1841.

v.

PEARSON.

used in this instrument, I may recal to your LordCASAMAJOR ships' recollection the rule which has been established in this country after some difficulty and some doubt, but which is now fully recognised, and which is the only rule by which questions of this sort can be determined with anything like certainty or anything like justice to the parties. It frequently happens that what a testator contemplates does not take place: he intends land to be converted into money, or money into land, and he gives directions accordingly, and those directions are not acted upon; and after many years having passed, the question arises how the interests of the parties are to be arranged; not entirely according to the directions of the testator, because he has given no directions with respect to the state of circumstances that has arisen; but how the intentions of the testator are best to be carried into effect with regard to the state of circumstances which has arisen subsequently to his death; because of necessity the Court must adopt some course of arranging the interests of the parties. You cannot ariange them exactly as the testator intende 1, because the facts are different from what he contemplated. The Court is, therefore, under the necessity of adopting some course with reference to the intention of the testator, and with reference to what is just between the parties. I allude to the doctrine laid down in the case of Sitwell v. Bernard (c); and there are many other cases in which a similar difficulty has occurred. In that case the testator intended that all the monies should be converted into land: that was the declared intention of the author of the trust; and contemplating that to take place, and intending that to take place soon after his death, and

(c) 6 Ves. 520; see also the notes, pp. 528-9.

intending to impose upon the parties claiming under his will a motive to stimulate them to carry his intentions into effect, he gave the whole of his estate in trust, and directed his income to accumulate till land should be purchased; he directed the money to be invested in land, and then gave a tenancy for life, with remainder over, in the land to be purchased. Many years elapsed and no land was purchased; the property remained as the testator had left it, in the shape of money; and the question arose, what was to be done with it? It was quite contrary to the testator's declared intention that any party should derive any benefit from the fund so long as it remained in the shape of money; but the Court held that as it had remained in the shape of money, and there had never been a conversion of it, it was necessary to adopt some middle course in order not to defeat the obvious intention of the author of the gift; namely, that the tenant for life should derive some benefit. And the Court directed the accumulation to cease after the expiration of the first year after the death of the testator, considering that a reasonable time within which the intentions of the testator ought to have been carried into effect, and directed the income of the fund so existing to be paid to the party who was tenant for life of the land: thus departing from the terms of the author of the gift, but doing that which, under all the circumstances, appeared to be most consistent with his intentions.

In the present case, there is a direction to convert the land into money; and when converted into money, after setting apart funds to meet the amount of the annuities of 400l. a year each, the surplus was, in so many words, given over to the legatees. Now it is obvious, that by not converting the land into money,

1841.

CASAMAIJOR

V.

PEARSON.

1841.

CASAMAIJOR

v.

PEARSON.

the chance, which the testator contemplated, of the proceeds of the estate being more than was necessary to meet the annuities, and of there being therefore a fund applicable to the immediate payment of the residuary legatees, would not come into operation, because it never could be ascertained that there was such a fund, and therefore there could be no such claim enforced till after the sale took place; and therefore to that extent they were disappointed and postponed. Those who claimed the annuities had reason to be content, because it was immaterial to them whether the annuities came out of the land or out of the money, provided there was sufficient. So long, therefore, as there was sufficient income out of the land, they received what it was intended they should receive. But when that income failed, and the produce of the estate was not sufficient to pay the annuities, they had the remedy in their own hands; they might then have insisted upon the execution of this trust, and upon the sale of the estates, in order that they might have the benefit of having a fund which probably would have produced more income in the shape of money than whilst it existed in the shape of land, in order to pay the annuities which the land was to pay. But they took no such step: they received the income of the land so far as it would go. They permitted the property to remain in the state in which the testator had left it, but which he had directed to be changed into another form, for the purpose of securing the payment of the annuities.

The question therefore is whether, independently of the particular terms of the gift, to which I have adverted; whether, if there had been more doubt upon those terms than in my opinion there is, the fair justice of the case between the parties would not

be to act upon the rule established in Sitwell v. Bernard and the other cases (referred to in the report of that case), that, if the parties choose to permit the property to remain, contrary to the intention of the testator, in the state in which he left it, but which he had directed to be changed, they should take it, for better or for worse, in the situation in which they leave it; and are not entitled at a future time to pay themselves in full, to the prejudice of those who, if the property had been converted at the time the testator directed, might at least have had a chance of having a share in it, and who in all probability would at that time have had a share. Therefore, independently of the particular provisions of this deed, I should have thought the justice between the parties would have been to let them receive such income as the land would produce, until the period of conversion, and to give them no title, either as against the future income of the fund, or as against the capital of the fund that has not been converted, for the purpose of making up the former deficiency of the fund.

Your Lordships will just permit me to call your attention to the extraordinary consequence of yielding to this claim. The first year after the death of the testator, the land produced more than enough to pay the annuities. Now, supposing there were 2001. more than enough to pay the annuities, the claim is that that surplus fund is to be held liable to make good the deficiency in any future year. A deficiency might not occur for twenty or thirty years; the land might have been sufficient to keep down the annuities, and only just sufficient; or it might have produced more. Then was that accumulating surplus income to be held de anno in annum, by the trustees, because perchance, twenty years hence, the land might not

1841.

CASAMAIJOR

v.

PEARSON.

1841. produce sufficient to pay the annuities? And yet, CASAMAIJOR according to the claim made by these annuitants, that

บ.

PEARSON.

would be the consequence. If they have a claim of lien to answer future deficiencies, the trustees would not then be warranted in paying the surplus over to the legatees. In what a situation then would the legatees be? They are entitled immediately to receive the surplus of the fund beyond what is necessary to pay the annuities, but they would be prohibited from receiving the surplus beyond what is necessary to pay them; and the fund is to be retained during the continuance of the lives of the annuitants, in order to meet the possible chance, more or less remote, of the land not being sufficient to pay the annuities. It seems quite impossible that such a construction should be adopted, leading to such extravagant consequences. In point of fact, there has been no one year in which a surplus has been found beyond the first two or three years. But that makes no difference in principle: it only shows how extravagant the proposition would be, to consider the annuitants as entitled to the surplus of one year, in order to meet the deficiencies of future years.

But when we come to see what it is that the testator has directed upon the face of this deed, it appears to me that these considerations may be thrown out of view; because, as I construe this instrument, it is this: Upon the sale of the estate, if the fund was sufficient to secure the annuities of 400l. each, an event which undoubtedly the testator contemplated, then there would be capital sums invested sufficient for that purpose; and then any surplus of the proceeds of the estate and those capital sums so invested, when made "tangible," as the expression is, by the death of the annuitants, were to be paid over to the residuary