INDIRECT PERFORMANCE OF COVENANTS TO DEVISE, BEQUEATH OR SETTLE PROPERTY.

Covenants to devise or bequeath property, real or personal. most often found in marriage settlements have not a necessary relation thereto. A covenant simply to devise or bequeath the covenantor's property or a proportionate part thereof will extend only to such property as the covenantor may be seised or possessed of at the time of his death and will not prevent him from disposing of his property, at his pleasure, while he lives. A covenant to devise or bequeath specific property of the covenantor at death, however, binds the covenantor to preserve it in his ownership and he may be restrained from disposing of it in such manner as will operate to defeat the covenant. Further, any disposition of the property made for the apparent purpose of defeating the covenant may be set aside. In the last cited case (one of covenant to settle) specific performance was decreed after the covenantor's death.

The right of the beneficiary of a covenant to devise or bequeath property is purely personal and contingent upon his surviving the covenantor. When the beneficiary dies the benefit of the covenant cannot be invoked by his heirs or personal representatives. A sum of money secured by a covenant to devise or bequeath is regarded as a debt of the covenantor, but it is not a preferred debt. Even where a borrowing covenantor agreed with the lender that the borrower should make a will, which he would not revoke, appointing that the loan should rank as a first mortgage upon specific assets of the covenantor's estate, and the will was so made, it was held, after the covenantor's death, that the lender had no priority over the borrower's general creditors. Lindley, L.J., said that it was settled that, except by making a creditor an executor, a person disposing of his own property by will cannot thereby prefer one creditor to another or make a gift by will payable before a debt. "A covenant to bequeath property by will", he said, "does not alter the character

1Needham v. Kirkman (1820), 3 B. & Ald. 531; Lewis v. Madocks (1810), 17 Ves. 48.

Logan v. Wienhold (1833), 1 Cl. & Fin. 611 (H.L.); Jones v. Martin (1800), 5 Ves. 266 (n) (H.L.); Synge v. Synge (1894), 1 Q.B. 466.

Jones v. How (1850), 9 C.B. I; Brookman's Trust, In re (1869), L.R. 5

Ch. 182.

4

Eyre v. Munro (1857), 3 K. & J. 305; Graham v. Wicksham (No. 1) (1862), 31 Beav. 447; In re Robson (1880), 19 C.D. 156 (C.A.).

of the property bequeathed in accordance with the covenant. What is so bequeathed is still a gift by will, and not a preferential debt." Beyfus v. Lowley. See to a like effect Jervis v. Wolferstan."

The law as to satisfaction of covenants to devise or bequeath property will be the same as that relating to covenants to pay money or to settle property, but that law, necessarily, will be affected by certain principles peculiarly applicable to the construction of testamentary documents and to the devolution of property upon death.

There may be indirect execution of a covenant, whether to pay, devise, bequeath or settle. When a covenantor who has covenanted, e.g., to settle property does not effectively do so, but does something, apparently in compliance with his obligation, which can be, under the equitable doctrine of conversion, applied towards execution, in whole or in part, of that obligation, he is deemed to have acted with an intent to execute as he was bound to do. Sowden v. Sowden. Such an intent, it is obvious, may be easily presumed in the case of a covenantor who, owning no land, covenants to settle land, subsequently acquires land, but dies before settling it. Ordinarily, in such a case, the acquired land, to the extent required to effectuate the covenant, is impressed with a trust in favour of the covenantee, who can, as against the heir of the covenantor, compel a conveyance. But it is not essential that the covenantor should be one who owns no land. There may be other justifying circumstances relied upon to produce a like result. Where a covenantor's obligation was to settle lands or a rent charge out of lands to certain uses, and he purchased lands but died without having executed any settlement the lands were held bound by the covenant. When the purchased lands are of less value than those to which the covenant in terms extends the purchased lands will be applied in part performance of the covenant and the residue will be made good out of the covenantor's personal estate, by considering it, to the necessary extent, to be converted into land. The rule stated applies under all circumstances. The purchased land will be bound even in the hands of the heirs to whom, in law, it has descended, and although he is not interested in the performance of the covenant. Lechmere v. Lechmere (Lady) (supra); Sowden v. Sowden, (supra). In Powdrell v. Jones" the

7

(1903) A.C. at 413 (H.L.).

(1874) L.R. 18 Eq. 18.

* (1785) 3 P. Wms. 228 (n).

Deacon v. Smith (1746), 3 Atk. 323; Tooke v. Hastings (1689), 2 Vern. 97; Roundell v. Breary (1704), 2 Vern. 482; Poole, Ex p. (1847), 11 Jur. 1005; Lechmere v. Lechmere (Lady) (1733), 3 P. Wms. 211.

' (1854) 2 Sm. & Gif. 335.

covenant was to a trustee, upon marriage, by a husband, to settle an estate upon his wife. He did not settle it, but exchanged the estate for another, receiving, additionally, the sum of £1,050. It was held that the estate taken in exchange belonged to the wife and that she had a claim for the £1,050 against the estate of her husband as a specialty debt under the covenant. The specialty debt in this case, it should be noted, resulted from the making of a decree. Until decree made no specific lien exists over the purchased lands as a result of the mere presumption that after covenant to purchase was made the lands were purchased in intended performance of the covenant. Hence, before decree, purchasers and mortgagees are not affected. The matter rests upon presumption. The fact that the covenantor did sell or mortgage is evidence of absence of the intent upon which the presumption is founded. Semble, there is a lien in the case of a covenant to charge an annuity on any property to which the covenantor may become entitled upon a certain event or within a certain time, the lien extending to such property as is acquired between the date of the covenant and the day limited for its performance. And such a covenant is subject to specific performance.10 Apart from the matter of indirect execution, it should be noted that a covenant to settle or charge specific land or other property gives rise to a lien on such property in favour of the covenantee and affecting all except purchasers for value without notice. And, apart from the matter of covenant to settle specific land, a covenant to purchase and settle lands of a certain value has been enforced against personal representatives of a deceased covenantor who died without purchasing the lands. The court directed an investment in land of a sufficient sum, equivalent to what would have been the actual value of the lands at the time of the decree, had the lands been purchased under the covenant.12

Indirect execution of a covenant, in manner mentioned, is always a matter of presumed intent. The circumstances will often prevent the presumption. It cannot apply, as has been already indicated, in the case of non-specific lands, where there has been a resale or mortgage subsequent to the purchase of the lands to which it is

10 Lyde v. Mynn (1831), 4 Sim. 505; Wellesley v. Wellesley (1839), 4 My. & Cr. 561.

"Fremoult v. Dedire (1718) 1 P. Wms. 429; Deacon v. Smith (1746), 3 Atk. 327: Legard v. Hodges (1792), 1 Ves. 477; Metcalf v. York (Archbishop) (1836) 1 My. & Cr. 547; Mornington v. Keane (1858), 2 DeG. & J. 292; Galavan v. Dunne (1879) 7 L.R. Ir. 144.

12

Suffield (Lady) v. Suffield (Lord) (1812), 3 Mer. 699. See also Taylor v. Hossack (1838), 5 Cl. & Fin. 380 (H.L.); Napier v. Staples (1859), 10 Lr. Ch. R. 344.

sought to attach the presumption. Prima facie, in that case, the purchase was not made in satisfaction of the covenant. Deacon v. Smith (supra). Neither will the presumption attach where the property purchased is of a different character from that which the covenantor was under obligation to purchase or to settle.13 Where the covenant is for future purchases of lands the existing lands of the covenantor remain unaffected by it.

The foregoing principles, confined for convenience of treatment to the case of a covenant to settle land, are nearly all as applicable to a covenant to convey personal property or to devise or bequeath real or personal property. The equitable principle of conversion will as fully apply. The matter of the intent of the purchaser will sometimes apply exactly as in the case of a covenant to settle, and at other times it will be replaced by its equivalent-the matter of the intent of the testator. In the case of a covenant to bequeath money it was held to be not satisfied by subsequently taken life assurance. Cartwright v. Cartwright.1 Further, there may be indirect execution of a covenant to settle, through a devolution of property upon the death of the covenantor. If the covenantee of a covenant to settle property takes by descent, upon default of settlement, the lands covenanted to be settled or other lands capable of being considered to have been converted to execution of the covenant, the descent will be deemed a satisfaction of the covenant. Wilcocks v. Wilcocks (1706) 2 Vern. 558; Lechmere v. Lechmere (supra). The same doctrine applies in the case of covenants to bequeath personal property. The leading authority is Blandy v. Widmore,15 the rule whereof is that in case of a covenant to leave, or that the covenantor's executor shall pay or deliver, money or personal estate, if, the covenantor having died intestate, the covenantee gets from the covenantor's estate personal property of an equal amount to or greater amount than that coming to him under the covenant he cannot claim both his covenant debt and his interest in the estate under the Statute of Distributions; and where the amount payable to the covenantee under the statute is less than the amount payable under the covenant the former amount must be applied pro tanto in reduction of the covenant debt.16 In Blandy v. Widmore, supra, there was an antenuptial covenant of a husband to his intended wife, that he would

13

Lechmere v. Lechmere (Lady) (1733) supra; Whorewood v. University College Oxford (1750), 1 Ves. Sr. 534; Pinnell v. Hallett (1751), 1 Am. 106. 14 (1903) 2 Ch. 306.

16 Ennis v. Smith (1839), Jo. & Car. 400; Rowan v. Chute (1861), 13 Ir. Ch. R. 169; Jervis v. Wolferstan (supra); Brookman's Trust, In re (supra).

"leave" her a stated sum of money. The husband died intestate. His wife's share of his personal estate amounted to more than the amount of money that he had covenanted to "leave" her. It was argued on her behalf that the covenant debt must first be paid and that afterwards the wife should receive under the statute her distributive share of the deceased's general estate-that what the statute gave was the gift of the statute and not that of the husband-a fortiori not the payment of the husband. But this reasoning was ineffective. The decision was that the husband had performed his covenant to "leave" to the wife the promised amount. To a like effect see Lee v. D'Aranda. As to the case when the distributive share of the covenantee is less than the amount covenanted to be paid see Garthshore v. Chalie.18

But neither the rule of Blandy v. Widmore (supra), applying to personal property, nor its equivalent applying to real property will necessarily apply where the convenator has made a will. Gifts by will prima facie import bounty and admit of a presumption of intent on the part of the testator to augment rather than to perform or satisfy the terms of the covenant. Thus in Haynes v. Mico1 a husband's bond for £300 to trustees for his wife, payable within one month after his death, was held not to be satisfied by his gift to her by will of £500 payable within six months after his death. See to a like effect DeVese v. Pontet.20 Nor will the rule in Blandy v. Widmore, supra, apply to covenants to pay a sum in the covenantor's lifetime, where, a breach occurring before the covenantor's death, a debt has resulted due to the covenantee. In such case the distributive share of, for instance, a wife, is considered to be neither whole nor partial performance of the covenant. By analogy the provision by the covenantor of a policy of assurance will not be performance. Cartwright v. Cartwright (supra).

21

Many decisions as to what will amount to "satisfaction" of a covenant to pay or to bequeath money relates in reality rather to cases of indirect performance. Some of them are cases of covenant to pay performed by way of bequest. Others are cases of covenant to bequeath performed by way of a leaving for distribution as the result of intestacy. If A covenants to pay B, within five years, the sum of $1,046.67, and A, dying within two years after making the

Lee v. D'Aranda (1746), 1 Ves. Sr. 1; Thacker v. Key (1869) L.R. 8

Eq. 408.

20 (1785) 1 Cox 188, and Harlock v. Wiggins (1888), 39 C.D. 142.

21 Oliver v. Brickland (1732) cited, 3 Atk. 420 and 422; Gartshore v. Chalie (1804), 10 Ves. 12.