Chap. XXIII. § 3 (i). Payment of estate duty. The Charitable Trusts Act, 1853. Mortgage of 24th December, 1888, when the Trustee Act, 1888 (t), came into operation. By sect. 11 of that Act, which applied to trusts created as well before as after the passing thereof, the provisions of the repealed enactment contained in Lord Cranworth's Act are virtually re-enacted. Sect. 11 of the Trustee Act, 1888, has been in its turn repealed by the Trustee Act, 1893 (u), but re-enacted in similar terms. It is to be observed that neither the repealed section nor the enactment now in force contains, as did Lord Cranworth's Act, an express power for the trustees raising money for renewals to convey or assure the hereditaments intended to be comprised in the security, so that it would seem that the only security they can give is by way of equitable charge upon the lands (x). The effect of the above statutory enactments is merely to facilitate the renewal of leases of lands comprised in settlements, and not to alter any rule of law as between tenant for life and remainderman, with respect to the ultimate incidence of the expenses of renewal (y). By the statute 57 & 58 Vict. c. 30, sect. 9, sub-sect. (5), a person authorized or required to pay estate duty may, for the purpose of paying the duty, or recouping the amount of duty already paid by him, raise the amount of such duty and any interest and incidental expenses by sale or mortgage of, or a terminable charge on, the property to which the duty has attached. But a tenant for life, being bound to keep down interest on charges on the inheritance, is not, under ordinary circumstances, entitled to raise by mortgage the interest on the unpaid portion of the duty (≈). ii. Mortgages under the Charitable Trusts Acts.-The 16 & 17 Vict. c. 137, constituting the Charity Commission, empowered the commissioners sitting as a board (sect. 21) to authorize money to be raised by mortgage of charity estates for improvement. purposes of improvement, provided that compulsory provisions were reserved in every such mortgage for payment of the charity estates for (t) 51 & 52 Vict. c. 59. (u) 56 & 57 Vict. c. 53, ss. 19, 51. (y) Ibid. See also Nightingale v. Lawson, 1 Bro. C. C. 440. (z) Re Howe's Settled Estates, (1903) 2 Ch. 69, C. A. principal money borrowed by annual instalments, and for redemption and reconveyance within thirty years. Chap. XXIII. § 3 (ii). able Trusts Under 18 & 19 Vict. c. 124, s. 30, in lieu of such compulsory provisions being inserted in the mortgage, the board authorizing The Charitany mortgage is to give directions by its order for discharge of Amendment the principal debt, or any part thereof, by instalments, within Act, 1855. thirty years, or for forming a sinking fund for discharge of the principal debt, or any part thereof, within the same period. By sect. 29 of the same Act, the trustees or administrators of Powers of any charity are disabled from borrowing money or from selling under Act. trustees only or mortgaging the charity estate otherwise than under an Act of Parliament or a Court of competent jurisdiction, or according to a scheme legally established, or with the approval of the Charity Commissioners (a). It seems that the approval of the Charity Commissioners to a Consent of mortgage is not necessary where the land is held not upon any commisspecific trust but upon trust for the general purposes of the charity (b), nor where the land has been purchased out of a fund arising from voluntary subscriptions (c). Act of 1860. By 23 & 24 Vict. c. 136, s. 15, the power contained in sect. 21 The Charity of the Act of 1853, is extended so as to authorize the application of moneys raised on the securities of the properties of the charity, to any purpose or object which the board shall consider to be beneficial to the charity or the estate or objects thereof, and which shall not be inconsistent with the trusts or intentions of the foundation. By sect. 12 of the Act of 1869 (d), a majority of the trustees Power of are empowered to execute all assurances, &c., requisite for carry- trustees. majority of ing any mortgage into effect, on behalf of themselves and of their co-trustees, and also of the official trustee, in cases where his concurrence would otherwise be required (e). (a) See Re Mason's Orphanage, (1896) Ch. 596, C. A.; Fell v. Official Trustee of Charity Lands, (1898) 2 Ch. 44, C. A. (b) Re Sons of Clergy Corp., (1893) 1 Ch. 178. (c) Re Clergy Orphan Corp., (1894) 3 Ch. 145; but see Re Stockport Ragged School, (1898) 2 Ch. 687. (d) 32 & 33 Vict. c. 110. A majority merly necessary. See 23 & 24 Vict. (e) As to when the concurrence of Chap. XXIII. § 4 (i). When express powers are required. Discretion of trustees. What will amount to power of mortgaging. SECTION IV. OF MORTGAGES BY TRUSTEES UNDER EXPRESS POWERS. i. Of Powers of Mortgaging in Settlements and Wills.— Express powers authorizing trustees to raise money for purposes connected with their trusts were formerly often inserted in settlements and wills, and are required at the present day if it is desired that money should be raised for purposes other than those of enfranchisement, exchange, or partition, or of discharge of incumbrances affecting settled lands (f), or of renewal of leases (g). Where trustees have a discretionary power to sell or mortgage settled property, the Court will not enforce the exercise of the power, however beneficial its exercise may be (h). If there be a devise in trust, by mortgage or sale, to raise money for payment of debts, the trustees may proceed to raise the money without the sanction of a decree; for decrees do not give rights, but are only executions of the trust or power already subsisting (i). If the power to mortgage is for payment of debts on a deficiency of personalty, there can be no mortgage after a decree proving that all debts are paid (k). A power or trust to raise money by mortgage may be created by informal words (1). Estates are sometimes vested in trustees upon trust or with power to sell, without any express power to mortgage. It has been held that mortgage is pro tanto a sale, and that therefore a trust or power for sale will, generally speaking, include a mortgage (m); but the authority to mortgage must depend upon the nature of the trust. If the object of the trust is for a definite purpose, such as to raise a certain sum of money for debts, portions, and the like, without an ulterior intention of effecting an entire conversion into personalty by an absolute sale, there seems no objection to the money being in every case, where practicable, raised by mortgage. Questions of this sort must depend on the peculiar circumstances of the trust, and the intention of the parties as shown on the instrument (n). Where a testator gave his real and personal estate to trustees upon trust for sale with a power of postponement and power during such postponement to manage and let the real estate and to make out of the income or capital of his real and personal estate any outlay necessary for improvements, repairs, &c., it was held that the trustees had power to raise money by mortgage or charge of the real estate for repairs (o). Chap. XXIII. § 4 (i). intention. A mortgage, however, would not be authorized under a trust Contrary for conversion out and out (p); nor where an intention appears that a complete conversion by sale should be effected (9). Where land is directed to be sold by trustees, they have only a power, but no estate (»). A power given by will to the executors and trustees thereof to wind up the testator's affairs, &c., and in so doing to make any "sales or other arrangements" as they should think fit, was held to empower the trustees to raise money by mortgage of the testator's real estate (s). Where a testator devised and bequeathed all his property to trustees and directed them to carry on his business, and empowered them to increase or abridge the business and the capital thereof, it was held that, inasmuch as the trustees had power to sell the realty and use the proceeds so as to increase the business, they had power to mortgage the realty for that purpose (t). mortgage Conversely, a sale is not, generally speaking, authorized by a Whether power to raise money by mortgage (u). But where a tenant power to for life under a settlement had a general power to charge the authorizes estate to any amount, and by his will he directed the estate to (n) See Binnie v. Broom, 14 App. Ca. 576. (0) Re Bellinger, Durell v. B., (1898) 2 Ch. 534. (p) Stroughill v. Anstey, 1 De G. M. & G. 635; Page v. Cooper, 16 Beav. 396. (a) Holdenby v. Spofforth, 1 Beav. 390. (r) Elliott v. Fisher, 12 Sim. 505; (t) Re Dimmock, Dimmock v. Dimmock, (u) Ridout v. Earl of Plymouth, 2 Atk. 104. a sale. Chap. XXIII. § 4 (i). Power to "raise" money. Power to charge. General power of appointment. Fines for renewal, when raiseable out of rents, &c. be sold, a sale was decreed pursuant to this direction (r). And a power to raise money "by mortgage or otherwise " will authorize a sale (y). It is doubtful whether, under a trust to raise money by sale or mortgage, trustees can make a sale after having raised the money required by mortgage; at all events, the mortgagee cannot compel the trustees to sell (3). A power to "raise" a sum of money has been held to authorize a sale, and could apparently enable the donee of the power also to mortgage (a). So a power of sale for raising a particular charge (b), or to pay debts (c), implies power to mortgage. A general power to charge will authorize an appointment of the fee to secure the money raised (d); but it would seem that a particular power of charging does not enable the donee of the power to appoint the fee by way of mortgage, but only enables him to create an equitable charge (e). Conversely, a power to appoint the fee will authorize a charge which the Court will, as a general rule, carry into effect by a sale (f). In such a case, the Court may authorize an appointment to trustees in trust for sale (g). In one case, a power to charge with a sum of money was held to authorize the grant of a rent-charge until the principal and interest were paid (h); but the case was a very special one. Upon the general principle elsewhere referred to (i), that a direction to raise money out of rents and profits for a purpose which requires a gross sum to be raised at once, will charge the corpus of the estate, fines for the renewal of leases for lives and upon taking admittance to copyholds, may be raised (k) out of the estate itself, although the rents and profits be the only specified fund. Where there is a power to raise fines out of annual rents and profits, with power to mortgage in case the necessary sums shall not be provided in that manner, the fines (x) Long v. Long, 5 Ves. 445. (y) Tasker v. Small, 6 Sim. 625, (e) Jenkins v. Keymis, 1 Ch. Ca. 103. (f) Roberts v. Dixall, 2 Eq. Ca. Ab. 668. And see Palmer v. Wheeler, 2 Ba. & Be. 18; Skelton v. Flanagan, Ir. R. 1 Eq. 362. (g) Kenworthy v. Bate, 6 Ves. 793. (k) Allan v. Backhouse, 2 V. & B. 65; Playlers v. Abbott, 2 My. & K. 97; Garmstone v. Gaunt, 9 Jur. 78. |