tenant for life and all other persons in remainder who should be successively in possession *were bound to sustain the expenses of the [*263] renewals becoming necessary during their several periods of enjoyment; and on payment over to an incumbrancer of the tenant for life of the balance of the rents and profits, a provision was required, of a fund for securing the payment of fines and expenses of future renewals, in the event of their occurring in the lifetime of the tenant for life, which was done by insuring his life against that of each of the lives on which the leases were held. Not only was the income accruing from the leaseholds during the life of the tenant for life subject to these payments, but it was considered that the trustees might have paid them out of the general income of the whole devised estate; which leads to the remark, that such an interest as is now under consideration may, as well as any other property, be devised subject to a condition which may in fact be more onerous than the value of the interest given may be beneficial, in which case the devisees will be bound to elect either to bear the burthen or to renounce any interest under the will.

The case of Stone v. Theed(ƒ) is one in which the charge was considered to be upon the rents and profits as they annually accrued, and excluding the common construction, that a charge upon or gift of the rents and profits is equivalent to a charge upon or gift of the corpus, it was likened to the case of an estate requiring an embankment to be kept up to protect it, in which case the expense of keeping up the embankment would be a primary charge upon the income. The successive tenants for life were then made chargeable, on renewals taking place in their respective lives, in each case to the full amount of the receipts past and prospective of the particular tenant.

When the amount of the fines was to be raised out of the rents and profits, or by sale or mortgage, it was considered *that the expen[*264] ses of renewal were primarily charged upon the corpus, and the tenant for life was not bound to contribute to the payment of the principal of a sum raised by mortgage on the estate, but only to keep down the interest.(g)

6. The directions to raise sufficient sums out of the rents and profits, or by mortgage, have been considered not to indicate any particular mode of charging those entitled to the income. In such cases, as where there is a bare direction to renew, the general rule of the court is applicable. In forming this rule there were obviously two courses to be adopted; namely, that provision should be immediately made for the gradual creation of a fund to meet future renewals; or that provision should be made as the occasion arose, the expenses thereupon being borne by the then tenants for life and in remainder in proportion to the benefits derived by them from the renewal. The first course has at first sight much to recommend it, since the property would thus always remain in the condition in which it was devised by the testator; namely, unencumbered, and subject only to the charge of the renewals; but it is open to

(f) 5 Hare, 451 in notis, 2 B. C. C. 243. (9) Playters v. Abbott, 2 My. & K. 97.

this objection, that there does not appear to be any fixed principle upon which the tenant for life is to be charged before a renewal becomes necessary, more particularly when the lives are old and deteriorated; and it may be dismissed as having never been adopted. The theory on the contrary appears to be, upon each renewal to look upon the property (that is, the further term or interest) as about to be purchased for the benefit of the settlement, and then to consider in what way the fine for renewal is to be borne.(h)

In the absence of any express direction, it has been always held that the court would raise the necessary *funds by a mortgage of the estate, or would apply any other funds subject to the like limitations; [*265] but some time elapsed before anything like an equitable rule was laid down as to the proportions in which the money raised was to be ultimately borne. At one time it was thought sufficient that the tenant for life should pay the interest of the mortgage; at another, that he should pay a third, and the remainderman two-thirds, of the fine; but such rules were obviously absurd, and are exploded. It is now clearly settled, that each party is to pay in proportion to the benefit he actually or de facto derives from the transaction.(i)

It is, however, easier to lay down abstract principles of justice than to apply them; and in this particular instance great difficulty has been felt in practice in the application of the rule, which may be considered to have been settled by Lord Thurlow in an carly case, when the leasehold was not for lives but for years.

7. In this case() a tenant for life, not bound to renew, renewed a term of which there were 12 years to run for a further term of 28 years, and died at the expiration of 9 years from the commencement of such further term. The question was as to the sum in which her estate should be recouped by the remainderman. "The Master," observed the court, "should take the sum paid by her for the renewal of the lease as the value of the term purchased—that is, of the term of 28 years, to commence at the expiration of 12 years. He should then consider the value of the term of 9 years after the existing term (viz. the 12 years), and what the term of 19 years after the existing term and the 9 years was worth; and the latter is the proportion of the fine actually paid to be borne by the remainderman :" and on such sum he directed compound interest at 4 per cent. to be calculated.

*Here there is an intelligible rule as regards leaseholds for years. The tenant for life is considered as purchasing at the time [266] of the renewal a reversionary term, equal to that which he actually enjoys, and the residue of the fine is to be borne by the remainderman.

8. How then is the rule to be applied to leaseholds for lives? There appear to be four ways. The first, by insuring the life of the new cestui que vie for the amount of the fine, and compelling the tenant for life in possession to keep down the interest and pay the premiums upon the policy; the second, by estimating the probable benefit derived by the

(h) Jones v. Jones, 5 Hare, 463; Huddleston v. Whelpdale, 9 Hare, 485. (i) White v. White, 9 Ves. 558.

(k) Nightingale v. Lawson, 1 Bro. C. C. 440.

AUGUST, 1853.—12

tenant for life or successive tenants for life and remainderman by the addition of the new life, and dividing the fine in such proportions; the third, by waiting until the death of the tenant for life, and then estimating the proportions according to the result then experienced; and lastly, by waiting until the lapse of the additional life, and estimating the term thereby gained as if an absolute term.

Of these four methods the first alone recommends itself as possessing both simplicity and perfect justice. The burden of the fine is imposed upon the income during the term of the life of the new cestui que vie, and is borne by the recipients of that income in exact proportion to their receipts. It is also equally easy of application, however numerous the successive tenants for life.

The second is equally fair, but it is liable to the objection that by it the parties paying the respective proportions of the fine undertake the office of an Insurance Company. For example: the tenant in remainder at once bears a proportion of the fine, although he may in the result either derive no benefit, or at least only the benefit of a subsequent renewal upon more favourable terms, or may be benefited to a much extent than the value of the fine paid by him. It is also open to this further objection-that if the amounts to be respectively paid are to be calculated upon mathematical principles, they cannot be correctly ascer

greater

tained except upon the assumption that the life of the tenant for [*267] life is insurable upon the ordinary terms; that is, that he is in a state of health sufficiently good to make his expectation of life equal to that indicated by the tables at the age which he has attained: for if he is not so, although an approximation to the truth may be obtained in a case of chronic malady by assuming him to be of a higher age, yet such an assumption is altogether arbitrary, and in the case of a confirmed and incurable disease seems to be altogether inapplicable. The new cestui que vie is of course always a healthy life.

The first plan was adopted in the case of Greenwood v. Evans,(1) but by consent; the second in an earlier case, (m) in which it was referred to the Master to ascertain what proportions should be borne by the tenant for life and in remainder, and the decree was acquiesced in (but it does not appear upon what principle the Master's report was made;) and again, in the case of Reeves v. Creswick,(n) in which the principle upon which the Master's report was made is clearly and accurately laid down. In that case the testatrix devised leases for lives to a married woman for her life, with remainder to her children absolutely. Upon the decease of the testatrix one of the cestuis que vie alone remained; and, the children being infants, a bill was filed by the trustees, to obtain the sanction of the Court to a mortgage of the property, and its direction as to the apportionments of the charge between the tenants for life and the persons entitled in remainder. The assistance of the actuary of an assurance office was called in, to ascertain the relative proportions. It was considered that, the period of enjoyment of the property by the tenant

(1) 4 Beav. 47.

(n) 3 You. & C. C. C. 715.

(m) Allan v. Backhouse, 2 Ves. & B. 65.

for life under each of the old leases being the joint duration of her own life and that of the then surving cestui que vie named in such lease, and the period of her enjoyment of the property under each corresponding renewed lease being in like manner the joint duration of [268] her life and those of the new cestuis que vie, or the longest liver of them, the difference between the values of the estates for these two periods gave the benefit derived by the tenant for life from the renewals in question. The residue of the increased value of the property necessarily expressed the benefit derived from the renewals by the children in remainder. The relative proportions being thus ascertained, it was directed that a policy should be effected upon the life of the tenant for life, for the amount which fell to her share, for the purpose of providing at her decease a corresponding portion of the fine charged by mortgage on the estate. The policy was then ordered to be assigned to the mortgagee; and directions were given for paying the premiums upon the policy, and keeping down the interest on the entire mortgage debt, out of the annual rents and profits of the estates.

In reading this case it is impossible to fail to remark, that although the principle is correctly laid down, it is not so correctly applied; for the tenant for life paid, in excess of her share, the interest during her life of the share of the remainderman.

We have observed that the Court will direct the raising of the money by a mortgage of the estate, in which case the interest of the mortgagemoney must be paid out of the rents, so that the result is the same as if the money had been advanced by the tenant for life. The method we have been considering assumes that both he and the remainderman pay their own shares of the fine: if, therefore, the former pays the interest of the share of the latter during his own life, his estate is entitled to compensation, as in Nightingale v. Lawson; or the amount of his share should be at once decreased in calculation by a just estimate of the additional burthen.

This principle is clearly enunciated in a dictum of Lord St. Leonard's in a very late case, when, speaking of the manner in which a sum of money raised by mortgage *by a tenant for life and remain[*269] derman, should be divided between them. He said: "I should therefore conceive that the father taking upon himself, as he was bound to do, the payment of the interest of the whole of the charge during the lifetime of the eldest son, would take such a portion of the money raised as would represent his life interest with that burthen, and the son would take that which would represent his interest to take effect after the father's interest.(0)

Upon two late occasions, however, the principle of these cases has been disapproved. In Jones v. Jones, (p) there were both leaseholds for lives and years; and Vice-Chancellor Wigram considered that there was no distinction between them, and that the proportion and manner. in which the tenant for life and remainderman were to bear the charge must be the same in both cases. "The rule," he said, "is, that the (P) 5 Hare, 465.

(0) Harrison v. Round, 17 Jur. 563. L. C.

parties must bear the expense of the renewal in proportion to their respective interests in the estate." This, it is clear, is Lord Eldon's doctrine; but the Vice-Chancellor further added this construction:-"The rule," said he, "is, that the parties are to pay in proportion to their enjoyment; by which I understand their actual enjoyment to be meant, aud not an extent of enjoyment to be determined by mere speculation, or by a calculation of probabilities. If the tenant for life renews, if he has not the whole enjoyment his estate will have a lien for whatever ought to be paid by the remaindermen;" and when the renewal was by the latter or by a charge upon the estate, he held that the tenant for life should give a security for the sum that he might eventually be liable to pay. In a still more recent case, (2) the doctrine in Jones v. Jones was commented on with approbation. A policy on the life of the new cestui que vie had been approved, *as a proper security to be given by the [*270] tenant for life; and on the case coming on, upon further directions, the Court observed, "The object in these cases is, that the sum paid out of the capital shall be borne by the parties in proportion to the benefits they derive; and the security, therefore, is for the purpose of bringing back to the capital so much as the tenant for life has had the benefit of, leaving the rest to be borne by the parties who may succeed him; and it is difficult to see how, when this amount would be payable on the death of the tenant for life, a policy of insurance on the life of another person could be a proper security for it. It may indeed be said that, if a fund be provided for the renewal, the remainderman would not suffer; but this is not the principle on which the order of reference to the Master was made, nor, so far as I am aware, a principle on which the Court has ever acted; and it is, in my opinion at least, open to very grave doubt whether it is a principle on which the Court ought to act. What the remainderman ought to bear is so much of the capital paid for the renewal as may not be paid by the tenant for life, in respect of the benefit he has derived; but the principle of this report would throw upon him not merely the interest of the whole capital, but the burden of keeping up a policy for the full amount. It was said, too, that the remainderman would himself be bound to give security, and that he would have the benefit of a policy at a less rate of premium in consequence of the early insurance of the life; but whether this advantage would countervail the additional burden which might fall upon him, would be mere matter of speculation."

It may be doubted whether this reasoning would prove satisfactory to an actuary; and, admitting it to be correct, it must still be asked upon what principle the calculation is to be made. Assuming the additional life to be in existence at the death of the tenant for life, after the expiration of a considerable term, in what manner is the amount to be paid by him to be estimated? If he is to be taken to have been the purchaser of a term absolute, equal to that which he has enjoyed [*271] the value of, the term may be more than the fine, leaving nothing for the remainderman to pay for the benefit he actually receives. If the remainderman is to be assumed to be the purchaser of an additional life (9) Huddleston v. Whelpdale, 9 Hare, 787.