Willett v Finlay

• Jurisdiction: Ireland
• Judgment Date: 03 June 1891
• Court: Court of Appeal (Ireland)
• Docket Number: (1890. No. 12,101.)
• Date: 03 June 1891

Chancery Division.

(1890. No. 12,101.)

WILLETT

and

FINLAY

Re Johnstone's Settlement 14 Ch. Div. 162.

Gale v. GaleENR 21 Beav. 349.

Blake v. Blake 15 Ch. Div. 481.

Sawyer v. Sawyer 28 Ch. Div. 595.

Norris v. WrightENR 14 Beav. 291.

Keays v. Lane Ir. R. 3 Eq. 1.

Ricketts v. RickettsUNK 64 L. T. (N. S.) 263.

Harrison v. Jackson 7 Ch. Div. 343.

In re Bridle 4 C. P. Div. 336.

Heath v. WickhamUNK 5 L. R. Ir. 285.

Brewer v. SwirlesENR 2 Sm. & G. 219.

Rutherford v. MaziereUNK 13 Ir. Ch. Rep. 204.

Williams v. LomasENR 16 Beav. 1.

Harvey's Estate 13 Ch. Div. 216.

Saunders v. CardenUNK 27 L. R. Ir. 43.

Buckeridge v. GlasseENR 1 Cr. & Ph. 135.

Johnson v. GallagherENR 3 De G. F. & J. 494.

Harvey's Estate 13 Ch. Div. 216.

Hodgson v. Williamson 15 Ch. Div. 87.

Heatley v. Thomas 15 Ves. 596.

Mayd v. Field 3 Ch. Div. 587.

Hughes v. WellsENR 9 Hare, 749, 772.

London Chartered Bank of Australia v. LempriereELR L. R. 4 P. C. 572.

Harvey's Estate (Godfrey v. Harben) 13 Ch. Div. 216.

Pike v. Fitzgibbon 17 Ch. Div. 466.

Pike v. Fitzgibbon 17 Ch. Div. 459, 460.

De Burgh Lawson v. De Burgh Lawson 41 Ch. Div. 568.

Williams v. LomasENR 16 Beav.1.

Jenney v. AndrewsENR 6 Madd. 264.

Settlement — Execution of power — Change of investment — Ademption of leyacy — Breach of trust — Concurrence of married woman —

156 LAW REPORTS4IRRLAND). [L. R. I. WILLETT v. FINLAY. (1890. No. 12,101.) Settlement - Execution of power - Change of investment - Ademption of legacy-Breach of trust-Concurrence of married woman-Trustee Act,. 1888, sect. 6. By marriage settlement a sum of £1000 lent on mortgage to A was settled so as to give the wife a life interest in the event of her husband's death or bankruptcy, but with restraint on alienation during marriage, and a general power of appointment by will. The wife, by her will, directed the £1000 A had to go to C D. Subsequently the £1000 was repaid, and expended by the trustees, with the concurrence of husband and wife, in the purchase of land (which was not an authorized investment). After the wife's death E F (to whom C D had assigned her interest under the will) brought an action against the trustees and husband to have it declared that the expenditure of the £1000 in the purchase of land was an unauthorized investment : Held (1), that the power of appointment was well exercised ; (2) that the gift of the £1000 was not adeemed by the change of investment; (3) that the concurrence of the wife did not prevent the plaintiff from making the trustees liable for the breach of trust; and (4) that the Trustee Act, 1888, s. 6, did not apply. Gale v. Gale (21 Beavan, 349) distinguished ; Be Johnstone's Settlement (14 Ch. D. 162) followed. TRIAL OF ACTION. This was an action against trustees for breach of trust. The-facts of the case sufficiently appear from the head-note and judgment. W. H. Dodd, Q. C., and J. Donaldson, for the plaintiff : There are three questions. in this case : (a) was the power of appointment given by the settlement exercised by the will ? (b) was there an ademption of the gift of the £1000 in the will by reason of the money having been converted into land ? and (c) did the concurrence of Mrs. Humphrys in the breach of trust prevent the plaintiff, the assignee of the appointee, from seeking. Vol,. XXIX.] CHANCERY DIVISION. to make the trustees liable for the trust fund ? As to (a), the testatrix, when she used the words, " I also, at my husband's death, wish the £1000 Mr. Fitzpatrick has to go to Augusta Astley," meant to exercise the power of appointment ; as to (b), the appointment was not defeated by reason of the change of investment : Re Johnstone's Settlement (1) ; Roper on Legacies, 4th Ed., pp. 333, 334 ; Sugden on Powers, p. 308, where Gale v. Gale (2) is questioned ; but there the appointment was of real estate, and so also Blake v. Blake (3), where Jessel, KR., followed Gale v. Gale (2) ; as to (c), Sawyer v. Sawyer (4) shows that a married woman must have acted for herself, and been lawfully informed of the facts of the case, before her interest in settled funds can be made answerable for a breach of trust to which she was a party. This was not the case here, and the onus is on the trustee : Norris v. Wright (5). Besides, here the interest of the married woman was reversionary, and with a restraint on anticipation, so that any act of hers would not be binding : Seays v. Lane (6), Ricketts v. Ricketts (7). The Trustee Act, 1888, s. 6, there referred to, does not apply to this ease, and even if it does apply, the Court has a discretion in the matter. The right, if any, of the trustees to an indemnity should have been raised by counterclaim. Serjeant Jellett, Roche, Q.C., and Bearden, for the trustees : The case involves four questions :-1st, the construction of the will of Victoria Humphrys ; 2nd, ;the ademption of the legacy of £1000 ; 3rd, how far it is competent for the plaintiff to Obtain relief in respect of a breach in which Victoria Humphrys is concerned ; and, 4th, the right of the trustees to indemnity out of her assets. The will of Victoria Humphrys, though dated 30th May, 1870, must, as to the property comprised in it, be interpreted as of the date of her death on 11th October, 1873. In the meantime she was party to a deed under which the £1000 on mortgage had been called in and invested in the purchase (1) 14 Ch. Div. 162. (2) 21 Beay. 349. (3) 15 Ch. Div. 481. (4) 28 Ch. Div. 595: (5) 14 Beay. 291. (6) Ir. R. 3 Eq. 1. (7) 64 L. T. (N. S.) 263. 158 LAW REPORTS (IRELAND). {L. R. I. M. R. of land in Cavan, adjoining the Humphrys Estate, and which 1891. was always regarded, according to the evidence, as an addition WILLETT to the family property, and in such circumstances would pass v. Farrar. under the description of "my property in Cavan." Secondly, there was a complete ademption of the appointment of £1000 lent to Fitzpatrick. Gale v. Gale (1) shows that an appointÂment under a power may be adeemed in the same manner as a specific legacy, and that the principle of ademption applies to the exercise of a general power of appointment where there has been a change of investment. In Sugden on Powers it is stated to be a narrow decision, but it was discussed and followed in Blake v. Blake (2). Johnstone's Settlement (3) is there referred to, and does not conflict with the other cases. There was in that case a valid change of investment, and. stress is laid. on that circumstance by Malins, V.-C. The principle of ademption applies, whether the gift is of real or of personal estate ; the law is that a specific legacy is adeemed when the subject matter of it has been aliened by the testator in his lifetime. The language of the Court in _Harrison v. Jackson (4) is directly applicable. Sir George Jessel there says : " If a man by will gives a debt, and. he is paid the debt in his lifetime, and with the money buys a horse, or a perÂpetual annuity, the horse or annuity does not pass." To the same effect is In re Bridle (5). Thirdly, the plaintiff is a volunÂteer, deriving title through a person who solicited the trustee to make the investment, and by whom, in conjunction with her husband, he was, as he deposes, induced,under threat of legal proceedings, to consent to the investment in land, and. as such cannot obtain the relief sought. Heath v. Wickham (6) shows that a general testamenÂtary power of appointment is not affected by a preceding life estate with a restraint on anticipation. A voluntary appointee is in no better position ; Brewer v. &dries (7) and Rutherford v. Maziere (8) show that the trustees could not be held responsible at the suit of Victoria Humphrys, if now living. (1) 21 Beay. 349. (5) 4 C. P. Div. 336. (2) 15 Ch. Div. 481. (6) 5 L. R. Ir. 285. (3) 14 Ch. Div. 162. (7) 2 Sm. & G. 219. (4) 7 Ch. Div. 343. (8) 13 Ir. Ch. Rep. 204. VOL. XXIX.] CHANCERY DIVISION. 159 Lastly, the appointed fund being assets of Victoria Humphrys M. is liable to indemnify the trustee without any counterclaim. 1891. WILLETT Williams v. Lomas (1) and Harvey's Estate (2) show that this - v. ,equity was administered long before a counterclaim was introduced ,FINLAy. by the Judicature Act, and that the fund is by the appointment made assets of the appointor. Sawyer v. Sawyer (3) is disÂtinguishable. The certificate of the chief clerk, on which the judgment proceeded, found merely a consent on the part of the married woman ; here the deed executed by her states that the purchase was made at her request, and the affidavit of Hugh Humphreys confirms the fact. The Trustee Act, 1888, s. 6, was merely declaratory of the previous law, except in the case of a married woman, and the Court has power to act under that section as against her estate when she has, as here, instigated the breach of trust. Dane, for the husband, adopted the argument of counsel for the trustees, and submitted that the plaintiff was in no better position than the testatrix and could not repudiate her acts. [PORTER, M. R.: How can you make that case ? You are liable to the trustees.] • Donaldson, in reply : It cannot be denied that the wife concurred, but it was not such a concurrence as would induce the Court to make an order under the Trustee Act, 1888, s. 6, impounding the fund by way of indemnity to the trustees. She believed that the purchase was -an authorized investment ; and the trustees should have explained the matter to her : Sawyer v. Sawyer (3). If the trustees are -entitled to any indemnity it should be from the husband : Keays v. Lane (4) ; .Ricketts v. Ricketts (5). There was no ademption ; personalty may be varied from day to day ; is it to be said that the appointor must make a new will whenever the fund is re-invested ? The appointment is subject to the power to vary the securities: Re Johnstone's Settlement (6). (1) 16...