On 21st August, the following written judgment was delivered

by,

A. H. SIMPSON, C.J. in Eq. By his will dated the 12th June, 1856, Thomas Smidmore after a specific devise gave all the residue of his real estate to his trustees upon trust to divide the same into four shares, and he gave one share to each of his four sons (naming them) and his heirs to be held and enjoyed in severalty.

The testator made two codicils which are not material to the question at issue, and by a third codicil, dated the 23rd October, 1860, the testator declared that whereas he was desirous of rendering inalienable so far as possible the shares of his sons, except that of his son Thomas, he directed his trustees to stand possessed of the share of each of his other sons whether in real or personal estate under his will upon trust to receive the income and pay the same to the sons until they respectively should do some act which would have the effect of vesting the right to receive the annual income directed to be paid to them respectively or any part thereof in any other person. And that on the doing of such act by his sons respectively the trust in his favour should cease and the annual income the trust whereof should so cease or become void should be paid to the person who would have been entitled to the same respectively by virtue of the trusts thereinafter declared in case such son had departed this life. And he declared that in case either of his said sons at the time of such forfeiture of interest should be married it should be competent for his trustees to pay during the then residue of the life of such son the annual income arising from the share in respect of which such forfeiture should have occurred to his wife or to any future wife he might have. And from and after the decease of his said sons respectively on certain trusts for the benefit of their issue as set out in the codicil.

The testator had four sons, Thomas Smidmore, who took his share absolutely, Albert Murray Smidmore, the defendant Joseph Sarsfield Smidmore, and the plaintiff Francis Paul Smidmore.

An originating summons was taken out by Albert Murray Smidmore for the determination of certain questions.

1905. SMIDMORE

v.

SMIDMORE.

August 21.

1905.

SMIDMORE

V.

SMIDMORE.

C.J. in Eq.

Before this suit was heard Albert Murray Smidmore died, and the suit was revived in the name of his executors, Messrs. Makinson and Plunkett.

By a decree dated 4th April, 1905, in that suit it was declared that upon the true construction of the will and codicils of the said testator the estates limited in remainder to the issue of Albert Murray Smidmore after his death by the third codicil failed either for uncertainty or as tending to a perpetuity, and that in the events which had happened in that case the share in the residuary real estate of the said testator devised to Albert Murray Smidmore belonged absolutely to the estate of the said Albert Murray Smidmore and passed to his personal representatives.

In that case Albert Murray Smidmore died before the decree, and it was unnecessary to consider whether his absolute title accrued in his lifetime. Here the plaintiff Francis Paul Smidmore is still alive.

The land has been resumed by the Government, and the money paid into Court. The plaintiff claims that he is entitled to have these moneys paid out to him.

The will gives Francis Paul Smidmore an absolute interest; the codicil cuts this down to a life interest determinable on alienation, in which event the income is to be paid to the persons who would have been entitled if Francis Paul Smidmore had been dead; but there is a proviso that if Francis Paul Smidmore has a wife living the trustees may pay her the income during the remainder of Francis Paul Smidmore's life.

The persons who would be entitled on forfeiture if Francis Paul Smidmore were dead would be Francis Paul Smidmore himself by the application of the rule laid down in Lassence v. Tierney (1 Mac. & G. 551), and in somewhat wider terms in Hancock v. Watson ([1902] A.C. 14).

Two constructions may be placed on these limitations: (a) that as Francis Paul Smidmore on purporting to alien would become entitled in fee simple any provision against alienation must be regarded as repugnant and void: In re Dugdale (38 Ch. D. 176); and the power to the trustees to pay the income to his wife is therefore void: (b) that on Francis Paul Smidmore aliening or purporting so to do, a power arises in the trustees to pay the

income to his wife if he has one during the remainder of his life, and that on his death the property becomes his in fee simple.

1905.

SMIDMORE

v.

I can see nothing illegal in such a gift. If the trustees had SMIDMORE. been directed after alienation by Francis Paul Smidmore to pay C.J. in Eq. the income to his wife during the remainder of his life, such a gift would not have been open to objection. It seems to me to make no difference that the trustees have power to pay the income to the wife if they think fit. This obviously carries out the intention of the testator whereas the other construction defeats it.

I must hold that the plaintiff is not entitled to have the moneys paid out to him. The answers to the questions asked will therefore be (1) No; (2) There is a valid power to pay the income to the wife during the remainder of the plaintiff's life if he alienes, but no valid trust in favour of the children or issue of the plaintiff. Costs of all parties out of the fund.

Solicitors: Makinson & Plunkett.

NOTE. A decision to the same effect was given by Holroyd, J., on a similar will in O'Brien v. Trustees, Executors and Agency Co. Ltd. (6 Argus Law Reporter (C.N.) 2).

1905.

Re CLARKE AND SOLOMONS' AGREEMENTS TRUSTS.

September 12. Company-Winding-up-Sale of assets-No legal transfer-Dissolution of company -Vesting order- Companies Act, 1899 (No. 40), s. 142.—Trustee Act, 1898 (No. 4), s. 29 (1) (d).

C.J. in Eq.

When a limited liability company goes into voluntary liquidation and during liquidation sells portion of its real estate and receives the full purchase consideration, and afterwards becomes automatically dissolved by virtue of s. 142 of the Companies Act, 1899, before the property has been legally conveyed to the purchaser, the Court will in a proper case make an order under the Trustee Act, 1898, vesting the property in the purchaser for all the estate of the company therein at the date of its dissolution: In re General Accident Assurance Corporation, Ltd. ([1904] 1 Ch. 147) and In re Richard Mills & Co. (Brierly Hill), Ltd.; Smith v. The Company ([1905] W.N. 36) followed. In re Taylor's Agreement Trusts ([1904] 2 Ch. 737), distinguished and not followed.

SUMMONS FOR VESTING ORDER.

The North Sydney Land Building and Investment Company, Limited, at an extraordinary general meeting held on the 2nd April, 1896, passed a special resolution for winding up the company, which was duly confirmed at an extraordinary general meeting held on the 20th April, 1896. Subsequent to the latter date the company in liquidation became registered as proprietor under the Real Property Act, 1900, of two parcels of land forming portion of its assets.

By agreements made on the 1st March, 1898, and the 19th September, 1898, Clarke and Solomons, as agents for the company in liquidation and its liquidators, contracted to sell these properties to W. M. M. Arnold, acting on behalf of Mrs. Helen Augusta Arnold, his wife. The full amount of the consideration of the purchase was paid by Mrs. Arnold out of her separate estate, but no legal transfer of either property was executed.

On the 27th April, 1905, a duly convened general meeting of the company was held under s. 141 of the Companies Act, 1899, for the purpose of having the liquidators' account of the liquidation laid before it, and on 12th May, 1905, the liquidators' return under s. 142 was forwarded to the Registrar and duly registered.

1905.

Re CLARKE AND SOLOMONS'

The company became duly dissolved on the 12th August, 1905, by virtue of s. 142 of the Companies Act, 1899. W. M. M. Arnold became bankrupt on the 14th July, 1905. This was a summons on behalf of Mrs. Arnold asking that a vesting order might be AGREEMENTS made under s. 29 of the Trustee Act, 1898, vesting in her the two parcels of land in question for an estate in fee simple.

Street, for the applicant. I submit that this case comes within s. 29, sub-s. (1) (d) of the Trustee Act, 1898, and that in this case the trustee " 'cannot be found." In re The General Accident Assurance Corporation, Ltd. ([1904] 1 Ch. 147) is precisely in point, and Farwell, J., adhered to his decision in that case in In re Richard Mills and Co. (Brierly Hill), Ltd.: Smith v. The Company ([1905] W.N. 36) notwithstanding that Buckley, J., had in In re Taylors' Agreement Trusts ([1904] 2 Ch. 737) refused to follow the former case.

Arnold (solicitor), for the official assignee of W. M. M. Arnold, consented.

A. H. SIMPSON, CJ. in Eq. I will follow Mr. Justice Farwell's decisions on the point; they are much more convenient than that of Mr. Justice Buckley, who was dealing also with the case of a patent. I don't know where the legal estate is, probably in the Crown; I don't know if the Crown could disclaim the legal estate because it would take merely the legal estate without the beneficial interest; no doubt the Crown as a general rule does not act as a trustee, yet in special cases it might; for instance, if a bastard died leaving real estate which he held as trustee only, it seems to me that this would escheat to the Crown, which would hold it on the same trusts; the case of realty is perhaps different in this respect from that of a patent. However, I need not consider that question. On the authorities as they stand, I have a discretion as to which I should follow, and I think I should follow the decisions of Mr. Justice Farwell. I make the vesting order as asked.

Solicitors: Minter, Simpson & Co.; A. G. De L. Arnold.

TRUSTS.