the decree. We contend that in the view of a Court of Equity the stipulation for payment of the whole sum at once can only be treated as a penalty to secure payment of the instalments. The course which conveyancers take when it is intended that the whole debt shall be recoverable at once in case of default in payment of any of the instalments, is, to make the debtor in the first place covenant for payment of the whole sum, and then to insert a * proviso restraining the creditor from suing if the instal- * 599 ments are punctually paid. There, no doubt, if default is made, the original covenant is restored to its full force, and there is no relief against its being enforced; but where the primary covenant is for payment of instalments, with a superadded stipulation like that in the present case, it is difficult to distinguish the case from that of a bond in a penal sum for securing payment of an annuity. A complete analogy is furnished by the authorities relating to provisions for the reduction of interest on punctual payment. It is quite settled that if a mortgagor covenants to pay 41. per cent, but that whenever he makes default in payment for a certain number of days he will pay 57. per cent instead of 41. per cent, this latter stipulation is treated only as a penalty, though where the original covenant is to pay 51. per cent, subject to a proviso that the mortgagee shall accept 47. per cent instead of 57. per cent if punctually paid, the mortgagor must pay the 57. per cent in full unless he tenders the 47. per cent within the specified time. Nicholls v. Maynard, (a) Jarm. Byth., (b) and cases there cited.

Mr. Malins and Mr. Caldecott, for the defendant. The legal right of the defendant to recover the whole sum at once is undisputed, and there is no ground for equity to interfere. The cases as to penalties have no application. In the case of a penalty a person covenants to pay a larger sum as a means only of more effectually securing a smaller sum; here the provision is merely that if the debt is not paid in a particular way the debtor shall be liable to pay it at once.

Mr. Langworthy, in reply.

*THE LORD JUSTICE KNIGHT BRUCE. The deed of the 600

(a) 3 Atk. 519.

(b) Vol. 5, p. 396.

VOL. I.

30

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15th of February, 1862, was founded on a valuable consideration, and is binding on both the plaintiff and the defendant. The plaintiff, however, alleges that there was a collateral agreement by parol, made contemporaneously with the deed, and that in equity this agreement precludes the defendant from availing himself of part of the provisions of the deed against the plaintiff. On this point there is a conflict of evidence, but, in my judgment, the evidence on behalf of the defendant so far preponderates that we cannot deal with the case on the footing that any such agreement as the plaintiff alleges to have been entered into was in fact made.

The case then stands upon the deed alone. It appears on the face of that instrument, that a stated amount of debt was at the time of its execution due from the plaintiff to the defendant, but that it was payable only by instalments at certain fixed times, with interest in the mean time. The deed provided for payment of the debt by instalments at periods different from those at which it was originally payable, with interest in the mean time, and it further provided that in a certain event payment of the debt should be accelerated. It did not provide that the amount payable should be increased, but only provided that, instead of being paid at future periods, with interest up to those periods, it should become payable at once, with interest up to that time. To a proviso of such a nature, none of the principles of equity relating to relief in the case of penalties are, in my opinion, applicable. I think that the plaintiff's case wholly fails, and that his bill ought to be dismissed with costs.

*601

*THE LORD JUSTICE TURNER. The plaintiff rests his case upon two grounds: first, upon an alleged parol agreement that the proviso upon which the defendant is suing at law should not be enforced; and, secondly, upon the ground that the proviso in question is in the nature of a penalty against which a Court of Equity will relieve. It is impossible to say that the evidence establishes the parol agreement, and its existence is distinctly denied by the defendant. The plaintiff, therefore, fails on the first branch of his case. As to the second question, the proviso must take effect according to its terms, unless it be clear that it was intended only as a penalty. Now an agreement that a sum payable by instalments with interest shall in certain events become payable at once, may possibly in some circumstances amount only

to a penalty; but I am of opinion that, on the construction of this instrument, the proviso was not intended so to operate. The deed recites that the defendant had agreed to give the plaintiff time upon having the payment of the debt secured to him with interest, "by the instalments and in manner hereinafter appearing," thus referring not only to the payment by instalments, but also to the different mode of payment mentioned in the proviso. That proviso, therefore, as it seems to me, ought not to be taken as in the nature of a penalty, but as expressing the mode in which in certain events the payment was to be made, the contract between the parties being that the sum due should be payable by instalments, provided they were punctually paid, but that, in case of any default in paying them, the whole sum should become payable at once. I agree in the opinion of my learned brother, that the decree ought to be reversed, and the bill dismissed with costs.

*MOORE v. MOORE.

1863. June 11. Before the LORDS JUSTICES.

* 602

A testator bequeathed his personal estate to trustees upon trust to pay thereout all his debts, funeral and testamentary expenses, and invest the residue upon the trusts therein mentioned, and he disposed of his real estate, part of which was subject to a mortgage. Held, that the trust for payment of all the testator's debts out of the personal estate took the case out of the operation of 16 & 17 Vict. c. 117, and that the mortgaged estate ought to be exonerated out of the personalty.1

THIS was an appeal from a decision of the Master of the Rolls, holding that the will of the testator Fielding Moore did not indicate an intention that an estate which had been mortgaged by him should be exonerated out of his personal estate.

The testator by his will, dated the 2d of November, 1860, specifically disposed of certain parts of his real estate, and bequeathed his household furniture to his wife, and devised the rest of his real

1 See Woolstencroft v. Woolstencroft, 2 De G., F. & J. 347, note (1); Maxwell v. Hyslop, L. R. 4 Eq. 415; Brownson v. Lawrance, L. R. 6 Eq. 4, 5; Nelson v. Page, L. R. 7 Eq. 25; 2 Dart V. & P. (4th Eng. ed.) 748 et seq.; Eno v. Tatham, 3 De G., J. & S. 443; 1 Sugden V. & P. (8th Am. ed.) 195.

estate to her for life, with remainders over. He then gave his ready money, securities for money, and all other his goods, effects, and personal estate whatsoever and wheresoever to trustees upon trust to call in, sell, and convert the same into money, and stand possessed of the proceeds upon trust thereout, in the first place, to pay all his just debts, funeral and testamentary expenses, and the expenses of proving his will, and after full payment and satisfaction thereof to invest the residue in manner therein mentioned, and pay the income to his wife during her widowhood, and after her death or second marriage dispose of the capital as therein mentioned.

Part of the testator's real estate was subject to an equitable mortgage made by himself to his bankers.

On the 21st of July, 1862, the Master of the Rolls decided that this real estate must be taken cum onere, for that the trust for payment of the debts generally out of the personal estate did not indicate a "contrary or other intention" within the meaning of 16 & 17 Vict. c. 117.

*603

*Mr. Baggallay and Mr. Archibald Smith, for the appellant, relied on Eno v. Tatham (a) as undistinguishable from the present case.

Mr. W. Pearson, for the respondents.

Their Lordships reversed the order of the Master of the Rolls, and made a declaration that the residuary personal estate was primarily liable for payment of the mortgage debt.

(a) Cor. LL. J., infra; [1 N. R. 256, 529; 32 L. J. Ch. 311 9 Jur. N. S. 482.]

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LADY MARY TOPHAM v. DUKE OF PORTLAND.

1863. June 20. Before the LORDS JUSTICES.

The costs of an application to stay the execution of a decree pending an appeal to the House of Lords are to be paid by the applicant.1

THIS was an application by Lady Harriet Cavendish Bentinck, that the proceedings under the decree in this cause, so far as related to the transfer and payment of certain sums of stock and cash to the plaintiff, might be stayed pending an appeal by Lady' H. C. Bentinck to the House of Lords from the decree made on the hearing of the appeal before the Lords Justices. (a)

Mr. Giffard and Mr. T. Stevens, appeared in support of the application, and the Solicitor-General (Sir R. PALMER), Mr. Charles Hall, and Mr. Rowcliffe, for the plaintiff.

It was arranged that an order should be taken in the following form:

That notwithstanding the said order (2d May, 1863), *the defendants the Duke of Portland, &c., do on or before * 604 the 20th of July, 1863, or within seven days after service of this order upon them, transfer into the name of the accountantgeneral in trust in this cause the 22,7107. 188. 8d. bank annuities in the said order mentioned, and that defendant Lady Harriet C. Bentinck do within the time aforesaid pay into the bank to the credit of this cause the 33117. Os. 9d. cash therein also mentioned.

Directions to invest the cash in consols and pay the dividends on the transferred consols and on the purchased consols to the plaintiff Lady Mary Topham upon her separate receipt until further order, with liberty for her to apply for a reinvestment on other securities.

The Solicitor-General asked for the costs of the motion.

Mr. Giffard, for the applicant, contended that the costs ought to abide the result of the appeal.

(a) Supra, p. 517.

1 See 2 Dan. Ch. Pr. (4th Am. ed.) 1471.