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Concerning the Renewal of Leaseholds for Lives or Years that have been the subject of Settlement
Published online by Cambridge University Press: 18 August 2016
Extract
When the entire ownership of renewable leaseholds for lives or years is vested in one person, common prudence dictates the setting aside of a portion of the annual income towards the payment, in the one case of the premiums of a policy upon the lives of the cestuis-que-vie, or, in the other case, to accumulate at compound interest, so as to form a fund for the future renewal, the amount reserved being proportionate to the length of the term. When, however, such a property has been settled, and successive interests have been carved out of it, if there is no separate fund provided for the purpose, questions arise between those entitled for life and in remainder, whether there is in the particular case any obligation to renew at all, and, in the event of renewal, by whom the expense is to be borne. In such cases the first point to be considered is, what are the provisions of the instrument by which the leaseholds are settled—whether they prescribe renewal expressly or by implication; and if so, whether they point out the mode by which the expenses of the renewal are to be paid: for (1), property of this description may be given in such a mode as to indicate that it was not intended to impose any obligations to renew; and (2), the donor or settlor may so model his dispositions as to throw the burden upon all or any of those in whose favour he has created limitations of the estate; or (3), he may expressly charge the renewals upon the annual income, to the intent that they may become as it were incidents to the estate, prior to any beneficial enjoyment by the objects of his bounty; or (4), upon the corpus, with the intent that the estate should be settled subject to the subordinate direction that it is to undergo a perpetual diminution, with a view to its being otherwise preserved.
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- Copyright © Institute and Faculty of Actuaries 1852
References
page 281 note * White v. White, 9 Ves., 561. Capel v. Wood, 4 Russ., 500. See Mountford v. Cadogan, 19 Ves., 635. Lawrence v. Maggs, 1 Ed., 453.
page 281 note † White v. White, supra.
page 282 note * Lord Milsintown v. Lord Portmore, 3 Madd., 491. 5 Mad., 47.
page 282 note † Colegrave v. Manny, 6 Madd., 72. 2 Russ., 238. Bennett v. Colley, 2 M. & K., 225.
page 282 note ‡ 2 My. and Keen, 111.
page 282 note || 5 Hare, 451, in notis. 2 B. C. C., 243.
page 283 note * Playters v. Abbott, 2 My. & K., 97.
page 283 note † Jones v. Jones, 5 Hare, 463. Huddleston v. Whelpdalc, 9 Hare, 485.
page 284 note * White v. White, 9 Ves., 558.
page 284 note † Nightingale v. Lawson, 1 Bro. C. C., 440.
page 284 note ‡ In such a case, in whatever manner the fine may have been fixed, the problem will be solved by ascertaining the actual rate of interest at which the purchase was made, and thence the proportions in which it is to be borne.
when Vt = the amount to be paid by the tenant for life, and VR = the amount to be paid by the remainderman. From the above formula the value of x may be found by approximation, and thence Vt and VR; for
page 285 note * Let F = the fine, A B and C be the three lives aged respectively 50, 60, and 20 years, C being the new tenant for life; let T be the tenant for life, aged 40 years; denote annuities on their lives and joint lives by a50, b60, c20, a50c20, a50b60c20: let I = the net income, x = interest of £1. for one year, F = the fine as before Then, supposing the fine accurately calculated by the tables,
in which case it is obvious that the values of Vt and VR depend entirely upon the question whether t40 = an annuity upon an average tabular life of that age.
If the fine be calculated arbitrarily,
page 286 note * 4 Beav., 47.
page 286 note † Allan v. Backhouse, 2 Ves. & B., 65.
page 286 note ‡ 3 You. & C, 715.
page 287 note * 5 Hare, 465.
page 287 note † Huddleston v. Whelpdale, 9 Hare, 787.
page 288 note * For, using the same notation as before, the benefit to the estate at the renewal
Let the tenant for life die at the expiration of 20 years, and suppose the three cestuisquevie still surviving, the benefit derived at that time from the addition of the third life
The proportion, then, that the remainderman ought to have paid, supposing it were possible
that the fine could have been divided at the time of its payment, 
and the amount to be paid by him on coining into possession, 
; but these amounts, as before, obviously depend upon the value of c40. Should it have greatly deteriorated, it may be only in fact = c70, against which risk the tenant for life may put the chance of c’s dying in his lifetime=the single premium of a survivorship insurance on the life of c against his own for the amount F; so that the arrangement would be only a balance of injustice.
page 289 note * 15 & 16 Vict., c. 80, s. 42. See Mildmay v. Lord Mcthuen, 1 Drew, 217.