[24] BRANDON v. ASTON. Nov. 14, 1842; April 20, 1843.

[S. C. 7 Jur. 10.

See In re Smith, 1862, 2 J. & H. 601; In re Jeffery [1891], 1 Ch. 675; In re Holford [1894], 3 Ch. 38.]

Testator bequeathed an annuity to his nephew for life, declaring that his nephew should have no power to sell, mortgage, incumber, or anticipate it, and that, in case he should attempt so to do, the same should cease and be no longer payable to him. And after the decease of his nephew, or any such attempt to sell, mortgage, incumber, or anticipate the annuity, the testator ordered the fund out of which the annuity was to be paid to be divided amongst his nephew's children. The nephew took the benefit of the stat. 1 & 2 Vict. c. 110, for the relief of insolvent debtors. Held, that this was a forfeiture of the annuity, and that the children were entitled to the fund.

Bequest of a personal fund to such of the children of J. N. as should live to attain the age of 21 years. J. N. had three children, two of whom, having attained 21, applied for payment of their shares. Under the circumstances of the case the Court declined to pay over to them any part of the capital, but allowed them to receive the interest of two-thirds without prejudice to the claim of after-born children of J. N.

Lewis Cohen, by his will, gave and bequeathed to certain persons named in his will one annuity or clear yearly sum of £50, to be paid by half-yearly payments on certain days named, upon trust during the life of the testator's nephew, Isaac Nathan, to pay the same to him, the said Isaac Nathan, when and as the same should become due, for his own use and benefit, the first payment of the annuity to begin and be made on such of the said days as should first happen after his, the said testator's, decease. And the testator willed and directed that a proper fund should be appropriated to answer and pay the said annuity. And he declared that the said Isaac Nathan should have no power to sell, mortgage, incumber, or anticipate the payment of the said annuity, and that in case he should attempt so to do, the same should cease and be no longer payable to him; and from and immediately after the decease of his said nephew, Isaac Nathan, or from and immediately after any such attempt to sell, mortgage, incumber, or anticipate the said annuity, the testator ordered and directed that his said trustees, or the survivors or survivor of them, or the executors, administrators, or assigns of such survivor, should pay, transfer, and divide the capital, stocks and funds, in or upon which the said annuity should be invested unto, between and amongst such and so many of the children of the said Isaac Nathan, lawfully begotten, as being sons or a son, should live to attain their or his age or respective ages of 21 years, or being a daughter or daughters, should live to attain that age, or be married, in equal shares and proportions; such shares to be payable and transferable to such children immediately upon their attaining 21, or being married, if the same should happen after the decease of him, the said Isaac Nathan, and in case he should be then living, to be a vested and trans-[25]-missible interest in such children or child as, being sons or a son, should attain the age of 21 years, or being daughters or a daughter, should attain that age, or be married during the lifetime of the said Isaac Nathan, and should be paid, transferred, and assigned to them, him, or her, their, his, or her executors, administrators, or assigns, immediately on the death of him, the said Isaac Nathan; and in case there should be but one such child, &c., then the testator directed that the whole of the said stocks, funds, or securities should be transferred, paid and assigned to such one child, his or her executors, &c., absolutely; and the testator appointed the trustees to be executors of his will.

The testator died in February 1823, leaving Isaac Nathan and the several other persons named in his will surviving him. Isaac Nathan had a daughter and two sons. The executors duly proved the testator's will, and set apart a sufficient portion of his personal estate to answer the annuity. The sum set apart was invested in the purchase of £1666 consols, and the executors regularly paid the annuity to Isaac Nathan to the 29th September 1841.

On the 4th October 1841 Isaac Nathan was taken in execution for debt upon a writ of ca. sa., and was confined within the walls of Whitecross Street prison.

On the 18th of the same month, being in actual custody within the walls of that prison, he presented his petition to the Court for the Relief of Insolvent Debtors. under the statute 1 & 2 Vict. c. 110, thereby stating that he was willing that all his real and personal estate should be vested in the provisional assignee according to the provisions of the statute, and praying to be discharged. The petition was afterwards duly filed and the usual vesting order made.

In the schedule, which was subsequently filed by the [26] insolvent, he described the annuity as being payable to him during his life, but which he could not sell, mortgage or incumber.

Claims having been made to the annuity by the creditors' assignee of the insolvent on the one hand, and the children of Isaac Nathan on the other, the present bill was filed by the trustees against the assignee and the children, for the purpose of having the rights and interests of the Defendants in the annuity and £1666 consols ascertained and declared.

The Defendants insisted upon their respective claims by their answers.
Mr. Lowndes and Mr. Faber, for the Plaintiffs.

Mr. Russell and Mr. Goldsmid, for the Defendants, the children. If insolvency be considered as an involuntary act of alienation, there are several authorities to shew that such alienation is nevertheless a forfeiture under circumstances similar to the present: Cooper v. Wyatt (5 Madd. 482), Dommett v. Bedford (3 Ves. 149). The cases of Pym v. Lockyer (20 Law J. 8) and Lear v. Leggett (2 Sim. 479; 1 Russ. & M. 690) differ from the others in principle. The present case, however, proceeds on stronger grounds. Here the alienation was the voluntary act of the insolvent, and the principles of Shee v. Hale (13 Ves. 404) distinctly apply. The words of the will are "sell, mortgage, incumber or anticipate." To anticipate is to do any act whereby you obtain beforehand the benefit of the property in question. Here the insolvent presents his petition, whereby he in effect says-take all my real and personal estate and give me liberty. Is there any distinction between a proceeding of [27] this nature and a sale and conveyance by deed for a valuable consideration?

Mr. Bacon, for the Defendant, the assignee. In all the cases the words of the will have directed the judgment of the Court: and the question here is, whether this is an attempt to sell, &c., within the meaning of the will. The case of Shee v. Hale was decided upon the words of the will. There the annuity was inserted in the schedule delivered in and signed by the insolvent. By the statute 41 Geo. 3, c. 70 (re-enacted by the stat. 44 Geo. 3, c. 108), upon which that case was decided, the insolvent was required in his petition to state that he had no property other than that which he had stated in his schedule, and the schedule and declaration on oath were one instrument, filed in the Court in which the petition was presented. The Master of the Rolls was of opinion that in taking the benefit of that Act the son did the very thing which the will provided against, namely, authorize and empower others to receive the annuity. Under the modern Act, the mere filing the petition vests the whole property of the Petitioner in the provisional assignee. [THE VICE-CHANCELLOR The petition is the wilful act of the insolvent.] Assuming it to be so, the question is whether it is an attempt within the words of the will. When he files his schedule he gives notice to all the assignees, not only that he does not attempt, but that he has not the power to mortgage or incumber the annuity. He tells them he has no title. It is true that by his petition he in the first instance makes a submission to the Insolvent Debtors Court that the law shall operate on his effects; but when he comes before the Court, he says that there is certain property which is nominally his,. but which he has no power to assign. That property vests in the assignee, not by [28] the act of the insolvent, but by force of the statute. [THE VICE-CHANCELLOR. It seems to be agreed that the absent insolvent has no title.] Upon that there is no question. As to the authorities, it is submitted that this case is like Lear v. Leggett, where the restriction against alienation was not immediately followed by words importing forfeiture, and where therefore the assignee was held entitled. Cooper v. Wyatt is not inconsistent with that case. Pym v. Lockyer was special in its circumstances. [THE VICE-CHANCELLOR. In Cooper v. Wyatt it was probably considered

that there was a defective specification by the testator of all the means of forfeiture. In Lear v. Leggett it was not so considered.]

THE VICE-CHANCELLOR [Sir J. L. Knight Bruce]. It is not necessary, if it would be right, for me to express any opinion on the respective decisions in Lear v. Leggett and Pym v. Lockyer. The judgment, which I feel myself bound to give in this case, may well stand consistently with those decisions.

I apprehend that the words "attempt so to do," meaning "attempt to sell, mortgage, incumber or anticipate the payment of the said annuity," are not too vague or indefinite, and that, under this will, there may have been an act amounting to an attempt to sell, mortgage, incumber or anticipate, which would make the annuity cease as to the insolvent, and give the fund to his children. The question is whether there has been such an act.

Now it is possible that there may be a case of insolvency which would not fall within the terms of this will. The present case, however, is one, if I may use the expression, of voluntary insolvency. It is the case of an application by a person for delivery from imprisonment upon certain conditions: it is his own act. He presents a petition to the Court for Relief of Insolvent Debtors, stating his imprisonment, and that he is willing that all his real and [29] personal estate and effects may be vested according to the provisions of the Act of Parliament. By so doing he has, in effect, executed a Parliamentary power; that is, he has voluntarily elected to do that act which, being done, brings the provisions of the Act of Parliament into operation. In effect, therefore, the vesting order is procured by himself: for every substantial purpose it is his own act. I apprehend I should be deciding against the letter and spirit of this enactment if I were to hold that there has not been a clear attempt to incumber and anticipate payment of the annuity. If that is so, the assignee has no interest, because the children are entitled.

It is unnecessary for me to enter into the question (if question it be) whether the insolvent could contend that, having regard to the will, the petition, the vesting order and the schedule taken together, the vesting order ought to be considered as not intended to pass or affect this particular interest, and therefore as leaving it in him notwithstanding his insolvency. As it is not necessary to decide that question, I neither encourage nor discourage any notion founded upon it, or intimate any opinion either against or in favour of it. In either view of the case, according to my judgment, the assignee under the Insolvent Act has no title, and I therefore declare that he has no title to this annuity. The question of costs may be fit matter for argument.

Mr. Bacon then addressed the Court on the question of costs.

THE VICE-CHANCELLOR said that, as the bill was filed by trustees to settle the conflicting claims of the assignee and other parties, and as the assignee would probably have his costs out of the insolvent's estate, he should be allowed no costs in this suit.

[30] Declare the assignee not entitled to the annuity. Dismiss the bill against him without costs.

April 20, 1843. The cause now came on for hearing for further directions. The Master having reported that two of the children of Isaac Nathan were of age, the question was whether, upon the construction of the will, they were entitled to have their shares of the fund (now in Court) paid to them immediately.

Mr. Wigram and Mr. Faber, for the Plaintiffs, observed that Bullock v. Stones (2 Vez. sen. 521) was the only case in favour of paying the shares immediately.

Mr. Russell, for the adult children, cited Shepherd v. Ingram (Ambl. 448), Mills v. Norris (5 Ves. 338) and Scott v. Earl of Scarborough (1 Beav. 154), contending that after-born children were not entitled. [THE VICE-CHANCELLOR. The rule recognized in the case of Whitbread v. Lord St. John (10 Ves. 152) as to after-born children is artificial, and I think only to be adopted when necessity requires. Lord Eldon, in cases coming very near it, but distinguishable from it, held after-born children to be entitled.]

THE VICE-CHANCELLOR said that he considered the case so circumstanced as to

justify him at present in withholding the capital from the adult children. He should, however, allow them the interest of their shares, which, if not otherwise right, might be supported by analogy to the course frequently taken by the Court as to maintenance.

[31] Let one-third of the dividends of the fund in Court be paid to one of the adult children, one other third to the other, and let the remaining third be carried to the account of the contingent share of the infant, without prejudice to any claim which after-born children of the father may have, and without prejudice to any claim which the insolvent may have.

[31] TEED. CARRUTHERS. Nov. 9, 12, 1842.

[S. C. 6 Jur. 987.]

On the 2d of May 1837 freehold and copyhold estates were mortgaged by C. to T., subject to a proviso for redemption on payment of £10,000 on the 2d of May 1844, with interest half-yearly in meantime. Prior to any default C. paid to T. £7000 by cheque, and gave him two bills of exchange drawn by C. & Co. upon and accepted by C. for £1620 at three months after date, and for £1500 at six months after date, being together the total amount of the mortgage debt and interest. Upon the receipt of the cheque and two acceptances T. signed the following memorandum :-" London, 23d December 1839-Received this day of C. the sum of £7000 in cash, and two bills of exchange, as under, for £3120, drawn by C. & Co. of M. upon and accepted by the said C., one dated 16th December, for £1620, the other dated the 23d of December, for £1500, and which cheque for £7000 and bills for £3120, making together £10,120, are in full of principal and interest due to me upon a mortgage of C.'s freehold property in K. and S. for £10,000, and I do hereby undertake whenever required to execute a conveyance of the said property. (Signed) T." T. gave this memorandum, together with the title and mortgage deeds of the premises, to C. The cheque for £7000 was paid, but both the bills of exchange were dishonoured; C afterwards conveyed all his estate to a trustee for the benefit of his creditors, and then became bankrupt. T. never reconveyed the premises. Held, that as between T. and C. and his assignee by deed, and his assignees in bankruptcy, the receipt of the cheque and bills, and the giving the above memorandum, did not discharge the mortgaged premises from the mortgage, but that on their dishonour T. was entitled to a decree against them all for the restoration of the title and mortgage deeds, and to a decree of foreclosure. A party having an interest in the subject-matter of a suit by virtue of a partnership had parted with his interest prior to the date of filing the bill. The Plaintiff, nevertheless, made him a Defendant, and he by his answer disclaimed. The Plaintiff was ordered to pay such Defendant's costs without being entitled to them over, the Court being of opinion that the Plaintiff might have easily ascertained the fact of the assignment, and it not appearing that he had attempted to do so. Although a Defendant disclaim all interest in the suit at the Bar, and his disclaimer is entered by the registrar, yet the Court will retain him on the record if there be any question whether he has documents relating to the suit in his possession which ought to be delivered up; and an inquiry will be directed on the subject.

The Plaintiff having lent to the Defendant, Carruthers, £10,000; by indentures of lease and release, dated the 1st and 2d of May 1837, between the Defendant, Carruthers, of the one part, and the Plaintiff of the other part, certain freehold and copyhold lands, forming an estate called the Mitchell's estate and Waghorn Gate farm, were, as to the freehold, released, conveyed and assured unto the Plaintiff, his heirs and assigns, and as to the copyhold, covenanted to be duly surrendered to him [32] and his heirs, subject to a proviso therein contained for the redemption and reconveyance thereof on the payment of the £10,000 on the 2d May 1844, with interest at £5 per cent. per annum in the meantime half-yearly on the 2d of

November and the 2d of May. The indenture of release contained a proviso that it should be lawful for the said Defendant, Carruthers, his heirs, executors or administrators, to pay off the said sum of £10,000, or any part thereof, not being less than £1000 at each payment, at any time before the said 2d May 1844, on giving six months' notice of each intended payment; but that it should not be lawful for the Plaintiff, his heirs, executors, administrators or assigns, to call in any part of the said principal before the said 2d May 1844, provided the said interest were punctually paid; but in case the same interest or any half-yearly payment thereof should be in arrear for the period of 30 days after the same should become due, then it should be lawful for the Plaintiff, his heirs, executors, administrators and assigns to call in and require payment of the said principal sum and interest in like manner as if the time fixed for the payment thereof had expired.

In the month of December 1839 the Defendant, John Carruthers, gave to the Plaintiff a cheque for £7000 on Messrs. Coutts & Co., in part discharge of the principal moneys due on the mortgage. He also gave to the Plaintiff two bills of exchange, one for £1620 and the other for £1500, intended to be in discharge of the £3000, residue of the principal mortgage money, and the interest then due on the security, which amounted to £120. Upon the receipt of the cheque and bills of exchange, the Plaintiff gave a receipt for the mortgage money and interest.

The cheque for £7000 was at first dishonoured by Messrs. Coutts & Co., but it was shortly afterwards duly paid. [33] The bill for £1620 was discounted by Messrs. Coutts & Co. for the Plaintiff, and it became due in their hands, and was dishonoured. Upon this the Defendant, Carruthers, paid Messrs. Coutts & Co. £120, part thereof in cash, and gave them a promissory note, drawn by him in favour of the Plaintiff for the residue, which note was indorsed by the Plaintiff as his surety. Carruthers at the same time deposited with Messrs. Coutts & Co. all the title-deeds of the mortgaged property (except the mortgage deeds to the Plaintiff, which he, Carruthers, retained), together with a memorandum in writing, by way of equitable mortgage, as a further security for the due payment of that note. The note, having become due, was dishonoured, and the Plaintiff paid the amount due thereon to Messrs. Coutts & Co. before the date of the filing the bill.

The bill of exchange for £1500 remained in the Plaintiff's hands, and became due on the 26th of March 1840, and was dishonoured in the hands of Coutts & Co., and remained unpaid at the time of filing the bill.

The Plaintiff, on the 8th of July 1840, filed his original bill stating the above facts, and praying that Messrs. Coutts & Co. might be ordered to deliver up to the Plaintiff the title-deeds of the mortgaged property and the memorandum of equitable mortgage; and that it might be declared that the Plaintiff was entitled to a lien on the mortgaged property, not only for what he had paid Messrs. Coutts & Co. but also for the residue of the sum of £3000 and interest. And that the Defendant, John Carruthers, might be ordered to redeliver to the Plaintiff the mortgage deeds and the receipt, and that he might in the meantime be restrained by injunction from receiving the said title-deeds so deposited, or destroying or parting with the mortgage deeds or the receipt of any title-deeds relating to the mortgaged property, and that Messrs. Coutts & Co. might [34] in like manner be restrained from delivering up the title-deeds deposited with them to the Defendant, Carruthers, or to any person other than the Plaintiff, and for redemption, and in default of redemption for a foreclosure of the equity of redemption in the premises.

Subsequent to the date of the filing of the Plaintiff's bill, by indentures of lease. and of release and appointment, dated the 7th and 8th of August 1840, the Defendant, Carruthers, conveyed the mortgaged premises to the Defendant, Hoggart, and his heirs upon trust for sale, and to stand possessed of the proceeds upon trusts for benefit of the creditors of Defendant, Carruthers, who should execute that deed. These deeds were executed by Defendants, Carruthers, Hoggart, and several creditors of Carruthers.

On the 21st of September 1840 a fiat in bankruptcy was issued against Carruthers, upon which and prior to the 12th of October 1840 he was declared bankrupt.

On the 12th of October 1840 the Defendant, Carruthers, answered the Plaintiff's original bill, and by his answer stated, as the fact at the hearing appeared to be, that