Baron and Feme

Separate Estate Restriction on Anticipation-PurchaserNotice.

A testator gave to M. A., a married woman, certain leasehold houses, for her whole and sole use during her life, free from the controul of her present or any future husband, and not to be sold or mortgaged, and after her decease to her heir or heirs; and provided her child or children should die before her, then that she at her decease might leave them to whom she would for the remainder of the term. By a deed, in which M. A. was named as a party, in consideration of a debt due from her husband to the defendant P, the husband and M. A. demised, by way of under-lease, the premises to P, for the term of twenty-six years, if M. A. should so long live, reserving only the rent of the original lease. P. afterwards underlet the same premises successively to the two other defendants, who had no other notice of M. A's interest than the circumstance that M. A. was a demising party in the under-lease to P. On bill by M. A. it was held, that the fact of M. A. being a party to the underlease to P. made it incumbent upon the other defendants to inquire as to the interest of M. A, and the under-leases were ordered to be set aside.

George Scrooby, the testator, being possessed of two leasehold houses, Nos. 1 and 2, Kent's Place, Paddington, held by him under a lease from the Grand Junction Canal Company, for the term of ninety-eight years, from September 1823, at a rent of 107. per annum, by his will, gave as follows:

"I give and bequeath to my eldest daughter, Mary Ann Steadman, in addition to what she has already had, my two leasehold houses, and all appurtenances belonging thereto, being Nos. 1 and 2, Kent's Place, for her whole and sole use, during her natural life, and free from the controul of her present or any future husband, and not to be sold or mortgaged, and after her decease to her heir or heirs; and provided her child or children should die before her, then she at her decease may leave them to whom she will for the remainder of the term."

The testator died on the 15th of March 1835, and the executor having assented to the bequest, Mary Ann Steadman shortly after the death of the testator, entered into possession of the premises. In November 1838, Mrs. Steadman deposited the abovementioned indenture of lease with Thomas Poole, by way of equitable mortgage, for securing a sum of money, the amount of advances made at various times by Poole to Mr. Steadman, her husband, and she

thereupon received from Poole a memorandum in the following words :

"November 14, 1838.

66 Thomas Poole has received of Mary Ann Steadman, the lease of two houses, situate in North Wharf Road, Paddington, as security for 50l. advanced this day.

"Thomas Poole."

Poole then entered into possession of the premises, and afterwards made further advances to Mr. Steadman. On the 20th of March 1840, Thomas Poole alleging that the sum of 3231. 17s. was then due to him in respect of such advances, an indenture of under-lease of that date was executed, purporting to be made between Thomas Steadman and Mary Ann Steadman his wife, of the one part, and Thomas Poole of the other part, whereby it was witnessed, that in consideration as well of the expense incurred and to be incurred by the said Thomas Poole in and about the repairs and improvements of the premises intended to be thereby demised, and also of the rents and lessee's covenants thereinafter reserved and contained, and likewise of the sum of 3231. 178., to the said Thomas and Mary Ann Steadman, that day paid by the said Thomas Poole, they the said Thomas Steadman and Mary Ann his wife, did demise and lease to the said Thomas Poole, his executors, administrators, and assigns, all those, &c. (being the premises demised by the abovementioned lease from the canal company,) to hold the same with the appurtenances unto the said Thomas Poole, his executors, administrators, and assigns, from Christmasday then last, for the term of twenty-six years, if the plaintiff should so long live, paying yearly during the said term the yearly rent of 10l., clear of all rates, taxes, and other deductions, together with such sums as would be to be paid to the said canal company for insurance from fire, &c.

By an indenture dated the 18th of November 1840, T. Poole, in consideration of 2007. demised the premises by way of underlease to the defendant Edney, to secure the payment of an annuity of 20l. per annum; and in December 1843, granted a second under-lease of the premises to the defendant Dunbar, to secure the sum of 2007. In September 1844, Edney entered into possession of the premises; and in August 1845, the bill was filed by Mrs. Steadman,

by her next friend, against Poole, Edney, Dunbar, and Thomas Steadman, her husband, praying that the indenture of March 1840 might be set aside, and that the same might be delivered up to the plaintiff to be cancelled, and for an account of the rents and profits thereof subsequently to the institution of the suit. The defendant Poole having become bankrupt after the filing of the bill, his assignees were brought before the Court by supplemental bill, and by their answer disclaimed.

Mr. Wood and Mr. Southgate, for the plaintiff, contended that the under-lease of March 1840, was, in truth, a sale in consideration of the debt then due to Poole from the defendant Steadman, and could not be supported against the wife, to whom the property was given by the will to her separate use, and who was expressly restricted from mortgaging or selling the same-Jackson v. Hobhouse (1). The absence of notice would make no difference, because the property was inalienable in equity; but if it did, the fact of the plaintiff having joined with her husband in the deed ought to have put the parties upon inquiries as to her interest. Jackson v. Rowe, 2 Sim. & Stu. 472;

s. c. 4 Law J. Rep. Chanc. 118.
Jones v. Smith, 1 Hare, 43; s. c. 11
Law J. Rep. (N.s.) Chanc. 83.
The Attorney General v. Backhouse, 17
Ves. 293.

West v. Reid, 2 Hare, 249; s. c. 12

Law J. Rep. (N.s.) Chanc. 245. Baggett v. Meux, 1 Coll. 138; s. c. 13 Law J. Rep. (N.s.) Chanc. 228.

Mr. Romilly and Mr. Tremenheere, for the defendant Edney.-Mrs. Steadman had a separate estate for her life, with an absolute reversion, which she might have disposed of-Sir E. Turner's case (2), Tudor v. Samyne (3), and Donne v. Hart (4). The lease was not an alienation within the terms of the restriction, but a method of enjoying the estate. But the defendant Edney is a purchaser without notice; for the circumstance that the wife was a party to the lease of 1840, was not notice of her

separate interest. The wife has stood by and concealed her interest from the purchasers, and therefore will have no remedy against them in equity-Savage v. Foster (5), Watts v. Creswell (6), Evans v. Bicknell (7), and Jackson v. Hobhouse.

WIGRAM, V.C.-The property was given to Mrs. Steadman, by the will, for her whole and sole use, with two qualifications: one, that it should be free from the controul of her husband; and the other, that it should not be aliened. The gift was clearly to the separate use of the lady. Then, with reference to the question of notice, the rule which I deduced in Jones v. Smith was, that if a purchaser at the time of his purchase has no notice of an interest in another, he is not bound to make inquiry, but that if he does know of such an interest in the property, he is bound at his peril to inquire what that interest is. Thus, in Allen v. Anthony (8), where a tenant in possession under a lease had an interest under an agreement posterior to his lease, the purchaser from the landlord was held bound by it. So in Taylor v. Baker (9), a party at the time of making his purchase and before it was made, had actual notice that one Strong had a judgment, or warrant of attorney, which affected the purchased estate. It turned out, however, that Strong had a mortgage and not a judgment; and the Court held, that the purchaser, having notice that Strong had an interest affecting the premises, could not ward off the claim of the incumbrancer, only because the nature of the claim was different from that which the notice conveyed to him. In the present case, notice of the lease to Poole, in which Mrs. Steadman had joined, was not denied; and the case appeared to be one in which the under-lessees were clearly bound to have made inquiries as to her interest. I have no doubt upon this point of notice, without going into the difficult question, how far a married woman having a separate interest, and standing by while her husband sells to an innocent party, can afterwards come here to defeat that sale.

(5) 9 Mod. 35. (6) 9 Vin, 415. (7) 6 Ves. 174. (8) 1 Mer. 282. (9) 5 Price, 306.

The

W. & Co. were in the habit of consigning wools for sale to T. R, a wool-factor; and bills were drawn by W. & Co. upon and accepted by T. R. against the wools. W. & Co. became bankrupt, and such bills were then outstanding to a large amount. T. R, with the concurrence of the assignees of W. & Co., by deed, assigned certain scheduled debts, due to him in respect of such wools, to A. & B, in trust, to get in the same, and apply the monies in such manner as T. R. would by law be entitled to apply the same. T. R. afterwards became bankrupt. A. & B, having got in the debts to a large amount, filed their bill against the assignees of W. & Co. and of T. R, praying that the trusts of the deed of assignment might be executed under the direction of the Court. decree, after ordering payment into court of the funds in the hands of A. & B, directed inquiries as to the scheduled debts, and also as to the bills, whether the same were drawn and accepted against the wools generally, or any particular part thereof, and who were the then holders thereof; and the Master was to be at liberty, if he should think fit, to publish advertisements for the persons claiming to be the holders of such bills, to come in and make out their claims before him; and further directions were reserved. In pursuance of the advertisement, the holders of the bills brought in their claims before the Master, who, by his report, found that all the bills were drawn and accepted against the wools generally in the hands of T. R. The cause coming back upon the report, it was held, that the bill-holders were not entitled to appear on the further directions; and that the Court of Equity, by its decree, could only order the fund to be paid over

to the bankrupt's estate found entitled to it; leaving the claims of the bill-holders, under the principle of Ex parte Waring (1), (if any) to be settled under the administration in bankruptcy.

The facts of this case, as found by the Master's report, were as follows:-Previously to and in the year 1841, Tristram Ridgway carried on business at Huddersfield as a wool-factor. In the course of his business he received and sold, as agent and factor for Henry Wilkins & John Wilkins, wools consigned to him for sale by them. Ridgway also received and sold, as agent and factor for George Pressey, wools consigned to him for that purpose by Pressey, who was the agent, in respect of these wools, of David and James Pollak, of Vienna. In May 1840, the Messrs. Wilkins and Pressey were concerned in the purchase of wools (principally German wools) on joint account; and which wools, to a large amount, purchased on such joint account, were from time to time consigned to Ridgway for sale, down to the month of May 1841, when the Wilkins' became bankrupt. Ridgway had notice of the joint interest of those parties in the wools so consigned to him. In those transactions, Pressey was also agent for the Pollaks. The Messrs. Wilkins, before and up to the month of May 1841, were also engaged with Pressey and one Mr. Cartwright (the manager of the North Wilts Banking Company) in the purchase of wools, principally colonial, on joint account, which wools were also consigned by the Messrs. Wilkins to Ridgway for sale, but on the joint account of the Wilkins', Pressey, and Cartwright, in equal shares. In these speculations the Pollaks had no interest.

In May 1840, the Wilkins' had a joint speculation in wool with one Brideman, of Vienna. Those wools were by Brideman consigned to his agent Simon Renter, and Renter, at the instance of the Wilkins', consigned parts of those wools to Ridgway for sale, on joint account of himself and the Messrs. Wilkins in equal shares. In the above transactions Ridgway sold the wools in his own name, and the accounts of such sales were from time to time made out by him to the Wilkins' alone.

(1) 19 Ves. 345.

In December 1840, the Messrs. Wilkins and George Pressey requested Ridgway to accept bills of exchange to be drawn by them upon him, and ultimately upon a representation made to him by the Wilkins' and Pressey, that the bills were to be deposited with the North Wilts Banking Company, as security for money to be advanced to pay for the wools, and that the amount of such bills would be covered by the property in T. Ridgway's hands, Ridgway acceded to the application. The bills drawn upon this occasion, and accepted by Ridgway were three in number; one of thosea bill for 9841. 6s. 10d.—was paid at maturity. The other two bills were renewed, and, as renewed, became due upon the 22nd of June 1841, and were now held by the North Wilts Banking Company. The respective amounts of those two bills were 2,3621. 2s. 4d. and 2,812l. 17s. 3d. In November 1841, the Wilkins' and Pressey proposed to Ridgway, that Pressey should draw upon him a bill of exchange for the balance in his hands, which balance they estimated at 8,500l. or thereabouts; and that the Wilkins' should guarantee to the holder of the bill, that the proceeds of the stock and debts at Huddersfield should be appropriated by Ridgway to the payment thereof. To this proposal T. Ridgway assented, upon the understanding that all the stock and debts under his contract should be a security to him for his engagements, whether on account of the Wilkins' alone, or on the joint account of the Wilkins' and Pressey; and it was further agreed that Ridgway should not make any further remittances to the Wilkins' until the bills were paid.

In pursuance of this arrangement Ridgway accepted a bill of exchange for 9,000l., drawn by Pressey, and payable six months after date. In March 1841, a bill of exchange for 400l., drawn by T. Ridgway upon and accepted by the Wilkins', fell due. To provide for this an arrangement was come to between Pressey and Ridgway, in pursuance of which a bill of exchange for 4577. 10s., dated the 2nd of March 1841, was drawn by the Wilkins' upon and accepted by Ridgway. The Wilkins' were to provide for this at maturity, and if they should fail to do so, the amount was (in favour of T. Ridgway) to go in part of the

9,000l. bill. The bill for 4577. 10s. was not paid at maturity, and the amount was still unpaid. The holders of this bill were Richard Sanderson, William Morris, and Richard Guard.

In or about the month of April 1841, a bill of exchange for 7897. 10s., drawn by the Wilkins' upon and accepted by T. Ridgway, also fell due. To provide for this and for some other purposes an arrangement was come to between the Wilkins', Presscy, and Ridgway, in pursuance of which the Wilkins' drew a bill of exchange upon Ridgway, to the joint account of the Wilkins' and Pressey, for 9381. 17s., which Ridgway accepted. This bill was unpaid at the time of Wilkins' bankruptcy. The Union Bank of London were then and are now the holders of this bill, and they are creditors for the full amount less 1417. 14s. 10d., which they had in their hands, as the bankers of the Wilkins'. The Master found that the Union Bank of London refused to make any advances upon this bill until they were assured by H. Wilkins, on behalf of himself and John, and also by Ridgway, that the wools and money owing for the wools, in the hands of or payable to Ridgway generally, was sufficient to provide for the bill.

In May 1841, a fiat in bankruptcy issued against the Wilkins', and they were duly found bankrupts. Their assignees were George Lackington, the official assignee, and the defendants, William H. Goschen and Charles Windeler, the creditors' assignees. Lackington was since dead, and Johnson had been appointed assignee in his place.

Shortly after the bankruptcy of the Wilkins', their assignees gave notice to the persons to whom Ridgway had sold the wools not to pay the proceeds of the sales to Ridgway. In consequence of this, an arrangement was come to by the persons interested, in pursuance of which an indenture, dated the 11th of June 1841, was made between Tristram Ridgway of the first part, William Henry Goschen and Charles Windeler (the assignees in bankruptcy of Henry and John Wilkins) defendants, of the second part, and James Laycock and William Quitter (the plaintiffs,) of the third part, whereby, after reciting that Ridgway had for many years sold wool in his own name, by commission, for the said H. Wilkins and J. Wilkins, and also reciting that

the several persons mentioned in the schedule thereunder written together with the amounts set opposite to their respective names, were the persons who were indebted to Ridgway as such agent as therein mentioned, and also reciting, that, previous to the date of the bankruptcy of H. Wilkins and J. Wilkins, Ridgway had received an authority in writing from them to appropriate the wools belonging to them then in his hands, and the proceeds of the sales thereof as well as the outstanding debts, in the first place, to meet certain acceptances which Ridgway had then agreed to give; and, after reciting that H. Wilkins and J. Wilkins had given notice to the debtors mentioned in the schedule thereunder written not to pay their debts to Ridgway; and also reciting, that in order to settle all matters in dispute it had been agreed that an action at law, which had been commenced against T. Ridgway by the assignees of H. Wilkins and J. Wilkins should be discontinued, and the notices to the debtors should be withdrawn, and that the several debts mentioned in the schedule thereunder written should be assigned, for the purposes thereinafter mentioned, it was witnessed that for the considerations therein mentioned, Goschen and Windeler did thereby covenant with Ridgway that the action should be discontinued, and the notices withdrawn; and it was by the indenture further witnessed, that, in consideration of the covenant entered into by Goschen and Windeler, he, Ridgway, did, with the privity and consent of Goschen and Windeler, assign unto the plaintiffs all those several debts mentioned in the schedule thereunder written, to hold unto the plaintiffs, their executors, and administrators, upon the trusts and for the purposes therein mentioned; and Ridgway did thereby constitute and appoint the plaintiffs his true and lawful attornies, to ask, demand, and get in the debts, and give releases for the same as effectually to all intents and purposes as he, Ridgway, might have done, he ratifying and confirming all their acts. The trusts were declared to be "that the assignment so made as therein mentioned was made to the plaintiffs, their executors, and administrators, upon trust that they should apply the money to be received from the debts, in the first place, towards paying the