No. 1. In re Jones, 26 Ch. D. 739, 740.

experience I remember the case of a nobleman who was tenant for life for more than seventy years, and during that period of time he had no power of dealing with any part of the property in the way of sale, unless by procuring an Act of Parliament for that purpose.

In the present case the testator appears to have had an estate encumbered to the extent of between £80,000 and £90,000, and producing an income of something between £4000 and £5000. He devises the property to trustees for a term of 2000 years for several purposes, and the trustees of that term were in the first place to invest £30,000, to the income of which his wife was to be entitled for her life, and a further sum of £15,000 was eventually to be raised. He gives the estate to trustees during the life of Colonel Grey, and after his decease devises the estate to the use of the sons of Colonel Grey by his deceased wife, who was the testator's daughter, successively. He directs the trustees of the life estate, after keeping down the interest on the several sums which for the time being should be charged on the property, to pay out of the residue of the rents and profits an annuity of £400 per annum to the son of his deceased daughter who should be entitled for the time being to the first estate in remainder expectant on the decease of Colonel Grey, and to pay the balance or ultimate residue of such rents and profits to Colonel Grey and his assigns during his life. Then a power of [* 740] sale and exchange was given to the trustees, exercisable with the consent of Colonel Grey. As far as regards the powers contained in the settlement, Colonel Grey was recognised and put in the position in which, under ordinary circumstances, the tenant for life would have been placed. He was the person whose consent was necessary to the exercise of the power of sale during his lifetime. That was the position of the parties when the Act passed. Colonel Grey was entitled to the residue of the rents and profits, if there were any, during his lifetime, and his consent was necessary to any exercise of the power of sale. The property is so heavily charged that the income is insufficient to keep down the interest on the charges and to pay the annuities. There is therefore no surplus income for Colonel Grey to receive, nor is there likely to be any for years. The question is whether under those circumstances Colonel Grey is entitled to exercise the power of sale conferred by the Act upon tenants for life. The 3rd section

of the Act provides that "a tenant for life" may sell the settled land or any part thereof. Then we have to see who is the tenant for life, and the 2nd section contains the definition. Sect. 2, subsect. 5, provides that "the person who is for the time being, under a settlement, beneficially entitled to possession of settled land, for his life, is for purposes of this Act the tenant for life of that land, and the tenant for life under that settlement." Then sub-sect. 10, clause i., says that the word "possession," includes receipt of income. Sub-sect. 7 declares that a person is equally tenant for life notwithstanding that under the settlement or otherwise the settled land is encumbered or charged in any manner or to any extent. Reading those three sub-sections together, the person, who is for the time being, under a settlement beneficially entitled to the receipt of income from the settled land during his life, is for the purposes of this Act to be deemed to be tenant for life of that land, notwithstanding the property has been charged or encumbered to any extent whatever. There appears to me to be very strong reason for contending that Colonel Grey comes exactly within the meaning of the 5th sub-section of the 2nd section, as explained by sub-sects. 7 and 10. But if there be any

doubt on that point, let us turn to the 58th section, which [*741] deals* generally with the interests of limited owners.

That section enacts that "each person as follows shall, when the estate or interest of each of them is in possession, have the powers of a tenant for life under this Act, as if each of them were a tenant for life as defined in this Act." In sect. 2, subsect. 5, the expression used is "beneficially entitled to possession," and when "possession " is extended to receipt of income, according to sub-sect. 10, clause i., we find that a person entitled to receive the income is treated as a tenant for life. I think that the words "where the estate or interest of each of them is in possession," means that the right is immediate and not in reversion or expectancy. Then we must look through the various provisions. of sect. 58, to ascertain whether Colonel Grey, supposing him not to come under the 2nd section of the Act, comes under any of these provisions. We find it provided by sub-sect. 1, clause ix., that a person is to have the powers of a tenant for life if he is "entitled to the income of land under a trust or direction for payment thereof to him during his own or any other life, whether subject to expenses of management or not, or until sale of the

No. 1.- In re Jones, 26 Ch. D. 741, 742.

land, or until forfeiture of his interest therein on bankruptcy or other event.” It appears to me that Colonel Grey is entitled to the income of the land under the trust to pay the surplus rents to him. I entirely agree with the suggestion of Lord Justice COTTON in the course of the argument, that you must look at the terms of the settlement to see what the person is entitled to, and not to the accidental circumstance that the intention of the testator has been to some extent defeated by reason of the income which he intended the party to take not being actually realised in consequence of the state of the property. In that view of the case it appears to me impossible to say that Colonel Grey is not entitled to the income of the land under the trust or direction for payment of it to him during his own life, exactly following the very terms of the Act of Parliament.

I think, therefore, assuming even that Colonel Grey would not be entitled under the 2nd section (and I am disposed to think that he would) to exercise the power of sale, he is clearly entitled to exercise it under sect. 58 (1) (ix.), and that the conclusion at which the VICE-CHANCELLOR arrived is correct.

*COTTON, L. J.: —

[* 742] This case has been very ingeniously argued by Mr. Saunders, but I think that the decision of the VICE-CHANCELLOR is right.

In my opinion, Colonel Grey comes within sect. 58 (1) (ix.). If that sub-section had not been there it would have been a serious question whether he would not have come within sect. 2, sub-sect. 5. I think that sect. 58 (1) (ix.) was introduced to meet the very case which exists here of trustees who are not simply trustees in whom the legal estate is vested (in which case the equitable tenant for life would be entitled to possession or to receipt of the rents from the tenants), but have powers of management which necessitate their remaining in possession, that is to say, managing the estates and receiving the rents from the tenants. The person entitled to income is not in the ordinary position of an equitable tenant for life, but is entitled to receive from the trustees who are in possession and are managing the estate, that which is called in the Act the "income" of the land. The interest of Colonel Grey is an interest in possession, the encumbrances created by the settlement not preventing its being

so, but only subjecting that interest, which is in possession and not in remainder, to certain prior charges.

The argument which was urged upon us may shortly be put thus in order to say that he is a person entitled to the income there must be income to which he is entitled. But in my opinion, looking at the whole purview of this Act, you must look to the settlement to see what the limitations are, and then, without regard to the greater or less productiveness of the estate, you are to see who, under the limitations of the settlement, answers the requisitions of the different clauses of the Act bearing on the question, Who is tenant for life? Considering that, I do not think it necessary (as at first I thought it was) that we should bring the case within sect. 2, sub-sect. 7, in order to say that Colonel Grey is entitled to exercise the powers of a tenant for life. But we can look at that sub-section, and also at other sections, for the purpose of seeing what the intention of the Act is. An encumbrance does not prevent a person being tenant for life within the meaning of the Act, and therefore the question is not what the person has actually received or enjoyed, but [*743] what under the settlement, he is entitled to, if there is any income to come to him. "Beneficially entitled," in sect. 2 does not mean "entitled and deriving a benefit from it,” but entitled for his own benefit if there is anything to be derived from the estate, and not simply as trustee for others. Having regard to what I think is the intention expressed in the Act, in my opinion we must hold that, as the limitations of the settlement put Colonel Grey in the position of having an immediate right to receive the income of the land, if there is any, from the trustees, he comes within sect. 58 (1) (ix.). Sub-sect. (viii.) of the same section is a strong enactment. Mr. Saunders said it showed that the limitations of the settlement are not the only things to be looked at.

*

It

is true that the person who gets the power under it is a person not contemplated by the limitations of the settlement, but he gets the possession by marrying somebody who is entitled under the limitations of the settlement.

My opinion here is that, as the limitations of the settlement put Colonel Grey, subject to encumbrances, in the position of being entitled to receive the income, if any, we are not to go into an account to see whether he gets anything, but must say that he is entitled under the Act to exercise the powers given to a tenant for life.

No. 1. In re Jones, 26 Ch. D. 743, 744.

LINDLEY, L. J.: —

I also think that the decision of the VICE-CHANCELLOR is correct. The paradox of Mr. Saunders is startling. He says, "How can a man be held to be entitled to the income of land when there is no income to be entitled to? Of course, if there is no income he cannot get it. But I think the answer to that paradox is this: You must see what is the meaning of the expression "entitled to income of land" in this Act. I am not at all sure that Colonel Grey could not be brought within sect. 2, but that is doubtful, and I prefer to rest the case, as the VICE-CHANCELLOR rested it, on sect. 58. In order to bring Colonel Grey within that section we must first bring him within the first part of sub-sect. (1): "Each person as follows shall, when the estate or interest of each of them is in possession, have the powers of a tenant for life under this Act." The interest of Colonel Grey is this: he is entitled to the income should there be any, subject to [* 744] the trusts of a prior term of 2000 years. It at first struck

me as doubtful whether a person in that position could be said to have any estate or interest in possession, the words "in possession," in sect. 58 being obviously used by way of distinction from " in remainder or reversion." But when we look further into the Act it seems obvious that a term of years, whatever its length be, when it is merely a security for charges, is not such an interest as prevents the person entitled to the income subject to that charge from being in possession within the meaning of sect. 58. It seems to me, therefore, that Colonel Grey comes within that part of the section.

Then does he come within the 9th sub-division of sub-sect. (1). Is he "a person entitled to the income of land under a trust or direction for payment thereof to him during his own or any other life, &c." I agree with my learned Brothers that, in order to answer that question you must not look at the rent-roll or the charges, to do which would, I think, be entirely contrary to the whole scope of the Act of Parliament, but you must look at the settlement which gives him his title.

Looking at that, I think he comes strictly within the words of the Act, and it appears to me, therefore, that he has the power given by the Act to a tenant for life.

The costs of all parties were given out of the corpus of the estate, the Court saying that it was a case proper to be settled by the Appeal Court.

VOL. XXV.-2