Now ready, price 5s. 6d., PART I., VOL. II., of MARITIME LAW REPORTS (New Series). By J. P. ASPINALL Esq., Barrister-at-Law, in the Admiralty Courts of England and Ireland, and in all the Superior Courts, with a Selection from the Decisions of the United States Courts, with Notes by the Editor. The First Series of "Maritime Law" may now be had complete in Three Volumes, half bound, price £5 58. for the set, or any single volume for 2. Back numbers may be had to complete sets. London: HORACE Cox, 10, Wellington-street, Strand, W.C. The Estates of Partners in Bankruptcy. What is a Valid Voluntary Settlement of & Chose in Action! 103 104 Duties Payable by Reason of Death. 105 Dublin Law Students' Debating Society... 115 LEGAL OBITUARY....... 115 PROMOTIONS AND APPOINTMENTS 116 116 BIRTH 3, MARRIAGES, AND DEATHS............ 118 The Law and the Lawyers. THE Albert Assurance Arbitration is approaching its termination. A third and final dividend of 5d. in the pound has been now directed by Lord CAIRNS to be paid to the creditors of the Albert Company, making, with the previous dividends of 2s. and 1s. 6d., a total dividend of 3s. 11d. It is more than four years ago that the company was ordered to be wound-up, the order having been VOL. LVI.-No. 1602. made on the 17th Sept. 1869. The liquidation proceeded in Chancery for a year and a half, and the arbitration has lasted more than two years and a half. It is worthy of notice that almost within a year of the commencement of the arbitration the first dividend of 28. was ordered to be paid, and the creditors of the other companies were paid in full. The European Assurance Arbitration Act was passed seventeen months ago, and it does not appear that there are any signs of a dividend being paid. Ir was for a considerable time a vexed question what damages ought to be given for convertion of stock. The following case has recently occurred in America: The plaintiff and defendants, who were stockbrokers, entered into an agreement whereby the plaintiff was to deposit with the defendants such collateral security or margin as they should from time to time require, and they were to purchase certain stocks, and to hold and carry the same, subject to the plaintiff's direction as to the sale and disposition thereof, as long as he should desire, and should not sell or dispose of the same unless plaintiff's margin should be exhausted or insufficient and not then unless they should demand of him increased security, or require him to take and pay for the stocks. In an action to recover damages for a wrongful sale by defendants of the stocks, the Judge instructed the jury that the plaintiff, if entitled to recover, was entitled to the difference between the amount for which the stock was sold by the defendants, and the highest market value which it reached at any time after such sale down to the day of trial. On appeal this direction was upset. There seems, however, still to be an opinion in the United States that circumstances may occur which would justify such a direction. Since Owen v. Routh (14 C. B. 327) our own rule has been inflexible, fixing the damages by the price the day before the trial. As a general rule interrogatories at common law are answered, if not with absolute bona fides, at least with such regard to the object sought to be attained, as to cause applications for oral examination to be very rare. Nevertheless, Peyton v. Harting (29 L. T. Rep., N. S., 478), should not be overlooked. There a defendant had answered interrogatories in "a voluminous manner," introducing many additional and irrelevant topics. Application was made to a Judge under the 53rd section of the Common Law Procedure Act 1854, by which, in case of omission without just cause, to answer sufficiently written interrogatories, the Court or a Judge may, at discretion, direct an oral examination of the interrogated party as to such points as they or he may direct, before a Judge or master. In Peyton v. Harting, Baron MARTIN had made an order that the interrogated party should attend before a master and make oral answer "as to such points as he has refused to answer in his affivadit." This, it was contended, was not sufficiently specific, and it was also urged that the fact that irrelevant topics had been introduced, was no ground for exercising the power. The Court overruled both objections to the order, expressing the opinion that it was open to the Judge Mr. to leave all necessary questions to be asked by the master. Justice DENMAN remarked, as to interrogatories generally, "without saying it is always a duty a give a categorical answer, it is often the case that excess may make an answer insufficient and wholly impertinent." THE formalities necessary to obtain payment of dividends and other moneys from the Court of Chancery, especially by solicitors and others holding powers of attorney, are still very troublesome and it might fairly have been expected that when the duties of the ACCOUNTANT GENERAL were undertaken by the PAYMASTER GENERAL a less cumbersome practice would have been adopted. It is generally known, that any person entitled to receive dividends or other moneys from the Court of Chancery by virtue of powers of attorney, instead of being able to obtain payment with the same facilities attending the payment of money in most of the commercial transactions of life (for even the Bank of England is in the habit of sending through the post dividend warrants to the persons entitled to receive them), is obliged when first receiving such dividends to attend in person at the PAYMASTER-GENERAL'S office, and be there identified by a solicitor known to the officials. We believe that shortly before the long vacation, in consequence of certain representations made on behalf of the Mercantile Law Amendment Society, the formalities of which we complain were relaxed by the Lords Commissioners of Her Majesty's Treasury in favour of bankers when receiving Chancery dividends under powers of attorney. The convenience of the legal Profession is not less important, and when to this inconvenience of attending as required, from all parts of London, we add the fact that solicitors are not allowed to charge for such attendances in party and party costs, we certainly think that a good case is made out for further considerable alteration. We fail to see why crossed cheques payable to order should not be handed to the clerks of solicitors on such clerks producing a request to that effect signed by those named in powers of attorney. We think that the facilities we suggest might be extended to many cases other than those in which Chancery dividends or other moneys are received by soli citors under powers of attorney, for instance, for the receipt of dividends by creditors in creditors' suits so that personal attendance in such cases may also be dispensed with. That of which we complain is frequently aggravated by the necessity for all the persons to whom a cheque may be payable, to attend and receive the same, where it is desired to avoid the expense of a power of attorney. Again, there are few firms of solicitors in extensive practice who have not in their offices Chancery suits in connection with which small sums are payable, but which, practically, can never be received, simply because of the expense of taking the parties to the office to receive the same or the expense of and incidental to receiving it under power of attorney. As an illustration of the objectionable working of the present rules, we may mention that while a solicitor can receive a cheque for costs, without being identified by another solicitor known to the officials, where he is himself known to them by previous identification, yet, if the solicitor receiving such cheque for costs were the next day to present himself at the same office to receive a cheque as a creditor in a suit, he could not obtain payment until he was identified. A SOMEWHAT startling claim to a lien was before Vice-Chancellor HALL on the 8th inst. The defendants were bankers, and the bill was filed by a person of unsound mind found lunatic by inquisition for a declaration that the defendants were not entitled to a lien on certain boxes and deeds, securities, and documents of title contained in them. The lunatic had, when a stockbroker, employed the defendants as his bankers, and they made advances to him from time to time upon securities. At the time of the inquisition certain boxes were in the defendants' possession, containing securities of customers of the lunatic. The keys of the boxes were kept by him, and he had access to them when and as he desired for the purpose of depositing or removing securities. The advances were not made on the contents of the boxes, but on securities specially lodged for the purpose. In consequence of several customers of the lunatic having applied for their securities, the boxes were examined in the presence of the plaintiff's solicitor, and the securities which belonged to customers handed over, until all claims were satisfied. It had been contended that the committee of the lunatic were the only persons entitled to the boxes and deeds of the customers; but the customers being satisfied, the bankers then set up their lien on all that remained, relying upon a custom of themselves and other bankers in London as a part of their ordinary business to receive securities on deposit generally, and they rested their present claim to a lien upon that general custom. It is difficult to understand how the bankers could believe that they were entitled to such a lien. The VICE-CHANCELLOR remarked that " No cases were cited in the arguments which sufficiently upheld the defendants' contention. They relied on the general law as banker's lien on his customer's property in their hands, and on that alone, and said the boxes came into their hands in their ordinary business, as bankers, because they allowed their customers to make such deposits with them. But that fell short of a proof that such a practice was the general practice of bankers towards their customers. The defendants' answer did not state such facts as would warrant the conclusion that the lien on which they relied existed or could be implied. The general law of lien was part of the law of merchants, and having regard to the authorities on the subject, he must hold that the lien which the defendants had set up failed." The true principle as regards a banker's lien is clearly laid down at p. 301 of Grant's Law of Bankers (last edit.) "The banker has a general lien upon all securities in hand belonging to any customer which have been lodged with him as security, and the lien extends to any general balance that may be due, unless the security was received under special circumstances that take it out of the general rule: (Re Williams, 3 Ir. R. Eq. 346)." It is difficult to imagine more special circumstances than those revealed in the case which we have noticed. to a THE question so much discussed recently of the right of a broker to deal as principal was again raised in White and another v. Benekendorf (29 L. T. Rep. N. S. 475). The broad general principle sought to be established in the motion in that case was that by the custom of markets a broker is personally responsible, and may sue his employer for goods sold and delivered. Mr. Justice KEATING observed that it was a startling proposition that both buyer and seller look to the broker only, and Mr. Justice BRETT added that it was one that cannot be maintained. Undoubtedly the proposition is startling, and it would seem only necessary to examine the nature of a broker's employment to see that it is unfounded. The accepted definition of a broker is that he is an agent employed among merchants and others to make contracts between them in matters of trade, commerce, or navigation, for a commission, commonly called brokerage. And Domat, b. 1, tit. 17, s. 1, describes him as being a person empowered, not to treat, but to explain the intentions of both parties. Now in White v. Benekendorff the plaintiff brokers were agents for HEILBUT and Co. in selling to BENEKENDORFF certain indiarubber at 2s. 11 d. per lb. Without giving any reason, BENEKENDORFF threw up the contract, and instructed the brokers to sell at 3s. They did sell at 2s. 10d., and sought to recover the difference between 2s. 10d. and 2s, 11 d. from BENEKENDORFF. The court held that there was no contract between the plaintiffs, the brokers, and the defendant, but between HEILBUT and the defendant. A feature in the case was a prior contract by the brokers to buy of SCHLUTER and Co., but that contract was cancelled by mutual consent. Mr. Justice BRETT considered that the brokers exhausted the authority which they had received from the defendant by entering into that contract, and that the defendant was not bound to pay HEILBUT. Consequently, when the broker paid HEILBUT, he paid him what there was no obligation on the defendant to pay, and consequently which the defendant was not liable to recoup. The only refuge for the broker was to claim against the defendant for goods bargained and sold, and there he is met by the fatal objection that he cannot constitute himself a principal. Then it was argued that by custom the broker makes two contracts, one for his seller and one for himself. But obviously the only contract intended was with HEILBUT. "Were there evidence of such a custom," said Mr. Justice BRETT, "I cannot say how far it would be reasonable, but we have no evidence of it, and I cannot agree to any such general proposition as that a broker may treat himself as principal.' The position seems to have been clearly laid down by Chief Baron KELLY in Fairlie v. Fenton (22 L. T. Rep. N. S. 373; L. Rep. 5 Ex. 169). Speaking of the broker he said "he, no doubt, may frame a contract in such a way as to make himself a party to it and entitled to sue, but when he contracts in the ordinary form, describing and signing himself a as broker, and naming his principal, no action is maintainable by him. Though innumerable contracts of this nature daily take place, yet no instance has occurred within my own recollection, nor has any instatce been cited to us, where an action has been brought by a broker, describing himself as such in the contract, and not using words which expressly, or by necessary implication, make him a contracting party." And there are observations in the judgments in Mollett v. Robinson (23 L. T. Rep. N. S. 187) to the same effect. There ought, therefore, on this one point connected with contracts through brokers to be no misunderstanding as to the law. OUR readers will probably have perused with attention, and some feelings of alarm, the judgment of the LORDS JUSTICES delivered on the 6th inst., in the case of Beall v. Smith. The application was made to the court by the committee of a lunatic, praying that certain proceedings and orders in a suit instituted in the name of the lunatic by a next friend might be declared to be improper and unauthorised, and that his solicitors by whom they had been conducted and obtained might indemnify the lunatic's estate from the loss occasioned thereby. It is very difficult to go into the merits of the question in the face of the careful and elaborate judgment of Lord Justice JAMES, and it would be improper to express any opinion, considering that Messrs. MERRIMAN and Co., the solicitors affected, have declared their determination to appeal to the House of Lords. We propose now simply to summarise the propositions of law established by this decision. Primarily it is laid down that as between a person non compos mentis and a solicitor proposing to act in his interest and on his behalf, the latter is not protected even by the orders of the court which he may obtain. "Those orders are, as between them, really the solicitor's own orders." Secondly, it is essential to a suit by a person of unsound mind suing by his next friend that he should not have been found so by inquisition. Having been found so by inquisition, or becoming of sound mind, the suit is completely paralysed thereby. "If he becomes of unsound mind," says the court, "the next friend can have no pretext for continuing his intervention; if he is found lunatic by inquisition so as to be under the control and protection of the Crown and of the Court in Lunacy, there is equally no pretext for continuing the officious protection of a self-constituted guardian or committee, when there is a legitimate protection in the proper tribunal." The finding of the inquisition stops the suit; it cannot even go on until the appointment of a committee. A receiver in Beall v. Smith was appointed by the Court of Chancery; the lunatic was found so by inquisition. The Court of Appeal declared that under the circumstances all proceedings taken after the appointment of a receiver were unauthorised and improper, and that all the proceedings after the finding on the inquisition, were irregular and void. The solicitors were held responsible for these proceedings, and were ordered to make good the loss to the lunatic's estate, the order made being to direct that they should pay into court in the lunacy the sums paid for costs to themselves, to the defendant's solicitor, and to the accountant, deducting the costs of the suit up to the appointment of the receiver. They were further ordered to pay all the costs of the suit, and of the appeal, as between solicitor and client. This is a very severe decree, more particularly as Lord Justice JAMES did not find that Messrs. MERRIMAN had acted malâ fide. He found simply that the proceedings taken by them were not taken in the interest of the lunatic, but for their own purposes. We simply state the effect of the judgment of the Court of Appeal, forbearing to examine the facts upon which the conclusions were arrived at. The lesson taught by it must be carefully regarded. The solicitors acted bona fide; they were not i aware that they were taking irregular or improper proceedings. But because these proceedings were not absolutely necessary in the interest of the lunatic, they are visited with a heavy penalty. The courts, as a rule, are disinclined to punish solicitors personally for proceedings taken bonâ fide, and we shall be glad if the House of Lords can discharge or modify the declaration of the Lord Justices. Vice-Chancellor WICKENS was of opinion that there had been only an error of judgment to which the court was in a measure a party. We have recently heard much of the licence of counsel in the cross-examination of witnesses. We have also for many weeks past seen a counsel wearing a silk gown verging upon open conflict with three learned Judges. It is marvellous that an explosion has not occurred before. It has come at last in a form which must be preserved as a warning to future generations of lawyers. Here is the newspaper report:- Dr. Kenealy. My object is to show that all these witnesses have, one after another, been talked to by various persons, and have been influenced in that way. The Lord Chief Justice.-Hitherto you have signally failed to show that. Dr. Kenealy. That is a matter for the jury and not for your Lordship. Your Lordship is perpetually insulting me from the bench. The Lord Chief Justice.-What did you say, sir? Dr. Kenealy repeated his words. The Lord Chief Justice.-Sir, don't use such language to me, because I won't bear it. Dr. Kenealy.-I consider that your Lordship has insulted me by what you have said in open court, taking into account the number of times it has been repeated. The Lord Chief Justice.-You have no business to use such language, sir. Mr. Justice Lush.-I think it is quite time to put an end to this kind of cross-examination. A Juror.-It has no effect on the jury whatever. Dr. Kenealy.-I am very sorry to hear your Lordship say this. I mean to ask the jury to suspend their judgment, and to say whether a number of persons, having talked to these witnesses, may not have influenced them in what they were going to say. Mr. Justice Lush.-When you hear that a witness has formed his opinion before he spoke to anyone, what reason can there be for such an insinuation ? Dr. Kenealy. I have no doubt it is the witness's conscientious opinion, but that is surely not to preclude me from questioning him. Mr. Justice Lush.-But I think something is due to the opinion of the Bench, and as I understand of the jury, that a great deal of time is being wasted. Mr. Justice Mellor.-I very much regretted, Dr. Kenealy, to hear you say what you did to the Chief Justice. It is the first time that I ever heard it said that a judge was not at liberty to interpose an observation of that sort when he considered that a question was not regular. I don't mean to impute to you anything wrong on account of the question which you put, but I am bound to say that the judge has a duty to perform in reference to the examination of witnesses. way. The Lord Chief Justice. A great many witnesses have been called-I really forget how many-with regard to this particular matter. The same kind of questions have been put to all of them, and nothing has been elicited from any one of them to shake confidence in the opinion which they had formed, whether rightly or wrongly, that he is the man. The witnesses make their statement, and it is reduced to writing in the ordinary I have not heard a single answer from a single witness which would lead one to suppose for a moment that the witness had formed his judg ment from what had been said to him by one of the solicitors for the prosecution or by any one else. I cannot therefore help interposing and say. ing that time has been wasted. It is the duty of a judge to interpose when he sees that the public time is being wasted; and I cannot help saying that it is not consistent with decency for a counsel to say that the judge has insulted him when he makes such an observation. (Applause.) Dr. Kenealy. I must exercise my discretion, although I may be indiscreet in doing so. The Lord Chief Justice.-It is not discreet or decent for a counsel to address a judge as you have done. Dr. Kenealy.-Your Lordship has repeated that so often that The Lord Chief Justice (with emphasis, and tapping the desk before him as he spoke).-For seventeen years have I sat on this bench, and I never had an unpleasant word with counsel before I had the misfortune to preside over this trial. Mr. Serjeant Parry.-That is so. Dr. Kenealy.-I have done all I could to avoid it. (Exclamations of "Oh!" from members of the Bar.) Mr. Justice Lush.-When I first heard what I have heard from you, I must say that I did so with astonishment that any gentleman of the Bar should have so misconducted himself, and I think the offence is much aggravated by the fact that the gentleman using such language holds the office of her Majesty's counsel, who owe a special allegiance to her Majesty's Court. Dr. Kenealy. This is not the first time you have reminded me of this, and I have borne more in this court than I ever did before. Mr. Justice Mellor.-If this were to occur in any other trial, the administration of justice would be very much impeded. I remember what that distinguished advocate whom you have so frequently mentioned, M. Berryer, said with regard to the relations between the Bar and the Bench conducing to the despatch of business. Those relations cannot exist if such things as these are to continue. Dr. Kenealy.-I have been treated as no other counsel was ever before treated in any of the courts of Westminster. The Lord Chief Justice (energetically).-You have brought it down upon yourself. Counsel cannot expect to violate all the ordinary rules and system of conducting justice, and to outrage all the rules of propriety, and not bring down upon himself the censure of the Bench. The judges would be wanting in their duty if they did not observe upon such conduct. (Supprassed cheers.) Dr. Kenealy.-I am quite anxious to pay due attention to the censure of the Bench, provided it is conveyed to me in different terms from what have been customary with your Lordship. Your Lordship has frequently ad dressed me in the most bitterly offensive terms which could be selected. (Indications of dissent.) I am sorry to have to say so, but that is my opinion, and I cannot alter it, whatever may be the opinion of others. The Lord Chief Justice.-Well, let us go on. An eminent person once said that the power of a Judge is too great. He has the power to punish for contempt, but in too many cases he cannot exercise it. The conduct of the defence in the Tichborne case furnishes us with a striking illustration of this. We desire to say, and we are sure that we speak the sentiments of the entire legal Profession, that Lord Chief Justice COCKBURN is universally admired, esteemed, and respected, and that any advocate who, taking advantage of his position, offers an insult or an indignity to this distinguished head of the Common Law Bench, commits an offence which is absolutely unpardonable. Whether it is one which can hereafter be taken cognizance of by the governing bodies of the Profession is a matter for the most serious consideration. THE ESTATES OF PARTNERS IN BANKRUPTCY.—II. WE propose in this paper to discuss the questions raised in the recent cases of Ex parte Honey (L. Rep. 7, Ch. 178; 25 L. T. Rep. N. S. 728); Ex parte Stone (L. Rep. 8 Ch. 914); and Ex parte Hammond (L. Rep. 16 Eq. 615; 29 L. T. Rep. N. S. 72), as to the joint and several liabilities of partners. 66 If per In the case of Ex parte Honey, a joint and several promissory note was signed by two members of a firm, by the firm, and by several other persons. The firm having become bankrupt, the holder of the note carried in proofs against the joint estate of the firm, and against the separate estates of the two partners who had signed the note. This raised the question of the construction of the 37th section of the Bankruptcy Act 1869, which says that if any bankrupt is at the date of the order of adjudication liable in respect of distinct contracts, as member of two or more distinct firms, or as a sole contractor, and also as member of a firm, the circumstance that such firms are in whole or in part composed of the same individuals, or that the sole contractor is also one of the joint contractors, shall not prevent proof in respect of such contracts against the properties respectively liable upon such contracts." The proper construction to be put upon this section is a matter of some doubt. Lord Justice Mellish discussed the meaning of the words " firm" and "sole contractor," and said "the section speaks of a person liable as a "sole contractor, and also a member of a firm." It is true it speaks of the joint liability as being the liability of" the firm," the reason of which, I apprehend is, that unless there is a firm there can be no joint estate. I should apprehend that the word "firm" would apply to every case where there was a joint estate. sons who did not carry on business in partnership at all, either generally or in respect of a particular business, made a joint and several note, although they would be jointly and severally liable, there would be nothing but their separate estates to administer-there would be no joint estate. The words relating to a firm are not, as it appears to me, to prevent the words "sole contractor" and "joint contractor," according to the plain and ordinary meaning of words, from being applied to every joint and several promissory note. A joint and several promissory note being entered into, there are "joint contractors" and "sole contractors." His Lordship subsequently added, "It appears to me that a joint and several promissory note, though it is one instrument, contains both a joint contract and distinct separate contracts by the several makers. It seems to me, therefore, to be within the plain meaning of the words of this section; and the only conclusion I can draw is that it was the intention of the Legislature that wherever there was a joint and separate contract and joint and separate estates being administered in bankruptcy, the creditor should be entitled to prove against both the joint and separate estates,' Upon this view of the section it was accordingly held that the holder of the promissory note was entitled to prove against and receive dividends from both the joint estate of the firm and the separate estate of the two partners who had signed the note. A question, we should have said, was raised as to the creditor's right to receive a dividend in each case. Lord Justice James was clear that the right to prove carried the right to receive a dividend. "The whole Act,” he said, "is framed on the plan of simply declaring the right of proof in each case, and then by a single clause, it says, once for all, that a proof carries with it a right to dividend." Lord Justice Mellish went through all the sections relating to proofs, and came to the same conclusion. In Ex parte Stone, we have a case where there is no evidence on the face of the instrument that the parties were contracting as partners, and it was there held that parol evidence is admissible to show that the debt for which the liability was incurred was a partnership debt, and the money which it represented usel for partnership purposes. Such evidence being satisfactory, proof was admitted against the joint and several estates of the bankrupt partners. John and Thomas Welch were in partnership, and they borrowed a large sum of money from their father, Henry Welch. In the agreement entered into covenanting for the repayment, the partners signed in the name of the firm, and this was the only fact which distinguished the case from that of Ex parte Honey (ubi sup.) "It was there decided," said Lord Justice Mellish, "that the separate contractor need not be carrying on business separately. Here the question is whether it is necessary that the joint contract should be formally entered into in the name of the firm." He concluded, "from the very nature of a covenant the covenantors must covenant in their own names; a firm as such cannot enter into a covenant. I think it is quite unnecessary that the firm should be specially mentioned, if the contract is made for partnership purposes." We cannot add anything which would make these decisions plainer or more intelligible than they are; and we will proceed to refer shortly to the case of Ex parte Hammond, which relates to the release of partners. A partner received his discharge under his separate liquidation, and the question was whether this released him from the joint debts so as to exempt him from further bankruptcy proceedings in respect of them. The appeal came up to the Chief Judge from the decision of the County Court Judge for Greenwich, who started this difficulty, that if two partners were separately discharged under liquidations in respect of their separate estate, and thereby released from liability to bankruptcy proceedings in respect of the partnership debts, the joint creditors would have no means of realising the partnership property. The Chief Judge pointed out, however, that in such a state of things the joint debtors were entitled to have every farthing of the joint estate administered. "The effect of the liquidation," he said, "is to take out of the debtor every particle of his property, while at the same time he gets discharged from all his debts. By the express terms of the Act joint debts are proveable under a separate liquidation. In what way are the joint creditors prejudiced in the present case? The County Court being asked to adjudicate these debtors jointly bankrupt, one of them answers, The debt alleged to be due from me is not due; I am already discharged from it, and there is no reason why I should be adjudicated a bankrupt, for by means of sect. 102 the creditor has an ample remedy under the existing proceedings.' If an adjudication is made against one partner alone, the joint creditors are entitled to have every farthing of the joint estate administered. It is useless to spell out the old Acts of Parliament or the new rules, none of which can countervail the plain provisions of this Act. You cannot make a man a bankrupt who does not owe a debt, and the appellant is entitled to say, 'I do not owe any debt; I am discharged from all my debts.' Nor is there any such danger as the County Court Judge thought would arise. The joint estate remains as much liable to the joint debts as it ever was." We shall follow up this branch of the subject in another paper. WHAT IS A VALID VOLUNTARY SETTLEMENT OF A CHOSE IN ACTION? V. A RECENT decision of Vice-Chancellor Bacon (Warriner v. Rogers, 28 L. T. Rep. N. S. 863; L. Rep. 16 Eq. 340), threatens to throw the law on this subject-which we had hoped had been tolerably settled by such cases as Richardson Richardson (L. Rep. 3 Eq. 686,) and Morgan v. Malleson (L. Rep. 10 Eq. 475,)-again into confusion: and we are compelled to ask, Is there no escape from this absurd and monstrous state of things, that at this time of day, with the nineteenth century on its wane, there is no certain rule as to what by the law of England does or does not constitute a valid donation? Nor will sect. 22, sub-sect. 6, of the Judicature Act cure this, unless "declarations of trust " are "assignments' within it, which it can hardly be contended they are. (See LAW TIMES, June 28, 1873.) Now we are not disposed, unless compelled, to disturb the law as laid down by so great a master of equity jurisprudence as the Judge, himself afterwards a Lord Chancellor, who decided Richardson v. Richardson. Still less are we inclined to accept in the place of it any rule of law laid down, though more recently, by another Vice-Chancellor, who is at best only a co-ordinate authority. Nevertheless, the decisions are in conflict; so it will not be disrespectful to Vice-Chancellor Bacon if we scan a little closely the grounds of his judgment. A donor about six months before her death, delivered to the donee a box, but retained the key, saying, "Take this box into your possession, it will be of some service to you some day, but you must not open it until after my death." In the box was paper writing signed by the donor, and stating that the " tents of this box is a deed of gift to the said John Warriner," inter alia, "of all the furniture, silver, glass, china, and the things in the house at Stramongate, my mother's portrait, watches and chains and trinkets, in care of J. Haston, also £100 each for all of Warriner's children; if anything happened among them, the other to be divided among the rest.' No deed of gift was in the box, or ever executed. The ViceChancellor held there was no valid declaration of trust. In Richardson v. Richardson, G., by voluntary deed, assigned all her personal estate to B. absolutely, and gave B. a power of attorney to sue, &c., for the assigned premises. This was held to pass promissory notes belonging to G., found in B.'s possession after G.'s death, though unindorsed, and not proved to have been ever delivered to B. In Morgan v. Malleson a paper writing, signed by J. S., "giving and making over to M. an Indian bond (which was a con transferable by delivery), as token for all his kind attention to me during illness," was held to pass the bend, though no consideration was given for the gift, and the bond was not delivered to M. With regard to the last-named case, Vice-Chancellor Bacon doubted the accuracy of the report, which, however, he himself did not accurately represent, for he says that the memorandum or letter was retained by the donor, whereas the report says that it was not, though the Indian bond was. It is true that that case is very shortly (for the importance of it too shortly) reported, and the judgment of the Master of the Rolls occupies only seven lines, but we have yet to learn that that detracts from its authority. The Vice-Chancellor is equally incorrect in saying of Richardson v. Richardson that the " assignor ceased upon the execution of the deed to be the owner of the things which he assigned," for the main argument against the donee's title there proceeded on the fact of the non-delivery of the notes, and therefore of the donor still continuing their owner. But Vice-Chancellor Bacon grounds his decision on the judgment of Lord Justice Turner in Milroy v. Lord (4 D. F. & J. 261), which he pronounces to contain a clear and distinct exposition of the law upon the subject. There T. M., by a voluntary deed, assigned some bank shares, which were transferable by entry in the bank books, to J. in trust for the plaintiff. No transfer was made; but L. held a general power of attorney to transfer T. M.'s shares, and a power to receive dividends on the bank shares, which dividends he for three years after the execution of the deed received and paid to the plaintiff, sometimes directly, and sometimes through T. M. The Lords Justices, reversing Vice-Chancellor Stuart, held that T. M. had neither declared himself nor L. a trustee for the plaintiff, though on the latter point Lord Justice Turner had "great doubt," and admitted the "intention was that the trust should be vested in L." whilst both Judges felt the hardship of the decree they made, and struggled against making it. The clear and distinct exposition of the law referred to by Vice-Chancellor Bacon was this: "I take the law of the court to be well settled, that in order to render a settlement valid and effectual, the settlor must have done everything which, according to the nature of the property, was necessary to be done, in order to transfer the property." (This seems irreconcileable with Richardson v. Richardson, where the "nature of the property," the notes, required indorsement and delivery, and yet the assignment was held good)—–— "And render the settlement binding upon him." 66 (This is not telling us much; for everyone admits that everything necessary" must be done. The question is-What is necessary?) The Lord Justice then proceeded to lay down three rules, to one or other of which a donor must resort to make the settlement valid. He must either (1) actually transfer the property to the donee or (2) to a trustee for him, or (3), declare that he (semble or the trustee) "holds it in trust for the purposes of the settlement. This may be all very true, but here again the pinch of the question is-What is such a declaration of Trust? and this the Lord Justice leaves undefined. And again "The cases, I think, go further to this extent, that if the settlement is intended to be effectuated by one of these modes, the court will not give effect to it by applying another of them. If it is intended to take effect by transfer, the court will not hold the intended transfer to operate as a declaration of trust, for then every imperfect instrument would be made effectual by being converted into a perfect trust." But Vice-Chancellor Wood, in Richardson v. Richardson, five years later than Milroy v. Lord, thought that the circumstance, whether "the assignor has done all he can, is not the sound doctrine on which to rest these cases," and that if there be "an out and out assignment" affecting to pass everything by the instru ment "such a declaration of trust is as good a form as any that can be desired." The importance of Warriner v. Rogers, in our opinion, is not so much the decision in that particular case, which was one relating to choses in possession (and is therefore strictly no authority for cases of choses in action), and was really decided on the grounds that the character of the paper writing was testamentary, as for the way in which the Vice-Chancellor resorted to the learning on the latter class of cases, and set up again the refined and over nice distinction between assignments and declarations of trust which was formerly said (18 Beav. 282) to pervade all the cases, but which Kekewich v. Manning (1 De. G. M. & G. 176), Donaldson v. Donaldson (Kay, 711), Miller v. Harrison (5 Ir. Eq. Rep. 324), supported and followed by Richardson v. Richardson and Morgan v. Malleson, had contributed to break through, establishing in its stead some sensible and tangible test by which to try every case. These had decided (1) that there is no magic in the words employed, and that neither the word "trust," nor "confidence," nor any language creating a trust," is necessary; (2) That the true tests of the validity of the transfer are not whether anything more is possible or capable of being done by the donor, but whether he intended something more, when called on to do it, distinctly expressed in the assignment to be future," and "whether the donee can take advantage of what has been done, without requiring anything 66 DUTIES PAYABLE BY REASON OF DEATH. THE case of Attorney-General v. Lemas, recently decided in the Court of Exchequer has convinced us that the laws relating to these duties are greatly in need of amendment. We propose to consider the several recent cases of De Lancey's Succession (L. Rep. 4 Ex. 345, and L. Rep. 5 Ex. 102); Attorney-General v. Cecil (L. Rep. 5 Ex. 263); Forbes v. Steven (L. Rep. 10 Eq. 178); Solicitor-General v. Law Reversionary Interest Society (L. Rep. 8 Ex. 233); The Executors of Perry v. The Queen (L. Rep. 14 Ex. 27): and the above-mentioned case of Attorney-General v. Lemas, and we shall attempt to point out the manner in which the Acts appear to us to operate unfairly, and to suggest alterations. The first case to which we shall refer, viz., that of De Lancey's succession, relates to the Legacy Duty Acts, and the facts of which as reported were as follows: Under a will dated in 1799, a testator who died in 1800, leaving two sons, H. and B., and a daughter C., bequeathed a large sum of money to trustees upon trust for investment in land, to be conveyed to the uses following in addition to the ordinary uses to support contingent uses, viz., to the use of his son A. for lite with remainder to the first and other sons of A. in tail male with remainder to the use of the testator's son B. for life, with remainder to his sons in similar manner, with remainder to the use of the testator's right heirs. The money was never invested in land, but A. received the income until his death in 1840, when he died a bachelor and intestate. B. then received the income until 1857, when he also died a bachelor and intestate. C. declined to receive the income, and died in 1866 a spinster and intestate. Upon C.'s death the fund was paid into the Court of Chancery, and, with the exception of the income which accrued during C.'s life which belonged to her personal representative was paid out to D., who was the heir at law of C. The commissioners of Inland Revenue, treating the money as equitably converted into land, claimed from D. succession duty upon it at the rate of five per cent., according to his relationship to C., but D. insisted that he was liable only to pay legacy duty under the will of the testator. The court was equally divided in opinion, Chief Baron Kelly and Baron Channell considering that legacy duty was payable, and Barons Bramwell and Cleasby being of opinion that succession duty was payable; but they all agreed that D.'s interest must be considered to be derived from C., and that the duty must therefore be at five per cent. Baron Cleasby being the junior baron, withdrew his opinion, and the court declared that legacy duty was payable. The case was argued principally upon the construction of the proviso at the end of the 19th section of the Legacy Duty Act (36 Geo. 3 c. 52); and we are inclined to agree with Mr. Baron Cleasby that that section relates solely to the duty payable by reason of the interests actually created by the will, and that so soon as the property becomes vested in a person absolutely, and he has paid the legacy duty imposed upon him by it, it ceases to have any operation; but we also agree with Chief Baron Kelly when he stated "that he was by no means prepared to say that if the 19th section had been omitted altogether in the Act, the duty would not have been payable, by virtue of its general provisions, upon any money to be laid out in land, until actually so laid out," and he added, "The doctrine that money to be laid out in land is to be treated as land, though long established in courts of equity is, in truth, a mere fiction, and no more; and founded upon what Lord Thurlow, in Pulteney v. Earl of Darlington (1 Bro. C. C. 223, 237), called the cant expression,' that in equity 'what is to be done, is considered as done.' This fiction is, indeed, reasonable and just when applied to the succession of per sons entitled under the limitations of a will or settlement, because it is necessary, in order to give effect to the intentions of the testator or settlor, that the property should pass in the same line of succession as if it were land; and, therefore, in case of intestacy, as to the heir, and not to the next of kin. But here the necessity for the fiction ends. And why should it be extended where no such necessity or reason exists? Why should the Crown be precluded from claiming in respect of any money whatever, while it is de facto money, duties imposed upon all personal estate by Act of Parliament, merely because its deceased owner may have directed it to have been laid out in land ? When it is remembered that, as this very case shows, property clothed with this trust may pass, not only through a long succession of persons entitled to limited interests, but from generation to generation, to a succession of heirs entitled to an absolute interest in the whole property, it cannot be supposed that the Legislature intended to confer a power upon anyone who might think fit to create such a trust, to exempt his personal estate from duties to which it is liable by law for an indefinite period of time. I am of opinion, therefore, that the principle, or equitable fiction, upon which courts of equity have so long held that money to be laid out in land is, for certain purposes, to be treated as land, is inapplicable to the interpretation of the statutes imposing duties upon personal estates; that these statutes must be read according to the plain and ordinary meaning of the language which the Legislature has used; and consequently that this money not having been actually laid out in land, is liable to duty in personal estate under the Legacy Duty Acts." We quite agree with every word which the Chief Baron has used, and as it appears to us quite clear that upon the death of the testator A. took the absolute reversion in fee expectant upon the death without issue of himself and B., and that C. never took any interest under the will, we consider that by force of the Legacy Duty Acts, the following duties became payable, viz., legacy duty at 3 per cent. under A.'s intestacy upon the absolute reversion to the money, expectant upon the death without issue of B., which passed by such intestacy to B.; further legacy duty at 3 per cent. upon the death of B. upon the capital of the fund which thus passed to C., and upon the latter's death legacy duty at 5 per cent., as ordered to be paid, but whether the above duties were all actually claimed and paid, we have no knowledge. Chief Baron Kelly, concurred with Mr. Baron Cleasby, that if succession duty were payable it would be by reason of the devolution from C. to D., and not by reason of the disposition made by the will of the testator, and that C., not the testator, would be the predecessor within the meaning of sect. 2 of the Succession Duty Act (16 & 17 Vict. c. 51). Upon appeal (L. Rep. 5 Ex. 102), the decision of the Court of Exchequer was affirmed, Chief Justice Bovill stating that "the argument on the part of the Crown has proceeded on the ground that, by reason of the will, and of the trusts still continuing, the money is to be treated as land for all purposes, including liability to duty, and that, therefore, succession duty attaches upon it as land. But that argument has pressed the equitable doctrine on which it proceeds beyonds its legitimate limit. When it is said according to that doctrine a fund to be laid out in land is treated as land for all purposes, and that in the phraseology of the courts it, in fact, is land, the language so employed is figurative and metaphorical;" and his Lordship proceeds to state, with approval, the decision of Lord Langdale in Matson v. Swift (8 Beav. 368), and more particularly the questions which Lord Langdale suggested-" Whether after a conveyance of land in trust to sell, or after valid contracts for the sale of land and the death of the legal owner, the Crown can be entitled, for its own purposes only, to enforce the equities between the parties? If the parties should release each other, could the Crown, for purposes merely fiscal, not in the contemplation of any party, and not required to fulfil the intention of any party, be entitled to the benefit of trusts, which are declared or acted upon only for the purpose of giving effect to the intentions of the parties ?" We cannot say whether probate duty was claimed in respect of the fund upon A., B., and C.'s intestacies; but we have no hesitation in saying that, as legacy duty was payable because the property was actually personalty, probate duty must, for the same reason, have become payable. (To be continued.) |