1824. Naylor v. Winch

further entry appeared beyond the order which directed the reference to the master to make the inquiry as to the sums expended.

Mr. Wray, amicus curiæ, stated that he was one of the counsel in the case of Graves v. Graves; and that the inquiry had been directed in that case to ascertain the amount, in order that the widow might obtain a security by way of mortgage of the estates.

Mr. Horne, Mr. Roupell, Mr. Spence and Mr. Theobald for the various other parties, defendants, interested under the will, did not oppose an inquiry. The Vice-Chancellor referred it to the master to inquire whether it was for the benefit of all parties interested in the testator's estate that the mansionhouse should have been finished; and if so, then to inquire what had [*454] been properly expended by the *widow in that respect. And also to

inquire whether it was for the benefit of those who might become entitled to the residuary personal estate after the death of the widow, that the sale of the leasehold estates should be delayed until the expiration of the under-leases granted by the testator; and in case the trustees should find that the delay was for their benefit, he was to inquire further, what compensation the widow would be entitled to in respect of her loss of income by the delay of sale from the death of the testator until the present time; and what she would be further entitled to in respect of her future loss of income from the present time until the expiration of the under-leases.

But his honor refused to make any order with respect to the expense occasioned by the dry rot, considering that it was an expense to which a tenant for life choosing to occupy a mansion-house, must submit. And his honor also observed, that upon the principle of this order he must have directed the the inquiry, even if there had been no personal estate applicable to satisfy the expense; and must have directed the expense to be a charge upon the real estate.[1]

1824, 27th, 28th, 29th January.—Annuity.—Agreement.—Mistake.

The court cannot inquire into the adequacy or inadequacy of the consideration of a compromise fairly and deliberately made.

Quere. Whether the rule, that a trustee cannot purchase from his cestui que trust, prevails where the relation of trustee gives no advantage.

Where a compromise of a doubtful claim is entered into fairly, with due deliberation, and upon consideration, the court will not inquire into the adequacy of the consideration.

JOHN WINCH, by his will, dated the 8th of March, 1796, bequeathed to the plaintiff, then the wife of R. Mealy, an annuity of 600l. per annum, to com[1] Vide Nairn v. Majoribanks, 3 Russell, 582.

1824. Naylor v. Winch

mence six months after his decease, for her life, and the issue from her body lawfully begotten; in failure of which to revert his heirs ; and he requested his friends, N. E. Kindersley and T. Cockburn, to act as trustees for her, so that the annuity might be secured for her sole use and benefit, and that it might be paid to her quarterly, or half-yearly, as they might deem proper; and he appointed his brothers, George Winch and James Winch, his executors and residuary legatees.

The testator died soon after the date of his will; and the executors proved it in the mayor's court at Madras Patnam, where the testator and the plaintiff were resident at the time of making his will, and of his death.

By an indenture dated the 8th of March, 1798, made between the executors of the one part, Adrian and John De Fries of the second part, and Mr. Kindersley and Mr. Cockburn, the trustees for the plaintiff under the will, of the third part, after reciting the will, and that Mr. Kindersley and Mr. Cockburn had declined accepting the trusts of it for a longer period than the natu ral life of the plaintiff, the executors assigned to A. and J. De Fries, their heirs, executors and administrators, the sum of 20,000 star pagodas part of *the testator's estate, upon trust to pay, out of the interest and pro- [*556] duce of that sum, the annuity of 600l. to Mr. Kindersley and Mr. Cockburn, their heirs, executors or administrators, for the sole use and benefit of the plaintiff during her life; and, after her decease, to repay the principal sum of 20,000 star pagodas to the executors, who thereby bound themselves, their heirs, executors or administrators, upon such repayment, to cause the said annuity of 600l. to be paid to such issue of the body of the plaintiff as should or might be lawfully begotten during the time of his, her or their natural lives, or the lives of the survivor or survivors, to each an equal part or share, with benefit of survivorship, agreeable to the true meaning and intent of the will, in such manner as they would have been bound to do if that deed had not been made. It was also provided by this deed, that if the executors should find it advantageous to the estate to remit the principal sum of 20,000 pagodas to England, and to place the same in the public funds, with such other and further sum as might be sufficient to produce an interest equal to the annuity, it should be lawful to the parties to enter into such other and further agreement as might be requisite for that purpose.

The plaintiff, as well as her trustees and the executors, were, at the time when this deed was executed, resident in India; and although she was not made a party to the deed, she was privy to it, approved of it, and acted under it.

In the year 1799, the executors came to England, and proved the will in the prerogative court of Canterbury. In 1808, the plaintiff being then a widow, intermarried with Mr. H. Naylor.

By the settlement dated the 16th of December 1808, made in con- [*557] templation of this marriage, the plaintiff assigned to Mr. Kindersley

1824.-Naylor v. Winch.

and Mr. Cockburn and two other gentlemen the annuity of 6007. "given and bequeathed by the will of the said John Winch to or in trust for her and the issue of her body," upon trust to pay the same to the plaintiff herself, for her life, for her separate use; and, after her decease, "upon the trusts by the will of the testator directed and declared of and concerning the same."

In 1809, the trustees under this settlement filed a bill in this court against the executors, the plaintiff and her husband, and a child of the marriage then born, for the purpose of compelling the executors to vest in the English funds as much money as would produce the annuity of 6007.; and in this bill it was suggested that the plaintiff claimed to be entitled to the annuity, not for her life only, but absolutely. In the deed of 1798, and in the marriage settlement of 1808, it had been taken for granted that the plaintiff was entitled for life only. The executors had refused to make the investment required in the English funds, inasmuch as it would occasion a great loss to them as the residuary legatees of the testator's estate; and they also insisted upon a right to compel the plaintiff to accept her annuity from the 20,000 star pagodas in India, according to the deed of 1798.

In March 1812, it was agreed between the plaintiff, her husband, the trustees, and the surviving executor, (the other executor being then dead,) that upon a proper investment being made in the public funds of Great Britain for

answering the annuity of 6007. the suit instituted in 1809 should be [*558] terminated and the bill dismissed. Accordingly a deed dated the

23d of March 1812, between the plaintiff and her husband of the first part, the trustees of the settlement of 1808 of the second part, and the surviving executor of the third part, was prepared and duly executed by all parties. This deed, after reciting the various circumstances already mentioned, recited that" doubts were entertained respecting the true construction and effect of the testator's will in certain contingencies;" and that it had been agreed to invest a sufficient sum in the funds of Great Britain, for the purpose of securing the annuity upon all the trusts declared concerning the same in the will of the testator, "except so far as the said trusts are altered by virtue of these presents;" and also reciting that the executor had accordingly invested the sum of 12,000l. navy five per cent annuities in the joint names of himself and another trustee named by him, and of Mr. Kindersley and Mr. Cockburn, witnessed that, for declaring the trusts of the sum of 12,000l. navy five per cent annuities so invested, it was declared and agreed by all the parties that the trustees in whose names that sum was invested should stand possessed thereof in trust to pay the dividends thereof to the plaintiff for life, for her sole and separate use, in satisfaction of the annuity of 6007, and in lieu of all interest in the 20,000 star pagodas, and, after her decease, to stand possessed of the capital sum of 12,000l. navy five per cent annuities, upon the trusts and for the intents and purposes created by the testator concerning the annuity of 600l." except so far as the same trusts were varied by the assignment thereby made by the plaintiff and her husband of all their interest, in any event, contingency or possibility

1824.-Naylor v. Winch.

in the capital sum of 12,000l, five per cent annuities after the decease of the plaintiff, whether such right or *interest should vest in the plain- [*559] tiff and her husband in their own right, or as representative of any of

her children, or by any other means whatsoever;" and it was thereby provid ed that, in case the plaintiff's husband should survive her, and the executor should on her death become entitled, by virtue of the testator's will or otherwise, for his own use, to any part of the capital sum of 12,000l. navy five per cents, then that a sufficient part thereof should be conveyed to trustees, in order that the plaintiff's husband should receive out of the dividends an annuity of 3001. for his life; and the plaintiff and her husband accordingly assigned to the executor, absolutely, all right and interest in the 12,000l. navy five per cents that might accrue to them in any event after the death of the plaintiff, or in right of representation to any of the plaintiff's children.

The plaintiff's husband died sometime before the present bill was filed by her against the surviving executor, the trustees of the settlement of 1808, the trustees under the deed of 1812, and the children of the plaintiff praying to have it declared that she took an absolute interest in the annuity of 600. under the will of the testator, and to have transferred to her the capital sum of 12,000l. navy five per cent annuities,

Mr. Horne and Mr. Kindersley, for the plaintiff:

I. Under the will the plaintiff must be held to be absolutely entitled to the annuity; and, as the deed of compromise proceeded upon a mistake as to the nature of her interest in the annuity, she cannot be bound by it. The interest which the plaintiff took in the annuity under the will was an estate in the nature of a fee *simple conditional at common law. Turner v. [*560] Turner.(u) The only difference between the bequest in that case and the present, is that the testator here uses the words "issue from her body." These words used in a will of real estate would give an estate tail, or a fee simple conditional before the statute de donis; and, as an annuity is not a species of property within the operation of that statute, the plaintiff must be held to take this annuity as a fee simple conditional. The nature of such an annuity issuing out of the general personal estate of a testator is, according to the expression of Lord Loughborough in Turner v. Turner, personal only as to its remedy, but real as to its descent. A real interest is created in personal property by the gift of an annuity with words of inheritance, just as personal interest is given out of real estate by a term of years. The interest which a husband takes in an annuity given to his wife as a fee conditional, is different from that which he takes in personal estate given to his wife. Therefore, where a woman is entitled to a fee simple conditional in an annuity, and she dies leaving a son, her husband, though he survives, can not be entitled to any interest in the annuity. There are many cases in which it has been held that, where parties mistake their interests, the court will relieve against a com

(a) 1 Bro. C. C. 323,

1824. Naylor v. Winch.

promise entered into under the mistake. In the present case it is plain that the plaintiff was ignorant of the extent of the interest which she had in this annuity, and could not intend to give up a perpetuity in the annuity, because she did not know that she was entitled to a perpetuity in it. By the deed of 1798 the parties took upon themselves to declare what were their [*561] rights under the will, and mistook the nature of "the plaintiff's interest in the annuity. Upon that mistake all the subsequent deeds were founded, for they all proceed on the notion that the plaintiff was entitled only to a life interest in the annuity.

II. The mistake in this case is of such a nature as the court will relieve against. It is not necessary that there should be fraud or concealment in order to obtain relief against deeds entered into by parties who mistook their rights in the property affected by them. The doctrine of the court, as established by many cases, is that, if parties enter into a deed under a mistake as to their rights, this court will relieve them and rescind the deed. Pooley v. Ray; (b) Hitchcock v. Giddings ; (c) Farewell v. Coker ; (d) Turner v. Turner ;(e) Lansdowne v. Lansdowne ;(f) Binghum v. Bingham ;(g) Pusey v. Desbouverie.(h) The deed of 1812 contains in itself sufficient evidence that the plaintiff executed it under a mistake as to her right. That deed recites the deed of 1798, which states the plaintiff to have a life interest in the annuity. No passage in the deed of 1812 contains any thing to show that any notion of the plaintiff's rights was then entertained different from that expressly stated in the deed of 1798, excepting these words: "And whereas doubts being entertained respecting the true construction and effect of the will of the said John Winch in certain contingencies." The words in certain

contingencies' show that the doubts referred to some other possible [*562] right which the parties fancied might arise upon the construction "of the will. It could not mean that the doubt was as to the extent of the plaintiff's right in certain contingencies, because her right did not depend upon any contingency. At that time she had two children born, and her interest in the annuity had become absolute.

III. The inadequacy of the consideration in the present case is evidence that the plaintiff did not know what the extent of her rights was at the time when she executed the deed of 1812.

IV. The person who made the compromise with the plaintiff by the deed of 1812, was the executor, who was himself a trustee for the plaintiff who was at that time a married woman, and was not therefore competent to enter into such an arrangement with her. It was his duty to protect her interests under the will in the property which was given to her separate use.

(b) 1 P. W. 355.

(d) Cited by Sir William Grant in Cholmondeley v. Clinton, 2 Meriv. 353.

(e) 2 Cha. Rep. 81.

(g) 1 Ves. 126.

(c) 4 Price, 135.

(f) Moseley, 351.

(h) 3 P. W. 315.