on the subject in the decree, but he wished the counsel | ture any after-taken wife, to the extent of 1,500l. per to state on their briefs that, in his opinion, the plaintiff was not entitled to any indemnity or compensation, Master of the Rolls. } FLOYER V. BANKES. 18 APRIL, 1863. Rent-charge without Deduction for TaxesContract to Pay Income-Tax-5 & 6 Vict. c. 35, s. 103. A contract for payment of a rent, or other annual sum, in full, without allowing the deduction of the income-tax, is absolutely void as to the latter proviso. Consequently, where, by pre-nuptial settlement, real estates were charged with a jointure-payable without any deduction whatsoever, on account of present or future taxes imposed on the said real estates, or on the rent-charge, or on the jointress in respect thereof, by Parliament, or otherwise howsoever · notwithstanding that a term of years was limited to trustees upon trust for securing payment of the rent-charge in full out of the rents and profits, or by leasing or mortgaging the estates: Held, that the income-tax was payable by the jointress. By an indenture, dated the 28th of June, 1810, duly enrolled, and by virtue of a common recovery in pursuance of an agreement therein recited, certain freehold estates were limited to such uses as Henry Bankes and William Bankes should by deed jointly appoint; and, in default, to uses therein declared. By an indenture of appointment and release, dated the 2nd of June, 1821, and made between Henry Bankes of the first part, William Bankes of the second part, H. Seymer and W. Bond of the third part, and G. Pickard and H. Masterman of the fourth part, Henry Bankes and William Bankes appointed the said hereditaments to such uses as they the said Henry Bankes and William Bankes should jointly appoint; and, in default, to the use that Frances, the wife of Henry Bankes, and her assigns should, in case she survived Henry Bankes, receive a yearly rent-charge of 7007. for her life, with remainder to the use of Pickard and Masterman and their assigns, for a term of 500 years, upon trusts for securing the said rent-charge, with remainder to the use of Henry Bankes and his assigns, during his life; remainder to the use of Seymer and Bond, their heirs and assigns, upon trust to preserve contingent remainders; remainder to the use of William Bankes and his assigns, during his life; remainder to trustees to preserve; remainder to the use of the first and other sons of William Bankes successively in tail male; remainder to the use of George Bankes, and his assigns, during his life; remainder to the use of the first and other sons of George Bankes successively in tail male, with divers remainders over. And, in the same indenture, power was reserved to Henry Bankes to join annum. And it was declared, that it should be lawful for William Banke and George Bankes respectively, when in actual possession of the estates, to appoint, by way of jointure, to or in trust for any wife of his, any annual sum not exceeding the clear yearly sum of 1,500l., to be charged upon all or any part of the said hereditaments. By an indenture of appointment, dated the 7th of June, 1822, and made between Henry Bankes and William Bankes of the first part, George Bankes of the second part, Georgina Nugent of the third part, and the Earl of Falmouth, H. J. Adeane, A. B. Drummond, and A. R. Drummond, of the fourth part, in consideration of a marriage then intended to be solemnised between George Bankes and Georgina Nugent, and in exercise of the joint power of appointment reserved by the indenture of the 2nd of June, 1821, Henry Bankes and William Bankes appointed that, immediately after the said intended marriage, the said hereditaments should be and remain to the use that Georgina and her assigns should, in case she should survive George, have, receive, and take during her life for her jointure, and in lieu of dower, thirds, and freebench, a yearly rent-charge of 8007., "without any deduction or abatement whatsoever, on account or in respect of any taxes, charges, impositions, or assessments, already taxed, charged, imposed, or assessed or hereafter to be taxed, charged, imposed, or assessed, on the said hereditaments, or on the said yearly rent-charge of 8007., or on the said Georgina or her assigns, in respect thereof, by authority. of Parliament, or otherwise howsoever;" and to the further use that, if Henry Bankes and William Bankes should both die in the lifetime of Georgina, and there should happen, during the joint lives of George and Georgina, a default or failure of issue male of William Bankes, and if Georgina should survive George, then, and in such case, Georgina and her assigns should, after the death of George, receive and take a further rent-charge of 7001., chargeable upon the said hereditaments, and to be paid "without deduction for present or future taxes, charges, impositions, or assessments, in such manner as was thereinbefore mentioned and appointed for payment of the said rent-charge of 8007." The indenture then contained a power of entry and distress, and all usual remedies for recovering the said rent-charges; and subject and charged as aforesaid, the said hereditaments were appointed to the use of Lord Falmouth, Adeane, A. B. Drummond, and A. R. Drummond, their executors, administrators, and assigns, for a term of 200 years, to commence from the death of George Bankes, upon the trusts therein declared, and subject thereto, to the uses upon which the premises would have stood limited and settled by virtue of the indenture of the 2nd of June, 1821, in case the indenture now in statement had not been executed, save and except that the power of jointuring reserved to George Bankes should not be exercised in favour of Georgina. And it was declared, that the said hereditaments were limited to the trustees of the term of 200 years, upon trust "for securing payment of the said several rent-charges of 8007. and 7007. respectively, without any deduction or abatement, as aforesaid, out of the rents and profits of the said hereditaments, or by devising, leasing, or mortgaging the premises, or by bringing actions against tenants, or by such other reasonable means as to the said trustees should seem meet." The marriage was shortly afterwards solemnised, and there was issue thereof, Edmund Bankes the eldest son, and seven other children. Court, inquiries were directed to ascertain what annual sums were payable out of or charged upon the trust estates, and a receiver was appointed. Edmund G. Bankes died on the 28th January, 1860, whereupon his eldest son, the defendant H. J. P. Bankes, an infant, became entitled for life to the settled estates, and the trusts of the 500 years' term for the management of the estates came into operation. The defendant Georgina Bankes insisting that, upon the construction of the indenture of the 7th June, 1822, the rent-charges of 8007. and 7007. were payable to her without any deduction in respect of succession duty or income-tax, and that under the trusts of the term of 200 years, a sum ought to be raised the instalment of succession duty (if payable), and Henry Bankes died in 1834, having survived his in each year of such amount as after payment of wife Frances. William Bankes died in April, 1855, without ever income-tax, and all other outgoings, would leave a having married. By an indenture dated the 2nd July, 1855, made between George Bankes of the first part, Edmund Bankes of the second part, and J. S. Gregory of the third part, and duly enrolled, the estate tail of Edmund Bankes was barred, and the said hereditaments were conveyed to such uses as George Bankes and Edmund Bankes should jointly appoint; and by an indenture dated the 3rd July, 1855, and made between George Bankes of the first part, Edmund Bankes of the second part, the plaintiffs Floyer and H. K. Seymer of the third part, the plaintiff Floyer of the fourth part, and J. S. Gregory of the fifth part, George Bankes and Edmund Bankes (in exercise of the joint power reserved to them in the indenture of the previous day), appointed the said hereditaments to such uses as they the said George Bankes and Edmund Bankes should jointly appoint, and in default to the use of the plaintiffs, their executors, administrators, and assigns, for a term of 500 years upon trust for securing certain annuities (not comprising the said 8007., and 7007., or either of them), and upon trusts for management of the estates and receipt of the rents and profits during the minority of any person for the time being entitled under the limitations of that settlement to the immediate freehold as tenant for life or in tail, with remainder to the use of Gregory, his executors, administrators, and assigns for one day, remainder to the use of George Bankes for life, remainder to the use of the plaintiffs for 1000 years upon trust for raising portions, remainder to the use of Gregory for one day, remainder to the use of plaintiffs, their heirs and assigns, during the life of Edmund G. Bankes, remainder in strict settlement in favour of the issue male of Edmund G. Bankes, and with divers remainders over. George Bankes died in July, 1856, leaving Georgina him surviving; she thereupon became entitled to both the said jointure rent-charges of 8001. and 7007. The bill was filed in 1859, and, on motion for decree on the 3rd June, 1859, it was ordered that the trusts of the indenture of the 3rd July, 1855, be carried into execution under the direction of the clear surplus of 1,5007., the plaintiffs presented a petition requesting the direction of the Court in reference to the rent-charges, and the persons by whom, or the funds out of which the succession duty and income-tax, payable in respect of the same charges, were respectively to be paid. The petition was not served upon the trustees of the 200 years' term; or upon the Commissioners of Stamps and Taxes. THE MASTER OF THE ROLLS said that he did not see that any succession duty was payable in respect of the rent-charges, but that could not be decided unless the Stamps and Taxes office was properly represented. He should decline to enter upon the question of succession duty, until the duty, was claimed by the office. The argument then proceeded on the question of the income-tax. Baggallay, Q.C., and Charles Hall, for the petitioners, stated the case to the Court. Hobhouse, Q. C., and Freeling, for Georgina Bankes. 1st. By the 103rd sect. of the Income-Tax Act (5 & 6 Vict. c. 35), a contract, covenant, or agreement for payment of a rent or other annual payment in full, without allowing the deduction of the tax, is void; but we contend that there is here no contract, covenant, or agreement within the meaning of that section. The reason of that provision (which is copied from the old Income-Tax Acts) is difficult to discover or understand; but it was possibly inserted with reference to the usury laws, in order to prevent arrangements by which more than legal interest would be obtained; if so, the repeal of the usury laws has removed the reason for the provision of course, if there were any intelligible public policy which rendered it inexpedient that one person should undertake to pay the income-tax for another, then the Court would not permit any mere evasion of the enactment intended to carry out that policy; but where no such policy exists, then the Court will not go beyond the strict words of the enactment, but will confine within of mere bounty, and to such the provision of the the narrowest limits so arbitrary and objectless an statute did not apply. interference with the arrangements of individuals, and the mode in which they shall be allowed to deal with their own property. There is nothing illegal in a provision for increasing or diminishing the rent paid to a landlord whenever the property-tax is increased or diminished, Colbron v. Travers, 31 L. J. (N. s.) C. P. 257 : In Davies v. Fitton, 2 Dr. & War. 225, 236, Sugden, L. C., said, that he saw nothing to prevent the Court from carrying into execution an agreement by a tenant to pay 100l. a-year rent, and in consideration of the tithe rent-charge, an additional sum of 51. a-year. His Lordship apprehended that the Court would have no difficulty in so modelling the contract, as to make the tenant liable to an entire rent of 1057. 2nd. This is the case of a trust to raise and pay two clear annual sums of 8001. and 7007. without any deduction whatsoever. An estate which is parcelled out by will, is not within sect. 103 of the IncomeTax Act; under a devise of real estate, subject to a rent-charge, payable without deduction on account of taxes, the donee of the charge is entitled to be paid the charge in full, and the income-tax falls upon the residue of the estate, Festing v. Taylor, 1 N. R. 32; 32 L. J. (N. s.) Lord Lovat v. Duchess of Leeds, 2 Dr. & Sm. 62. In the judgment delivered in Festing v. Taylor, in the Court of Queen's Bench, it was said, that a very different conclusion might be arrived at by a Court of Equity in relation to a trust, from that at which a Court of Law arrived in regard to a contract; and this distinction was recognised and approved by the Vice-Chancellor Kindersley, in Lord Lovat v. Duchess of Leeds. The present tenant for life is entitled only to so much of the estate as was parcelled out to him by the settlement of the 3rd July, 1855, i. e., he is entitled only to the estate subject to the trusts of the term of 200 years, which trusts are to raise so much as may be required to pay the rent-charges to the defendant Georgina Bankes, free from all deductions whatsoever. Colbron v. Travers, and Davies v. Fitton, showed that an agreement to pay 1007. a-year rent, and if a certain tax was imposed, then to pay 107. a-year more, or any other fixed and definite sum, was good; but this only served to make it (if possible) more clear, that an agreement or contract to pay the tax was bad. The income-tax must be paid or allowed by the jointress. By an indenture dated the 20th March, 1833, certain freehold estate in Westminster was conveyed to the use of Charles Giraud, his heirs and assigns, by way of mortgage. Charles Giraud was a trustee for Jean Giraud (a naturalised British subject), by whom the mortgage-money was in fact advanced. Jean Giraud made his will, dated the 2nd October, 1857, and two codicils dated respectively the 11th February, and 30th August, 1859, and thereby appointed Louis Watbled his executor. The testator died on the 24th January, 1860, and on the 30th August, in the same year, the said will and codicils were proved by Watbled in Her Majesty's Court of Probate. Charles Giraud was a mariner, and was last seen or heard of in 1844. In February, 1861, Watbled, and the residuary legatees under the will of Jean Giraud, presented a petition, praying that the lands comprised in the indenture of 20th March, 1833, might be ordered to vest in Watbled, his heirs and assigns, for the estate Selwyn, Q.C., and Lovell, for the tenant for life, of Charles Giraud therein, and on the petition coming were not heard. THE MASTER OF THE ROLLS said, that the 103rd sect. of 5 & 6 Vict. c. 35, was decisive upon the question. This was clearly a contract entered into by the donee of the rent-charge, for payment of the rent in full, without deducting the income-tax. The Act made such a contract utterly void, and this could not be evaded by means of technical reasoning as to the trust for raising the full amount of the rent-charge. In Festing v. Taylor, and Lord Lovat v. Duchess of Leeds, there was no contract at all. They were cases on to be heard, His Honour made an order according to the prayer. It was subsequently discovered that Watbled was an alien; whereupon an application was made to Hiss Honour for leave to amend the petition, and the order thereon, by substituting for the name of Louis Watbled, the name of Charles Giraud; but. His Honour was of opinion that, without the consent of the Attorney-General, the order could not be thus amended. Under these circumstances, the residuary legatees presented a petition of rehearing, and that the order made on the original petition might be varied in the hearing, a receipt by a trustee for the legacy was particular before-mentioned. discovered; and on the causes coming on for further consideration, a question arose as to the admissibility of an affidavit verifying the signature to the receipt. Osborne, Q.C., Glasse, Q. C., Bazalgette, Q.C., Renshaw, S. Smith, and Pole, for several defendants, contended that the affidavit was admissible under 13 & 14 Vict. c. 35, s. 28 (Sir Geo. Turner's Act), and De Gex (Hemming with him), for the petitioners. Watbled was not a fit and proper person to be appointed a trustee in the place of Charles Giraud, and the lands ought not to have been ordered to vest in him. Watbled was willing to submit to, or concur in, any order to be made, or in doing any act, that would divest him of any estate which the exis-cited, ting order gave him. An estate conveyed to an alien, did not vest in the Crown till office found, Page's Case, Rep. 52. Devy v. Thornton, 9 Hare, 233. Baily, Q. C., for the plaintiff, opposed the admission of the affidavit. The order in the present case had only given an inchoate right to the Crown, which had not been KINDERSLEY, V.C., said that in this case the matter perfected by inquisition and office found. sought to be proved was of great importance, and reHe submitted that the petition ought to be reheard:lated to matters not put in issue by the pleadings. To that on the rehearing the order made on the original hearing ought to be discharged: and that a new order should be made vesting the estate in some person who was fit and proper to be a trustee of real estate in this country. Wickens, for the Crown, offered no objection to the rehearing. THE MASTER OF THE ROLLS held, that, as the estate did not vest in the Crown till office found, it was, under the circumstances of the present case, competent for the Court to make an order, discharging the former order, and vesting the legal estate in some person who was fit and proper to be appointed a trustee. The written consent of such a person being obtained, and the Crown not objecting, the matter might be mentioned at any time, and His Honour would make the order asked for. 20 APRIL, 1863. De Gex again mentioned this petition. Wickens offered no objection, the costs of the Crown being provided for by the petitioners. THE MASTER OF THE ROLLS made an order, dis- | charging the order made on the original petition, and vesting the lands in the proposed new trustee. Practice—Affidavit—Evidence after Hearing 13 & 14 Vict. c. 35, s. 28. Evidence discovered after the hearing, but raising a new issue, cannot be admitted upon the hearing on further consideration under 13 & 14 Vict. c. 35, sect. 28; if, however, the justice of the case require it, the Court will direct an inquiry. The pleadings in the causes raised the issue whether a certain legacy should be charged on real estate, but did not raise the issue, whether there had been an appropriation, in satisfaction of the legacy. After the such a case Sir Geo. Turner's Act did not apply. But as it would be impossible for His Honour to do justice without considering the effect of the receipt by the trustee, he should direct an inquiry. Note.-See Fleming v. East, Kay, App. lii. ; Re Hooper, Bayliss v. Watkins, 1 N. R. 46. Kindersley, V.-C., LORD PORTARLINGTON v. Will-Construction-Charge-Priority of A testator devised a specific estate subject to certain annuities, and charged his general residuary personal cstate with the payment of debts and legacies, and if that should be insufficient, then the specific estate, "devised subject as aforesaid" : Held, that the annuitants were entitled to be paid in priority to the legatees. A testator, by his will, charged his general residuary cstate with legacies given by his will or any codicil thereto, unless a contrary intention should appear by the codicil. In a codicil he charged an annuity on "his estates in Ireland," which expression included an estate which had been specifically devised by the will, subject to two other annuities. Held, that the general residuary estate, and not the specifically devised estate, was primarily charged with | the annuity. The testator in the cause, by his will, after giving certain pecuniary legacies, devised his Roscrea estate to Colonel Damer in tail male, subject to two annuities. He then devised his general residuary estate to trustees to sell for the payment of debts and legacies, the residue, after such payment, to be conveyed and assigned to Colonel Damer, and directed that his Roscrea estate "hereinbefore devised subject as aforesaid to Colonel Damer and the heirs of his body," should not be subject to the payment of debts and legacies unless the residuary estate proved insufficient. The main question was, whether the residuary estate having proved insufficient, the annuities on the Roscrea estate were subject to the charge of the legacies. Glasse, Q.C., Osborne, Q.C., Shapter, Q.C., Baily, Q.C., Bagshawe, Chapman, Barber, Druce, Phear, Bovill, Cracknell, Rasch, Roxburgh, Young, Erskine, and Waller, for the various parties interested. For the legatees it was argued, that the annuitants stood on the same footing as tenants for life, and took a part of the estate, subject to the charge on the estate, i e., that the estate and the annuities were both charged with the legacies. KINDERSLEY, V.-C., said, that there could be no reasonable doubt about this point. The question was, whether the legacies charged on the Roscrea estate, in case the general residuary estate were insufficient, were a charge upon the two annuities. Such, he thought, was clearly not the intention of the testator. He devised the Roscrea estate subject to two annuities. He then directed that debts and legacies were to be secondarily charged upon that estate, subject as aforesaid—that is, subject to the two annuities. The annuities, therefore, were not charged with the legacies. A further question then arose as to the construction of a codicil. The testator, by his will, directed that the general residuary estate should be charged with legacies given by "this my will or by any codicil thereto," unless a contrary intention should appear by such codicil, and by a codicil he directed that an annuity of 300%. should be raised out of his "estates in Ireland,” the residuary real estate and the Roscrea estate being both in Ireland. For the annuitant it was argued, that the intention of the codicil was plainly to charge the Roscrea estate with this annuity. On the other side, it was contended that the testator had, in the will, clearly pointed out what estates were to be charged with gifts by codicil, and that a specific charge was not to be derogated from by a more general charge, Conron v. Conron, 2 H. of L. Ca. 168; Creed v. Creed, 11 Cl, & Fin. 491. KINDERSLEY, V.-C., said, that, looking at the words "out of my estates in Ireland" alone, no doubt the annuity would be chargeable on all the testator's estates in Ireland, but the codicil must be construed with reference to the will and the intention of the testator. By the will, the Roscrea estate was devised charged with two annuities; then the residuary estate was made the primary fund for the payment of debts and legacies, and dealing with the trusts of the residuary estate, the testator mentions not only the legacies in Held, that the certificate, which stated the results of the inquiry as to each of the contracts, without specifying or referring to the items of which such results were composed, was right in point of form. David McIntosh, the original plaintiff in this suit, was a railway contractor, who had entered into several contracts for the making of certain works connected with the defendants' railway. The bill was filed in the year 1847, for the purpose of obtaining payment of a sum of about 248,000l., claimed by him from the defor an account of what was due. The defendants set fendants under those contracts, or, as an alternative, up a cross demand of large sums, by way of penalties heard in the year 1855, and the claim of 248,000l. for non-performance of the works. The cause was refused; but it was referred to Chambers for an inquiry whether anything, and what, remained due to materials supplied by him under the contracts, and the plaintiff, in respect of the works executed and whether anything, and what, was due to the defenis in the 3rd volume of Smale & Giffard's Reports, dants by way of penalties. The report on the hearing P. 146. The Chief Clerk, who was occupied two days in every week for nearly six years (the items involved in the account being upwards of 1,500 in number), ultimately, by the direction of the Judge in Chambers, made his certificate, stating that the sums of 9,9581. Os. 8d., 22,1847. 78. Sd., 25,5657. 13s., 8,4577. 1s. 3d., 1,9421. 7s. 10d., 7887. 1s. 5d., and 9,6477. 3s. 7d., were respectively due to the plaintiff's then representatives, under the seven contracts in question, together with the sum of 68,925l. 4s. 8d. for interest, calculated at 4 per cent. ; but the certificate did not specify or refer to the particular items which composed such sums, or the items which had been disallowed. The claims of the defendants in respect of penalties were wholly disallowed, |