The Test to be Applied.

It seems, therefore, that in considering questions such as (1) the non-disclosure of a trust, or (2) the irrevocability of a trust, the dominating element of what was the material cause which in the first place gave rise to the declaration of trust is the vital and deciding test. Take a case, for example, like Wigan v. English and Scotch Law and Life Assurance Co., [1909] 1 Ch. 291. An insured person assigned under seal his interest under a policy of life assurance to a creditor to secure an antecedent debt, without ever communicating the assignment to the creditor. It was held that there was no consideration for the assignment, which was voluntary, because the mere existence of a debt is not sufficient valuable consideration for the giving of a security to secure the debt. But if there has been pressure, and in response to that pressure the further assignment is made, that suffices, vide Glegg v. Bromley, [1912] 81 L. J. K. B. 108. This is an excellently illustrative case.

There

is no magic in the idea of a trust any more than in the idea of an assignment. A trust, like every other substantive state of things, is a question of fact. The worst thing a student can do in fixing principles and concepts of law in his mind is to surround any of them with the impressions of mystery or magic. Now a trust is only a legal fact when one of two things can be established, either (1) it is contractual that is, impelled and secured by valuable consideration-or (2) it is voluntary -that is, founded in bounty or benevolence; without pressure or obligation in law. readily grasps the efficacy of the first class because of its substance, and it is the substance of a thing that equity works on. The second class is necessarily different, being merely an act of grace in the giver. Law and equity not unnaturally require that such a voluntary trust should be completed in such a

One

way, in such a form, as will make it clear, beyond a scruple, to the Court that the donor intended positively and irrevocably to give the subject-matter of the trust; for it lies in sense and honesty that what the donor has not himself effectively given is not in fact given at all, and no Court can pretend to give that which belongs to a man unaffected by any consideration of contractual obligation, or any question of confidence. Hence, if the trust in such a case be not a complete and irrevocable one, it is patently unenforceable. There is no equity to protect an imperfect gift: vide per Lord Eldon, in Pye, Ex parte (18 Ves. 140, 149), and Ellison v. Ellison (6 Ves. 656). That is also why, if a man makes a gift by one mode, and it fails, the Court will not effectuate it by applying another mode (see, for example, Richards v. Delbridge (supra), Scales v. Maude, [1855] 6 De G. F. & G. 264, Dillon v. Coppin, [1839] 4 Myl. & C. 647, and Bayley v. Boulcott, [1828] 4 Russ. 345. In Richards v. Delbridge (supra) Jessel, M.R., enunciates the position in this way: "A man may transfer his property, without valuable consideration, in one of two ways -he may either do such acts as amount in law to a conveyance or assignment of the property, and thus completely divest himself of the legal ownership, in which case the person who by those acts acquires the property takes it beneficially, or on trust, as the case may be; or the legal owner of the property, by one or other of the modes recognised as amounting to a valid declaration of trust, constitutes himself a trustee, and, without an actual transfer of the deeds of title, may so deal with the property as to deprive himself of the beneficial ownership, and declare that he will hold it from time forward on trust for the other person." On the point of the Court refusing to effectuate a gift by a mode other than the one adopted by the donor, we have this valuable commentary by Turner, L.J. The cases, I think, go farther, to this extent, that if the settlement is intended to be effectuated by one of the modes to which I have referred" (that is, of making a voluntary settlement valid and effectual), the Court will not give effect to it by applying another of those modes.

(To be continued.)

Notice

THE CONVEYANCER is published monthly. of non-receipt of any number must be given to the Publishers not later than the end of the month of issue. After the end of that month the Publishers accept no liability for non-delivery. COMMUNICATIONS respecting matters of an Editorial nature should be addressed to The Editor of the Conveyancer," at 3, Chancery Lane, London, W.C.2. CONTRIBUTIONS Or manuscript forwarded with a view to insertion in the publication must be sent at the risk of the sender, although every effort will be made to return drafts or unsuitable copy. SUBSCRIPTION RATES :-Annual Subscription (payable in advance), £1 10s., inclusive of Postage; Single Copies, 2s. 9d. (postage, 2d. extra). ÉDITORIAL AND PUBLISHING OFFICES-3, Chancery Lane, London, W.C.2.

Notes of Recent Cases. ASSIGNMENT OF SHARE IN FUND, SUBSEQUENT ACQUISITION OF TITLE-ESTOPPEL.

she

a

A husband and wife or survivor had power under marriage settlement to appoint amongst their children. One of their daughters. by her marriage settlement, which recited that was entitled in reversion under the previous settlement expectant on the death of the survivor of her parents to one-third of £6,500, assigned and settled the one-third share to which she was so entitled. No appointment had then been made under the first settlement, but the mother, who survived the father, by her will appointed £2,000 part of the settlement funds to the daughter. It was held that this £2,000 was caught by the settlement of the daughter. Harper's Settlement, In re, [1919] 1 Ch. 270.

ANCIENT LIGHTS-ACTION QUIA TIMET.

If, in an action quia timet for a threatened obstruction to ancient lights by the erection of building, the Court is able from the evidence to satisfy itself that substantial damage will be caused by the building when completed, then the action will lie and an injunction be granted, as they will in all other cases of apprehended nuisances, unless the act complained of is in itself lawful and does not per se constitute a nuisance. Litchfield-Speer V- Queen Anne's Gate Syndicate (No. 2), Lim. (88 L. J. Ch. 137).

VOL. 4.

RESOLUTION TO ALTER ARTICLES - ARTICLE ENABLING MAJORITY ΤΟ EXPROPRIATE MINORITY ON PROPER COMPENSATION.

A proposed article enabling the holders of nine-tenths of the shares of a company to compel a member to sell his shares to their nominee for fair value is not just or equitable or for the benefit of the company as a whole, but only for the benefit of the majority, and such an article cannot be forced on the minority under section 13 of the Companies (Consolidation) Act, 1908. Brown v. British Abrasive Wheel Co., [1919] 1 Ch. 290; 88 L. J. Ch. 143.

WILL-DEVISE OF FARM-INCORRECT DESCRIPTION.

Testator devised a farm in Little Bentley and Little Bromley, Essex, now in the occupation of Mr. Thomas Girling purchased Testator had by me of Alderman Thorpe."

a farm called "Welham's Farm" situate at Little Bentley and Little Bromley which at the date of his will and of his death was in the occupation of Thomas Girling, but which included a small farm not purchased by the testator from Alderman Thorpe. Held, that the words purchased by me of Alderman Thorpe " did not define or restrict the subject of the devise which was the farm in the occupation of Thomas Girling, and that the whole of Welham's Farm passed under the devise. Norman v. Norman, [1919] 1 Ch. 297.

EXCESS PROFITS DUTY-DEDUCTION OF, IN ASCERTAINING NET PROFITS.

The question whether for the purpose of ascertaining amounts or values based on the net profits of a business or company excess profits duty ought to be deducted, which has come before the Court in Thomas v. Hamlyn & Co., [1917] 1 K. B. 527, and several other cases (see short note on page 11 of Vol. 3 of The Conveyancer), was again discussed in Patent Castings Syndicate, Lim. v. Etherington, [1919] 1 Ch. 306, in which Younger, J., following Collins v. Sedgwick, [1917] 1 Ch. 179 and Condran, In re, [1917] 1 Ch. 639, decided that where the manager of a company was to receive a commission of a percentage upon the net profits" for the year the excess profits ought first to be deducted.

N

LEASE FOR A YEAR AND A FRACTION-DATE OF

COMMENCEMENT.

The case of Croft v. W. F. Blay, Lim. (noted on page 65, Mag.), is now reported in [1919] 1 Ch. 277 and 88 L. J. Ch. 153.

INCOME PAYABLE SUBJECT TO INCOME TAXPAYMENT WITHOUT DEDICATION-RECOVERY OF ARREARS.

Where the Court held that income payable under a deed was subject to income tax, such income having been for years paid in full without deduction of income tax, it was also held that the past over-payments having been made under a mistake of law, could not be recovered as a debt or be deducted from future payments. Hatch, In re, [1919] 1 Ch. 351; 88 L. J. Ch. 147.

WILLS ACT, s. 27- CONTRARY INTENTION."

Where a testatrix, having a general testamentary power over a fund, appointed the fund in favour of her husband absolutely (her will containing a residuary bequest), and afterwards by codicil revoked her former bequests to her husband and died in his lifetime, it was held that the residuary bequest operated as an execution of the power, and that the failure of the appointment to the husband occasioned by the subsequent revocation did not amount to a contrary intention" within the meaning of section 27 of the Wills Act, 1837. Jarrett, In re, [1919] 1 Ch. 366; 88

L. J. Ch. 150.

ARBITRATION.

The summary procedure under section 12 of the Arbitration Act, 1889, is prompt and convenient where there is no objection to the award or where the objections raised are such as can be easily disposed of; but where there are matters which may gravely affect the validity of the award it should be dealt with by an action in which the facts can be fully ascertained. Boks & Co., In re, and Peter Rushton & Co., [1919] 1 K. B. 491.

PRIVILEGED WILL-SEAMAN.

Section 2 of the Wills (Soldiers and Sailors) Act, 1918, which extends section 11 of the Wills Act, 1837, to "any member of His

Majesty's naval or marine forces not only when he is at sea but also when he is so circumstanced that if he were a soldier he would be in actual military service within the meaning of that section," applies to the case of a sailor who made his will before but died after the passing of the Act of 1918. Yates, In the estate of, [1919] P. 93; 88 L. J. P. D. & A. 92.

LANDLORD AND TENANT-INCREASE OF RENT, &c. ACT, 1915.

A tenant holding over after notice to quit, in the case of a house to which the Increase of Rent, &c. Act, 1915, applies, does not become liable to double the yearly value of the premises under the Act 4 Geo. 2. c. 28; nor does he become a tenant on sufferance. He will remain a tenant on the terms of his former tenancy so long as he continues to pay his rent and performs the other obligations of the tenancy: such is the effect of the 1915 Act. Per Avory, J., it has been held from early times that the use of the word wilfully" in the statute of Geo. 2. means 'wilfully and contumaciously" in holding over by the tenant, and having regard to the provisions of the Act of 1915 it could not properly be said that the tenant was "contumaciously holding over." Crook v. Whitbread (Times L. R., May 24).

COPYHOLD-RIGHT OF WAY.

Where a right of way, not of necessity, over copyhold land had been enjoyed by the copyhold tenant of adjoining land held of the same manor for eighty years such length of user was sufficient to found a presumption that by custom of the manor such a right of way could be acquired-but as the dominant tenement had been enfranchised not under the Copyhold Acts but at common law without the right of way being reserved in the Deed of Enfranchisement it was thereby extinguished. DERRY V. SANDERS ([1919] 1 K. B. 223; 88 L. J. K. B. 410).

CONTRACT TO BE VOID IN A CERTAIN EVENT.

By a contract in 1913 a French company contracted to build a steamer for a shipping company subject to a condition that if the builders should be unable to deliver the steamer within, in the event of France

becoming engaged in a European war, eighteen months from the 30th January, 1915, the date fixed for completion of the ship, then the contract should become void. France became engaged in war with Germany on August 2, 1914, and the completion of the vessel within the time fixed in that event was prevented. Held by the House of Lords, affirming the decision of the Court of Appeal, that the contract became void and not merely voidable, and as there was no wrongful act or default on the part of the builders they were entitled to allege that it was void. NEW ZEALAND SHIPPING CO. v. SOCIÉTÉ DES ATELIERS ET CHANTIERS DE FRANCE ([1919] A. C. 1).

Non-communication of a Declaration of Trust.

(Continued from page 88, Mag.)

"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 (he adds shrewdly enough) every imperfect instrument would be made effectual by being converted into a perfect trust" Milroy V Lord [1862] (4 De F. & J. 264, at p. 274).. 274). And, consequently, in the case of a voluntary gift, if an imperfect instrument of a fiduciary nature is produced, the Court will not enforce it because, to adopt the language of Jessel, M.R., you only make the imperfect instrument evidence of a contract of a voluntary nature which the Court will not enforce Richards v. Delbridge (supra).

66

Non-communication.

It is here that the element of non-communication may be examined. We dissent profoundly from the dicta of Neville, J., quoted above. The phrase secrecy of a man's chamber" counts for nothing-it is mere rhetoric. The absence of communication is an element of evidence like every other surrounding circumstance. That it is presumptive evidence in the sense that, standing by itself, unexplained, unrebutted, it predicates an intention to render the trust ineffective, we cannot, with humility, agree. We repeat, it

is merely an element for the consideration of the Court. What is of the essence of the matter is this: do the facts establish a perfect irrevocable trust or gift? Non-disclosure will weigh in the scale against a trust or gift where the alleged voluntary trust or gift is found to be revocable or imperfect, because it is additional evidence of the inefficacy of an act incomplete and not binding; it will weigh not at all if the fact of the irrevocability is established, because the element of communication is not thus essential to its completeness or efficiency, nor can its absence alter the legal effect. It is not like the contractual example of offer and acceptance where communication is ex necessitate rei indispensable. Evidence of intention, of course, plays a big part here, as it manifestly did in Radcliffe's Case and in Hunting's Case (supra). And intention is only deducible from all the surrounding circumstances and not merely from a consideration of secrecy or non-disclosure. Eve, J., utters a potent truth when he says, in Radcliffe's Case, that the circumstances in which a document, such as was the one before him, comes into existence are not infrequently such as to impose the necessity for absolute secrecy if the catastrophe against which it was prepared is still to be postponed and not precipitated. adds: When these circumstances exist I do not think any presumption that a document is revocable arises from the fact of its existence not being disclosed to any person." The motive and substance of a case of this description, whether it be effected in the open or under cover, is that it is bottomed on the valuable consideration which the fact of external pressure and self-protection import into the act. And whether it move from the actual act of another party or is merely the moral result or effect of what it is expected that other party will, under the existing circumstances of a given case, do, is immaterial. On these grounds Radcliffe's Case seems a very sound decision. The dicta of Neville, J., bear the mark of false reasoning They are in conflict with Hunting's Case (supra), an authority of the first class. This does not necessarily pronounce Cozens Case as wrongly decided, but it is thought there is ample room for mooting the question of whether the trustee there did not in fact hold

And he

V.

his interest in the property on which he purported to advance the appropriated money as a constructive trustee. That the element of non-communication even of a voluntary trust or gift properly constituted, and a fortiori of one where there is valuable consideration, is unimportant and non-essential is proven by a long line of authorities-see Barlow Heneage (Pre. Ch. 211), Hudson's Case (Pre. Ch. 235), Broughton v. Broughton (1 Atkyns 625), Sear v. Ashwell (3 Swan 411 n.), Worrall v. Jacob (3 Mer. 256), Doe d. Garnons v. Knight (5 Barn. & Cr. 671), Exton v. Scott (6 Simons 31), Jones v. Jones [1874] (31 L. T. 535), and Middleton v. Pollock [1876] (2 Ch. D. 104). In Garnons Case an attorney misapplied moneys of one Garnons his client, executed a mortgage in favour of Garnons, and handed it over to his (the attorney's) sister. The existence of the mortgage was not known by Garnons until after the attorney's death. Bayley, J., in that case said: "Where an instrument is formally sealed and delivered, and there is nothing to qualify the delivery but the keeping the deeds in the hands of the accepting party, nothing to show he did not intend it to operate immediately, then it is a valid and effectual deed, and the delivery to the party who is to take by it or any person for his use is not essential." In Exton's Case, A. received moneys of B., and privately and without communication to B. executed a mortgage for him, and retained the deed, and though the existence of the deed was not known to B. until after A.'s death, yet the mortgage was held valid. This latter case seems to have a strong bearing on Cozens Case as regards the point of constructive trust. In Middleton v. Pollock (supra), E. placed in the hands of a solicitor a sum of money for investment. died insolvent without investing the money, and after his death there was found in the safe at his office a memorandum dated a fortnight before his death, the contents of which had not been communicated to E. By this memorandum, the solicitor declared himself trustee of certain leaseholds then in mortgage to himself and of a bill which he had indorsed to E. to secure the repayment. In a creditors' suit for the administration of the solicitor's estate:

He

HELD, by Jessel, M.R., that, even if the solicitor executed the memorandum with the

knowledge of his insolvency, still E. was entitled to the benefit of the security as against the other creditors; for the solicitor retained no benefit for himself, and the gift was bona fide within 13 Eliz. c. 5.

The Test of an Irrevocable Trust.

One point still remains: was the trust in Radcliffe's Case irrevocable? Did the power to vary the allotment if another division should be found more satisfactory manifest, to use the words of Neville, J., an intention to adhere to or abandon it as best served his (the declarant's) advantage for the time being "? What then is the test? Because unless a trust or act relied on can be proved to have been irrevocably constituted it cannot be supported. Observe the test is not one so much of power of distribution or dominion as of interest. Bacon, V.-C., would seem to accurately define the rule in Warriner v. Rogers, L. R. 16 Eq. 340, at p. 348: The law on this subject I take to be very clear . . . all the decisions are perfectly consistent with that rule. The one thing necessary to give validity to a declaration of trust-the indispensable thing I take to be, that the donor or grantor or whatever he may be called should have absolutely parted with that interest which had been his up to the time of the declaration; should have effectively changed his right in that respect and put the property out of his power, at least in the way of interest. [The italics are ours.] In Radcliffe's Case the grantor had put the property out of his power at least in the way of interest.' He retained no interest, or, as Jessel, M.R., says in Middleton v. Pollock (supra), he retained no benefit for himself," but merely a right of allotment or distribution. The rule of law defined by Bacon, V.-C., was thus satisfied. And this also covers the question of a perfectly constituted voluntary trust, for here again the interest in the property is parted with, albeit the property itself is still within the power and dominion of the donor. Thus we see the indispensable thing, as Bacon, V.-C., terms it, is "a putting of the property out of the power of the owner, at least in the way of interest, and that non-communication merely ranks, like any other circumstance, as a mere item of evidence, neither a test nor an essen

66

66