., 7 Ch. Apps., 719 ; 41 L. J.. Ch. 520. (A) Krv\. T amoH. 28 Ch. D., 268 ; 33 W. R., 113. (c) Hoey v. Green, W. N., 1884, p. 236 : see also Smef hurst v. Hast' ings, 30 Ch. D., 490 ; 33 W. R., 496. (rf) W. N., 1886, p. 148 ; L. S. J., 1886, p. 222. 44 OF TRUSTEES. Trustees' liability for defaults of co-trustees and others. plant £2,600. The mortgagor became a bankrupt, and the security proved insufficient, and the trustees were held liable for the deficiency. The Court laid down that a trustee's duties in making investments are : (1) To choose only those investments which come within the terms of his trust. (2 ) In selecting one of those investments to use the care and caution which an ordinarily prudent man would exercise in the business of investing money for the benefit of persons entitled to enjoy it at some future time, and not for the sole benefit of the person en- titled to the present income. (3) To apply such care and caution in acting on advice which they have obtained on matters which they do not personally understand, e.g., valuations, and that the mere fact that they have obtained such advice is not in itself sufficient. Besides being liable for his own individual acts, a trustee may often find himself liable for the breaches and default of his co-trustee, the rule being that he is liable if he has in any way conduced to the breach of trust, e.g., by permitting his co-trustees to receive and retain trust money, or handing over the trust money to him {e). To this rule there is one exception, and that is where the co-trustee resides at a distance, and money is remitted to him there to be properly applied, where an agent would naturally be employed ; for, here if he misapplies it the other trustee is not liable ( /). And though it is a general rule that trustees may not delegate their powers — for they themselves are but delegates, and the maxim is, delcgaiua non potest delegare — yet they may do so where a moral necessity for it exists, or where it is done in the ordinary and proper way of business (g). This is well shown by the recent (e) Townlei/ v. Sherborne, 2 VVli. and Tu., 1*60. (f) Joy V. Campbell, 1 Sch. and L.. :M1. {g) F^imrtc HcIcliiiT, Amh.. .Um. OF TRUSTEES. 45 case of Re Speight, Speight v. Gaunt {h), where it Be Speight, was necessary lo~purchase certain stock, and the Q^wit. ^' trustee employed a stockbroker to purchase it who falsely represented that he had done so, whereupon the amount was paid to and misapplied by him. It was held that the trustee was not liable, for he had acted bond fide in the ordinary way of business and with reasonable prudence, having selected a stockbroker of fair repute. Although it has been held that trustees are liable Trustees for the fraudulent act of their solicitor (i), yet it soljjtor?' would appear on the foregoing principle that if it is a proper employment, and nothing has been done but what is usual, the trustees would not be liable for money entrusted to the solicitor, e.g., where trustees employ a solicitor to complete a mortgage, and, just before completion, hand him the necessary amount. Clearly, however, the trustees must be very careful in the way in which they act, and they would certainly be liable if they allowed a solicitor to receive and retain money pending an investment being found {k). However, as a general rule, trustees for sale are not justified in employing a solicitor to receive the pur- chase-money ; and, therefore, where trustees having sold property placed the conveyance executed by them, . and having their receipt endorsed thereon, in the hands of a solicitor, and he received and misapplied the money, they were held liable for a breach of trust {I). And in fact in sales by trustees, the pur- chaser is not actually safe in paying to the solicitor of the trustees, or even to one of the trustees under an authority from the others, but he must pay to all the trustees who must attend to receive it, or else he (A) 9 App. Cas., 1 : 53 L. J.. Ch.. 419. (i) Bostock V. Floyer, L. R., 1 Eq., 26. {k) See In re Mitchell, Mitchell v. Mitchell, 54 L. J., Ch.. 342 : .^.2 L. T., 178. (0 Ghost V. Waller, 9 Beav., 497. 46 OF TRUSTEES. must pay it into a bank at their request in their joint names (?»). The rule, however, is not invari- j able, as there may be many cases of moral necessity in which a solicitor could receive the money properly, , c.g.f where the vendor is abroad (;i). Liability for Trustees are not liable if, in the ordinary discharge bfink'^^ ^ 0^ <^"ty, they deposit money tcmmj^mihi in a bank and the bank fails (o). Nor will trustees be liable for the misapplication by an auctioneer employed Or auctioneer, by them of a deposit on a sale, necessarily left in the hands of the auctioneer on the sale in accordance with the conditions (p). Liability of trustees neglecting to invest. Where trustees neglect to invest money, or im- properly invest it, the general rule is that they are liable for the fund with interest at 4 per cent, per annum (g), but in certain cases they may be liable for more, e.g., where they have improperly called in a security carrying a higher rate, or have dealt with the money in such a waj' that they have made more out of it, when they will be accountable for all profits, or where they have traded with the money, or have been guilty of gross misconduct (r). Trustees' powers are joint only. \ Trustees' powers are joint only, and not like those of executors, joint and several, and, therefore, in the case of trustees joining in receipts, as they have but a joint authority and their joining is therefore neces- sary for conformity, no presumption of receipt of the money will usually arise, but in the case of executors, {m.) Re Bellamy and Meiropoliian Board of Woris, 24 Ch. D., 387 ; 52 L. J., Ch., ^70 • lir Flower and Metropolitan Board of Works. 27 Ch. D., 592 ; T>\\ L. .J.. Ch., 95.-). (?/.) See Per Hovven, L. .J., in Bellamy and Metropolitan Board of Works, 24 Ch. D., 403, 404. (o) Swin/en v. Swiufen, 29 Beav.. 21 1 : Frtnvicke v. Clarke, 31 L, J., Ch., 728. (p) Edmondi^ v. Peake, 7 Bcav., 239. (q) Robinson v. Ilobinson , I Do G. Mar. and 0.. 247, (r) Snells Kcj., 163. OF TRUSTEES. 47 as they ordinarily have not merely a joint but also a several power, if they h^ve joined in signing a receipt, a presumption of actual receipt of the money arises though that presumption is capable of being re- butted (s). A trustee is not, as a rule, allowed to make any Trustee must profit out of his trust estate or to purchase the pro- profit.^ ^ perty of his cestui que trust {t) ; and such a transac- tion will be set aside unless the trustee can clearly show that his cestuis que trusts (being of course sid juris) were fully aware of his purchasing, and under- stood the matter, and that he disclosed all possible facts which might affect the matter, and took no ad- vantage of his position but paid full value (u). And, in fact, no trustee can safely purchase the trust pro- perty without coming to the Court for its sanction ; and, even then, if the approval of the Court has been obtained by the suppression of any facts that ought to have been disclosed, or any misstatements, the tran- saction will be set aside. Where a trustee has been guilty of a breach of Liability for trust he remains continually liable for it. The rule l^^^^ is that lapse of time forms no bar to a claim by a cestui que trust against his trustee, a rule which always existed in Equity, and which is made the general law by the 25th sec. of the Judicature Act, 1873. The only bar to the cestui que t7'usts' rights are laches or acquiescence. The expression laches signifies Laches. a neglect, a lying by and not enforcing a demand after knowledge of one's rights. Acquiescence means more Acquiescence. than laches, signifying a kind of permission, as standing by and knowingly permitting a thing to be done. Every cestui que trust, who is sui juris and who is (s) Brice v. Stokes, 2 Wh. and Tu., 26, and notes. (0 Fox V. Mackreth, 1 Wh. and Tu., 141. (m) Underbill's Trusts, 229. 48 OF TRUSTEES. aware of his claim against bis trustee, must proceed with reasonable diligence to enforce it, for the maxim is Vigilantihus non dormkntihus ceqnitas suhrenit, and if therefore the cestui que trust lies by for a long time he is not allowed to bring forward his stale demands (v). All the more, if a cestui que trust who is sul juris has acquiesced or concurred in a breach of trust, in fact been a party to it, he cannot be allowed to complain of it. And a cestui que trust who is even not sui juris, and who concurs in a breach of trust, will not be allowed to afterwards charge the trustee if he has himself been guilty of any fraud (/r); but this does not apply to a married woman in respect of property settled upon her for her separate use with- out power of anticipation (x). ' ■ ' ''v bankruptcy. Even bankruptcy does not exonerate a trustee from the consequences of his fraudulent breach of trust, it being expressly provided by the Bankruptcy Act^ 1883_ (y), that an order of discharge shall not release the bankrupt from any debt or liability incurred by means of any fraudulent breach of trust to wliicli he was a party (,?). It should also be noticed that trust property in the possession of a person who becomes bankrupt does not pass to his trustee. And if a person into whose possession money comes as trustee for another pays it into his bankers and lets it rest there, and then draws cheques in the ordinary manner, the presumption is that he draws his cheques on that part of the money at his bankers which is not trust money, and the money remaining at his bankers will be presumed to the necessary ex- (v) Underhill's Trusts, 31u, 3ir.. (w) Sharp v. Foi/, L.l!., 4 Ch., X, ; 17 W. K.. 65. (x) Stanley v. 'Slanlei/, L.R., 7 Cli. I).. .58!t : 47 T..'J.. Cli.. 2T>(i : Underhill's trusts. .111, '.'?1 2. (y) 4(i & 4 7 Vict., c. J2. .sec. 30. (.;) With repjard to the italicised words see as to the position prinr t.. this .\,t, Cooper V. Pritchnrd. 11 Q.B.D.. 371: 52, T.. J.. Q. i'.., .V_>(;. OF TRUSTEES. 49 tent to still be the trust money so as to enable the cestui que trust to claim it (a). Trustees are in general unremnnerated, and there- whatcareand fore, looked at by analogy to the rules of law relating L. 'J'., (il ; AV < orsiUig, Lawton v. Elwes, 33 Ch. D., KJU ; r>5 L. .1., Cli., i,:.') ; /iV Jiarhn; Jiurgtssx. Viviii- comb, L. J.. Notes of Cases, l.H8«, p. -Ktu ; L. S. .J.. 1X8(5, p. 223. (/) 10 & 11 Vict., c. % : 12 & 13 Vicl.. <■. 7. OF TRUSTEES. 51 terested, he is freed from further habilit}', for any person may then present a petition, or, if the fund does not exceed £1,000, take out a summons for payment out to him, on which the Court will deter- mine the point involved. Of course the trustee is not justified in putting his eestais que trusts to this expense unless the circumstances present some real difficulty. Under Lord St. Leonard's Act (r/) it is provided Lord st. that any trustee may, by petition or summons, apply ^ct"^ to the Court for its opinion or direction on any question touching the management of the trust / property. This is not a provision applying to points u(^ of construction, but to practical questions touching the management of the trust property, e.g., where he has a discretion as to investments, and is pressed by his cestui que trust to make a certain investment, and is in doubt whether he is justified in doing so, he may under this provision apply for the direction of the Court, and if he acts in accordance with that he is protected. Order LV., rulej, of the Rules of Court of 1883, Order LV.. affords great protection to trustees. Under the provisions of this rule trustees may apply summarily to a Judge hi Chambers to decide for them various points in connection with the trust property and generally to protect them. It is indeed a very general provision, under which almost any question arising in the course of a trust may be determined. Thus, should trustees hold property in trust for a certain class of persons, they may under it apply for the ascertainment of that class, and should a trustee desire to purchase the trust property he may under it apply for the approval of the sale to him, and thus practically render himself safe. There are {g) 22 & 23 Vict , c. 35, sec. 30. E 2 X b'l Trustee always safe when acting under direc- tion of Court. OF TRUSTEES. many cases in which it must be for the trustee to determine whether it is best for him to have recourse to this provision or to pay the money into Court under the Trustee Eelief Acts, 1847 and 1849, and either course may be equally operative and effectual. Of course in all cases a trustee is safe if he acts under the direction of the Court. An action may be instituted against him for carrying out of the trust under +he order of the Court, or he himself may institute such an action, and, under these circumstances, practically the whole matter is placed under the control of the Court, ^nd the trustee is protected if he merely acts under the Court's direction. The ending of trustees' duties. When trustees' duties come to an end they should require their cestuis que trusts to give them a release, and though they cannot demand a release under seal that is a matter of small importance. They should render to their cestuis que trusts the fullest accounts and information, and having done this they are entitled to demand a proper release. When a cestui que trust is sui juris and is absolutely entitled, and has created no charge or incumbrance upon the propertj^ he is entitled to have the trust property handed over and conveyed to him, provided, of course, he goes into the trustee's accounts, and deals properly with him. 53 ) • CHAPTER III. OF THE Administration of the estates of deceased PERSONS. On the decease of any person the first enquiry to be General made is, naturally, whether he has died testate or ^^^^^ ^' intestate, and if testate to prove his will, and if in- testate to obtain a grant of letters of administration. The executor or administrator has then the important duty cast upon him of properly administering or applying the personal estate. A.S to the realty, he has, ,as simply an executor or administrator, nothing j to do with that, unless he is also a trustee of it, or ' unless the real estate is by the will charged with payment of debts, and there is no express provision made as to who is to have the power of sale, and the property has not been devised to trustees for the whole of the testp-tor's estate or interest therein, when under Lord St. Leonard's Act {h) he has a power of sale for the purpose of raising the money (i). The, executor or administrator proiseeds to acquaint Executor's himself with all details relating to the deceased's estate, getting it in, and generally exercising all proper controlling powers, bearing in mind that he is now the person responsible, and though he has a period of one year within which to wind up the estate, called the executor's year, yet he should not, Executors if it can be avoided, so extend the period of his y^^'"* admiuistnition, but should use all reasonable expe- dition. As to the liabilities of the deceased, he must (A) 22 & 23 Vict., c. 35, sec. 16. • (j; See Williams' Real Property, 261, 262, 54 OF THM ADMINISTRATION OF TH1-: be carofiil to ascertain them, and if ho distributes the estate without either having it administered by the Court, or advertising under Lord St. Leonard's Act as mentioned in the next paragraph, he will be per- sonally liable for any legal claims that may after- wards be made. Advertising for creditor!^. It is, therefore, very common for an execut(n- or administrator to take advantage of Lord St. Leonard's Act (A), which provides that where he shall have advertised, as would be done by the Court in an administration suit {I), for creditors and others to come in and prove their claims, he may, at the ex- piration of the period named in such advertisement, distribute the assets having regard only to the claims of which he then has notice, and shall not then be liable. This enactment goes on to provide that this shall not prejudice the rights of any creditor or claimant to follow the assets into the hands of the person or persons who may have received the same respectively. This provision applies to claims of next-of-kin as well as to claims of creditors, and affords protection to the sureties in an administration bond where the administrator has pursued the course prescribed (m). Executor cotnpoundincr debts. &c. y f By the Conveyancing Act, 1881 Th), it is provided that an executor may pay or ajjow any debt or claim on any evidence that he thinks sufficient, and that he may, if he thinks fit, accept any compensation or security for any debt, and may allow time for pay- ment thereof; and may compromise, compound, abandon, submit to arbitration, or otherwise settle any debt, account, claim, or thing relating to the testator's estate, and may do such acts as may be (yt) 22 & 23 Vict, c. 35, sec. 29. (^) See Indcrmaurs Manual of Practice, 1S9. I'.tn. Xvi) Newton v. Shernj. 1 C. I'. D., iMC : 4;") L. .]., C. 1'., i:*',. (n) 44 & 4.-. Vift.. c. 41. soc :!7. ESTATES OF DECEASED PERSONS. 55 necessary or expedient therefor, without being res- ponsible for any loss occasioned by anything so done by him in good faith. It may be observed generally that an executor's powers are joint and several, so ^^^^ ■^ "^ '"'^ '^/^ that if there are several executors one can act without 2. (tj) Sec. 125. ESTATES OF DECEASED PERSONS. 61 petition against such debtor had he been alive — that is if the debt is at least £50— may present a petition in bankrupt}' praying for an order for the administra- tion of the estate of the debtor according to the law of bankruptcy. The Court is not to make any such order unless satisfied that there is a reasonable pro- bability that the estate will be insufficient for the payment of the debts owing by the deceased ; and generally such an order cannot be made until the expiration of two_ months from the date of the grant of probate or letters of administration, unless with the concurrence of the personal representative. How- ever, if the petitioner prove to the satisfaction of the Court that the debtor committed an act of bankruptcy within three months prior to his decease, then there is no need to wait this period of two months. The section goes on to provide that upon an order being made for administration, then the property of the deceased person vests in the Official Eeceiver in bankruptcy, who realises and distributes it in ac- cordance with the provisions of the Act, subject only to this that he shall have regard to any claim by the personal representative to payment of proper funeral ' and testamentary expenses, which are to be payable in full in priority to all other debts. Subject to this, however, of course the whole of the bankruptcy rules prevail, and it, therefore, follows that when there is any insolvent estate of a deceased person, it should now, strictly speaking, be administered in bankruptcy. The enactment under consideration also goes on to Transfer of provide for the transfer of proceedings in Equity to fn*Equ1tyTo bankruptcy, on the application of any creditor on Bankruptcy. proof of the insolvency of the estate.^ If, then, an insolvent estate is being thus administered, the result is that the priorities of debts before detailed are not observed, and, subject to the few exceptions existing in bankruptcy, all debts will be paid pari pas.s?(. It is not contemplated, however, that the Official Receiver 62 OF THE ADMINISTRATION OF THE in whom the estate is to vest, shall do more than pay the debt— or rather dividends thereon — for it is pro- vided that should the estate, contrary to expectation, turn out to be solvent, and there is a surplus, such surplus shall be paid over to the personal represen- tative, or dealt with in such other manner as may be prescribed. Decision as "With regard to the transfer of administration pro- to transfer of t i i i i i • i i i i administra- ceedings to bankruptcy which have been commenced tion proceed- Jn Chancery, it has been held that the power of trans- ino's from . .' . Kquitry to fer is a discretionary one, and that it will not be Bankruptcy, exercised when the estate is small, the number of creditors is small, and considerable expense has already been incurred in chambers in the proceedings under an administration judgment (r). In the same case an opinion was expressed that an application for transfer can only be made by a creditor who has proved his debt in the administration proceedings in Chancery. Order of liability of different pro- perties to meet debts. An important point to be considered in the adminis- tration of an estate is that of the rights of the various beneficiaries. If the assets are ample there is no difficulty ; all the debts will be paid, and then in their proper order the beneficiaries, but it is manifest that when the estate is insufticientto pay all the creditors, and also all the devisees and legatees, some must suffer, and the question then presents itself, as between the beneficiaries, what is the order in which assets are to be applied for the payment of a deceased person's debts ? and the shortest plan will first be to give a list comprising the general order, which is as follows : — 1. The general personal estate is applied to the payment of debts, unless exempted expressly or by plain implication. (r) In re Weaver, Eiggs, v. Weaver, 29 Ch. D. 741). 2.S6 ; 54 L. J., Cb. ESTATES OF DECEASED PEKSONS. 63 2. Any estate particularly devised for payment of debts, and only for that purpose. 3. Estates descended to the heir. 4. Eeal or personal property charged with the pay- ment of debts, and devised, or suffered to descend, or specifically bequeathed subject to that charge. 5. General pecuniary legacies j^w rata. 6. Specific devises, residuary devises, and specific bequests, not charged with debts. 7. Eeal and personal estate appointed by will under a general power of appointment (s). i A V - 8. Paraphernalia of the widow of the deceased (t). It should be observed that the whole reasoning in Reason for respect of the order in which assets are to be applied as just mentioned, is a carrying out of the testator's intention. The personal estate is deemed the natural and primary fund for payment of all debts, and the testator is presumed to act on this legal doctrine until he shows some other distinct and unequivocal intention to the contrary (m). This seems very natural reasoning, for it is manifest that a inan when living will pay his debts out of cash in his possession rather than realise property to pay them, and, therefore, at his death, it is only in accordance with his probable desire to pay his debts out of his general personal estate. But if the general personal estate is not sufficient, then, again, it is only common sense to suppose that if the testator has taken the trouble to devise property for the payment of his debts that is the property he would desire should next be resorted to. Failing that, it would seem to be in furtherance of the tes- tator's intention that the heir, not being an object of his bounty, but taking only by operation of' the law, should be the person who should next suffer, and (s) Storv, 37rj, 376. (0 2 Wh. & Tu., 106. (?() Story, 372 ; Duke of Ancaster v. Mayer. 2 Wb. and Tn., 723, 64 01" THE ADMIMSTKATJON OF THE As to specific legatees and devisees, and residuary devisee^. this line of arp;nment is applicable tlirousliout the Avhole order. Special attention should be paid to the assets numbered " " in the order given, for it is there stated that a specific legatee or devisee stands in exactly the same position as a residuar}^ devisee, and, at first sight, this will probably strike the reader as not being just and right. Prior to the Wills' Act (r) there could be no doubt but that a residuary devisee stood in the same position as a specific devisee or legatee, for the will only spoke from the date of the making, and could only pass property which the testator then had. A residuary devisee was, therefore, then substantially a specific devisee. The Wills' Act, however, made a will speak from the date of the death, and it was then argued that as a residuary devisee might take other property than what the testator was then possessed of, he was not equally an object of the testator's bounty as a specific devisee or legatee ; that the residuary devisee was in fact only a devisee of whatever might be left, and that, there- fore, he would be liable to contribute rateably with pecuniary legatees, that is to be placed in the order numbered "5" in our list. After some contrary decisions it has, however, now been definitely decided that this is not the correct view ; that though it is true that he may take other property, yet it must always have been clear in the testator's mind what real estate he possessed, and that, therefore, in effect a residuary devise remains at the present day just as much specific as it ever was (w). This is only a further illustration of what has been already stated, viz., that the whole principle upon which the order of applica- tion of assets is founded, is the i nteiition of the_ t estator . (v) 1 Vict., c. 26. (w) ffensman v, Fn/er, L. R-, 3 Ch., Api)s., 420 ; .S7 L. J. Cli. 97 ; Lancctiibl v . Tgfful'deti: V) Cli.. Apps., IHI) ; 44 L. .T. Ch., 2(W ; Far But these ordinary rules do not in all cases apply Exception to to determine the rights of a cestui que trust against rega^rS(JL»" his trustee. Thus, where a trustee had paid trust quetmsfs _ money into his own banking account, and had drawn trusteef^^^'"^ cheques generally on such account for bis own purposes, it was held that the strict rule of Clayton's case did not apply, so as to produce the result that he had drawn cheques against the money earliest paid in, and thus spent the whole trust fund, but that it must be presumed that he intended to do right, and that he had drawn his cheques against his own proper moneys rather than the trust moneys ; and, therefore, that any money remaining at his banking account at the time of his bankruptcy must be presumed, so far as was necessary, to still represent the trust money, and that to this extent such money would not pass to his trustee on his bankruptcy as part of his estate {I). (J) Mills V. Fowkes, 5 Bing. (N.C.), 45c. {k) Favenc v. Bennett, 11 East, 36. {1} In re Ucdldt's Estate, 13 Ch. D., G9G ; 49 L. J., Ch., 41.5. ( 80 ) CIIAPTEE V. MORTGArxES. Definition of a raortsrasre. Vivum radium. Morimnn vadium. A MORTGAGE, in its widest sense, may be defined as a security whereby the property in land or goods is passed by one person to another conditionally. Mortgages of land are ordinarily stffected by means of a formal deed of mortgage, and mortgages of chattels by means of some such like instrument, which is designated a bill of sale {m). Mortgages of land may either be by way of vivum vadium, that is, a living pledge, or mortuum vadium, a dead pledge, though the former is, at any rate at the present day, practically unknown. A vivum vadium is where the mortgagor borrows a sum of money and grants his estate to the mortgagee to hold until the rents and profits shall repay the sum so borrowed, and when this object is accomplished then the estate in natural course results back to the borrower. On the other hand, a mortiuDu vadium is where the mortgagor borrows a sum of money, and grants his estate to the mortgagee to hold absolutely, subject to this, that if the mortgagor shall repay the money with interest on a given day, then the mortgagee shall reconvey the estate to the mortgagor (»). This is still the letter of an ordinary mortgage deed, and we must here notice the different way in which all such transactions have always been regarded at law and in Equity respectively. (m) Bills of Sale given by way of securing money are governed by the Bill of Sale Act, 18S2 (lo & 40 Vict., c. 45). See hereon Indcr- maur's I'pls. of Com. Law, 10;M()(;. (") 1 Step. Corns., 80:!. MORTGAGES, 81 At law, the day named in a mortgage for payment Effect of a was required to be strictly observed, and if the money i^^*^^^^ ^"^ was not paid on that day the mortgagor's rights were at an end, and the mortgagee was the absolute owner. The estate, in fact, was granted to the mortgagee absolutely, subject to a certain condition, which condition was required to be strictly observed, and if it was not so observed, the mortgagor's right was gone for ever. But Equity always regarded the transaction And in in a different light, viz., as purely and simply meant ^^"^*-^- as a security for money, and acting on the maxim, " Equi ty regards the spirit and not the letter," the Court of Chancery always allowed the mortgagor to come and redeem his property on payment of prin- cipal, interest, and costs, which right is styled the mortgagor's equity of redemption (o). The maxim just referred to is the very foundation of the doctrine of Equity on this subject, and this, coupled with another maxim, "Qii££.,a_mortg_a^ always a mort- Once a mort- gage," forms the basis of the rules there observed f mortga^e^ relating to mortgages. This latter maxim may be shortly stated to mean, that when a transaction is I clearly shown to be a mortgage then a mortgage it ' must remain ; thus, a clause in the mortgage deed, providing that if the money is not paid within five years, the mortgagor shall have no further right of equity of redemption, would be perfectly useless (p). Whilst law and Equity were distinct systems we had, therefore, two different rules applying ; but it must be remembered that now, under the Judicature Act, 1873 (q), the Equity rule is the prevailing one in all divisions of the Court, and that the common law rule is only, as it were, a relic of what has been. But, notwithstanding the maxim, " Once a mort- Extinguish- ment of equity of (o) Story, 6fi3, 664. redemption. (p) Howard v. Harris, 2 Wh. and Tu., 1178 ; Story, 671. (9) 36 & 37 Yiot., c. 66, sec. 25. G 82 MORTGAGES. gage always a mortgage," a mortgagor may, by a subsequent deliberate act, extinguish his equity of redemption. Thus, a mortgagee may purchase the equity of redemption of the mortgagor ; but such a transaction is looked at jealously by the Court, and where the mortgagor has, under pressure from the mortgagee for payment of the mortgage debt, and being in embarassed circumstances, sold and con- veyed his equity of redemption to the mortgagee at a price under its value, the transaction has been set aside (?•)• Distinction For the rule to exist that a person who has con- mortsaee^and veyed property to another, subject to a condition for sale with a reconveyance to himself on payment on a certain day, condition , -^ „ , . ,, ^ .-, . i -, , , for re- need not really strictly observe ibat day it must be purchase. clearly made out that the transaction is one by way of mortgage, a matter not always perfectly plain. Sometimes there may really be a transaction whereby A conveys property to B, say for £1,000, reserving to himself a right to buy it back by a given date, say, for £1,100. Now, here the question would arise, is this a mortgage, or is it not an out and out sale, with a right of re-purchase on a given day? If the former, then the principles we have referred to apply, but if the latter, then they have no application, and the day named must be rigidly adhered to, and there is no principle upon which the Court can allow to the con- veying party an extension of his privilege of re-pur- chase beyond the day named. There being but little difference in the form of such instruments, it is some- times necessary to look to surrounding circumstances, to ascertain the real nature of the transaction, and the following circumstances will be more or less cogent evidence to show that it was really intended as a mortgage, and not as an out and out sale, viz. :— (1) (r) Smith's Manual, 347 ; Ford v. Oldm, L. R., 3 Eq., 461. MORTGAGES. 83 That the conveying party was allowed to remain in possession, merely accounting for rents as an equiva- lent to interest. (2) That though the party to whom the property was conveyed was let into possession, he yet accounted to the conveying party, (o) That the conveying party paid the whole costs of the instru- ment. (4) That the money paid was utterly inade- quate to what would be the purchase-money (s). The whole idea of the Court of Chancery in con- The reason of tinually allowing to the mortgagor this right or onhe^CoiSt. equity of redemption, embraces the doctrine of the objection of the Court to penalties. The Court, in fact, has always regarded the naming of a day by which, if the money is not paid, the estate is to be the mortgagee's absolutely as a penalty. Though this was reasonable enough in some respects the idea has probably been carried too far. Thus, it Conversion of was formerly laid down that a provision in a mort- p^-jncipai" ° gage deed to the effect that if interest is not punctually paid it shall be converted into principal, and added to the mortgage debt, so as itself to carry interest, partakes of the nature of a penalty, and cannot be enforced (t). This, however, cannot now be considered to be the law, it having been recently j, distinctly held that a provision in a mortgage deed | for such capitalisation of interest to become in arrear, is not contrary to any rule of equity, and will be given effect to (w)* Again, it has been held that a provision that if Provision for interest is not punctually paid it shall be increased, amount of cannot be enforced as really being a provision in the interest. nature of a penalty (w). Thus, to reserve £5 per (s) story, 671 ; Snell's Eq., 296, 297. (0 See Smith's Manual, 327. (m) Clarkson v. Henderson, 14 Ch. D., 348 ; 49 L. J., Ch., 289, \w) Smith's Manual, 327 ; Snell's Eq., 307. G % 84 MORTGAGES. The modes of effecting morteages. Equitable mortgage. cent, interest, making it £6 per cent, if it is not paid within, say, fourteen days of becoming due, has been held bad, and yet the same idea can undoubtedly be satisfactorily carried out by reserving £6 per cent, reducible to £5 per cent, if paid within, say, fourteen days of becoming due. It is, however, submitted that a different decision would probably now be come to (x). A mortgage of freeholds is effected by an ordinary deed of conveyance, reserving the right of redemption on a day usually six months from the date of the instrument. It is not in practice usually con- templated that this day will be observed, and the mortgage deed contains a provision for future pay- ment of interest. A mortgage of copyholds is effected by a conditional surrender, the mortgagee not being admitted unless he wishes to enforce his security. A mortgage of leaseholds may be effected by assignment or underlease, but the latter is the preferable plan, because thereby the mortgagee is in no way connected with the lessor of the property ; there is, in fact, no privity of estate between them, and he is not liable in respect of the rents and covenants reserved in the lease. A mortgage of property, be it freehold, copyhold, or leasehold, may, besides being affected in any of the foregoing direct ways (which are called legal mortgages), be effected by way of equitable mortgage, that is by a memorandum or charge on the property, without any direct convey- ance, or even by a deposit of the muniments of title, either simply, or accompanied by a memorandum. That a mere deposit of deeds should create a charge on land, may at first sight appear strange, bearing in mind the 4th section of the Statute of Frauds {y), (x) See in support of this view. General Credit and Diseount Com- pany v. Glcgg, 22 Ch. D., 549 ; 52 L. J., Ch., 297. (^) 29 Car. II., c. 3. Mortgages. 85 but the point was decided long ago in the well-known case of Russel v. Russel {z), and the theory is this, liussd v. that it does so as a matter of necessity, for, if the depositor sued at law to recover back his muniments, the lien of the depositee thereon would be an answer, and if he sued in Equity for their specific delivery up he would be met with the maxim, " He who seeks Equity must do Equity; " and it certainly would not be Equity to order their restoration to him without pay- ment of the money. He, therefore, could in no way so get them. One peculiar and out-of-the-way mortgage may also Welsh mort- be noticed, viz., what is known as a Welsh mortgage, ^^^^' which is a transaction whereby the estate is conveyed to the mortgagee, who is to go into possession and take the rents and profits as an equivalent for his interest, the principal remaining undiminished. In such a transaction there is no contract, express or implied, between the parties for the repayment of the debt at a given time, and though the mortgagee has no remedy to enforce payment of his money, yet the mortgagor or his heirs may redeem at any time (a). The position of a mortgagor has been greatly Position of ameliorated and improved by modern legislation, for i^°provedby originally the law would scarcely recognise his posi- legislation. tion as being any longer that of owner of his property. The law in fact simply considered, that whilst allowed by the mortgagee to remain in possession, he might take any crops or profits of the land without account- ing to the mortgagee and he might distrain for rent, but this was all (b). The Judicature Act, 1873 (c), Provision of ameliorated the harsh rule of the common law by ^ct, 1873, — . — _— sec. 25 (5). (2) 1 Wh. andTu., 773. (fl) SnelPs Eq., 298. (&) Story, 669, 670. (c) 36 & 37 Vict., c. 66, sec. 25 (5). 85 MORTGAGES. providing that a mortgagor entitled for the time being to the possession or receipt of the rents and profits of any land, as to which no notice of intention to enter has been given by the mortgagee, may sue for the possession of such premises, or for the recovery of such rents and profits, or to prevent or recover damages in respect of any trespass or other wrong relative thereto, in his own name only. The mort- Positionasto gagor also, at common law, having parted with the makius leases j j estate, could not make anv valid lease of the of mortgagca & ' ^ ^ property. mortgaged property, and any lessee claiming under a lease made by an owner, after he had mortgaged his estate, was Uable to be ejected (d). Any lease had, in fact, to be made by the mortgagor and mortgagee to- gether, the rent being reserved to the mortgagee until redemption, and then to the mortgagor. The Con- veyancing Act, 1881 (('), has now improved the mort- gagor's position in this respect, for under that pro- vision, in the case of mortgages made since the Act, whilst the mortgagor remains in possession he has power to make leases as follows, viz. : An agricultural or occupation lease for not exceeding 21 years, and a building lease for not exceeding 99 years, such leases to take effect within a year, to be at the best rent, without fine, and to contain usual covenants, and a condition for re-entry on non-payment of rent for not exceeding 30 days. The mortgagor must also within one month of making such a lease deliver to the mortgagee, or where more than one, then to the mort- gagee first in priority, a counterpart of the lease duly executed by the lessee, although the lessee is not to be concerned to see that this provision is complied with. Limitations Wo have stated that the mortgagor has in Equity gagorfright ^ continual right of equity of redemption, but this to redeem. {d) Kecch v. liuU, 1 ISmitli's Lead. Caaes, 571. \c) 44 & 40 Vict., c.'H see, 18. MORTGAGES. 87 right is limited (1) by the Statute of Limitation, and (2) by the mortgagee's right of foreclosure. The Real Property Limitations Act, 1874 (/}, provides that where the mortgagee enters into possession and holds for a period of 12 years without giving any written acknowledgment of the mortgagor's rights, his title is absolute, and the mortgagor is barred from any further right of equity of redemption ; and it has been decided that in this case there is no further extension of time in the case of disability, but that the mortgagor's right is absolutely lost alter the one period of 12 years (g). The mortgagor desiring to redeem tenders to the mortgagee his principal, in- terest, and costs, and, if not accepted, then he may commence an action in the Chancery Division for redemption. In such an action an account is taken of what is due to the mortgagee for principal, interest, and costs, and, on payment of this, the mortgagee must reconvey to the mortgagor. It is a common expression, "You foreclose down, and redeem up," Foreclose by which is meant that a mortgagee can only fore- close or shut out those interested in the property subsequently to him, whilst a mortgagor must redeem all mortgages, and any mortgagee must redeem any prior mortgages to give him the full rights of a first mortgagee over the property. Not only may the original mortgagor redeem the Who may , T L T L 11 redeem be- mortgaged property, but, as a general rule, any per- sides the son interested in the equity of redemption may do so, mortgagor. e.g., a tenant by the curtesy, a tenant in dower, and even a judgment creditor (h). There is, in every mortgage, a day named for pay- Non-observ- ment by the mortgagor, and if he does not observe named in^^ — mortgage for (/) 37 & 38 Vict., c. 57, sec. 7. payment. (ff) Forsfer v. Patterson, 17 Ch. D., 132 ; 50 L. J.) Ch., G03. {h) Smith's Manual, 349. down, I'edeem up. 68 MORTGAGES. Who rccon- vcys on death of mortiraECCC. Provisioa of Vendors' and Purchasers' Act, 187i. Provision of Convey- ancing Act, 1881. that day, then be is not entitled at any moment to come forward and pay the money with interest to date,^ but he must give six months' notice of his intentionjto repay, or in heu thereof pay six months' interest.*:. This is so that the mortgagee may have proper opportunity of seeking another security for his money. If the mortgagee is dead, and the property is freehold, formerly it was not always perfectly easy to determine who should reconvey to the mortgagor. In the absence of any devise of the mortgaged pro- perty, the rule was that whilst the mortgagor must pay his money to the personal representatives of the mortgagee, the heir of the mortgagee was the person to reconvey, but if there was any devise of the mort- gaged property, then the devisee was the only person concerned. Difficulties often arose as to whether there had been a devise of the mortgaged property, for it w'as held that under a general devise mortgaged property would pass, unless a contrary intention was shewn (l) ; but it was by no means easy to determine whether there was a contrary intention or not, for instance, supposing the property comprised in the general devise was charged with payment of debts, or was subject to a series of complicated limitations, here there was usually held to be sufticient contrary intention. The Vendors' and Purchasers' Act, 1874 (/t), however, provided that in all cases the legal personal representative of the mortgagee might reconvey, but it was strangely enough held that this enactment, though applying to a reconveyance to the mortgagor, did not operate to enable the personal rejDresentative to transfer (l). Now, however, the Conveyancing Act, 1881 {in), meets all cases by enacting that the mort- gaged property shall, on death of the mortgagee, (i) Lord Brai/hrookc v. Iruikip, Lead. Ca«. Convey., 'JSO. (k) 37 k. HS Vict., c. 78, sec. 4. (0 lie Spradheri/s Mortgac/e, W Cli. 1)., :>\\ ; I'J L. J., Ch., G2o. (/«) \\ & 15 Vict., c. 41, sec. 3U. MORTGAGEiS. S9 always go to the personal representatives, notwith- standing any testamentary disposition, and that they shall have all powers both of reconveyance and transfer, and they are deemed, for the purposes of this enactment, the heirs and assigns of the deceased. But though a mortgagor was always entitled to re- Right on ^ -L L £ ^ payment on; conveyance of the property, or to have it transferred of mortgage to his nominee, he was not formerly entitled to call J^^'^'lJJ'f^g upon the mortgagee to assign the mortgage debt assigned, itself, the reason for which was that the debt was a chose in action, and only assignable at law by means of a power of attorney to the assignee to sue in the mortgagee's name, and it was not reasonable that a mortgagee should have cast upon him the risk of liability for costs in any action brought for the debt in his name. But when the Judicature Act, 1873 (u), made choses in action assignable, this reasoning no longer held good, and by the Conveyancing Act, 1881 (o), as amended by the Conveyancing Act, 1882 (p), it is provided, that in the case of all mortgages, the mortgagee shall on payment, be bound, if required, not only to reconvey or transfer, but also to assign the mortgage debt, \ but a requisition for its assignment by an incum- / brancer prevails over the requisition of the mort- / gagor, and, as between incumbrancers, a requisition | of a prior incumbrancer prevails over a requisition of a subsequent incumbrancer. We have seen that the mortgagee holds the estate Mortgagee ,.,. lii-ii. -LP may become which IS conveyed to him but as a security lor absolute his money, that being the real nature of the trans- owner. action, but the property may become his absolutely, as already noticed, either by force of the Statute (n) 36 & 37 Vict., c. 66, sec. 25 (6). (o) 44 & 45 Vict., c. 41, sec. 15. (p) 45 & 46 Vict., c. 39, sec. 12. % MORTGAGES. of Limitations, or by foreclosure. The mortgagee at first is not let into possession of the property ; there is no need that he should be, for, if the money is paid when required that is all he can want, but, assuming it is not, then we have to con- sider his remedies, and there are several, all of which he may if he pleases exercise concurrently. Mortpagreo These remedies are chiefly as follows : — (1) To sue rcmedi'es^con- ^^^ ^^^ money. (2) To enter into possession and cuiTcutiy. eject the mortgagee, and then also he has certain other incidental powers. (3) To sell either under express powers conferred by the mortgage deed, or given by Statute. (4) To foreclose. Mortgagee must sue within 12 years. Any action by the mortgagee for his money must now be brought within twelve years, under the provi- sions of the Real Property Limitations Act, 1874 (q) ; and this even though apart from the mortgage there is a collateral bond by the mortgagor (r) ; but if there is a collateral bond by a third person, then as against such third person an action on the covenant may be brought within twenty years (s). The period of twelve years dates from the deed, or from the last acknowledgement, or payment of interest, or part payment of principal. Mortgagee entering into possession. As soon as the mortgage is created, the mortgagee, in the absence of any stipulation to the contrary, might immediately enter on the lands, but would be bound to restore them upon performance of the con- dition by payment of the money on the day named in the deed, and, therefore, it is usual to insert a pro- vision that the mortgagor shall hold the land till the day named for payment. Practically, therefore, a (7) :i7 & 38 Vict., 0. 57, eec. 7 ; Sutton v. Sutton, 22 Ch. D.. 511 ; 2 L. J., Ch.. .3.S3. (r) Fcarnside v. Flint, 22 Ch. D., 579 ; 52 L. J.. Ch.. 170. (s) lie Pon-ers, lAwhell v. VhiUips, 30 Ch. D., 21)1. MORTGAGES. 91 mortgagee cannot enter until default is made, nor is it ever meant that he should, but after default then he can do so if he thinks fit ; and if the mortgagor will not go quietly, he may be turned out by means of an action of ejectment. Once in possession, the Mortgagee 11 T hl ^ 1. i ^^ possession mortgagee may take the rents and pronts, but must must account always be prepared to account for them, and he is torrents. liable indeed, not only for everything that he actually receives, but also for everything that he might but for his default have received, and if he assigns over his mortgage to another without the assent of the mort- gagor, he will be held liable to account for the profits received even subsequently to the assignment, upon the principle that having ejected the mortgagor it is in- cumbent on him to take care in whose hands he places the estate {t). The usual position of a mortgagee in possession is As to annual that he receives the rents and applies them in pay- ment of costs and interest, and accumulates any surplus until he has collected enough to pay himself off in one lump sum ; but where no interest was in arrear when he entered into possession, and there was no other special reason for his going into posses- sion — e.g., in the case of a mortgage of leaseholds to prevent forfeiture for breach of covenant — annual rests will be made, that is, a yearly balance will be struck, and any surplus after payment of costs and interest will from time to time be applied in reduction of his principal, which will produce a corresponding abatement of interest ; in other words, here he will, contrary to the general rule, be compelled to take payment of his principal by driblets {u). Amort- Whatamort- gagee in possession is entitled to add to his mortgage IdlTo^S" debt any proper costs incurred, any money he may mortgage properly expend in maintaining his title, any sums {t) Snell's Eq., 308. 00 Story, 667, 668. d^ MORTGAGES. Leases by mortgagee. Mortgagee cutting timber. paid for renewing renewable leaseholds, and any money expended in necessary repairs. But be may not add to bis principal, money expended in general improvements, for be bas no rigbt to make tbe estate more expensive and difHcult for tbe mortgagor to redeem tban is necessary {tc). However, it bas recently been decided tbat if a mortgagee in posses- sion, or a mortgagee selling under a power of sale, bas reasonably expended money in permanent works on tbe property be is entitled, on prima facie evid- ence to tbat effect, to an inquiry as to wbetber tbe outlay bas increased tbe value of tbe property, and, if it bas done so, be is entitled to be repaid bis expenditure so far as it bas increased sucb value, and in sucb case it is immaterial wbetber tbe mortgagor bad notice of tbe expenditure {x). A mortgagee in possession may make leases similar to those already noticed as being capable of being made by a mort- gagor in possession under tbe provisions of tbe Con- veyancing Act, 1881 (_(/). Formerly he could, in the absence of express power, make no satisfactory leases, for tbe tenancies would end as regards tbe mortgagor on redemption by him. By tbe Conveyancing Act, 1881, also, it is provided {z), tbat a mortgagee in possession may cut and sell timber ripe and fit for cutting and not planted for shelter or ornament ; any such sale to be completed within twelve months from making of any contract of sale. Before this enact- ment a mortgagee could only fell timber when his security was insufiicient. statutory It is not now usual to insert in mortgages an ex- power o s e. pj,ggj^ power of sale, ample power being conferred by the Conveyancing Act, 1881 (a), which provides that, {w) Smith's Manual. 668. {x) Shcpard v. Jones, 21 Ch. D., {y) Ante, p. 86. (r) Uk. 45 Vict., c. 11, sec. 1!). (rt) Sees. 19-22. 169. y X^vf . MORTGAGES. 93 in the case of mortgages made since the Act, the mortgagee shall, when the principal money becomes due, have a power of sale in the ordinary way, but such power is not to be exercised until default in pay- ment after three months' notice to the mortgagor, or unless interest is in arrear for two months, or unless there is a breach of some other provision in the mortgage deed. Money received from any such sale is applied in discharging prior incumbrances, then all costs of sale, then the particular mortgage debt, and, lastly, any balance is paid to the mortgagor. With regard to any balance on a sale, the mortgagee is a constructive trustee for the mortgagor. Any action by the mortgagor for such balance must be brought within six years (b). Foreclosure consists of an action by the mortgagee Foreclosure. against the mortgagor, and any subsequent mort- gagees, for the purpose of shutting them out from any further right of equity of redemption. It is brought in the Chancery Division, and in it an account is taken by the Court of what is due to the mortgagee for principal, interest, and costs, and a day is named, usually six months from the date of the Chief Clerk's certificate, for payment. If not paid, then the mortgagor and other persons in- terested in the equity of redemption, are shut out and the mortgagee is at last the absolute owner (c). This is not a course usually adopted, as sale is in most cases preferable ; but there may be cases in which it is an advisable remedy, e.g., where the mortgagee has a scanty security, but thinks he may, as absolute owner, work it out advantageously, e.g., by building on the land, a thing he could not safely (b) Ktiox V. Gh/e, L. R., 5 H. L., 656 ; Banner v. Beveridqe, 18 Ch. D., 254 ; 50 L. J., Ch., 630. (c) As to the practice when in the course of a foreclosure suit a receiver has been appointed who has receiveri certain rents, s^e Jenner-Fust v. Needham, 32 Ch. D., 582 ; 55 L. J., Ch., 629. 94 MORT(iAGES. MortgaG:eo's power to appoint a receiver and to insure. do in his capacity of mortgagee. In the one case also of an equitable mortgage by deposit of deeds, foreclosure is indeed the proper and only remedy against the land (d); but if the deposit is accom- panied by a memorandum of agreement to execute a legal mortgage, then the mortgagee's action may, at his option, be either for foreclosure or sale (e). It may here be noticed that in any foreclosure or redemption suit, the Court has, under the Con- veyancing Act, 1881 (/), full power to direct a sale on such terms as it thinks fit, including, if it thinks fit, the deposit in Court of a reasonable sum to meet the expenses of sale, and to secure the performance of the terms (g). Other incidental powers of a mortgagee are, to ap- point a receiver, and to insure, both of which powers are conferred by the Conveyancing Act, 1881 (/<). The mortgagee's power of appointing a receiver arises as soon as the principal money is due, and he is entitled to exercise his power of sale. Such receiver is considered the agent of the mortgagor, but has to deal with the money he receives thus: — (1) In dis- charging rents, rates, outgoings, &c. (2) In keeping down all annual or other payments, and the interest on any principal sums having priority. (3) In pay- ment of his commission, and of any premiums on proper policies of insurance, and of any sums for necessary or proper repairs directed in writing by the mortgagee. (4) In payment of interest accruing in respect of the principal money due under the mortgage; and, (5) The residue he pays to the person who, but for his possession, would be entitled to receive the income of the mortgaged property. (d) James v. James, L. II. IC> ; Eq., 158. le) Yor/c Union Bank v. Artley, 11 Ch. D., 205. (f) 44 i: 4.-> Vict., c. 41, sec. 2.1. {g) See Oldham v. Stringer, •X\ W. R., 251 ; 51 L, T., 895. (},) 44 k 45 Vict., c. 41, sec. 19. 23, 24. MOETGAGES. 95 The mortgagee's power of insurance against fire arises at any time after the date of the mortgage deed, and the insurance must not exceed the amount specified in the mortgage deed, or if no amount is specified, then two-thirds of the amount that would be required, in case of total destruction, to restore the property. All moneys received under the insur- ance are, in the option of the mortgagee, applied in rebuilding, or in or towards discharge of the mort- gage debt. This power of insuring does not exist when there is a declaration in the mortgage that no insurance is required, or when the mortgagor keeps up an insurance in accordance with the mortgage deed, or when the mortgage deed contains no cove- nant as to insurance, and the mortgagor insures to the amount which the mortgagee is authorized to insure for. It has already been stated that a mortgagee may Mortgagee exercise all his remedies concurrently so far as 1"!°?^*^^ ■^ foreclosure, feasible, but it should be observed that if he fore- or after sale, closes and then sues, the effect is to re-open the foreclosure and to give the mortgagor a renewed right to redeem. If, therefore, the mortgagee sells after foreclosing, he cannot then sue for any defi- ciency (i). This principle, however, does not appear to apply to a mortgagee who sells under his power of sale, who, it seems, can still sue for any deficiency (A). In the absence of any particular circumstances, Priorities, where there are several mortgages on the same estate they rank according to their dates, but this must be taken subject to the advantage which may sometimes be gained from possessing the legal estate and in particular subject to the doctrine of Tacking. (i) Lockhart v. Hardy, 9 Beav., 349. {k) Budge v. Rickens, L. R., 8 C. P., 358 : Fisher on Mortfrno-eSj 959, 9fiO, 96 MORTGAGES. A mortgagee, who has notice of a prior equitable charge at the time he advanced his money, can never avail himself as against it of the protection of the • legal estate ; and, with regard to notice, it may be actual or direct notice, or it may be only constructive Constructive notice. As to what will amount to constructive notice notice. ^j^^ ^,^jg .g^ ^^^^^ anything which is sufficient to put a person of ordinary prudence upon enquiry, is con- structive notice of whatever that enquiry might have led to (0, so that if a mortgagee makes an advance and take a legal mortgage, but docs not get the deeds handed over to him, and it turns out that they were deposited with some one by way of equitable security for a previous advance, the legal mortgagee will be deemed to constructively have notice of the prior charge, and will take subject to it, unless, indeed, he at the time of completing his security enquired for the deeds, and a reasonable excuse was given for their non-production (m). On the point of notice it is now also provided by the Conveyancing Act, 1882 (n), as follows : — " A purchaser shall not be prejudicially " affected by notice of any instrument, fact or thing, " unless, (1) It is within his own knowledge or would " have come to his knowledge if such enquiries and " inspections had been made as ought reasonably to " have been made by him ; or (2) In the same tran- " saction with respect to which a question of notice " to the purchaser arises, it has come to the know- " ledge of his counsel as such or of his solicitor or "• other agent as such, or would have come to the " knowledge of his solicitor or other agent as such, " if such enquiry and inspection had been made as " ought reasonably to have been made by the solicitor Definition of " or other agent." Tacking may be defined as the tacking. uniting of securities given at difterent times so as to (/) Smith's Manual, 110, (/«) Agra Bank v. Barri/. L. R.. 7 Eiipr. ami Tr, Apps., 135. («) \f> & 4f. Vict., c. 8!», sec. S, MORTGAGES. 97 prevent any intermediate purchasers from claiming a title to redeem or otherwise to discharge one lien which is prior, without redeeming or discharging the other liens only, which are subsequent to his own title (o). Thus A, B, and C are first, second, and third mortgagees respectively, but C when he ad- vanced his money thought he was second mortgagee, here, if he can buy in A's mortgage and so clothe himself with the legal estate, he will be able to get payment of both mortgages before B. This doctrine Reason of the is founded upon the equitable maxim that " where the "^o^*"^^- Equities are equal the law shall prevail"; in point of equity and conscience C has as good a right as B, and now, getting in the legal estate, he is allowed to oust B, The essence, therefore, of the doctrine of tacking is, firstly, the existence and possession, by the person claiming to tack, of a legal estate, and, secondh^ an equal equity or right in point of conscience in such person. If all parties have but equitable interests, then the doctrine cannot apply, and they must be relegated to the order of their existence, for the rule then is Qui j^^'ior est temi:)ove 'potior est jure (p), and though one may have the legal estate, yet if at the Notice pre- time he advanced his money he had actual or con- "^ents tackmg. structive notice of the security he is seeking now to squeeze out, he cannot succeed in doing so. Middle- Effect of re- sex and Yorkshire are counties in which registration fikMieseV^ of all dealing with land is provided for, and the ques- ^"5^ York- tion arose long ago whether registration of a mort- gage in itself constituted notice, a question which was decided in the negative, but it has also been held that where there are several charges they take effect according to priority of registration and cannot be tacked (q). And with regard to Yorkshire, it has been specially provided by the Yorkshire Eegistries' (o) story, 264. (j)) Marsh v. Lee, 1 Wh. and Tu., 696 : Storv, 264, 265. {q) Credland v. Potter, 10 Cb., App., 8 ; 44 L. J., Ch., 169. 5 98 MORTGAGES. Legislative provisions as to tackine. Act, 1884 (;•), that no protection or priority by means of the legal estate or tacldng shall, as from the 1st January, 1885, be permitted as regards lands in Yorkshire except against an estate or interest exist- ing prior to that date. The justice of the doctrine of tacking is undoubtedly open to question, but though temporarily abolished it is now revived. By the Vendors' and Purchasers' Act, 1874 (s), the doctrine of tacking was abolished as regards estates and interests created on or since 7th August, 1874, but by the Land Transfer Act, 1875 (t), this provision was repealed except as to any- thing done before the commencement of the Act (»). Therefore, between 7th August, 1874, and 31st De- cember, 1875, both inclusive, tacking was non-exis- tent. Mortgage for future advances. Tacking, in a certain sense, may be provided for by a mortgage. Thus, a mortgage may be for 14,000, with power to the mortgagee to make further advances up to £2,000, and add them to his security. It has been decided that if such a mortgagee makes further advances with notice of a mesne incumbrance, he will not be entitled to priority in respect of such further advances {w). Consolidation Another somewhat peculiar doctrine with regard to mortgages is that known as consolidation of mort- gages, a doctrine which rests on principles wholly different from those forming the foundation of tack- Definition, ing. Consolidation may be defined as the right of a mortgagee, having two or more securities from the same mortgagor, to refuse to allow the mortgagor to (r) 47 & 48 Vict., c. 54, sec. IG. (s) Sec. 7. (i) 38 & 39 Vict., c. 87, sec. 129. (w) 1st January. 187G. (w) Rolf V. Hopkinson, 9 H. li. C. 514, MORTGAGES. 99 redeem one of them without redeeming the other or others. This was a doctrine very harmless in its early stages and founded upon principles of justice and equity. Thus, if A mortgages to B, Whiteacre, and then Blackacre, here, to avoid multiplicity of actions, B was held entitled to refuse to allow Whiteacre to be redeemed by itself. Again, he who seeks Equity must do Equity; and B may have advanced on Blackacre, knowing it to be an in- sufficient security, but knowing also that Whiteacre was very ample, and thinking that the deficiency on the one would be made up by the surplus on the other ; and in this view it was held that it would be inequitable to allow the mortgagor to come and redeem the ample security alone. This doctrine. Extension of. ... , , ' . .. , the doctrine. which was modest enough m its commencement, became extended, for it was held that the rule was the same also, where, though the mortgages were originally to different persons, yet they ultimately became vested in one (x) ; and, as a consequence, great injustice often occurred ; for, by reason of this rule, no one was safe in buying an equity of redemption ; for, though he might be willing to give £500 for an estate subject to an existing mortgage for £2,000, yet there was the risk that he might find the mortgagee at some subsequent time possessed of another and distinct mortgage from the same mortgagor, and then he would be unable to redeem the one property of which he had bought the equity of redemption, without re- deeming the other, and he might thus, perhaps, lose the whole benefit of his purchase. In late its modifi- years, however, the doctrine of consolidation has •^''^^^""• been considerably and reasonably modified, it having been now decided that for consolidation to exist, both or all of the mortgaged properties must have (x) Vint V. Paclget, 2 De G. and J., 611. H 2 100 MORTCiAGES. not only been created, but have become vested in the same mortgagee before any dealing with the equity of redemption in one of them (?/). Thus, if A mortgages Whiteacre to B, and Blackacre to C, and then sells the equity of redemption of Whiteacre to D, and then B buys up C's mortgage, B will not be allowed to consolidate to the prejudice of D. It has also been held that consolidation is not to be allowed unless there is default by the mortgagor on both mortgages (z). In addition to these modifying decisions, the doctrine in question has been considerably affected by the Conveyancing Provisions of Act, 1881 (a), which provides that with regard to Convey- cases in which the mortgages, or one of them, are 1881. or is jmade^ on or after 1st Tanuar}^^882^ and so far as no contrani intnitioii ;s crpressed, a mort- gagor seeking to redeem shall be entitled to do so without paying any money due under any separate mortgage made by him, or by any person through whom he claims, on property other than that comprised in the mortgage which he seeks to redeem. Position on payment off of mortgage. On payment off of a mortgage the estate is re- conveyed to the mortgagor. If no reconveyance takes place, then the position of the mortgagor is technically that of tenant-at-will to the mortgagee, 'and that tenancy will, under the Statute of Limita- tions (h), be deemed to have determined at the end of the year from the payment off ; and, twelve years after that time, any right or estate of the mort- gagee will be barred, and the mortgagor's position will be the same as if the property had been re- (w) Jennings v. Jordan, 1,. R.. Appeal Cases, COS; 51 L. J., Ch., 129 ; Harter v. Colman, 10 Ch. Div., (530 : HI L. J., Ch., 481. (s) Cummins v. FlctcMr, 14 Ch. D., G9 ; 49 L. J., Ch. App., 5G3, (c) 44 & 45 Vict., c. 41, sec. 17.^ (6) 3 & 4 Will. IV., c. 42, sec. 7.\ MOKTGAGES. 101 coDveyed to him (c). If a mortgage of fee simple property is cancelled by a mortgagee, although the cancellation destroys the debt, it does not operate to revest the estate, and the mortgagee becomes a trustee of the legal estate for the mortgagor. (c) Sands to Thompson, 22 Cli. D., 6U ; 52 L. J., Ch., 406. ( 102 ) CHAPTER VI. THE RECTIFICATION AND SETTING ASIDE OF WRITTEN INSTRUMENTS, AND HEREIN OF ACCIDENT, MISTAKE, AND FRAUD. The assistance of the Court to rectify or set aside any written instrument, is chiefly sought on grounds coming under the heads of mistake or fraud, and in some exceptional cases on the ground of accident. These subjects, no doubt, embrace more than ques- tions of rectification, but it appears convenient to consider them in this way. Definition of accidents. Defective execution of powers. An accident remedial in Equity may be defined as some unforeseen event, misfortune, loss, act, or omis- sion, not the result either of negligence or misconduct in the party (d). This is very different to what is understood by an accident in the ordinary sense in which that expression is used, for it then usually signifies any occurrence not referable to design, but in cases of that character only, the Court never gives relief. Thus, if a lessee covenants to keep the demised premises in repair, he will be absolutely bound by this covenant, notwithstanding whatever may happen, e.g., that the premises are destroyed by lightning, or by public enemies, or any such extra- ordinary event, and the reason is that he might have provided for any such contingencies by his contract if he had chosen (e). A good instance of an accident, recognized as such {d) story, 48. {<•) Ktory, 48, 59. favor Court relieves THE RECTIFICATION AND SETTING ASIDE, ETC., ETC. 103 by the Court, occurs in the case of the defective ex- ecution of a power of appointment, although such a defect is, perhaps, more likely to occur by reason of mistake, of which, therefore, it will also form an instance. The Court does not, however, in all cases interfere, because, either through accident or mistake, a power is iusufiiciently or defectively executed, but it grants relief only in favor of persons who are con- sidered as, in a moral sense, entitled to the same, and are, therefore, viewed with peculiar favor, and that only where there are no opposing Equities. The In whose persons thus favored are a purchaser, a creditor, a wifCj a legitimate child, and a charity. The Court will not relieve in favor of a husband, unless, indeed, he is an intended husband at the time, when, of course, he is a purchaser (/). It is not every defect in the execution of a power What defects that the Court will relieve in respect of, but only remedied. when the defect is not really of the very essence of the power. Thus, a defect in executing the power by will when it was required to be by deed or other instrument inter vivos will be aided, as will the want of a seal, or of witnesses, and defects in the limitation of the property, estate, or interest. But if a power is to be executed with the consent of certain parties, this is of the essence of the matter, and relief cannot be given to aid an execution of the power made without such consent. So, also, if a power is re- quired to be executed by will, and it is executed by an irrevocable and absolute deed, the Court will not support such an execution, for it is apparently con- trary to the settlor's intention, a will being always revocable during the testator's lifetime, whereas a deed would not be revocable unless expressly so stated in it (g). (/) story, 56, 57 ; Toilet v. Toilet^ 1 Wh. and Tu., 269. ig) Story, 57. 104 THE RECTIFICATION AND SETTING ASIDE OF No relief against non- execution of power. Except in two cases. But although the Court relieves agamst the defec- tive execution of a power, it stops short there, and refuses to relieve as regards the non-execution of a power (//). Thus, if A has a power of appointment, and is about to exercise it in favor of B, when he is suddenly called abroad and then he dies, here the Court will not give relief in favor of B. To this rule there may be said to be two exceptions. The first of such exceptions is when the execution has been pre- vented by fraud (i). Suppose that A has a power of appointment, and in default of appointment the pro- perty is to go to B. A is about to exercise the power in favor of C, but B, to prevent him doing so, untruly represents that C has been provided for by some other person, and believing this A does not appoint, and dies leaving the property to go in default of appointment to B. Here B would not be allowed to benefit by his fraud, but C if he could prove this fact would get relief. The second exception, — if indeed it can be called one, — is where the power is not a bare power but is coupled with a trust, for in all such cases Equity will interfere and grant suitable relief (j). Thus, for instance, if a testator should by his will devise certain property to A with directions that A should at his death distribute the same amongst his children and relations as he should choose, and A should die without making such distribution, the Court would interfere and make a suitable distribution, because it is not given to the devisee as a mere power, but as a trust and duty which he ought to fulfil, and his omission, whether from accident or otherwise, ought not to disappoint the objects of the testator's bounty {k). (h) Toilet V. Toilet, 1 Wh. and Tu., 209. (0 Story, 56. (j) Har'dhiff v. Glynn, 2 Wh. and Tu., 1,077. (/i) Story, 57, 58. WRITTEN INSTKUMENTS, ETC. 105 Other instance in which the Court would give other in- relief on the ground of accident would be the follow- accident! ing : An executor, having to pay various legacies, care- Wrong lessly pays some in full, and the estate is insufficient leg^ades. ° to pay all in this way, so that there ought to have been proportionate abatement. Here, if the executor is insolvent, the unpaid legatees have a right against those who have been paid in full, to compel them to refund in proportion (I). An annuity is given by will, and the executors are Reduction of directed to set aside a sufficient amount of certain stock to meet such annuity. This they do, but sub- sequently the stock is reduced by Act of Parliament so that the annuity falls short. The Court will decree the deficiency to be made up against the residuary legatee {m). One of the most common interpositions of Equity, Lost Bonds. under the head of accident, was formerly in the case of lost bonds or negotiable instruments. At law an action could not be brought upon a lost bond because there could be no J^r^yt of the instrument, so that in all such cases relief was sought in Equity. But, in more recent times, it has been unnecessary to come to Equity in such matters, as the courts of law entertained jurisdiction and dispensed with the profert, if an allegation was made of loss by accident («). Mistake may be defined as some unintentional act, ( Definition of or omission, or error, arising from ignorance, sur- prise, imposition, or misplaced confidence (o). A mistake may be either of matter of fact or of law, and whilst as to the former the rule is, Ignorantia mistake. (/) Story, 55. (m) Story, 56. (?0 Story, 49. {o) Story, 63. 106 THE RHCTIFICATION AND SETTING ASIDE OF factl cxcusat, the rule as to the latter is just the contrai'3', viz. : — Ifjuorantia leri'is nemincm cxcusat. These two simple rules or maxims do not, however, at all adequately answer the question, " When will Equity give relief in cases of mistake V " and it is, therefore, necessary to consider the matter more in detail. Mistakes of fact. The mistake must have been mate- rial. With regard to mistakes of fact, the mistake may be either unilateral or on one side only, in- which case relief is almost universally given, on the ground more of surprise or fraud practised on the other party, than strictly on the ground of mistake (p), or it may be a mutual mistake on the part of both parties. In all cases to entitle a person to relief, the fact on which there was the mistake, must have been one material to the matter. Thus, sup- pose A were to sell to B an estate well known to both, and their mutual idea was that the area was 100 acres, whereas it really contained something less, but the difference would not have varied the pur- chase in the view of either party ; such a mistake as this would not form any ground to rescind the contract (q). Mistake pro- perly uncon- nected with fraud. Mistake pure and simple, that is mutual mistake, is unconnected with fraud ; for here, however inno^- cont both parties may be, yet the Court will relieve if the mistake is material. Thus, if one agrees to sell and another to buy a house which actually at that time is not in existence, say, through having been destroyed by fire, or washed away by a flood, the Court would relieve the purchaser upon the ground that both parties intended the sale and purchase of an existing thing, and implied its existence as the basis of their contract. So again, (p) Story, 88 ; Snell's Eq., 418, 449. (y) Story, 85. WRITTEN INSTRUMENTS. ETC. 107 if one person understands that in buying an estate a certain piece of land is included as parcel thereof, but the other party had no intention of selling that piece in the estate, here the Court would set aside the contract (?■)• The general rule on the point of what mistake General rule of fact forms ground for obtaining relief is, that reiief"^^^"^^' mistake or ignorance of facts in parties is a proper subject for relief only when it constitutes a material ingredient in the contract of the parties, and dis- appoints their intention by a mutual error ; or where it is inconsistent with good faith and proceeds from the violation of the obligations which are imposed by law upon the conscience of either party (s). And it should be noticed that acquiescence in a mistake will deprive a person of any right to be relieved against it (t). The direct rectification of written instruments forms one of the most common cases in which the Court acts on the ground of mistake. Sometimes by mis- take an instrument contains less than the parties intended, sometimes more, and sometimes it simply varies from their intent by expressing something different in substance from what was intended. In all such cases the rule is that if the mistake is clearly made out by satisfactory proofs, Equity will reform the contract, so as to make it conformable to the precise intent of the parties (jt). Thus, marriage settlements are often reformed and varied so as to conform to the previous articles, on the strength of which the parties married, or which the settlement is recited to be made in pursuance of (tv). So, where (r) Story, 86, 67. (s) Story, 90. (t) Earl Bcauchamp v. Winn, L. R., C Eng. and Ir. Ai»ps., («) Story, 90. (w) Legg v. Goldivirv, 1 Wh. and Tn.. IT. i2B. Rectification of written in- struments on the ground of mistake. 108 THE KECTIFICATION AND SETTING ASIDE OF there is some memomndum or note of a transaction, and then a formal instrument is executed, any such memorandum or note is admissible for the purpose of shewing a mistake in the formal instrument, pro- vided that in all such cases it is clearly shewn that the parties meant in their final instruments merely to carry into eli'ect the transaction designated by their prior memorandum or note (a). Mistake implied. In some cases the Court will relieve where, irres- pective of actual proof of error, a mistake may be fairly implied from the nature of the case. Thus, where there has been a joint loan of money to two or more obligors, and they are by the instrument made jointly liable, but not jointly and severally, the Court has reformed the bond, and made it joint and several, upon the reasonable presumption from the nature of the transaction that it was so intended by the parties (y). No relief against />oud fide purchase. Notwithstanding that an instrument may, by mis- take, not be what the parties intended, and may confer an estate not meant to be conferred, yet until rectified by the Court the instrument stands ; and, therefore, if there is any disposition under it whereby the property comprised therein becomes vested in a bond fide purchase for value without notice of the mistake and who has the legal estate, the Court will not grant any relief as against him upon the common rule, " Where the Equities are equal the law shall prevail" (r). Rectification of wills. The jurisdiction of the Court to rectify and reform written instruments applies not only to instruments iiiter vivos, but also to wills, when the mistake can be Gr) story, 94. (y) Story 90, 97. («) Htory, lUO. WRITTEN INSTRUMENTS, ETC. 109 made out from the words in the will itself, but not otherwise, for parol evidence is not admissible in such a case to shew that something was intended by the testator which the will does not express (a). The Revocation of Court will also give relief against the revocation of Sak™ ^^ a legacy when the revocation was made under a mis- take. Thus, if a testator revokes a legacy to A, giving as a reason that A is dead, whilst in fact A is living, Equity will hold this revocation invalid, and order the legacy to be paid {b). With regard to mistakes of law the probable ground Mistakes of , . -r . , . . , . law. for the maxim Ignorantia legis neminem excusat is, that were it otherwise there is no saying to what extent the excuse of ignorance might not be carried (c). One of the most common cases put to illustrate the doctrine is where two or more are bound by bond, and the obligee releases one, suppos- ing, by mistake of law, that the other will still remain bound ; in such a case the obligee will not be relieved in Equity on the ground of mistake of law {d). So also where a person had a power of appointment, and executed it absolutely without introducing a power of revocation, upon a mistake of law that being a voluntary deed it was revocable, relief was refused (e). If, however, the power of revocation had been intended to be inserted, but was somehow omitted by mistake, that would be different, for the Court would in such a case relieve, as that would be really mistake of fact (/). In some exceptional cases, however, notwithstand- ing the general rule, the Court will relieve although (a) story. 107, 108. (b) Story, 109. (c) Per Lord Ellenborough. 2 East., 469. (d) Story, 64. (e) Worrall v. Jacob, 3 Meriv., 195. (/) Story, 65. When the Court will relieve in respect of mistake of law. no THK RECTIFICATION AND SETTING ASIDE OF the mistake is one of law (;/). Such cases are, how- ever, rare, and on an examination of various decisions in which it appears that relief has been thus given, it will mostly be found that they involve mixed prin- ciples, embracing sometimes mistake of fact also, and sometimes surprise, or even fraud. From these decisions, however, we may gather that there is, how- ever, one class of cases in which although sub- stantially the mistake is one of law, yet the Court will give relief, viz. : Where there is a plain and established doctrine on the subject, so generally known, and of such constant occurrence as to be understood by the community at large, there ignor- ance of law and of title, founded on it, is ground for relief, so that if any person acting in ignorance of the plain and settled rule of law is induced to give up a portion of his indisputable property to another under the name of a compromise, the Court will grant relief [h). Thus, if through ignorance of the common rule of descent that the eldest son is heir, such son were to divide the estate with his brother relief would be given. The real reason of this ex- ception to the maxim Ifinoratia leg'is neminem exeusat seems to be, that the mistake is of such a kind that it gives rise to an almost irrebuttable presumption of undue influence, imposition, mental imbecilit.y, sur- prise, or confidence abused, so that to some extent it may fairly be said that the exception is more apparent than real, that the mistake of law is not the founda- tion of the relief, but is the medium of proof to establish some other proper ground of relief (/). Compromises But where there is a doubtful point of law, such as of doubtful r^ ouestion respecting the true construction of a will, right upheld. ^ ^ (9) Lansdownc v. Lamdoume, 2 Jacob and Walker, 205 ; Bivgham V. JSingham, 1 Ves.. 12(). (/() Story, iC>>^, 7<. \iS Story, 74, WKITTEN INSTRUMENTS, ETC. Ill there is nothing whatever to prevent a compromise, and though naturally one party must be wrong in his view, yet he can never afterwards seek relief on the ground of mistake, that is assuming that the compromise was fairly entered into with due delibera- tion (A). In all cases of compromise depending on matters of fact, there must be a full and fair disclosure by each party to the other of all facts connected with the matter known to him, and which might influence the other. A family compromise settling Family com- disputes will be upheld, as in cases of suspected P^°™^^^' illegitimacy, to prevent family disputes and possible ligitation, but if there is any concealment the ar- rangement will be set aside (/). Thus, in one case there had been an agreement between two brothers for the settlement of the family estates, as the younger disputed the elder's legitimacy. At the time of the ^ agreement, however, the younger brother was aware of a private marriage that had taken place, but he did not communicate this to the other. The legitimacy of the elder brother was afterwards established, and although some nineteen years had elapsed, the Court set aside the compromise, holding that it mattered not whether the omission to disclose originated in design, or in an honest opinion of the invalidity of the private marriage, and of there being no obligation on the younger brother's part to make the communi- cation {m). It may be observed that ignorance of foreign law Foreign law, is deemed ignorance of fact, and relief may be ob- tained on that ground as in other cases of mistake of fact. It is evident that mistake is often closely allied Fraud. (^) Stapilton V. Siapillon,, 2 Wh. and Tu.. 920 ; Story, 68. {I) Story, 78. (?«) Gordon v. Gordon, ?> Swanst., 400. 112 THE RECTIFICATION AXD SETTING ASIDE OF to fraud, although, of course, as pointed out, there may be cases in which all parties concerned in a mis- ^\'^latis take are perfectly innocent. Fraud in Equity may be Fraud. described as such conduct on the part of a person as is either deliberately wrong, or is considered by the Court as wrong, and forming, therefore, a ground for the assistance of the Court to set aside any transaction tainted with it. The ways and modes of fraud are infinite, and the Court of Chancery has always declined to lay down any general pro- position of what shall constitute fraud, so that it is impossible to accurately define it. Definitions of Fraud in Equity is of two kinds, Actual and Con- cOT'striictivc structive. Actual fraud may be defined as some- fraud, thing said, done, or omitted by a person with the design of perpetrating what he must have known to be a positive fraud (n). Constructive fraud may be defined as something said, done, or omitted, which is construed as a fraud by the Court, because, if generally permitted, it would be prejudicial to the public w^elfare. The great distinction to be observed is, that whereas in actual fraud there is the design to do evil, in cases of constructive fraud there may be no such design, and the act maj^, indeed, in the opinion of the person chargeable therewith, amount to nothing more than was allowable and justifiable. It is only the Court which steps in and declares what is done to be a fraud as calculated to do harm ; and, in fact, in many cases of constructive fraud there may really be nothing harmful in the individual transaction, but to allow it to be good in one particular instance, would be to open the door to much possible evil in other cases. Actual fraud. Dealing first with Actual fraud it mainly presents (?0 Smith's Manual, 901, WEITTEN INSTRUMENTS, ETC. 113 itself as being either suf/gestio falsi or suppress'w veri. Suggcstio If a person makes a representation to another which •^"^*'' is false, and thereby that other is induced to act, if this representation was of a material kind the Court will relieve, and will set the transaction aside, and this is so even though the person who made the representation did not know at the time of its falsity (o). As to cases of suppressio veri, it is not every concealment, even of facts material to the interest of a party, which will entitle him to the interposition of the Court, but the case must amount to the keeping back of facts which one party is under some legal or equitable obligation to communicate to the other, and which the other has a right to know not merely inforo conscientice, but jiiris et de jure (p). Si(2')]presm> veri. In the great majority of cases of dealings between two parties, there is no obligation on the part of the one to inform the other of any circumstances con- nected with the matter, for each must look out for himself, the maxim of caveat emptor applying. Thus, there is no obligation, either at law or in Equity, cast on a vendor to disclose defects in the property he is selling to the purchaser, when they are of a patent nature which the purchaser could ascertain for him- self, e.g., that there is a right-of-way over the pro- perty {q) ; but anyjatent defect, that is one which the purchaser could not ordinarily find out for himself must be disclosed, as also must all defects in title. And there is ordinarily no obligation cast on a pur- chaser to disclose facts to his vendor, which render the property more valuable than the vendor thought it, for every one must be supposed to know the value of the property he is selling. Thus, a purchaser is (o) BedgraveY. Hurd, 20 Ch. Div., 1 ; 51 L. J., Cli., 113; Smith v. Chadwick, 9 App. Cases, 187 ; 53 L. J., Ch., 873 ; Edgington v, Fits- maurioe, 55 L. J., Ch., 650. (p) Story, 128, 130. (q) Oldficld V. Bound, 5 Yes., 508, X Silence not ordinarilj^ fraud. Vendor not bound to disclose defects. Purchaser not bound to in- form vendor of special value of estate. 114 THE RFX'TIFICATION AND SETTING ASIDE OF not boniul to inform the vendor that he knows of minerals in the land, of which fact the vendor is igno- rant, and which renders the property of much greater value (r). But, of course, if there is any misrepre- sentation this will be fraud, as if the purchaser is expressly asked by the vendor if he is aware of there being any special circumstance of value connected with the property, which he, the vendor, is not aware of, and the purchaser replies in the negative, though possessed of this knowledge. Cases in which dis- closure noces- sarv. Trustees, itc. Insurances. Surety. It may be well, however, to notice some specific cases in which concealment or non-disclosure of facts will be held to constitute fraud. By far the most comprehensive class of cases arises where a fiduciary relationship exists between the parties, for anything material kept back here by the person occupying the fiduciary position, will be sufficient to lead the Court to set the transaction aside (s)- Cases of insurance also furnish another instance in which disclosure is neces- sary, for if the insurer keeps back any material fact which might have influenced the granting of the policy, this will amount to fraud. There must here be every disclosure, and if any material facts are withheld, whether the concealment be by design or accident, it is equally fatal. Thus, if a person pro- poses his life for insurance, omitting to inform the insurance company that his life has been rejected by another office, and the company accepts his life and issues the policy not knowing of this, here is ground for setting the same aside (t). Again, if a party takes a guarantee from a surety, and is at the time aware of facts of which the proposed surety is ignorant, which render his liability and risk much (r) story, 129. (s) Story, 135 ; and see hereon post, p. 119. (() London Assurance Company v. Mansel. 11 C'h. D.. 3f»,S : 48 L. J., Ch., 331. WRITTEN INSTRUMENTS, ETC. 115 greater than he supposed, he is bound to inform him thereof (u). There are certain cases in which, from the excep- Persons in an tional position in which a party is placed, any ^^q^^^'j'^II'"'^^ dealing with him is not looked at in the same way as a similar transaction would be if entered into with a person not so situated. Thus the Court watches with the most jealous care every attempt to Lunatics and deal with persons non compos mentis, and whenever there is any evidence of the absence of good faith, or the act cannot be for their benefit, the Court will set it aside or make it subservient to their just rights and interests (/(•). And this same principle is Persons ot applied to some extent to persons who, though ^andin"-. ^'^' not actually non compos mentis, are yet of weak understanding ; for it is a rule that, as such persons are specially liable to imposition, their acts and contracts will be set aside if of such a nature as to justify the conclusion that they have been imposed upon, circumvented, or overcome, by cunning, arti- fice, or undue influence (x). So, also, if a contract intoxicated is entered into with a person who is in such a state P"*'*^'^^- of drunkenness as to be deprived for the time of the use of his reason and understanding, the Court will interfere. But if there is not that extreme degree of drunkenness, the Court will not interfere, unless there has been some contrivance or management to draw the party into that state, or some unfair advan- tage taken of his condition {y). To make out a case of actual fraud some proof Proof of thereof must be given, and circumstances of mere ^'"^""^ " suspicion will not be sufHcient. The Court of (u) Pidcoch V. Bishop, 3 B. & C, 605. (w) Story, 140-142. Ix) Story, 143-140. (//) Story, 112, I 2 116 THE RECTIFICATION AND SETTING ASIDE OF Inadequacy of price. Fraud only renders transaction voidable. Chancery has always acted on a lower degree of proof of fraud than was accepted by the Courts of Law, but as Law and Equity are now fused, and the rules of Equity prevail, there is no object in here con- sidering this difference. The Court does not insist upon positive and direct proof of fraud, for it would in many cases be an utter impossibility to give such proof, but the Court will deduce the evidence from circumstances affording strong presumption (z). Mere inadequacy of price is not by itself ordinarily a sufficient circumstance from which the Court can conclude that there is fraud, for persons must be left to judge for themselves as to the value of their pro- perty ; but if the inadequacy is so gross as to manifestly demonstrate some imposition, or undue influence, or if there are other suspicious circum- stances in addition to the inadequacy, then it is otherwise {a). Although an actual fraud is practised, the trans- action is not thereby rendered void, but it is voidable only at the option of the person on whom the fraud has been practised (h). And a person on whom a fraud has been practised may lose this right of avoiding the transaction if a third person innocently, and for value, acquires an interest in the matter, for / the rule is, that where one of two innocent parties ' must suffer by the fraud of a third person, that one shall be the sufferer who has, however innocently, put it in the power of the third person to perpetrate the fraud (c). Thus, A on the faith of B's repre- sentation, which is false, signs a receipt, and C on the faith of this receipt pays certain money, e.g., completes a purchase; here A must suffer, and not C. (z) story, 115. (a) Story, 1.51, ir)2. {h) Oais V. Turguand, I-. R.. 2 H. L., :125. fc) Hunter v. Walters, L. K., 7 Ch. Apps., 75, WRITTEN INSTRUMENTS, ETC. Il7 Constructive fraud has already been defined, and Constructive the distinction between it and actual fraud ex- plained id) ; and it may also, upon that distinction, be observed that the doctrine of relief on the ground of constructive fraud is founded on an anxious desire of the Court to apply the principle of preventitive justice, so as to shut out the inducements to perpe- trate a wrong, rather than to rely on mere remedial justice after a wrong has been committed. By dis- arming the parties of all legal sanction and protection for their acts, the Court suppresses the temptations and encouragements which might otherwise be found too strong for their virtue (e). Some of the cases coming under the head of con- Constructive structive fraud are principally so treated because they f-Sngatliust are contrary to some general policy of the law, e.g., the policy of marriage brokage contracts, contracts or conditions in restraint of marriage, frauds on marriages, agree- ments to influence testators. the law. A marriage brokage contract is an agreement Marriage whereby a person engages to pay another a sum of tracts"^ ^°'^' money to bring about a marriage, and it is firmly established that all such contracts are utterly void as against public policy, so much so as to be deemed incapable of confirmation, and the Court will even allow money paid under them to be recovered back(/). All provisions in the nature either of direct con- Conditions in tracts, or of conditions annexed to gifts, legacies, and I'estraint of ' _ o ' o ' marriage. devises in general restraint of marriage, are bad as being against public policy ; and so also even if the condition is not in general restraint of marriage, but (rf) See ante. p. 112. (e) Story, 1H5. (/) Story, lG(,v 107. 118 THE RECTIFICATION AND SETTING ASIDK 01' still is of SO rigid a nature that the party upon whom it is to operate is unreasonably restrained in the choice of marriage, it will fall under the like consideration, e.g., where a legacy was given to a daughter upon condition that she should not marry anyone who was not possessed of freehold property of the clear yearly value of £500 (r/). Frauds ou A fraud on a marriage signifies some concealment manuiges. ^^^ misrepresentation whereby some person is misled, or by reason of which certain acts intended to be of effect, are reduced to mere forms or become inopera- tive. Thus, where a parent declined to consent to the marriage of his daughter with the intended husband, on account of his being in debt, and his brother, therefore, gave a bond for the debt, and thus the desired consent was procured and the marriage took place. The husband had, however, by arrangement with his brother, secretly given him a counter bond, but the Court held it was a fraud upon the marriage, and must be considered as a nullity (li)- Agreement to Any agreement having for its design the using tatoS""^*^ ^^^' influence or power to induce a person to make a will in a certain way is bad, for all such contracts tend to the deceit and injury of third persons, and encourage artifices and improper attempts to control the exer- cise of their free judgment (/)• Thus a bond given by A to B, to pay a certain sum in consideration of B using his persuasive influence over C, to induce C to leave A a legacy, would be void. These particular cases given will shew sufficiently the nature of constructive frauds which are so on account of the policy of the Jaw, and others that may (g) Sec further as to conditions in restraint of marriage, Williams' Personal I'roiicrt.y. otin, 560 ; Smith's Comp. of the Law of Heal and rersoiia) Prujiertv, 'JiMlO. (//) lii'dman v/lichnan, 1 Ycrn., 348 ; Story, 168. 160. (i) Story, 167. Written instruments, etc. 1I9 in addition be mentioned, are the following: — Con- tracts in general restraint of trade ; contracts invol- ving champerty or maintenance ; contracts for the buying or selling of public offices. Where any contract or conveyance is considered by \viiei\ii fraud the Court to amount to a constructive fraud by reason ^^^{^^ n^^t of being opposed to some positive law, or to principles voidable; of public policy, it is void altogether and incapable of ratification for Quod at initio non valet in tractn temporis non convalcscit, in Vi^hich respect there is a difference from the rule in cases of actual fraud, and in other cases of constructive fraud, in which the matter is voidable only and is capable of confirma- tion (/.•). Other cases coming under the head of constructive fraud are so treated because of a peculiar confidential or fiduciary relationship existing between the parties. In this class of cases there is often to be found the actual design of perpetrating a fraud, and then the matter is properly styled actual fraud, but it is only desired here to consider the effect which may be pro- duced by the bare existence of such relationships. It has, in treating in a previous page [1) of the position of trustees, been pointed out that they are not allowed to make any profit out of their trust estate, or generally to purchase of their cestuis que trusts. Here the whole principle depends on the doctrine of constructive fraud, for the Court considers that, irrespective of unfair dealing, the position is such that it cannot be allowed, and on preventitive principles it lays down an almost hard and fast rule, that it is to be considered that a fraud has been committed. Constructive frauds on account of confidential or fiduciary- relationships. Trustees. (k) Story, 193. 194 ; ante, 116. (l) Ante, p. 47. 120 THE RECTIFICATION AND SETTING ASIDE OF Otber con- lidcntial positions. The same idea pervades the relationship of soli- citor and client, and, indeed, other relationships of a confidential nature, such as counsel and client, agents and their principals, promoters and directors of com- panies, medical men and their patients, and ministers of religion and those confiding in them, and, indeed, every case in which influence is acquired and abused, or confidence is reposed and betrayed (//;). Solicitor and client. To take particularly the position of solicitor and client, though the solicitor is not incapable of con- tracting with his client even whilst that relationship is existing, yet on account of that position any tran- saction between them is viewed with jealousy by the Court, and the onus of supporting it is on the solicitor, who must be prepared to shew the perfect fairness and propriety of the transaction, or that the client had independent advice, and in both cases that he has taken no advantage of his professional position, but has done as much to protect the client's interest as he would have done in the case of the client dealing with a stranger (u). And upon this same principle of protection of the client against the power of the solicitor, the Court always refused to allow a security given for future costs to stand, although it would allow it to stand if only for costs' already incurred (o). However, now, by statute (j?) a solicitor may take security from his client, either for past or for future costs, and a solicitor is allowed to contract with his client as to his remuneration (q). Generally, in all dealings with his client the solicitor must protect him, so that if he takes a mortgage from his client which contains any unusual provisions, — e.g., an im- (wi) See hereon, Huguenvi v. Banelci/ Smiles, 2 \Vh. and Tu., ">07 Li/oii y. Home, li. R., (> Eq., 055 ; ;$7 L. J., Ch., (Ml, {n) Story, 197. (o) 2 \Vh. and Tu., 629. Ip) 83 & 31 Vict , c. 28, sec. 1(1. Iq) 33 & 34 Vict., c. 28 ; U &. 15 Vict., c. ih WRITTEN INSTRUMENTS, ETC. 121 meLliate power of sale — lie must specially point this out to the client (r), unless, indeed, it is evident from tile transaction that such immediate power was in- tended (s). And it lias recently been held that the rule which forbids a solicitor to buy his client's pro- perty, without full and complete disclosure, applies to the case of a solicitor purchasing from the trustee in the bankruptcy of his client (0- If, however, a solicitor obtains leave of the Court to bid at a sale, that relieves him from his fiduciary character, and places him in the same position as an ordinary purchaser («)• A solicitor is absolutely incapable of taking a gift inter vivos from a client, unless indeed it is of a trifling character when the Court would not interfere- In order that a gift from a client to a solicitor should stand there must not only be an absence of fraud or suspicious circumstances, but there must be a sever- ance of the confidential relation (w). The relation of principal and agent naturally shows the existence of confidence, and their position is therefore affected by the same considerations, and the rule is that agents are not permitted to become secret vendors or purchasers of property which they are authorised to buy or sell for their principal, or by abusing their confidence to acquire unreasonable gifts or advantages, or indeed to deal validly with their principals in any case except when there is the most entire good faith and a full disclosure of all facts and circumstances, and an absence of all undue Gift to solicitor. Principal and aeeut. (r) Cockburn v. Edwards, 18 Ch. D., 449 : 51 L. J., Ch., 46. (s) PooJctj V. Whctham, 55 L. J.. Ch., 654, subsequently affirmed on Appeal, see L. S. J., 1886, p. 2U2. (0 Luddi/'s Trustee v. Pcard, W. N., 1886, p. 129 ; L. S. J,, August, 1886. («) Coaks V. Boawell, L. E., 11 App. Cases, 232 ; 55 L. J., H. L.. 761 . {w) Tomson v. Judge, 3 Drew, 306 ; Morgan v. Minctt, 6 Ch. D., 638. I22 TUK IIECTIFICATKJN AM) SETri.\(J ASIDK OK Directors and promoters of companies. Who is a promoter. iuliuence, advantage, or imposition. Upon these principles if an agent sells to bis principal his own property as the property of another without disclos- ing the fact, the bargain at the election of the prin- cipal will be held void ; and if an agent employed to purchase for another, purchases for himself, he will be considered as the trustee of his employer (x). The position of a director of a company as regards the shareholders is that of agent to a principal, and therefore the above remarks apply to him (/y) ; and a promoter of a company also occupies an analogous position (.-). A promoter may be defined as a person who sets in motion the machinery by which the Com- panies' Acts provide that incorporated companies can be created, and such a person, by the necessity of the case, is in a fiduciary position to the company he forms, since he is the creator of it (a). CJuaidian and ward. Parent child. md Transactions between guardian and ward fall under the general principle we are considering. Any dona- tion from a ward to his guardian is looked upon with much jealousy, and if obtained during the guardian- ship, or immediately after the ward attaining majo- rity, it will be set aside ; and even though a considerable time has elapsed between attaining the majority and making the gift, it will be set aside if it can be shown that the guardian still retains influence over his former ward (I)). And much the same doctrine applies as between parent and child, for donations from the child to the parent are always looked upon jealously, and will usually be sot aside if any advantage has been taken of the parental position ; and particularly is (.r) story, 204. (?/) Imperial Mercantile C'r. Association v. Coleman, L. K., H. L, is;). (-) Eriavgcr v. New Somhrtro Vhoxiyhatc Coinrtani/, L. 11.. 8 H. L., 1,218. («) Storv, 211. {>>) 2 Wh. and Tii., G25-G27. WlUl'TEN INSTRUMENTS, ETC. \2^ this SO when the child has only just come of age. But if a transaction between parent and child is reasonable, and entered into willingly the Court will not interfere. Thus, in one case (c), a son in plentiful circumstances gave his father a bond to pay him an annuity during his life, and it was held that as it appeared to have been the free act of the son, and what he then thought himself bound in honour to do, it ought not to be set aside in Equity, there being no proof of fraud, but merely the circumstance of the relationship (d). The position existing between a man and woman Persons en- engaged to be married is such that in gifts and ^limeci! '^"^ other transactions between them, some presumption of fraud arises ; and on account of the probable in- fluence possessed by the man, the Court will require satisfactory evidence that that influence has not been improperly used (e) ; and so there may be many other cases in which a transaction may amount to a fraud on account of the dominant position of one of the parties to it (/). And even though there be no special position exist- General post- ing between the parties, yet it is a general rule that ^^^^.^ ^° ^^' if a voluntary settlement is attacked and sought to be set aside — c.>j., on the ground of undue influence — the burthen of proving that the transaction was fair and honest, is on the party taking the benefit thereunder (g). A third class of cases coming under the denomina- Constructive tion of constructive fraud, are those which are so account of the treated because of the peculiar position in which the peculiar posi- tion of the person seek* (c) Blackborn v. Edgclcy, 1 P. Wms., GOO, ing relief. [d) 2 Wh. and Tu., fi23-62o. (c) Page V. Home, 1 1 Beav., 227. (/) See Harvey v. Mmmt, 8 Beav., 4.S9. (^) Hoghton v. Hogl/ton. 15 Beav., 299. 124 THE RECTIFICATION AND SETTING ASIDE OF Expectant heirs. 31 Vict., c. 4. Tlic ])rinciple of relief to expectants. Whcndcal- iuj^s with ex- pcctauts good. person stands who is seeking relief, irrespective of any special or peculiar position of the other party. An expectant heir is the most prominent instance of a constructi\x> fraud coming under this head. By an expectant heir is here meant one who has either some reversionary estate, or who has at an}^ rate an expectancy of some future henefit. Thus, if an estate is limited to A and then to B, B is during A's life an expectant, and so also if B merely has expectations that his father will leave him a fortune, he is also an expectant, but he may be styled a bare expectant, whilst in the former case the expectant is something more, for he has an estate limited to him. The same principles apply to both, subject only to this, that it is now provided that no purchase of a reversionary i)iterest made Jiona fide, and without fraud or unfair dealing, shall be set aside merely on the ground of undervalue ; and the word " purchase " includes any contract, conveyance, or assignment, under or by which any beneficial interest in any kind of property may be acquired. Therefore, if there is an honest sale or mortgage of a reversionary interest, this is now always good, unless there is some fraud or unfair dealing, and the prac- tical effect is, that if the transaction is an un- conscionable one, this is fraud and unfair dealing, and it is as liable to be upset as it was before the Statute 31 Vict., c. 4 (//). The principle on which the Court construes deal- ings with expectant heirs of an unconscionable nature to be frauds, is that from their circum- stances, weakness on the one side, and extortion on the other, can l)e presumed (i). Therefore to render a bargain with an expectant good, it is necessary (h) Karl of Aylcsford v. Morris, L. R., 8 Cb. Apps. 484 ; 42 L. J.. Ch., .-.4(; ; Miller v. Cook, L. R., 10 Eq., G41 ; 40 L. J., Ch., 11. (/) Earl of Chesterfield v. lansscn, 1 Wh. & Tu., G24. WRITTEN INSTRUMENTS, ETC. 125 for the person dealing with him to prove that the transaction was reasonable and fair, when it will stand, or that it was made known to and approved by the person to whose estate the expectant hoped to succeed, when, although it does not necessarily ^ follow that it will stand, there yet arises a pre- sumption of its fairness (k). Post olnt bonds form a method of dealing with Post obit an expectant which are almost always bad as con- structive frauds. A post obit bond may be defined as an agreement made, on the receipt of money by the obligor, to pay a sum exceeding the sum so received and the ordinary interest thereon, on the death of the person upon whose decease he expects to become entitled to some property {!). It must be borne in mind that the doctrine of Confirmation the Court with regard to dealings with expectants ^ ' P has only the effect of making transactions entered into with them voidable, and that they are cap- able of confirmation after the peculiar position has ceased to exist, for if the person is no longer an expectant he can by his own free and delibe- rate act confirm and render perfectly valid the transaction which he had a right to question (m). Or laches or And, without any express act of confirmation, if the ^cqmescencp. position of expectancy ceases to exist, and the party lays by some time without enforcing his right to have the transaction set aside, the Court will refuse to interfere on the principle, Vigilan- tihus non dormientihus cequitas siihvenit (u). And with regard to the relief that the Court gives to an expectant the maxim, " He who seeks Equity {k) Snell's Eq., 486. 487. (0 Story. 224. (m) Earl of Chesterfield v. Janssen, 1 Wh. and Tu., 624, (») Gerrard v. Heilhj, B Dru. and W., 414. 126 THE RECTIFICATION AND SETTING ASIDE OF Case of 'jcneral ox- |>ectancy. Common sailors. Virtual frauds on indivi- duals. must do Equit}' " (o), must be borne in mind, and the rule is that the Court will only set aside the transaction on the terms of repayment of the money actually advanced with fair interest thereon, usually 5 per cent, per annum ( p). The principle of the Court with regard to relief to expectants, has been applied to cases where the expectancy is not to any direct property, but is only of a general character, e.g., where a man has no property or direct expectation of any, but his father or other relative is in a good position, and an un- conscionable tranaction is entered into in the ex- pectation that the father or other relative will come forward and help him, rather than see him made a bankrupt (q). As another instance of this kind of constructive fraud may be mentioned the case of common sailors, who are considered by the Court as being so ex- tremely improvident a class of men as to require some guardianship all their lives, and Equity there- fore treats them much in the same light as expectant heirs, and relief is generally afforded against con- tracts respecting their prize money or wages, when- ever any inequality appears in the bargain, or any undue advantage has been taken (/•). There are, in addition to the classes of cases we have now considered as coming under the heading of constructive fraud, some others in which the transac- tion is held by the Court to be a fraud, because virtually it would operate to work some wrong, or because it is contrary to some statute. It may be well to mention some such cases. (o) See ante, p. 13. Ip) Earl of Ai/lesford v. Morris, L. II., S Ch. Ajips.. 484 ; 42 L. .J.. Ch., r>i6. (qj Nevill v. Siiellhu/, L". Ch. D.. t;79 : 40 L. J.. Ch.. 777. (r) .Story, 216. WRITTEN INSTRUMENTS, ETC. 127 An agreement whereby parties engage not to bid Frauds at against each other at a public auction, is considered ^'^^^^o^s- bad as a fraud, for such an agreement may operate as a virtual fraud on the vendor in causing his pro- perty to be sold at an undervalue (s). The vendor may himself commit a virtual fraud on intending purchasers by infringing the provisions of the Sale of Land by Auction Act, 1867 (t), which renders it illegal for him to have a reserve price, or to employ a puffer, unless he states in the conditions of sale that he is doing so. Any secret agreement entered into by a debtor with Secret com- one of his creditors to give him some benefit to P°^^*^^°"^- induce him to accept a composition, or to act in some particular way in his bankruptcy, is considered bad, as virtually operating as a fraud upon the other creditors (w). Voluntary settlements or other dis- positions which are held bad under the provisions Frauds under of either 13 Eliz., c. 5, or 27 Eliz., c. 4 (iv), come ^^^^'-Jr: ''' strictly under the head of constructive fraud, as c 4. operating as virtual frauds on creditors or pur- chasers, as the case may be. If a person has a special power of appointment, Frauds on he must, if he executes it at all, execute it bond jide P°^*^^^- for the direct end reserved, and, in so far as he fails in doing this, he virtually defrauds the objects of the power, and his execution is bad as a fraud {x). Thus, if although the appointor appoints to an object of the power, yet it is under some private arrange- ment that he, the appointor, shall receive part for his own benefit, this is bad ; and even though there is not such a direct arrangement at the time of the appoint- (s) story. 184. {t) 30 & 31 Vict., c. 48. [u) Story, 241. {w) See ante, pp. 2.5-27. \x) Alpyn V. Belckier. 1 Wli, and Tu,, 437. 128 THE KECTIFICATION AND RETTING ASIDE OF Excessive execution of ])Ower. ment, but the intention of the appointor is that a certain course shall be taken with regard to a part of the fund appointed not authorised bj' the power, and shortly after appointment this is done, this also is a fraud (?/). So if a person has a power of appoint- ing a fund amongst his children, and he appoints to a child who is not in want of the appointment, and who is seriously ill, so that he, the father, will in the probable event of the child's death be entitled as his next-of-kin, this is a fraudulent appointment (::). In all such cases as those, although nominally the ap- pointment is in accordance with the terms of the power, yet the design underlying the matter renders the transaction a virtual fraud on the other objects of the power. And where a person having a special power of appointment, openly appoints to persons not objects of the power, although there is nothing strictly fraudulent in this, yet it is equally bad, but this is styled the excessive execution of a power. Thus, under a power to appoint amongst children, the appointor appointed part to the children, and part to the grandchildren, and it was held that the part appointed to grandchildren was beyond the power and bad (a). Illusory ap- pointments. An illusory appointment would formerly also have been a constructive fraud. An illusory appointment is when a person having a power to appoint, amongst a certain class, appoints to all the members of such class, but only giving a nominal share or shares to one or more members. An illusory appointment, though valid at law, was not considered in Equity as a ho?id fide exercise of the power, but as construc- tively fraudulent, but by 1 Will. IV., c. 46, this iy) Tofhamw Dulc of Vortland. 1 Do G.. J. and S., HI?. {z) Hinchinhrook v. Seymour, as stated by Jcssel, IM.H., in Hc?ili/v, Wray, 21 Ch. D.. :M2 ; 5:5 I.. J., Cli., CG7 (a) Alexander v. Alexander. L. C. Convg., 395, WEITTEN INSTRUMENTS, ETC. 129 Equity rule was abolished, and an illusory appoint- ment rendered valid. Still, even after this statute it was necessary to appoint some share, though it might be a nominal or illusory share, but now by the Powers Amendment Act, 1874 (h), even an exclusive appointment is valid, that is to say, any member or members of the class may be omitted from the appointment, unless the instrument creating the power makes any declaration to the contrary. Where an instrument is void on the ground of Cancellation fraud, or otherwise, or where, though not void, its up*^of instri^ object has been satisfied, and it forms a cloud over ments. the plaintiff's rights, the Court will direct the same to be delivered up and cancelled ; for, if an instrument ought not to be used, it is against conscience for a party holding it to retain it, and especially this is so if it purports to convey property, as its existence has a tendency to affect the plaintiff's position. Such jurisdiction is said to be exercised in favor of the plaintiff' quia timet ; that is, because, he fears that the Jurisdiction instrument sought to be delivered up may, possibly, ^n^Jalimet be used to his detriment ; but where the instrument is manifestly a nullity the Court will not interfere, because, in such a case, there is no occasion for it to do so (c). And the Court will not interfere on behalf of a purchaser for value of lands, to order delivery up of a prior voluntary settlement, the same being mani- festly bad against the plaintiff under 27 Eliz., c. 4 {d).' (b) 37 & 38 Vict., c. 37. (c) Story, 461-465. (d) Be Hoghton v. Money, L. R., 2 Ch., 164. { 130 ) CHAPTER VII. Distinction between Tj.iw and E(inity. OF SPECIFIC PERFORMANCE OF CONTRACTS, AND SPECIFIC DELIVERY UP OF CHATTELS. At Common Law every contract to sell or transfer a thing was, if no actual transfer bad been made, treated as a mere personal contract, and if unper- formed tbe only remedy was an action for damages. But tbe Court of Chancery in many cases deemed such a course wholly inadequate for tbe purposes of justice, and did not hesitate to interpose and require a strict performance of the contract, where it was possible to perform the same. This is tbe doctrine of specific performance of contracts. The contract. Yoluntarr contracts even though under seal not enforced. The first point manifestly to be looked to is, whether there is a binding contract existing be- tween the parties. The ordinary essentials of every simple contract are : (1) Parties able to con- tract ; (2) Their mutual assent to the contract ; (3) A valuable consideration; and (4) Something to be done or omitted which forms the object of the contract (e). In some cases also writing is required by the Statute of Frauds. And although a deed does not require a valuable consideration to enforce it, so that there may be an action at law for damages for the breach of a covenant con- tained in a voluntary deed, yet with regard to seek- ing specific performance the rule is the same whether the contract is a simple contract or a deed, viz. : that the Court will not carry into efi"ect a mere (c) Indcrmanr's Principles of Common Law, 29. OF SPECIFIC PEEFORMANCE OF CONTRACTS, ETC. 131 voluntary agreement, contract, or covenant, to transfer property (/). Most contracts of which specfic performance is what will sought are in writing, and it will generally be found contract. that writing is essential by reason of the provisions of the 4th section of the Statute of Frauds (g), for the chief class of cases in which specific performance is desired is, as we shall presently see, the sale and purchase of land. No formal contract is ever re- quired, provided only that in some way the essentials of the contract appear. Thus, a binding contract may be made out from letters passing between the parties, provided only that there is an offer on the one side, accepted unconditionally on the other, and the Court can collect from a fair interpretation of the letters that they import a concluded contract. Thus, if A writes to B offering to sell a house for £1,000, and B writes back simply accepting the offer, here there is a binding contract ; but if B in accept- ing the offer were to insert as a condition that half the purchase-money should remain on mortgage, here there would be no binding contract (h). The tendency of modern decisions is to apply greater strictness to the construction to be placed on a series of letters than was formerly done(i); and indeed no memorandum which does not appear to be intended to amount to a con- cluded agreement can constitute a binding contract (kj. Assuming that there is a contract binding between The nature of the parties it is important to consider the nature of that contract, for if it is of such a kind that (/) Ellison V. Ellison, and Notes, 1 Wh. and Tu., 291. (f/) 29 Car. 2 C, .3. (h) Fry on Specfic Performance, 124. (i) Neshavi v. Sdhj, L. R., 7 Ch., 406 ; 41 L. J., Ch., 551 : May v. Thomson, 20 Ch. D., 705 ; 51 L. J. Ch., 917. (A,) Winn v Bull, 7 Ch. D., 29 ; 47 L. J . r;h.. 139 ; Haiukcsirorth v. Chafey. 55 L. J., Ch., 3.35. K 2 132 OF SPECIFIC rERFORMAXCE OF CONTRACTS AND damages for its breach will compensate both parties then the Court will not decree specific performance, so that as a general rule the Court will not decree specific performance of a contract for the sale of stock or goods, because damages are manifestly a sufficient remed}', inasmuch as with the damages the party may ordinarily purchase the same quantity of the like stock or goods (/). Nor will the Court de- cree specific performance of a contract to borrow or lend money on mortgage, for damages will mani- festly meet the case (m). But with regard to con- tracts for the sale and purchase of land, it is otherwise, for a person is taken to have a particular desire for the very land he has agreed to bu}', and it cannot be said that damages will necessarily com- pensate him (n). Therefore, although as we shall presently see, there are cases in which the Court will decree specific performance of contracts relating to personal chattels, the great class of cases in which the Court grants this special relief is that of con- tracts for the sale of land. Where the The Court cannot, as a general rule, decree specific decree snccific performance of a contract for the sale of lands unless pcrforiuauce jt is in Writing and signed, as provided by 4th sec. contract of the Statute of Frauds (o) ; but to this rule there relating to j^^.^ three exceptions, viz.: — (1) Where there has been a part performance of the parol contract ; (2) Where the contract was intended to be reduced into writing, but has been prevented from being so by the fraud of the defendant; and (3) Where, although the contract was by parol, the plaintiff (0 Cmldcc V. Futier, 1 Wli. and Tu..907. (m) liogcrs v. C/iallis, 27 15cav., 175. («) litixion V. Lister, .S Atk., 384. (o) 2'.t Car. II., c. 3. As to what will bo a snfTicicnt sif^.atiirc to satisfy the Sta1iit(> where lands have been sold bv ntiction see Potter V.' Dvjfield, L. U.. IS Ecj., 1 ; 43 L. J., Cli.. 472 ; liossittr v. Miller, L.R., 3 App fa-.. 1124 ; 48 L. .J., Ch., 10. SPECIFIC DELIVERY UP OF CHATTELS. 133 has set it out in bis Statement of Claim and the defendant has admitted it in his Statement of Defence, and has not pleaded the Statute of Frauds (j>). The doctrine that the Court will in some cases grant Part per- .(, p r 1 i. J. 1 1- i. formauce. specific performance of a parol contract relatmg to land, notwithstanding the Statute of Frauds, is based on the principle that not to do so would be to open the door to fraud, for if A and B contract, though by parol, and A suffers B to do certain acts partly performing the contract, surely it would be in- equitable to allow A to then turn round and take advantage of the provisions of the Statute (g). But it is not every act done bv reason of the "Wiiat acts , , 1 •' T -11 1 1 ' 1 L sufficient part parol agreement which will be deemed a part per- performance. formance ; for them to be so they must be such as are exclusively referable to the contract, done with no other view than to perform it, and of such a nature that it would be a fraud in the other party, after allowing them to be done, not to carry out the contract (r). Thus the admission of the purchaser into possession, if such giving of pos- session was exclusively referable to the agreement, is a sufficient part performance, particularly if the purchaser then expended money in building, or in repairs, or improvements, for under such circum- stances, if the parol contract were to be treated as a nullity, he would be a trespasser (s). But the mere continuing in possession by a tenant to whom the landlord has agreed to sell the premises, is not a sufficient part performance, for it cannot be said that his remaining in possession is exclusively referable to the agreement, unless there is something (p) Lestet \. Foxcroft, and Notes, 1 Wh. and Tu., 881. (5) Story, 501. (r) Smith's Manual, 276, 277. (s) Story, 504. 134 OF SPECIFIC PERFORMANCE OK CONTRxVCTS AND iu addition, such as the laying out of money in re- l)airs or improvements, upon the faith of the con- tract (t) ; and with regard to a parol agreement for a new tenancy to a tenant already in possession, though his continuing in possession, is no sufficient part performance, yet where the new tenancy was to be at a higher rent than the old one, and the tenant paid a quarter's rent at the higher rate, it was held that this constituted a suflicient part performance, and specific performance of the contract was accor- dingly decreed (»)• What acts not sufficient part pei'- formance. As to reprc- sentatious made on marriage. None of the following acts will, in themselves, be a sufficient part performance to take a case out of the Statute of Frauds : — Part payment, or even pay- ment of the whole of the purchase-money ; delivery of abstract ; making valuation of timber on the estate which is to be paid for at a valuation ; preparing the draft conveyance. All such acts are only ancillary to the transaction, and the party can be placed iu Htatu quo (ir). And marriage is not in itself a suffi- cient part performance, for, although the parties cannot be placed in statu quo, so, that in a sense, it is suffering a fraud to be committed to allow the party to refuse to perform his contract, yet to hold that marriage is a sufficient part performance, would be to act in direct opposition to another clause in the 4th Section of the Statute of Frauds, which provides that no action shall be brought upon a contract made in consideration of marriage, unless such contract is in writing and signed by the party to be charged therewith (x). But, although this is so, yet, where a person marries upon the faith of a representation made to him or her for the purpose of influencing his or her (0 1 Wh. and Tu., 888, 889. («) Niiiin V. I'hhian, L. R., 1 Ch. Ai>p!^.. Ho ; 3.". L. J., Cb., 1 10. (w) 1 Wh. and Tu., 8SG. (.r) Lassencr v. Ticrvey, 1 Mac. and Q., ool ; Siircomhe v. Pinniacr, 8 Dc G. M. and (5., r>71. SPECIFIC DELIVEKY UP OF CHATTELS. 135 conduct with reference to the marriage, then, provided such representation is clear and absolute, the person making the same will be compelled in Equity to make the same good ; but where the representation is merely of what a person intends to do without pledging himself to its performance, or where the promise is of such a character that the person making it refuses to enter into a contract giving the party to whom it is made, to understand that he must rely on or trust to his honour, it seems that the Court cannot enforce the performance of the representation or promise (ij). Indeed, it may be doubted whether any representation will be enforced which only amounts to a promise to do something in futuro, but that it must be a representation of some state of facts alleged to be at the time actually in exis- tence (z). As a simple instance of a representation which would undoubtedly be enforced, we may take the following : — A father, in order to induce a man to marry his daughter, represents to him that he has actually executed a certain settlement of property upon his daughter and the intended husband ; here, this representation would have to be made good, for this is a representation as to an existing fact, and not a mere promise of what shall be done. As regards the second mentioned case in which the Writing pre- Court will decree specific performance of a contract, J^^^^i ^^^ although not in writing as required by law to be, viz., where it was prevented from being reduced into writing by the fraud of the other party, the principle of the doctrine is that were the Court not to do so, the statute, which was designed to suppress fraud, •would be the greatest assistance to fraud. Thus, if an agreement in writing should be arranged between the parties, and entrusted to one of them, who (y) 1 Wh. and Tu., 895, 896. (*) Maddison v. Alderson, 8 App., Cas., 473 ; .52 L. J., Q, B., 737. 136 OF SPECIFIC PEllFORMANCE OF CONTRACTS AND fraudulently and secretly changes it for a different agreement ■which is executed, in this and like cases the Court would relieve (a). Parol coil- As regards the third mentioned case, in which the mkuaia Court decrees specific performance of a contract, pleading, although not in writing as required hy law to he, viz., admission in the pleadings, the reasons for the doctrine are that the statute is designed to guard against fraud and perjury, and the contract being now admitted there can he no danger of anything of that sort, and in substance, though late in the day, yet, now, by means of the pleadings, the contract is at last substantially in writing. But, of course, if the defendant pleads the statute this has no application, and if he does not he may indeed be fairly deemed to have waived it, for the rule is, Qnisque renuntiare potest jur I pro se introducto [b). Parol varia- In some cases, although there may be a contract written con- ^" Writing, yet there may subsequently have been tract. some variation of it by parol, and it is necessary to consider the effect of such a parol variation. It is always open to a person, against whom specific per- formance is being sought, to show that the terms were afterwards varied by parol, for the Statute of Frauds does not say that the written contract shall bind, but simply that the unwritten contract shall not bind ; but, as a general rule, it is not open to a person to obtain specific performance of a written contract as subsequently varied by parol (c). This distinction is well shown by the following instance : — A sues B for specific performance ; B sets up in his Statement of Defence that there was a subsequent parol variation of the contract, and then, by way of (a) Story, oOO. (b) Story. oOO. (c) Woollavi V. Ilcarit, 2 Wli. niul Tii., 5u8. SPECIFIC DELIVERY UP OF CHATTELS. 137 Counter-claim, be asks for specific performance of the written contract with such parol variation. This defence would be good, and would stand, but the Counter-claim would be bad, and would be dis- missed (d). In the same way, however, that we Thrcccases have seen that the Court will in three cases decree S^mt^wiii specific performance of a parol contract required decree spcci- ^ ■'• -^ . . ^. fie perform- by law to be in writing, so also m three practically ance with analogous cases, the Court will decree specific per- P.^^°^ '''''"'''• formance of a written contract as subsequently varied by parol, viz.: — (1) After there have been acts of part performance of the subsequent parol variation of the nature before described as regards the principal con- tract ; (2) Where the defendant in his defence sets up a parol variation of the contract as a reason for its non- performance, and the plaintiff then amends his claim, and seelis specific performance with the parol variation ; and (3) Where the parol variation has not been reduced into writing by reason of the fraud of the defendant (e). But although land is generally the subject matter Where the of those contracts of which the Court decrees specific decree sped- performance, yet, in certain cases, the Court will also ^J;^-!Jf|J"Q^. interfere in like manner although personal chattels tracts relating form the subject of the contract, mainly upon the g^atteis.'^^ ground that, on account of the peculiar nature of the case, damages would not be a sufficient or satis- factory remedy, and the following cases may be particularly enumerated : — (i) Where the chattel is of special and peculiar value, such as an object of vertu, as a picture or the like. Thus, in one case (/ ), the Court decreed specific performance of a contract for the sale of two China jars, which were so nearly unique that (d) Totbnshend v. Stangroom. 6 Ves., 328. (c) Wnollam v. Hearn and Notes, 2 Wh. and Tu., 508. (/) Falckc V. Gray, 5 Jur. N. S., 64.5. 138 OF SPECIFIC PERFORMANCE OF CONTRACTS AND it was imj^ossible to say what price they would bear in the market. (2) Where there is some special element connected with the contract which it is practically impossible, or at any rate very difficult, to compensate for by damages, e.g., a contract to sell a debt owing in a person's bankruptcy, for it is quite uncertain what the dividends will be (f/). So also where there was a contract for the sale of 800 tons of iron to be de- livered and paid for in a number of years, by in- stalments, specific performance was decreed, for the profit upon the contract depended on future events, and could not be estimated except by conjecture (//)• And upon much the same principle the Court will decree specific performance of a contract for the sale of a patent (i). (3) Where the contract is for the sale of shares in a company as distinguished from the public funds, upon the principle that, unlike the public funds which can always be obtained by a person who chooses to apply on the market for them, the shares of companies are limited in number, and are not always to be had on the market He). (4) Where, beyond a contract, a trust is created between the parties in respect of the chattels, e.g., if A by marriage articles agrees to hand over certain chattels to trustees, in trust for realization and in- vestment by them, and after the marriage he refuses to do so. The Court would here compel the specific performance by A of what he had contracted to do (/J. Provisions of Mercantile Law Amend- ment Act, 1856. As connected with this sul)joct it may here be noticed that by the Mercantile Law Amendment {(/) Addcrley v. Dixon, 1 S. and S., 0()7. {h) Taylor v. Neville, 3 Atk., 381 ; Buxton v. Lister, 3 Alk., 385, (i) Coijcnt V. Oefoo7<, 33 Beav., h'u. Qc) Duncvft V. Albrccht, 12 Sim., 189. (/) Pooley V. Utidd, 11 Beav., 31, 43. SPECIFIC DELIVERY UP OF CHATTELS. 1^^ Act, 1856 {m), even Courts of Law had conferred on them a limited power of decreeing specific per- formance, for that statute enacted that in any action for breach of contract to deliver specific goods for a price of money, the judge might, on the applica- tion of the plaintiff, order execution to issue for the delivery of the goods themselves, instead of simply giving damages («). In all cases in which specific performance is sought. The remedy the remedy, if it exists at all, must be a mutual one, mutual. so that, if looked at in the light of the interest of one of the parties to a contract, it is of such a nature that the Court would grant specific performance, so also will the Court do so at the instance of the other, although the relief sought by him is merely in the nature of compensation in damages or value (o). The Court will not decree specific performance in favor of an infant, upon the principle of want of mutu- ality (p). True, infancy is at law a personal privi- lege, and an infant may sue though not capable of being sued, but, as regards specific performance, that is a remedy beyond the powers of Common Law, and the Court of Equity has practically always said, that such a remedy shall not be given by them, where it would be unfair or inequitable to do so. There are some cases in which although the eon- Cases in tract is one for the breach whereof damages will wiiWot grant not compensate, and of which, therefore, ordinarily ^PJ^^jf^^P'^'" specific performance would be decreed, yet the although Court will not interfere. The Court will certainly ^J^^^^^pet^^^ give no relief where the consideration, or nature, or sate. (m) 19 & 20 Vict., c. 97, sec. 2. (n) See also post, p. 1.50, as to specific delivery under provision of Common I^aw Procedure Act, 1851. (o) Story, 483. Ip) Yansittaft v. Vansittart, 4 K. and J., 62. 140 OF SPECIFIC PERFORMANCE OF CONTRACTS AND scope of the contract is illegal or immoral, or where it is against public policy, such as a contract by an officer in the army or navy with reference to his future accruing pay, or where alienation is prohibited by sta- tute, as in some cases of pensions even for past services (<2). or a contract dealing with a mere naked right to ligitate, as a right to set aside a conveyance for fraud, or an agreement to refer matters to arbitration instead of resorting to the Court, for it has been deemed against public policy to exclude any person from the appropriate judicial tribunal {r). The Court also will not interfere where it is practically impossible to com- pel the doing of the thing contracted to be done, and this in particular involves the point of contracts for Contracts in- the doing of personal acts. Thus it is evident, that in sonal"skm.^' ^^ cases of contract to do acts involving the personal individual skill of the party, the Court cannot com- pel the person to put forth that skill if he will not. If an artist agrees to paint a picture and will not, it may be that damages will not compensate, but how can the Court compel him to put forth his artistic skill '? Or if a singer agrees to sing, or an actor to act, how can the Court comj^el such per- sonal acts (6). The utmost relief that the Court can give is, that in certain of such cases as these, the party who has agreed to do the particular per- sonal act, has stipulated that he will not do a like thing for any other person during a certain period, e.g., in the case of a singer agreeing not to sing, or an actor agreeing not to act, during a certain period at any other theatre ; and, when this is {q) Lucas V. Harris, W. N., 1886, p. 181 ; L. J., Notes of Cases, 1886, p. 146. (r) Smith's Manual, 258-275. With regard, however, to arbitration, though the Court will not decree specific i^crforinancc of a contract to refer, a Inndini^ .submission to arbitration may be made under the Common Law Procedure Act, 1854. See as to arbitration Williams' Personal Property. Part II., Ch., 8. («) Sue Lumlcy v. Wagner, 1 De G. M. and G,, 604. SPECIFIC DELIVERY UP OF CHATTELS. 141 so, the Court will grant an injunction against the infringement of this negative stipulation (t), and even if there is no express negative stipulation, yet the Court will so interfere by injunction where the doing of an act would be inconsistent with the contract, e.g., if in an actor's agreement it evidently appears that he is to give his exclusive services, and his acting elsewhere during the period in question would be inconsistent (ti). There are, indeed, many cases in which injunctions in the nature of specific injunctions in » T , III the nature of periormance are decreed, e.g., covenants not to re- specific per- move manure, or crops, at the end of a lease ; cove- foimaucc. nants not to plough meadow land ; covenants not to dig gravel, sand, or coal (v). And, in a recent case, where a contract for the sale of chattels to the plaintiff, contained an express stipulation not to sell to any other manufacturer, the Court granted an injunction to restrain the breach of the negative stipulation, and thus, practically, to compel specific performance, although the contract was one of which specific per- formance would not have been decreed in direct terms {w). The Court will not decree specific performance of a Contracts to contract to repair premises, considering that damages will compensate, and also that there is an element of uncertainty about the matter, rendering it difficult for the Court to see that the actual contract is carried out. Whether a contract to build or to rebuild premises will be decreed to be specifically performed, must be said to be still the subject of some doubt, though the better opinion would seem to be that the same reasoning applies here as to a contract to repair, and that the parties must be left to their Common Law remedy of damages (x). (t) Luviley v. Wagner, supra. (m) Webster v. Dillon, 5 W. E., 867. (y) Story, 48L (w) Bonnell v. Bennett. 22 Ch. D.. 835 ; 52 L. J., Ch., 414, (.r) Story, 4So, 486. buikl or repair. 142 OF SPECIFIC rKRFORMA>'CE OF CONTRACTS AND Contract for sale of good- will. y > r" >' J ^ v^ ;tA* Decreeing specific per- formance not- withstanding terms of con- tract not strictly- observed. When the Court will decree speci- fic perform- ance with compensa- tion. The Court will not decree specific performance of a contract to sell the goodwill of a business un- connected with the premises where the business is carried on ; but where the goodwill is altogether, or principally, annexed to the premises, a contract for the sale of the goodwill and premises will be en- forced, the goodwill, which is part of the sale, being nothing more than the probability that the old customers will resort to the same place (?/). It seems doubtful whether the Court will decree specific performance of a contract for the sale of a medical practice , even though accompanied with the pre- mises {z)', and the same doubt would apply to a contract for the sale of a solicitor's busines s, though such a contract is in itself perfectly valid {a). If the contract is one of such a nature that the Court would ordinarily decree specific performance of it, then, notwithstanding, that certain of its terms have not been complied with, ye t if such t erms do not pertain to the essence oF the contract , or if there has been a slight misdescription of the pro- perty, the Court will decree specific performance, even in favour of the party chargeable with the nou' compliance or misdescription, if compensation can be made for any injury occasioned to the other party {h). The most important point to be con- sidered in connection with this rule is, that of the vendor not having the same interest in the estate as he has contracted to sell. Where there is an agreement to sell property, the vendor knowing at the time that he has not got in every respect what he contracts to sell, then upon the commonest principles of fraud, the Court will {xj) 1 \Vh. and Tu., 942 ; Fry on Specific rcrformancc, 34. (?) May V. Thomi)son, 20 Ch. D., 705 ; ol L. J., Ch., 917. (a) Whittaker v. Hoive, 3 Boav., 383. (6) Story, 515, olG. SPECIFIC DELIVERY UP OF CHATTELS. 143 not decree specific performance at his instance. And where though the vendor was ignorant of his want of title, yet the failure to perform the contract is substantial, so that in fact it would appear that if there had been no misdescription the person would not have agreed to purchase, then equall}' the Court will not decree specific performance against the pur- chaser. But where the misdescription is unknown to the vendor, and the purchaser can get substan- tially what he contracted for, then the Court will decree specific performance even at the vendor's in- stance, giving compensation to the purchaser for the misdescription, in the shape of an abatement of the purchase-money (c). Thus, where the vendor could not make a good title to a small portion of the estate not material to the enjoyment of the whole, the Court decreed specific performance with compensa- tion (d) ; and where 14 acres of land were sold as water meadow, and only 12 acres answered that de- scription, the Court decreed specific performance with compensation (e). And where there is a definite Contract for agreement to sell premises, together with something ^ises wiTh' else which forms as it were an adjunct to such some adjunct, premises, but which is not an essential part of them, and a performance of the contract as regards the adjunct becomes impossible, yet the Court will decree specific performance of the con- tract without such adjunct. Thus, where there was an agreement for the sale of an estate for £24,000, and the agreement provided that certain furniture and other articles on the estate (which were worth about £2,000), should be taken by the purchaser at a valuation to be made by valuers, to be mutually agreed on, and the vendor refused to appoint a valuer and to complete, the Court (c) 2 Wh. and Tu., 577. (d) McQueen v. Farq\i,har, 11 Ves., 467. (e) Scott V. Hanson, 1 K. and My,, 128. 144 OF SPECIFIC PERFORMANCE OF CONTRACTS AND decreed specific performance of tlie contract, except 80 far as related to tlie furniture and otlier articles (/). But if the adjunct is essential to the enjoyment of the property-, t'.//., in the case of fix- tures in a public-house, specific performance of the contract to purchase property without the adjunct will not be enforced {g). Contract to sell land of one tenure which is in fact of an- other. Where property is agreed to be sold as of one tenure, and it turns out of another, this is not a matter for compensation, and specific performance will not be decreed (/<). In the case, however, of long leasehold property capable under the Conveyancing Acts, 1881 and 1882 (i), of being converted into a fee simple, the fact that it was described as freehold when it was in fact leasehold, would appear to be immaterial, as the vendor can at once make it free- hold. Purchaser's rif^ht to specific per- formance not- withstanding misdescrip- tion. Although a person cannot, as before stated, be com- pelled to take a portion of property agreed to be sold to him, where the portion to which a title cannot bo made is material, yet a purchaser may, in general, if he wishes to do so, elect to take what he can get, with com- pensation, so that where the defendant agreed to let premises to the plaintiii', and it turned out that he was only entitled to half such premises, it was held that the plaintiff was entitled to specific perform- ance in respect of the half, with an abatement of half the rent (A). But this jDrinciple does not apply where the purchaser, at the time of entering into the contract, knew of the vendor's limited title (l). (/) Bichardson v. Smith, L. R.. 5 Ch. Apps., r.48 ; .39 L. J., Ch., 877. (r/) Darhcy v. Whittakcr, 4 Drew, i:?l. [h) 2 \Vh. and Tii.. .578. {() 11 .t lo Vict, c. 41, sec. cr, ; [r, & 4G Vict., c. 31), sec. 11. (/•) Burrow v. Scavmicll. 19 Ch. D., 17r> ; .'51 L. .J., Ch., 290. (0 Casflc V, WUkimon, L. 11,, o Ch.. Apjis., o3l : 39 L. J., ('h.. 813. SPECIFIC DELIVERY UP OF CHATTELS. 145 On the principle before mentioned that specific As to time performance may be decreed notwithstanding certain esTmce^oniie terms have not been strictly complied with, a con- contract. tract may be decreed to be specifically carried out although stipulations as to time have not been ob- served, any proper compensation being made for the non-observance of the stipulations (m). At law the rule was different, for these stipulations as to time were always considered of the essence of the contract, but in Equity it was never so, unless it was originally expressly so stipulated, or unless it has, after default, been made so by a reasonable notice by the other party to that effect, or unless it appeared to be the intention of the parties that it should be so from the nature of the property, e.g., a public-house or other business sold as a going concern, which is necessarily of a fluctuating character, or an annuity which may determine at any moment, or a reversion which may, of course, suddenly change into an estate in posses- sion (n). And, now, under the provisions of the Judicature Act, 1873, this former Equity rule is the prevailing rule in all divisions of the Court (o). It may be stated generally, that the Court will not No specific interfere to decree specific performance, except in {fheiTiTwouW cases in which it would be strictly equitable to do be wrone: or so, but will leave the party to whatever legal right he decree it! has in an action for damages, or the Court may itself grant damages as will be presently mentioned. Thus, in a recent case, an estate had been sold in building lots, the purchasers of each lot covenanting with the vendors, and with each other, not to carry on any trade, and one of the owners of a lot now infringing his covenant, an injunction and damages were sought. The plaintiff had for some time acquiesced in the (m) Seton v. Slade, 2 Wh. and Tu., 542. (n) Story, 517 : Smith's Manual. 246. 247. (o) 36 & 37 Vict., c. 66, sec. 25 (7). L 14G OF SPECIFIC PEKFOKMANCK OF CONTRACTS AND Specific per- formance a discretionary remedy. defendant's breach of covenant, and although the property was originally intended as a residential estate, yet its character had altered, several houses on it being used as shops, and it was held on the facts that were proved, that the original design of the covenant, viz., the keeping the estate as a residential property had failed, and that, therefore, it was in- equitable to enforce the specific performance of the covenant ; and it was further held that under the circumstances there was no case for the granting of damages (j)). It would be well, indeed, to remember that the whole branch of Equity jurisprudence res- pecting the specific performance of contracts, is not a matter of right in either party, but is a matter of discretion in the Court, not, indeed, of arbitrary or capricious discretion dependent upon the mere pleasure of the judge, but of that sound and reason- able discretion which governs itself, as far as may be, by general rules and principles, but at the same time which withholds or grants relief according to the circumstances of each particular case, when these rules and principles will not furnish any exact mea- sure of justice between the parties (q). Therefore, in some cases, the Court has refused specific perfor- mance when to grant it would have worked a great hardship ; and where a person has made a voluntary settlement of land, and has afterwards agreed to sell it, the Court will not, at his instance, decree specific performance against the purchaser notwithstanding the 27 Eliz., c. 4 (r) ; but it would grant specific per- formance at the instance of the purchaser (s). Granting damages. It is evident on this principle, that in many cases though a person may fail in obtaining specific per- (p) Sayers v. Collycr, 28 Ch. D., 103 ; 54 L. J., Ch., 1. {q) Story, 492. (?•) Smith V. Garland 2 Mcr., 123. (s) Da/ciiicf V. Wliimpcr, 2(; Boa v., 568, SPECIFIC DELIVERY UP OF CHATTELS. 147 formance yet he may have a sustainable claim for damages. It seems doubtful whether the Court of Chancery originally had jurisdiction to award damages instead of, or incidental to, the relief it gave by specific performance (t). By Lord Cairns' Act (u), it was, however, provided generally that in all cases in which the Court of Chancery then had jurisdiction to entertain an action for specific performance, it should be lawful to award damages either in addition to or in substitution for specific performance. The Judicature Act, 1873 (iv), also provides that the Supreme Court shall grant all such remedies whatsoever as any of the parties to an action appear to be entitled to in respect of any legal or equitable claim. It may be noticed that Lord Cairns' Act was repealed by the Statute Law Eevision Act, 1883 (x), but the effect of its enact- ment is kept alive by a general provision of the repealing Act (y), so that for all practical purposes it is still an existing statute (z). The joint effect of the two statutory provisions on the subject is, that damages may now be given instead of or in \ addition to specific performance, and even though specific performance could not on the principles adopted by the Court be properly granted; but not if the plaintiff had no case for specific performance when he issued his writ (a). To entitle the Court to grant specific performance Specific per- of a contract relating to land, it is not actually neces- contract re- sary that the land should be situate in this country. ^^*™|^^*° ^^^^ It is sufficient that the parties to be affected and (0 story, 496. (u) 21 & 22 Vict., c. 27, sec. 2, liu) 36 & 37 Vict., c. 66, sec. 24. (.r) 46 & 47 Vict., c. 49. (y) Sec. .5. (s) Smjers v. Collycr, 28 Ch. D.. TOR : 54 L. J., Ch., 1. \a) Story, 497. I. 2 148 OF SPECIFIC PERFOEMANCE OV CONTRACTS AND bound by the judgment are resident here, for in all suits in Equity the primary judgment is in j^ersonam, and not hi rem, and the incapacity to enforce the judgment in rem constitutes no objection to the right to entertain such a suit (h). Where speci- fic perforra- anee soii<;ht ]iut vendor lias no title. Doubtful title. If there is an agreement to buy and to sell land or other property, and the vendor turns out to have no good title to it, it is manifest that it is impossible for the Court to decree specific performance. And where the vendor is the plaintiff and fails to make out a title, the Court will dismiss his action with costs, and order the return of any deposit and interest, and, if required, the Court will also make the same a lien on whatever interest the plaintiff has in the estate (e). As a general rule the Court will not admit as a de- fence to an action for specific performance, that the title is a doubtful one, but will itself determine whether the title is good or bad (d), unless, indeed it is some matter of great difficulty, and there are parties not before the Court whose interests may be affected, or the doubt is not one on some general rule of law, but turns on the construction of some badly worded instrument as to which the Court itself is doubtful (e). Summons under Ven- dors' and Purchasers' Act, 1874. Under the Vendors' and Purchasers' Act 1874 (/), disputes arising between vendors and purchasers may be determined by a summary application in Judge's Chambers in the Chancery Division. But this pro- vision does not enable the Court to decree specific performance in this summary way. If, however, (5) Story, 493, 494 ; Pcmi v. Lord Baltimore, 2 Wb. and Tu., 1,047 ; ante, p. 15. (c) 2 Wh. and Tu., 594. id) Alexander v. MHb, C> Ch. D., 124 ; 40 L. J., Ch., 7.3. (e) Clarke and Humphrey's Sale of Land, 475. (/■) :57 & 38 Vict., c. 78, sec. 9. SPECIFIC DELIVERY UP OF CHATTELS. 149 on such an application the Judge decides that the vendor has not shown a good title, and the pur- chaser is entitled to rescind the contract, it has been held that the Judge has jurisdiction to order the vendor to repay to the purchaser the deposit and interest thereon, and also his costs thrown away of investigating the title (g). Closely allied to the jurisdiction of the Court to Specific de- decree specific performance of contracts, is the juris- ci^^tteM • le- diction to decree specific delivery up of chattels spective of irrespective of contract. This the Court will do ^°° ^^^ ' when the chattel is an heirloom or something else of peculiar value to the owner, instead of leaving the party to his remedy at law by an action of detinue. The ground of the jurisdiction is the same as that upon which the specific performance of a contract is enforced, viz., that the specific thing is the object, and damages will not aflbrd an ade- quate compensation (/z). Thus, in Pusey v. Pusey (i), ptcsei/ v. specific delivery up of an ancient horn was decreed ■P^'^'^y- on account of its peculiar value to the plaintiff, it having time out of mind gone along with his estate, and having been delivered to his ancestors in ancient times to hold their land by. And, in Duke Duke of of Somerset v. Cookson (k), specific delivery of an ^TotZf ^" ancient altar-piece was decreed in favor of the lord of the manor in which it had been found, and who was entitled to it as treasure trove. Many other instances might be given (/). And upon this same principle the Court will entertain jurisdiction to decree the specific delivery up of deeds or writings to the persons entitled to them {m). ( g) Be Hararenvcs and Tltonvjason, 32 (A) 1 "Vf li. and Til. , ^rggT""""'^ Cb. D., 454. (0 1 Wh. and Tu., 961. (Jc) 1 Wh. and Tu., 962. (0 See Fells v. Read,, 3 Ves., 70 ; Lowthcr v. Lowther, 13 Vcs., 96. {m) Jackson v. Butler, 2 Atk., 806. 150 OF SPECIFIC PEEFOKMAN'CE OF CO>'TKACTS, ETC. Specific de- livery on uccoimt of fiduciary position. And although a chattel wrongly detained is of no special and peculiar value, yet if there subsists a fiduciary relationship between the parties, the Court will decree specific delivery, cjj., goods wrongfully detained by a trustee, an agent, or a broker (u). Actions cf detinue, and ])rovisions of Conimou Law Procedure Act, 1854. Had the Court not interfered in these cases, the plaintiff's only remedy would have been an action of detinue, in which action the form of judgment was for the return of the goods or their value. However, by the Common Law Procedure Act, 1854 (o), it was provided that the Court might, on the applica- tion of the plaintiff in such an action, order execu- tion to issue for the return of the particular property without giving the defendant the option of retaining it on paying its value. But this is merely a discre- tionary power, and the Court under this enactment can only proceed to enforce the delivery by distrain- ing as on the defendant's goods, whilst a decree in Equity for specific delivery could always be enforced by attachment {'p). (n) Wood V. Rowcliffe, 2 Ph., 283. (o) 17 & 18 Vict., c. 125, sec. 78. (p) 2 Wh. and Tu., 966; sec also ante, pp. 138, 139, for provisions of the Mercantile Law Amendment Act, 18oG, as to specific delivery of chattels contracted to be sold. ( 151 ) CHAPTER VIII. THE JURISDICTION OF THE COURT IN RESPECT OF THE PERSONS AND ESTATES OF INFANTS. The origin of the jurisdiction of the Court of Chan- Origin of ., , L p • e L • jurisdiction. eery over the persons and property ot mlants is very obscure, and has been a matter of much discussion. It would appear, most probably, that it has its founda- tion in the prerogative of the Crown flowing from its general power and duty as parens patrke, to protect those who have no other lawful protector ; and par- taking, as it does, more of the nature of a judicial administration of rights and duties in foro conscientice than of a strict executive authority, it would naturally follow that it should be exercised by the Court of Chancery as a branch of the general jurisdiction originally confided to it. The Court's powers are then a delegation of the rights and duties of the Crown (q). A father is the natural guardian of his children, Father and has the right to their custody, a right guarSL. not in general to be disputed, and which may be enforced at law by means of a writ of habeas corpus ; and the reason the parent is by law entrusted with the care of his children is, because it is generally supposed that he will best execute the trust reposed in him, for that in a moral sense it is a trust cannot be doubted (r). Not only has the father the right to the custody of his children, but under the authority of the Act abolishing feudal tenures (s), pov^^er is given to him to appoint a guardian to his legitimate (g) Story, 919-922. (r) Story f)32. (s) 12 Car, II. c, 2i. 152 THE JURISDICTION OF THE COURT IN RESPECT OF Gjiaxdianship 'of Infants' Act, 188G. children, until marriage or attainment of full age, either by deed or by will, and it may be noticed that such a deed appointing a guardian is substantially a testamentary instrument and may be revoked by a will (/). Until lately a mother's rights over her children have not been properly recognized, but the Guardianship of Infants' Act, 1886 («), however, now confers important powers on the mother. It enacts (iv), that on the death of an infant's father, and in case the father died before 25th June, 1886 (x), then from that date, the mother, if surviving, is to be the guardian of the infant, either alone, when no guardian has been appointed by the father, or jointly Avith any guardian appointed by the father. It also provides (i/), that the mother of any infant may, by deed or will, appoint any person or persons to be guardian or guardians of such infant after the death of herself, and the father, if such infant is then unmarried, and if guardians are appointed by both parents, they are to act jointly. In addition the mother is empowered by deed or will to provisionally nominate some fit person or persons to act as guar- dian or guardians with the father after her death, and the Court then, if satisfied that for any reason the father is unfitted to be the sole guardian, may confirm such appointment. Father's and mother's position now almost equal The father and mother, therefore, are now recog- nised as almost equally natural guardians of their children, with a right on death to transfer that power over to another. It may, however, be noticed with regard to divorce proceedings that the statute just mentioned {z), provides, that the Court pronouncing CO 2 Wh. and Tii., 72:;. (m) l!) & 50 Vict., c. 27. (w) Sec. 2. (.r; The date of the commencement of the Act, {>/) Sec. y. (:) -19 & 5(1 Vict., c. 27, sec. 9. /. ». Vi THE PEKSONS AND ESTATES OF INFANTS. 153 any divorce or judicial separation, may by its decree declare the parent by reason of whose misconduct the decree is made, to be a person unfit to have the custody of the children of the marriage, in -which case that parent is not on the death of the other to be entitled as of right to the custody or guardianship of such children. The direct power of appointing a guardian though Appointment .,..,, , , .... ,01 guardian existmg m tne parents does not exist m any one else, ^y a stranger. but yet in an incidental way, and to a certain extent, a stranger may appoint or select a guardian, for if substantial benefits are given to an infant by a stranger who professes to appoint, or who desires to appoint, a certain guardian, generally if the infant has no parent living the Court will give effect to this desire, and itself appoint the person selected by the stranger, if he appears to be a fit person. And a father may even act in such a manner as to render an appointment by a stranger effectual, for where a benefit is conferred either upon children, or upon their father upon condition that the father gives up the guardianship of them, then if he accepts the benefit himself or commits the care of the children to the guardian nominated by the stranger, he will not afterwards be allowed to prejudice their interests by interfering to take them again into his custody (a)-, but the Court will not deprive a father of the custody of his children merely because to do so would be to their pecuniary advantage, e.g., where a person makes an offer to maintain and advance them if given into his custody {h). When there is existing no guardian for an infant Appointment of guardian ■^'■^^ ' — '' ~ ~ "^ by the Cotil-t. {a) Blake v. Blake, Amb., 30(j. (b) In re Fynn, 2 De G., and Sm., 457. 154 Tin: juia.si)i(.nu:s uf the court in respect of Remov.al of guardians. Removal from cnstorly of father. then the jurisdiction of the Court is at once exercis- able, and the Court on being applied to will appoint a guardian, and this even though the child was born and is resident abroad, if he is a child of English subjects (c). But in any case, though the Court 130ssesses jurisdiction, it will not ordinarily interfere unless the infant has some property within the juris- diction of the Court, because of the want of means to exercise its jurisdiction with effect ((/) ; and where, therefore, it is desired to make an infant who has no property a ward of Court, it is the common practice to make some small settlement upon him or her of money or other property {e). But the power of the Court does not stop here, for whoever may be the guardian, and by whatever authority the guardian may be acting, the Court will interfere and remove the infant from such custod}', and appoint a new guardian, should occasion require. In all such cases the guardianship is treated as a delegated trust for the benefit of the infant, and if it is abused or in danger of abuse the Court interferes. And when the conduct of the guardian does not require so strong a measure as a removal, the Court will interfere and regulate and direct his conduct, and may require security to be given by the guardian if there is any danger of injury to the infant's person or property (/). But for the Court to interfere with the custody of the natural guardian — the parent — a very strong case must be made out, such as that the parent is living in immorality, or is guilty of constant drunkenness, or continually ill-treats the children, or generally that the parent's conduct is such that (c) Hojjc V. Ho2}c, i D. M. & 0., 328 ; In re Willouyhby, 30 Cli. D., 321 ; 54L. J., Ch., 1122. (). And with regard to the question of the religion a As to religion child should be brought up in, the general rule is Jo w?u*:^"'^ that the religion of its father is to be followed, unless cated. the child is of some reasonable age of discretion and not of very tender years, and has already received education in another religion to such a depth and extent as to render it dangerous and improper to ; attempt any change (g). And it has been held that v an ante-nuptial promise, made by a father to have the [ children brought up in a particular religion, cannot be enforced, since a father cannot abdicate his right to have his children brought up in accordance with his own religious views (r). Secondly, the Infants' Custody Act, 187.3 (s), pro- infants' Cus- vides that it shall be lawful for the Court, on the appli- ^^^l^ a<^*: cation of the mother of any infant not exceeding the giving cus- age of sixteen years, to order that the infant shall, for *°'^^^^er any period up to that age, be delivered to the mother and remain in or under her custody or control, sub- (p) In re Besant, Besant v. Wood, 12 Ch. D., 605 ; 48 L. J., Ch., 497. ( g) Stourton v. Stmirton, 8 De G. M., and G., 760; and see /?» re Agar-Ellis, Agar-Ellis v. Lascellea, at p. 74, of 10 Ch. D. (r) Injiie-A.(fai:zMUds, Agar-Ellis v. Lascelles, 10 Ch. D., 49. (s) 36 Vict., c. 12., sec. 1. 158 TITF, JFRTSDirTIOX OT' THE COURT IN RESPECT OF ject to such provision as to access of the father, or other guardian, as the Court shall think proper, or that to the like age the mother shall have access to the infant at such time and subject to such regula- tions as the Court shall deem proper. This provision, it will be observed, is quite irrespective of au}' mis- conduct on the father's part ; and it has been laid down that it is a discretion vested in the Court, which discretion is to be exercised on a consideration of three matters, viz., the paternal right, the marital dut}^ and the interest of the child (t) ; and the mis- conduct of the mother will, of course, disentitle her to ask the Court to exercise the discretion vested in it by this Act (»). By reason of the Infants' Custody Act, 1873, and the general jurisdiction of the Court of Chancery already dealt with, and of the fusion effected by the Judicature Act, 1873 {ir), on any attempted enforcement by the father in the Queen's Bench Division by habeas corpus of his right to the custody of the person of his child, the Court will look at all the surrounding circumstances before they will accede to the application of the father {x). Maintenance. Besides appointing a guardian the Court will also, where necessary, order an allowance to be paid out of the property of the infant for maintenance. To get maintenance allowed for an infant it is by no means always necessary to seek the assistance of the Court, for, firstlj% in the settlement or will under which the infant derives his or her property there (t) In re Elderton, 25 Ch. D., 220 ; 53 L. J., Ch., 258. (?/) In re Bcsant, 11 Ch. D., 508 ; 48 L. J., Ch., l',)7. Xw) See 36 & 37 Vict, c. GO. sec. 25 (10). (x) See In re Ethel Broivn, 13 Q. B. D., (!14. It may also be noticed that by the Matrimonial Causes Act, 1878 (41 Vict., c. 19, sec. 4), it is provided that on a maf^istrate making an order under that Act, which is to have tlie cflFect of a judicial separation between husband .and wife, he niaj' also give to the wife the custodv of the children of the marriage up to the age of 10 year.s. And with regard to the power of the Divorce Court, as to the custody of children, see 20&21 Vict., c. 8.5, sec. 35 ; 22 & 23 Vict., c. (15, sec. 1. THE PERSONS AND ESTATES OF INFANTS. 159, may be a direct trust for the income or a portion thereof to be applied for maintenance ; and, secondly, under_the_Cpnyeyancing Act, 1881 (y), trustees have full discretionary power of applying, for the benefit of any infant, the income of any property he or she will be either absolutely or contingently entitled to on attaining twenty-one (z). But, failing the obtaining of maintenance in either of these ways, the only course is to apply to the Court. Where the infant has no father living, or is WTien main- removed from the father's custody, the Court will JjJ^o^^yed. always direct an allowance to be paid to the guardian out of the infant's property for maintenance, for how otherwise can the infant be properly main- tained ? If, however, the father is living, and the infant is residing with him, then the Court only allows maintenance if the father has not the means to properly maintain the infant {a). Where the ques- tion turns upon the ability of the father to maintain the child, the rule is not that maintenance is allowable only upon the father's absolute insolvency, but that it is allowed where he is not in such circumstances as to be able to give the child such a maintenance and edu- cation as is suitable to the fortune which he or she ex- pects (h). Thus, in one case, although the father had an income of i€6,000 a year, an allowance was ordered to be made to him of £1,400 a year towards the maintenance of his six children, who were entitled to an estate of £8,600 a year (c). Where the Court allows maintenance it does not Principle as always act strictly on the view of the maintenance beaUowedfor and education of the infant being the only object to maintenance. (y) 44 & 45 Vict., c. 41, sec. 43. (s) See as to the construction of this provision. Be BicJcson, Hill v. Grant, 28 Ch. D., 291 ; 54 L. J., Ch., 510 ; Cadman v. Cadmaii, W. N., 188G, p. 152 ; L. S. J., Sept., 1886. (a) Story, 93.3. {b) 2 Wh. and Tu., 777. (c) Jervoisc Y. Silk, G. Coop. Eep., 52. 160 THE JURISDICTION OF THE COURT IN RESPECT OF Ordering maintenance though accu- mulation directed. bo attained, but it has a liberal regard to the circum- stances and state of the family to which the infant belongs; as for example, if the infant be an elder son, and the younger children have no provision made for them, an ample allowance will be ordered for the infant, so that practically the 3'oungGr children may be maintained thereout, and similar considerations will apply to a father or mother of the infant who is in distress or narrow circumstances {d). This certainly in an indirect way benefits the particular infant, for it could hardly be for the infant's real benefit to be fed, clothed, and educated in a totally different style from his or her brothers and sisters, or to be indulging in luxuries whilst his parents with whom he or she was residing were living scantily. And, where it will be for the benefit of the infant, maintenance will sometimes be allowed, although there be an express direction to accumulate, and though there be a limited gift of interest for main- tenance, with an express direction to accumulate the rest, the Court will allow such further sum as may be deemed adequate to maintain the infant properly {e). And where the property is small, and more means are necessary for the due maintenance of the infant, the Court will sometimes even allow the capital to be broken in upon ; but without the express sanction of the Court a trustee should never break in upon capital unless there is a power of ad- vancement, in the trust instrument. But where a trustee has on his own responsibility made an ad- vancement, the Court will not call him to account for having done so if the circumstances were such that, had the Court been applied to, it would have sanctioned it, e.g., to pay for the infant being appren- ticed or articled (/). (d) story, 9.39. (e) 2 Wh. and Tn., 780. (/) Ne Welch, 2^^ L. J.. Ch., 3U : and see 2 Wli. and Tu.,787, 788. THE PERSONS AND ESTATES OF INFANTS. 161 Not only may an allowance be made for the future Allowance maintenance of an infant, but also in respect of his mainteuance past maintenance ; but there is this distinction be- tween future and past maintenance, that whilst the allowance for future maintenance is, as has been stated, in accordance with the fortune of the infant and other circumstances, the amount allowed for past maintenance is only what has been actually properly expended (^7). When maintenance is allowed for an No account infant, and the guardian to whom it has been paid guarcliau. '°^^ has properly maintained, educated, and supported the infant thereout, he cannot be called upon to vouch the items of his expenditure or to account for any surplus which may remain (h). Although, strictly speaking, a ward of Chancery is a Who is a person who is under a guardian appointed by the chancery. Court, yet, where a 'feuit is instituted in the Chancery Division relative to the person or property of an infant, although he is not under the control of any guardian appointed by the Court, he is treated as a ward of Court, and as being under its special cog- nizance and protection. In all such cases no act can General mie be done affecting the infant's person or property with- ment of^^*' out the Court's sanction, for every act done without wards. such sanction is treated as a violation of the Court's authority, and the person guilty of it is said to have committed a contempt of Court, and is liable to attachment (i). Thus, in the leading case of Eyre Eyre v. V. Countess of Shaftesbury (k), the mother of a ward slaftesburu. of Court, who contrived and effected his marriage without obtaining the consent of the Court, was held liable for a contempt of Court, although the marriage was in other respects proper. And it is (g) 2 White and Tu., 782. (hj Hora v. Hora, 33 Beav., 89. (O Story, 93.5, 93G. (k) 2 Wh. and Tu., 693. M 162 THE JURISDICTION OF THE COURT IN RESPECT OF a contempt of Court to take an infant ward out of the jurisdiction without leave of the Court, which leave will, however, be given in exceptional cases when it is shown to be for the benefit of the ward and generally reasonable under the circumstances, e.g., temporarily to visit near relatives who reside abroad, or for the benefit of health, or even to reside abroad permanently if sufficient security is given that future Duty of orders will be obeyed (/). And, as it is manifestly guardian. impossible for the Court itself to watch the actions of all its wards, it is the duty of the guardian to inform the Court from time to time of what is taking place, as of any misconduct on the part of the ward, or of difficulties in which he has become involved (m). And the Court may order the infant and guardian, or either of them, to attend personallj' before the Court in Chambers on any matter, and may enforce its orders by means of the Serjeant-at-Arms. Marriage of As has been pointed out, for an infant ward of a ward. Court to marry without the Court's sanction is a contempt of Court, and it should be added that all persons concerned therein are guilty of contempt, and this even though ignorant of the fact of the Court's wardship («). Application for leave for a ward to marry must therefore be made, and then the Court enquires into the fitness of the match, and into the question of what is a proper settlement to be made, which settlement is prepared by one of the conveyancing counsel of the Court, and approved by the Court. And, where proposals for a settlement on the marriage of a ward have been entertained by the Court, the parties will not be allowed to defeat the intention of the Court by deferring the marriage until the ward comes of age and then entering into (I) In re fallaffhan, Elliott v. Lambcrt,2S Cli. D., 186 ; rA L. J., Ch., 292. (m) Kay v. Johnson, 21 Beav., 538. (II) Story, 942. THE PERSONS AND ESTATES OF INFANTS. 163 a fresh settlement (o). Where a marriage takes place in contempt of the Court, and the husband is attached for such contempt, the ordinary rule is not to liberate him until he makes a proper settle- ment, and, if he knew the lady to be a ward of Court, ordinarily the settlement will be of such a nature as to exclude him from all interest in the property, but if he was ignorant of the wardship then the Court generally acts more leniently, but the nature and details of the settlement are matters entirely in the Court's discretion ( p). With the view of preventing evil, if it is brought injunction to to the Court's knowledge that there is reason to ^^511^,. „f suspect the marriage of a ward without its consent, ward. the Court will interfere by injunction to prevent the marriage, and will even go so far as to interdict communications between the ward and the admirer, and if the guardian is suspected of any connivance it will remove the infant from his custody (q). A child of foreigners, but resident in England, Appointment may, if possessed of property in England, be made ll fore?]n " a ward of Court, and this even although the child is child. under the control of guardians appointed by the foreign Court. This is only, however, for the purpose of supplementing the office and duty of the foreign guardian, and no interference with the control of the person of the ward by the foreign guardian will be allowed, unless some case of abuse of the power is shown (r). The position of idiots and lunatics resembles that Jurisdiction of infants to this extent, that protection is required and^matics not in the (o) mbson V. Ferrahy, 2 Coll., 412 ; Money v. Money, 3 Drew, Court. 256. (p) 2 Wh. and Tu., 760. \q) Story, 942. (?■) Nugent v. Vetzera, L. R., 2 Eq., 704 ; 35 L. J., Ch., 777. M 164 THE JURISDICTION Ol" THE COURT, ETC., ETC. both in respect of their persons and property, but this jurisdiction is not vested in the Court. The custody of the persons and estates of lunatics and idiots was originally vested in the lord of the fee, but by certain ancient Statutes (s) this power was vested in the Cro\An, with the distinction, however, that in the case of a lunatic the sovereign was a mere trustee, but in the case of an idiot he had a beneficial interest (/). The jurisdiction being in the sovereign it appears by him to have been specially delegated to the Chancellor in his individual capacity, as an officer of high standing in close connection with the Crown, and not to the Court of Chan- cery (m). And at the present day this jurisdiction is vested in the Lord Chancellor, and such other Judges of the High Court, or Court of Appeal, as are entrusted with it by the Sovereign's Sign Manual (ir), which in actual practice are the Lords Justices of Her Majesty's Court of Appeal (x). When, how- ever, the Court may act to ,1 cer- tain extent. But, notwithstanding that the jurisdiction as to persons non compos mentis is not in the Court, yet where a person has not actually been found a lunatic by inquisition, the Court has an original jurisdiction, where the property is small, to give directions as to his maintenance, though not to appoint a guardian of his person (?/). (s) 7 Ed. II., c. 9 ; 17 Ed. II., c. 10. (t) In re Fitzgerald, 2 Sch. and Lefr.. 4.36. Practically this distinction is of no importance as the inquiry as to a person's state of mind is never carried back to the date of his birth, which would be necessary to have him declared an idiot. 8ee Elmer's Lunacy Practice, p. '^. (u) Story, 923-926. (?r) See 36 & 37 Vict., c. 66. sec. 17 ; 38 & 39 Vict., c. 77, sec. 17. (x) See as to Lunatics, &c.,Sneirs Principles of Equity, 423-429 (7/) Vane v. Vane, 2 Ch. D., 124 ; 45 L. J., Ch., 381 ; In re Bligh, 12 Ch. D., 361 ; 49 L. J., Ch., .Ofi. ( 165 ; CHAPTER IX. PARTITION, ETC. Joint owners, be they joint tenants, tenants in com- Different mon, or co-parceners, are not usually desirous of ^JJ'tf^™ ^ continuing to thus hold conjointly, but prefer to have partition. a division or partition of the estate. This partition may be effected by mutual arrangement between themselves without any assistance from the Court, or sometimes, though seldom, it is effected through the agency of the Land Commissioners, under the pro- visions of the General Enclosure Act, 1845 (z) ; but, ordinarily, if the parties cannot agree between them- selves, or it is impossible to do so by reason of dis- ability of some of the parties, or otherwise, the course is to apply to the Chancery Division of the Court for a partition. There was always existing a mode of effecting par- Partition at tition at Common Law by means of a writ of partition, pare^^'^tii a remedy by no means satisfactory on account of its the remedy in insufficiency, and the Court of Chancery, at a very early date, therefore, assumed jurisdiction, because of the judicial incompetency of the Courts of Com- mon Law to furnish a plain, complete, and adequate remedy for such cases (a). As an instance of the insufiiciency of the remedy at law, may be mentioned the fact that the Courts of Law were restrained to a mere partition or allotment of the lands, having regard to the parties' interests and the true value, (0) 8 & 9 Vict., c. 118, sees. 147, 150. (a) MitforcVs Eq. PI. by Jeremy, 120. Equity. 166 PARTITION, ETC. Tlie mode ol' cfl'ectiiif^ partition. Of what pro- ))erty jiarti- tioa can be made, and who may claim parti- tion. but the Court of Chancer}' could, with a view to the more convenient and perfect partition or allotment of the premises, decree a pecuniary compensation to one of the parties for equality of partition, so as to prevent any injustice or unavoidable inequality (b). Many other points might be mentioned, but this in itself seems sufficient to justify the Court of Chancery having assumed jurisdiction. The remedy, therefore, in Equity, was concurrent, but it naturally became that usually adopted, and, as the writ of partition was abolished in the year 18.33 (c), the jurisdiction became then exclusive, and the Judicature Act, 1873 (J), has now assigned such matters to the'exclusive jurisdiction of the Chancery Division. The mode of effecting partition in Chancery was by first ascertaining the rights of the several persons interested, and then issuing a commission to make •the partition required, and, upon the return of the Commissioners and confirmation of the return by the Court, the partition was finally completed by mutual conveyances of the allotments made to the several parties (c). But, in modern_practice, a commission is not issued, as a partition can be made in the Judges' Chambers if any enquiry is necessary as to the rights of the parties, the nature and value of the estate and the like, and if no enquiries are necessary, . the partition can at once be made at the hearing (/). At the present day partition may be made of free- hold, copyhold, and leasehold property. At Common Law only co-parceners could claim partition, but, by the Statutes of Partition {(/), joint tenants, and tenants in common, have equal right. But a person (6) Story, 428. {c) 3 & 1 Will. IV., c. 27, sec. 6. (d) 36 & 37 Vict., c. (3(i, see. 34. (c) Mitford's Equity PI. 120. (/) 2\\Ti. and Tu.,' 17(5. ('o (a) Per V. C. Wood in Covenit'y v. Chichester, 2 H. and M., 158. (J) Stevenson v. Masson, L. R., 17 Eq., 84. (c) Chichester v. Coventry, L. R., 2 H. L., 92. (cZ) Kirk V. Eddowes, 3 Hare, .509. (e) Burham v. Wharton, 3 C. and F., 146. 190 SATISFACTION AND PERFORMANCE. tiDito, of a previous bequest of a residue (/) ; and, so, to take the converse, if there is a portion given to a child hj settlement, and then there is a will contain- ing a bequest of residue to the same child, this will operate as a satisfaction entirely or pro tanto, and the child will not be allowed to take first the portion, and then the residue (ff). All these instances clearl}' go to show that the Court leans in favor of the doc- trine, for the discrepancy appearing in each case would give opportunity to the Court to say there was no satisfaction, if it chose to do so. Cases of no satisfaction. It has, however, been held that a legacy to a daughter is not adeemed by a simple gift to the daughter's husband after marriage {h). And a legacy to a child is not adeemed by occasional small gifts made by the testator in his lifetime, nor by a sum of money simply given to the child for a wedding outfit, or for the wedding trip (/'). Evidence to rebut satis- faction. Intrinsic evidence. But it must be remembered that the whole doc- trine which we are considering is but a presumption of Equity, based on what the Court considers the probable intention, and such presumption is liable to be rebutted by any indication of a contrary inten- tion appearing in the instrument conferring the benefit, and on which the question arises, or even by extrinsic evidence. Thus, if A having made a settlement on his child subsequently makes his will in which, after reciting the settlement, he expresses a desire to make further provision for the same child, and then gives that child a legacy, it could not be suggested that there was any satisfaction, for there is here an express indication to the contrary. And, (/■) ScJiolficld V. Heap, 27 Boav., 93. ((/) Thijnnc v. Earl of GlengalL 2 H.L. Cas., LSI. (A) Ravcuscrojt v. Jones, H2 licav., ti(J9. (0 ii>. SATISFACTION AND PERFORMANCE. 19; even without any such express indication, the cir- cumstances may be such as to amount to intrinsic evidence against satisfaction, e.g., where the portion is vested and the subsequent legacy is contingent (/.•)• And land will not be presumed to be a satisfaction for money, or money for land {I), unless there are |/- special circumstances showing that the value of the land was computed, and that it was regarded as money (m). Considerable difficulty often arises as ^\ to what is sufficient intrinsic evidence of intention to rebut the doctrine {n). As regards the admission of extrinsic evidence to Extrinsic rebut the doctrine of Equity, it must be borne in evidence mind that there is, in admitting such evidence no conflict with the general rule that parol evidence cannot be given to alter, add to, or vary a written instrument, or to prove with what intention it was executed ; for the evidence is not admitted for the purpose of proving the intention in the first instance, but as dealing only with a presumption of the Court, for the purpose of ascertaining whether that pre- sumption is well or ill founded (o). Where there are two written instruments — say, first a will and then a settlement — in favor of the same child, though as they stand there would be two distinct benefits, yet the presumption of the Court primarily pre- venting this being so, parol evidence can be admitted for the purpose of showing that really the child was meant to have both. This is not contradicting or varying, but rather supporting, the wTitings, and is but rebutting the presumption of Equity. But once admit parol evidence thus, and it becomes absolutely necessary to admit counter-parol evidence, so that {k) Ballasis v. Uthwait, 1 Atk., 426. {I) lb. (m) In re Lawes, 20 Ch. D., 81, (») See Montagu v. Earl of Sandwich, 82 Ch. D., 525. (o) Kirk V. Eddowes, 3 Hare, 509. 192 SATISFACTION AND PERFOKMANCE. Extrinsic evidence always ad- mitted to rebut pre- sumption of Equity, but not to con- tradict a writin" if possible the presumption of Equity may be sup- ported ip). Thus, if a legacy is given to a child, and afterwards there is an advancement or a settle- ment made in favor of such child, here evidence might be given that the testator at the time of such advancement or settlement, or even subsequently, said that he still meant the child to have the legacy, and this might lead to considerable conflict of evidence on both sides. And the rules as to the admissibility of extrinsic evidence are the same whether a will or a settlement comes first (q). But upon the principle that parol evidence can- not be given against written instruments, as distin- guished from giving it to rebut what is merely a presumption, it is submitted that if a gift to a child is of such a nature that the Court would not itself raise a presumption of satisfaction, ex- trinsic evidence is not admissible to show that a satisfaction was in fact intended (r). It may be stated here, as a general rule, that ex- trinsic evidence may be always given to merely rebut a presumption of Equity, but the rule must not be carried further, so as to originally introduce evidence to rebut not a presumption, but a written instrument. Thus, in a very recent case, a testator bequeathed certain property equally between his children, and after reciting that certain specified sums had been advanced by him to some of his children on account of their shares, he directed that such advancements were to be brought into hotch-pot. Some of the children desired to give evidence to show that certain of the recited ad- vances had in fact never been made. It was held that the evidence was inadmissible, for to admit it (p) 2 Wh. and Tu., JOl. (q) In re Tussaud's Estate, Tiissavd v. Tussattd, 9 Ch. D., 3G3 ; 47 L. J., Ch., 849. (r) See 2 Wh. and Tu., 102. SATISFACTION AND PERFORMANCE. 19^ would be to contradict the instrument under which they took their benefits (s). Although, as has been stated, the doctrine of elec- One case of tion does not apply to strangers, but only to children, iggacy^o^a ""^ and those towards whom a person has placed himself stranger. in loco parentis, yet, where a testator gives a legacy to any person, expressing it to be for a particular purpose, and afterwards he advances money for the same purpose, a presumption arises that the advance- ment was an ademption of the prior legacy, and, in the absence of evidence to the contrary, it will be so held {t). Secondly, as to satisfaction in the case of legacies Satisfaction to creditors. The general rule on this subject is laid 16^.1^6^10°^ down in the leading case of Talbot v. Duke of Shrews- creditors. hury{u), as being that where a debtor, without taking Talbot v. any notice of the debt, bequeaths a sum as great as, Skrewsburi/. or greater than, the debt to his creditor, this shall be a satisfaction unless bequeathed upon some contin- gency. The ground of the doctrine is, — as has been Ground for stated indeed with regard to satisfaction gene- t^is doctrine. rally {v), — that the testator must be presumed to have meant to be just before being generous, and, there- fore, although a legacy is generally to be taken as a gift, yet, when it is to a creditor, it ought to be deemed to be an act of justice, and not of bounty, in the absence of countervailing circumstances according to the maxim of the civil law, " Debitor non jircesumi- tiir clonare " (?t'). The doctrine of satisfaction in the case of legacies The Court to creditors has particularly met with much censure, satiVfa^cffon^of debts by (s) In re Wood, Ward v. Wood. 32 Ch. D., 517-; 55 L. J., Ch., 720. l^S^'^i^s. (t) Monck V. Mfliick, 1 Ball and B., 303. (w) 2 Wh. aud Tu.. 378. (v) See ante, p. 18.5. (w) Story, 775, 776. VM SATISFACTION AND PERFORMANCE. Chancey'B case. Instances showing this. though it is (lillicult to see that it is more deserv- ing of it than is the same doctrine arising in the case of legacies and portions. Be that, however, as it may, whilst the Court, as has heen shown, leans in favor of satisfaction as regards legacies and por- tions, and strives as it were to hold anything a satis- faction when possible, yet in the case of legacies to creditors the reverse rule prevails, that is to say, the Court leans against satisfaction of a debt by a legacy, and will lay hold of trifling circumstances in order to prevent it. Thus, even in Talbot v. Duke of Shreics- hunj (.r) it was held that the legacy would only satisfy the debt if equal to or greater in amount, and also that the fact of the legacy being given on a contin- gency would be sufficient to prevent satisfaction. In the leading decision known as Chancci/s Case (//), it was also held that, notwithstanding the general rule, slight evidence of intention to be gathered from the will would prevent there being any satisfaction, so that where there was a legacy to a creditor far exceeding the amount of the debt, but the will con- tained a direction that all the testator's debts and legacies should be paid, it was held that this direc- tion showed an intention that the testator's debts should be paid as well as his legacies, and was suffi- cient to prevent the legacy to the creditor operating as a satisfaction of the debt. It will be observed that the direction in the will in this case was to pay debts and legacies. Whether a direction in a will simply to pay debts without adding the words " and legacies " will prevent a satisfaction must be con- sidered jloubtful, there being conflicting authorities on the point (c). The fact that the legacy is given payable at a (x) 'J Wli. iin. (r) Sowdtn v. Son-din, i! 1'. Wiii.'s, 228. SATISFACTION AND PERFOR^rANCE. 201 settle fee simple lands in possession ; and, secondly, that certain purchases of fee simple land in pos- session, made before entering into the covenant, could not be considered as a performance, as it was impossible that they could have been so intended, the obligation not having been then created. And, generally, it cannot be presumed that property, of a different nature from that covenanted to be pur- chased, was acquired as and meant to operate as a performance, e.g., where the covenant is to buy and settle freeholds, and leaseholds are then purchased ; or where the covenant is to buy and settle lands of inheritance to be settled, without impeachment of waste, and copyholds are then purchased, for copy- holds could not be thus settled without impeachment of waste (ip). Where, however, the covenant is simply to purchase and settle lauds, then copyholds subse- quently bought will be a performance {x). Where a person, who has entered into a covenant Purchasirg to purchase and settle lands, subsequently buys lands suance^f^"^' under circumstances which will make such purchase covenant, and then a performance or part performance ot the covenant, mortgaging and then he makes a mortgage of them instead of ^^^™- proceeding to settle them as he should have done, the mortgagee will gain a good title if he took with- out notice, but if he took with notice, it is doubtful whether this would be so {y). And it has been held . that notwithstanding the mortgage, the land subject to it, that is the equity of redemption, would still go under the covenant {z). Cases of performance may also arise from the Performance merely quiescent act of the death, intestate, of the intestete. (w) Pennell v. Hallett, Amb., 106. (.r) Wilkes v. Wilkes, 5 Vin., Abr., 293. \y) Deacon v. Smith, 3 Atk., 327 ; Ex parte Poole, 11 Jur., ]U05. {z) Ex parte Poole, supra. 202 SATISFACTION AND PERFORMANCE. Blandy v. ''Widmore. person on whom a.n obligation rests. The rule on this point is substantially laid down by the lead- ing case of Blandy v. Widmore {a), viz., that if a person covenants to ~leave, or that his executors shall pay to another a sum of money, or part of his personal estate, then if such person dies in- testate, and the person for whose benefit the cove- nant was made becomes, under the Statute of Dis- tributions, entitled to a portion of the covenantor's personal estate of equal or greater amount, such distributive share will be a performance of the covenant, and he cannot claim both. And if the distributive share be less than the sum covenanted to be left, it will be taken to be a part perform- ance (h). Principle not np])licable when a ile])t created (luring lifetime. Nor to cove-; nant to give a life interest. But this principle does not apply where an actual debt is created in the lifetime of the covenantor. Thus, in one case, a husband covenanted to pay his wife a sum of money within two years, and he lived more than two years, but did not pay the money, and died intestate, and it was held that the widow was entitled to the amount covenanted to be paid, and to her distributive share (c). Nor does the principle apply where the covenant is not to pay a definite sum but only to give a life interest, e.g., an annuity. Thus, where a man covenanted to leave his wife the interest on a certain fund, and he died intestate, it was held she was entitled to the life interest and to her distributive share (J). (a) 2 Wh. and Tu.. 428. (i) Garihshore v. Chalie, 10 Ves., 14. Cc) Oliver V. ]Jrickl(imi, 3 Atk., 420. {(1) Couch V. Straitoii. I V(>s.. 391. (■ 203 CHAPTEE III. CONVEKSION AND RECONVERSION. Conversion may be defined as an implied or equit- Definitions. able change of property from real to personal, or from personal to real, so that each is considered transferable, transmissible, and descendible, accord- ing to its new character (e). Reconversion may be defined as that notional or imaginary process, whereby a prior implied conversion is annulled (/). The equitable doctrine of conversion arises as a natural consequence of the maxim, "Equity looks General , n 1 • 1 Till 1 )) r •!! explanation upon that as done which ought to be done, tor it of the two a man agrees to sell his land or to invest his doctrines, money in land, then that property which he is pos- sessed of, be it land or money, changes as it were by magic, and the Court says the property must be deemed of that nature into which he has agreed to change it. So, if it is not a matter of contract, but of direction in a deed or will, the same result ensues, and land directed to be sold is at once con- sidered as money, and money directed to be invested in land is deemed to be land. This equitable doc- trine is not opposed to common sense, but is rather in accordance with it, and the equitable doctrine of reconversion is even more so, it simply meaning that where there is, by reason of a direction, an implied conversion, and the property, the sub- ject of the conversion, belongs absolutely to a person, that person may elect to either take (c) story, 842. (,/■) Snell, 199. 204 CONVERSION AND RECONVERSION. Example the property *as converted, or be may say he desires no conversion, and by this election, as by the stroke of a conjuror's wand, the doctrine of the Court vanishes and the property goes as it actually is, for it has been said, " Equity, like nature, will do nothing in vain " (v), and, whatever we may think of that as a general axiom, it serves our purpose here. To instance the two doctrines let us take the following simple case : — A, by his will, tioc7dnes. " ^ directs a freehold estate to be sold and the pro- ceeds paid to B. A dies, and this benefit B takes is considered money though the estate is still ex- isting, and were B now to die this property would go to his personal representatives, for here there is an equitable conversion by the direction in A's will. But if B writes to the trustees not to sell the estate, but that he, being entitled to the whole proceeds, would prefer to take it as it stands, and then he dies, this property will go to his heir, for here there has been reconversion — in the words of the definition given above, a notional process has taken place which has annulled the prior conver- sion. Conversion may arise either by force of contract, or direction, and it may be either a conversion of land into money, or money into land, and this is well expressed in the leading case of Fletcher v. Ashhurncr (//), as follows: — "Money directed to be '" employed in the purchase of land, and land directed " to be sold and turned into money, are to be con- " sidered as that species of property into which *' they are directed to be converted, and this in " whatever manner the direction is given, whether by " v^ilL. by way of contract, marriage articles, settle- " ment, or otherwise." Ways in which conversion may arise. Fleicher v. Ashbtimer, (ff) Lord Cowper in Seelcy v. Jaqo, 1 1\ Wms,, 389. (h) 1 Wh. and Tn.. 'JTl. CONVERSION AND RECONVERSION. 205 Couvcrsiou by reason of contract. The effect of conversion by contract is well shown in the case of a devise^ of an estate and then an agreement to sell it, and death of the testator before conveyance ; here the devisee gets nothing, for had the estate been actually conveyed away he could have got nothing, and Equity considers it as conveyed (i). Again, if a man agrees to buy freehold land and dies before conveyance, yet the land will go to his residuary devisee, or his heir, as the case may be, and formerly such residuary devisee or heir would have been entitled to have the purchase-money paid out of the general personal estate, but this is no longer so {k). But an aborti ve contrafii, or one which cannot be enforced in Equity, will not effect a conversion ; thus, generally, a contract made by a trustee for the purchase of the trust property, will not be considered as changing the money into realty (l). And a notice to treat given by a railway company, or oilier body having compul- sory powers to purchase land, to the owner of lands version. in fee, is not sufficiently a contract as to operate as a conversion of the land into money {m) ; but when subsequently the price is fixed, whether by arrange- ment, arbitration, or by a jury, then there is a com- plete contract, and conversion takes place (n). Notice to treat not in itself a con- When a person has given to him an option of Effect of purchasing property, and he exercises that option , ^'^^q^^^J^ this constitutes a contract so as to cause conver- purchase. sion (o). The option to purchase is substantially an offer, and when the person exercises the option then there is in fact an acceptance, and the offer and (i) See 1 Prideaux, 91. Ik) 30 & 31 Vict., c. 69 ; 40 & 41 Vict., c. 34, and see ante, p. 66. (l) See Ingle v. Richards, 28 Beav., 361. (m) Hayius v. Hayncs, 1 Dr. and Sim., 426. (n) Ex iMrte Hawkins, 13 Sim., 569 ; Harding v. Metropolitan Bail' may Company, L. R., 7 Ch., Apps., 154 ; 41 L. J., Ch,, 371. (o) Lawes v. Bennett, 1 Cox, 167. 206 CONVERSION AND RECONVERSION. acceptance together constitute a contract making the position is the same as if there had been a direct contract for sale and purchase in the first instance. Thus, A makes a lease of a freehold house to B for seven years, giving him by the lease an option of purchasing the property at a certain price during the term. It may be that B never exercises his option, and then it is only, as it were, an offer made and not accepted ; but if B during the term exercises his option then there is a contract. It has been From what argued that, when the option is exercised, a contract a^contract^^ is constituted as from the date of the instrument when option conferring the option, but it is now decided that in exercised. such a case there is only a contract as regards the rights of the vendor and purchaser as against each other, from the date ol ^hc exercise of the option (p). Thus, in the instance given above, suppose A has insured the house for £2,000, it is burnt down, and then B exercises his option to purchase, he will not be entitled to claim that the money coming from the policy should be taken as part pay- ment of his purchase-money. But this rule as to what shall be deemed the date of the contract produced by the exercise of the option, does not apply as regards the rights of the real anJ personal representatives of the person who has con- ferred the option, for to determine their rights the exercise of the option is deemed to have a retro- spective operation back to the date of the instrument giving the option (7). Thus, to keep to the instance given, suppose A dies and then B exercises his op- tion, there is now the question, does the purchase- money go to A's real or personal representative '? It was realty at A's death, but now by the exercise of the option it has been converted, and, for the (p) Edwards v. West. 7 Cli. U., 358 ; 47 L. J., L'li., I(;:J. () Chitty V. Parker, 2 Ves., Jr., 271 ; Davenport v. Coltman, 12 Sim., 610. {q) Smith v. Claxton, 4 Madd,, 484. 214 CONVERSIO^• AND RECONVERSION. 3. If money is directed to be converted into land for a purpose -which wholly fails, so that the in- vestment is not made, then the next-of-kin, of course, take the money as personalt3^ 4. If money is directed to be converted into land for a purpose which wholly fails, or partly fails, and the investment is actually made, so that it is land which results to the next-of-kin, they will take it as real estate, so that it will devolve as part of the real estate of that person to whom it has come as next-of-kin (r). What Eeturning again to the direct decision in Ackroijd tnitZin' V. Smithsou, it will be observed that all that was reaiiy really decided in that case was, that a conversion directed by a testator is a conversion only for the purposes of the will, and that all that is not wanted for those purposes must go to the person who would have been entitled but for the will (s). And it has been held that if a conversion has been rightfully made, whether by the Court or a trustee, all the consequence of a conversion must follow if there be no Equity in favor of any person to produce a different result (t). Thus, in the case just referred to, in an administration suit, the Court considered it beneficial to sell freehold property to which an infant was entitled, which was accordingly done, and the purchase-money was paid into Court and carried to the infant's separate account. The in- fant died without having attained twenty-one, and it was held that the fund belonged to his personal representatives, and was not to be treated as realty. And it is presumed that the position would be the (r) Cvrteis v. Wormald, 10 Ch. D., 172, overruling Beynolds v. God- lee, Johns, &3fi. (fi) Per Sir G. Jesscl. M.K., in Steed v. Precce, L. E. 18, Eq., 192 ; 43 L. J., Ch., 087. (;:) Steed v. Precce, supra. As to what will constitute such an equity as mentioned above, see Foster v. Foster, 1 Ch. D., 588. CONVERSION AND RECONVERSION. 215 same had it not been a sale by the Court but by trustees in the proper exercise of a discretion vested in them, or by a guardian, if justified under the circumstances in selling. However, as to a guar- dian, he will not generally be permitted to change the character of his ward's property, and thus affect the rights of the ward's real and personal representatives, but there may be peculiar circum- stances justifying it, as where it is manifestly for the ward's benefit (m). Where the Court in an action for administration. When sale in the exercise of its jurisdiction, makes an order for courTcon^ the sale of real estate, it has been recently decided version takes that the order effects an immediate conversion from date of order. its date, and before any sale under it has actually taken place (w). The doctrine of Eeconversion has already been Reconversion. somewhat explained (x). Any person absolutely en- titled to the property in question can reconvert, pro- vided he is solely interested therein, and is sui juris. If not sui juris, then the position is generally the same as has been explained with regard to the doc- trine of election (ij). If the person desiring to recon- vert is not solely interested, then there is a distinction to be observed according to whether it is money into land, or land into money. If money is directed to be invested in land for the benefit of two or more per- sons, any one of them may elect to take his share of the money, for it is evident that no injustice will be done to the other or others thereby, for the residue must produce at least quite as advantageous a pro- perty as if the whole had been invested and then (u) See Ex parte Phillips, 19 Ves., 122 ; Vernon v. Vernon, cited 1 Ves., Jr., 456, (w) Hi/ett V. Mekin, 25 Ch. D., 735 ; 53 L. J., Ch., 241. (x) See ante, pp. 203, 204. (j/) See ante, pp. 181-183. 216 CONVERSION AND RECONVERSION. divided between the parties (z). But if land is directed to be sold for the benefit of two or more persons, one cannot effect a reconversion without the consent of the other or others, for to allow this might be injurious to the other or others, as compelling an undivided share, or undivided shares, to be sold, which, probably, would not produce as much as if the entire estate were sold, and the proceeds divided (a). What will amount to a reconversion. As to what will amount to a reconversion, not only may it be made in express terms, but it may be pre- sumed from circumstances. If money is directed to be invested in land for the benefit of a person, who, instead of requiring the investment to be made, receives the money from the trustees, this is con- clusive {h). If real estate is directed to be sold for the benefit of a person, slight circumstances in the dealing with the property will be sufticient to raise a presumption of a reconversion, though that presump- tion is liable to be rebutted. Thus, if the person entitled makes a lease of the land (c), or goes into and remains in possession of the land for a consider- able time without attempting to sell (rf), or generally deals with the property as land, e.f/., by mortgaging it, all these would be circumstances from which re- conversion would be presumed. Reconversion by operation of law. In addition to a reconversion by the party's act, it may sometimes arise by construction of the Court, or, as it is said, by operation of law. Where a person has an obligation cast upon him to convert property for certain purposes, which include a benefit to him- (c) Seeley v. Jago, 1 P. Wm's., 389. (a) Hollowau v. RadcUffc, 23 Beav.. 1G3 : In re Davidson. 11 Cb, D., 341. (b) Wheldalc v. Partridge. 8 Vcs., 236. (c) Crabtrec v. Bramble, 3 Atk., ()80. (d) Dixon V. Gay fere, 17 Bcav., 433, CONVERSION AND RECONVERSION. 217 self, and before he makes the conversion the objects fail, so that he is solely interested, then, as the obliga- tion to convert and the right to call for the pro- IDerty in question are both in him, the obligation, "without any act on his part, will be considered as discharged, and the property will be deemed to be, and will devolve on his death, as in its actual state {e). Thus A covenants to invest £10,000 in land to be settled on his wife and children with ultimate limita- tion to himself absolutely, and his wife dies without issue, here he is solely interested. Suppose he, never having bought the land, then dies intestate, the question arises, will his heir be entitled to this £10,000 on the principle of conversion, or will it go to his next-of-kin ? It will go to his next-of-kin. The money is at home in A's hands, and he has in himself the determination of its destination, and it is only fair to presume that he would desire to dis- ^charge himself from his obligation, and, as he has died silent on the point, the reasonable view to take is that he meant the money to devolve as money, and not as land. (c) Chichester \. Bickerstaff, 2 Vern., 295 ; Pulteney t. Darlington, ( 218 ) CHAPTER IV. Explanation of the ex- pressions. Apportion- ment of benefits. APPORTIONMENT AND CONTRIBUTION. Apportionment and contribution may be designated as synonomous terms, signifying a division of some benefit, or of some liability. This right was, to some extent, recognised at Common Law, but the remedy was more usually sought in Equity; firstly, because it could be there obtained in some cases unrecognised at Common Law, and, secondly, because the practical course of procedure there was more beneficial. Apportionment or contribution may be sought either in respect of some benefit, or of some liability. As to a benefit, if a premium was paid in respect of an apprentice or articled clerk, and the principal became bankrupt before the expiration of the ap- prenticeship or articles, the Court would decree a return of a portion of the premium (/). However, now the remedy would be in the bankruptcy, it being provided by the Bankruptcy Act, 1883 (g), that in such cases application may be made to the trustee of the bankrupt to return a portion of the premium paid, which he may do, his discretion being subject to an appeal to the Court. But the Court has no jurisdic- tion to direct an apportionment of part of a premium by reason of the death of the principal before the expiration of the period of apprenticeship or articles, unless it is expressly provided for by the instrument, or the master is a member of a firm, and his part- ners have participated in the premium, and refuse to continue the apprentice or articled clerk (/t). (/) story, 304. {res, 2 E. and B,, 287. ArrORTIONMENT AND CONTRIBUTION. 223 Such distinctions have now ceased to exist since The remedy the fusion of law and Equity, and the Equity rules "nthrchan- nrevail (s) ; and a surety may get similar contribu- eery or */»/»_' Qu66n s tion, either in the Chancery or the Queen's Bench Bench Division of the Court. But in many cases, to pursue i^i^ision. the remedy in the Chancery Division would l)e most appropriate, on account of the machinery of the Court enabling it to make enquiry in Chambers as to the number of sureties and other necessary points in connection with the matter. (s) 36 & 37 Vict., c. 66, sec. 25 (11). ( 2-24 ) CHAPTER V. PENALTIES AND FORFEITURES- Origin anman v. Walter, 2 Wh. and Tu., 1,257 ; Thompson, v. Hudson, L. R., 4 H. L., 15 ; 38 L. J., Ch.. 435. {s) In re Dagenham Thames Bock Company, Ex parte Huhc. L. R., 8 Ch. Apps., 1,022 ; 43 L. J., Ch., 2(Jl. Q 22() PENALTIES AND FORFEITURES. time the Court of Chancery granted relief in cases of forfeitures by tenants of their premises by reason of non-payment of rent, upon the principle that the right of entry was intended merely as a security for the debt, and that provided the rent, interest thereon, and all costs were paid, the landlord was put in the same position as if the rent had been paid to him originally. And by the Common Law Procedure Act, 1852 {a), a similar power of granting relief was conferred on the Courts of Common Law. VeacTxey v. Duke of Somerset. Nature of But there are many cases in which the perfor- JheCourt wm mance of the thing is essential, and in which the not relieve. Court will not relieve. Thus, in Peachey v. Duke of Somerset {b), the Court refused to^Mieve^a' copyhold Tenant who had incurred a forfeiture of his lands by making leases contrary to the custom of the manor without TTie license of the lord, and by felling timber, digging stones, and putting up hedges, although he offered to make compensation for what he had done. ; But it was recognised in that case that, had the for- j feiture been for non-payment of rent or fines, the ■ Court would have relieved. So, also, although the Court gave relief against a forfeiture for non-payment of rent, yet it would not do so in respect of other covenants, arf., a covenant to repair, or to insure, or liot to assign without license, and a tenant commit- ting breaches of such covenants was, therefore, abso- lutely liable to be ejected under the condition of re- entry reserved in the lease, although as regards the covenant to repair it was at one time thought that there was a distinction between a general covenant to repair, and a covenant to lay out a specific sum in repair, and that the Court would relieve in the latter case ; but in later times no such distinction has (a) 15 & 16 Vict., c. 76, sec. 212. {h) 2 Wh. and Tu., 1245, PENALTIES AND FORFEITURES. 227 been observed, and the general rule has been that in neither case, in the absence of some special circum- stances, will the Court relieve (c). But, with regard to breaches of covenants in leases, Provisions of it is now provided by the Conveyancing Act, 1881 (d), andng^Act, that a landlord shall not be liable to take advantage issi, as to of breaches of covenants (with the exceptions pre- covenant, sently mentioned), by re-entering under a condition of re-entry until he serves a notice specifjdng the breach, and, if capable of remedy, requiring it to be remedied, and in any case requiring the lessee to make compensation in money for the breach, and the tenant within a reasonable time fails to comply with these requirements ; and the Court has power to give relief against any forfeiture on such terms as it thinks fit in its discretion. The exceptions from this provision are : — (1) Covenant to pay rent ; (2) Covenant against assigning, underletting, or parting with the possession of the property, or a condition for forfeiture on bankruptcy of tenant or seizing of his interest in execution ; (3) Covenants or con- ditions in mining leases for the lessor to have access to books and accounts, records, and weighing machines, and to inspect the mine. In these ex- cepted cases, therefore, no previous notice need be given or is necessary as in other cases ; and, as re- gards the last two exceptions, the rule remains the same as ever, viz. : that the Court cannot relieve on the breach of such covenants; but as regards the covenant for payment of rent, irrespective of this enactment, the Court has full power to relieve, as has been pointed out. It may be noticed that a strict construction has been placed on the nature of the notice required to be given before a landlord (c) Hill V. Barclay, 18 Ves., 62 ; Bracehridge v. Buckley, 2 Price, 200. {d) 44 & 45 Vict,, c. 41, sec. 14. Q 2 228 PENALTIES AND FORFEITURES. can now take advantage of general forfeitures in leases, it having been held that the notice must strictly follow the section, and that in all cases it must not only give notice of the breach and require it to be remedied, but must demand compensa- tion (e). Provisions for I'orfeiturcs had in themselves. Distinction ))etween ])enaltiesand forfeitures. Some provisions for forfeiture are in themselves bad, as if the thing to be performed and which if not performed is to be the cause of the forfeiture, is in itself illegal. And a condition that if a tenant for life auempts to sell or lease the property under the provisions of the Settled Land Act, 1882, his estate shall be forfeited, or shall go over to another, is absolutely void (/). From what has been stated it is plain that there is a distinction taken by the Court between a penalty strictly so called, and a forfeiture of estate or interest as distinguished from a penalty; In the former case relief is always given if compensation can be made, whilst in the latter, though compensation can be made, yet relief is not always given {g). Thus, take even now a forfeiture for a breach of a cove- nant not to assign, the Court will not relieve, though really the landlord has not been damaged. It is difficult to see the grounds for the distinction, but the most probable ground is that the whole doc- trine of relief against penalties and forfeitures is a dangerous one, and its policy has indeed been much questioned. It was originally adopted in the case of penalties and forfeitures for the breach of pecu- niary covenants and conditions, and judges have been loth to extend it (h). (e) Jacques v. Harrison, 12 Q. B. D., 136 ; Greenfield v. Hanson, 81 L. T. Newspaper, 247. {/) ■\:>ii 4(; Vict., c. 38, sec. 51. Ig) Story7'9ll. '-* (A) See Story, 912, PENALTIES AND FORFEITURES. 229 But, notwithstanding what has been stated of cases Special cir- in which the Court will not give relief, there may sometimer be special circumstances which will enable the Court enabling the ^ . J. , Court to to do so, or will induce the Court to interfere to interfere. prevent advantage being taken of the forfeiture or penalty. These special circumstances may be either accident, fraud, mistake or acquiescence. If either by unavoidable accid'ent, by fraud, surprise, or ignorance, a party has been prevented from ^^V^forming a covenant literally, the Court will inter- fere and relieve on compensation being made (i). Thus, a person will not be allowed to take ad- vantage of a forfeiture brought about by his own act, as where a landlord has by his conduct misled his tenant into supposing that the cove- nant would not be insisted on (k). And where there has been long acquiescence in a breach of covenant the landlord cannot proceed to enforce a forfeiture {I). A difficulty sometimes arises on a contract in Penalty or , , 1 • 1 - 1 J. 1 liquidated determinmg whether a sum which is agreed to be damages. paid on breach is a penalty, or whether it is a sum considered between the parties and fixed as liquidated damages, for if it really is the latter, then the whole amount can be recovered on breach, and the Court will not relieve. But the mere fact that the parties in their agreement style the amount to be paid as liquidated damages, does not con- clude the matter, for the Court will not allow its jurisdiction to be evaded merely by that fact, or because the parties have designedly used language, and inserted provisions, which are in their nature penal, and yet have endeavoured to cover up their (t) See 2 Wh. and Tu., 1287, 1288. (k) Hughes v. Metropolitan Bailway Company, L. R., 2 App. Cases, 139 ; L. J., C. P., 583. {I) Gibson v. Doag, G W. K., Ex., 107 ; Story, 915-917. 230 PENALTIES AND FORFEITURES. Two rreneral principles to assist in arriving at conclusion. objects under other disguises (m). The question, indeed, of penalty or liquidated damages, depends on the construction to be placed on the whole in- strument taken together (n), though some general principles may be laid down to assist in arriving at that construction, of which we may mention two chief ones. (1) Where a sum of money is stated'^to be payable, either by way of liquidated damages, or by way of penalty, for breach of stipulations, all or some of which are, or one of which is, for payment of a sum of money of less amount, the former sum of money is really a penalty, and the actual damage only can be recovered as the Court will not sever the stipula- tions (o). Thus, where an actress was, by the con- tract of engagement, to act at a theatre and to be paid a fixed weekly salary, and she subjected herself to the payment of certain fines and forfeitures, and it was agreed that on breach on cither side £200 should be paid, it was held that this was a penalty ( j)). 2. But where the damage for the breach of stipula- tions is unascertainable^or not readily ascertainable, and there is a sum agreed to be paid on breach of any or either of them, then, notwithstanding that some of the stipulations may be of greater, and some of less importance, the sum is treated as liquidated damages {q). Still this principle is to be carried out with limitations, for, although a good general principle, it may amount to great hardship in some cases, and so much so that the Court can- not consider the payment of the sum to be the real design. (w) story, 910, 911. (m) Wallis V. Smith, 21 Ch. D., 213 ; 52 L. J., Ch., 11.5. (0) 2 Wh. and Tu., 127-1. (p) AMcy V. Wddun, 2 B. & P., 346 ; and see Kemhlc v. Farren, 6 Bing., 141. (9) Kcmblev. Farrm, 6 Bing, 141 ; Per Jessel, M.R., in Wallis v. iSmith, 21 Ch. D,, 258 ; 52 L. J., Ch., 149. PENALTIES AND FORFEITURES. 231 Where a person contracts not to do an act, and if Person can- he does it to pay a certain sum of money, or, that if contract by he omits to do an act he will pay a certain sum of paying a sum , ., , T 01 money money, he cannot elect to do the act, or omit to do provided to the act and pay the amount, and this whether the breach? °" amount is a penalty or liquid^ated damages, but the Court will interfere by injunction to prevent the doing of the act he had agreed not to do, or will compel specific performance of the act he had agreed to do, if it is a proper case for the Court to do so (r). Thus, it is an ordinary condition of sale that if the purchaser does not comply with tl\e conditions, he shall forfeit the deposit ; but the purchaser has no right to elect to not carry out the purchase, but, instead, to avoid the contract and forfeit his de- posit (s). But care must be taken to distinguish cases coming unless it is within the principle just mentioned, from that class aitematire of cases in which there is a contract not to do a cer- tain thing except subject To certain payments. In such cas'es tfie intention of the parties is that one of them shall either do or refrain from doing a particular thing, or as an alternative make a certain payment, and if a party chose the alternative, the Court will not interfere, either by way of specific performance or injunction (t). Thus, where a lessee covenanted not to plough up the ancient meadow or pasture ground, and if he did that he would pay an addi- tional rent of £5 an acre, it was held that he could if he liked plough it up, but that if he did he must pay the extra rent (u). (r) Freyich v. Macale, 2 D. and War., 274 ; City of London v. •1 Bro., C. C. Toml., Ed., 395. (s) 2 Wh. and Tu., 1269. (0 2 Wh. and Tu., 1270. (w) Bolfe V. Peterson, 2 Bro., C. C, 436, Toml. Ed. ; Woodward v. Gyles, 2 Vern., 119. ( 232 ) CHAPTER VI. MARRIED WOBIEN. The doctrines The various peculiar doctrines of the Court of Chan- as to married ^cry with reference to^the subject of married women women are all q]\ hsiwe reference to their property, and it will, m connection , , ~ . r l j ^ with their therefore, in the first place be necessary to consider property. ^|jgjj. position and rights with regard to their pro- perty at Common Law, both as it was and as it now is. Position as to At Common Law as regards the freeholds of the pertyat "^'He, the husband had a right to take the rents Common Law. ^nd profits thereof, and if he had issue by her, born alive, capable of inheriting, he had an estate by the curtesy. The inheritance, however, was in the wife, and this could be disposed of by the husband and wife by means of a fine, and afterwards under the provisions of the Fines and Eecoveries Act (iv), by deed acknowledged, she being separately examined before a Judge or two Commissioners (x), and on her death, subject to the husband's curtesy, they went to her heir. As regards her leaseholds, they vested absolutely in the husband, and he could dis- pose of them in any way excerpt by will ; if her hus- band did not dispose of them during his lifetime they survived to her. As to her other personalty, if that consisted of choses In possession they vested absolutely (w) 3 & 4 Will. IV., c. 74, sec. 79. (x) One Commissioner was allowed by the Conveyancing Act, 1882 (45 & 46 Vict., c. 39, sec. 7). MARRIED WOMEN. 233 in the husband, but if of cJioses in action it was neces- sary for the husband to reduce them into possession, e.g., by recovering judgment and issuing execution, and if he failed to reduce them into possession they survived to the wife. If he, however, survived her he took all her personalty, including leaseholds. This position was to some extent altered by the The Married Married Women's Property Act, 1870 (//), the pro- visions of which statute, however, so far as necessary to be considered here, only apply to women married on or after 9th August, 1870. By that statute it is provided {z) as to her freeholds, that if they descend to her, the rents and profits shall be to her separate use. As to her personalty, which term of course in- cludes leaseholds, it provides (a), that if she takes it as next-of-kin it shall be to her separate use, and there is a similar provision {b), if it consists of a sum of money not exceeding £200 coming to her under a deed or will. Women's Property Act, 1870. But the position has now been still further altered by the Married Women's Property Act, 1882 (c), which came into operation on 1st January, 1883. There are two distinct provisions of that Statute to be noticed here. It provides, firstly (d), that, as regards a woman married after it came into opera- tion, all propertif which she is possessed of at the time of her marriage, or subsequently acquires, shall be to her separate use ; and, secondly (e), that, as regards a woman married before its commence- ment, all property, her title to which accrues after the The Married Women's Property Act, 1882. (y) 33 & 34 Vict., c. 93. (z) Sec. 8. (a) Sec. 7. (b) Sec. 7. (c) 45 & 46 Vict., c. 75. (d) Sec. 2. (e) Sec. 5. 234 MARRIED WOMEN. commencement of the Act, shall be to her separate use. On this provision it has been decided that there can be but one accrual of title, so that where a woman married before the Act is entitled, also before the Act, to property in reversion or remainder, which then falls into possession on or after the 1st January, 1883, that is not property which has accrued to her since the Act. It accrued to her at the original date of her acquirement of it, and the mere fact of its changing from a reversionary property into an estate in possession is not an accrual of title (/). Fraud on The husband's rights, therefore, in his wife's pro- marital perty have been almost swept away. But formerl}' rights. tiigy yyere manifestly very considerable, and the rights he would acquire by marriage gave rise to a doctrine of the Court in his favor, known as a Fraud on the husband's marital rights. The doctrine was, tnat if a woman engaged to be married, made a settlement or disposition of her property secretly, without notice to the intended husband, it operated as a fraud on him, and would be set aside {(j). The husband was considered as having a right to expect that, after the contract to marry, no change should be made in the lady's position without his being apprised of it. And the rule prevailed even though it was not immediately before marriage, and though the hus- band did not know of the wife being possessed of the property, and though a considerable time had elapsed after the marriage before taking proceedings to set it aside (//), provided he had not been guilty of laches, and provided also that his right was not defeated by the countervailing equity of a bond fide purchase for value having the legal estate. But if the settlement was made with notice to the then intended husband it was {/) Reid V. Reid, .31 Ch. D., 402 ; 55 L. J., Ch., 294. {(l) Couniess of Strathmorc v. Bowee, 1 Wh. aud Tu,, 471. (Ji) Goddard v. Snow, 1 Ruh., 485. MARRIED WOMEN. 235 good, SO that in such a case where the woman directly afterwards broke off the engagement, and married another man who knew nothing of the settlement, it was held that he could not set it aside, for it was no fraud upon him (i). And, although a settlement or disposition by a a settlement woman engaged to be married might be a moral and monfiiy righteous one, yet the Court would not permit her righteous thus to defeat her husband's expectations, so that a defeat secret provision by her for children of a former mar- ^i^sband. riage could not have been supported (k). But, where Butasettie- a man had seduced the woman he was engaged to be ao-l^nsT" married to, and she then secretly made a reasonable i^usband who settlement of her property, the Court refused to set seduced wife, it aside in favor of the husband, upon the ground that he had by his conduct practically prevented her from retiring from the marriage, and had put it out of her power effectually to make any stipulation for the settlement of her property (l). ' " It seems that as a woman married on or after The doctrine " 1st January, 1883, will, under the Married Women's husband's^ " Property Act, 1882 (m), be entitled to her property maiitai right at and alter her marriage to her separate use, the to exist now. " right of the husband to set aside a settlement made " by the wife can no longer be enforced, since the ' " marital right of the husband, to protect which the " rule was enforced, has by this Act been almost in " effect abolished " (w). The fact of the husband's great control over and Separate interest in his wife's property at law, gave rise in ^^ ^ ^' Equity to the doctrine of separate estate, that is an (i) Countess of Strathmore v, Bowes, 1 Wh. and Tu., 471. {k) 1 Wh. and Tu., 482. (0 Taylor v. Ptigh, 1 Hare, 6U8. (m) 45 & 46 Vict., c. 75. {n) 1 Wh. and Tu„ 485. 236 MARRIED WOMEN. {ownership of property by a married woman apart from her husband for her exclusive use. It was at first considered necessary that any property which a wife was to have for her separate estate should be vested in trustees for her benefit, but it was after- wards established that this was not an essential, and that whenever either real or personal property was given to a married woman for her separate use, even though there were no trustees, yet effect should be given to the intention of the parties, and the Court would follow the legal estate, or possessory interest, into the husband's hands, and compel him to hold but as a trustee for her (o). What words As regards what words will be sufficient to show an separate intention to create a separate estate for a married cBtatc. woman, it may be stated that any words are sufficient which show an intention to exclude the husband Trom any interest in the property. The most apt words are " to her sole and sex)arate use," but many other expressioiis have been held sufficient, e.g., " to her sole use and benefit ; " " for her own use and at her own disposal ; " "to her own use during her life mcTependently of her husband " (p). A gift to a woman for her " sole benefit," has been held not by itself to be sufficient to make the property to her separate use (q), but if the property is given in this way to trustees then such words are usually sufficient (r) ; and, if when the gift is made, the woman is married, or her marriage is then in contemplation, a gift for her " sole benefit," shows a sufficient intention to exclude the husband and to create a separate estate (s). (o) story, 956. ( p) Story, 957. (}) Massi/ V. Bon-en, L. R., 4 H. L., 288. (r) Gilbert v. Lewis, 1 Dc G. Jo. and S , 88. (s) Ex parte Ray, 1 .Madd., 199; //* re Tarsei/'s Triisi.^. L. Iv., 1 Eq., 561; 35 L. J., Ch., lo2. MARRIED WOMEN. 237 The establishment by the Court of Chancery of the clause right of a woman to have property so settled upon ^ntidpation. herself that she should hold it apart from any husband, was not sufficient in itself to afford that real protection that was desirable, for there was always the very likely event to be considered that she would hand the property over to her husband, either by reason of his persuasion, or his threats. To protect her against the influence and control of her husband, the Court held that a clause might be inserted in the settlement or will restraining her from anticipating or alienating her separate pro- perty, whether real or personal, and whatever might be her interest therein, whether absolute or for life only {t). The effect of this clause was fully con- sidered in the leading case of Tullett v. Arm- Tullett\. strong (u), where it was laid down that both the ^"««^™m^- separate use clause, and the restriction against anticipation, are practically only applicable during marriage ; but that if property is given to a then unmarried woman these provisions become effec- tual on subsequent marriage ; that the anticipa- tion clause can only be annexed to separate estate ; and that neither clause can have any effect during widowhood, but that they can revive on subsequent marriage if apt words are used. Whenever property is settled upon a woman for powerto her separate use then, provided there is no clause gg^^j^te*^^ restraining her from anticipating, she may dispose property. of it by deed or will as if she were a feme sole, and this whether the property so settled is real or per- sonal, in possession or in reversion (w). (0 1 Wh. and Tu., 605. (m) 1 Beav. 1, subsequently affirmed an appeal 4 My. and Cr., 405' (w) Fettiplace v. Gorges^, 1 Ves., Jr., 46 ; Taylor'.y. Mi'ads, 34 L. J., Ch.,203 ; Sturgis v. Coep, 13 Ves., 190. 238 MARRIED WOMEN. Position now under the Married Women's Property Act, 1882. As to the anticipation clause. At the present day, by reason of the Married Women's Property Act, 1882 (x), if it is simply desired that a woman shall enjoy property for her separate use, there is no occasion to express that> for it must be to her separate use without any words being annexed to it to make it so. It is evident, therefore, that any lengthened conside- ration of the subject of the creation of separate estate by contract, settlement, or will, with the various distinctions on different points arising therefrom, cannot be of general practical use, having, as it would, only reference to the past and not to the present or future. But the Mar- ried Women's Property Act, 1882, simply gives a woman her property for her separate use, and if it is desired that she shall not have a full disposing power over it, it is still necessary to give the property to her expressly without power of anticipation, and we have already considered the general effect of that clause. Although, formerly, for the clause against anticipa- tion to have had any effect, the property must have been expressly given to the woman's separate use, there cannot be any necessity now for such words, for as all property is, without it being so stated, to be to her separate use, it follows that all that is necessary is to simply provide against anticipation, the separate use clause being in effect provided by the statute. When property is so given to a woman, the effect is that she can simply receive the rents, profits, or other income thereof as and when the same becomes due, and she cannot dispose of or in any way deal therewith until that time, when, of course, she can, for the clause can have no reference to that. And though interest is ordinarily deemed as accruing due de die in diem, a married woman, upon (x) See ante, p. 233. MARRIED WOMEN. 239 whom the fund out of which it proceeds is settled to her separate use without power of anticipation, cannot effectually assign an apportioned part of the interest up to the date of the assignment, but can i only deal with the interest after it has become payable (y). And though ordinarily the income of property ^settled to the separate use of a married woman is liable to make good a loss occasioned by her own breach of trust in making away with other property under the trust, yet if there be a clause against anticipation, future income during coverture will not be so liable {2). If a sum of stock or money is given absolutely Gift of stock to a married woman without power of anticipation, aw^mTn ^ it is sometimes difHcult to determine the exact effect, without A distinction has been drawn between whether the anticipation. fund happens to be an income-bearing fund or not, but this distinction cannot now be maintained (a). Thus, if a sum of stock is bequeathed to a married woman with a clause restraining her from antici- pating, she can only receive the income, and can- not call for the capital, the words having the effect practically of giving her an annuity (h) ; but if a sum of money was bequeathed to a married woman with a clause against anticipation, then it was formerly considered that such clause was ineffectual (c). It No distinc- must, however, be considered that there is now no ^^gt^^p^i^g such distinction, and, indeed, it seems a strange fand is one view to make the validity of the clause turn on fncome^f the accident whether at the time the money is in "ot. cash, or invested, for that is what it reiilly comes to. The correct view must now be taken to be that {y) In re Brettle, 2 De G. Jo. and Sm., 79. {s) Clive V. Carew, 1 J. and H., 199. (a) Per Cotton, L. J., In re Bown, O'Halloran v. King, 27 Ch. D., 422 ; 52 L. J., Ch., 884. (h) In re Ellis's Trust, L. R., Ch., 17 Eq., 409 ; In re Benton, Smith v. Smith, 19 Ch. D., 277 ; .57 L. J., 183. (c) In re Clarke's Trusts, 21 Ch. D. 748 ; 51 L. J., Ch., 855. 240 MARRIED WOMEN. the clause against anticipation may be equally good in either case, the question turning entirely upon the intention of the testator declared in his will, viz., has he declared an intention that the money should be paid to the married woman, or that only the income should be paid her from time to time, and, if the latter, she will only enjoy the fund as an annuity, and not as a sum of money (d). If, however, there is a gift of a capital sum, either of stock or cash, to a married woman at a future date, e.g., the death of a life tenant of the fund, a clause against anticipation is construed as appli- cable only to the interval between the death of the testator and the future period, and will not prevent the married woman from calling for a transfer of the fund on the death of the tenant for life. Thus, where a sum was directed to be invested upon trust for one for life, and then at his death a portion of the fund was given to a married woman for her separate use without power of anticipation, it was held that the effect of the clause was only to prevent the married woman anticipating or alienating the fund during the life of the tenant for life, but that on his death it ceased, and she was absolutely entitled to call for the whole amount given to her, and was not compelled simply to receive the income as and when it became due from time to time {c). Provisions of The clause against anticipation, though invented andn^^Act ^^^' ^^® benefit of married women, has been found 1881. in certain cases to work hardly, and inconveniently, and to their detriment (/). It has, therefore, been provided by the Conveyancing Act, 1881 {[/), that {d) Per Cotton, L. J., In re JBown, O'Halloran v. King, 27 Ch. D., 422 ; 53 L. J., Ch., 884 ; In re Grey's Settlement, W. X.. 1880, p. 167,: L. S. J., 1886, p. 293. (c) In re Bowii, O'HaUoran v. King, 27 Ch. D., 41 1 ; .'53 L. J., Ch., 881 . (/) See Robinson v. Wheelwright, 6 De G., M. and G,. 535 ; ante, p. 182. (y) 44 .vc 45 Vict., c. 41, sec. 39, MARRIED WOMEN. 241 notwithstanding that a married woman is restrained from anticipation the Court maj^ if it thinks fit, where it appears to the Court to be for her benefit, by judgment or order with her consent, bind her interest in any property. A very liberal view has been taken of this section, the Court dealing with it in a practical light, and removing the clause at her request when it is shown that a benefit to her is likely to result by doing so. Thus, in a recent case a woman was entitled to a considerable reversionary property for her separate use without power of anti- cipation. The husband was a medical man and wished to purchase a practice, and the wife applied to have the restraint removed so that money could be raised thereon for the purchase. The Court ac- ceded to the application, it being shown that the practice was a substantial one and likely to be for the woman's benefit {h). We have shown that not only can a married woman own separate property, but that she can also dispose of it ; it is also necessary to consider the extent of the liability of the separate property for her debts and engagements. The general rule has long been that those debts or contracts will bind her separate estate which she expressly charges thereon, or which, judging from their nature she may fairly be taken to have intended to charge thereon, e.g., a bond, or a pro- missory note, or the like (I) ; but of course ordinary general engagements would not bind it, for as regards these she is presumed to enter into them as agent for her husband, and there is certainly no intention ordinarily shown to charge her own separate property ; but if such an intention can be found then even such debts as that would bind it {k). The (7i) In re Torrance's Settlement, 81 L. T. Newspaper, 118 ; L. S. J., 1886, p. 167. (i) Hulme v. Teitant, 1 Wh. and Tu., 536. {k) Mrs. Matthewman' s Case, L. R., 3 Bq., 787. R Liability of separate estate. Provisions of Married Women's Property- Act, 1882, 242 MARKIED WOMEN. importance of a knowledge of the various decisions bearing on the subject of liability of separate estate is not now great, for by the JMarried Women's Pro- perty Act, 1882 (Z), it is provided that every contract entered into by a married woman is to be immd facie considered as binding her separate estate. This, of course, does not make her separate estate liable for ordinary debts for necessaries, unless, indeed, ex- pressly charged thereon, for as to these she simply contracts as agent for her husband. Married wo- If a married woman concurs with her trustees in manjommgm committing a breach of trust which results in the breach ot *=" . trust. loss of her separate use property, she will be held to have disposed of it and cannot call upon the trustees to replace it {in), unless it is settled on her without power of anticipation, when it is otherwise (?i). Whatsepa- It was formerly held that although a debt or con- rate estate of \^Y?iC,i was of such a nature as to bind a married a married woman liable woman's Separate estate, yet it would only bmd for her debts. ggpg_i,g^te estate to which she was entitled at that date, and not separate estate which she subsequently acquired {o) ; but, now, under the Married Women's Property Act, 1882 (p), a man-ied woman may bind all separate property which she may be then pos- sessed of, or may subsequently acquire. No personal decree against a married woman. It must be borne in mind that, although a married woman's separate estate may be liable, yet the Court cannot make a personal decree against her, but can affect her separate estate only {q). And, though by the Married Women's Property Act, 1882 (r), it is pro- (l) 45 & 46 Vict., c. 7.5, sec. 1 (2). (?«) Crosbi/ V. Church, 3 Beav., 485. («) JJavies v. Hodqson, 25 Beav., 18G. (n) Pike v. Fitcyi'bbou*. 17 Ch. D., 454 ; 50 L. J., Ch., 394. (y;) '45 & 4f5 Vict., c. 75, sec. 1 (4). (q) Durrant v. Ricketts, 8 Q. B. D., 177 ; 51 L. J., Q. B.,425. (/•; 45 & 40 Vict,, c, 75, sec. 1 (2). MARRIED WOMEN. 243 vided that a married woman may sue or be sued in ail respects as if she were a feme sole, yet it has been held that execution can only be issued against her separate estate (,s), and that where an order is made to sign judgment against a married woman, such order should state that execution is to be limited to such separate estate as she may have, and which she is not by the act of any other person restrained from anticipating {t). It was also formerly held that a j married woman, though possessed of separate estate, could not be made a bankrupt {ii), but the Married Women's Property Act, 1882 (y), now provides that every married woman carrying on a trade separately from her husband, shall, in respect of her separate property, be subject to the bankruptcy laws in the same way as if she were a. feme sole. If a married woman having property to her sepa- Receipt by rate use does not exercise her right of separate iQctme'of^ receipt, but permits her husband to receive the income wife's sepa- ,1 p' 1 L T '^ ' rate property. thereof, she cannot ordinarily recover any arrears ^ ^ • thereof from him, for the allowing him to receive it will usually amounI~T6 a gift of it to him, either for the benefit of the family or otherwise (to). But ■^iiere the husband has received the income of his wife's separate property without either her autho- rity or tacit acquiescence, she will be entitled to reimbursement from him or his estate {x). On the death of a woman entitled absolutely to Devolution of property for her separate use, and not having dis- ggtatTon posed thereof by deed or will, it has long been cieath of settled that if realty, it goes to her heir, subject woman with- out having (s) PerJcs V. Mijlrea, W. N., 1884, p. 64, disposed (0 Bursell v. Tanner, 13 Q. B. D., 691. thereof, (w) Ex farte Jones, In re Grissell, 12 Ch. D., 484 ; 48 L. J., Bk., TOO. (r) 45 L 46 Vict,, c. 75, sec, 1 (5). liv) Povell V. Remkey, 2 P, Wms.. 82 ; Ron-leij v. I nwin, 2 K. and J., 138. (x) Parker v, Brooke, 9 Ves., 583. R 2 244 MARRIED WOMEN. to the husband's curtesy (y), and if personalty in possession the husband takes it jure mariti, and if in action he also takes it, but only on taking out letters of administration (c). The question has, however, been raised whether, in cases of property made the separate estate of a mar- ried woman by the provisions of the Married Women's Property Act, 1882, a husband can now have any such right in his wife's undisposed of separate property, as she is to be deemed as a feme sole, and a separate individual (a). It is, however, submitted that it was not the intention of the legis- lature to take away any rights of the husband on the death of his wife, but merely to protect her estate, and give her the powers of disposition of a feme sole during her lifetime, and that the position has not been altered by the provision in ques- tion (6). Protection to A married woman will be protected by the Court T^^omaniu ^^ ^^^ enjoyment of her separate property, and respect cf her the husband will if necessary be restrained by in- property. junction from interfering with it (c). And, under tlTC' Married Women's Property A ct, 1882 (d), any questions of ownership arising between nusoand and wife may be decided by summary application to a Judge of the High Court of Justice, or of the Judge of the District County Court, irrespective of the value of the property. ' Pin-money. PixLrmon ey is closely allied to separate estate, and"'ra?ty be defined or described as an allowance (y) Cooper v. Macdonald, 7 Ch. D., 288 ; 47 L. J., Ch.,373. (z) See 1 Wh. and Tu.. 596. {a) Sec Wolstenholmc and Turner's Conveyancing and Married Women's Property Acts, ."Ird edition, pp. 8, 9. (^) See 1 Wh. and Tu., r,9G-598. (c) Green v. Green, 5 Hare, 400 ; Symonds v. Hallett, 24 Ch. D., 346 ; 53 L. J., Ch., 60. (d) 45 & 46 Vict, c. 75, sec. 17. MARRIED WOMEN. 245 settled upon the wife before marriage for the wife's expenditure upon her person, to meet her personal expenses, and clothe herself according to her proper rank and station (e). The provision for pin-money is usually contained in the settlement made upon marriage, but gifts or gratuitous payments may be made from time to time by the husband for the like purposes (/). The object of the allowance of pin-money being to What arrears enable the wife to meet her personal expenses, if she cin be"^^^^"^ lets the payment get into arrear she cannot, as a recovered, general rule, on her husband's death, claim for more than one year's arrears prior to his death. Under spe- cial circumstances, however, more may be recovered ; thus, where a wife from time to time demanded the arrears of her pin-money from her husband, and' he always promised she should have it, it was held that she was not limited in her claim to one year's arrears, but could recover all arrears due at the husband's death {g). If a wife dies, her per- sonal_ representatives cannot recover any arrears of her" pin-money {h). Paraphernalia of a wife is a peculiar kind of Parapher- property possessed by a married woman, also some- °^^^^" what allied to separate estate, but yet held in a very different way. This paraphernalia consists of such apparel and ornameufs^of" the wife, given to her by her husband, as are suitable to her rank and condition in life, e.g., rings, watches, and other jewellery given to the wife to be worn merely as ornaments (i). The property possessed by the wife in her jjaraphernalia is of an anomalous character, (c) See Howard v. JDigby, 8 Bligh, N. R., 259. (/) ] Wt. and Tu., 620. (g) Ridout v. Lewis, 1 Atk., 269. (A) Howard v. Bigby, 3 Bligh, N. R., 245. (i) Graham v. Londonderry, 3 Atk., 394. 246 iMARRIED WOMEN. When jewels, &c., consti- tute separate estate. Equity to a settlement. for she has no power to dispose of it during her husband's life, whilst the husband can dispose of it either by sale or gift inter vivos, though not by will, so that on his death she is absolutely entitled, but subject to payment of his debts. The parapher- nalia is, however, the last property to be re- sorted to, and, if it is taken by cr9ditors for payment of their debts when there is any other property available for payment, she is entitled to have the assets marshalled in her favor so that the amount of her paraphernalia shall be made good to her {k). If a husband pledges his wife's paraphernalia and dies solvent, she is entitled to have it redeemed for her benefit, and this even to the prejudice of any legatees (0' Jewels, ornaments, and the like, not given to a woman by her husband, but by a third party, are not paraphernalia, but are considered as being given to her for her separate use (m) ; and, although, gifts from husband to wife are ordinarily para- phernalia, yet the gift may be expressly made to her separate use, and it is so generally considered if not of clothes and ornaments of the person, but of other things. A doctrine of the Court, which has been of great service to married women, is that known as her Equity to a settlement, which may be defined as being a right given her by the Court to insist on a settlement being made upon her of property com- ing to her during coverture, and which would other- wise be seized by her husband. The student will have observed that a wife's personal property practically became her husband's (n), and the {k) Tipping v. Ti2>pi7u/, 1 P. Wms., 7'M) ; sec ante, p. G3. (I) Graham v. Londonderry, 3 Alk., 393. (m) Graham v. Londonderry, supra, (re) See ante, pp. 232, 233. MARRIED WOMEN. 247 reason, no doubt, was the obligation be was under to provide for his wife, but then there were no means for enforcing this obligation. Bearing this Origin of the in mind, the Court first gave the married woman '^°^'^""^- some assistance by an application of the maxim "He who seeks Equity must do Equity," for when the hiisband had, as was often the case, to come into Chancery to get his wife's property, the Court would, if it appeared right to do so, refuse to assist him unless he made an adequate settlement on his wife (o). This then was the origin of the doctrine, but as it thus stood it was plainly insufficient, for in many cases the husband could obtain his wife's property without having to seek the assistance of the Court of Chancery. The doctrine, however, received a great extension in the leading case of Lady Elibank V. Montolieu {j)), to the effect that the wife might come and actively assert her right as a plaintiff, so that when she found her husband was likely to ac- quire her property without the assistance of the Court, she could come to the Court and assert and maintain her right to a settlement thereout (q). It was always necessary, however, that she should come to the Court before her husband got possession. Extension of the doctrine. Ladi/ Elibank V. Montoliezt. Any lengthened consideration of this subject would be out of place in a work like the present, because of the practical general unimportance of the subject in consequence of the provisions of the Married Women's Property Act, 1882 (r) ; for as now, generally speak- ing, all property is to the separate use of a married woman, it is hers, and in no way is it her husband's, Equity to settlement not an im- portant doc- trine now, and will in course of time become obsolete. (o) Bosvil V. Brander, 1 P. Wms., 459. (p) 1 Wh. and Tu., 486. {q) See also Sttorgis v. Chatnpneys, 5 My. and Cr.. 105. (»•) See ante, pp. 233, 234. 248 MARRIED WOMEN. and he has nothing to do with it. The doctrine of Equity to a settlement will soon be merely a thing of the past, but it is not quite so at present, for cases may well arise for some time yet, in which it may be necessary to assert this right. We have already mentioned the point that if a woman married before 1st January, 1883, is entitled to a reversionary in- terest under some settlement or will before that date, that is property which accrued to her when she first acquired such reversionary interest, and that although it falls into possession on or after 1st Januarj', 1883, that is not property which has accrued to her since the Act (s). Here then, if personal property, the husband would take it, and the only course to prevent this is for the wife to assert this right. In fact, in the case of Reid v. Reid, cited below, that is just what happened, the Court decided that the property was not to the wife's separate use, but then subsequently it enforced her right to a settle- ment f^. The following remarks on the subject of Equity to a settlement have, therefore, but a very limited application. Out of whati The right of a married woman to her Equity to a rfgirr ^ ^ settlement was, for a long time, supposed to be con- attaches, fined to the purely personal property of the wife of an equitable nature, but in modern times it has ac- quired a wider range, and is generally applied also to all cases of equitable interests in real estate as well, and also to all cases of the real estate of the wife, whether legal or equitable, when the husband is obliged to come to a Court of Equity to enforce his rights against the property (u). As regards lease- hold property, if of an equitable nature, it appears (s) Sec ante, p. 234 ; Reid v. Rcul, 31 Ch. D., 402 ; 55 L. J., Ch., 294. (t) Bold V. Reid, 33 Ch. D., 220 ; 55 L. J., Ch., 756, (m) Story, 967 MARRIED WOMEN. 249 the wife is entitled to enforce her Equity to a settle- ment thereout (w), but not if it is a legal term (x). Not only can the wife enforce her Equity to a set- Against tlement against her husband, but also against his ^.^g^jt; en- trustee in bankruptcy, or his assignee. With regard, forced, however, to the extent of the right, even in enforcing it against the husband, the Court will not ordinarily take from the husband the income of the property so long as he is willing to live with and maintain her, and there is no reason for their living apart. The most the Court will do under such circumstances is to secure the fund allowing him to receive the income (?/) ; and, therefore, when this is so, either as against the husband or his assignee, the settlement decreed will ordinarily be one which provides for her only from her husband's de§ith. But if the husband is bankrupt, and the wife i^enforcing her right against his trustee in bankruptcy, then, as he is taken to be incapable of maintaining his wife, the Court ordinarily decrees a settlement providing for her immediate maintenance (0). It, therefore, follows that if a wife is entitled to a life interest only in property, although she can enforce her Equity to a settlement against her husband's trustee in bank- ruptcy, she cannot ordinarily do so as against him, or against his assignee. Although a wife may be entitled to enforce her The amount Equity to a settlement, it does not follow that the ^grt^^toTc whole of the property will be settled on her. This is settled on a matter left to the discretion of the Court. The ^^ ^' general rule, however, is that, in the absence of special circumstances, half the property only will be (jw) Hanson v. Keating, 4 Hare, 1. {x) Hill V. Edmonds, 5 De G. and S., 603. (y) Story, 971. (s) Story, 973. 250 MARRIED WOMEN. settled, but the Court may take into consideration the amount of the wife's fortune already received by the husband, or any previous settlement which may have been made, or the husband's ill conduct or insolvency, and may, according to circumstances, settle a less or a greater proportion, or even the whole (a). Nature of the right of equity to a settlement. Nature of the settlemeat. How the right lost or waived. Equity to a settlement is not property in a wife, but is simply a right that she has to come to the Court and ask for a settlement. It is a right personal to the wife, and may be waived or aban- doned, or may be lost by her act (h), but if she proceeds to enforce it, and the Court decrees a set- tlement, that settlement provides also for the chil- dren (c). But although the children have no independent right of their own, yet if the Court decrees a settlement on the wife's application, and then the wife dies before a settlement is actually made, the Court will carry out the settlement in their favor notwithstanding her death {d). In ordinary cases, when the Court decrees a set- tlement, the nature of that settlement is a separate life provision for the wife, with a power of appoint- menfTo' her amongst her children, and in default of appointment to her children by that or any sub- sequent marriage, equally between them, sons on attaining twenty-one, and daughters on attaining that age or marrying, and in default of children to the husband absolutely (e). A wife will ordinarily lose any right of Equity to (a) 1 Wh. aud Tu., 519, 520 ; Reid v. Ecicl, 33 Ch. D., 220 ; 55 L. J., Gh.. 75(;. (h) Hodgcns v. Hodgcns, 11 Bligh, N. H., 101. (c) Johnson v. Johnson, 1 J. and W., 172. Id) Murray v. Lord Elihank. 1 Wh. aud 'Oi., 501. (e) 1 Wh.'audTu., 521. MARRIED WOMEN. 251 a settlement if she is living apart from her hus- band in adultery (/), unless she is a ward of Court married without its consent {g). A wife may i waive her Equity to a settlement by appearing in Court and being separately examined by the Judge, or by a Commission issued for the purpose of re- [ ceiving her waiver (h). And, under the provisions of Malins' Act (i), she may release and extinguish her "Equity to a settlement out of personal pro- perty in possession acquired by her under any in- strument (not being a settlement on her marriage), made after 31st December, 1857. A wife's equitable right by survivorship should be The wife's distinguished from her right of equity to a settle- sJj^Yivorshin ment. It consists of her right to claim her property if she survives her husband, and needs no active enforcement by her. Thus, if the husband does not reduce into possession his wife's choses in action, or if her reversionary interests in pure personalty do not fall into possession during coverture, then at her husband's death she claims her right by survivorship, and all assignments that may have been made by the husband are of no avail against such right, and this even although she may have joined in the assign- ment ij). This right is superior to any Equity to a settlement, and therefore, as by it she is fully pro- tected as regards her reversionary property, she cannot claim Equity to a settlement thereout, though of course she may do so when the re- versionary interest becomes an interest in posses- sion (A;). However, now by Malins' Act (Z), it is (/) Carr v. Eastabroke, i Yes., 146. (g) Ball V. Cotitts, 1 V. and B., 302. (/i) 1 Wh. and Tu., 523, 524. (i) 20 & 21 Vict., c. 57. {j) Purdem v. Jackson, 1 Russ., 1. (k) Usborn v. Morgan, 9 Hare, 434. (0 20 & 2P»Vict., c. 57. 252 MARRIfiD WOMEN. provided that every married woman may, with the concurrence of her husband, hy deed acknowledged in the manner prescribed by the Fines and Recoveries' Act (m), dispose of every reversionary interest, whether vested or contingent in any personal estate to which she is entitled under any instrument (not being her marriage settlement), made after 31st December, 1857. There may still, however, be cases in which a married woman is entitled to some such reversionary interest under an instru- ment executed prior to the above date, and in that event her right by survivorship cannot be taken away from her. Of course, however, if she has married since the 1st January, 1883, the re- versionary interest is to her separate use under the provisions of the Married Women's Property Act, 1882, and then she can do what she likes with it ; she remains in fact a feme sole in all respects as regards her property. Separation It was at One time thought that the Court would deeds. never give effect to and enforce a deed of separa- tion entered into between husband and wife, but it is now well established that it will do so, pro- vided it is not a contract for future, but for present separation (h). And it was formerly considered that the intervention of trustees was necessary in a deed of separation, but it appears now that this is not so, and that a wife may satisfactorily contract with her husband as to the separation (o). A deed of separation does not alter the legal condition of the wife, but her rights and general position remain the same, subject to any provisions of the deed. (m) 3 & 4 Will. IV., c. 74. {n) Story. it7G. {oj Sec Bcsant v. Wood, 12 Cb. D., G05 ; -18 L. J., Cli., 197. (, 253 ) CHAPTER VII. INJUNCTIONS. An injunction may be defined as a judicial process, Definition of whereby a party is required to abstain from doing ^^ i'^3™c a particular act, or to do a particular act, in which latter case it is styled a mandatory injunction. The object of the process is generally preventitive and protective, rather than restorative, although not confined to the former ; it seeks however to prevent a meditated wrong more often than to redress an injury already done (p). Injunctions were formerly divisible into two injunctions of general classes, viz., common injunctions, and spe- cial injunctions, and although injunctions of the ■former class are not now ordinarily granted, it is necessary to give them some consideration. By a common injunction is meant an injunction Common granted by the Court of Chancery to restrain pro- "^^""*^ "'°^* ceedings in another Court. This was a power at first arrogated by the Court of Chancery to itself, and much disputed, but finally established. The prin- ciple upon which the Court of Chancery claimed the right was, that it would not allow a judgment of the Court of Common Law to be made an instru- ment of oppression and wrong. The Court of Chancery did not pretend to overrule the judgment ( p) story, 573. 2o4 INJUNCTIONS. of Courts of Law, but, acting in im'sonaniy would in some cases restrain a person from proceeding on a judgment at Common Law, or from further proceed- ings in an action there. This they would do if the judgment was obtained by fraud, or if the defendant in the Common Law action had what would have been recognized in Chancery as a defence, but was not so recognized there. The matter was the sub- ject of a great dispute between Lord Ellesmere and Lord Coke in the time of James L, and was referred to the King in person, and he decided in favor of the power of Chancery {q). When Equity Equity, therefore, would grant an injunction to would grant i-gstrain proceedings in a Common Law Court, when an injunction -^ . " . . n ii of this kind, it was agauist conscience to allow the party re- strained to proceed there. Cases of this kind usually occurred when the defendant in the Common Law action had a defence which Equity would re- cognize, but which Law would not. The Common Law Procedure Act, 1854 (r), endeavoured to remove such a strange state of things as one Court practi- cally restraining proceedings in another, by enacting that equitable pleas and replications might be made use of at Common Law; but the narrow construc- tion put upon that provision by the Courts of Common Law, where it was held that no equitable plea was good unless it disclosed facts which would entitle the party to an absolute and uncondi- tional injunction in Equity, rendered applications to Chancery still necessary in many cases (s). Hence, at the time of the passing of the Judica- ture Act, 1873 (0, common injunctions were often granted. (9) See Hallam's Constitutional History, Vol. T., p. M'l ; FmtI of Oxford's Case, 2 Wh. .and Tu., 642. (r) 17 & 18 Vict., c. 12.1. sec. 83. (.s) 2 Wh. and Tu., (554. It) 36 & 37 Vict., c. 60. INJUNCTIONS. 255 Such a state of things is, of course, easily under- Provisions of stood when we recognise the fact that Law and Equity ^.^^^g Act^^" were two distinct tribunals, but it would be absurd 1873. for that condition of affairs to be existing at the present time, when Law and Equity are fused, and constitute one complete system as is now the case under the Judicature Acts, 1873 and 1875. It has, therefore, been provided that no one division of the Court can restrain proceedings in another division, but that every matter of Equity, in respect of which an injunction might formerly have been obtained, may be relied on by way of defence in any action (a) ; and that, generally, in all matters in which there is any conflict or variance between the rules of Equity and Law with reference to the same subject matter, the rules of Equity shall prevail. The effect of these provisions is, that as the Courts Effect of of Law and Equity are no longer distinct, and as the vMonr°' rules of Equity in all cases of conflict prevail over those of Law in every Division of the High Court, an injunction to restrain proceedings on a judgment, or to restrain an action pending in one Division of the High Court, can no longer be granted by another Division (w). However, it appears that the High injunction Court may grant an injunction to restrain a person granted to from instituting proceedings in any division, e.g., to restrain restrain a wife from instituting proceedings for the instituting purpose of compelling her husband to cohabit with Proceedings, her (x). And the Court has interfered by injunction to restrain a person, claiming to be a creditor of a company, from presenting a petition to wind up the company where the debt was bond fide disputed, and the company was shown to be solvent (?/). (m) 36 & 37 Vict., c. m, sep. 24 ($), (w) Garbutt v. Fawms, 1 Ch. D., 155 ; 45 L. J., Qh., 133, (.r) Besant v. Wood, 12 Ch. D., G05 ; 48 L. J., Ch., 4!)7. (y) Cercle Bestaurant Castiglione Company v. Lavcry, 18 Ch. D., 555 ; 50 L, J., Ch., 837. 256 LN'J UNCTIONS. Restraining proceedings against an executoi- or administrator after deciee for adminis- tration, or against a companj' after order for winding- np. An instance in which the Court of Chancery used formerly to grant an injunction to restrain proceed- ings in another Court, was, where a decree had been made for the administration of the estate of some deceased person by the Court, and actions were pending against the executor or administrator to recover any debt or damages, or in case of the winding-up of companies, where an order had been made for winding-up, and actions were pending against the company (z). After the passing of the Judicature Acts the proper course in administration proceedings was held to be, to apply in the particular action brought by the creditor to stay further proceedings therein, and for the transfer of the action to the Chancery Divi- sion (a); and the proper course in winding-up pro- ceedings was the subject of much conflict of judicial opinion as to whether the application to stay should be to the Chancery Division, or to the division in which the action was pending (b). All such doubts have been now settled by a direct provision to the effect that, when an order has been made for the administration of the estate of a deceased person, or for the winding-up of any company, the Judge in whose Court such administration or winding-up shall be pending, shall have power to order the transfer to himself of any cause or matter pend- ing in any other Court or Division, brought or con- tained by or against the executor or administrator, or the company, as the case may be (c). It may be noticed that, where bankruptcy proceed- ainst ^^^^ ^^^ pending in the High Court, an order may bankrupt. be made in bankruptcy restraining any action or Eestraining proceedings (s) 2 Wh. and Tii., fi58. (a) In re Sfuhhs Estate. Hanson v. Stuhbs. 8 Ch. D., VA ; 47 L. J., Ch., (171. (i) See 2 Wh. and Tu., «G1. ((•) Order XLIX., nile 5. INJUNCTIONS, 257 other proceedings against the person or property of the debtor (d). But the County Courts exer- cising jurisdiction in bankruptcy, have no power to restrain proceedings in the High Court, and an ap- plication must be made to the High Court in any such action to stay it (e). Whenever parties are resident here, the Court has Kestraining power to restrain such persons from proceeding in a fn a^fordln Court out of the jurisdiction, whether such Court is Court. actually the Court of a foreign country, or of Scot- land, or Ireland, or of a Colony (/). The Court does not interfere upon any pretension to control or over- rule the decisions of such Courts, or to examine judicial or administrative acts abroad, but in liersonam on the circumstances of the party on whom the order is made being within the power of the Court, and that the questions to be deter- mined are such as ought to be adjudicated upon in this country {g). Although the Court manifestly can have no juris- Restraining diction to restrain an application to Parliament for toPaSament. a public Act, it has been held that there is vested in the Court a power to restrain an application for a private Act, provided a proper case can be made out for the Court's interference, but that what would be a proper case for the purpose is very difficult to conceive {h). Practically it may be taken that though the Court has such a power, it invariably refuses to exercise it, for the parties objecting to the proposed Act can be heard before the Com- {d) 46 & 47 Vict., c. 52, sec. 10 (2). (e) In re Burnett, ex parte Beynolds, 15 Q. B. D., 169 ; 54 L. J., Q. B., 354. (/) Story, 580-582. \g) 1 Wh. and Tu., 665. {Ji) Heathcotc v. The North Staffordshire Railway Co-,npanij, 2 Mac. & G., 100. S 258 INJUNCTIONS. mittees of the Houses of Parliament in opposition to it. But the Court will interfere by injunction to restrain the application of trust funds, or the assets of a company, towards the costs of an appli- cation for an Act of Parliament where they can- not lawfully or properly be so applied (<). Special injnnctions. By a special injunction is meant one which is granted to restrain or compel the doing of some particular thing, e.g., the committal of waste, or of a nuisance, the infringement of patents, copy- rights, or trade marks, the publication of private letters, and other acts which might tend to injure the plaintiff. Injunction to prevent waste. Cases of trespass. The whole idea of the jurisdiction of the Court in cases of this nature is to prevent a wrong, and the exercise of this jurisdiction in cases of waste may be referred to the broadest principles of social justice. The interference of the Court was originally confined to cases founded in privity of title, e.g., a remainder- man against a tenant for life, but by insensible de- grees the jurisdiction was enlarged to reach cases of adverse claims and rights not founded in privity, e.g., to cases of trespass attended with irreparable mis- "ehief (/;). But the Court would formerly only inter- fere by injunction in cases of trespass, to prevent irreparable mischief or to suppress multiplicity of suits, and oppressive litigation, for if the trespass were but temporary, and adequate compensation could be obtained in an action at law, the Court would not interfere by injunction, if otherwise, then it would. Thus, for instance, the Court would grant an injunc- tion where a mere trespasser dug into and worked a (i) Simpson v. Denison, 10 Hare, 51 ; Attorney-General v. Corpora- tion of Aorivich, IG Sim, 225. {k) Earl of Talbot v. IScott, 4 Kay and Johnson, ^Ck INJUNCTIONS. 259 mine to the injury of the owner, because it per- Provision of manently affected the property (I). And now by the Act^TsTS^ Judicature Act, 1873 (m), it is provided that an sec. 25 (8). injunction may be granted by an interlocutory order of the Court in all cases in which it shall appear to be just or convenient that such order shall be made, and such order may be made with or without con- dition, and either before or after the hearing of any cause or matter to prevent any threatened or appre- hended waste or trespass, and whether or not the person against whom such injunction is sought is or is not in possession under any claim of title or other- wise, or if out of possession does or does not claim a right to do the act sought to be restrained under any colour of title, and whether the estates claimed by both or either of the parties are legal or equitable. It will be noticed that this provision is a great ex- tension of the power of the Court to grant an injunction, as it enables it to do so whenever just or convenient, and of course an injunction to restrain waste or any other wrongful act may now be granted by any division of the Court. In most cases of waste and trespass there has Equitable always been an action at law for damages, and the ^^^*^' obtaining an injunction was only an additional remedy afforded in Equity. In the one case, how- ever, of a tenant for life holding without impeach- ment for waste, the Courts of Law held that the tenant for life was justified in doing anything that he chose, and the only remedy was in Equity. The Court of Chancery would grant an injunction to restrain such a tenant from pulling down the family mansion- house, or cutting ornamental timber, upon the prin- ciple that there was an implied trust in favor of the remainderman, and that it was unjust to allow the (0 story, 598, 599. (w) 36 & 37 Vict., c. fi6, sec. 25 (8). s 2 260 INJUNCTIONS. Injunctions against nuisances. Public nuisances. Private nuisances. tenant for life to injure him to this extent (h). This was, therefore, styled equitable waste. Now, under the provisions of the Judicature Act, 1873 (o), a tenant for life without impeachment for waste can be made liable for such acts in damages, and re- strained by injunction, in any division of the Court. With regard to injunctions to restrain nuisances, a distinction must be observed between such as affect the community at large, that is public nuisances, and those which only aft'ect particular individuals, that is private nuisances. The remedy for a public nuisance is indictment at Common Law, or an in- formation in Chancery in the name of the Attorney- General for an injunction. Any individual affected by a public nuisance can bring the matter before the Attorney-General, and obtain his liat to com- mence proceedings in his name, and he is called the relator, and has the conduct of the proceeding, and is liable for the costs. An injunction can be obtained in this way to prevent the stopping up of a public highway, or the carrying on of any noxious occupation, or indeed the doing of any act which will affect a whole neighbourhood. But, in addition to this, it must be noticed that jf the nuisance, though a public one, affects a private individual more than the community at large, he may maintain an action for an injunction in his own name, e.g., where a person lives close to a place where a bell is continually rung, and which con- stitutes a nuisance to the neighbourhood, for he, by his close position to the nuisance, is more in- jured than his neighbours (p). The remedy in respect of a private nuisance is, of course, an action for an injunction by the individual affected, (70 Gart/i V. Cotfoii, 1 Wh. and Tu., 806. (fl) Sfi & :i7 Vict., c. f.G, sec. 2n (3). (;)) Solfnn V. Br Held, 2 Sim., (N. S.). 1.33. INJUNCTIONS. 26 i e.g., to restrain noxioui? vapours or smoke (q), or the obstruction or pollution of a stream running by the plaintiff's land (?•), and other wrongful and injurious acts. But, in] all cases in which an injunction is sought General to restrain an alleged nuisance, the Court will only ["granting^ grant an injunction where the matter is clearly made injunctions out, upon determinate and satisfactory evidence, tor nuisances. if the evidence be conflicting, or the injury doubtful, the Court will not thus interfere. And as a general rule, and subject to what the Court in particular cases may consider just and convenient, for the Court to grant an injunction the injury complained of must be such as from its nature is not sus- ceptible of being adequately compensated by dam- ages, or such as from its continuance or permanent mischief must occasion a constantly recurring griev- ance, which cannot be otherwise prevented but by an injunction (s). The reason that the Court interferes by injunction Injunctions to restrain an infringement of a person's patent, fr^ingement copyright, or trade mark, is for the purpose of pre- of ^^^^^Xti venting irreparable mischief and multiplicity of suits, and trade ' for it is evident that, if no other remedy could be ^^^^'^s- given in such cases than an action for damages, the injured person might be ruined by the necessity of perpetual litigation, without ever being able to have a final establishment of his rights (t). The law as to patents and trade marks is mainly Patents and contained in the Patents, Designs, and Trade Marks' ^^"^^^^^ ^• Act, 1883 {u). A patent may be granted for a period (g') Broadbent v. Imperial Gas Company, 7 De G. M. and G., 436. (r) Kensit v. Great Eastern Eailivay Comfany, 27 Ch. D., 122 ; 54 L. J., Ch., 19. (a) Story, 592-594. (0 Story, 601. As to patents, copyrights and trade marks, generally, see Williams' Personal Property, Part III., Ch. 2. (m) 46 & 47 Vict., c. 57. 262 INJUNCTIONS. of fourteen years, and may be renewed for a further period of seven or fourteen years, according to circum- stances. It is not as a matter of course that the Court protects the proprietor of a patent by granting an injunction against its infringement. The validity of the patent must first be established by a trial, or the patent must have been in public use for some considerable time for the Court to thus interfere {ic). As to a trade mark, for the Court to interfere, it must have been duly registered ; bare registration is suffi- cient prima facie proof of title, and if registered five years, then the Act makes the party's title conclusive, though even after that period an application may be made to expunge it from the register {x). (Jopyri-ht. Copyright is governed mainly by the Copyright Act (y), and exists in an author for the period of his life and seven years afterwards, or for the period of forty-two years from publication, whichever is the longer. No copyright can exist consistently with principles of public policy in any work of a clearly irreligious, immoral, libellous, or obscene description, and, therefore, the Court will not interfere by injunc- tion in cases where there is even a doubt that the work is of such a nature, until that doubt has been removed by a trial of the point {z). lujunction Closely allied to the granting of injunctions to re- af,'ain.st the strain the infringement of copyright, is the granting publication of . . . , , • .-, i i- j- p ■, ,i private of mjunctions to restram the publication of letters letters. without the consent of the writer. This the Court will do, not only where the letters form literary com- positions, but, also, even in the case of merely private letters («) (w) story, 602. (x) Re Wrar/g's Trade Mark, 29 Ch. D., 5D1 ; 54 L. J., Ch., 301. (y) C & (J Vict, c. 45, {z) Story, 603, 604. (a) Earl of Lytton v. Dcvey, 54 L. J., Ch., 293 ; 54 L. T., 121. INJUNCTIONS. 263 Some few other particular instances in which the other in- Court will interfere by granting an injunction may injunctions. also be mentioned. An injunction will be granted to restrain the sailing of a ship contrary to agreement with another person, or where it would be contrary to good faith with other part owners (b). In many cases where a person has contracted not to do an act, the Court will also so interfere, e.g., to prevent an actor acting elsewhere when he has agreed expressly or impliedly to act exclusively at one place, or to pre- vent a person setting up a business contrary to a valid covenant he has entered into not to do so (c). And the Court will grant an injunction to restrain the publication of a libel where such publication would injuriously affect a person's property (d). In- deed, it must be remembered that under the provi- sions of the Judicature Act, 1873, before referred to (e), the Court has a general power in its discretion to grant an injunction in all cases in which it seems either just or convenient so to do ; and an injunction may be equally granted in any division of the Court, and whether that is the direct relief sought, or damages are the direct relief sought, and the in- junction is only asked as ancillary thereto. But the granting of an injunction is a matter The granting resting entirely in the discretion of the Court, and i'njunctToif ^^ consequently no injunction will be granted if it will is a matter in . , ■ ', ^ ^ X the Court's operate oppressively, or mequitably, or contrary to discretion. the real justice of the case. Thus, no injunction will be granted to restrain the further erection of a building where the erection has been acquiesced in or encouraged by the party seeking the relief, nor will an injunction be granted in cases of gross (6) Story, 623. (c) Story, 623. {d) Thorley's Cattle Food Co^npany v. Massam, 6 Ch. D., 5S2 ; 46 L. J., Ch., 7]3; 14 Ch. D., 763. (e) See ante, p. 259. 264 INJUNCTIONS. Lord Caims' Act. laches or delay in enforcing bis rights by the party seeking the relief, as where a patentee has lain by and allowed the infringement to go on for a long time without seeking redress. The Courts constantly decline to lay down any rule which shall limit their power and discretion as to the par- ticular cases in which injunctions shall he granted or withheld (/). In any action for an injunction the Court has power, if it thinks lit, to award damages to the plaintiff either in addition to or in substitution for such injunction (//). Ex parte iujunctiou. Usual terms iinpopcd on {jrantin'r an Different Injunctions may be either pfixpetAial or interlocu- injuuctioiis— — t2£I' ^ perpetual injunction is granted at the hearing of a cause, and an interlocutory injunction is granted at some time previously to the hearing, extending until the hearing or for some less time. In cases of a very pressing nature the Court even goes so far as sometimes to grant an ex parte injunction — that is an injunction on the application of the plaintiff with- out notice to the defendant — for a short time until the matter can he properly heard so as to prevent an immediate threatened injury. In all cases of appli- cations for interlocutory injunctions, however, the interlocutory Court will onlv grant such an injunction upon the injunction. ".,.., n , i • i -i i terms ol the plaintm undertakmg to abide by such order as the Court shall think fit to make thereafter should it ultimately be of opinion that no injunction ought to have been granted, and that damages have been caused thereby to the defendant. Where the plaintiff' obtains an interlocutory injunction upon giving such an undertaking, the defendant is entitled to the benefit thereof, even though it should afterwards (/) story, 624, 625. {(j) 21 & 22 Vict., c. 27 ; and though this Act was repealed by the .Statute Law Kevision Act, 188;5 (Jfi & 17 Vict., c. 49), its principle la preserved, Sai/rrs v. ColU/ir, 28 (Jli. D., lU."! ; 54 L. J., Ch., 1. INJUNCTIONS. 265 be decided that the injunction was wrongly granted by the mistake of the Court itself (h), A writ of Ne exeat regno, being in the nature of an Writ of Ne injunction, may properly be referred to here. It is a writ which is issued in certain cases to prevent a person from leaving the realm. The origin of the writ is obscure, but undoubtedly in early times it was applied only to great political objects and purposes of State, for the safety or beneht of the realm, al- though, in later times, it came to be applied to merely civil purposes in aid of the administration of justice in cases of equitable debts and claims (i), e.g., to prevent a trustee leaving the country where he had not accounted to his cestui que trust. It was, how- ever, only applied to equitable claims and not to legal claims, except in two cases, viz. : (1) Where alimony had been decreed to a wife ; and (2) Where a balance was admitted by a defendant, but the plaintiff claimed a large ;sum. But Law and Equity being now fused, there is WritofiVe no longer any practical distinction between an equit- Jjjiy igg^ejj able and a legal debt, and as provision has been in cases in o ' ^ which arrest made by the Debtors' Act, 1869, for the arrest provided for of a debtor in certain cases when he is going p^^btore' Act, abroad (j), it appears that the writ will only be 1869. issued in cases coming within its provisions, that is to say, the debt or claim must be to the ex- tent of £50 at least, and, except in the case of penalties other than a penalty under a contract, it must be shown that the absence of the defendant from England will materially prejudice the plaintiff in the prosecution of his action (k). (h) Griffiths v. Blake, 27 Ch. D., 474 ; 53 L. J., Ch., 965. (t) Story, 1,008-1,010. Ij) 32 & 33 Vict., c. 62, sec. 6. See Indermaur's Principles of Common Law, 363, 354, (k) Drover v. Beyer, 13 Ch. D„ 242 ; 49 L. J., Ch., 37. 266 ^ Action to perpetuate testimony. CHAPTER VIII. JUKISDICTION OF THE COURT OF AN EXCEPTIONAL NATURE. In certain cases the Court will entertain an action brought by a person not to obtain redress in respect of an injury or to enforce a right, but merely to per- petuate or preserve testimony. In doing this, the Court of Chancery was said to act as an auxiliary to Common Law, for the matter might be one within its jurisdiction, and all that the Court did was to pre- serve evidence to enable the person to thereafter prosecute his right there. The essence of such an action. The essence of a proceeding of this character has always been that the plaintiff had some right which he could not then litigate, and that he feared that when the day arrived for litigation, the evidence which would support his right might be no longer obtainable through death of the witnesses or other- wise. The Court then will allow the evidence to be taken, that it may be preserved for the future day when the litigation takes place. The plaintiff must have some real interest in the matter in respect of which ho desires to perpetuate evidence, and if his interest is capable of being immediately barred by the defendant the Court will not give the relief sought, thus the Court will not entertain such an action brought by a remainderman against a tenant in tail in possession (/). (0 story, 10.32. JUEISDICTION OF THE COURT, ETC. 267 Originally the Court would only perpetuate testi- Original mony in respect of an actual right to property (m) ; {o^perpetuatc but it was afterwards enabled to do so in respect even testimony , IP SpUcI present of a mere chance of succession, e.g., that ot an jurisdiction. heir-at-law, or in respect of an honour, title, or dig- nity {n). An action to perpetuate testimony is not ordinarily Action to brought to a hearing, for there is nothing to hear, the Simony^ot whole design being the preservation of the evidence, P'^^^^"']"^ and when that is taken the proceedings usually ter- hearing. minate, and the plaintiff pays the defendant's costs, unless, indeed, the defendant has taken advantage of the proceedings to perpetuate testimony also on his own behalf, when usually each party pays his own costs. But this is only a general rule, and the costs of an action to perpetuate testimony are, as in other actions, in the discretion of the Court, and it would appear that either of the parties is entitled, if he so desire, to bring the action to trial, for the purpose of determining the question of costs (o). To entitle a party in subsequent litigation to use When a evidence that has been taken in an action to per- useevi(^nce petuate testimony, he must, unless the other party so taken. consents to it being used, show that the deponent is dead, or beyond the jurisdiction of the Court, or unable from sickness or other infirmity to attend the trial (p). There was formerly another kind of proceeding Bill to take evidence de ~~~ "^ bene esse. (m) Townskend Peerage Case, 10 CI. and Fin., 289 ; JDurslcy v. Fitzhardinge, 6 Ves., 251. (n) 5 & 6 Vict., c. 69. This statute was repealed by the Statute Law Revision A ct, 1883 (46 & 47 Vict., c. 49), but its provisions are in substance now contained in Order XXXVIL, rules 35'38, which now regulate the practice on the subject. See Indermaur's Manual of Practice, 183, 184. (o) Daniels' Chancery Practice, 1515. \p) Order XXXVII., rule 18. 268 JURISDICTION OF THE COURT OP with reference to evidence, called a bill to take evid- ence de bene esse, which was a suit brought in Chan- cery when an action was pending at Common Law, asking to have the evidence taken of aged or infirm witnesses, or of a witness going abroad, or of a single witness in support of a case even though not aged or infirm, or going abroad. The idea was that before the trial could come on, the evidence might be lost, and the Court of Chancery, therefore, was here an auxiliary to the Courts of Common Law. The broad distinction between a bill to take evidence de bene esse and a bill to perpetuate testimony was, that the latter could only be brought in respect of a future right which could not be litigated at that time, whilst a bill to take evidence de bene esse could only be brought when an action was pending, and not before (q). Now obsolete. By reason of powers given by various statutes to the Courts of Law to examine witnesses before trial, the jurisdiction of the Court of Chancery to take evidence de bene esse has long been practically obso- lete, and such an action could not be maintained now, the division in which the action is pending having full power, on interlocutory application by sum- mons in the particular action, to order the examina- tion upon oath before the Court, or any judge, or any officer of the Court, or any other person, and at any place, of any witness or person (/•)• Discovery. ] Another matter of special relief formerly afforded in Equity has also long become obsolete in like manner, viz., Discovery. Of course, in a sense, in nearly every proceeding in Equity, discovery is a part of the relief sought— that is using the word (y) story, 1,033, 1,034. (r) Oiclor XXXVII, rule C. AN EXCEPTIONAL NATURE. 269 in its widest application; but by a Bill for Dis- covery strictly so called was meant a Bill which asked for no relief, but which simply sought the dis- covery of facts resting in the knowledge of the de- fendant, or the discovery of deeds, or writings, or other things, in the possession or power of the de- fendant, in order to maintain the right or title of the party asking it in some suit or proceeding at law (s). Here again the Court of Chancery acted as an auxiliary to the Courts of Common Law, and enabled the plaintiff to get what he sought, and then, strengthened by that, to return to the Common Law Court, and proceed with his action there. The plaintiff was indulging in something outside the action, however, and had to pay his own costs of getting the discovery in Equity. But Obsolete. Bills for Discovery have long been obsolete, power having been conferred by various Statutes on the Courts of Common Law of granting discovery as an interlocutory step in the existing action ; and there are, of course, now full provisions to this effect under the existing Judicature Practice (t). The Court of Chancery has never had any general Proceedings jurisdiction over wills, and the proper tribunal at the ^iffs.^ present day with regard to them is the Probate Divi- sion of the High Court of Justice. In some cases, however, the Court has exercised a practical juris- diction, founded upon considerations of suppressing interminable litigation, and to give security and repose to titles, by enquiring, at the instance of devisees and others, into the validity of a will, and establishing it and granting a perpetual injunction against the heir-at-law and others, to restrain them from contesting its validity in future (u). It appears (s) story, 1,016. (t) See Inclermaur's Manual of Practice, 100-107. («) Story, 995. 270 JimiSDICTION OF THE COURT OF Action in the nature f»f a 1)111 of peace. Instances. useless to consider the details of the former prin- ciples on which the Court acted in this manner, for practically the validity of nearly all wills may now he determined in the Probate Division (?c). It must be borne in mind, however, that the Probate Division has no jurisdiction over a will which deals only with real estate, and which also does not contain any appointment of an executor, and this even although the will directs a conversion of the real estate (.r) ; consequently in such exceptional cases an action may still be brought in the Chancery Division in the nature of a bill to establish the will, being by the devisee under the will against the heir-at-law (?y). The Court of Chancery has long exercised a juris- diction in respect of what has been known as a Bill of Peace, and would now be styled an action in the nature of a bill of peace, a proceeding of rare prac- tical occurrence. It is a proceeding in which the plaintiff seeks to establish and perpetuate a right which he claims, and which from its nature may be controverted by different persons, at different times, and in different actions; or when several attempts have already been unsuccessfully made to overthrow the same right, and justice requires that the party should be quieted in the right, if it is already, or can be now, sufficiently established (0). An action of this nature may be brought by a lord of a manor against his tenants for an encroach- (w) Allen V. McPherson, 1 H. L. Cas., 191 ; Meluisk v. Milton, 3 Ch. D., 27 : 45 L. J., Ch., 83(). (r) In the goods of Jane Harden, L. R., 1 P. and D., .^25. (y) In the goods of .Jordan, L. R., 1 P. k D., 555 ; 37 L. J., P. & M., 22. As regards a will of a married woman, however, merely executing a power of appointment over real estate, the Court has no jurisdiction to grant Probate, even though the will appoints an executor, unless it is shown that there is some personal property which will vest in such executor. {In the goods of Tomlinson, G P. Div., 61 ; 50 L. J., P. D. & A.. 74 : liromirif/ij v. nke, 7 P. Div.. (il ; 51 L. J., P. D. & A., 29. Jn rr Cuhhon, W. N., 18.S(; p., 15fi.) {=) Story, 567. AN EXCEPTIONAL NATURE. 271 ment under color of a common right ; or by tenants of a manor against the lord for disturbance of a common right ; by a party interested to establish a toll due by custom ; or by a person having a right which he has repeatedly established by trial in the ordinary way, and yet there is danger of future liti- gation and obstruction to his right, from new attempts to controvert it (a). The obvious reason for the exercise by the Court Reason of this extraordinary jurisdiction, is to procure re- proceeding, pose from what might prove to be perpetual litiga- tion, and therefore the proceeding was justly called a Bill of Peace. A general doctrine of public policy is, that an end ought to be put to litigation, and above all to fruitless litigation. If actions might be continually brought to litigate the same ques- tions as often as the parties choose, it is evident that remedial justice would soon become a mockery, for the termination of one action would only become the signal for the institution of a new one, and the expenses might become ruinous to all the parties. The Court, by exercising the jurisdiction it does, is enabled to suppress useless litigation, and to pre- vent multiplicity of suits (b). / (a) Story, 568, 569. (6) Story, 567, 568. GENERAL INDEX. Abatement of Legacies, 56, 57 Accident, Definition of, 102 Difference from in Equity and in ordinary sense of word, 102 Defective execution of powers, 102 — 104 No relief against non-execution of powers, 104 Wrong payment of legacies, 105 Reduction of stock, 105 Lost bonds, 105 Accounts, Three kinds of, 76 Relief given as regards stated and settled accounts, 77, 78. Surcharging and falsifying, 78 Appropriation of payments, 78, 79 Mortgagee in possession liable to furnish, 91 Acquiescence, 47, 125 Actor, injunction to restrain him acting contrary to agreement, 263 Actual Fraud, 112—116: See Fraud Ademption : See Satisfaction. Of specific legacy, 56 Doctrine of as regards legacies and portions, 188, 189 Administration, 53 — 71 General points as to, 53 Duties of executor as to, 53 — 50 Legacies, 57, 58 T 274 GENERAL INDEX. Administration — cnniimied. Distinction between legal and equitable assets, 58 Order for payment of debts out of legal assets, 58, 59 Of insolvent estates, 59 — G2 Order of application of assets, 62 — 6G Marshalling of assets, 67 — 71 Of assets of partnership, 75, 7G When proceedings pending for, action against executor or administrator may be restrained by injunction, 256 Administrator, Duties of, and generally as to administration, 53 — 71 Eestraining proceedings against, 256 Advertising for Crkditors, 54 Annual Rests, in taking mortgagees' accounts, 91 Anticipation Clause, May be annexed to gift to married woman, 236, 237 Effect of, 237—240 Former distinction as to Avhetlicr fund producing in- come, or not, 239, 240 Provision of Conveyancing Act, 1881, as to, 240 Appointment, Of new trustees, 37 Under power must not be fraudulent or excessive, 127, 128 Illusory and exclusive appointments under powers, 128, 129 Appointments under Powers : See Powers. Apportionment and Contribution, 218 — 223 Explanation of these expressions, 218 Reason of remedy being peculiarly in Equity, 218 No apportionment of apprentice fee on death of prin- cipal, 218 Otherwise in case of principal's bankruptcy, 218 Apportioning purcliase-money between tenant for life and remainderman, 219 Apportionment of liabilities, 219 In case of incumbrances on an estate, 220, 221 Contribution between sureties, 222, 223 genekal index. 275 Apprenticeship Fee, Not apportioned in case of death of principal, 218 Otherwise in case of bankruptcy of principal, 218 Appropriation of Payments, 78, 79 Arbitration, In disputes between partners, 74, 75 Assets, Distinction between legal and ec|uitable, 58 Order for payment of debts out of legal and equitable assets, 58, 59 Order of application of, 62 — 66 Marshalling of 67—71 Of partnership, and administration of, 75, 76 Auctions, Frauds on, 127 Aula Eegis, 1 Auxiliary Jurisdiction, 6 B. Bankruptcy, Does not exonerate trustee as regards fraudulent breach of trust, 48 Rules of to prevail in insolvent estates, 59, 60 Administration of insolvent estates in, 60, 61 Transfer of administration proceedings to, 61, 62 Restraining proceedings against a bankrupt, 256, 257 Bill of Sale, 80 Bona Fide Purchaser, 10, 108 Bonds, Loss of could be relieved against on ground of accident, 105 Boundaries, 171, 172 : See Settlement of Bounda- ries Breaches of Covenants, Consequence of and provisions of Conveyancing Act, 1881, 226—228 Breaches of Trust, Liability of trustee for, 47 Consequence of laches or acquiescence, 47 276 general index. Build, Contract to, not generally specifically enforced, 141 c. Cancellaria, 2 Cp:stui que Trust : ^V*^ Trustees. Must give release to trustee on his office terminating, 52 The ordinary rule as to appropriation of payments does not apply between cestal (pie trust and trustee, 79 Chancery, Origin of, 1 Styled a Court of Conscience, 2 Evil repute of, 4 , Modern substitute for old Court of, 1 7 Matters assigned to exclusive jurisdiction of Chancery Division, 17 Charitable Trusts, 35, 36 Charity, No marshalling in favor of, 68 — 70 Debentures may be given by will to, 69 (note h) Chattels, Where the Court will decree specific performance of contract relating to, 137, 138 Provisions of Mercantile Law Amendment Act, 185G, as to specifically enforcing contract for, 1 38 Child, 151—163 : Sec Infants— Guardian— Satisfac- tion. Common Injunctions, 253 Common Sailors, Dealings with, 126 Company, Proceedings against, after winding-up order, may be restrained, 256 Assets of, may be restrained from being applied to- wards expenses of application to Parliament, 258 Compensation, When specific performance decreed with, 142, 143 l.s the rule in cases of election, not forfeiture, 175, 176 general index. 277 Compositions Of a secret nature constitute a fraud on other creditors, 127 Compromises of Doubtful Rights, Eulesas to, 110, 111 Concurrent Jurisdiction, 6 Condition, For re-purchase, 82 In restraint of marriage, 117 Confidential Relationships, Position of persons occupying, 1 20 Consolidation, Doctrine of, 98—100 Defence of, 98, 99 Extension of doctrine of, 99 Modification of doctrine of, 99, 100 Provision of Conveyancing Act, 1881, as to, 100 Constructive Fraud, Definition of, 112 Marriage brokage contracts, 117 Conditions in restraint of marriage, 117 Frauds on marriages, 118 Agreements to influence testators, 118 When transaction affected by, absohitely void, 119 By reason of fiduciary relationships, 119 — 123 Position of trustees, 119 Position of solicitors, 120, 121 Gift to solicitors, 121 Position between principal and agent, 121, 122 Directors and promoters of companies, 122 Guardian and ward, 122 Parent and child, 122, 123 May arise on account of engagement to marry existing, 123 Position of expectant heirs, 124 — 126 Position of common sailors, 126 Engagement not to bid at auction, 127 Secret compositions, 127 By reason of Statutes, 127 278 (lENERAL INDEX. Constructive Fraud — continued. Fraudulent execution of powers, 127, 128 Excessive execution of powers, 128 Illusory appointments, 128, 129 CoNSTiiucTiVE Notice, 96 Constructive Trust: See Trusts. Definition of, 30 Instance of, 33 Contract Cannot be avoided by paying sum of money provided to be paid on breach, 230 Unless distinctly alternative, 231 Contract : See Spkcific Performance. Nature of for Court to decree specific performance, 130—132 AVhen time essence of, 145 Effects a conversion, 205 Option given to purchase, when accepted constitutes a contract, 205—208 Contribution : See Apportionment and Contribution. Between sureties, 222, 223 Conversion, By trustees, 39, 40 The doctrine of, generally, 203 — 215 Definition of the doctrine of, 203 Explanation of the doctrine of, 203 Example of the doctrine of, 204 Ways in which it may take place, 204 Doctrine of, as laid down in Fletcher v. Ashhnrner, 204 Taking place by reason of contract, 205 Notice to treat does not by itself effect, 205 Option to purchase effecting, 205 — 208 Taking place by force of direction, 208, 209 Time from which it takes place, 209 Who is entitled to surplus of mortgaged property after death of mortgagor, 210 Effect of doctrine of in particular cases, 210 Result of failure of objects for which directed, 210 — 215 GENERAL INDEX. ^79 Conversion — continued. Case of Ackroijd v, Smithson, and its reason, 211 — 214 Distinction in case of failure of objects of, according to whether directed by deed or will, 212 As to the quality in which property results on failure of objects for which directed, 212 — 214 Taking place by reason of sale under order of Court, 215 Copyholds, As to relieving against forfeiture of, 226 Copyright, Injunction to restrain infringement of, 261 Eight to, 262 Covenants, Breaches of and provisions of Conveyancing Act, 1881, 226—228 Cannot be avoided by paying money provided to be paid on breach, 230, 231 Unless performance of covenant on payment of money distinctly alternative, 231 Creditors, Eights to upset trusts, 26 Satisfaction in case of legacies to, 193 — 195 Court leans against satisfaction in case of legacies to, 193, 194 Instances showing this, 194, 195 Cumulative Legacies, 196 — 198 Curtesy is allowed out of money directed to be invested in land, 210 Custody of Infants, 151—163 : See Infants— Guar- dian. D. Damages, May be awarded in actions for specific performance, 146, 147 Or in action for injunction, 264 Undertaking as to, on granting of interlocutory in- junction, 264, 265 280 general index. De ben?: esse, Bill to take evidence, 267, 268 Such a proceeding as a separate action now obsolete, 268 Debts, Order for payment of, 58 — 60 Liability of difterent assets to, 62 — 66 May be satisfied by legacies, 193 — 196 Distributive share does not operate as payment of a debt, 202 Liability of married woman's separate estate for, 242 Defective Execution Of powers relieved against, 102 — 104 Devolution Of trust estate, 38 Direction Effecting a conversion, 208, 209 Directors Of companies stand in fiduciary position, 122 Discovery, As to defence of boiui fide purchaser for value, 1 Bill for, and generally as to, 269 Dissolution of Partnership, Difterent xvays of, 72, 73 Grounds for decreeing, 73 Divisions of Equity, 6 Double Portions: See Satisfaction. The Court leans against, 189 Dower Is allowed out of money directeil to be converted into land, 210 E. Election, 173—183 Definition of doctrine of, and reason for, 173 Instance of, 174 Occurs whether party knc^w property not his own, or thought it was his own, 174 GENERAL INDEX. 28 1 Election — continued. Where testator has partial interest in property he has given, 175 Compensation and not forfeiture is the rule, 175, 176 In the case of appointments under powers, 176 May arise in deeds as well as in wills, 177 By infant woman who has covenanted to settle, 177, 178 When a person may take one gift and reject another, 178 Parol evidence not admitted to raise a case of, 178 Express, 179 Implied, 179 Four principles as to implied election, 179, 180 Acts not amounting to, 181 Death of person entitled to elect without electing, 181 In the case of persons under disability, 181 — 183 Equitable Mortgages, 84, 85 Equitable Waste, Injunction to restrain, 259 Equity, Origin of, 1 Selden's remarks on, 2 Original defects in, 3 Growth of, 3, 4 Real foundation of, 4 Maxims of, 6 Now a fixed system, 5 Definition of, 5 Divisions of, 6 Maxims of, 7—16 Rules of, now prevail, 19 Never wants a trustee, 37 Equity of Redemption, How extinguished, 81, 82 Limitations on right of, 86, 87 Equity to Settlement, 246—251 Doctrine of, and its origin, 246, 247 Extension of doctrine, 247 282 GENERAL INDEX. Equity to Settlement — continued. Not now an important doctrine on account of Married Women's Property Act, 1882, 247, 248 May still be claimed, 248 Out of what projierty it can be claimed, 248 Against whom it can be enforced, 249 Amount to be settled on wife, 249, 250 Nature of the right of, 250 Nature of settlement made when enforced, 250 How right of lost or waived, 250, 251 Essence of Contract, When time of, 145 Establishing a Will in Equity, 269, 270 Evidence, Parol, not admitted to raise case of election, 178 To rebut satisfaction, 190—192, 195 To show whether legacies cumulative or substitu tional, 198. Action to perpetuate, 266, 267 Taking evidence de bene esse, 267, 268 ExcEssivi; Execution of Powers, 128 Exclusive Aitointment, under power, 129 Exclusive Jurisdiction, 6 Matters assigned to Chancery Division, 17,18 Executed and Executory Trusts, 28, 29 Executor, His duties, 53, 54 Year allowed to, 53, 54 May compound debts, 54 May prefer one creditor, 55 Retainer by, 55 Restraining proceedings against, 256 Executor's Year, 53, 54 Expectant Heirs, Rules of the Court with regard to, 124 — 126 Who is an expectant, 124 Provision of 31 Vict., c. 4, 124 GENERAL INDEX. 283 Expectant Heirs — continued. Post obit bonds, 125 Confirmation of voidable transactions with, 125 Rights of, may be lost by laches or acquiescence, 125, 126 Extension of doctrine of Court as to, 126 Express Trusts: See Trusts. Extrinsic Evidence, Allowed to rebut doctrine of Equity, 191, 192, 195 But not to contradict written instrument, 192 To show whether legacies cumulative or substitutional, 198 F. Failure Of objects for which conversion directed, 210 — 215 Falsifying Accounts, 78 Family Compromises, Rules as to. 111 Father : See Infants. Is natural guardian of his children, 151, 152 When children removed from custody of, 154, 156 General position of, with regard to his children, 155 Formerly had absolute right to custody of children unless guilty of misconduct, 155, 156 Modification of this rule by Act of 1873, 156—158 Has right to have children brought up in his own religion, 157 Foreclosure. Of what it consists, 93 When advisable, 93 When mortgagee may sue after, 95 Foreign Court, Restraining proceedings in, 257 Foreign Law, Mistake of. 111 Forfeiture : See also PenAlI'ies. Not the rule on election, but compensation, 175, 176 284 GENERAL INDEX. Forfeiture — continued. Origin of relief given in Chancery against, and general principles thereon, 224 Relief against by Statute, 224, 225 Nature of cases in which Court relieves and does not relieve, 225, 226 Provisions of Conveyancing Act, 1881, as to breaches of covenant, 227 Provisions for, bad in themselves, 228 Distinction between and penalties, 228 Special circumstances enabling Court to relieve against, 229 Fraud, 111—129; See also CONSTRUCTIVE Fraud. As regards creditors and purchasers, 26, 27 What is, 112 Definitions of actual and constructive, 112 Actual, 112—116 Suggestio falsi, 113 Svppressio veri, 1 1 •'> Silence not ordinarily, 113 Position of vendors and purchasers as to, 113, 114 As regards trustees, insurances, and sureties, 114 As regards lunatics, &c., and intoxicated persons, 115 Proof of, 115, 116 Inadequacy of price not usually fraud, 116 Only renders transaction voidable, 116 Constructive, 117—129 Cancellation and delivery up of instrument on ground of, 129 Specific performance may be granted of contract pre- vented from being reduced into writing by, 135 On husband's marital rights, 234, 235 Fraududknt Exkcution of Powers, 127, 128 Fusion of Law and Equity, 17 Future Advances, Mortgage for, 98 G. General Personal Estate, Primary fund to pay debts, 62 When not so, 65 general index. 285 Gifts, A beneficial one may be accepted and a disadvan- tageous one rejected, 178 Goodwill, Of partnership business, 75 Contract for sale of, not specifically enforced, unless connected with premises, 142 Contract for sale of medical practice or solicitor's business, 142 Guardian : See Infants. Position of, as to dealing with ward, 122 Father is the natural, 151 Power of appointing under Act of 1886, 152 Appointment of by a stranger, 153 Court, 153, 154 Removal of, 154 No account required from, 161 Duty of, 162 Appointment of, to foreign child, 163 H. Heirs : See Expectant Heirs. High Court of Justice, Present division of, 17 Husband and Wife, 232 : See Married Women Mortgage of wife's property for husband's benefit, 32, 33 Fraud on marital rights of husband, 234, 235 I. Idiots, When transactions with bad or fraudulent, 115 Jurisdiction as to, 163, 164 Illegitimate Child, No presumption of satisfaction arises in case of gift to, 186 Illusory Appointments, 128, 129 286 GENERAL INDEX. Implied Trust : See Trusts. Definition of, 30 Instance of, 30 Parol evidence to rebut presumption of, 30 Inade(juac;y of Prick Not in itself fraud, 11 G Indemnity, and reimbursement of tnistees, 49 Infants, 151 — 163 Origin of jurisdiction as to, 151 Father natural guardian of, 151 Mother's position as to, and particularly with reference to Act of 1886, 152—153 Appointment of guardian by a stranger, 153 Appointment of guardian by Court, 153, 154 Removal of guardians of, 154 Removal of, from custody of father, 154, 155 When the Court will interfere with father, 155 Formerly father had absolute right, unless guilty of misconduct, 155, 156 Act of 1873 as to custody of, 156—158 Religion in which to be brought up, 157 How father may obtain possession of, if wrongfully withheld from him, 158 Maintenance of, 158 — 161 When they are wards of Court, 161 General rules as to wards of Court, 161 Duty of guardian of, 162 Marriage of ward of Court, 162, 163 Appointment of guardian to child of foreigner, 163 Covenants to settle by, 177, 178 How they elect, 182, 183 Injunctions, In the nature of specific performance to prevent doing things contrary to contract, 141 To prevent marriage of ward of Court, 163 Generally as to, 253—265 Definition of an injunction, 253 Of two kinds, 253 Common injunctions, 253, 254 GENERAL INDEX. 287 Injunctions — continued. Restraining proceedings in another Court, 253, 254 Provisions of Judicature Act, 1873, and position now hereon, 254, 255 May be granted to restrain institution of proceedings, 255 Restraining proceedings against executors or adminis- trators after decree for administration, 256 Or against company after winding-up order, 256 Or against bankrupt, 256, 257 Restraining proceedings in a foreign Court, 257 Restraining applications to Parliament, 257, 258 Special injunctions, 258 To prevent waste, 258 To prevent trespass, 258 Provisions of Judicature Act, 1873, extending power of Court to grant, 259 To restrain waste, and as to equitable waste, 259, 260 To restrain nuisances, 260, 261 To restrain infringement of patent, copyright, or trade mark, 261, 262 Against publication of private letters, 262, 263 Other instance of granting of, 263 The granting of is a matter in Court's discretion, 263, 264 Damages may be granted in actions for, 264 Ex parte, interlocutory, and perpetual injunctions, 264, 265 Undertaking as to damages on granting of interlocutory injunction, and effect of, 264, 265 Restraining persons going abroad, 265 Insolvent Estates, Provisions of Judicature Act, 1875, as to, 59 Provisions of Bankruptcy Act, 1883, 60, 61 Institution of Proceedings, May be restrained by injunction, 255 Insurance, By mortgagee, 94, 95 Full disclosures must be made in effecting, 114 288 general index. Interest, On legacies, 57, 58 Provision in mortgage for converting into principal, 83 Provision in mortgage for increase of, 83, 81 Intoxicated Persons, Contracts with, 115 Intkinsk; Evidence, To rebut satisfaction, 191 Investment, Powers of trustees as to, 40, 41 Position of trustees who have discretionary powers of, 42 On mortgage, rules as to, 43, 44 Liability of trustees for non-investment, 4G J. Jurisdiction of Equity, G L. Laches, Maxim as to, 15, IG Definition of, 47 Consequence of, 47 May cause an expectant to lose right to set transaction aside, 125 Landlord and Tenant, Breaches of covenants, and provisions of Conveyancing Act, 1881, 226—228 Lapse, 56 Latent Defects, Must be disclosed by vendor to purchaser, 1 1 3 Leases, By mortgagor, 86 By mortgagee, 92 Legacies, 5G — 58 Relief given against wrong payment of, on ground of accident, 105 GENERAL INDEX. 289 Legacies — continued. Revocation of, by mistake, 109 Satisfaction or ademption of, in case of children, 187, 188 When legacy to a stranger satisfied by subsequent advancement, 193 When a legacy operates in satisfiiction of a debt, 193, 194 Extrinsic evidence admitted to show legacy not a sat- isfaction of a debt, 195 Question as to whether cumulative or substitutional, 196—198 Lessor and Lessee, Breaches of covenants, and provisions of Conveyancing Act, 1881, 226—228 Letters, Injunction to restrain publication of, 262 Liabilities, Apportionment of, 219 — 223 Libel, Injunction to restrain publication of, 263 Lien, For unpaid purchase-money, 34 Life Tenant, Position of, on paying oflF incumbrance on an estate, 220 Limitation, Statutes of, As regards accounts, 77 Have no application to claims by cestui que trust against trustee, 77 As regards mortgages, 90 Liquidated Damages Distinguished from penalties, 229, 230 Loco Parentis, What is putting oneself in, 185, 186 Lost Bonds, 105 Lunatics, When transactions with bad on ground of fraud, 115 Jurisdiction as to, 163, 164 How they elect, 183 V 290 GENERAL INDEX. M. Maintenance of Infants, 158—161 Marital Rights, Fraud on, 234, 235 Marriage : See also Married Women, Conditions in restraint of, 117 Fraud on a, 1 1 8 Engagement for may cause transaction to be 1)ad as constructive fraud, 123 When representations made on must be made good, 134, 135 Effect of on property of woman, 232 — 234 Marrlvoe Brokage Contracts, 117 Married Women, Covenant to settle by infant married woman, 177, 178 How they elect, 182 Position of as to electing where property settled with- out power of anticipation, 182 Anticipation clause and provision of Conveyancing Act, 1881, 182 Generally as to, 232 Doctrines of Court as to, arc all in connection with property, 232 Position as to property of, at Common Law and by Statute, 232—234 Fraud on husband's marital rights, 234, 235 Separate estate, 235, 23G What words will create separate estate, 236 Clause against anticipation, 236, 237 Disposal of separate estate by, 237 No need now to expressly settle property for separate use of, 237, 238 Effect of anticipation clause, 238, 239 Gift of stock or money to, without power of anticipa- tion, 239 No distinction as regards anticipation clause, whether the fund producing income or not, 239, 240 Provision of Conveyancing Act, 1881, as to anticipa- tion clause, 240, 241 GENERAL INDEX. 291 Married Women — continued. Liability of their sejDarate estate, 241, 242 Position of, joining in breach of trust, 242 What separate estate of, liable for debts, 242 No personal decree against, 242, 243 Receipt by husband of wife's separate estate, 243 Devolution of separate estate of, 243, 244 Protection to, in respect of separate property, 244 Pin-money, 244, 245 Paraphernalia, 245, 246 Distinction between paraphernalia and separate estate, 24G Equity to a settlement, 246 — 251 Right of by survivorship, 251, 252 Separation deeds, 25 2 Marshalling of Assets, 67 — 71 Instance of, 67 As regards legatees against heirs, 67 Between legatees, 68 No marshalling in favour of a charity, 68, 69 Instance of this, 69 By direction of testator, 70 marshallinc4 of securities, 70, 71 Maxims of Equity, Equality is equity, 14 Equity acts in personam, 14, 253, 254 Equity follows the law, 8, 28 Equity imputes an intention to fulfil an obligation, 12, 184, 200 Equity looks on that as done which ought to be done, 12, 203 Equity never wants a trustee, 37 Equity regards the spirit and not the letter, 9, 224 Foreclose down, redeem up, 87 He who comes into Equity, must come with clean hands, 13 He who seeks Equity must do Equity, 13, 125, 126 Ignorantia facti excusat, 106 Ignorantia legis neminem excusat, 106, 110, 180 No right without a remedy, 7 u 2 292 GENERAL INDEX. Maxims of Equity— cow/? m^erZ. Once a mortgage always a mortgage, 81 Qui prior est tempore 2)oticr est jure, 9 Quod ah initio non valet hi tradu temporis non cmivalescit, 119 Vi(jilantihus non dm'inientlbns (cquitas subvcnit, 15, 48, 77, 125 Where the equities are equal the law prevails, 9 Mhdical Practice, Whether the Court will decree specific performance of contract for sale of, 142 Misconduct of Father, Ground for taking children from his custody, 154, 155 Misdescription, Effect of, as regards specific performance, 142 — 144 Mistake, 105—111 Definition of, 105, lOG Of fact relieved against, 106, 107 Rectification of instruments on the grouiul of, 107, 108 May sometimes be implied, 108 No relief on ground of, against bona fide purchaser, 108 Revocation of legacy on ground of, 1 09 Of law not generally relieved against, 109 Exceptions, 109, 110 Compromises, 110, 111 Of foreign law, 111 Mortgagee : See Mortgages. Mortgages, 80—101 Rule as to payment of mortgage debts in administra- tion, 66 Definition of a mortgage, 80 Vivum radium, 80 Mortuum vadium, 80 Effect of at law and in Efjiiity, 81 Once a mortgage always a mortgage, 81 How Equity of redemption may be extinguished, 81, 82 i GENERAL INDEX. 293 Mortgages — continued. Distinction between and condition for re-purchase, 82, 83 Provisions for compound interest, and for increasing rate of interest, 83, 84 Modes of effecting, 84 Equitable, 84, 85 Welsh mortgage, 85 Improvements in mortgagor's position by legislation, 86, 87 Limitations of mortgagor's right to redeem, 8G, 87 Foreclose down, redeem up, 87 Who may redeem, 87 Reconveyance on death of mortgagee, 88 Assignment of debt on payment off, 89 Remedies of mortgagee may be exercised concurrently, 90 Time for suing on mortgage, 90 Position of mortgagee in possession, 90, 91 As to annual rests, 91 What mortgagee may add to his mortgage money, 91, 92 Leases by mortgagee, 92 Power of mortgagee to cut timber, 92 Mortgagee's power of sale, 93 Foreclosure, 93, 94 Mortgagee's powers of insuring and appointing re- ceiver, 94, 95 When mortgagee may sue after foreclosing, 95 Priorities of, 95, 96 Tacking, 96—98 For future advances, 98 Consolidation, 98—100 Position on payment off of, 100, 101 Who is entitled to surplus of mortgaged property after mortgagor's death, 210 Mortgagor: See Mortgages. MoRTUUM Vadium, 80 Mother: See Infants. Rights of now under Guardianship of Infants' Act, 1886, 152, 153 21)4 GENERAL INDEX. Mother — continued. Rights of uiuler Infants' Custody Act, 1873, 15G — 158 N. Ne Exeat Kegnu, Origin of writ of, and generally as to, 205 Writ of, now only issued in cases coming within the Debtors' Act, 1869, 2G5 New Trustees, Appointment of, 37 NoN Compos Mentis, Contracts with persons, 115 NoN -execution of Powers Not generally relieved against, 101 Notice, What will amount to constructive, 1)0 Prevents tacking, 97 To treat, does not by itself effect a conversion, 205 Nuisance, Injunction to restrain, 200, 201 General principles as to granting injunction to restrain, 261 o. Once a Mortgage always a ]\Iortgage, 81 Open Accounts, 76, 77 Option to Purchase, Effecting conversion, 205 — 208 Order LV., rule 3, 51, 52 P. Paraphernalia, Last property resorted to in adniinisLering husljand's estate, 63, 246 What it is, and of what it consists, 245 Distinction between and separate estate, 240 Parent and Child, Position of, 122, 123 general index. 295 Parliament, Restraining application to, 257 Parol Contract : See Specific Perforiniance, When Court will decree specific performance of, 132 — 134 Parol Evidence, Not admitted to raise case of election, 178 Admitted to rebut doctrine of Equity, 190 — 192, 195 To show whether legacies cumulative or substitutional, 198 Parol Variation, When Court will decree specific performance of con- tract with, 136, 137 Partition, 165 — 171 Different ways of effecting, 165 Remedy at law compared with remedy in Equity, 165, 166 Mode of effecting, 166 Of what property may be made, 166, 167 Who may claim, 166, 167 As to directing sale in action for, 1 67 Provisions of Partition Act, 1868, 167, 168 Distinction between the three provisions of the Act of 1868, 168, 169 Difficulties arising under Act of 1868, 169 Provisions of Partition Act, 1876, 169 — 171 Costs of suit for, 171 Partnership, 72 — 79 Definition of, 72 Different ways in which it may be dissolved, 72, 73 Grounds for Court decreeing dissolution of, 73 Procedure in suit for dissolution of, 73, 74 Exceptional relief in cases of, 73, 74 Arbitration in case of disputes, 74 Assets of, 75 Goodwill, 75 Administration of assets of, 75 Accounts, 76 — 78 290 genekal index. Part Perfohmaxck, Wliat sufficient to enable Court to decree specilic per- formance of parol contract, 133, 131 Patent, Injunction to restrain infringement of, 2G1, 262 Eight to, 261,202 Patent Dkfects. Need not be disclosed by vendor to purchaser, 1 1 3 Payment off of Mortgage, Position on, 100, 101 Peace, Bill of, 270, 271 Instances of, 270 Reason for, 271 Penalties, Doctrine of the Court as to, applied to mortgages, 83, 8-4 Origin of relief given in Chancery against, 224 General principles as to relieving against, 224 lielicf against by Statute, 224, 225 Nature of cases in which Court relieves, 225 Provision to secure payment of purchase-money, 225, 226 Nature of cases in which Court will not relieve, 226 Provisions of Conveyancing Act, 1881, as to breaches of covenant, 227 Provisions for, which are bad in themselves, 228 Distinction between, and forfeitures, 228 Special circumstances enabling the Court to relieve though it would not ordinarily do so, 229 Question of penalty or liipiidated damages, 220, 230 Person cannot avoid contract by paying sum provided to be paid on breach, 230, 231 Unless it is distinctly alternative, 231 Performance, Maxim it depends on, 13, 18-1 Defhiition of, 184 Distinction between and satisfaction, 184 General rule as to, 199 GENERAL INDEX. 29? Performance — continued. An act may operate as, though somewhat different from what agreed to be done, 199, 200 When acts not deemed to be, 200, 201 Effect of purchasing lands in performance of covenant and then mortgaging them, 201 By person dying intestate, 201, 202 Distributive share not payment of debt, 202 Perpetuation of Testimony, 266, 267 Essence of action for, 266 Original jurisdiction as to, and its extension, 267 Action for, not ordinarily brought to a hearing, 267 Costs in action for, 267 When a person may use evidence taken in action for, 267 Personal Chattels: See Chattels. Personal Estate, Primary fund for payment of debts, 62 When not so, 65 Personal Judgment, For payment of debts not made against married woman, 242, 243 Pin-money. AVhat it is, 244, 245 What arrears of, can be recovered, 245 Policy of the Law, Constructive frauds by reason of, 117 Portions : See Satisfaction. Gifts to children regarded as, 186 Court leans against double, 189 Powers, Belief given against defective execution of, 102 — 104 But not usually against non -execution, 104 Frauds on, 127, 128 Excessive execution of, 128 Election arising in the case of appointments under, 176 Precatory Trusts: See Trusts. Presumption of Equity, May be rebutted by parol evidence, 192 298 GENERAL INDEX. PRINCirAL AND AOKNT, Constructive fraud arising on caccount of relationship of, 121, 122 Priorities of Mortgages, 95, 96 Private Lktti':rs, Injunction to restrain publication of, 2G2 Private Nuisance, Injunction to restrain, 2G0, 2G1 Probate Court. When no jurisdiction to grant probate of will, 270 Promoter of Company, Stands in fiduciary position, 122 Who is, 122 Protection of Trustees, Provisions for, 50 — 52 Public Nuisance, Injunction to restrain, 2G0 Public or Charitable Trusts, 35, 36 Purchase Of trust property by trustees, 47 Option to, may effect a conversion when exercised, 205—208 Purchaser, Position of, 10, 108 His rights against voluntary trusts, 27 Not bound to inform vendor of value of property, 113 Q. ' Quia timet, Jurisdiction exercised on ground, 129 R. Receipts of Trustees, 38, 39. Receive!;, Ap})()iiitnu'ni of l)y mortgagee, 91 Reconversion, Definition of doctrine of, 203 Explanation of doctrine of, 203 Example of, 204 GENERAL INDEX. 2d9 Reconversion — continued. Who may effect, 215 What will amount to, 216 When one of several persons interested may reconvert, 215, 216 By operation of law, 216, 217 Reconveyance of Mortgaged Property On death of mortgagee, 88 Rectification of Written Instruments, 102 — 129 : See also Accident, Mistake, Fraud. Redemption : See Equity of Redemption — Mortgages. Who has right of, 87 Reduction of Stock, When relieved against as an accident, 105 Registration, In Middlesex and Yorkshire prevents tacking, 'J 7, 98 Reimbursement Of trustees, 49 Religion, Father has right to have child brought up in his, 157 Repair, Contract to, not specifically enforced, 141 Representations made on Marriage, Effect of, 134, 135 Restraining: See Injunctions. Restraint of Marriage, Conditions in, 117 Resulting Trusts, 31, 32 Retainer By executor or administrator, 55 Retirement of Trustees, 38 Reversionary Property, Duties of trustee as to, 40 Provisions of 31 Vict., c. 4, as to sale of, 124 Revocation Of legacy by mistake, 109 300 GENERAL INDKX. s. Sailoiis, Dealings with, 12G Sale, By mortgagee, 92, 93 In partition suits, 167 Satisfaction, 184 — 196 Maxim it depends on, 12, 181 Definition of, 184 Distinction between, and pcrl'ornuuice, 184 Cases of express, 184, 18a Cases of presumed, 185 Two wide classes of, 185 In the case of portions, 185 That is putting oneself in loco jMrenlh, 185, 186 No presumption of, in case of illegitimate child, 186 Gifts to children regarded as portions, 186, 187 Arises equally, whether first a settlement or a will, 187, 188 No substantial difference whether settlement first or will, 188 When styled ademption, ISS, 189 The Court leans against double portions, 189 Cases in which no, 190 Evidence to rebut, 190—192 One case of satisfaction of legacy to a stranger, 193 In the case of creditors, 193 Court leans against, in cases of legacies and debts, 193, 194 Instances showing this, 194, 195 Extrinsic evidence admitted to show legacy no satis- faction of debt, 195 No satisfaction in case of legacy by parent to cliild to whom he owes money, 195, 196 As to legacies being cumuhitive or substitutional, 196 —198 Secret CoMrosrnoNs, 127 Secured Creditor, Position of in administration, 60 general index. 301 Securities, Marshalling of, 70, 71 Selden's Remarks on Equity, 2, 3 Separate Estate : See also Married Women. Provisions of Married Women's Property Acts as to, 233, 238 Doctrine of Court as to, 235, 236 What words will create, 236 Anticipation clause annexed to, 286 — 240 Power to dispose of, 237 Liability of for debts, 241, 242 Liability to make good breaches of trust, 242 Receipt of by husband, 243 Devolution of on death, 243 Protection to married women in respect of, 244 Distinction between and paraphernalia, 246 Separation Deeds, 252 Settled Accounts, 76 — 78 Settlement, When it may be upset by creditors or purchasers, 26, 27 When a fraud on husband's marital rights, 234, 235 Equity to, 246—250 Settlement of Boundaries, 171, 172 Origin of jurisdiction as to, 171 Limit of jurisdiction as to, 171, 172 Where lessee has confused lands demised with his own, 172 When many persons interested, 172 Modern practice in action for, 172 Ship, Injunction to restrain sailing of, 263 Skill, Contract involving, not specifically enforced, 140 Solicitor, Liability of trustees for acts of, 45 Position of in dealing with client, 120, 121 Cannot take gift from client, 121 As to enforcing specific performance of contract for sale .of practice of, 142 302 GENERAL INDEX. Specific Delivery of Chaitels, U9, 150 Specific Performance, 130 — 149 Eemetly by, peculiar to Equity, 1 30 Not given of voluntary contract oven tlioui^di under seal, 130 What sufficient contract, 131, 132 Cases in which Court decrees, 132 Of parol contract, 132—136 Part jierformance of parol contract, 133, 134 Contract prevented from beini;- ))ut into writing l»y reason of fraud, 135, 13G Admission of parol contract in jiliadings, 13G When decreed of written contract with parol variation, 13G, 137 Of contracts relating to personal chattels, 137, 138 Provisions of Mercantile Law Amendment Act, 1856, as to, 138, 139 Must be a mutual remedy, 139 Cases in which Court cannot decree, 139, 140 Not granted in respect of personal acts, 140 Nor of contract to build or repair, 141 Injunctions granted in the nature of, 141 Not granted of contract to sell goodwill unless con- nected with premises, 142 May be decreed with compensation, 142, 144 May be granted omitting some adjunct, 143, 144 Not granted when land of different tenure, 144 As to time being of essence of contract, 145 Not granted if wrong or inccpiitable to do so, 145 Is a discretionary remedy in the Court, 146 In action for, damages may be granted, 146, 147 May be granted of contract relating to lands abroad, 147, 148 Course taken where in action for, it appears vendor has no title, 148 Defence of doubtful title in action for, 148 Cannot be obtained by summons under Vendors' and Purchasers' Act, 1874, 148, 1 I'J Compelling delivery of chattels independently of con- tract, 149, 150 general index. 303 Stated Accounts, 76—78 Stock Reduced by Act of Parliament, when relieved against as an accident, 105 Strangers, No satisfaction arising in case of gifts to, 193 Substitutional Legacies, 196 — 198 Surcharging Accounts, 78 Surety, \Yhen absolved from liability on ground of fraud, 114 Contribution between sureties, 222, 223 Survivorship, Wife's right of, 251, 252 T. Tacking, Maxim it depends on, 11 Definition of, 96, 97 Eeason of doctrine of, 97 Effect of registration in Middlesex and Yorkshire on, 97, 98 Legislative provisions as to, 98 By express provision, 98 Tail, Tenant in. Position of on paying off incumbrance on an estate, 220 Tenure, If land of different, specific performance not decreed, 144 Testator, Agreement to influence, 118 Timber, When mortgagee may cut, 92 Time : See Limitation, Statutes of, Point of priority of, 11 From which conversion takes place, 209 Title, Position where, in action for specific performance, it appears a vendor has no title, 148 304 GENERAL LNDEX. Title — continued. Doubtful, 148 Points on, may be determined under Vendors' and Purchasers' Act, 1874, 148, 119 Trade Mark, Right to, and injunction to restrain infringement of, 261, 262 Treat, Notice to. Does not by itself eftect a conversion, 205 Trespass, When mortgagor may sue for, 86 Injunction to prevent, 258 Trustees, Equity never wants, 37 Appointment of new, 37 Their powers and duties, 37 Eetirement of, 38 Their power to give receipts, 38 Devolution of estate of, 38 Their power to compromise, etc., 39 Conversion of property by, 39 Duties of as to wasting and reversionary property, 40 Duties of as to selling, 40, 41 Powers of as to investment, 41, 42 Position of as regards discretionary powers of invest- ment, 42 Position as to advancing money on mortgage, 43 Liability for defaults of co-trustees, 44 Liability for acts of agents, 44, 45 Liability for act of solicitor, banker, or auctioneer,45,46 Liability for not investing, 46 Have joint powers only, 46 ]\Iust not make profit, 46 Must not purchase trust property, 47 Liabilities for breaches of trust, 47 Not exonerated from fraudulent breaches of trusts by bankruptcy, 48 What care and diligence Ijound to use, 49 Indemnity and reimbursement of, 49 GENERAL INDEX. 305 Trustees — continued. Employing a solicitor, 50 Provisions for protection of, 50 — 52 Rights and position of on termination of their duties^ 52 What will amount to fraud by, 114 Cannot purchase of cestuis que trusts, 119 Writ of ne exeat regno to restrain going abroad, 265 Trusts, Definition of a trust, 20 Division of, 20 History of modern doctrine of uses and trusts, 21 Of personalty, 23 Definition of express trust, 23 Three essentials, 23 Precatory, 23 When writing necessary, 24 Voluntary trusts, 24 — 28 Executed and executory, 28, 29 Implied and constructive, 29 — 35 Resulting, 31 Private, and public or charitable, 35, 36 Funds belonging to, may be prevented from being applied to expenses of application to Parliament, 258 u. Undertaking as to Damages On the granting of interlocutory injunction, 264, 265 Uses, Modern doctrine of, &c., 21 Statute of, 22 V. Value, Trusts based on, 27 Vendor Not bound to disclose patent defects though he is latent defects, 113 306 GENERAL INDEX. Vendor's Lien For unpaid purchase-money, 3-i, 66 Vested and Contingent Legacies, 57 ViVUM V/\X»IUM, 80. Voluntary Trusts, 24 — 28 If by act inter vivos must be complete, 24, 25 Liable to be defeated, 25—27 Position of volunteer as to proof if settlement ques- tioned, 123 w. Waiver, Of right of equity to settlement, 250, 251 Ward in Chancery : See Infants, Guardian. Who is a, 161 General rule as to treatment of, 161 Marriage of, 162, 163 Injunction to prevent marriage of, 163 Waste, Equitable doctrine as to, 34 Injunction to restrain, 258, 259 Wasting Property, Duty of trustees as to, 40 Welsh Mortgage, 85 Will : See Administration, Legacies. Rectification of on ground of mistake, 108, 109 Proceedings to establish, 269, 270 When Probate Division no jurisdiction to grant pro- bate of, 270 Year allowed to Executor To wind-up estate, 53, 54 LONDON : GEO. BAKBEE, PRINTER, OURSITOR ST., CHANCERY LANE. ^ UNIVERSITY OF CALIFORNIA LIBRARY Los Angeles I lii> book is Dl'L on the last date stamped below. MAR 2 3 1970 Form L9-Serie8 4939 % UNIVERSITY OF CALIFORNIA LOS ANGELAS % UC SOUTHERN REGIONAL LIBRARY FACILIT AA 000 798 507 o