Re Lambert's Estate

• Jurisdiction: Ireland
• Judge: Ross, J.
• Judgment Date: 15 February 1906
• Court: Court of Appeal (Ireland)
• Date: 15 February 1906

In re Lambert's Estate.

Ross, J.

Appeal.

CASES

DETERMINED BY

THE CHANCERY DIVISION

OF

THE HIGH COURT OF JUSTICE IN IRELAND

AND BY

THE IRISH LAND COMMISSION,

AND ON APPEAL THEREFROM IN

THE COURT OF APPEAL.

1906.

Power — Execution — Joint power of appointment given to father and son — Contingent sole power of appointment given to son, if surviving — Covenant by son, in deed of arrangement with creditors, to exercise sole power — Equitable obligation — Covenant by creditors to forbear suing — Arrears of interest — Right to receive — Statute of Limitations — 3 & 4 Wm. 4, c. 27, ss. 40-42.

Held, by the Court of Appeal (reversing the decision of Ross, J.), that the trustees under the deed of 1868 were, on the 8th April, 1899, entitled to payment of the principal sum secured by the said deed, with interest thereon at the rate of 5 per cent. from the date of the deed of 1868, and were not precluded by the Statute of Limitations from claiming more that six years' interest prior to the date of the absolute order for sale.

The facts of this case, and the contents of the several deeds in question, have been already stated in In re Lambert's Estate (1). The case now came before the Hon. Mr. Justice Ross for the ascertainment of the date from which interest was to be deemed to run on the principal sum of £2010 12s. 1d. secured by the deed of 4th July, 1868. The trustees under the said deed claimed payment of the said principal sum of £2010 12s. 1d., together with £3018 3s. 10d., being interest at 5 per cent. on said principal sum, less income tax, from the 4th July, 1868, to 4th April, 1899, together with further interest till payment.

Serjeant Dodd, Ronan, K.C., and R. F. Doyle, for the trustees.

S. L. Brown, K.C., and Dixon, for the petitioners.

H. Wilson, K.C., for other mortgagees.

By a disentailing deed, executed and enrolled in 1862, lands were limited to such uses as A and B, subject to the life estate therein of A, during their joint lives, should by deed appoint; and in default of such appointment, to such uses as B, if he should survive A, should, after the death of A, by any deed made after the decease of A, appoint; and in default of such appointment to such of the uses of a certain settlement as were subsisting before the execution of the disentailing deed, under which B took an estate tail.

In 1868 B, who was then in pecuniary difficulties, executed a deed by way of arrangement with his creditors. This deed provided, as alternative securities, (1) a policy of insurance for £2500, effected on B's life, payable in the event of his predeceasing A, which B assigned to trustees for the benefit of his creditors; (2) a covenant by B, that, if he survived A, and thereby became entitled to the lands, he would, within one month thereafter, grant and appoint the lands by way of mortgage to the use of the trustees, subject to redemption on payment of £2010, the aggregate amount of the debts, with interest thereon at the rate of 5 per cent. This deed contained a grant by the creditors to B of full liberty to follow and attend to his business without any arrest, attachment, or execution against his person or estate by the creditors on account of any of their debts, the debt of any creditor acting contrary to such license to be forfeited and void.

By deeds, executed in 1872 and 1880, A and B, in exercise of their joint power, mortgaged the lands, which latter mortgages were, by an order of the Court of Appeal ([1901] 1 I. R. 261), declared to be puisne to the deed of 1868.

A died on the 8th April, 1899, prior to which a petition for sale was presented by the mortgagees under the deed of 1872, and the order for sale was made absolute on the 3rd September, 1889:—

Ross, J.:—

I am now required to decide a point reserved in an order of 24th July, 1900.

The facts of the case are fully set out in [1901] 1 I. R. 12. The Court must now ascertain the date from which interest is to run on the charge of £2010 set out at No. 6 in the order.

By a deed, dated 31st October, 1862, John Walter Lambert and his son, Thomas Walter Lambert, disentailed the estate and resettled it, limiting it, without prejudice to the father's life estate, to such uses as would be effected by the exercise of a joint power of appointment in the father and the son, and, in default of such joint appointment, to such uses as the son, in case he should survive his father, should, by deed made after the death of his father, direct or appoint. Thomas Walter Lambert, the son, being in embarrassed circumstances, executed a deed, dated 4th July, 1868, in favour of his creditors. The deed recites that Thomas W. Lambert is indebted in the sum of £2010 to the creditors mentioned in the schedule; that he was unable to discharge his debt, and had proposed to his creditors to effect a policy on his life for £2500, and to assign it to the trustees mentioned in the deed, so that in the event of the death of the son in the lifetime of the father, the

proceeds of the policy would be available for the discharge of the said liabilities, and, further, that he would enter into a covenant with the trustees to the effect that in case he should survive his father and should come into possession of the lands, he would, within a month thereafter, charge the lands with a sum of £2010 with interest at 5 per cent. from the date of the deed. The operative part of the deed contained a covenant by Thomas Walter Lambert that in case he should survive his father he would appoint the lands to the use of the trustees within a month after coming into possession, subject to redemption on payment of the aggregate debt and interest.

Subsequently, the father and son executed their joint power of appointment several times in favour of other parties.

The Court of Appeal (1) has held that the deed of 1868 took priority over the deeds executed by the father and the son under their joint power of appointment; that the covenant from the moment of its execution affected and bound in equity every estate and interest vested or contingent the covenantor then had or might thereafter have in the lands. They held that it was an equitable alienation operating in prœsenti upon every estate and interest of the grantor.

The petition in this matter was filed in the lifetime of John Walter Lambert, the father. The absolute order was made in the year 1889. On the 8th April, 1899, John Walter Lambert died, and the proceedings were carried on in the name of Thomas Walter Lambert as owner. The contention of the parties claiming under the deed of 1868 is that inasmuch as the covenant was to charge the estate within a month after the father's death, and by a deed made after his death, they could do nothing until that event occurred, and that consequently their equitable charge was unaffected by the Statute of Limitations.

All this might seem very plausible, indeed, if the decision of this Court had been well founded to the effect that there was no real charge upon the lands till the life estate came to an end. But the reasoning of the Court of Appeal, by which I take leave to say I am quite convinced, puts an end to this contention.

There was an equitable charge operating in prœsenti as soon as the deed was executed. The interest chargeable on the land became immediately affected by the statute. There were many things the trustees of the deed could have done. They might have proceeded to sell the contingent estate—they might have got a declaration that their interest was well charged thereon. It is a common thing to mortgage a contingency, or often a mere possibility, and in such a case it is well settled the mortgage may be realised before the contingency happens: Sinclair v. Jackson (1).

The next point that arises is whether the 42nd section of 3 & 4 Wm. 4, c. 27, prevents the recovery of more than six years' arrears accruing due before the reversion falls into possession. In this case the incumbrance was only on the contingent reversion, and not on the life estate at all. The weight of authority is in favour of holding that such a case is not within the exception to the Act. Even supposing the possession to have been vacant, the incumbrancer could not have gone against the life estate. He was not kept out by a prior incumbrancer only, and that is the case dealt with by the proviso. As the incumbrancer is not saved by the proviso, the express words of the Act apply, and limit the interest to six years' interest accrued before the suit was brought. When the order was made absolute on the 3rd of September, 1889, it enured for the benefit of all parties interested in the estate. They are deemed to be...