The Estate of The Most Honsourable John Henry, Marquis of Ely, Owner and Petitioner

• Jurisdiction: Ireland
• Judge: Ross, J.
• Judgment Date: 21 December 1903
• Court: Chancery Division (Ireland)
• Date: 21 December 1903

In the Matter of the Estate of the Most Honourable John Henry, Marquis of Ely, Owner and Petitioner.

Ross, J.

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.

1904.

Landlord and tenant — Land Purchase Acts — Tenant for life and remainder-man — Percentage under 3 Edw. 7, c. 37, s. 48 — Vendor.

The percentage payable to the vendor of an estate, out of the Land Purchase Aid Fund, under sect. 48 of the Irish Land Act, 1903, where the vendor is tenant for life only or a trustee for sale, is bound by the trusts of the settlement.

Semble: The powers of sale conferred by the Settled Land Acts are supplementary to those in the Land Purchase Acts.

Motion on behalf of the owner and petitioner having carriage for an order—(1) That it be declared that the solicitor having carriage of the sale in this matter of the hereditaments and premises comprised in and ordered to be sold by the absolute order for sale made herein, and dated the 29th of November, 1902, should, on behalf of the Marquis of Ely as vendor, be at liberty to enter into negotiations with the tenants of the holdings upon the said hereditaments and premises, and obtain from the said tenants proposals for the sale to and purchase by the said tenants under the Irish Land Act, 1903, of the holdings of such tenants upon the hereditaments and premises comprised in the said absolute order for sale, to which the provisions of the said Act were applicable, provided that such negotiations should be carried on, and proposals obtained, upon terms of sale and prices to be approved by the said Marquis of Ely, and upon the basis, and subject to the conditions following, that is to say, that in the event of a sale being effected out of Court by him as vendor, the said Marquis of Ely as such vendor of such hereditaments and premises was entitled to be paid and to receive and retain for his own absolute use the moneys which should be paid by the Irish Land Commission pursuant to section 48 of the said Act. (2) That it be declared that the said Marquis of Ely as such vendor was, upon such sale, entitled to be paid and to receive and retain for his own absolute use the moneys which should be paid by the said Land Commission as aforesaid. (3) That all further proceedings towards a sale under the provisions of the said absolute order for sale herein might be stayed, or, if necessary, that such absolute order might be discharged upon such terms as to the Court might seem just. (4) Alternatively that the Court might make such other order or give such relief as the nature of the case might require. (5) That the costs of and incidental to this application, order therein, and proceedings thereunder, might be provided for, or, if the Court should so deem it expedient, that leave might be given to the solicitors having carriage to issue on behalf of the said Marquis of Ely an originating summons to determine the questions above mentioned.

By permission of the Court an originating summons under Order LV., R. 4, was also served on behalf of the owner, intituled “In the Matter of the Judicature Act, and of Order LV. of Rules of the Supreme Court, 1891 and 1902, and In the Matter of the Landed Estates Court Act, and In the Matter of the Trusts of an Indenture of Settlement, bearing date the 7th December, 1875, and made between the Most Hon. John Henry Wellington Graham, Marquis of Ely, of the first part; Caroline Anne Caithness, of the second part; Charles John Tottenham and John Christopher Lethbridge, of the third part; Maurice Ceely Maude and Patrick Hare, of the fourth part; and Godfrey Taylor and Christopher Lethbridge, of the fifth part; and in the Matter of the Estate of the Most Noble John Henry, Marquis of Ely, owner and petitioner, pending in this honourable Court,” for the determination of the following question:—Whether the said Marquis of Ely, as tenant for life under the said settlement in the title mentioned, of the lands, hereditaments, and premises comprised in the absolute order for sale made and dated the 29th of November, 1902, to which the provisions of the Irish Land Act, 1903, were applicable, was in the event of a sale out of Court by him as vendor under the provisions of the said Act, entitled to receive and retain for his own absolute use such moneys as should be paid by the Irish Land Commission out of advances by the National Debt Commissioners from the Land Purchase Aid Fund for the purpose of aiding the sales of estates under the said Act.

The following is a sufficient summary of the material facts of the case:—

John Henry Wellington Graham, Marquis of Ely, being seised in fee of certain estates in the counties of Fermanagh and Wexford, executed a settlement thereof on the 7th December, 1875, whereby he created a jointure rentcharge in favour of his intended wife, and subject thereto, limited them to such uses as he should by will or deed appoint, with remainder, after certain limitations, which have failed, to the use of John Henry, the present Marquis of Ely, for life, with remainder to his first and other sons in tail male, with divers remainders over.

At the time of the execution of the settlement the estates were subject to certain mortgages, and subsequently he raised further sums from the Royal Exchange Assurance Corporation under the power of appointment contained in the settlement.

By his will, dated 3rd July, 1884, and two codicils, in exercise of his general power of appointment, he charged the estates with certain rentcharges, and he created a term of 200 years to secure the same, and then devised his estates to Charles Robert Worsley Tottenham and Christopher Lethbridge, for a term of 1000 years, and subject thereto, granted the same to the uses, upon the trusts, and subject to the powers, provisions, and declarations in the settlement of the 7th December, 1875. By his will he also gave large pecuniary legacies. The following were the trusts of the term of 1000 years:—In the first place by mortgage or by sale of timber, or out of the rents or profits, to raise any sum that the trustees might consider expedient for the payment of incumbrances on the estate existing at his death which, but for the trusts of the term of 1000 years, would be payable out of his other real estate, or out of his personal estate, to the exoneration of such real and personal estate; and also such sum as it might be necessary to raise for his funeral and testamentary expenses, debts and legacies.

The testator died on the 3rd April, 1889, and as it was found impossible to raise any further sums upon the settled estates, in order to carry out the trust of the term of 1000 years and to pay the funeral and testamentary expenses and legacies bequeathed by his will, an action was commenced in the High Court of Justice in England for the administration of his estate, and on the Sth November, 1889, an order was made for the administration thereof and appointing Maurice Ceely Maude receiver over the county Fermanagh estates, comprised in the term of 1000 years, and Godfrey Lovelace Taylor receiver over the county Wexford estates, comprised in the same term. The several charges and incumbrances secured by the term of 1000 years were all paid off, with the exception of a sum of £5146.

Ronan, K.C. (with him O'Brien, and Littledale), for the Marquis of Ely:—

The Court has now jurisdiction to entertain a suit to declare rights: see Order XXV., Rule 5, Order LV, Rule 4, of the Rules of 1891, and Order LV. of the Rules of November 18, 1902; Attorney-General v. Merthyr Tydvil Union (1); Islington Vestry v. Hornsby U. D. C. (2); Llandudno U. D. C. v. Woods (3); Young v. Ashley Gardens Properties Limited (4); and it will be necessary to adjudicate on the question as to the bonus before arriving at any conclusion as to whether the motion should be granted. We submit that the Marquis of Ely is entitled to the percentage under section 48 of the Irish Land Act, 1903, usually called the bonus, payable to the vendor, if the estate is sold out of

Court, as we propose. It is different from every other money as to which questions between tenant for life and remainderman arise. (1.) It is in the nature of a free gift; (2.) it is not bound by any antecedent equity; and (3.) it is not calculated on the value of the actual net estate sold, but on the gross sum realized before the payment of the redemption price of the superior interests. It was a general principle of equity that a tenant for life should not obtain a benefit at the expense of the inheritance, but there is nothing to prevent the Legislature legalizing it; and if the statute says the tenant for life is to get it, this will be given effect to. Even when a decision on a statute has been considered as part of the law of the land, it will be reversed if it is erroneous: see In re M'Naul's Estate (1), overruling Billing v. Welch (2), which was decided in 1871. “Paid to the vendor” in section 48 is in contradistinction to “added to the purchase-money” in the same section, and means that it is not to be added to the purchase-money, but paid to the vendor beneficially. If the trustees are right in their contention that it forms portion of the trust estate, the anomalous result would be that proceedings would in every case have to be taken by the trustees of a settlement against the vendor tenant for life, to have it declared portion of the trust funds, a thing which the Legislature cannot be said to have contemplated. Again, there is no provision in the Act for the distribution of the bonus, save in the case of a sale here, when it is to be added to the purchase-money, though there is for the distribution of the purchase-money (the bonus is to be paid and the purchase-money distributed), and the distinction between the two is kept up throughout. The existence of the absolute order for sale does not take away the right of the...