Williams v Hensman [1861]
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Williams v Hensman [1861] 1 J&H 546 is a seminal case in English trusts law, its principles particularly relevant to co-owned land held either as joint tenants, the default form, or as tenants in common. The case outlines three essential means of severance, providing a foundational framework for understanding co-ownership interests and the subsequent legal obligations.
In the case, money was bequeathed to be invested in stock, with an annuity for A and the principal destined for her children upon her death. The eight children unanimously agreed to invest the money in a mortgage fund, but with three minors, the trust could not be terminated until they reached adulthood under the rule in Saunders v Vautier [1841]. The trustee, with unanimous agreement, advanced a sum to one child, and the other children entered into covenants related to the advance. The pivotal question before the Chancery Court was whether the beneficiaries of the trust still held a co-owned joint tenancy.
The Chancery Court held that it was indeed a joint tenancy, and the actions of the five beneficiaries severed their interest from the other three. Page-Wood VC delivered the judgment, establishing three means of severance.
Firstly, an individual act of severance could occur when any co-owner acted upon their own share, disposing of it in a manner that severed it from the joint fund and relinquishing their right of survivorship. Secondly, a joint tenancy could be severed by mutual agreement among co-owners. Thirdly, a course of dealing indicating that co-owners' interests were treated as constituting a tenancy in common could result in severance. Importantly, this required a genuine course of dealing where the shares of all parties involved were affected, rather than relying on intentions declared behind the backs of other interested parties.
This case remains significant in English trusts law, providing a comprehensive understanding of the principles governing joint tenancy and co-ownership interests. The case underscores the importance of clear intention and a demonstrable course of dealing in determining the nature of co-ownership, whether as joint tenants or tenants in common. The three established means of severance continue to guide legal interpretations in the realm of co-owned land.
In the case, money was bequeathed to be invested in stock, with an annuity for A and the principal destined for her children upon her death. The eight children unanimously agreed to invest the money in a mortgage fund, but with three minors, the trust could not be terminated until they reached adulthood under the rule in Saunders v Vautier [1841]. The trustee, with unanimous agreement, advanced a sum to one child, and the other children entered into covenants related to the advance. The pivotal question before the Chancery Court was whether the beneficiaries of the trust still held a co-owned joint tenancy.
The Chancery Court held that it was indeed a joint tenancy, and the actions of the five beneficiaries severed their interest from the other three. Page-Wood VC delivered the judgment, establishing three means of severance.
Firstly, an individual act of severance could occur when any co-owner acted upon their own share, disposing of it in a manner that severed it from the joint fund and relinquishing their right of survivorship. Secondly, a joint tenancy could be severed by mutual agreement among co-owners. Thirdly, a course of dealing indicating that co-owners' interests were treated as constituting a tenancy in common could result in severance. Importantly, this required a genuine course of dealing where the shares of all parties involved were affected, rather than relying on intentions declared behind the backs of other interested parties.
This case remains significant in English trusts law, providing a comprehensive understanding of the principles governing joint tenancy and co-ownership interests. The case underscores the importance of clear intention and a demonstrable course of dealing in determining the nature of co-ownership, whether as joint tenants or tenants in common. The three established means of severance continue to guide legal interpretations in the realm of co-owned land.