CHAP. XXIII. Mortgage of charity estates for empowered the commissioners sitting as a board (s. 21) to authorize money to be raised by mortgage of charity estates for purposes of improvement, provided that compulsory provisions improvement. were reserved in every such mortgage for payment of the principal money borrowed by annual instalments, and for redemption and reconveyance within thirty years. The Charitable Trusts Amendment Powers of trustees only under Act. The Charity Power of majority of trustees. Under 18 & 19 Vict. c. 124, s. 30, in lieu of such compulsory provisions being inserted in the mortgage, the board authorizing any mortgage is to give directions by its order for discharge of the principal debt, or any part thereof, by instalments, within 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 any charity are disabled from selling 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 (7), or with the approval of the board. By 23 & 24 Vict. c. 136, s. 15, the power contained in s. 21 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 (r), a majority of the trustees are empowered to execute all assurances, &c., requisite for carrying 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 (→). When express powers are required. 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 (9) See Re Mason's Orphanage, (1896) 1 Ch. 596, C. A. (r) 32 & 33 Vict. c. 110. A majority of two-thirds of the trustees was formerly necessary. See 23 & 24 Vict. c. 136, s. 16 (repealed). () As to when the concurrence of the official trustee is required, see 16 & 17 Vict. c. 137, ss. 47-50; and 18 & 19 Vict. c. 124, s. 30. is desired that money should be raised for purposes other than CHAP. XXIII. those of enfranchisement, exchange, or partition, or of discharge of incumbrances affecting settled lands (s), or of renewal of leases (f). trustees. Where trustees have a discretionary power to sell or mortgage Discretion of settled property, the Court will not enforce the exercise of the power, however beneficial its exercise may be (u). 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(). 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 (y). amount to power of A power or trust to raise money by mortgage may be created What will by informal words (≈). Estates are sometimes vested in trustees upon trust or with power to sell, without any express power mortgaging. 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 («); 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. intention. A mortgage, however, would not be authorized under a trust Contrary for conversion out and out (b); or where an intention appears that a complete conversion by sale should be effected (c). (y) Carlyon v. Truscott, L. R. 20 Eq. 348. (-) Denyssen v. Bothey, 8 W. R. 710. (a) Mills v. Banks, 3 P. Wms. 9; Earl of Orford v. Lord Albemarle, 17 L. J. Ch. 396. See Ball v. Harris, 4 My. & Cr. 276. (b) Stronghill v. Anstey, 1 De G. M. & G. 635; Page v. Cooper, 16 Beav. 396. (c) Holdenby v. Spofforth, 1 Beav. 390. CHAP. XXIII. Whether power to mortgage authorizes a sale. Power to "raise" money. Power to charge. General power of appoint ment. Where land is directed to be sold by trustees, they have only a power, but no estate (d). 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 (e). 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 (ƒ). Conversely, a sale is not, generally speaking, authorized by a power to raise money by mortgage (g). But where a tenant for life under a settlement had a general power to charge the estate to any amount, and by his will he directed the estate to be sold, a sale was decreed pursuant to this direction (). And a power to raise money "by mortgage or otherwise " will authorize a sale (i). 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 (j). A power to "raise" a sum of money has been held to authorize a sale, and could apparently enable the donce of the power also to mortgage (k). A general power to charge will authorize an appointment of the fee to secure the money raised (1); 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 (m). Conversely, a power to appoint the fee will authorize a charge which the Court will, as a general rule, carry into effect by a (d) Elliott v. Fisher, 12 Sim. 505; (f) Re Dimmock, Dimmock v. Dimmock, (g) Ridout v. Earl of Plymouth, 2 Atk. 104. (h) Long v. Long, 5 Ves. 445. (i) Tascker v. Small, 6 Sim. 625, affd. on other points, 3 My. & Cr. 63. (j) Palk v. Lord Clinton, 12 Ves. 56. (k) Wareham v. Brown, 2 Vern. 153; Bateman v. Bateman, 1 Atk. 421. (1) Long v. Long, 5 Ves. 445; Bateman v. Bateman, sup. ; Drake v. Whitmore, 5 De G. & S. 619. (m) Jenkins v. Keymis, 1 Ch. Ca. 103. sale (n). In such a case, the Court may authorize an appoint- CHAP. XXIII. ment to trustees in trust for sale (o). 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 (p); but the case was a very special one. newal, when Upon the general principle elsewhere referred to (), that a Fines for redirection to raise money out of rents and profits for a purpose raiseable out which requires a gross sum to be raised at once, will charge the of rents, &c. corpus of the estate, fines for the renewal of leases for lives and upon taking admittance to copyholds, may be raised (») 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 will be payable out of the income if it be sufficient (s). But where the power is simply to raise the fines out of the rents or by mortgage, if the trustees refuse to exercise their discretion as to the mode of raising the money, the Court, in pursuance of its general principles, will so raise it as to throw the burden upon the parties in proportion to their interests in the property charged; although it seems the trustees, in the exercise of their power, might have made a different disposition (t). receipts. It has been seen that the receipt of trustees for moneys Trustees advanced to them will generally exonerate the mortgagee from seeing to the application of the money (u); but fraud or collusion on his part, enabling the trustees to apply the money to their own purposes, will vitiate the mortgage (a). A power to charge an estate with a specific sum of money Interest. without mentioning interest, includes a power to charge with interest (y); and the interest may be at any rate fixed by the donee of the power, who is not limited to the rate of interest allowed by the Court (≈). But this rule does not apply where the trustees have not a discretionary power to charge, but an (n) 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. (0) Kenworthy v. Bate, 6 Ves. 793. (r) Allan v. Backhouse, 2 V. & B. 65; Playlers v. Abbott, 2 My. & K. 97; Garmstone v. Gaunt, 9 Jur. 78. (8) Solley v. Wood, 29 Beav. 482. (t) Jones v. Jones, 5 Ha. 440; Ainslie v. Harcourt, 28 Beav. 313. (u) 22 & 23 Vict. c. 35, s. 23; 56 & 57 Vict. c. 53, s. 20, ante, p. 401. (x) Burt v. Truman, 6 Jur. N. S. 721. (y) Kilmurry v. Geery, 2 Salk. 538; Boycot v. Cotton, 1 Atk. 556; Evelyn v. Evelyn, 2 P. Wms. 659; Hall v. Carter, 3 Atk. 359; Lewis v. Freke, 2 Ves. jun. 507, (z) Lewis v. Freke, sup. CHAP. XXII. imperative trust to raise a sum of money for specific purposes; in such a case, the interest must not exceed the rate of 4 per cent., or, in the case of Irish estates, of 5 per cent. (p). Costs. Covenant to pay. Power of sale. Where trustees have power to raise a sum of money, they have power also to raise the costs of the mortgage (4). Where real estate subject to several incumbrances was conveyed to trustees in trust to raise 75,000l. to pay off the incumbrances prior to a mortgage to A., who paid off and took transfers of the prior incumbrances; the trustees then, by a deed to which the mortgagor was a party, purported to assign to A. the 75,0007. raiseable under the trust deed, and to convey to him the property by way of mortgage to secure 75,000l. and interest; it was held that this was not a mortgage under the trust, and that, as against mesne incumbrancers, A. could only stand as a transferee of the incumbrances transferred to the extent of the security thereby created (»). ii.-Form of Mortgage by Trustees.-A covenant to pay in a mortgage by trustees is unusual (s); and where a covenant was entered into by a trustee-mortgagor, an action on such covenant was, under circumstances of fraud, restrained (†). It may now be considered settled that a power to trustees or others to mortgage authorizes a mortgage with power of sale (u), in opposition to former authorities (x). It is safer, however, that trustees to whom power to mortgage is given, should be authorized in terms to give a power of sale (y). Where money is directed by the Court to be raised by mortgage, a power of sale has been sometimes inserted (≈), and sometimes refused (a). The plan has sometimes been to give a power of sale with a proviso that it shall not be exercised during the infancy or other disability of the persons entitled subject to the mortgage, without the leave of the Court (b). (p) Balfour v. Cooper, 23 Ch. D. 473, C. A., distinguishing Young v. Lord Waterpark, 13 Sim. 199. (a) Armstrong v. Armstrong, L. R. 18 Eq. 541. See Sewell v. Bishopp, 62 L. J. Ch. 985, C. A. (r) Thompson v. Hudson, L. R. 2 Ch. A. 255, reversed on other grounds, L. R. 4 H. L. 2. (s) See Stronghill v. Anstey, 1 De G. M. & G. 635, at p. 642. (t) Greenfield v. Edwards, 2 De G. J. & S. 582. (u) Bailey v. Abraham, 14 L. T. 219, Q. B.; Bridges v. Longman, 24 Beav. 27; Cook v. Dawson, 29 Beav. 128; Re Chawner's Will, L. R. 8 Eq. 569. See Bennett v. Wyndham, 4 De G. F. & J. 259; Russell v. Plaice, 18 Beav. 21; Cruikshank v. Duffin, L. R. 13 Eq. 555. (x) Clarke v. The Royal Panopticon, 4 Drew. 26; Sanders v. Richards, 2 Coll. 568. (y) Dav. Con. (4th ed.) vol. ii. pt. 2, p. 85. (2) Selby v. Cooling, 23 Beav. 418. (a) Drake v. Whitmore, 19 L. T. 243. (b) 2 Dav. Conv. 3rd ed. p. 635; 4th ed. p. 86. |