THE TRUSTEES AND MORTGAGEES ACT.

(23 AND 24 VIc., c. 145.)

As the examiners appear to think that candidates for the examination should be fully acquainted with the provisions of the 23 and 24 Vic., c. 145, being "An Act to give to Trustees, Mortgagees, and others certain Powers now (i.e. theretofore) commonly inserted in Settlements, Mortgages, and Wills," we propose to notice the clauses of the Act, though, as the "Answers to the last Term's Examination Questions," and the "Examination Studies," referred to the principal provisions of the Act, this will necessarily involve some repetition, but as the enactments are of a very complex character, this will really be an advantage to the student anxious to become familiarised therewith. Indeed, one principal object of this publication is to make the articled clerk conversant with the principal changes taking place in the law, so that he may not fail on his examination from ignorance in this respect, and this can best be done by repetitions.

The Act comprises four parts, concerning distinct subjects. The first part relates to the Powers of Trustees for Sale, &c., and Trustees of Renewable Leaseholds; the second, to the Powers of Mortgagees; the third part contains Provisions as to the Investment of Trust Funds, the Appointment and the Powers of Trustees and Executors, &c., whilst the fourth part contains some general provisions, mostly modifying or affecting the previous provisions of the Act.

Before giving in a formal manner the provisions of the Act, it will be useful to state them shortly, with an occasional comment.

Mode of exercising powers of sale.-As already stated, the first ten sections relate to trustees for sale, &c., and trustees of renewable leaseholds. It is provided that powers of sale may be exercised by selling together or in lots, by auction or private contract, at one or several times, subject or not to special conditions. And the donees of a power may buy in, or vary contracts, and resell, without liability for loss (secs. 1-2). Little discussion is likely to arise on these sections. The authorities they confer (except perhaps that of buying in, Taylor v. Tabrum, 6 Sim. 281), have usually been considered to be incidental to the position of persons selling under a power. Donees of a power to exchange are also authorised, by sec. 1, to give or receive equality-money; and purchasers are exempted by sec. 2, from inquiring whether any particular reinvestment in land is in contemplation-two provisions which are, perhaps, hardly necessary (see as to the first 2 Sug. Pow. 482).

Conveyance by trustees exercising powers.-The third section authorises the donees of a power of sale or exchange to make conveyances, and will, we think, be the subject of a good deal of discussion before its exact operation is ascertained. It will, probably, not authorise the conveyance of outstanding legal estates (see sec. 33).

Investment of sale moneys.-The next four sections (4, 5, 6, 7) direct the investment of sale moneys in hereditaments to be settled to the same uses as those sold, or in payment of incumbrances, or, in the meantime, at interest. Leaseholds are not to vest absolutely in any tenant in tail by purchase who does not attain twenty-one. But the Act does not say what is to happen to them in the event of the death of any such tenant in tail under age. We presume, however, that in such a case it would be held by implication that they devolved along with the freeholds.

Trustees of renewable leaseholds may renew.-The eighth section relates to the duty of trustees of renewable leaseholds, but does not remove the existing doubts whether such trustees are bound to renew in the absence of special directions (Montfort v. Cadogan, 17 Ves. 488; Lewin, 385). In fact, it may be plausibly argued that, whatever be the existing law on the subject, such trustees will not in future be liable for not renewing unless directed or required to do so, for the Act expressly gives a discretionary power of renewing, imposing a duty of renewing only in cases where trustees are thereunto required by the beneficiaries. It remains to be seen whether the Court of Chancery will adopt this section as an authoritative exposition of the proper rules of equity on this subject.

Exchange and renewal moneys by mortgage-Consent of tenant for life to sale. The ninth section authorises the raising of money by mortgage for equality of exchange and for renewal. And the tenth makes the consent of the tenant for life (if not under disability) necessary to sales, exchanges, or purchases.

Mortgagee's powers of sale, insurance, appointment of receiver.The second part of the Act (secs. 11-24) relates to the powers of mortgagees, and will, we think, be found more generally useful than the sections which we have already discussed. It is provided that mortgagees, after the expiration of one year from the time limited for payment of principal money, or after interest shall have been in arrear for six months, or an insurance premium shall not have been duly paid, shall have, as of course, a power of sale, a power of insuring against fire, and a power of appointing or obtaining the appointment of a receiver (who is to be the agent of the mortgagor, sec. 18). There are proper provisions for protecting purchasers

from any irregularity in the exercise of the power of sale, and for the application of the purchase moneys (secs. 12-14). With respect to receivers, it is provided that a mortgagee may call upon a mortgagor to appoint one, and in default of appointment may nominate one himself; the receiver is to be the agent of the mortgagor, to be removable by a similar process to that employed in appointing him, to be paid by a commission not exceeding five per cent., and to receive and apply the rents of the mortgaged property, after payment of outgoings in keeping down the interest of the mortgage money (secs. 17-23). These provisions will, we think, be very useful. It is not very usual at the present time to insert special provisions as to the appointment of a receiver in any mortgage deeds except those relating to large transactions; but the occasions are many in which the existence of such an agent would prevent unnecessary irregularity in the payment of interest. The sections, in fact, give to future mortgagees most of the advantages enjoyed by a mortgagee in possession, with none of the risk attending that very unpleasant position; and they inflict no hardship on mortgagors, who will always be able to prevent their operation by paying their interest regularly, and will have the power of choosing their own receivers if they choose to exercise it.

Investments by trustees.- Maintenance of infants out of income.The next section of the Act (25) authorises trustees to invest trust funds in any of the Parliamentary stocks or public funds, or in Government securities-a provision probably intended to remove the doubt thrown by Hancom v. Allen (2 Dick. 498), on the power of trustees to invest in any stock except consols. But, as to this subject, we must refer the reader to what is stated of this and other acts, with the late order, ante, pp. 27-46-47. And the twentysixth section authorises the maintenance of infants out of the income of legacies to which they may be only contingently entitled. This provision rather extends the existing rules of equity, which will be found well stated in 2 Spence, Eq. Jur. 185. A similar power has been hitherto usually inserted in well-drawn instruments.

Appointment of new trustees.-The next two sections (27, 28), contain a general power of appointing new trustees without application to the Court of Chancery, and follow the form of the usual power for this purpose. They do not, however, provide, as welldrawn powers do, for the cases of a trustee residing abroad or of two trustees retiring simultaneously, or of there being two sets of trustees of the same instrument, or of its being desirable to augment or reduce the number of trustees. It is provided that any new trustees appointed under the Act, "and also every trustee appointed by the Court of Chancery either before or after the passing of this

Act," shall have the same powers, &c., as if he had been originally nominated a trustee. This will settle the question raised in Newman v. Warner (1 Sim., N.S., 457) and other cases, as to the powers of new trustees appointed by the Court of Chancery (see Morgan's Chancery Acts, 102).

Receipts of trustees' discharges.-The twenty-ninth section contains the much-required general power for all trustees to give effectual receipts, and the next section authorises executors to compound claims, &c.-a power which, we think, might have been advantageously extended to administrators and trustees. The only important section to which we have not already called attention is the thirty-second, which declares that the powers given by the Act may be negatived by express declaration, and when not so negatived, are to take effect only subject to the special provisions of each settlement, as to which see ante, p. 31.

We now proceed to give the enactments themselves, shortening them, however, in such a manner as not to overburthen our pages. The Act is intituled "An Act to give to Trustees, Mortgagees, and others certain powers now commonly inserted in Settlements, Mortgages, and Wills.”

PART I.-Power of trustees for sale, &c., and trustees of renewable leaseholds.

Sec. 1. Trustees may sell in lots, by auction or privately.-In all cases where by any will, deed, or other instrument of settlement, it is expressly declared that trustees, or other persons therein named or indicated, shall have a power of sale, either generally or in any particular event, over any hereditaments named or referred to in or from time to time subject to the uses or trusts of such will, deed, or other instrument, it shall be lawful for them to sell, either together or in lots, and either by auction or private contract, and either at one time or at several times, and (if the power shall expressly authorise an exchange) to exchange the trust estate for the time being for any other hereditaments in England or Wales, or in Ireland, as the case may be, and upon such exchange to give or receive any money for equality of exchange.

Sec. 2. Trustees may sell under special conditions, buy in, rescind, resell, &c.-The persons making such sale or exchange may insert any such special or other stipulations, either as to title or evidence of title or otherwise, in any conditions of sale or contract for sale or exchange as they may think fit, and also buy in the hereditaments or any part thereof, and rescind or vary any contract for sale or exchange, and resell without being responsible for any loss which may be occasioned thereby; and no purchaser under any such sale

shall be bound to inquire whether any reinvestment of the purchasemoney in other hereditaments is contemplated.

Sec. 3. Trustees empowered to convey.-For the purpose of completing any such sale or exchange as aforesaid, the persons empowered to sell or exchange as aforesaid may convey as may be

necessary.

Sec. 4. In the absence of a contrary indication, moneys arising from sales to be laid out in other lands.-The money received on any sale, or for equality of exchange, shall be laid out in the manner indicated by the will, deed, or instrument containing the power. If no indication be therein contained as to all or part thereof, then the same shall, with all convenient speed, be laid out in the purchase of other hereditaments in fee simple in England or Wales, or in Ireland, as the case may be, or of lands of a leasehold tenure (having sixty years to run), or copyhold or customary tenure; the freehold of inheritance to be settled to the same uses and trusts as the hereditaments sold or given in exchange were subject to, or as near thereto as circumstances will admit, and the leasehold, copyhold, and customary tenures to such trusts, intents, and purposes as nearly as may be to correspond with and be similar to them. Provided that no such leaseholds shall vest absolutely in any tenant in tail by purchase who shall not attain the age of twenty-one, and any such purchase as aforesaid may be made subject to any special conditions as to title or otherwise.

Sec. 5. Sale moneys may be applied in payment of incumbrances. -Provided nevertheless that such money, or any part thereof, may be applied towards paying off or discharging any mortgage or other charge or incumbrance affecting all or any of the hereditaments then subject to the same uses or trusts as the hereditaments so exchanged or sold were subject to.

Sec. 6. Limiting locality of investments and exchanges.-No such money shall be laid out in the purchase of, or lands exchanged for, any lands or hereditaments elsewhere than in the country in which he lands sold or exchanged are situated.

Sec. 7. Intermediate investment.-Until such money shall be disposed of in the manner herein mentioned, the same shall be invested at interest for the benefit of the parties entitled.

Sec. 8.-Trustees of renewable leaseholds may renew.-It shall be lawful for any trustees of renewable leaseholds at their discretion, and it shall be their duty if thereunto required by any person having any beneficial interest, present, or future, or contingent in such leaseholds, to use their best endeavours to obtain from time to