life, remainder to trustees to preserve contingent remainders; remainder to the first and other sons of the infant in tail male, with divers remainders over. Subsequently to the decree for sale of the testator's real estates for payment of his debts an order was made in the cause, dated the 20th of December 1853, that the infant tenant for life should, pursuant to the 1 Will. 4, c. 47, convey the freehold parts of the testator's estates to the purchasers under the decree, and that his guardian in his place should surrender to them the copyhold parts of the same estates. [214] The purchaser objected to the surrender of the copyholds which it was proposed should be made to him under this order. Mr. Villiers, for the Defendants. The order is good under the Trustee Act, 1850. Mr. T. Stevens, contrà. The chief difficulty is that there are contingent rights and interests, subsequent to the infant's life-estate, which this surrender would not defeat. These ought to be discharged under the 29th section of the Trustee Act of 1850, and there should have been a petition for that purpose under that Act. 66 Mr. Villiers. Section 43 of the Trustee Act, 1850, gives power to the Court in any cause, upon the hearing of the said cause, or of any petition or motion in the said cause," to make an order under the authority of the Act; and, therefore, this order may be considered as having been so made. Then the 12th section of the 1 Will. 4, c. 47, gives the infant, though only tenant for life, power to convey the fee-simple, in order to carry out a decree for sale for payment of the testator's debts. [THE VICE-CHANCELLOR. That is a statutory power. Would a conveyance, by a person appointed to convey in place of the infant, under the Trustee Act, 1850 exercise that power? Could a person appointed under the Trustee Act, 1850, to convey in the place of an infant, pass by his conveyance more than the estate actually vested in the infant?] The 20th section of the Trustee Act, 1850, contains nothing to limit the power of the person appointed to convey. If, under the 1 Will. 4, c. 47, the infant could convey the fee-simple, then a person appointed to convey in his place, under the Trustee Act, 1850, can make a conveyance, which shall have the same effect. [THE VICE-CHANCELLOR. As to the freehold part of this lot [215] the order made under the 1 Will. 4, c. 47, appears to be sufficient.] Mr. T. Stevens, contrà. As to the copyhold part, the order cannot be taken to have been made under the Trustee Act, 1850, because there was no petition under that Act. [THE VICE-CHANCELLOR. The words of the 43d section are, "Whensoever, in any cause or matter."] That refers to the power previously given to go before the Master in the first instance. THE VICE-CHANCELLOR Sir W. PAGE WOOD. I believe that many titles now depend upon orders made in this way without petition in a cause, and I do not think the objection of sufficient weight to induce me to make a decision which would affect these titles. With respect to the other point, I think that it is far too doubtful to compel the purchaser to be content with the proposed surrender, when an order can easily be obtained under the 29th section to cure the defect which is suggested. The Act of 1 Will. 4, c. 47, in the case of a sale of real estates for payment of the debts of a deceased owner, gives certain powers to the persons who wish to sell, when the parties entitled to the property are otherwise unable to convey the fee-simple. In the case of the fee-simple being vested in an infant, by sect. 11, the Court may compel him to convey, and such conveyance will be valid. Where the estate has been devised to one for life, not saying to an infant for life, the tenant for life, by sect. 12, is empowered to convey the whole fee-simple. Then the Trustee Act, 1850, provides that, whenever the Court has power to direct a party to convey, and such party is an infant, they may direct someone else to convey for him. I think it is too doubtful for me [216] to hold that, when an infant has only a statutory power under the 1 Will. 4, c. 47, a person appointed to convey for him under the Trustee Act, 1850, can exercise that statutory power. The words of the 20th section of that Act are larger than I thought at first, and do not in terms limit the effect of such conveyance to passing only the estate vested in the infant; but as the title is capable of being made clear in this case, by discharging the contingent rights of other parties under sect. 29, I think that this is the proper course to take, and I cannot force the purchaser to take a conveyance on any other terms. The purchaser is entitled to his costs out of the fund in Court. [S. C. 1 Jur. (N. S.) 203. See Goslings v. Blake, 1888-89, 22 Q. B. D. 153 ; Income Tax. Interest on Purchase-money. 5 & 6 Vict. c. 35, s. 102; (2) A purchaser liable to pay interest on his purchase-money may deduct income tax from This was a suit for specific performance by a vendor against a purchaser. [217] Before the Judge in Chambers a question was raised as to the right of the Defendant, as purchaser, to deduct the income tax upon interest on his purchasemoney payable to the Plaintiff, as vendor, for the time which had elapsed since the day fixed for completion of the purchase. The following cases were cited to His Honour in Cham-[218]-bers: Duval v. Mount (35 Leg. Obs. 260), Holroyd v. Wyatt (1 De G. & S. 125), Dinning v. Henderson (3 Id. 702), Dawson v. Dawson (11 Jur. 984), Humble v. Humble (12 Beav. 43). THE VICE-CHANCELLOR Sir W. PAGE WOOD. The question in this case depends upon section 40 of the 16 & 17 Vict. c. 34 and section 2, Schedule D; the language of which sections, from their vagueness, creates some difficulty. With the view to resolve my own doubts, I have, in addition to the assistance to be derived from the cases cited, endeavoured to ascertain what has been the practice of the Inland Revenue Office. It appears never to have been doubted that, under section 40, the tax upon interest on mortgages should be deducted; and that in practice the mortgagor, in all cases, deducts the tax. And I have been told, by the authority above referred to, that prosecutions have been instituted against mortgagees to recover the penalty for refusing to allow such deductions, and that such penalty has been paid without proceeding to trial. Now a mortgage deed rarely, if ever, reserves a yearly interest. (1) The editors are indebted for the report of this case to the courtesy of Messrs. Lyon, Barnes & Ellis, the solicitors for the purchaser. (2) By the 102d section of the 5 & 6 Vict. c. 35, it is enacted that "upon all yearly interest of money or other annual payments, either as a charge on any property of the person paying the same, by virtue of any deed, will or otherwise, or as a reservation thereout, or as a personal debt or obligation by virtue of any contract, or whether the same shall be received and payable half-yearly or at any shorter or more distant periods, there shall be charged for every 20s. of the annual amount thereof the sum of 7d., according to the third case of Schedule D; and where such interest shall be payable out of gains and profits charged by the Act, the party liable to such annual payment shall be authorised to deduct out of such annual payment at the rate of 7d. for every 20s. of the amount thereof; and in every case where any such (annual) payment shall be made from profits or gains not charged by that Act, or where the interest of money shall not be reserved or charged or payable for the period of one year, then there shall be charged upon such interest or other annual payment as aforesaid, the duty before mentioned, according to Schedule D, Case 3." Case 3 of Schedule D applies to "the duty to be charged in respect of profits of an uncertain annual value, not charged in Schedule A." By the 2d rule of Case 3, Schedule D, "the profits on all interest of money not being annual interest payable Most mortgage deeds contain only a covenant to pay the principal, with interest at a certain rate per annum, on a day certain. After that it accrues de die in diem, and the interest, without any particular reservation, ordinarily is received half-yearly, from year to year. It is difficult to see the distinction between interest so reserved and paid, and that which by special agreement accrues on purchase-money, which also goes on from day to day, and may run on for a year, or stop at any time on payment of the purchase-money, and which, in some shape or other, forms a lien on the property. There are two classes of cases which have occurred in [219] practice bearing on the question. First, in the Master's offices I find that the tax has always been. deducted in all cases of debt bearing interest, including even bills of exchange. Lord Justice Knight Bruce, in Dinning v. Henderson (3 De G. & S. 702), having found that practice to be settled in respect of interest on bills of exchange, declined to disturb it, and allowed the deduction, although doubting the principle. Secondly, on payment of purchase-money into Court the deduction has not been allowed, and for the very obvious reason, stated by Lord Langdale in Duval v. Mount, that payment into Court is not payment to the party, as against whom the purchaser is entitled to deduct the tax. But the purchaser must apply for the deduction when the money is paid out of Court; and, of course, the Court cannot be subject to the penalty mentioned in section 40, for not allowing the deduction. In that case Lord Langdale expressly gave leave to apply when the money should be paid out, though it does not appear whether the purchaser availed himself of such liberty. The whole difficulty is in the expression "yearly" interest of money; but I think it susceptible of this view, that it is interest reserved, at a given rate per cent. per annum; or, at least, in the construction of this Act, I must hold that any interest which may be or become payable de anno in annum, though accruing de die in diem, is within the 40th section. I cannot make any solid distinction between interest on mortgage money and interest on purchase-money. The case has been very well argued, and it was chiefly in reference to the point made on the part of the vendor as regards Schedule D that I referred to the authorities of the Inland Revenue Office, who say that this schedule was framed more particularly in reference to the case of public bodies, such as parochial boards, who have no income out [220] of which interest is payable, and are not assessed to the duty, and, having to pay interest on bonds or the like, are not therefore parties entitled to deduct the tax under section 40; so that the tax becomes payable by the receiver of the interest under Schedule D. I consider the Act very singularly worded, yearly interest being used apparently in the same sense as annual payments; but I am clearly of opinion that it means at least all interest at a yearly rate, and which may have to be paid de anno in annum; such as interest on purchase-money, as well as mortgage interest; and that, therefore, the purchaser is or paid by any person whatever, shall be charged according to the preceding rule," which directs the duty to be computed on the full amount of profits arising within the preceding year. By the 2d section of 16 & 17 Vict. c. 34, Sched. D, the duty granted by that Act is directed to be charged "for and in respect of all interest of moneys, annuities and other annual profits and gains, not charged by virtue of any of the other schedules contained in the Act, and to be charged for every 20s. of the annual amount thereof." And by section 40 of that Act it is enacted, "that every person who shall be liable to the payment of any rent, or any yearly interest of money, or any annuity or other annual payment, either as a charge upon any property or as a personal debt or obligation, by virtue of any contract, whether the same shall be received or payable halfyearly, or at any shorter or more distant periods, shall be entitled, and is hereby authorised, on making such payment, to deduct and retain thereout the amount of the rate of duty which, at the time when such payment becomes due, shall be payable under the Act." The duties granted by this latter Act are, by section 5, directed to be assessed, raised, levied and collected under the rules, regulations and provisions of the former Acts, so far as the same are not superseded by or inconsistent with the express provisions of the latter Act. entitled to deduct the tax in this case. In fact, if this interest be not subject to such deduction, I do not well see how it can be charged with the tax at all. [220] In the Matter of THOMAS SPOONER'S ESTATE. In the Matter of AN ACT OF THE 7TH AND 8TH VICT., INTITULED "AN ACT FOR MAKING A RAILWAY FROM COLCHESTER TO IPSWICH, AND FOR INCORPORATING THE EASTERN UNION RAILWAY COMPANY." And in the Matter of THE LANDS CLAUSES CONSOLIDATION ACT, 1845. Dec. 21, 1854. Costs. Lands Clauses Act, ss. 80, 82 and 83. A railway company took land belonging to a devisee for life, with reversion to the testator's heirs, and paid the purchase-money into Court. Held, that they must pay the costs of two petitions by two co-heirs who claimed the fund on the death of the tenant for life, and also the costs of investigating the title of other persons who claimed to be heirs, in answer to the advertisements issued by order of the Court, except such costs as were occasioned by affidavits of the Petitioners, in opposition to such claims, which were "occasioned by adverse litigation," within sect. 80 of the Lands Clauses Act. Costs incurred before the conveyancing counsel are provided for by ss. 82 and 83, and, being liable to taxation, a proper bill of them should be delivered to the company. In 1844 the Eastern Union Railway Company took land, which, under the will of Thomas Spooner, deceased, be-[221]-longed to his widow, Mary Spooner, for life, and, subject thereto, had descended, as undisposed of, to the heirs of Thomas Spooner, who had left no issue. The purchase-money was ascertained and paid into the bank, and invested in consols, and the dividends paid to the widow under an order of the Court. On the 1st of February 1853 Mary Spooner, the widow, died. Two persons, claiming to be co-heirs of Thomas Spooner (each tracing his descent from one of two coparceners), thereupon presented two several petitions for transfer to them of their respective portions of the stock in Court, and that the costs should be paid by the company. Upon these petitions a reference to Chambers was ordered, to ascertain who was or were the heir or heirs at law of Thomas Spooner, and the real representatives of such heir or heirs, if dead. Advertisements were put into the newspapers. Several claimants appeared, and the investigation proved troublesome. The Petitioners supported their claim by affidavits, and succeeded; and the question now was, who was to bear the expense of all these proceedings, and of the costs incurred before the conveyancing counsel? Mr. Rolt, Q.C., Mr. Eddis and Mr. Bird, for the Petitioners. Mr. Selwyn, for the company, objected that the company ought not to pay the costs of two petitions, nor so much of the other costs as had been "occasioned by litigation between adverse claimants," and were therefore within the exception contained in the 80th section of the Lands Clauses Act. Then the costs incurred before the conveyancing counsel were provided for by ss. 82 and 83, and might be taxed; so that a proper bill of these costs ought to be delivered. [222] Mr. Rolt, Q.C., in reply. THE VICE-CHANCELLOR Sir W. PAGE WOOD said that he had no doubt that the company were liable to pay the costs occasioned by the two petitions. Each of the Petitioners claimed as co-heir, deriving his title from one of two sisters, who had inherited as heirs in coparcenary. Neither Petitioner could know what might be the pedigree of the other. Each had traced his title through the sister from whom he was descended, and need not incumber his own title with the pedigree of his co-heir. The two petitions were therefore properly presented. With respect to the claimants who answered the advertisements, the Petitioners had filed some affidavits in answer to the claims set up; and those affidavits were no doubt a litis contestatio; and therefore the costs of them came within the exception in the 80th section. His Honour further observed that the company had a right to require a bill of the conveyancing costs to be delivered in the usual way, under ss. 82 and 83; and therefore the order now made would be only, under the 80th section, for payment of the costs of the petitions, "except the costs by the Act otherwise provided for, and the costs occasioned by the adverse claims of other parties." [223] LAW v. THE LONDON INDISPUTABLE LIFE POLICY COMPANY AND ANOTHER. Jan. 15, 16, 1855. [S. C. 3 Eq. R. 338; 24 L. J. Ch. 196; 1 Jur. (N. S.) 178; 3 W. R. 154. See In re Alliance Society, 1885, 28 Ch. D. 567; In re Sovereign Life Assurance Company [1892], 3 Ch. 287.] Policy of Insurance. Jurisdiction. Indemnity. 14 Geo. 3, c. 48. Where, by the terms of a policy of insurance the funds of the company were made liable to pay the amount of the insurance: Held, that, on the happening of the event, a bill in equity praying that the company might be decreed to pay the money out of their funds might be sustained, because the remedy sought was larger than could be obtained in an action at law. Semble, that a proviso that the members of the company should not be sued as such in their individual capacity would not alone give equity jurisdiction to enforce payment of the policy. The Plaintiff purchased from his son a contingent legacy of £3000, bequeathed to him if he should attain thirty years of age. When the son wanted twenty months of that age the Plaintiff applied to the Defendant company to insure the event of his son's attaining thirty in the sum of £2999. The company's agent told the Plaintiff that, according to the practice of the office, he must insure two years of his son's life, which he accordingly did at an annual premium, calculated without any reference to the particular risk to be covered. After both premiums were paid the son attained thirty, and the father received the legacy; the son then died, before the expiration of the two years. Held, that the whole sum secured by the policy might be recovered against the company. In 1850 the Plaintiff, being entitled by purchase from his son, Thomas Dixon Law, to a legacy of £3000, bequeathed to the son at the age of thirty, contingent upon his attaining that age, of which he then wanted twenty months, insured his son's life for two years, to cover that risk, by a policy in the following form :— "The London Indisputable Life Policy Company, incorporated according to the provisions of the Act of Parliament 7 & 8 Vict. c. 110. "Non-participating Policy of Assurance. "No. 560. "For two years, yearly premium, £39. Sum assured, £2999. "Whereas, James Law, of No. 24 Tottenham Court Road, London, cheesemonger, the person assured by this policy (and hereinafter denominated the assured), is desirous of effecting an assurance on the life of Thomas Dixon Law, residing at No. 45 Warwick Street, Regent Street, Westminster, gentleman, for the period of two years, and becoming a member of the Incorporate London Indisputable Life Policy Company, according to a deed of settlement, bearing date the 1st day of June 1848, and registered the 14th day of June 1848, in the Registration Office [224] of Joint Stock Companies, in pursuance of the directions of the Act 7 & 8 Vict. c. 110; and has caused to be delivered into the office of the company a proposal for assurance in writing, bearing date the 27th day of March 1850. And whereas the said company have undertaken the proposed assurance upon the terms and conditions herein and hereon expressed. And whereas the assured hath paid to the company the sum of £39, being the amount payable in respect of such assurance, for twelve calendar months from the date hereof. Now this policy of assurance witnesseth that the |