Covenant to settle wife; after-acquired property.

gives her power to dispose of her interest by deed or by will. In declaring the class who are to take under the ultimate trust in default of appointment by the wife, the phrase "next-of-kin" should not be used in substitution for "the persons entitled under the Statutes of Distribution," for next-of-kin," without reference to the Statutes of Distribution, means the nearest blood relations of the same degree.(e.g., if there were brothers and a nephew, the child of a deceased brother, the brothers would take all, excluding the nephew).

It is the practice to insert a covenant to settle any property which may be acquired by the wife during the coverture with specified exceptions. This is usually framed as an agreement and declaration that the wife's afteracquired property shall be settled, in which case it operates as a covenant by both husband and wife. But owing to the provisions of the Married Women's Property Act, 1882, and of the Married Women's Property Act, 1907, the husband's covenant is ineffectual unless the wife, being of full age, executes the settlement. Except, therefore, where the intended wife is an infant, the covenant on the part of the intended husband can be of no real value (j).

The property settled is generally stated to be—(1) any property to which the intended wife shall at the time of the intended marriage be entitled (in order to include reversionary interests falling into possession after the marriage); (2) any property which during the coverture she or (if the husband covenants) the husband in her right becomes entitled to, at the same time and from the same source, except (a) furniture, jewels, plate, etc.; (b) sums not exceeding a minimum value (often £200); (c) property as to which in the instrument under which it is acquired there is any condition or expression of intention on the part of the donor that it shall be exempt from the covenant; (d) property settled on her for life without power of anticipation.

(j) Elph. Conv. 411.

As usually framed, the clause does not include property over which the wife may acquire a general power of appointment, unless she exercises the power in her own favour. It would not include savings of income nor an estate tail. But, unless the covenant is worded as suggested above, it would include property given to the wife subject to a condition that it shall not be bound by her covenant to settle her after-acquired property (k).

Effect of

bankruptcy on

settle after

property.

In connection with covenants by an intended wife or husband to settle after-acquired property, the student may be reminded of the provisions of the Bankruptcy Act, 1914 (1), that any covenant or contract made in considera- acquired tion of marriage for the future payment of money for the benefit of the settlor's wife or husband or children, or for the future settlement on or for the settlor's wife or husband or children, of property wherein the settlor had not at the date of the marriage any estate or interest, whether vested or contingent, in possession or remainder, and not being money or property in right of the settlor's wife or husband, shall, if the settlor is adjudged bankrupt and the covenant or contract has not been executed at the date of the commencement of the bankruptcy, be void against the trustee in bankruptcy, except so far as it enables the persons entitled under the covenant or contract to prove in the bankruptcy as deferred creditors, i.e., they are postponed until all other creditors for valuable consideration in money or money's worth are satisfied. Even if the money has been paid or the property has been transferred in pursuance of the covenant or contract before the commencement of the settlor's bankruptcy, the payment or transfer will be void against the trustee in bankruptcy unless the persons to whom payment or transfer was made can prove (1) that it was made more than two years before the commencement of the bankruptcy, or (2) that at the date of the payment or transfer the settlor could pay all his debts without the aid

(k) Elph. Conv. 413-4; Re Wharton, 102 L. T. 531; Re Thorne [1917] 1 Ch. 360.

(1) 4 & 5 Geo. 5, c. 59, s. 42 (2).

D.C.

15

Trader's settlement.

of the money so paid or property so transferred, or (3) that the payment or transfer was made in pursuance of a covenant or contract to pay or transfer money or property expected to come to the settlor from or on the death of a particular person named in the covenant or contract, and was made within three months after the money or payment came into the possession or under the control of the settlor. If the payment or transfer is declared void, the persons to whom payment or transfer was made can prove as deferred creditors.

66

The term trader's settlement is applied to a form of settlement where the owner of real property conveys it to trustees to sell and directs the trustees to hold the purchase money upon trusts similar to those of an ordinary settlement of personal property. The origin of the term appears to have been that a man who had made money in trade and had purchased land, and then desired to make a settlement of his property on his marriage or by his will, would not desire to tie up his land in strict settlement by virtue of which his eldest son, as first tenant in tail, would ultimately succeed to the bulk of the property, but would prefer that it should ultimately be divided among all his children.

If such a settlement is made by a man on his marriage, the proper scheme is not to settle the land itself but to vest it in trustees in trust for sale and to settle the proceeds of sale. The ordinary clauses and provisions of a settlement of personalty can then be made use of (m).

The land is conveyed by a separate deed to the trustees upon trust for the settlor until the marriage and afterwards upon trust that they the trustees shall, at the request in writing of the husband and wife or survivor of them, and after the death of such survivor at the discretion of the trustees, sell the land. The trusts of the purchase money are then set out in a separate deed.

(m) Elph. Conv. 406.

trusts off the title.

The object of drawing up two deeds, one conveying the Keeping the land to the trustees and the other setting out the trusts of the purchase money, is "to keep the trusts off the title,' i.e., to avoid the inconvenience that would arise if the settlement was to become one of the title-deeds of the property. The purchaser would then have the right to claim that such settlement, on the completion of the sale, should be handed over to him. But if two deeds, as explained above, are drawn up, then, after all the property is sold, the deed containing the trust for sale, being no longer of any use to the trustees, can be handed over to the purchaser, who is not concerned to see the deed containing the trusts of the purchase money, which is retained by the trustees (n).

The deed setting out the trusts of the purchase money contains the ordinary clauses and provisions of a settlement of personalty.

We have already (0) referred to the fact that, if land is conveyed to trustees upon trust for sale, section 63 of the Settled Land Act, 1882, as read with section 7 of the Settled Land Act, 1884, applies, and the trustees can sell without the consent of the tenant for life and the tenant for life cannot sell without an order of the Court. We have also mentioned above the provisions of the Conveyancing Act, 1911, as to such trusts.

(n) Elph. Conv. 407.

(0) Above, p. 216.

CHAPTER VII.

OF WILLS (a).

THE subject for our consideration in this chapter is a Will of Land. In the previous chapters of our work we have gone through the clauses of a simple form of the particular instrument under discussion, in order to show how the practical work of conveyancing is made to comply with the rules of law. But when we come to the subject of wills it is not possible for us to adopt our usual plan. All the other instruments to which our attention has hitherto been directed, however much they may vary in detail, have some parts common to the class to which they belong. The covenants in a mortgage deed, the lessee's covenants in a lease, the limitations in a strict settlement, vary only within moderate limits; and the observation, therefore, of any one set of them serves as a guide in framing all other assurances of a like nature. But with wills the case is different. There may be, and often is, a similarity between one will and another. The conveyancer may be able to lay his finger upon this and that form, and say that they ought, respectively, to be made use of in certain cases, but he cannot say of any of the important parts of any one will that they are matters of common form.

The general arrangement of a will is as follows: 1. Commencement (" I, J. S. of hereby revoke all former wills and codicils made by me, and declare this to be my last will"). 2. Appointment of executors. 3. Specific legacies. 4. General legacies and annuities. 5. Specific devises. 6. Residuary gift. 7. Testimonium. The word "devise

(a) See Precedent XLIII.