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England and Wales High Court (Chancery Division) Decisions
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Cite as:  EWHC Ch J51
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70 ER 862, (1861) 1 J&H 546
Sara Creak, widow, deceased, by her will, dated the 16th day of February 1828, bequeathed £200 a year to Mrs. Hensman, of Kimbolton, to be placed in the stocks, and the principal to go to her children at her death, all the rest of her estate and effects to be equally divided between the three persons therein named; and by codicil without date she directed as follows: "Only £4000 to go to pay Mrs. Hensman's annuity of £200."
The testatrix died on the 23d of February 1828, and administration of her estate and effects, with her will and codicil annexed, was granted to Buswell Hensman, since deceased.
The said Mrs. Hensman had, at the date of the testatrix's death, the following eight children only, that is to say, Bethiah Hensman, since deceased, the Defendants, Rebecca and Ann Palmer and Sarah Maria Hensman, Caroline –the late wife of the Plaintiff- and the Defendants, William Hensman, John Hensman, Frederick Hensman and Harriette Hensman. The said eight children all attained the age of twenty-one years; and she had no child born after the said testatrix's decease.
The tenant for life and her eight children, none of her daughters being then married, and John Hensman, Frederick Hensman and Harriette Hensman, being the minors, signed the following document, addressed to the administratior of the testatrix:
"13th October 1828. We hereby approve of your paying, and request you to pay, the annuity left to Mrs. Hensman, of Kimbolton, by Mrs. Creak, half-yearly, although there may be doubt whether she is entitled to any portion of a year's annuity until the end of that year; and, on her death, we call upon you to repay the last half-yearly payment made her, on the ground that you should have paid nothing till the end of the year; and, further, we agree to the first half-yearly payment being made to her now; and, further, we agree to your investing the £4000, out of which her annuity is directed to come, on mortgage of freehold or copyhold estates, at £5 per cent. Interest; and we consent to your making such investments for two years certain; and in case of Mrs. Hensman's death before the expiration of such two years, we will not claim the principal so invested until the end of such two years, but will affirm the investment and take the interest pending the two years, and then receive the principal."
The said document was acted on, and the investment therein mentioned was soon afterwards made.
The Defendant, Rebecca Ann Palmer (late Hensman), intermarried with the Defendant, Hanslip Palmer, on the 3d of July 1829.
By the settlement made in contemplation of the marriage, dated the 3d of June 1829, after reciting that the said Rebecca Ann Palmer was entitled, amongst other sums, to a share in the said sum of £4000 bequeathed by and under the will of the said Sarah Creak, on the death of the said Mrs. Hensman, the said Rebecca Ann Palmer, with the approbation of the said Hanslip Palmer, assigned unto the trustees, their executors, administrators and assigns, amongst other things, all that her share of and in the sum of £4000, payable to her on the death of the said Bethiah Hensman, her mother, and on that event bequeathed to the said Rebecca Ann Palmer, as one of the children of the said Mrs. Hensman, by thesaid will of the said Sarah Creak, to hold unto them, their executors, administrators and assigns, upon trust to invest the same as therein mentioned, and to hold possession thereof in trust for the separate use of the said Rebecca Ann Palmer during her life, with a restraint on anticipation; and after her decease in trust for the said Hanslip Palmer, during his life; and after the decease of the survivor of them, on the trusts therein declared for the benefit of their children.
The following document was found among the papaers of Bethiah Hensman after her decease:
"Whereas Sarah Creak, of Finsbury Square, London, by her will, dated 18th day of February 1828, bequeathed the sum of £4000, to be placed in the stocks, the interest thereof to be paid to Mrs. Hensman, and the principal to go to her children at her death. And whereas it is doubtful whether, in case of the decease of any of the children before Mrs. Hensman's death, the legacy would become lapsed. Now it is hereby mutually understood and agreed by and between all the said parties hereto, that from the day of the date hereof, each shall be entitled to his or her share of the said principal money, and shall have power to sell, assign over, or devise the same; and that, if no disposition thereof be made, it shall belong to the personal representative of such deceased legatee or legatees. As witness our hands, this 19th of September 1833."
There was no evidence of the original having been signed, but the paper was described in the heading as a copy of an agreement between the legatees.
By agreement, dated the 1st day of January 1834, signed by the said Mrs. Hensman of the first part, her said eight children and the said Hanslip Palmer of the second part, and the said Buswell Hensman, deceased, of the third part –after reciting that the said sum of £4000 had been reduced to £3799 by being sold out of the stocks to invest on mortgage by direction of the parties of the first and second parts, which they themselves acknowledge; and that £1700, part of the said £3799, had been lost through the deficiency of a person into whose hands the same was paid; and that, disputes having arisen as to the liability of the said Buswell Hensman as administrator to make good such loss, the person deficient being solicitor for all parties, he, the said Buswell Hensman, had ultimately agreed to be responsible for the same, on the express condition that he, his executors, administrators and assigns, should not be called upon to raise or pay the said £170o trust money, or any part thereof, during his life, nor until twelve months should have elapsed after his decease, unless he, his executors, administrators or assigns should choose so to do, but should duly pay the interest thereof in the meantime, in consideration of the said Buswell Hensman conditionally acknowledging his liability as aforesaid –the said Mrs. Hensman, and also the said Bethiah Hensman, Sarah Maria Hensman, Caroline Hensman, William Hensman, John Henry Hensman, Frdererick Hensman and Harriette Hensman, for themselves and their respective heirs, executors, administrators and assigns, and also the said Hanslip Palmer, for himself and the said Rebecca Ann, his wife, and for his and her heirs, executors, administrators and assigns, did severally agree with the said Buswell Hensman that they, or any of them, or their executors, administrators and assigns, would not, at any time, during the life of the said Buswell Hensman, nor during the twelve months immediately succeeding his decease, commence or prosecute any action, suit or proceeding in any manner whatsoever, or call upon the said Buswell Hensman, his executors, administrators or assigns, for or respecting the payment or investment of the said sum of £1700 as aforesaid; but the same should, during the period aforesaid, remain in the hands of the said Buswell Hensman, his executors, administrators and assigns; and that the now-stating agreement he pleaded in bar in any proceedings instituted contrary to the meaning thereof. And it was thereby further agreed and declared that nothing therein contained should release or discharge the said Buswell Hensman, his executors, administrators or assigns, from paying in the mean time the interest of the said £1700 to the said Bethiah Hensman the elder during her life, and after her decease to the persons entitled to share the said principal sum of £1700, according to their respective shares in the said principal, by even half-yearly payments, the first thereof to be made on the 15th day of April next, at the rate of £5 per cent. per annum.
By an indenture of mortgage, bearing date the 9th day of March 1855, and made between the said Defendants, John Hensman and Frederick Hensman, of the one part, and the Defendant, Harriette Hensman, of the other part, all the two-eighth parts or shares, or such other parts or shares, of the sum of £4000, to which the said John Henry Hensman and Frederick Hensman were or would be entitled, under or by virtue of the said will and codicils of the said Sarah Creak, in reversion or remainder expectant on the decease of the said Mrs. Hensman, were assigned by the said John Hensman and Frederick Hensman unto the said Harriette Hensman, her executors, administrators and assigns, for securing the repayment of £1000 and interest.
By an indenture, dated the 22d of May 1835, and made between the Defendant, William Hensman, of the first part, the said Mrs. Hensman of the second part, her said seven other children, and the Defendant, Hanslip Palmer, of the third part, and the said Buswell Hensman, deceased, of the fourth part –after reciting the said testatrix's will and administration; and that the said sum of £4000 had, by a fall in the stocks, been reduced to £3799; and reciting that the said Defendant, William Hensman, had applied to the said Buswell Hensman to lend him the sum of £450, on the security of his said one-eighth share of the said £3799 to which he was entitled in reversion expectant on the decease of the said Mrs. Hensman, who had agreed to give up a proportionate part of her said annuity, or to receive the same from the said William Hensman, and to rely on his sole security for that purpose, it was witnessed that the said William Hensman assigned to the said Buswell Hensman, his executors, administrators and assigns, his one-eighth reversionary share in the said sum of £4000 bequeathed by the said will, and all sums of money and interest which should become due in respect thereof, in trust nevertheless as a pledge or security to him, the said Buswell Hensman, his executors, administrators and assigns, for the repayment to him or them of the said sum of £450 so by him lent to the said William Hensman as aforesaid; and for that purpose, in case the said sum of £450, or any part thereof, should remain unpaid at the decease of the tenant for life, upon trust, that he, the said Buswell Hensman, his executors, administrators or assigns, should receive all sums of money payable in respect of the said one-eighth reversionary share, and should there-out satisfy himself and themselves the said sum of £450, or so much thereof respectively as should be then owning to them, together with all costs, charges and expenses which he or they should pay or incur in or about the receipt or recovery thereof, and the legacy duty payable or paid in respect thereof; and should pay the surplus of such moneys unto the said William Hensman, his executors or administrators, or assigns; provided always that, if the said William Hensman, his executors or administrators, should pay the said Buswell Hensman, his executors, administrators or assigns, the sum of £450, on the 22nd of May 1845, or upon the decease of the tenant for life, which should first happen, the assignment thereby made should be void. And therein were contained covenants by the said William Hensman that, in case from any circumstances the said sum of £450 should, without any default of the said Buswell Hensman, be or become actually more than the said William Hensman should be entitled to receive on the decease of the said Mrs. Hensman, then he, the said William Hensman, his heirs, executors or administrators, would, on demand, repay the difference to the said Buswell Hensman, his executors or administrators. And the said Mrs. Hensman, the elder assigned unto the said Buswell Hensman so much of the said annuity as should be equal to the interest of the said sum of £450, and released the said Buswell Hensman from payment of so much of the said annuity. And it was further witnessed that they, the said Bethiah Hensman, Hanslip Palmer and Rebecca Ann, his wife, Sarah Maria Hensman, Caroline Hensman, John Hensman, Frederick Hensman and Harriette Hensman, did thereby jointly, and each of them did severally, covenant with the said Buswell Hensman that, in case from any circumstances the said sum of £450 then paid to the said William Hensman should, without any default in the said Busewll Hensman the elder, become more than the said William Hensman should be entitled to receive, then the said last-mentioned covenanting parties, or any of them, their or any of their heirs, executors or administrators, should not, nor would, at law or in equity, or otherwise howsoever, sue the said Buswell Hensman, his executors, administrators or assigns, or other the personal representative for the time being of the said Sarah Creak, deceased, for any greater share or shares of the said legacy of £4000 than the said Buswell Hensman, his executors, administrators or assigns, or such personal representative or representatives, should have in hand or be legally responsible for, without reckoning the said sum of £450 then paid to the said William Hensman as aforesaid, or reckoning only so much of the same as should be actually repaid to the said Buswell Hensman, his heirs, executors or administrators, by the said William Hensman, his heirs, executors or administrators, by virtue of the covenant hereinbefore contained for that purpose. And further, that they, the said last-mentioned covenanting parties respectively, and their respective heirs, executors and administrators, should and would, at all times thereafter, effectually save harmless and keep indemnified the said Buswell Hensman, his executors, administrators and other the personal representatives for the time being of the said Sarah Creak, deceased, from and against all costs, charges, damages, expenses and losses whatsoever, by reason or in consequence of the said payment so as aforesaid made by the said Buswell Hensman to the said William Hensman, or of any matter, cause or thing in anywise relating thereto.
The said Caroline Williams died on the 1st of March 1852, and letters of administration of her estate and effects were granted to the Plaintiff.
The said Bethiah Hensman died on the 23d of November 1859.
The said Buswell Hensman died on the 5th of February 1860.
The said trust fund was represented by a sum of £3799, with interest from the decease of the said Mrs. Hensman, in the hands of the executor of Buswell Hensman; and he did not insist on the benefit of the stipulation entitling him to retain the said sum of £1700 until the expiration of the twelve calendar months from the decease of the said Buswell Hensman.
It appeared, by the evidence of the son of the trustee who had acted at his solicitor, and generally as the adviser of the family, that it had always been assumed, until after the death of the tenant for life and of Bethiah, that the legatees were to be paid their shares in severalty, no question as to the existence of a joint-tenancy having ever been raised.
Shortly after the death of the tenant for life Bethiah pressed for payment of her share, but this was delayed in consequence of the trustee having mixed up the fund with his own property, and not being prepared to convert it immediately; but it was contemplated by all the legatees that the fund should be divided as soon as it could be got in.
Mr Rolt, Q.C., and Mr. Bagshawe, for the Plaintiff. There was a severance of the shares of the Plaintiff's late wife, and other legatees, by the agreement of 1834; and, if not by that, then by the deed of 1835, which was in fact a mortgage of each several share to secure the trustee against loss.
Mr Willcock, Q.C., and Mr. Hemming, for the executors of Bethiah Hensman. There was clearly a severance of this share. The agreement of 1828 was signed by the eight children, of whom three where minors, and thus became binding on five shares and not upon the three. That severed the five shares –one of which was ours- at any rate from the three, if not from one another. We are, therefore, thus severed from Harriette (one of the three), if not from Sara Maria, they being the only beneficiaries who claim as under a joint-tenancy.
Further, the memorandum of 1833 is headed "Copy of agreement entered into", and not as a draft; and, even if the document were not executed, which is uncertain, the retention of this paper by Bethiah was a severance of her share, because anything done with that view would suffice (this being personalty) without a signed writing.
Then the security and indemnity given by the deed of 1835 fixed each legatee with liability absolutely, whether she should or should not be among the survivors, which certainly would not have been done unless the shares were regarded as thereby or previously severed.
Again, it is in evidence that all the parties treated their interests, after the death of the tenant for life, as separate, and Bethiah pressed for payment of her share, which was only delayed by the default of the trustee in not having the fund ready in a specific shape. A trustee's default cannot affect the rights of the cestuis que trust, because what he ought to have done will be regarded as if it were done. The interest being a mere chose in action, anything which sufficiently indicated an intention to deal with it as severed would operate as an assignment in equity as completely as a regular deed. This intention (as well as the assent of the trustee, though that was not necessary) appears on the correspondence, and the share must therefore be considered as severed.
Further, the will may be construed as a joint-tenancy only during the suspense of the determination of the class; or, more correctly, the whole would be the quasi corporate property of the class, and would become, as to the several shares, the separate property of each survivor at the instant of the death of the tenant for life: Kenworthy v. Ward (17 Jur. 1047).
Mr Daniel, Q.C., and Mr. R. F. Glaister, for the other Defendants. The evidence shews that the question as to the existence of a joint-tenancy never occurred to the minds of the legatees. Therefore, any acts seeming to point to a severance being done in ignorance raise no presumption of an intention to sever.
VICE-CHANCELLOR Sir W. PAGE WOOD. In these questions of joint-tenancy the Court ahs frequently been driven to rely on minute grounds for holding a severance to have taken place, by the unfortunate circumstance that the Legislature has not thought fit to interpose by introducing the rule that express words shall be required to create a joint-tenancy in place of the contrary rule which is established, that words pointing to severalty of interest are necessary to constitute a tenancy in common. Under certain circumstances, as in the case of mortgages of trust money, a joint-tenancy is a considerable convenience; but it would be very desirable that, in general, in the absence of any express direction, a tenancy in common should be the construction adopted.
The question here is whether the circumstances in evidence are enough to justify the Court in holding the interests of the legatees to have been severed.
A joint-tenancy may be severed in three ways: in the first place, an act of any one of the persons interested operating upon his own share may create a severance as to that share. The right of each joint-tenant is a right by survivorship only in the event of no severance having taken place of the share which is claimed under the jus accrescendi. Each one is at liberty to dispose of his own interest in such manner as to sever it from the joint fund –losing, of course, at the same time, his own right of survivorship. Secondly, a joint-tenancy may be severed by mutual agreement. And, in the third place, there may be a severance by any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common. When the severance depends on an inference of this kind without any express act of severance, it will not suffice to rely on an intention, with respect to the particular share, declared only behind the backs of the other persons interested. You must find in this class of cases a course of dealing by which the shares of all the parties to the contest have been effected, as happened in the cases of Wilson v. Bell and Jackson v. Jackson.
In the present case I think you do find, especially in the indemnity deed, such a course of dealing as is required on this principle. As to some of the shares, there is no question. Rebecca's share was severed by the assignment of it to the trustees of her marriage settlement. The shares of John and Frederick were severed by the mortgage of the 9th of March 1835 of "their two-eight parts or shares" to Harriette. William clearly severed his share by taking the advance of £450 under the arrangement entered into with the trustee of the fund. A fifth share is disposed of in this way: A document was signed in 1828 by all the eight legatees purporting to sanction the investment of the trust funds in a manner not authorized by the will. At the time three of the legatees, John, Frederick and Harriette, were infants, and the other five only were bound by the document. That was, therefore, a dealing by the five as to their shares in a manner inconsistent with the continuance of a joint-tenancy between the five and the three. I do not go so far as to say that, because the five did not recreate a joint-tenancy, their shares must be taken as severed as between themselves. It was a severance of the five from the three, but not a severance among the five. Two of the three shares would have been subsequently severed, as I have said, by other means; and by the effect of this document Harriette's share also must be treated as completely severed. There remain three shares to be considered: that of Caroline, the Plaintiff's late wife, of Bethiah, and of Sarah. As regards Bethiah's share, it would be a very strong exemplification of the hardship of the general rule if I were unable to hold that her share was severed. In her lifetime, after the death of the tenant for life, she had asserted her right to her share and pressed for payment. How far that would operate as a severance is a question of some doubt; and I am glad to find other grounds on which to rest my judgment.
The remaining transactions apply equally to the case of the Plaintiff and that of Bethiah's executors. I do not rely much on the instrument of 1834, by which an arrangement was come to with reference to the £1700 which has been lost. It was true that the legatees "severally agreed", in consideration of the trustee acknowledging his liability, not to take any proceedings until the expiration of the trustee acknowledging his liability, not to take any proceedings until the expiration of a year from the death of the trustee; and there was a proviso that nothing therein contained should release the trustee from paying interest in the meantime on the £1700 to the tenant for life, and after her decease "to the persons entitled to share the said principal sum of £1700, according to their respective shares in the said principal, by half-yearly payments". But the argument founded on this instrument is open to the observation that it was not such a dealing as necessarily to create or imply a severance –due regard being had to the possible future rights of the parties to which the language might be applied, notwithstanding the continuance of the joint-tenancy for the time being. The meaning may very well be that none of the legatees will sue the trustee as a defaulter even in the event of their shares being severed at some future time; and it is not easy to treat an instrument which admits of that construction as necessarily creating a severance of the joint-tenancy.
But I think that the deed of May 1835 was a dealing which cannot be reconciled with any view, except that of the parties to it thenceforth holding their interest as tenants in common. The arrangement was this: William was to have £450 on account of his share, and the tenant for life releases her income to the extent of the interest of this sum. Then it was contemplated that the fund might happen to be reduced, so that the share coming to William at the death of the tenant for life would become less than £450; and all the eight children, therefore, concurred in making themselves jointly and severally responsible, in that event, not only to make good the excess of the advance over the amount of William's share, but to bear the risk of all the costs, charges and expenses of the trustee. Each of them guaranteed, not only as to his own acts but as to those of the others, that they should hold the trustee harmless, so that the executors and administrators of anyone who died would become responsible to indemnify the trustee; although at the same time the personal estate of any legatee who might die before the division or severance of the fund would, if the interest were to continue joint, be without the slightest benefit from the fund. In other words, they al enter into this engagement solely by reason of their interest in the fund; and, if I were to hold that they undertook such a liability to be operative whether they ultimately acquired any benefit or not from the fund, the assumption would involve so much injustice that I must hold this document to imply an agreement among themselves that their interests should be treated as held in severalty, and this not only up to the death of the tenant for life, but so as to exclude the survivorship at any period, whether before or after that date.
Mr. Daniel read a passage from the affidavit of the solicitor of the trustee, tending to shew that the parties acted in ignorance of the fact that the will created a joint-tenancy, but that it is not material; and the same affidavit also proves the really material fact that they did treat the interest as a tenancy in common. In Jackson v. Jackson, it is laid down, that, where you find in point of fact a dealing as tenants in common, it is not material whether that was or was not done in ignorance of the existence of a joint-tenancy. And there is good reason for this, for it must be borne in mind that a joint-tenancy is a right which any one of the joint-tenants may determine when he pleases; and, if all continue to deal on the footing of their interests not being joint, it would be most inequitable to treat it as a joint-tenancy when all the parties, whether in ignorance or not, have dealt with their interests as several.
I am of opinion, therefore, that the continuance of a joint-tenancy is not reconcilable with the covenant of indemnity to which I have referred; and I must, therefore, hold that all the shares were severed.