gages should explain the existing law and the effect of the reservation (o). Chap. XXXIII. (ii.) Proviso for redemption. If any unreasonable postponement of the time for redemption is inserted, the mortgagor will have the same rights as in an ordinary mortgage (p), and especially so if there has been any concealment or misrepresentation (q). Where a mortgage by a client to his solicitor contained a Power of sale. power of sale to be exercised, although there was no default, and without the attention of the client being especially called to it, a sale was set aside, and the solicitor was fixed with the damages and costs, the damages including the difference between solicitor and client and party and party costs (r). Where, however, a client owed a sum to his solicitor, and, being pressed for payment, executed a charge to secure the debt containing a power for the solicitor to sell the property without notice if the money was not paid by a specified day, it was held that this was not an ordinary mortgage transaction, but an arrangement for giving time to the debtor, and accordingly, that a sale under the power could not be impeached, though the debtor had no independent advice, and it did not appear that the unusual form of the power was explained to him (s). The obligation of a solicitor in dealings with his client extends Obligation of to cases where the solicitor of a bankrupt is dealing with the solicitor to trustee in the client's bankruptcy (t). trustee of bankrupt client. solicitor and A solicitor whose fiduciary relation towards his client has severance of been put an end to is free from all obligations incident to the relation of relation in subsequent dealings with his former client (u), if the client. influence attributable to such relation is also at an end (v). A gift or security for a gift to a solicitor by his client pending Security for the relation is voidable (x), and no such gift can be supported citor void. gift to soliunless the relation between the parties had been finally severed (y), or unless the solicitor can show that the gift was uninfluenced by his position of solicitor (z). (0) Climpson v. Coles, 23 Q. B. D. 467, 468. (p) See note (m), sup. (a) Cowdry v. Day, sup.; Thomas v. Lloyd, 3 Jur. N. S. 288. (r) Cockburn v. Edwards, 18 Ch. D. 449, C. A.; Cradock v. Rogers, 56 L. J. Ch. 968. (s) Pooley's Trustee v. Whetham, 33 Ch. D. 111, C. A. (t) Luddy's Trustee v. Peard, 33 Ch. D. 500. (u) Boswell v. Coaks, 23 Ch. D. 302; but see L. R. 1 Ch. at p. 260. (e) Wright v. Carter, inf. (x) Newman v. Payne, 4 Bro. C. C. 350; Liles v. Terry, (1895) 2 Q. B. 679. (y) Morgan v. Minett, 6 Ch. D. 638. (2) Wright v. Carter, (1903) 1 Ch. 27, C. A. Chap. XXXIII. (iii.) Grounds for setting aside mortgages of reversions. Interference of Court formerly limited to expectancies. iii.-Dealings with Reversionary Interests.-The Court, for the protection of expectant heirs, frequently grants relief against dealings with reversionary interests and expectancies, and the like, on the ground of fraud, and, in such cases, inadequacy of consideration is still a material element in raising a presumption of fraud. Unconscionable bargains with young men will be set aside, though they have mere expectations from their relations, where the bargains are not understood by the borrower (a). But, though youth is treated as an important circumstance, relief may, in a proper case, be granted against an unconscionable bargain, though the mortgagor was a person of mature age (b), and, in such a case, a mortgage of an expectant or reversionary interest is liable to be set aside if its terms are unreasonable, where the mortgagor is poor and ignorant, especially if he is without independent advice (c). And the same rule would apparently be applied even where the mortgaged interest is in possession (d). But in such cases a bargain will not be readily presumed to be unconscionable on account of inadequacy of consideration, unless it is clearly proved to be the result of fraud, surprise, or misrepresentation, or unless the inadequacy is so gross as of itself thereby to indicate fraud, so as to afford a ground for setting aside a mortgage (e). On the other hand, it has been held in several cases that it is not necessary for the mortgagor to prove that he was in actual penury at the time of the transaction (ƒ). This interference of the Court was at first limited to dealings with expectancies, or what is called post obit securities, which the Court has always regarded with a jealous eye; and unless the transaction has been a fair one, it has either restrained an action at law upon the securities (g), or set the bargain aside as unconscionable (1), or refused to carry it into execution, leaving (a) Nevill v. Snelling, 15 Ch. D. 679. See Readdy v. Prendergast, 56 L. T. 790. (b) Earl of Portmore v. Taylor, 4 Sim. 182; Davis v. Duke of Marlborough, 2 Swanst. 139 at p. 143. (c) Fry v. Lane, 40 Ch. D. 312. See James v. Kerr, 40 Ch. D. 449; Rae v. Joyce, 29 L. R. Ir. 500, C. A. (d) Fry v. Lane, sup., per Kay, J., at p. 322. (e) Gwynne v. Heaton, 1 Bro. C. C. 8; James v. Morgan, 1 Lev. 111; Stilwell v. Wilkins, Jac. 280; Rice v. Gordon, 11 Beav. 265; Haygarth v. Wearing, L. R. 12 Eq. 320. (f) Bromley v. Smith, 26 Beav. 644; Salter v. Bradshaw, 26 Beav. 161; St. Aubyn v. Harding, 27 Beav. 11; Foster v. Roberts, 29 Beav. 467; Emmet v. Tottenham, 10 Jur. N. S. 1090. (g) Marsack v. Reevers, 6 Madd. 108. (h) Sir John Barnardiston v. Lingood, 2 Atk. 133; Wiseman v. Beake, 2 Vern. Chap. (iii.) the plaintiff to his remedy at law (i). The onus falls on the mortgagee to show that the bargain is provident (). But where XXXIII. the bargain is a fair one, the Court will enforce an agreement which rests on a contingency, although the event has turned out favourable for the mortgagee or purchaser (7). And the debtor cannot invariably impeach the post-obit security, though the money might have been raised on more moderate terms (m). Nor will the Court grant relief further than as against the penalty of a bond, where the debtor, after coming into possession, and being under no pressure, has chosen to confirm the bargain (n). It is also to be remarked that dealings with expectancies, though liable to be set aside on the ground of fraud, were not within the Statutes of Usury, on account of the risk of the principal (n). rests. The same principle of relief was extended to sales of vested Vested reverreversionary interests (0). The doctrine not only includes the sionary inteclass who in a popular sense might be called "expectant heirs," but also all remaindermen and reversioners (p). Although a reversion which is expectant upon the failure of issue of a tenant for life is generally not capable of valuation (9), yet if such tenant for life be a female, who has been many years. married without having issue, though not past the age of childbearing, it seems that the Court will, for the purposes of valuation, treat the interest expectant on her death without issue as a simple reversion (»). It was held in one case that although an expectant heir might Privity of be entitled to relief, he would lose such title if he acted in the father, &c. matter with the privity of the father or other person standing in loco parentis, but in that case the heir had also, after repudiating the bargain, acted in such a manner as to alter the 121; Earl of Ardglasse v. Muschamp, 1 Vern. 237; Wharton v. May, 5 Ves. 27; Curling v. Marquis of Townsend, 19 Ves. 628. See Earl of Aylesford v. Morris, L. R. 8 Ch. 484; Beynon v. Cook, L. R. 10 Ch. 389. (i) Johnson v. Nott, 1 Vern. 271. (k) Davis v. Duke of Marlborough, 2 Swanst. 139. (1) Mortimer v. Capper, 1 Bro. C. C. 156; Baker v. Bent, 1 R. & My. 224. But see Pope v. Roots, 1 Bro. P. C. 370. (m) Curling v. Marquis of Townsend, 19 Ves. 628; Wharton v. May, 5 Ves. 27. (n) Lord Chesterfield v. Janssen, 2 (0) 1 Sug. V. & P. 14th ed. p. 285. (q) Baker v. Bent, 1 R. & My. 224. Chap. XXXIII. (iii.) Life interest. How value ascertained. Sale of Reversions Act. situation of the other party and his property (s). But the principle that the fact that dealings by an expectant heir are known to his father or other relative deprives the heir of his equity to relief is strongly dissented from by Lord St. Leonards (t). And it may now be regarded as settled that such knowledge, though material as tending to rebut the presumption of fraud or extortion (u), will not of itself prevent relief from being given in a proper case (x). The interest of a tenant for life, whose estate is subject to annuities and to interest upon mortgages, is not a reversionary interest within the scope of these considerations (y). Although a party dealing with an expectant heir must before the Sale of Reversions Act (2) have shown that he gave a fair price for his post-obit securities, such value, where a valuation is possible, was to be ascertained not by the tables of actuaries, but by the market price at the time of dealing, taking all the circumstances of health and age into account; and it was in the discretion of the Court to direct an inquiry if it had not sufficient information (a). Hence, a sale by auction of expectancies, or of securities thereon, was held good, that being evidence of the market price (b). In estimating the value of a contingent reversionary interest, the Court may admit evidence to show how far such value is affected by the remoteness of the contingency (c). The adequacy of the consideration is a matter for the Court to decide in each case, having regard to the circumstances of the particular transaction (d). By the Sale of Reversions Act (e), it is enacted that no purchase, made bona fide and without fraud or unfair dealing, of any reversionary interest in real or personal estate, shall hereafter be F. 436. And see Headen v. Bosher, (b) Shelley v. Nash, 3 Madd. 232. (d) See and compare Nott v. Hill, 2 Ch. Ca. 121; Edwards v. Browne, 2 Coll. 100; Edwards v. Burt, 2 De G. M. & G. 62; Foster v. Roberts, 29 Beav. 471; Jones v. Ricketts, 31 Beav. 130. (e) 31 Vict. c. 4; Carson, R. P. Stat. 730. opened or set aside merely on the ground of undervalue; and the word "purchase" shall include every kind of contract, conveyance, or assignment under or by which any beneficial interest in any kind of property may be acquired. The Act came into operation on January 1, 1868, and does not apply to any purchase concerning which any suit was then depending. It is in other respects retrospective. Chap. XXXIII. Act. (iii.) The law regarding setting aside unfair and unconscionable Effect of this bargains respecting reversionary interests remains the same as before the statute (f). The Act leaves undervalue still a material element in cases in which it is not the sole equitable ground for relief. These changes of the law have in no degree whatever altered the onus probandi in those cases, which, according to the language of Lord Hardwicke (g), "raise from the circumstances or conditions of the parties contracting-weakness on one side, usury on the other, or extortion, or advantage taken of that weakness a presumption of fraud. Fraud does not here mean deceit or circumvention; it means an unconscientious use of the power arising out of these circumstances and conditions; and when the relative position of the parties is such as primâ facie to raise this presumption, the transaction cannot stand, unless the person claiming the benefit of it is able to repel the presumption by contrary evidence, proving it to have been in point of fact fair, just, and reasonable " (h). The burden of proof will, however, apparently be shifted, so far as undervalue is concerned, if the value of the property has been stated by the mortgagor in his proposals (i). In a case of setting aside for inadequacy of value a sale by a young man of a reversion, relief was refused, there being no fraud; but it was held by Lord Hatherley, that as a separate and independent adviser was not employed, the whole transaction must be opened (). Relief may be granted as against an assignee of a mortgage Relief against with notice of fraud affecting the original transaction (1). (f) Tyler v. Yates, L. R. 6 Ch. 665; Earl of Aylesford v. Morris, L. R. 8 Ch. 480; Beynon v. Cook, L. R. 10 Ch. 392; Nevill v. Snelling, 15 Ch. D. 679; Brenchley v. Higgins, 70 L. J. Ch. 788, C. A. (7) In Earl of Chesterfield v. Janssen, 2 Ves. Sen. 125, at p. 157. (h) Per Lord Selborne in Earl of Aylesford v. Morris, L. R. 8 Ch. 484, assignee, with notice. |