LIFE INTERESTS. 335 tion void brocage. It should be remembered that an agreement in a settle- Condonament on marriage condoning, or authorising the trustees to condone, breaches of trust under a prior instrument, may, where one of the trustees committing the breach of trust is in loco parentis to one of the persons marrying, and possibly in other cases, be void as amounting to marriage brocage (d). Clauses of the Second Class (see ante, p. 307). The question whether the husband or the wife should take the first life interest in the property brought into settlement on the part of the wife is fully discussed in 3 Dav. Prec. 68. Though in any particular case this is a matter for agreement, still it may be said that at the present day the usual practice is for each to take the first life interest in the property settled on his or her behalf, except that sometimes, where the husband is engaged in trade, the wife takes the first life interest in both properties; for, in such cases, the risk intended to be guarded against by the settlement is not that of disagreement between husband and wife, but that of the husband falling into pecuniary difficulties. use. Where the wife takes the first life interest in any part of Separate the trust funds, the income is given to her for her separate use during her life, and generally with a restraint on anticipation. If by a settlement the income is given to the wife for her separate use, without a restraint on anticipation, she is exactly in the position of a feme sole in respect of it; she can dispose of her interest during the joint lives, and is exposed to pressure on the part of her husband or his creditors to do so; but when the restraint on anticipation is added, the income becomes practically inalienable. power of There is some difficulty in understanding the phrase Without (d) Hamilton v. Mohun, 1 P. W. Allen, 2 Vern. 588. See the notes anticipa 118; S. C. 2 Vern. 652; Kent v. to Scott v. Tyler, 1 W. & T. L. C. tion. "without power of anticipation": for, as the only place where it is used with a technical meaning is in the clauses under consideration, it is sometimes erroneously supposed to mean "inalienable." Suppose that the owner of Consols, immediately after he has received his dividend, goes with the money in his pocket to a shop and makes a purchase, which he pays for out of it, he applies his dividend not by way of anticipation. On the other hand, if he makes the purchase before he has received the dividend, and promises to pay out of the dividend when received, he disposes of it by anticipation. So if he sells his stock, he disposes of the whole of the future dividends by way of anticipation. Generally speaking, the law does not allow a restraint on anticipation to be imposed on income; if income be given to a man with a restraint on anticipation, the restraint is absolutely void: he can dispose of it as absolute owner (see M. L. R. P. 195). How, then, does the restraint on anticipation protect a woman? It will be remembered that a married woman was before 1883 absolutely unable to contract, except with respect to property constituted her separate estate, either by express declaration or under the M. W. P. A. 1870; and that all income coming to her during the coverture belonged at law to the husband. Equity, which gave to her the rights of property in respect of her separate estate, gave her also a power of contracting with respect to it; but when the words "without power of anticipation of anticipation" were added, Equity modified the power of contracting, so that it did not apply to contracts made by way of anticipation, and her Common Law incapacity of contracting remained; and as she could not dispose of her income by way of anticipation, either at Common Law or by virtue of any power given to her by Equity, she could not dispose of the corpus, for this would in effect be to dispose of the income to arise from it in the future. Where the woman marries after 1882, the M. W. P. A. 1882, which gives her a statutory power to hold, dispose of, and contract in respect of her property, expressly 66 WITHOUT POWER OF ANTICIPATION." declares (s. 19) that nothing in the Act shall "interfere with or render inoperative any restriction against anticipation attached to the enjoyment of any property or income by a woman under any settlement, agreement for a settlement, will, or other instrument." So that, where the restriction is imposed, she is in the same position as a woman married before 1883, with respect to separate property as to which she was restrained from anticipation. See, as to the "restraint on anticipation," M. L. R. P. 128; M. L. P. P. 390. Although the restraint on anticipation is generally inserted, there are a few cases-as, for instance, on the marriage of a woman of mature years-where it may properly be omitted. 337 In most cases, the income of property settled on the wife Income generally without power of anticipation is paid by the trustees to the paid to husband by the tacit permission of the wife. The question husband. has to be considered whether the trustees are justified in acting in this manner, or whether it is not their strict duty to obtain the wife's consent for each such payment. In other words, can the wife charge them as for a breach of trust in making such payments ? The older opinion, founded on the analogy of the cases as to pin-money, was that the wife was entitled to recover one year's arrears of income. But the modern doctrine appears to be that the wife is not entitled to any account. Although most of the cases (which are collected in a note to Payne v. Little, 26 Beav. 1, at p. 5; and see per Jessel, M.R., in Dixon v. Dixon, 9 Ch. D. 587) relate to separate estate where there is no restraint on anticipation, still the grounds of the decision appear to apply equally to the cases where that restriction is imposed (e). The case of Rowley v. Unwin, 2 K. & J. 138, confirms this view. Trustees acting in this manner should be careful not to continue the payments to the husband if circumstances arise (such as the husband's 13 App. Ca. 385. (e) See 1 Vaizey on Settlements, pp. 787 et seq.; Edward v. Cheyne, E.I.C. 22 Payment of income to the survivor. Trusts de pecuniary embarrassments, or grave dissensions between husband and wife) which would probably cause the wife to wish to have the payments made to herself (3 Dav. Prec. 73 (d)). The modern form (2 K. & E. 466; Stud. Prec. 111) of the trust for separate use without power of anticipation consists of directions to the trustees to pay the income to the wife during her life, for her separate use, without power of anticipation (ƒ). Where the wife takes the second life interest (i.e., a life interest after her husband's death) in personal property under a settlement made before 1883, it is a reversionary chose in action, which is not alienable by her during the coverture (ante, p. 302); but where she takes it under a settlement made since 1882, it may be argued that she can alienate it by virtue of the M. W. P. A. 1882; and until it is decided (as it probably will be) that this view is erroneous, it will be proper expressly to restrain her from anticipating it, which in effect renders it inalienable during the coverture. (See form in Stud. Prec. 110.) But to return to the general frame of the settlement. Where the wife takes the first life interest, the trust for the wife during her life is generally followed by a trust for the payment of the income to the husband, if surviving, during his life; but sometimes the property is still further protected by making the interest of the husband, in case of his surviving the wife, determinable on alienation or bankruptcy. In framing such a trust, we have to bear in mind—first, terminable that it is impossible to give to any person a continuing on bank ruptcy (g). (f) The doctrine of separate estate is discussed in the notes to Hulme v. Tennant, 1 W. and T. L. C. A collection of cases as to what amounted under the old law to a gift for separate use will be found in Interp. 297 et seq.; 1 Vaizey on Settlements, 754 et seq. See also the important cases of Massey v. Rowen, L. R. 4 H. L. 288; Taylor v. Meads, 4 De G. J. & S. 597; Bishop v. Wall, 3 Ch. D. 194; Cooper v. Macdonald, 7 Ch. D. 288. (9) See M. L. R. P. 195, Vaizey on Settlements, 947; 2 K. & E. 469. TRUSTS DETERMINABLE ON BANKRUPTCY. interest in property after bankruptcy (Brandon v. Robinson, 18 Ves. 429; Graves v. Dolphin, 1 Sim. 66); secondly, that property cannot be so settled on any person, except a married woman, as to take away the power of alienation to the extent of his or her interest in it (see Co. Lit. 222, b, and the exception, Co. Lit. 223 a; Re Macleay, L. R. 20 Eq. 186); but thirdly, income can be settled on a man till he becomes bankrupt (Lockyer v. Savage, 2 Stra. 947; Ex parte Hinton, 14 Ves. 598; Kearsley v. Woodcock, 3 Hare, 185; Ex parte Eyston, 7 Ch. D. 145), or till he alienates or attempts to alienate it (h). This third rule is subject to the exception that a settlement on a person of the income of his own property (i) till bankruptcy is considered as a fraud upon creditors, and the trustee in bankruptcy takes the whole interest originally given (Higinbotham v. Holme, 19 Ves. 87). It was formerly considered that in the case of a settlement on a person of the income of his own property till alienation the restriction was void, but this is not the case. (Brooke v. Pearson, 27 Beav. 181; Knight v. Browne, 9 W. R. 515; S. C. 30 L. J. Ch. 649.) It follows that the income of all the property comprised in the settlement can be settled on the husband till he attempts to alienate it, and that the income of all the property except that belonging to him originally (belonging to him, not that brought into settlement on his behalf) can be settled on him till his bankruptcy: so that the life interest of the husband in the whole of the property can be made inalienable, and his life interest in the whole of the property, except that which (h) The same result may be obtained by a limitation in favour of a man for life, followed by a proviso that his interest shall cease on bankruptcy or alienation; and this appears to be effectual even though there is no gift over to another person in that event; but a mere direction that a man shall have no power to alienate without the addition of a proviso for cesser of his interest would be inopera- (i) Which does not include pro- 339 |