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with reversioners.

Sales of

There is, as was stated in the leading case on the subject (1), Dealings hardly any older head of equity than that under which the Court is enabled to relieve expectants or reversioners from unjust or catching' bargains which have been made with them. Formerly purchases of reversions were set aside if, in the opinion of the Court, the consideration was inadequate. A considerable change, however, was introduced into the law on this subject by the Act "to amend the law relating to sales of reversions," which came into operation on the 1st of January, 1868, and provided that no purchase made bona fide and without fraud or unfair dealing, of any reversionary interest in real or personal estate should thereafter be opened or set aside merely on the ground of under value. The word purchase was defined by the Act to include "every kind of contract, conveyance, or assignment under or by which any beneficial interest in any kind of property may be acquired" (2).

The present law with regard to dealings with reversioners, was very carefully considered by the Court of Appeal in Aylesford v. Morris, decided in 1873, and subsequently, by the House of Lords, in O'Rorke v. Bolingbroke, decided in 1877 (3). In the former, the Court granted relief against the bargain into which the expectant heir had entered, and ordered the security to be given up on payment of the actual advance with 5 per cent. In the latter case, the seller of the reversion attained his majority on the 11th April, and executed the deed, assigning his reversionary interest on the last day of the same month. He never had a separate solicitor or any one to act for him in the character of an independent adviser. The majority of the House of Lords decided that as there was no evidence of fraud on the part of the purchaser the transaction could not be set aside. The present state of the law was, in

(1) Earl of Aylesford v. Morris, L. R. 8 Ch. 484, citing Lord Hardwicke's decision in Chesterfield v. Janssen, 2 Ves. Sen. 127.

(2) 31 Vict. c. 4.

(3) O'Rorke v. Bolingbroke, 2 App. Cas. 814.

Act, 1868.

Sales of

these cases, summed up as follows: The arbitrary rule of Act, 1868. equity as to sales of reversions was an impediment to fair and reasonable, as well as to unconscionable bargains. Both have been abolished by the legislature, but the abolition of the usury laws leaves the nature of the bargain capable of being a note of fraud in the estimation of this Court, and the Act as to sales of reversion (31 Vict. c. 4), is carefully limited to purchases made bonâ fide and without fraud or unfair dealing, and leaves undervalue still a material element in cases in which it is not the sole ground for relief. Those changes of the law have in no degree altered the onus probandi in those cases, which arise from the circumstances or conditions of the parties contracting-weakness on one side, usury on the other, or extortion or advantage taken of that weakness, a presumption of fraud. Fraud does not mean here deceit or circumvention, it means an unconscientious use of the power arising out of these circumstances and conditions, and when the relative position of the parties is such as prima facie to raise the presumption, the transaction cannot stand unless the person claiming the benefit of it is able to repel the presumption by contrary evidence proving it to have been in point of fact just and reasonable.

Commenting on the phrase "expectant heir," which has been much employed in cases of this description, Sir George Jessel expressed himself: "The phrase is used, not in its literal meaning, but as including every one who has either a vested remainder or a contingent remainder in a family property including a remainder in a portion, as well as a remainder in an estate, and every one who has the hope of succession to the property of an ancestor either by reason of his being the heir apparent or presumptive or by reason merely of the expectation of a devise or bequest on account of the supposed or presumed affection of his ancestor or relative. More than this the doctrine as to expectant heirs has been extended to all reversioners and remaindermen. So that the doctrine not only included the class mentioned, who in some popular sense might be called 'expectant heirs,' but also all remaindermen and reversioners" (1).

In a still later caso decided in 1880, in which the plaintiff, the son of a nobleman possessed of large estates, who possessed no property of his own and no expectation of any except such general expectations as were founded on his father's position, had obtained a loan at 60 per cent. interest. The Court came to

(1) Beynon v. Cook, L. R. 10 Ch. 391, note.


the conclusion that the money had been lent without any Cases as to dealings thought on the part of the money-lender that he would be paid with reby the young man personally, but partly on the general expec- versioners. tation that the plaintiff would some day be entitled to the family estate, and partly in the hope that the father or friends. would pay, so as to avoid exposure. The Court set aside the transaction, and ordered the defendant to pay the costs.

"The real question," said the judge," in every case, seems to me to be the same as that which arose in the case of expectant heirs and reversioners before the special doctrine in their favour was established-that is to say, whether the dealings have been fair, and whether undue advantage has been taken by the money-lender of the weakness or necessities of the person raising the money. Sometimes extreme old age has been unduly taken advantage of, and the transaction set aside. Sometimes great distress. Sometimes infancy has been imposed upon, and transactions, though ratified at the full age, have been set aside because of the original vice with which they were tainted. In every case the Court has to look at all the circumstances" (1).

In the last reported case bearing directly on this subject decided in 1888, the result of the decisions was stated to be that where a purchase is made from a poor and ignorant man at a considerable undervalue, the vendor having no independent advice, a Court of Equity will set aside the transaction. This will be done even in the case of a property in possession, and à fortiori if the interest be reversionary. The circumstances of poverty and ignorance of the vendor, and absence of independent advice, throw upon the purchaser when the transaction is impeached, the onus of proving in Lord Selborne's words that the purchase was "fair, just and reasonable" (2).

The principles of the law as to dealing with reversioners and expectant heirs were also applied to a case which came before the Court in 1884. A young man in very poor circumstances, was defendant in a probate action in which he claimed a share of certain real estate as co-heir of the deceased. In order to enable him to conduct his defence he borrowed money from a solicitor to whom he executed a mortgage in which he covenanted to employ a particular person as his solicitor in the action, and if he should be successful in the action to pay a considerable sum "by way of bonus." The deed also provided

(1) Nevill v. Snelling, 15 Ch. D. 679, where nearly all the previous authorities are collected.

(2) Fry v. Lane. In re Fry. Whittle v. Bush, 40 Ch. D. 312.

Terms on

which dealing with reversioners set aside.

that the mortgagee should make such further advances to the
mortgagor as and when the mortgagee should "think fit, to
meet any
further necessities of or to be applied in or towards
the costs of the action." The deed then charged the mort-
gagor's interest in the real estate in question with present
and further advances and interest, and the sum agreed on as
"bonus." The Court decided (inter alia) that the transaction
was voidable as an undue advantage obtained from the mort-
gagor when under pressure of distress, and in a condition
analogous to an expectant heir, and ordered redemption of the
mortgaged property on payment only of the actual advance
with interest at 5 per cent. The judge also cited with approval
the observations of one of his predecessors, that one noteworthy
effect of the repeal of the usury laws was to bring into operation,
to a greater extent than formerly, another branch of the jurisdic-
tion of the Court of Equity which had existed long before them,
viz., that founded on the principle that any oppressive bargain,
or any advantage exacted from a man under grievous necessity
and want of money, ought to be prevented by the Court from
prevailing against him. "The moment the usury laws were
repealed, and the lender of money became entitled to exact any-
thing he pleased in the name of interest, from that moment the
jurisdiction of the Court which prevailed independently of the
usury laws, became likely to be called into active operation" (1).

The usual terms on which dealings with reversioners are set aside, are

Repayment of the amount actually paid or advanced, with interest at 5 per cent. per annum.

The plaintiff is not usually allowed his costs, as the Court proceeds on the principle that he ought to pay for the relief which they grant him against the consequences of his own folly. If, however, the defendant has refused reasonable terms offered before the commencement of the action, or has been guilty of fraud or misconduct, the plaintiff may be allowed costs (2).

(1) James v. Kerr, L. R. 40 Ch. D. 449, 459, citing Barrett v. Hartley, L. R. 2 Eq. 789.

(2) The following cases, in addition to those which have been previously noticed, may advantageously be consulted on the subject of dealings with reversioners: Croft v. Graham, 2 De G. J. & S. 155; Savery v. King, L. R. 5 H. L. 627; Webster v. Cook, L. R. 2 Ch. 542. (In this case, decided in 1867, before the passing of the Sales of Reversion Act, the

borrower was entitled to the income of property subject to the payment of rent-charges and interest on mortgages, and the Court of Appeal considered that his interest was not a "reversion," and that therefore the transaction could not be set aside); Miller v. Cook, L. R. 10 Eq. 641; Tyler v. Yates, L. R. 11 Eq. 265; 6 Ch. 665; Beynon v. Cook, L. R. 10 Ch. 389; Brett's Leading Cases in Equity, p. 130, notes to Earl of Aylesford v. Morris.



It must be borne in mind in connection with this subject Confirmathat impeachable transactions may be rendered valid by acts of confirmation, especially when of a formal character after advice taken, or acquiescence for a great length of time on the part of a person who is cognisant of his right to relief.

But confirmation or acquiescence will be of no avail whilst the reversioner continues in the same situation as when he entered into the contract, for in such cases it has always been presumed, that the same distress, which pressed him to enter into the contract, prevented him from coming to set it aside; it is only when he is relieved from that distress that he can be expected to resist the performance of the contract (1).

It has already been pointed out that in dealing with reversionary interests, time is regarded as of the essence of the contract (ante, p. 583 (2)).

(1) Savery v. King, L. R. 5 H. L. 627; Beynon v. Cook, L. R. 10 Ch. 391, note; Fry v. Lane, 40 Ch. D. 312.

(2) Newman v. Rogers, 4 Bro. C. C.

391; Hipwell v. Knight, 1 Y. & C.
Ex. in Eq. 401; Patrick v. Milner, 2
C. P. D. 342, where the reversionary
interest in question was contingent.

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