and its operation as an assignment will alone affect an equitable bar of the vendor's wife. In the spirit of existing decisions (supra) he should think it doubtful whether, as the term was not relied on by the purchaser, it would not be set aside as against the wife, in the same manner as if it had been left in the vendor's trustee. As to the Obligation of seeing to the Application of Purchase Money (ante, p. 103). [The rules of equity obliging a purchaser to see to the application of his purchase money, in cases where the party selling is not expressly authorized to give receipts, does not seem settled to the satisfaction of the profession. It is to the writer's mind an anomaly that the party who has been entrusted with power to sell should not be the party to give a discharge to the person purchasing. The rule appears to be as stated by the author (ante, 102), that where the objects of the trust are defined and certain, the purchaser must see to the application; but if they are of an indefinite nature he is discharged by payment to the trustee. Indefinite trusts are generally where debts and legacies are charged upon the estate. In such cases a purchaser is discharged by payment to the trustee or executor, for the ascertaining and payment of the debts is an indefinite trust; and although the charge of legacies is a defined trust which a purchaser could see the performance of, yet the impracticability of his seeing to the payment of the primary charge of debts absolves him from concern as to any part of the trust fund. (Eland v. Eland, 4 M. & C. 420.) [The principal difficulty in these cases arises from the purchaser having notice that the debts had been paid, or that there were no debts, and then it was a question whether an ulterior trust for paying legacies is to concern the purchaser for the due application of his purchase money. [The question may arise both as to personal and real estate, but it must always be borne in mind that as to personal estate the executor is complete owner for sale and discharge, and that a purchaser from him as executor is never concerned to see to the performance of any trusts. Always, however, excepting fraud and collusion between the executor and the purchaser, and that the latter is free from notice that the executor is dealing with the property in breach of his duty. (Ewer v. Corbett, 2 P. Wms. 148. Hill v. Simpson, 7 Ves. 152.) The executor's power is for the purpose of administering the estate, and as he is the only party so empowered, a purchaser dealing with him bona fide is completely discharged by payment into his hands. A purchaser need not, and should not make any inquiries as to debts or the motive of the sale, unless there are circumstances exciting reasonable suspicion that a breach of duty is intended (Page v. Adam, 4 Beav. 269), and a vendor should not answer if any inquiry be made. [With respect to real estate, it must be recollected that there is no administering hand, but vendors are either trustees or beneficial owners. A purchaser must therefore see that the former are empowered to discharge him, or, if not, that his purchase money is properly applied. As to owners, he must procure the discharge of every person having any certain charge on the estate. If the trust be for payment of debts, then a purchaser is absolved if he purchase bona fide, and, as it was said, without notice that there are no debts. If in addition to the charge of debts, legacies are added, the latter do not concern the purchaser, because the charge of debts absolved him. But the charge of legacies seems to cause this peculiarity, that though the purchaser have notice that there are no debts, yet he is not bound to see the legacies paid. In Forbes v. Peacock, (1 Phil.717), Lord Lyndhurst, C., negatived the importance of notice to a purchaser that the debts were paid, only limiting the proposition by not determining what would be the decision if the purchaser knew there were no debts at the testator's death. His lordship said, "The estate being charged in the first instance with the payment of debts, the purchaser was not bound according to the general rule to see to the application of the purchase money. If indeed he had notice that the vendor intended to commit a breach of trust, and was selling the estate for that purpose, he would by purchasing under such circumstances be concurring in the breach of trust, and thereby become responsible. (Watkins v. Cheek, 2 Sim. & St. 99. Balfour v. Welland, 16 Ves. 151. Eland v. Eland, 4 My. & C. 429.) But assuming that the facts relied on in this case amount to notice that the debts had been paid, yet as the executor had authority to sell, not only for the payment of debts, but also for the purpose of distribution among the residuary legatees, this would not afford any inference that the executor was committing a breach of trust in selling the estate, or that he was not performing what his duty required. The case then comes to this, if authority is given to sell for the payment of debts and legacies, and the purchaser knows that the debts are paid, is he bound to see to the application of the purchase money? I apprehend not." [The reason of this decision seems clear, on the ground that whenever an indefinite trust is created, a receipt clause is implied, not on account of the actual performance of the trust, but that the language of the trust furnishes the testator's intention that the trustees should have a power to discharge purchasers. When once such a clause is implied from the language of the will, it is the same in effect as if the clause were actually written in the will, and no series of events can affect the construction which the very language bears. (See the principle very clearly put, DART's Vendors and Purchasers, p. 283). [The subject has been recently elucidated by some remarks made by Lord St. Leonards, in Stroughill v. Austey (16 Jur. 676). It was not necessary for any decision upon the point, but his lordship reviewed the cases upon the subject, and, it is thought, satisfactorily settled the question. Taking up the case of Forbes v. Peacock, and the note to the report of it (1 Phil. 722), which implied that Lord Lyndhurst did not mean to decide that if there were no debts at the testator's death, the purchaser was not bound to see the money applied, Lord St. Leonards proceeded, "Now I cannot follow that distinction. The case must stand upon one of two grounds; either it is unimportant that the purchaser should know that there are no debts, and then, upon principle, it would be indifferent whether there were no debts at the death of the testator, or no debts at the time of the purchase; or-and this is a ground which is more satisfactory, and which is open to none of these ambiguities— it must stand upon this, that when a testator charges his estate with debts and legacies, he has shown that he means to entrust his trustees with the power of receiving the money, because there may be debts. He has anticipated that there will be debts, and provides for the payment of them. It is therefore by implication a declaration by the testator that he intended to entrust the trustees with the receipt and application of the money, and not to throw an obligation upon the purchaser at all. The intention does not cease because there are no debts. That remains just as much if there are no debts, as if there are debts, because the power arises from the circumstance that the debts are provided for, but the power does not cease because there are no debts, it being in the very creation of the trust a clear indication amounting to a declaration by the testator that he means, and the nature of the trusts shows he means, that the trustees are alone to receive and apply the money. In that way, all the cases would be reconcileable, and they would stand upon one footing, namely, that if a trust be created for the payment of debts and legacies, the purchaser shall in no case be bound to see to the application of the purchase money. That would be a consistent rule on which every body would be able to act: it is a sensible rule and is authorized by the words, and draws none of those fine distinctions which embarrass courts and counsel in advising upon cases, and leads to litigation."] PRECEDENT V. Parties. CONVEYANCE BY DEVISEES IN TRUST UNDER THE THIS INDENTURE, made &c., BETWEEN (trustees) of &c. of the first part, the said (widow and one of the Seisin and will. trustees) of the second part (1), (cestui que trust and remainder-man) of the third part, (termor) of the fourth part, (purchaser) of the fifth part, and (dower Recitals. trustee) of the sixth part: WHEREAS (testator), late of , deceased, being at the date* and execution of his will hereinafter recited, and so continuing to the time of his death, seised in absolute fee simple by purchase. for a valuable consideration of the hereditaments hereinafter described, did by his will, bearing date and duly executed and attested, devise to the said (one of the trustees) and A. B., and his then wife the said and their heirs (2), All the said hereditaments, in trust to receive the rents and profits thereof during the life of the said testator's sister (who is still living), and pay her As to the , (1) The widow is again made a party, because she acts in two capacities, trustee and dowress. (2) The trustees are not required by the nature of the trust to estate taken take the whole legal fee, but only an estate during the life of the by the trustees. annuitant. And the strict legal effect of these words in a devise like the present is now suffered by the courts of law to be controlled by the nature of the trust,-a strange but established anomaly. (See 1 Eden, 119. 1 Burr. 222. 3 T. R. 41. Stanley v. Stanley, 16 Ves. 491.) Effect of the Wills estate [It is not clear whether these cases are affected by the Wills Act on the Act (s. 30), which enacts that every devise to a trustee shall pass the fee simple, or the testator's whole estate, unless a definite term of years, absolute or determinable, or an estate of freehold, shall be given to him expressly, or by implication. taken by trustees. [This section is not limited to cases of a devise to trustees without words of limitation, for it says every devise. Then is not such a devise as in the Precedent one where by implication an estate of freehold is given? The decisions on the subject * [lf the will were made after the operation of the Wills Act (1837), recite as ante, p. 99.] |