[*242]

and this she must do by application to the Court, which will settle the whole or a part of the property upon her and her *issue, exercising a discretion as to the amount, and in the event of her death after a bill filed and an order made, her right will survive to her children.(g) This equity will attach upon any reversionary property upon its falling into possession during the coverture, and upon the income of her real estate during her husband's life, (h) and even upon her trust estate in a term of years, (i) but not, it would seem, where she is entitled to a life interest only, which has been specifically assigned by her husband to an assignee for value;(k) and where the property becomes at any time such that the husband, by the exercise of a legal right, can transfer it, equity will compel him to do so.()

15. When a reversion or any interest in equitable personalty is purchased, or any lien thereon is created, notice is necessary, as on the purchase of a policy, to rebut the doctrine of reputed ownership and to secure a priority over subsequent incumbrances. Notice should be given to all the trustees in whom the property may be vested, since if given to one of several, it will operate only during the life of him who has received it.(m) Not only may notice be given, but when the property consists of stock or shares either in the Bank of England or any public company, whether incorporated or not, a writ of distringas out of chancery, (n) or when the property consists of a fund in court a stop-order, (o) may be obtained to restrain a transfer. When there is no acting trustee to whom notice can be given, and the fund consists of stock, the party first serving a distringas upon the bank will be entitled,(p), and this would seem to give the rule as to all other funds, shares and choses in action. Where a fund has been paid into court, and the trustee is functus officio, the party first obtaining a stop-order will obtain [*243] the priority, and where trustees having a lien pay a fund into court without stating their claims or obtaining the security of a stop-order, they will be postponed.(g) But where notice has been given to trustees, and subsequently the sum is paid into court by them in a suit to which the assignee is not a party, he will not lose his priority by neglecting to obtain a stop-order, as against a party obtaining a charge under a judge's order in one of the common law courts, (r) nor it would seem by a stoporder in equity. When a reversionary chose in action of a married woman has been assigned, a stop-order may be obtained, that during the life of the husband the fund shall not be transferred without notice to the petitioner. (s) When the property consists of a reversion in real estate, the doctrine of notice whether as regards the question of apparent

(g) 2 Spence, 488.

(h) Sturgis v. Champneys, 5 My. & Cr. 97.

(i) Hanson v. Keating, 4 Hare, 1, and see post, Pt. 3, Ch. 1.

(k) Tidd v. Lister, 10 Hare, 140.

(1) Alexander v. Cana, 15 Jur. 51. (V. C. B.)

(m) Meux v. Bell, 1 Hare, 97.

(n) 5 Vict. c. 5. General Orders, 17 Nov. and 10 Dec. 1841, 2 Dan. Chanc. Pr.

2555.

(0) 2 Dan. Chanc. Pr. 2559.

(p) Etty v. Bridges, 2 You. & Coll. C. C. 486.

(9) Swayne v. Swayne, 11 Beav. 464.

Brearcliffe v. Dorrington, 14 Jur. 1101. (V. C. B.)
Morian v. Polley, 1 De Gex & S. 144.

ownership, or in fixing the priority of incumbrancers, does not apply;(() the first charge in point of time will have the priority, unless the second incumbrancer can obtain a transfer of the legal estate without notice. Inquiry should however be always made of the trustees, and except upon the personal integrity of the parties, a purchase or advance upon the security of property of this description cannot be recommended. The title-deeds, it will be observed, are generally in the possession of the tenant for life. The latter remarks apply also to any security made subject to a prior mortgage in fee. Where a mortgage was made with a power of sale, and the power was exercised and followed by the bankruptcy of the mortgagor, a preference was given to the assignees over a second mortgagee, who had neglected to give notice to the first mortga gee.(u)

EQUITIES ARISING FROM CONTRACTS OTHER THAN CONTRACTS OF SALE, OR THE CREATION OF LIENS, BY THE ASSURED.

1. WHEN an insurance has been effected by one party upon the life of another, the latter independently of any contract has no interest in the policy. Such a contract may be either express, or implied from the acts of the parties. In such a case the want of an insurable interest in the assured, is a circumstance of which the insurers alone are entitled to take advantage. Its existence or absence is unimportant, as regards the person whose life is assured, except, perhaps in explaining circumstances from which a contract may be inferred.

2. Such questions, have very frequently occurred where insurances have been effected by creditors on the lives of debtors. Thus when a creditor insured the life of his debtor, and debited him in account with the premiums upon the policy, it was assumed that it was effected as a security for the payment of the debt, subject to which it reverted to the debtor; and when the assured after the satisfaction of the debt from other sources, had received the policy moneys from the office, it was held that the executor of the debtor might recover the sum so received as money had and received to his use. (a)

3. A formal agreement is not necessary as evidence of such a contract, but there must be evidence; and a fact which may be referred to some other object will not be sufficient proof when standing

[*245] alone. Thus, the payment of the first and certain other of the premiums by the debtor was not considered necessarily to raise any presumption that the latter was interested in the policy. This was decided

(t) Wilmot v. Pike, 5 Hare, 14.
(a) Holland v. Smith, 6 Esp. 11.

(u) Waldron v. Sloper, 1 Drewry, 193.

very late case, in which a policy in the Scottish Widows' Fund se was effected in 1840 by James Hardey, in his own name upon the of his brother Sebastian, and the policy recited that James had deted a declaration setting forth the age of Sebastian, &c., and "that said James Hardey had an interest in the life of the said Sebastian dey to the extent of that assurance." The first three premiums apd to have been paid by Sebastian, who died in 1847, and it was nded that the policy was his property, and not that of his brother s, by whom it was effected. Sir J. Romilly, M. R. observed, "The I was effected in the form usual where one person insures the life of er claiming an interest in such life. In the absence of any eviI should assume that the policy was the property of the person ppeared to have effected it, and that the allegation of his having terest to the extent of that policy was a sufficient allegation. The iff," he added, "upon whom the burden of proof of establishing Sebastian was the owner of the policy lies, contends that if he eses the payment of these premiums by Sebastian, James must be › be a trustee for him, in analogy to a principle established in cases the purchase money for an estate is paid by one person and the yance taken in the name of another, in which case the latter is held a trustee for the former. In the first place (assuming, as I do for the present, that these premiums were paid by Sebastian out of his own money) I do not think that the analogy applies to a case of this description. If a man buys an estate, for a sum of money to be paid down, it is very material for the purpose of ascertaining the owner of the property to see who paid the consideration money; but if the estate be purchased for an *annuity, the same principle does not apply, until you ascertain by whom the whole annuity has been paid." [*246] "The presmption arising from the payment of the consideration. money is liable to be rebutted by a great number of circumstances. The money might have been lent for the purpose of enabling the party to effect the purchase. Here there were various dealings and transactions between the parties, and it would seem to be a stronger matter to make the ownership of an estate depend, either upon what might turn out to be the result of taking some complicated accounts, or upon certain items of payment in the account, and which might possibly turn out to have been made by one person on behalf of another. In order to have enabled me, in this case, to ascertain the clear weight to be attached to these particular items, it would undoubtedly have been of great importance for me to have known the state of the accounts between James and Sebastian when the policy was effected; for if it should be true, as is alleged, that Sebastian owed James a considerable sum of money, it would not seem an unreasonable thing for James to effect a policy upon his brother's life for the purpose of making a good security. I have nothing to guide me with respect to these accounts; but assuming it to be proved, as I do, that the payment of the first and the two subsequent premiums was made by Sebastian out of his own proper moneys, I do think that that is sufficient to enable me to come to the conclusion that the policy belonged to Sebastian, or to rebut that which appears to be

established, prima facie, by the form and declaration upon the face of the policy."(b)

4. We have seen, in a former chapter, that assuming that the payment of the debt will discharge the insurers as regards any policy effected by the creditor on the life of the debtor, the payment by the insurers will not discharge the debtor unless he is entitled by contract to an interest in the policy. Were it otherwise there would be little *induce[*247] ment to a creditor to insure the life of his debtor; since, while in the absence of any agreement he could have no right to call upon his debtor for an insurance, or for the payment of the premiums of a policy already effected, he would nevertheless be entering into a contract which the other would be entitled to adopt or reject according as it promised to become a profitable transaction or the contrary. This reasoning holds good as well where the policy is effected on the life of a surety as of the principal debtor. Thus in a case in Ireland where the mortgagee effected an insurance upon the life of the mother of the mortgagor, who had joined her son in a collateral bond as surety for securing the mortgagemoney, and subsequently went into possession of the mortgaged premises and received the amount insured from the office, it not being proved that there had ever been any arrangement that a policy should be effected as part of the security, or that the mortgagor has been charged with the premiums; it was held, upon a bill filed to redeem, following Humphrey v. Arabin, (c) that the mortgagor was not entitled to credit for the amount received upon the policy.(d)

Again in Henson v. Blackwell.(e) The plaintiff and his wife in August 1831, assigned two reversionary choses in action of the latternamely, the tenth share of an annuity for the lives of two persons, and the survivor of them, and the fifth share of a legacy, to the enjoyment of both of which she was entitled on the death of her father, to the defendant as a security for a sum of 3007. due to him from the plaintiff. It was provided that upon the death of either of the cestuis que vies, it should be lawful for the defendant to effect an insurance upon the life of the survivor, and add the premiums to the mortgage debt. This latter provision was not acted upon, but in August 1832, the defendant, without the privity or knowledge of the *plaintiff or of his wife, insured the life of [*248] the latter in the Norwich Union Life Office for the sum of 2007. which amount was paid to him upon her death in July 1835. The plaintiff thereupon filed his bill to redeem, praying that the defendant might be charged with the amount received upon the policy, subject to the premiums and expenses paid by him. The Vice-Chancellor (Sir James Wigram), however, held that the plaintiff was not entitled to the benefit of the insurance. This decision is unimpeachable, but the reasoning of the learned judge who decided the case is not so obvious. It was assumed that if the defendant had an insurable interest, the Court would refer the policy, although silent upon the subject, to that interest; and that the plaintiff might have rights dependent upon the validity of the policy, as a contract of indemnity, that the policy was intended to

(b) Triston v. Hardey, 14 Beav. 232.
(d) Bell v. Ahearne, 12 Ir. Eq. Rep. 578.

(c) Ante, p. 26. (e) 4 Hare, 434.

guard against the wife surviving the husband, in respect of which contingency the defendant had an insurable interest in her life; but that risk ceasing with her death, the policy became void; and the office having paid the money in its own wrong, the plaintiff could not be entitled to the benefit of such a payment. It is, however, difficult to discover the insurable interest possessed by the mortgagee in the life of the lady. The risk consisted in her living, and not in her dying; and although the ViceChancellor remarked that, in the event of her surviving her husband, the policy would be the only security for the debt, this remark would have been equally applicable to a policy effected upon the life of any other person, although an entire stranger to the mortgage transaction; or, to speak more correctly, the policy in such a case would not be a security for the debt at all, any more than the defendant's own balance at his banker's could be so. The lady would not be his debtor, neither would he possess any property dependent upon her life; from whence then. could his insurable interest arise? and in what manner could the policy become impressed with the character of a security? The risk to *be insured against was evidently the contingency of the death [*249] of the husband before that of his wife, without having been able to reduce the share of the legacy into possession. Perhaps the explanation of the expressions of the Vice-Chancellor may be, that they were not intended to do more than enunciate that the Court will refer the policy to the insurable interest, and if it finds that interest bound by a trust, will not allow the trustee a pecuniary benefit derived from his fiduciary character.

5. In a late case in Ireland, (f), already mentioned, it was said that ex parte Andrews(g) proceeded on the ground that the party assuring effects the insurance from the interest which it is necessary for him to have, according to the state of the law in England. The parties were trustees upon an express trust, the contingent interest which was insured having been assigned to them in trust, partly for themselves, and partly for the creditor. They thereby got a title to effect the insurance, and the Court held that being trustees they could not be entitled to take the benefit of it themselves, because in any other character than that of trustees they could not have any right to insure.

6. This case of Henson v. Blackwell, (h) moreover, thus explained, must not be supposed to decide that the failure or want of an insurable interest would entitle the party, who might happen to receive the sum insured from the office, to retain it for his own use, notwithstanding any rights arising from contract, or by way of trust, to which it might be otherwise subject in his hands. The case of Holland v. Smith would be a case in point to the contrary; but the question would be decided by the general principle of the Court, that where a man pays money from conscientious motives which he is not legally bound to pay, such money shall be divided according to equity, (i) and *that the Court, although it will not, of course, enforce an illegal contract, will [250]

(f) Bell v. Ahearne, 12 Ir. Eq. Rep. 578. (g) 2 Rose, 410. (h) Supra. Aynsley v. Wordsworth, 2 Ves. & B. 334; Paget v. Gee, Amb. 198; Oldham v. Hubbard, 2 Y. & C. C. C. 209.