Future Interests
Cases
Re Murphy’s Estate
[1964] LR. 308 (High Court)
M.M. made his will in 1935. He devised his freehold farm in trust for his wife for her life and after her death in trust ‘for my son’ S. ‘absolutely provided he has attained the age of twenty-five and in the event of my said son’ S. ‘predeceasing my said wife or dying before reaching the said age of twenty-five years then in trust for my son’ M. ‘provided he attains the said age of twenty-five years.’ The will contained a residuary clause. M.M. died on the 10th April, 1935; his widow died on the 1st November, 1937. S. attained twenty-five years on the 13th May, 1956. Questions arose on the construction of the said will 1, as to whether S. took a vested estate on the death of the testator’s widow on the 1st November, 1937, or on his attaining twenty-five on the 13th May, 1956, and 2, as to the destination of the income arising from the farm between the said dates.
Kenny J.:
Michael Murphy, of Geoghanstown, County Kildare, a farmer, made his will on the 10th April, 1935. He appointed the defendants, Patrick Murphy and James J. Byrne, to be his executors and trustees and then provided:
‘I leave my holding at Geoghanstown aforesaid to my said trustees in trust for my wife for life or until such time as she may remarry and after her death or on her remarriage in trust for my son Sean absolutely provided he has attained the age of twenty-five and in the event of my said son Sean predeceasing my said wife or dying before reaching the said age of twenty-five years then in trust for my son Michael provided he attains the said age of twenty-five years. I charge the said lands with the payment to each of my sons Michael and Brendan of the sum of £300 said sums to be paid to them at such times as my said executors may in their absolute discretion deem fit. In the event of the said lands passing to my said son Michael then I charge same with the payment of the sum of £600 to my said son Brendan to be paid by my executors in manner aforesaid and in which event the said charge of
£300 in favour of my said son Michael is to be determined. I also charge the said lands with the payment of the debt due by me to the Munster and Leinster Bank. All the rest residue and remainder of my property of every nature and description I leave to my said trustees to apply the income or proceeds thereof in paying the outgoings of said lands and the support and maintenance of my wife and children and the education as befits their station in life of my said children and for the purposes aforesaid it is my will that my said trustees consult my wife’s wishes especially in respect to my children over whom I appoint her sole guardian.’
When this will was made, the testator had three sons, Sean, who was almost four, Michael, who was two and a half, and Brendan, who was one. The testator, who died on the 10th April, 1935, owned a farm which was registered under the Registration of Title Acts on Folio 5798R of the Register of Freeholders, County Kildare: it was valued for estate duty purposes at £1,850. The only other property which he had was livestock valued at £400.
The testator’s widow, Frances Murphy, died on the 1st November, 1937, without having remarried and Sean Murphy, his eldest son, attained the age of 25 years on the 13th May, 1956. The two sums of £300 mentioned in the will have been paid to Michael and Brendan Murphy. On the 30th October, 1961, an order for the administration of the estate of Michael Murphy was made and accounts and inquiries for this purpose were ordered. Before these can be taken, it is necessary to decide whether Sean Murphy had a vested or contingent estate in the lands at Geoghanstown between the 1st November, 1937, and the 13th May, 1956, and whether he was entitled to all the income of the lands between those two dates.
If I were not handicapped by three decisions of the House of Lords given before 1921 (and therefore binding on me) and by the rule of construction which they establish, I would unhesitatingly decide that Sean Murphy had no interest in the lands at Geoghanstown until he attained twenty-five and that the income of the lands until then passed under the residuary clause in the will. It has, however, been argued that the rule of construction, usually referred to as the rule in Edwards v.
intend. While rules of construction are of assistance when the words used are ambiguous, I cannot see why a rule of construction should be recognised by our Courts when it fixes on the language used by Mr. Murphy a meaning which it may have had in 1683 in England but which it certainly had not in Ireland in 1935. The history of the rule shows that it was imposed on the Chancery Courts by the Common Law judges. However, despite my objection to it, I feel that the three
decisions of the House of Lords compel me to recognise its existence as a rule of construction.
In my opinion, however, the rule does not apply to the will of Michael Murphy. The basis of the rule is that the first devisee is to take all that the testator had to give except what has been given to the person entitled under the gift over; if, however, there is a condition or words of contingency attached to the gift over, the whole basis of the rule disappears for there is not then any intention of the testator to dispose of all his interest in the property by the first contingent gift and the absolute gift over. This conclusion is stronger when there is a residuary clause, for then the testator has disposed of all his interest in the property by the combined effect of the first gift, the conditional gift over and the residuary clause. In this case the gift over which was expressed to take effect in the event of Sean Murphy predeceasing the testator’s wife or dying before reaching the age of 25 years was ‘in trust for my son Michael provided he attains the said age of twenty-five years.’ The gift is con ditional and there is therefore no basis for applying the rule of construction and I can give the words their natural meaning.
The questions which have arisen on the taking of the accounts are referred to in the affidavit of the plaintiff, sworn on the 3rd May, 1962. The answers to the questions will be:
1. The farm of Geoghanstown passed to Sean Murphy absolutely on the 13th May, 1956, when he attained the age of twenty-five.
2. The income from the said farm between the 1st November, 1937, when Frances Murphy died, and the 13th May, 1956, was held by the trustees on the trusts declared by the residuary clause in the said will.
I express no opinion on the question whether the plaintiff is entitled to any share of the income captured by the residuary clause as this matter has not been argued.
Cole v Sewell
(1848) 2 H.L.C. 186 (House of Lords)
Lands, held in fee simple, were, by settlement made in 1752, conveyed to trustees, to the use of the settler for life; remainder to the use of his three daughters for their lives, as tenants in common; remainder to the use of trustees to preserve; remainder, as to the share of each daughter, to the use of her first and other sons successively in tail male; remainder, in case of the death of any one or more of the daughters without issue male, to the use of the survivors or survivor, during their or her respective lives or life, as tenants in common in case of two survivors, with remainder, in like manner as to the original share, to the use of the first and other sons of such surviving daughters or daughter in tail male; remainder, in case all the daughters should die without issue male, as to the share of each, to the use of their daughters as tenants in common in tail; and in case one or two of the settlor’s daughters should die without issue, the share or shares of such daughter or daughters, to go to the use of the daughters of the survivors or survivor, as tenants in common in tail general; and in case all three should die without issue, then remainder over, with ultimate remainder to the use of the settlor in fee. He died soon after without disposing of the reversion.
One only of the settlor’s daughters had issue, four daughters and no son; L.E.S., one of the four, in 1779, while her sisters, mother, and aunts were living, executed a post-nuptial settlement, which recited the said deed of 1752 – and another of 1749, under which she was entitled to a vested estate tail in lands called the B. estate, on the death of her father – and that she was entitled in remainder or reversion, expectant and to take effect in possession on the determination of certain prior estates, to several parts of lands in the deed of 1752 mentioned. It also recited a post-nuptial settlement of 1776, in which were recited L.E.S.’s title to certain shares in remainder or reversion expectant, etc., and her desire to limit and assure the same, and that it was thereby witnessed, that in order to bar the estates in remainder or reversion expectant and to take effect in possession as aforesaid, then vested in her, but without prejudice to the prior estates, she and her husband covenanted to levy fines of her said undivided shares in remainder, to enure to these uses, namely, that the trustee should, out of the hereditaments comprised in the deeds of 1749 and 1752, first falling into possession, take an annuity of £300, and out of those next falling into possession, a similar annuity, both being for L.E.S. ‘s separate use, and, subject thereto, to the use of her husband for life, remainder to herself in fee. It further recited that no fines were levied under the deed of 1776, and that L.E.S. was desirous of securing payment of certain debts, and, subject thereto, of settling the said ‘1.!mainders and reversions expectant and to take effect as aforesaid, for the benefit of her two children, and had agreed to settle the same, and all her right and interest in the premises, to the uses thereinafter mentioned; and it was, by the deed of 1779, witnessed that, in order to bar the estate tail in remainder or reversion expectant upon and to take effect as aforesaid, then vested in L.E.S. in the hereditaments comprised in the deeds of 1749 and 1752, without prejudice to the prior estates, the said L.E.S. and her husband covenanted to levy fines of all her undivided shares in remainder or reversion expectant, and to take effect as aforesaid in the said hereditaments, to enure to trustees for 1000 years, to raise the amount of the aforesaid debts; remainder to other trustees for 2000 years to raise an annuity of £100 out of the lands first falling into possession, and a similar annuity out of those next falling into possession for maintenance of her only son; remainder to trustees for 3000 years, to raise £3000 for her only daughter; remainder to the use of the son and his issue, in strict settlement; remainder to the use of the daughter and her daughters in tail.
The settlor’s three daughters died – one in 1784, s.p., another, the mother of L.E.S., in 1793, the third, in 1799, s.p. – all intestate and without having disposed of the reversion vested in them by descent. One of L.E.S.’s sisters died in 1788, intestate and without issue. In 1809, one-third of the lands comprised in the deed of 1752 was, on partition, allotted to L.E.S., and by a decree for sale made in 1820, in a suit instituted against her by the trustees of the term of 1000 years comprised in the deed of 1779, it was declared that the whole of the one-third so allotted was subject to the trusts of the term, and bound by that deed, and the fines levied in pursuance thereof. By a deed executed in 1825, it was witnessed that for barring all estates tail therein mentioned, and settling the lands therein comprised, L.E.S. and her husband and a trustee of the deed of 1779, conveyed all the said one-third part, so allotted in severally to L.E.S. as aforesaid, and also her undivided third part of the B. estate (which had then by the death of her father come into possesion) to a trustee, that recoveries might be suffered of the said lands, and it was covenanted that they should enure, as to such of the said undivided parts as were comprised in the deed of 1779, to the uses therein mentioned, and in confirmation thereof and of the terms of 1000 years; and – after reciting that three specified denominations of lands of which L.E.S. was stated to be seised in tail in remainder, at the date of the deed of 1779, were not comprised therein or in the fines levied in pursuance thereof, and reciting the said suit and decree for sale therein made, and that L.E.S. had agreed to make the said denominations subject to the said term – it was further agreed and declared that the said recoveries should enure to confirm the sale of the said three denomina tions for the said term, and to give validity to the said decree, and, subject to the said term, to such uses as L.E.S. should appoint, and, as to the lands comprised in the deed of 1779, to such further uses as had not been thereby declared concerning the same, as L.E.S. should by deed or will appoint.
By her will L.E.S. devised all her real estate in fee to her grandson F.S.C. who filed a bill in Chancery in Ireland claiming under the devise part of L.E.S.’s share allotted to her on partition of the land. Sugden L.C., after sending a case for and receiving the opinion of the judges of the Court of Common Pleas [see (1842) 5 Ir. L.R. 190], dismissed the bill, see (1843) 4 Dr. & War. 1; 2 Con. & L. 344 ; 6 Ir. Eq. R. 66. F.S.C. appealed to the House of Lords.
Lord Cottenham L.C.:
In this case the first question is, whether the gift over upon failure of issue of the daughters is too remote.
On the 5th of February, 1752, Peter Daly settled estates upon his three daughters for life, as tenants in common, with remainder to their first and other sons in tail male, respectively; if there were no such heir male to any, then life estates in those shares were given to the survivors, with remainder to their first and other sons in tail male; if all died without issue male, the estates were given to the daughters respectively, as tenants in common in tail general; if any died without issue, they were given to the daughters of the survivors, as tenants in common in tail general; if all died without issue, remainder over.
It is said that this last limitation is too remote, because, there being no previous limitation to issue generally, there might be a failure of all the prior limitations, and yet issue, as in the case of a son of a daughter, might exist, so that this last limitation would not take effect. But if this be a remainder, it would be barrable, and the objection, therefore, would not arise.
The rule is to construe the limitation as a remainder, if possible; Carwardine v. Carwardine (l Eden, 27). What then prevents this being a remainder? Assuming the words to receive their strict construction, the limitation would be this: to each daughter for life, \\-ith remainder to the sons of each daughter, if any, in tail male; then, if no sons, to other daughters for life; remainder, if no sons of any, to daughters of the daughters in tail general; remainder to daughters of surviving daughters in tail general. But to this last is added a condition that it is to take place only if there be no issue of the daughters, and not only a failure of sons and daughters. But does the interposing of this condition convert this remainder into a shifting use? In the case of Jack v. Fetherstone (2 Hud. and B. 320), decided by the Courts of Common Pleas and Exchequer Chamber in Ireland, it was held that it was a remainder, and rightly so held. The whole is a series of gifts to take effect upon the death of each daughter, or upon the failure of the prior limitations, all of which are estates tail; but the last has a particular contingency attached to it. So had the cases referred to by Sir Edward Sugden in Fearne (page 5) and in Leonard (vol. 4, page 237). It is therefore a contingent remainder, and barrable; Nicolls v. Sheffield (2 Bro. C.C. 215) is in point.
The next question is, whether the daughters of Margaretta, who died in 1793, became entitled under the deed to the share of Anastatia, who died in 1799 without issue; the gift over, in the event of any daughter dying without issue, being to the use or behoof of the daughter or daughters of such survivors of the daughters. This is not question of cross-remainders being implied, for cross-remainders are dis tinctly given, but the question is, whether upon the construction of such gift, the word ‘survivor’ is not to be construed ‘other,’ and I think it is such a case, the intention being clear, that all daughters of any daughter should take the share of any other daughter dying without issue. Doe v. Wainewright (5 T. Rep. 427) is directly in point.
Upon the second point I think it clear, that all the estates and interests to which Lady Elizabeth Sewell was entitled under the limitations of the settlement of 1752, passed under and were bound by the settlement of the 23rd of February, 1779, and the fines levied in pursuance thereof. The case of Doe v. Oliver (10 Barn. and Cr. 181) is decisive.
The last question, as to the effect of the deed and recoveries of 1825, upon the interest in the property, which at the date of the deed of 1779 belonged to Matilda, who did not die till 1788, is certainly one of some difficulty, arising from the fact that in 1825 the true state of Lady Elizabeth Sewell’s (then Russell) title does not appear to have been distinctly understood.
In 1809 there was a partition of the Daly Estate, and one-third was decreed to belong to Lady Elizabeth, which was correct, and in 1812 the trustees of a term created by the deed of 1779, filed a bill for raising the money charged upon such term; and upon a reference to the Master to inquire what lands were comprised in that term, the Master reported, in 1820, that the term applied to the whole of the one-third, and a decree accordingly was made for the sale of a sufficient part of such one-third.
With this decision, as to the state of her title to the one-third of the Daly Estate, namely, that it was all comprised in the deed of 1779, Lady Elizabeth, in 1825, suffered recoveries of the property, described in terms comprehending the interest in question, but with the additional description of being comprised in the deed of 1779; and the question now is, whether the share which was vested in Lady Matilda, at the date of the deed of 1779, and was therefore not included in that deed, was affected by the deed of 1825. Upon this subject, I concur in the judgment of Sir Edward Sugden, and with less doubt than he expressed.
The description of the property in the deed is large enough to include every interest therein, and is expressed to be ‘as to Lady Elizabeth’s estate and interest therein,’ and at that time the estate and interest now in question was in her, and she had been told, by the decree in the partition suit, that the whole of such estate and interest was comprised in the deed of 1779; and this deed of 1825, therefore, so describes it, in addition to the more general description, but that inaccurate description cannot take out of the operation of the deed an estate and interest comprehended in the general description, and which, it is clear, she intended to include in it.
Upon all the points, therefore, I think that the Judges of the Court of Common Pleas in Ireland and Sir Edward Sugden, came to a just conclusion, and that the appeal must be dismissed with costs.
Lord Brougham.:
I entirely agree with my noble and learned friend in the view which he has taken of this case, and I agree also in the certificate of the Court of Common Pleas upon the case sent to them, and in the judgment that was afterwards come to by the learned Lord Chancellor of Ireland upon that certificate being returned, in which the learned Judges expressed their opinion upon the three points referred to them by the Lord Chancellor.
On looking at the learned and able arguments in the Court below, as reported (4 Dru. and War. 1), which I have read carefully, I was a good deal surprised to find that there was a question raised about the remoteness of the limitation. Now, whatever doubt may have arisen in the earlier periods of the learning of the law of contingent uses, whatever confusion of expression, perhaps, rather than of sub stance, may be found in the reports, giving rise to an impression that there is in such a case a rule similar to the rule with respect to perpetuities in the case of springing uses and executory devises, which, on accou:it of the law respecting perpetuities, may be too remote; whatever difficulty, confusion, or doubt may have arisen in earlier cases as to this, I am quite confident that for upwards of a hundred years the rule has been settled, as will be clearly seen if you search through the authorities. I have been led to do so from the curiosity of the case, and from seeing that the learned gentlemen, particularly Mr. Serjeant Warren, who argued this case below, raised the point, and, therefore, we would suppose that there must be some foundation for it; I wished, therefore, to trace what that foundation was, because it opened to my mind a new and a strange view of the law, applying that to contingent remainders which I had always understood must be, from the very nature of the thing, confined to springing uses, and executory devises: and why? In the case of a contingent remainder, if the limitation is to operate by way of remainder, it must be supported by a preceding particular estate of freehold, an estate for life or an estate tail, and it is absolutely useless unless it is to take effect eo instanti that the preceding estate determines; that is the very nature of it, the bond of the existence, if I may so speak, of a contingent remainder.
But then, ifl have an estate limited upon a fee, that is to say, an estate to A. and his heirs, and upon the determination of that estate in fee, that is, when the heirs shall cease, then over; that cannot operate by way of remainder; it is quite clear that that is void as a remainder, and it is quite clear that if that is to take effect by way of executory devise or springing use (the only way in which it can take effect) there is no end of it. It may be a perpetuity to all intents and purposes, because if the fee is first limited to A. and his heirs, then, as long as there are heirs, the contingent use, the springing use, or, in the case of a will, the executory devisee, cannot come into possession, cannot exist, and cannot be available; consequently, there might be a perpetuity created from the condition of a former use not coming into esse, that condition being the general failure of heirs. What is the consequence then? That the law has said, ‘to prevent the possibility of this perpetuity, we will fix certain bounds, beyond which the limitation shall not take effect.’ Therefore, there may be an estate given to A. and his heirs ; that is a fee; but you cannot limit a remainder upon that. If you give an estate to A. and his heirs, and for want of such issue, or if A. shall die without heirs during the life of B., then over, that will do, that will operate by way of springing use or executory devise, because the life of B. limits the period during which that shall be held in suspenso, and that is the origin of the rule. In the same way, I will take the ordinary case of a fee limited upon a fee, that is, a fee to come into use, to come into possession upon the determination of the estate of A. and his heirs, living B.; that prevents the perpetuity, because it limits the period to dying during the life of B.
But suppose another instance of an executory devise or springing use; suppose I give an estate to commence in futuro(and a case of that kind is to be found in the books); if there is an estate for life given to A., and one year after to B.; the Courts say, ‘No; you cannot do that;’ and this was the origin of the application of the rule, because it maybe one year after the life estate of A. terminates, it may be a thousand years, and so it might end in a perpetuity. But, however the law has settled that, it must be only for a life or lives in being, and twenty-one years after, and no more. That has been found to be the law first, I think, properly and justly recognised in the Duke of Norfolk’s Case (3 Chan. Cas. 1), in the end of the century before the last, but subsequently more effectually recognised in a case which I heard here, when I held the Great Seal. The famous case of Cadell v. Palmer (1 Clark and F. 372), in which we had the benefit of the attendance of the learned Judges, and in which, for the first time, it was authoritatively laid down, that without regard to the origin of the rule against perpetuities, you may tie up a bequest by way of executory devise, – and consequently a limitation in a settlement by way of springing use, – for a life or lives in being, and for twenty-one years longer. And as I had often heard ventilated the notion that there could be no such thing as a term in gross, at all, of twenty-one years, I put the question expressly to the learned Judges (and in the judgment I gave in the case, I argued it upon that ground), namely, can there, without the least regard being had to the fact out of which the rule arose (for that is the origin of the rule), without the least regard being had to the fact of the heir of A., the life or last of the lives in being, not being able to cut off or to bar the remainder, by suffering a recovery or levying a fine, till he is twenty-one, – without any regard to that, but supposing there to be no question of the heir at all; supposing there to be no question of levying a fine or suffering a recovery, or barring the remainder over at all, can by law the life or lives in being have the addition of a term in gross of twenty-one years? The Judges held that that is now the law, whatever may have been its origin. It most clearly arises from a mistake. The law never meant to give a further term of twenty-one years, much less any period of gestation. The law never meant to say that there shall be twenty-one years added to the life or lives in being, and that within those limits you may entail the estate, but what the law meant to say was this: until the heir of the last of the lives in being attains twenty-one, by law a recovery cannot be suffered, and consequently the discontinuance of the estate cannot be effected, and for that reason, says the law, you shall have the twenty-one years added, because that is the fact and not the law, namely, that till a person reached the age of twenty-one he could not cut off the entail. For that reason and in that way it has crept in by degrees; Communis error facit jus; and that rule never was applied more accurately than in Cadell v. Palmer.
I have said this much upon the ground, and the only ground, upon which this case
has been argued. But, my Lords, this is not the case of an executory devise in which any argument against perpetuity on the ground of remoteness can be raised, and the doctrine of remoteness has been therefore, I think, most erroneously imported into this case, with which it can have nothing whatever to do, because it cannot be an executory devise, if it can operate by way of contingent remainder; and there cannot be remoteness created here, because the preceding estates tail are all barable; at all events, you have the most perfect security against a perpetuity ever creeping into it, because if it is a contingent remainder, it must take effect on being barable, and it is gone for ever eo instanti that the particular estate arises. The law upon that subject is not confined to the case of Carwardine v. Carwardine (1 Eden, 27), which was only decided in 1757 by the very able judgment of Lord Northing ton, but long before that, it had been understood, and a great deal of learning upon the subject is to be found in former cases; if I recollect rightly, they are mentioned in Saunders, but certainly in Mr. Serjeant Williams’ notes to Saunders; and in various cases it has been held, and that is now a great landmark of the law, that whatever use can operate by way of remainder shall never be held to operate by way of executory devise.
My noble and learned friend also called your Lordships’ attention to the other
point in the case, that is, with respect to the expression ‘survive or survivors.’ Now, certainly I am of opinion that there is no ground for saying, for I have watched it very narrowly, that Lord Eldon threw any discredit upon the doctrine which has been laid down in other cases, viz. that ‘survivor or survivors’ may, regard being had to the circumstances, operate as the word ‘other’ or ‘others.’ I find that Lord Eldon, in Davidson v. Dallas (14 Ves. 576), is supposed by the learned reporter (but I think most erroneously supposed) to have thrown discredit upon that principle. Sir E. Sugden very justly observes that, though Lord Eldon may have had doubts upon it, he always decided according to it, – he always adopted it, – a thing which I have not unfrequently known to happen to that most able and learned Judge, that though he might carp at a principle which had been recognized, he was very slow in overruling if it had been once adopted. But on looking into that case I find that what Lord Eldon says, is this, ‘The Judges of the Court have, under thenecessity of construction, had recourse to the reading of ‘survivors’ as ‘other’ instead of ‘survivors,’ where the parties have not survived at the time in question, under the pressure of construction, to effectuate the plain meaning of the parties, and that there might not be a complete failure of the accomplishment of that purpose.’ That is what his Lordship says; but he does not anywhere say that he disapproves of the principle. Now, my Lords, I never saw a case in which that was more completely carried into effect than in the present case, and I entirely agree with my noble and learned friend, who is more clear upon this subject than the learned Lord Chancellor of Ireland. I do not see any reason for the doubts and hesitation with which he seems to have arrived at that conclusion. The only point which I had any doubt about was upon the one-fourth of the one-third, Lady Matilda’s portion, but when I come to look at that, it is evident that it would clearly defeat the very design and object and frame of the instrument if you were to open it.
Then it is said in the Court below that this is a settlement and not a will, and what signifies the intention in a settlement? My Lords, there never was a greater fallacy, and I think I must take this opportunity of reprehending the fallacy, of saying that we are not to construe a settlement or any other instrument inter vivas in the same way as we should construe a will, but that we are to adopt a totally different rule of construction in the two cases; in other words, that we are to attend to the intention in the case of a will, and not to care for the intention in the case of a settlement. If there are not certain words used which have acquired a technical meaning, it is a different thing; for example, if there are no words of limitation used, you are not to say, there is an estate tail created, but only an estate for life. But it cannot be said that if I give an estate in Blackacre to A., in a settlement, that will not do to carry a fee, that will only be an estate for life, because there are no words of inheritance; but if I give all my estate in Blackacre to A. in a will, that will do to carry the fee. If any one had gone so far as to contend for that proposition, we should have found no great difficulty in disposing of it. But when a man says in his will, ‘I give all the estate I have to A., now being in the occupation of John Noakes’ (which is clearly demonstrative of the nature of the limitation, and is a clear description of the particular property that he meant to give), it is too late to deny or to doubt, and the Courts have so held; and that is now the law, that in a will that carries the fee, without the assistance of words of inheritance, that a fee would pass ‘by all my estate in Blackacre, farmed by J. Noakes.’ That would, no doubt, be the case, because there are certain words which have, by technical construction (for it is merely technical), in the case of a will, a certain meaning given to them, which meaning is not given to them in the case of a settlement. I recollect when I was arguing a case before Lord Ellenborough, happening to use the argument of the difference between a deed and a will, and Lord Ellenborough’s observation was this, ‘What? Are we not to look at the meaning of the parties? Are we to make nonsense of the words that they use? Are not we rather to take a construction which effectuates their purpose and accomplishes their object, than a construction which defeats it? Most certainly you are to do so, admitting at the same time the technical difference of the rules in the one case and in the other.’ You are clear!y, said his Lordship, to get at the intention of parties in a deed as well as in a will, though rules have been adopted for getting at their intention differently in a will. Upon the whole, I entirely agree with my noble and learned friend, that there is no reason for doubt in this case; that the Judges of the Court of Common Pleas, in their certificate, took a sound view of the question, and that your Lordships ought to affirm the judgment of the Court below, which judgment appears to have been given with some hesitation, and with more reluctance, I might say, than my noble and learned friend seemed to entertain, and that hesitation on the part of the Lord Chancellor of Ireland I could not quite understand, and I wanted to look into his edition of Saunders to see whether he had ever committed himself by any opinion he had there expressed; for when persons come upon the Bench, they sometimes feel a little remains of the author about them, as we have seen in more Judges than one, in one case in particular of a late most learned Judge upon Bills of Exchange, who has frequently shown instances of remembering his former statements, perhaps more than we should have wished to have seen, and that, I thought, might have been the case here, but I have not found anything to warrant that impression.
The decree was affirmed, with costs.
Peyton v Lambert
(1858) 8 LC.LR. 485 (Queen’s Bench)
A testator, in 1783, devised fee-simple lands to A, for life, with remainder to the first son of
A. for life, with remainder in tail male to the first and every other son of such first son, and their issue male successively, with a devise over in case A shouid die without leaving issue male of his body, lawfully begotten. The testator then limited similar devises of the same lands to B. and M., moietively, and to their respective eldest sons and their issue male; and, to prevent any misunderstanding of the said limitations to A, and his eldest son, for their respective lives, the testator declared his meaning to be, that in case such eldest son of A should die without issue male, then his real estates should go to the second, third, fourth and every other son of A successively, and to the first and every other son of such second, third, fourth and every other son of A; such second son of A and his issue male to be preferred to such third, fourth and other sons and their issue; and the like rules to be observed with respect to the second, third and other sons of B. and M. respectively; and in case either B. or M. should die without leaving issue male, the share of either so dying should go to the survivor, or, if she were dead, to her first and every other son, if she leave issue male, under the same limitations as the testator had already annexed to the shares of B. and M. respectively, with devise over to the daughters of A, in case both B. and M. should die without issue male.
Crampton, J.:
This case was heard in the last Term, before my Brother O’Brien and myself. The case is one of great importance; and we felt that it was likely that the parties would carry it to the Court of Error. Under these circumstances, on the last day of the Term, we gave a formal judgment in the case, in order that the parties might not be delayed in their proceedings; intimating, however, our intention upon a future day to state the grounds of our decision; and this being a convenient time for the purpose, I now proceed to state the reasons upon which we arrived at the conclusion that the plaintiff was entitled to judgment.
This was an ejectment upon the title, brought for recovery of an undivided moiety of certain lands, called the Loughscur estate, in the county of Leitrim. The Loughscur estate comprised a great many denominations of land, ninety (it was said) in number, and, of these ninety denominations, sixteen were somewhat differently circumstanced, as to the devolution of title, from the other denomina tions. The pedigree of the parties, so far as it is necessary for the understanding of the case, is as follows: In the year 1765, George Reynolds was seised and possessed of the entire of the Loughscur estate; he has been in the argument called George the first; he died in the year 1769, leaving an only son, George Nugent Reynolds the younger, who has been called in the argument George the second. This George the second died in the year 1787, leaving three children, viz., his only son, George Nugent Reynolds, the grandson, who has been called in the argument George the third, and two daughters, Mary Anne and Bridget. George the third died in the year 1802, without issue, leaving his two sisters his co-heiresses-at-law. Mary Anne was twice married, first to Colonel Peyton, by whom she had two children, namely, John Reynolds Peyton, the father of the plaintiff Richard Reynolds Peyton, and Jane, who married John Lambert, and who, with her husband, are the defendants in this record. Colonel Peyton died in the year 1805; and, in the year 1817, Mary Anne, his widow, intermarried with Major Richard Macnamara, her second hus band ; and of this marriage there was no issue. Major Macnamara died in the year 1848, leaving Mary Anne, his widow, him surviving. Bridget Reynolds intermarried with Richard Young, who took the name of Reynolds; and of this marriage there was no issue. Bridget Reynolds died in the year 1842; and her husband, Richard Young Reynolds, died in 1848. On the 23rd of November 1836, John Reynolds Peyton intermarried with Alicia Ennis, and died in the year 1850, leaving the plaintiff, Richard Reynolds Peyton, his son and heir. In the year 1855, Mrs. Macnamara died.
This case turns altogether upon the construction of the deeds and wills which were given in evidence at the trial. A verdict was directed for the plaintiffs; but, by consent of the parties, and with the sanction of the learned Judge who tried the case (Mr. Justice Christian), the verdict was ultimately to be entered for the party who should, in the opinion of this Court, be entitled thereto.
Having heard the case very ably and elaborately argued, my opinion is, that the plaintiffs are entitled to a verdict for the whole of the premises comprised in the ejectment; and I shall now state the grounds upon which I entertain that opinion. I shall not, for the present, notice the peculiar circumstances of the sixteen demonin ations which I have referred to, but shall consider the case with reference to the bulk of the property which is the subject of this action, and as if all the ninety denominations rested upon the same derivative title. There are three documents, upon the construction of which the decision of this case must turn; these are the will of 1783 , the will of 1795 and the deed of 1836. Upon the will of 1783 the main question in the cause arises; and that is, what estate did George the third take under the will of 1783? The defendants contend that, under this will, George the third took an estate tail; the plaintiffs contend that he took an estate for life only. I think that the plaintiffs’ is the true construction. – [His Lordship here read the will of George N. Reynolds (George the second), 1783.] – Now I think, upon the reading of this will, it is manifest that the testator’s principal object and intention was, to keep the Loughscur estate in the name and blood of Reynolds as long as possible. It is equally clear that it was with that view and for that purpose that he gave, after the life estates devised to his son and daughters, successive life estates to the unborn sons of his own children, with estates in tail to the children of those unborn children. This kind of limitation, as tending to perpetuity, the law will not permit. Accordingly, if we were to construe this will strictly according to its terms, all the limitations after the life estates would be void for remoteness, and the necessary result (giving effect to the law upon this subject) would be to defeat the main object and intent of the testator, which was to continue the estate in his family and name as long as the law would permit. In order to prevent this result, the defendants’ Counsel would construe this will as giving an estate tail to George the third; but it appears to me that this construction is plainly inadmissible. By giving an estate tail to George third, the testator’s primary object would be altogether frustrated, since, by a recovery or disentailing deed, the first taker, George third, could have at once made himself owner of the fee-simple, and thus destroyed all the laboriously framed limitations of the will. The only mode, as it appears to me, by which the main, the ruling intention of the testator can be accomplished, is, to apply the cy pres doctrine to this will. That doctrine is founded upon the rule that the primary, the paramount intention of the testator shall be carried out, although at the sacrifice of subordinate views expressed by the terms of the will. The Court, in its interpretation of the instrument, does for the testator that which he probably would have done for himself, had he been aware of the impracticability of reconcil ing the main object of his will with the subordinate limitations which he had in view. Numerous cases there are upon this subject, from Humberston v. Humbers ton (1 P. Wms. 332) and Pitt v. Jackson (2 Bro. C.C. 51), down to Vanderplank v. King (3 Hare, 1), which is quite in point with the present case. In Vanderplank v. King, there was a devise to the daughter of the testator, for her life, with remainder to her unborn child, for life, with remainder to the children of the unborn child, in tail. Vice-Chancellor Wigram thought it right to apply the cy pres doctrine to that case, and says (p. 10): ‘I have considered the question during the argument, with reference to the cy pres doctrine, and, upon that part of the case, I do not think that I am at liberty to exercise any discretion. That point is now sufficiently simple and is well established, though sometimes of difficult application.’ He then examines the cases referred to, and, again taking up the case before him, after consideration, he reiterates the doctrine which I have just stated, as the ground upon which he decided that particular case. That case is a leading one upon the subject – one which has not been questioned, and upon which I might very well found the opinion I entertain upon this part of the testator’s will. Now, in this will we have the general and paramount intention of the testator, that the estate shall not go over as long as there shall be male descendants of his son and daughters. This intention may be carried out, and can be carried out only, not by giving life estates to the unborn children of the tenants for life then in esse, but by giving them estates tail; and thus, without violating the rule against perpetuities, we are enabled to carry out the main object and intention of the testator. I think, therefore, that, under the will of 1783, George third took only an estate for life, with remainder to his first and other sons, in tail male, and that, on his death without issue, his sisters took an estate for life each, as tenants in common, with remainder, as to a moiety, to their first and other
sons, in tail, with cross remainders over.
This being so, the will of 1795 could not affect the main body of the Loughscur
estate; it could only affect those denominations of which the then testator, George the third, was seised in fee. – [His Lordship here read the will of George N. Reynolds (George the third), of 1795.] – By this will of 1795, it appears to me that the sisters Bridget and Mary Anne took each an estate tail in common, with cross remainders over, the reversion in fee being limited to one Hugh Connell.
We have nothing to do here with Mary Ann’s moiety; that moiety, we are given to understand, was disposed of by a suit in Chancery. Our concern now is with Bridget’s moiety. Taking then Bridget to have been tenant in tail of her moiety in the year 1836, we find that in that year two deeds were executed, the effect of which we have now to consider. Upon the marriage of John Reynolds Peyton in that year, a marriage settlement, dated the 23rd of November 1836, was executed by the parties thereto, and, amongst others, by Richard Young Reynolds and Bridget his wife. Contemporaneously with this settlement, a second deed, of the same date, was executed by Mrs. Reynolds and her husband; this has been called the disentail ing deed; but the effect of both deeds plainly was, reserving her life estate to Mrs. Reynolds, to vest the fee of her moiety in trustees, to the uses of the marriage settlement. The plaintiff R.R. Peyton is the eldest son of that marriage, and tenant in tail under the settlement. It was vainly contended by the defendants’ Counsel that, inasmuch as the settlement of 1836 was not acknowledged by Bridget Y. Reynolds, before a Judge or a Commissioner, that it was inoperative as to her, and those deriving under her; but the answer to that argument is, that the disentailing deed of the same date with the settlement was acknowledged regularly before a Judge, and with the manifest view of assuring to the uses of the settlement the moiety in question: so that the conclusion upon the whole is, that the plaintiffs are now entitled to the whole of the premises for which the ejectment was brought. Our decision, therefore, is that the plaintiffs shall have judgment for the whole.
O’Brien, J.:
I concur in the clear and satisfactory judgment which has been pronounced by my Brother Crampton.
The first question raised upon the will of George Reynolds the second (1783) was, as to the application of the cy pres doctrine to the limitations in favour of testator’s son, George Reynolds the third, and his sons. The cases to which my Brother Crampton has referred show clearly that the doctrine is applicable to those limitations; but defendants’ Counsel contend that the result of such application would be to give an estate in tail male to George the third, instead of giving to his first and other sons successively, as purchasers, estates in tail male, in remainder expectant upon his life estate. In my opinion, such a proposition cannot be main tained, consistently with the nature and principles of the cy pres doctrine. That doctrine has been applied by the Courts to limitations such as those in question, for the purpose of effectuating as far as possible, a testator’s general intention to preserve his property in a family, and for the purpose of preventing the total disappointment of that intention by the rule against perpetuities. If, for example, lands be devised to an unborn person, for life, with remainder to his sons, in tail, then (as such limitations in remainder are void and incapable of taking effect in the manner intended), the doctrine of cy pres gives to the unborn devisee for life the estate in tail, which was designed for, but could not be legally given to his sons, and which estate tail, so given to the devisee for life, would (if not barred) comprise in its devolutions by descent all the persons intended to have been made tenants in tail by purchase.
In the first part of the will of 1783, the limitations are ‘to George Reynolds the third (who was then unmarried), for his life, with remainder to his first son, for his life, with remainder to the sons of such first son successively, in tail male.’ In that part of the will there are no limitations to the second and other sons of George Reynolds the third; but I am of opinion (and it has indeed been conceded in the argument), that the limitations in favour of the second and other unborn sons of George the third and their sons, which are contained in the subsequent clause of the will, that commences with the words, ‘and to prevent any misunderstanding,’ should (though differing in some respect from the limitations in favour of the first unborn son and his issue) have the same effect as if the first part of the will had contained express limitations in their favour, similar to those contained in favour of the first unborn son and his sons.
Now, as estates in tail in remainder expectant upon the life estate of the unborn
sons of George Reynolds the third could not be legally given to their sons respec tively, I think it clearly follows, from the principle above stated, that the cy pres doctrine should be applied by giving to the unborn sons of George Reynolds the third the estate tail which were designed for, but which could not be legally given to, their first and other sons. What authority or reason is there for applying the cy pres doctrine (as contended for by defendant), so as to give an estate tail to George Reynolds the third? He took an estate for life under the will; the limitation of an estate for life, to his first and unborn son was valid in itself; but the limitation of estates tail in remainder to the sons of such unborn son was invalid, though an estate tail might have been legally given, by express words, to such unborn son himself. It is necessary, for the purpose of effectuating the testator’s general intention, and of observing the rule against prepetuities, that we should (as con tended for by plaintiffs Counsel) substitute an estate tail in such unborn son for the life estate and the invalid estates tail in remainder, which were intended to be devised to him and to his issue; but it is not necessary, for the foregoing purpose, that we should (as urged by defendants’ Counsel) adopt such a construction of the will as would substitute an estate tail in George Reynolds the third, for the life estate expressly given to him, and the remainders over to his sons and grandsons. This latter construction would not only depart, more than is necessary, from the express limitations of the will, but would tend to the further disappointment.of the testator’s general intention, by unnecessarily accelerating the period at which such intention could be defeated; as (if George Reynolds the third took an estate tail under the will) he could, by suffering a recovery, destroy the limitations over, and alienate the property from the family, at a much earlier period than could be done by his sons. I am, therefore, of opinion that the construction contended for by defendant, as to the cy pres doctrine, cannot be maintained, and that, under the part of the will to which I have referred, George Reynolds the third took an immediate estate for life, with remainder to his first and other sons successively, in tail male.
The defendants’ Counsel, however, next contended that even if George the third
took under the will an immediate estate for life only, with remainder (by the application of the cy pres doctrine) to his sons, in tail male, yet that the effect of the words in the will, ‘and in case my said son George shall die without leaving issue male of his body lawfully begotten’ (which precede the limitations to testator’s daughters), is to give George the third an estate in tail male, in remainder expec tant upon the estate in tail male given to his sons. Now, although in many cases, where a devise to a party is followed by a limitation contingent upon ‘the failure of his issue,” or upon ‘his dying without issue’, and the effect of these words, or of expressions of a similar import, has been to give an estate tail, by implication, to that party; yet it has been settled that, where those expressions (even without the word ‘such’ being used) are preceded by a devise to the issue of that party, which embraces, in its terms, all the issue whose failure is contemplated, then the words importing a failure of issue should be construed as if the word ‘such’ had been used, as referring to the objects of the prior devise, and not to issue at large, as intended to provide for the failure or determination of the estate previously given to the issue, and not to give an estate tail, by implication to that party. This principle is established by the case of Baker v. Tucker (11 Ir. Eq. Rep. 102; S.C., H.L. Cas 106), and several other cases cited in the argument. In the will now before us, the words importing a failure of the issue male of George the third are preceded by a devise which, under the cy pres doctrine is (as I have already stated) to be construed as a devise to his first and other sons successively, in tail male. This devise embraces, in its terms, all his issue male; and it follows, therefore, that the words in question have not the effect of giving George Reynolds the third an estate tail by implication, but only denote the event upon which there would be a failure or determination of the estate in tail male, previously given to the sons of George Reynolds the third.
The limitations next contained in the will are those to the testator’s daughters Bridget and Mary (who were also then unmarried), for their respective lives, as tenants in common, with remainder, as to each daughter’s share, to her first son (then unborn), for his life, with remainder to the sons of such first unborn son successively, in tail male; and in the subsequent part of the will to which I have already referred, he directs that the like rules should be observed with respect to the second and other sons of his daughters, as he had directed with respect to the second and other son of George Reynolds the third. I think (for the reasons I have already stated) that, by the application of the cy pres doctrine, Bridget and Mary took, under these limitations, life estates only in their respective moities, with remainder to their respective first and other sons successively, in tail male. I think also, that, by the subsequent limitation, in the nature of cross remainders, each sister would (upon the determination of the life estate and estates tail given to the other sister and her sons as aforesaid) take an estate for her life, with remainder to her sons successively, in tail male, in that other sister’s moiety.
The will then contains a limitation to the daughters of George Reynolds the third. It is necessary to consider its construction, because, though the limitations to the sons of Bridget and Mary (under which the plaintiff claims) are contained in a prior part of the will, yet the testator, by his codicil, declares that the limitations to the issue female of George Reynolds the third should operate in priority to the limitations to the issue male of Bridget and Mary. The limitation to the daughters of George Reynolds the third is in the following terms: ‘I devise all my said real estates to the daughters of my said son George, as tenants in common, and not as joint tenants, under the same limitations and restrictions as I have hereinbefore devised the same to my said daughters Bridget and Mary, and their issue’. This limitation is inaccurately drawn, and could not be carried out in the particular manner expressed. If the testator had repeated in it the precise terms of the preceding limitation to Bridget and Mary and their issue, the result would be an attempt to give to the unborn daughters of George the third estates for life, in their respective shares, as tenants in common, with remainder, as to said respective shares, to the first and other sons successively of each unborn daughter, for life, with remainder to the first and other sons of such sons successively, in tail male. Such a devise could not, of course, be carried out according to its terms. It would be a further violation of the rule against perpetuities, by attempting to interpose life estates in the sons of the unborn daughters between the life estates of those daughters and the estates tail purported to be given to the sons cf those sons. It has not, however, been suggested by the defendant’s Counsel that the peculiar form of this limitation creates any greater difficulty, in the application to it of the cy pres doctrine, than exists in the application of that doctrine to the limitations in favour of Bridget and Mary and their issue male; and I am of opinion that, by the application of that doctrine to the limitations in favour of the daughters of George Reynolds the third, and having regard to the testator’s general intention, as collected from other parts of the will, the results would be to give to the daughters of George Reynolds the third estates in tail male, in their respective shares, as tenants in common, with cross remainders between them. In this view of the case, the limitations of estates in tail male, which (as I have already stated) were given to the sons of Bridget and Mary, by the preceding parts of the will (but which were, by the codicil, postponed to the limitations in favour of the daughters of George Reynolds the third), would not, as contended for by the defendant’s Counsel, be void for remoteness.
The parts of the will to which I have referred were those principally relied on in
the argument; and I do not think that, for the purposes of this case, their construc tion is affected by the devise in the codicil to the testator’s wife for her life, with remainders over in the event of all the testator’s children dying without issue.
Part of the plaintiff’s claim in this ejectment is for Bridget’s moiety of the fee-simple lands of George Reynolds the second, which passed by the said will and codicil of 1783. It appears that George Reynolds the third died without ever having had any issue; and, therefore, according to the foregoing construction of the said will and codicil, the plaintiffs father (who was the only son of Mary) became entitled to an estate in tail male, in Bridget’s moiety, in remainder expectant upon the death of Bridget and of Mary, and upon the failure or determination of the estates in tail male given to the sons of Bridget, in that moiety. By the disentailing deed and settlement of November 1836, executed on the marriage of the plaintiff’s father (who has since died), his said estate was barred, and Bridget’s moiety was settled to the uses mentioned in said settlement. Bridget died in 1842, without ever having had any issue; Mary died in 1855, and the plaintiff, under the uses of that settlement, is now entitled to Bridget’s moiety of said fee-simple lands of George Reynolds the second.
The residue of the lands mentioned in the ejectment were the fee-simple estates of George Reynolds the third; and the plaintiff claims also to be entitled to Bridget’s moiety of those lands, under the will of George Reynolds the third (died in 1795), and under the disentailing deed and settlement of November 1836; contending that Bridget took, under said will of 1795, an estate tail in her said moiety. The defendants, on the other hand, contend that, under said will, Bridget took in her moiety an estate in fee-simple, with an executory devise over to Mary, in tail, in the event of Bridget dying without issue living at her death; that, as such event happened, Bridget’s estate determined, and that the executory devise to Mary was not affected by the disentailing deed or settlement of 1836. In my opinion, the construction of this will contended for by the plaintiff’s Counsel is correct. The testator in the first part of his will gives ‘all his real and personal estate’ to his sisters Bridget and Mary, share and share alike. This would have given Bridget an estate in fee in her moiety of the real estate; but there is a subsequent clause whereby testator, ‘in case Bridget should happen to die without issue,’ bequeaths her moiety of his real and personal estate to her husband, Richard Young, for his life, ‘and to descend immediately upon his death to Mary and her issue’. Now as a general rule, respecting wills made before 1837, if a devise of lands to a party in fee be followed by a limitation over, in the event of that part ‘dying without issue’, those words are construed as importing an indefinite failure of issue, and as giving to that party, an estate tail by implication, instead of the estate in fee, which he would have taken under the preceding devise. I admit, however, there are several cases where the words importing a failure of issue in the party taking an
estate in fee under the preceding devise were (by force of other expressions in the will) restricted to a failure of issue at the death of that party, or at some other period, and were accordingly held to have the effect, not of creating an estate tail in that party, but of subjecting his previous estate in fee-simple to an executory devise over, in the event of the failure of his issue occurring at his death, or at such other period. In the case now before the Court, the devise of a life estate to Richard Young, in the event of Bridget dying without issue, and the direction that her moiety should descend immediately upon his death to Mary and her issue, are relied on by the defendant’s Counsel as grounds for adopting the restricted con struction of the words ‘dying without issue,’ instead of giving them their legal and natural construction. Now the circumstances of a subsequent devise of lands for life is not of itself sufficient to confine the failure of issue to a failure at the death of the first taker. Estates for life are frequently limited in remainder after estates tail. In the case of Roe v. Jeffrey (7 T.R. 589) which was relied on by the defendant’s Counsel, all the subsequent devises were of life estates; and in the subsequent case of Barlow v. Salter (17 Ves. 483) and Doe v. Owen (1 B. & Ad. 321), the authority of the decision in Roe v. Jeffrey has been confined to cases where that state of fact occurs. That case does not, therefore, govern the case now before the Court, as in the will of 1795, there are devises in tail and in fee, subsequent to the devise of a life estate to R. Young. With respect to the direction that, in the event of Bridget dying without issue, ‘her moiety should descend immediately on the death of Richard Young to Mary and her issue’, cases have been cited in which expressions, referring to the death of the party whose issue was to fail, have been held as restricting the import of the words ‘dying without issue’, to a failure of issue at the death of that party; but in the case now before the Court, the words ‘descend immediately’ refer to the death of Richard Young and not to the death of Bridget; and it has not been contended by the defendant’s counsel that the words ‘dying without issue’ could be restricted to a failure of her issue at the death of Richard Young.
The defendant’s Counsel have also relied on the circumstance that the testator’s real and personal estate are included in the same devises and clauses of his will. But this is no ground for giving to the words ‘dying without issue’ the restricted construction as regards the real estate, though we should give them that construc tion with respect to the personal estate. It has been decided in Forth v. Chapman (1
P. Wms. 663) and other cases, that where real and personal estates are devised in the same clauses and by the same terms, a different construction may be given to the words ‘dying without issue’ (or to similar expressions), as regards the real estate, from what is given to them as regards the personal estate.
There are other limitations in the will of 1795, which, in my opinion, furnish grounds for our adopting the natural instead of the restricted construction of the words in question, and for our holding that Bridget took an estate tail in her moiety of the real estate. Supposing it should be held (as contended for by the defendant) that Bridget and Mary took in their respective moities estates in fee-simple, with executory devises over in the event of their dying without issue living at their respective deaths, it is admitted (even on such a construction), that, if either of them died without issue living at her death, the other sister would, under the devise ‘to her and her issue’, take an estate tail in the moiety of that sister so dying. There is then in the will a limitation of the entire real estate to H. Connell, in fee, in the event of both sisters ‘dying without issue’. Now what construction is to be given to those words, as applied to this devise to Connell? They are immediately preceded by limitations of a estate tail to each sister in the moiety originally devised to the other sister; and, having regard to those limitations alone, the natural and obvious construction would be, that the testator intended that the failure of issue, upon
which the property was to go over to Connell, was to be identical with that on which the immediately preceding estates were made determinable, namely, an indefinite failure of issue. But, in order to avoid the objection of putting different construc tions upon the same words in different parts of the will, the defendant’s Counsel contend, that the words ‘dying without issue’, as applied to the limitation of the entire real estate to Connell, should receive the same restricted construction as in the limitation of Bridget’s and Mary’s moieties, and should be construed as mean ing ‘dying without issue at their respective deaths’. The result then of the entire will, according to the defendant’s construction, would be, as to one moiety, a devise to Bridget, in fee, with an executory devise over (in the event of her dying without issue living at her death) to Richard Young, for life, and then to Mary, in tail, and with a further executory devise over to H. Connell, in fee, in the event of Mary also dying without issue living at her death; and as to the other moiety, a devise to Mary, in fee, with an executory devise over (in the event of her dying without issue living at her death) to Bridget, in tail, with a further executory devise over (in the event of Bridget also dying without issue living at her death), to Richard Young, for life, and then to H. Connell, in fee. Such devises could, no doubt, have been legally made by the testator; but it will be found that, by adopting this construction, results would follow which could hardly be considered as consis tent with the testator’s intention, or as having been contemplated by him. In the event (which has actually happened) of Bridget dying in Mary’s lifetime, without leaving issue living at her death, then, according to the defendant’s construction, Mary would (subject to Richard Young’s life estate) take an estate tail in Bridget’s moiety, with an executory devise over to H. Connell, in fee, in the event of her dying without issue living at her death; and by suffering a recovery she might defeat that executory devise, and acquire the absolute interest and fee-simple in Bridget’s moiety; whereas, in her own original moiety, she would have only an estate in fee determinable upon the same event of her dying without issue at her death, and with an executory devise over, on that event, to H. Connell, in fee, which she could not defeat. It is not likely that the testator contemplated such a result. It was more probably his intention that, if either sister became entitled to the moiety of the other sisters, she was to have the same estate in and dominion over that other moiety as she had got in her own original moiety. Suppose again, that after the death of Bridget, without leaving issue at her death, Mary died leaving issue at her death (but without having suffered a recovery), then, according to the defendant’s construction, the executory devise to H. Connell as to both moieties would be defeated and incapable of taking effect. Mary’s estate in fee in her own original moiety and her estate tail in Bridget’s moiety would become absolute; but the reversion expectant in that event upon her estate tail in Bridget’s moiety would have been undisposed of by the will, and, if Mary’s issue afterwards determined, without a recovery being suffered, Bridget’s moiety would revert to the testator’s heir-at-law, namely, to the heir of Bridget and Mary themselves. Such a result could not be considered as in accordance with the testator’s intention, which appears to have been to provide for every contingency, and to dispose of the entire interest in his real estate. Other results might also follow, from the defendant’s construction of the will, which would be equally at variance with the testator’s apparent intention.
The defendant’s Counsel have also referred to the terms of the limitation of Mary’s moiety, ‘that in case she should die without issue, then her moiety was to descend upon her death to Bridget and her issue’, and have relied upon the expressions ‘then,’ and ‘upon her death,’ as giving the restricted construction to the words ‘dying without issue’ in that part of the will, and as affording an explanation of their import in the previous part relating to Bridget’s moiety. Considering, however, the other limitations of the will, to which I have referred, I think that, although the expressions relied on by the defendant’s Counsel have in some cases had the effect for which they contend, yet that, in the present case we should regard those expressions as having been used by the testator to denote that the limitation to Bridget was to take effect immediately after or upon the failure of the estate which Mary took under the preceding limitation, and under the words, ‘in case she shall die without issue’, and not as intended to fix the death of Mary as the period for ascertaining whether her estate would determine or become absolute: Water v. Drew (Comyns, 372).
It appears to ine, upon the whole of the will, more in accordance with the testator’s intention, and the purposes he had in view, to hold that he intended to give to each sister similar estates in her original moiety, and also in the moiety of her sister, when the same should accrue to her, and that he did not intend to use the words ‘dying without issue’ in a sense different from their ordinary and legal construction of an indefinite failure of issue. I am accordingly of opinion, that each sister took an estate tail in her original moiety, with remainders, as to Bridget’s moiety, to R. Young for life, then to Mary in tail, and then to H. Connell in fee, and with remainder, as to Mary’s moiety, to Bridget in tail, then to R. Young for life, and then to H. Connell in fee. I do not think that the bequest of a life annuity to P. Brennan, in the event of the devise to Connell taking effect (which has been also relied on by the defendant’s Counsel), furnishes any sufficient argument against this construction, as such an annuity might well be limited after the determi nation of previous estates tail.
The defendant’s Counsel have further contended that, even supposing Bridget took, under the will of 1795, an estate tail in the fee-simple lands of George Reynolds the third, yet that the plaintiffs are not entitled to that moiety, under the disentailing deed and settlement of November 1836, inasmuch as the settlement, though executed by her, was not also acknowledged by her, pursuant to the Fines and Recoveries Abolition Act (she being then a married woman). It appears, however, that the disentailing deed was duly acknowledged by her under the statute. That deed, though hearing the same date, appears to have been executed subsequent to the settlement. It recites the settlement, and that the lands were thereby conveyed ‘to the uses, trusts, &c. in said settlement expressed’. It also recites that Bridget and her husband had thereby covenanted to execute such further assurance, whether in the nature of a fine or recovery, or otherwise, as should be requisite for more effectually assuring the lands to the uses and trusts of the settlement. The disentailing deed then conveys the lands to the uses, &c., already declared by the settlement. I think it clear, therefore, that it was not necessary that the settlement should be also acknowledged by Bridget under the statute. The uses and trusts, &c., declared by it were as effectually incorporated in the disentailing deed, by reference and recital, as if they had been repeated in terms in the operative part of that deed. With respect to the reservation clauses in the disentail ing deed and settlement, which were relied on by the defendant’s Counsel, I think they only referred (as regards Bridget’s and Mary’s estate) to the life estates to which under the will of 1783 they were entitled in Bridget’s moiety of the fee-simple lands of George Reynolds the second, in priority to the estate tail of the plaintiff’s father, but did not affect his rights to any of the lands on the death of Bridget and Mary.
The plaintiffs are, therefore, now entitled to Bridget’s moiety of all the lands mentioned in the ejectment.
Exham v Beamish
[1939] I.R. 336 (High Court)
Gavan Duffy J.:
This case concerns a voluntary settlement of freehold land in Ireland, made in
1865, which, in the events that have happened, directed the trustees from and immediately after the decease of the survivor of two named tenants for life, daughters of the settlor, to sell the settled land and stand possessed of the moneys to arise from the sale in trust to pay and hand over the proceeds equally, share and share alike, unto and amongst all and every the grandchildren of the settlor and his wife upon their respectively attaining 21 (or marriage as to granddaughters), but, if any such grandchild should have previously died leaving issue, such issue were to take the share to which their parent would have been entitled if living: there was a hotchpot clause and a gift over in default of all such issue.
The settlor, as I shall call him for convenience, the Rev. William Hamilton
Thompson, died in 1895 and his wife in 1892; they had four children, all born before 1865; they survived two of these children, who died unmarried; the other two, who became tenants for life, were Mrs. Edith Annie Beamish, who died in 1932, and Mrs. Frances de Courcy Fenwick, who died on the 20th of August, 1937. The only grandchildren were (a) Mrs. Beamish’s children: the defendant, Ludlow Hamilton, born in 1871; Ethel Hilda Frances, born in 1873, who died a spinster in 1894, after attaining her majority; and Harold Delacour, born in 1874, who died without issue in 1934; and (b) Mrs. Fenwick’s only child, Gerard de Borrowden,education of the children of the testatrix until they attained 21, and then upon trust to pay them the capital, following which provision the trustees were empowered ‘to dispose of any competent part, not exceeding one half of the presumptive share of any of my children’ for their advancement in life. The same Judge who decided Fox
v. Fox – Jessel M.R. – held that an infant who had died did not take a vested interest in his share. He said at p. 45: ‘When a legacy is payable at a certain age, but is, in terms, contingent, the legacy becomes vested when there is a direction to pay the interest in the meantime to the person to whom the legacy is given; and not the less or when there is superadded a direction that the trustees ”shall pay the whole or such part of the interest as they shall think fit”.’ If this be right, and I should be ready to follow it, the fact that the trustees’ power is discretionary to pay all or only part of the income, does not matter. But Jessel M.R. continued at p. 46: ‘But I am not aware of any case where, the gift being of an entire fund payable to a class of persons equally on their attaining a certain age, a direction to apply the income of the whole fund in the meantime for their maintenance has been held to create a vested interest in a member of the class who does not attain that age’. He added that there was nothing in the will before him ‘giving an aliquot share of income to any individual child’. Similarly, in In re Gossling, Gossling v. Elcock ([1903] 1 Ch. 448] where each child was held to take an immediate vested interest in his or her share, the very feature was present which Jessel M.R. held to be absent in In re Parker (16 Ch. D. 44), as by the terms of the will in Gossling’s Case ([1903] 1 Ch. 448) the testator ‘intended that the income of the aliquot share coming to the particular child should be payable for the maintenance of that child until he or she attained the age of 21’.
In view of these quotations, I think that Fox v. Fox (L.R. 19 Eq. 286) and In re Mervin ([1891) 3 Ch. 197) can be distinguished and may stand together; but the presence or absence of anything giving an aliquot share of income to any individual child does not seem to me to enable Fox v. Fox (L.R. 19 Eq. 286) and In re Wintle ([1896) 2 Ch. 711) to be reconciled, in view of the wording of the maintenance provision in In re Wintle ([1896) 2 Ch. 711), which I find hard to distinguish from the like clause in the will in Fox v. Fox (L.R. 19 Eq. 286). The maintenance clause in the will of Major Poe stands out by itself; but I do not think it makes clear that each child is to get an aliquot share of the income. Taking the cases I have quoted together, I think it is very doubtful whether Fox v. Fox (L.R. 19 Eq. 286) could be applied in the interpretation of the present will.
Whether it is necessary for those representing the existing children’s interest to invoke Fox v. Fox (L.R. 19 Eq. 286) at all is another matter. Before coming to that, I must consider the last words of the will, which clearly define the term ‘children’ by saying that they are to include any children of the said A.P. Poe which he may have at a future date. If the gift in this case were not immediate, those words would not affect in any way the old rule that such words of futurity do not let in children born after the first share has become payable. In Hawkins on Wills, 2nd ed., p. 93, the view is taken that in the case of an immediate gift also, such words will generally be considered as intended only to provide for the case of children coming into existence between the date of the will and the testator’s death. A number of cases are cited in support of this rule. One of them – Sprackling v. Ranier (l Dick, 344) turned upon the use of the word ‘then’, and is perhaps in no way an authority for the proposition that such words do not enlarge the class. See note (t) at page 1695 of the 6th edition of Jarman. But there is ample authority left. There are the decisions in Storrs v. Benbow (2 My. & K. 46); Butler v. Lower (10 Sim, 317) and the dicta in Mann v. Thompson (Kay, 638). As against this, Mogg v. Mogg (1 Mer. 654) is undoubtedly a decision in the contrary sense. In accordance with the
practice at the time, and the circumstances, no reasons were given for it. Besides this, its authority is not increased by the way it was dealt with in the Privy Council in Dias v. De Livera (5 App. Cas. 123). In the latter case the authorities in support of the old rule that such words as ‘born and to be born’ in a bequest which is immediate to children as a class do not enlarge the class to let in those born after the testator’s death, are reinforced by a citation of the weighty opinion of Mr. Justice Williams. Seep. 134. The case of Deffiis v. Goldschmidt (1 Mer. 417) which may be said to support Mogg v. Mogg (1 Mer. 654) turned upon very special wording not present in Major Poe’s will. I should not be satisfied that these two cases suffice to supplant the old rule as to the effect of such words of futurity as ‘to be born’ or ‘to be begotten’.
In Bateman v. Gray (L.R. 6 Eq. 215) the words were ‘to the children of A. now or hereafter to be born who shall attain the age of 21 years’. These were followed
by a power of advancement out of the vested or presumptive share of any object of the gift. Lord Romilly M.R. thought the word ‘vested’ was very strong, and held that the class of children to take was not ascertained when the eldest attained 21. The word ‘vested’ does not appear in the clause of the present will authorising the use of the money until the children reach 25. A like decision was given in Iredell v. Iredell (25 Beav. 485). But there the clause authorising the maintenance contained the words ‘whether the child should or should not attain 21’. In In re Deloitte, Griffiths v. Allbeury ([1919] 2 Ch. 209), Eve J. said that Bateman v. Gray (L.R. 6 Eq. 215) was not satisfactorily reported, and that the matter before the Court of Appeal could not be concluded in any way by that case. In Gimblett v. Purton (L.R. 12 Eq. 427) Malins V.C. said at p. 431, that even if he was dealing with a clause for advancement similar to that in Bateman v. Gray (L.R. 6 Eq. 215) he would have declined to follow that decision ‘as it tends to throw a doubt upon a rule which is as well settled as any rule of interpretation in the Courts’. He held in that case that a power to apply the interest of the presumptive shares of grandchildren towards their maintenance did not prevent those born after the eldest attained the age of distribution from being excluded. It is true that in this case there were no words of futurity such as ‘to be born’; but the case is none the less relevant, and also of interest for the view the Vice-Chancellor took of Bateman v. Gray (L.R. 6 Eq. 215).
Upon all the authorities, I should not be prepared to hold that in the present case
children born after the eldest child attained 25 years of age form members of the class of children in whose favour the testator made his disposition. On the other hand, I do not think the matter is free from doubt, and I can quite understand that it might present itself differently to another mind. The view to which I incline tends to avoid intestacy and to evade the rule against perpetuities. Both Judges and text-writers have complained that various questionable decisions have been given under the influence of a desire to evade that rule. I can only hope that I am not adding to the number of these errors so influenced. The words of Lord Selborne
L.C. in Pearks v. Moseley and Others (5 App. Cas. 714) were impressed on me. He said at p. 719: ‘You do not import the law of remoteness into the construction of the instrument, by which you investigate the expressed intention of the testator. You take his words, and endeavour to arrive at their meaning exactly as if there had been no such law, and as if the whole intention expressed by the words could lawfully take effect’. But I think that pronouncement cannot be taken to mean that I must leave the law of remoteness entirely out of account in all circumstances. I think there are circumstances in which I may take it into account. Indeed, the very next words of Lord Selborne make that clear. He proceeds to say: ‘I do not mean,that, in dealing with words that are obscure or ambiguous, weight, even in a question of remoteness, may not sometimes be given to the consideration that it is better to effectuate than to destroy the intention’. I consider the words of the will before me to be ambiguous and indeterminate, and such that in construing them, I should be justified in giving some weight, if necessary, to the consequences that would ensue from adopting a construction that would admit afterborn children to the class in whose favour the disposition was made – a construction which I do not think would give effect to the testator’s intention. But, even without any such consideration of consequences, I should take the same view, albeit with the doubt which so many conflicting authorities appear to me to render inevitable.
But, apart from all the foregoing considerations, I am of opinion that the words of Major Poe’s will are more like the words used in the will in Kevern v. Williams (5 Sim. 171) than those in any of the cases I have referred to. In that case the property was given in trust for the grandchildren in the first instance, and then followed the words ‘to be by them received in equal proportions when they shall severally attain the age of 25 years’. It was held that the class was limited to those born in the lifetime of the person who took the anterior life interest. Here there is likewise in the first instance an unqualified disposition in favour of the children. In a much later part of the will there is a distinct provision – ‘a sort of annex’ as it was called in In re Grimshaw’s Trusts (11 Ch. D. 406, at p. 411) – to the effect that each child is to receive his share on reaching the age of 25 years. Paraphrasing the words of Mr. Jarman at p. 1399 of the 6th edition, it would seem to me that futurity is not annexed to the substance of the gift, but appears rather to relate to the time of payment. Kevern v. Williams (5 Sim. 171) has not escaped criticism, including that of the learned author of ‘Gray on Perpetuities’. Yet it is said in Gray that ‘assuming that the postponement of payment was too remote, it is submitted that the decision was correct’. It was suggested that on the facts in that case, the time of payment was not too remote. (See Gray on Perpetuities, 2nd edn. p. 480, s. 638.) If that be so, the postponement of payment in this present case would surely be too remote. I am not aware that Kevern v. Williams (5 Sim. 171) has ever been overruled. In most of the cases quoted, the postponement of payment was part and parcel of the gift itself. If the two can be divorced here, the postponement of the period of distri bution not being annexed to the substance of the prior unqualified gift, then the vesting would have been instanter, and Mr. McCann would have been right in his contention that what he was pleased to call ‘the tags’ – at any rate, the postpone ment clause – could be disregarded.
If the gift here and the quite separate clause regarding postponement of distri bution can be treated as disconnected – and there are a series of legacies sand wiched between then – then I think the cases cited in argument of Cooke v. Cooke (38 Ch. D. 202) and In the matter of the estate of Herbert Clarke (39 I.L.T.R. 78) would be illustrations of a principle that might be applied to the construction of this will. I incline to the view that they may be regarded as distinct.
Therefore, on the several alternative grounds I have indicated, I take the view upon the whole that the disposition in favour of the children of Captain Poe was valid, and that children born after the eldest child attained 25 years of age, if there had been any, would have been excluded. For the same reason, future children, if there should ever be any, would have no claim upon the property left to the children of Captain Poe.
Re Hay
[1932] N.I. 215 (High Court)
The testator by his will devised a portion of his estate upon trust, after the death of his wife (which happened), to pay the rents and profits thereof in certain shares to five of his children, Francis, Joseph, Grace, Jane and Margaret during their respective lives, with powers of appointment and gifts over in default of appointment as therein mentioned. The testator directed that from and after the death of the survivor of his said five children, his trustees should hold the shares of any of them, which might remain unappointed by will, for his sons, James and William Thomas jointly for life, and after the death of the survivor, for the first son of Francis for life, and after his death, for such of his children, grand-children, brothers, sisters, nephews and neices as he should by his last will appoint, and in default of appoint ment, for the second and every other son of the said Francis, severally, according to their respective seniorities with limitations and powers of appointment similar to those given to the first son of Francis. Then followed the words: ‘and in default of the same then for the first and every other son of the said Joseph successively according to their respective seniorities in like manner and with like limitations and power of appointment as is hereby given to the first and other sons of Francis’. Similar provisions were made in favour of the first and every other son of the testator’s sons and daughters, James, William, Thomas, Grace, Jane and Margaret, all of which provisions were introduced by the words: ‘and in default’, while the ultimate limitation was expressed in the words – ‘in default for my own right heirs for ever.’
The testator’s last surviving son was William Thomas, who prior to his death, was entitled to a life interest in the shares of Francis and Margaret, both of whom died without issue and without having exercised the powers of appointment given to them by the will.
The question for determination was as to who was entitled, on the death of William Thomas, to the shares of Francis and Margaret.
The claimants were Edward Norman, the only son of the testator’s son Joseph, and
appointee under his will of all his (Joseph’s) interest under the will of the testator, and Edward James, the only son of the testator’s eldest son, James, who claimed to be entitled under an alleged intestacy. Both claimants were born during the lifetime of the testator.
It was admitted that the gift over which immediately followed the life estate to the first son of the testator’s son, Francis (or, as there was no such son, the gift which in the events which happened, immediately followed the life estate of William Thomas) offended against the rule against perpetuities and was void.
It was argued on behalf of Edward Norman that he was entitled to a life estate under the
immediately succeeding gift in favour of ‘the first and every other son of Joseph’.
On behalf of Edward James it was contended that, as the limitation in favour of the children of the first son was void, all ulterior limitations were also void. It was thus submitted that an intestacy arose upon the death of William Thomas, the last tenant for life, and that the interest in question thereupon passed to the heir-at-law of the testator, namely, his eldest son, James, who had by his will appointed all his estate and interest in the lands to his only son, the said Edward James.
Andrew L.J. :
The case has given me a considerable amount of anxiety, as the relevant author ities do not appear to be wholly free from conflict, and the decisions depend in so many cases upon the particular phraseology employed by the testator. The view which I have formed, however, renders it unnecessary for me to refer to the greater part of the authority cited by Counsel or perused by me.
Upon the question of the construction of the words ‘and in default of the same’,
which introduce the limitations in favour of the first and every other son of Joseph, I am of opinion that Mr. Chambers’ submission is the correct one, and that their true meaning is ‘in default of the exercise of the power of appointment’ which was conferred in the immediately preceding line of the will. Not only does it seem unnatural in finding a subject matter for the words ‘of the same’ to refer back, as Mr. McGonigal contends we should do, to certain selected objects named in practically the opening words of the preceding clause, namely, the sons of Francis, but also any construction which did not make the words ‘in default of the same’ relate to the immediately preceding power of appointment, would leave unpro vided for, if the limitations had been, as the testator assumed they were, valid, the contingency of there being objects of the power but no appointment. The Court is always slow, especially in the case of such series of limitations as are before us in this will, to put such a construction upon ambiguous words as would create an intestacy.
To this extent, therefore, I agree with Mr. Chambers’ argument, but I differ from him in the conclusions which he asks todraw. Proctor v. Bishop of Bath and Wells (2 H.BI. 358), and many other cases which could be cited, amply support the proposition to be found in Jarman on Wills, 7th Ed. 324, that, where a gift is void for remoteness, all limitations ulterior to and dependent on such remote gift are also void; but on page 326 the learned editors also rightly lay it down that a limitation following one which is too remote may be good, if it can take effect independently of the void limitation. Now in my opinion a gift over in default of appointment does take effect independently of the preceding power, and it may, accordingly, be good though the power itself be bad for remoteness. Other text books express the same clear view in unhesitating manner. Thus in Theobald on Wills, 7th Ed. 605, the learned editors, after pointing out that limitations following as remainders upon limitations void for perpetuity are themselves void, whether within the line of perpetuity or not, proceed immediately to add: ‘But where a power of appointment is given to arise upon an event beyond the limits of perpetu ity a gift in default of appointment is valid’. The reason assigned for the difference in the law applicable to the two cases is both clear and authoritative, namely, that in the former class of cases the remaindermen are only intended to take if there is no one to take under the prior limitations; in the latter, the gift in default of appoint ment is intended to take effect unless displaced by a valid exercise of the power. Finally, the same view is shortly expressed in Halsbury, vol. 22, 360, where it is stated that ‘the fact that a power may be exercised in a manner contrary to the rule does not affect a gift in default of appointment which takes effect unless it is itself obnoxious to the rule against perpetuities. This is so because until the power is exercised the property remains vested in those who take in default of appointment.’ Such unanimity of opinion would not, of course, exist without ample authority to support it. Two cases are especially in point, Webb v. Sadler (L.R. 1 Ch. 419), and In re Abbott, Peacock v. Frigout ([1893] 1 Ch. 54). The former is a decision of Lord Selborne, L.C. and James and Mellish, L.JJ.; the latter is a considered judgment of Stirling, J. I do not propose to examine them in detail, as the grounds and effect of the decisions are embodied in the passages from the text books which I have cited. Both cases in my opinion support the view that the principle that a limitation, depending or expectant upon a prior limitation which is void for remoteness, is invalid, does not necessarily apply to limitations in default of appointment, as in most cases of such limitations the intention is that they should take effect indepen dently of and unless displaced by a valid exercise of the preceding power of appointment.
This is, in my opinion, the true view in the present case. The testator intended that after the death of the survivor of his sons James and William Thomas the unappointed shares of his children Grace Taylor, Jane, Margaret Anne, Francis and Joseph should pass to the first, second and other sons of Francis, and after wards to the first and every other son of Joseph unless displaced by the exercise of the powers of appointment which were invalid for remoteness. I therefore hold that on the true construction of the will of the testator and in the events which have h appened, Edward Norman Hay is entitled to a life interest in the twelve one hundredths shares of Margaret Anne Wray and of Francis Hay respectively, and I answer questions 2 and 3 of the summons accordingly. All parties are entitled to their costs out of the estate.
Re Hallinan’s Trust
[1904] 1 LR. 452; 4 N.I.J.R. 237; 381.L.T.R. 165 (Court of Appeal)
Porter M.R.:
The facts of the case are shortly these. By marriage settlement of 26th April, 1877, executed on the marriage of John Hallinan, junior, with Mary Frances O’Farrell, a life estate in lands was limited to John Hallinan, junior, and after his death the property the subject of the settlement was to go ‘in trust for all or such one or more exclusively of the other or others of the children and remoter issue of the said intended marriage, at such ages or times, or age or time, and in such shares, if more than one, and upon such conditions, and in such manner, as the said Mary Frances O’Farrell and John Hallinan, junior, or the survivor of them, should by any deed or by his or her will appoint’, and in default for the children of the marriage equally. John Hallinan, junior, died 9th June, 1901, having survived his wife, and leaving a number of children, of whom Maude Beatrice attained eighteen in March, 1904, and there are other children younger. John Hallinan, junior, previous to his death, by his will dated 26th May, 1896, appointed to his daughter, Maude Beatrice, all the lands, comprised in the settlement on her attaining the age of twenty-five years; but he did not dispose of the income of the property which should accrue between the date of his death and her attainment of the age of twenty-five.
The question now arises as to whether the appointment in favour of Maude Beatrice Hallinan is a valid execution of the power created by the settlement of 1877, or is void on account of remoteness. The settlement would not have autho rised an express appointment to unborn children on attainment of twenty-five, because that would be practically twenty-five years longer than a life in being. But the question is not quite so simple, and will have to be considered in reference to the facts. Maude Beatrice was born in 1886, and the appointment in her favour would necessarily take effect in much less than twenty-five years from the date of her father’s death.
The question is whether she takes any interest under the appointment, or whether it is void for remoteness. The general rule is stated by Lord St. Leonard’> in his book on Powers. He says (p. 396): ‘It is well established, therefore, that under a particular power, as a power to appoint to children, no estate can be created which would not have been valid if limited in the deed creating the power.’ He then refers to Massey v. Barton (7 Ir. Eq. R. 95), and says: ‘The test of the validity of the estates raised is to place them in the deed creating the power, in lieu of the power itself. Thus, if by a settlement an estate be limited to A for life, remainder to his children as he shall appoint, and he afterwards appoint to a son born subsequently to the settlement for life, remainder to the children of that son as purchasers; read
the limitations as if inserted in the settlement in the place of the power, and they will stand thus: to A for life, remainder to his unborn son for life, remainder to the sons of that son as purchasers. Now, the limitation to the grandchildren would have been void if contained in the settlement; and therefore it cannot be sustained as a due execution of the power. But it is important in these cases to consider whether the power was created by will or deed: this speaks from the execution of it; that from the death of the testator: so that in the case of a power created by will, children born in the testator’s lifetime, though after his will, stand in the same situaiton as children born at the execution of the deed where the power is created by deed.’ ‘We must be careful,’ he sa ‘not to destroy this distinction by extending it to an instrument executing a power; for whether the power be executed by deed or will, the limitation, in regard to the question of perpetuity, must receive the same construction. The point of inquiry is the instrument creating, and not the instrument executing the power.’The only case he refers to in support of the general proposition is Massey v. Barton (7 Ir. Eq. R. 95), and Massey v. Barton was a decision of Mr. Blackburne when Master of the Rolls. That case goes the whole length of the statement in Lord St. Leonards’ book: but, curiously enough, Lord St. Leonards relies on Massey v. Barton (7 Ir. Eq. R. 95) in support of his statement of the law, and Massey v. Barton (7 Ir. Eq. R. 95) seems to have been decided on the authority of the dictum in Lord St. Leonards’ book. The suit of Massey v . Barton (7 Ir. Eq. R. 95) was brought for the purpose of taking the opinion of the Court on a question which arose upon the marriage settlement and will of Mr. George William Massey, who was the father of the plaintiffs in the action. In his judgment the Master of the Rolls says: ‘In this case a pecuniary fund was vested in trustees on the marriage of George William Massey, the father of the minors, with Miss Narcissa S. Barry, in trust for him and his lady for their lives, which trusts have ceased by their deaths; and subject to their life estates, as to the principal money, on trust for the issue of the marriage in such shares and proportions, and at such times and with such benefit of survivorship, as George W. Massey should by his last will and testament, attested by two witnesses, appoint; and in default of appointment, to be equally divided between them; the shares of such of them as should be sons to become vested interests on their attaining the ages of twenty-one years. There were three sons, the only issue of the marriage, who are plaintiffs in the cause; and two of them having attained the age of twenty-one years, apply to be paid their shares of the fund. It appears that Mr. Massey made a will attested as the power required, and bequeathed the fund amongst his children, but not to be paid until they attained their respective ages of twenty-five years, and not before; this postponement is contended to be void by the two sons who make the present application. This is the case of a particular power restricted as to its objects to the children of the mar riage.’ Then he quotes Sir Edward Sugden, and says: ‘Adopting this test, the result would be, that by this settlement the fund would be limited to the issue of the marriage then unborn, on the death of the father; but would not become vested for a period that might exceed twenty-one years from the time of his death; such a limitation would be clearly void for remoteness: Lade v. Holford (Amb. 479), and Proctor v. Bishop of Bath and Wells (2 H. Bl. 358); in which latter case a devise to the eldest unborn son of the testatrix’s grandson, who should be bred a clergyman and be in holy orders, was held to be void, as he could not be in orders until
twenty-four years of age; until which time there was, therefore, a possible suspense of property.’
In that case, which was heard in November, 1844, George William Massey had died nine years before, but the dates are not given in reference to the objects of the power at all, and I only take the decision as being a general statement of a general proposition. Oddly enough (and I mention it merely as matter of curiosity), I find a note of mine, made years ago, in my own copy of the report: ‘Query as to this case’, and setting out reasons – ‘In 1835 two, and most probably all, of the sons were upwards of twelve years old, and to give them the fund upon their attaining twenty-five was merely, in other words, to give it to them provided they should be living respectively in thirteen years to be computed from that time The
mistake appears to be in confounding a limitation in the settlement to any son who should attain twenty-five – which might or might not be within the rule against perpetuities, and the limitation to ascertained sons who must attain the vesting age within that period.’ In this case the gift is ‘unto my daughter, Maude Beatrice Hallinan, on her attaining the age of twenty-five years’.
The matter is not very clear; and, in his extremely able argument, Mr. Clery relied very largely on Wilkinson v. Duncan (30 Beav. 111), which might at first sight appear to be quite undistinguishable from the case before me. It was a question about a will, but I find that it was not decided on any such ground. Massey
v. Barton (7 Ir. Eq. R. 95) was not referred to. The view the Master of the Rolls took was this. He says (p. 117): ‘The view I take of the case generally is that which I have stated, viz. where the shares of each person is ascertained, the gifts to those who happen to be within the limits of the rule against perpetuity may be good as to them, though the gifts be invalid as to the others who are beyond that limit, because the number and amount of the shares are ascertained at the proper period, and within the proper limit of time’. He looked into the matter further, and in a supplemental judgment he says: ‘I think this will affords instances of both the rules stated by Vice-Chancellor Wood. In the gift to the daughters a sum is specifically given to each, which is not dependent on the gift to the others, and consequently those will take it who can take it within the time allowed by the law against perpetuities. With respect to the gift to the sons, it illustrates the other rule. I am of opinion that it is a gift to a class which cannot be ascertained until all the members of it shall have attained twenty-four, and, therefore, with respect to them, the appointment of the residue is wholly void for remoteness. With respect to the daughters, as the number of sums of £2000 were ascertained at the death of the nephew, I think that those who attain their age of twenty-four within the period of twenty-one years from the death of the nephew are entitled to their shares, and the residue will go as unappointed.’ That case was one no doubt in which the question arose upon a power created by will; but the simple question which arose for decision was whether what were good gifts in exercise of the power in reference to the actual attainment of twenty-four within the limit of twenty-one years were bad, because the appointment was not restricted to the age of twenty-one, after lives in being at the creation of the power.
Von Brockdorff v. Malcolm (30 Ch. D. 172) was also a case of the exercise of a special power of appointment, and it was held that an appointment ‘upon trust for all and every my daughters and daughter who shall survive me, and shall, either in my lifetime or after my decease, attain the age of twenty-four years, and if more than one, in equal shares as tenants in common,’ was not void for remoteness. The discussion of the case and judgment were largely cognizant with a different ques tion, viz., as to whether there was an exercise of the power at all; but the question as to remoteness was argued as a subsidiary matter, and Cozens-Hardy, J., puts it this way: ‘All the limitations to children are void, as in the case of daughters they might possibly be too remote. A daughter might not attain twenty-four till more than twenty-one years after the death of the testator. The gift is to a class, and, if part of it is void, the whole is void: Pearks v. Moseley (5 A.C. 714).’ Then Mr.Wright, who appeared for the trustees, says: ‘The youngest child was three years old at the time of the testator’s death. The class of children must, therefore, be ascertained within twenty-one years from his death: Wilkinson v. Duncan (30 Beav. 111). The gift is therefore good, and the point which was decided in Pearks v. Moseley (5 A.C. 714) did not arise. It is immaterial whether the gift is to a class or individuals. The state of things at the time of the testator’s death must be looked at. The daughters take absolutely; the direction to settle their shares is of course void;’ and Pearson, J., says: ‘I think that Wilkinson v. Duncan (30 Beav. 111) applies, and that the appointment is not void for remoteness.’ The result follows that whether the power is created by will or deed, if it is exercised in favour of a person named or described, and if it be directed to vest at a period exceeding twenty-one years after a life in being, but must in the natur things actually vest before the expiration of twenty years after the determination of the life in being at the creation of the power, in that case there is a good exercise of the power, and I so hold in this case. (Frances Hallinan appealed to the Court of Appeal FitzGibbon, Walker and
Holmes, L.JJ.
The Court affirmed the decision of the Master of the Rolls, and dismissed the appeal.)
Jameson v Squire
[1948] I.R. 153; 821.L.T.R. 46 (Supreme Court)
Maguire C.J.:
This is an appeal from a judgment in favour of the defendants, pronounced by the President of the High Court on the trial of the action.
The action was brought for a declaration that an option contained in an agree ment, dated the 15th of October, 1941, was a valid and subsisting option, and for an order that, on payment of the sum of £1,720 by the plaintiff to the defendants, the defendants do execute to the plaintiff a proper sub-lease of the premises the subject of the option. There was also a claim for damages, but this part of the claim is not persisted in.
After the expiration of the term of three years the plaintiff remained on in possession as a tenant, and on payment of rent, which was accepted by the defendants, he became a yearly tenant. On the 18th November, 1945, he gave notice to the defendants that he intended to exercise the option contained in the agreement. The defendants, through their solicitor, replied that the option was ‘not exercisable in the events which have happened.’ Thereupon the plaintiff com menced these proceedings.
The President of the High Court held that, on the fair reading of the agreement, the option was a right given to the tenant conditionally on its exercise within the term of three years created by the agreement. Holding that the tenant’s attempt to exercise the option came too late, he dismissed the action.
I find myself unable to agree with the learned President in his interpretation of
the agreement. The provision that the option might be exercised ‘at any time’ after the expiration of two years, and the omission of words limiting the period during which it might be exercised, make it plain to my mind that the option was to continue as long as the relationship of landlord and tenant under the agreement lasted. Consequently I hold that, being a term of the original agreement which was not inconsistent with the yearly tenancy which arose after the expiration of the original lease it was carried into the yearly tenancy.
It is contended however that the option is rendered invalid by the rule against
perpetuities. If the agreement is to be read as giving only an option to the plaintiff personally, or to his assignee, and is exercisable only during the life of the plaintiff, no question would arise as to the rule against perpetuities. This Court has not been asked to read the agreement in that way. The case has been argued on the basis that, provided it be held that the option to purchase is incorporated in the yearly tenancy, it is capable of being exercised beyond the period permitted by the rule. The appellant contends that, although the option is styled an option to purchase, the rule against perpetuities does not apply because the agreement is to grant a new lease on payment of a premium or fine. If the option was to purchase the fee, it is clear that it would be void for remoteness. Whether the exception of covenants to renew a lease from the rule against perpetuities can be justified on principle, (Romer J. in Woodall v. Clifton ([1905] 2 Ch. 257) expressed the view that it cannot) it is settled by a long series of decisions that they are outside the rule.
Can the option given here be regarded as a covenant for renewal of a lease? The lease to be granted is a new lease on completely different terms to the original lease. It is to commence at a date which overlaps the original lease. It is to be a sub-lease at a rent which appears to be but a portion of the head-rent reserved by the lease under which the defendants hold the premises. A very substantial purch ase money is to be paid. The covenants which it is to contain are such covenants in the superior lease as are applicable to the premises. McGowan v. Harrison ([1941]
I.R. 331) was relied on by the respondents as showing that the transaction to be carried through on the exercise of the option is a sale and not a lease. It was argued that if it is to be regarded as an option to purchase the land it is against the rule against perpetuities. Rider v. Ford ([1923] 1 Ch. 541) was cited by counsel for the appellant. The facts there were that an agreement for a lease provided that a prospective tenant should ‘take the house for three, five, or seven years, and have the option of purchasing either the freehold or a lease of ninety-seven years’.
Russell J. held that the option to purchase the freehold was inoperative and invalid because of the rule against perpetuities. At p. 546 he says: ‘As to the right to call for a lease of the premises the position is different; it is not disputed that under the authorities a covenant for what is called a renewal of the lease is outside the rule against perpetuities. It was argued that this was not a covenant for the renewal of a lease because the agreement in terms describes it as a right to purchase. That is merely a question of language, and it is quite inaccurate to describe as a right to purchase a lease that which is really a right to call for a lease. It was further argued that although a right to renew a lease was outside the rule this was not such a right because it was a right to call for a lease on different terms from the original. But the right to renew is a right to call for a fresh lease. The new lease is the result of a fresh demise. Even if all the provisions in the fresh lease were the same as in the old lease three-year term commenced from 15th October, 1941. If, then, he exercised the option and got the promised lease during the currency of any year of the tenancy from year to year, the lessor would, thereupon, be deprived of his right to termin ate the tenancy from year to year, at the end of the year in question, by notice to quit. The right to determine a tenancy from year to year by notice to quit is a necessary incident in such a tenancy. So it is expressed in Woodfall’s Landlord and Tenant (1934 ed., p. 429) and I think never disputed. The exercise of the option would thus take away from the tenancy from year to year ‘a necessary incident’. Would such an option be consistent with the nature of a tenancy from year to year? There are many express decisions which seem to make this, at least, doubtful. In Gray v. Spyer ([1921] 2 Ch. 549) there was an agreement which Younger L.J. held to create a tenancy from year to year. There was a stipulation in this which purported to give the tenant a right to get a p etual renewal. Younger L.J. held that such a right would be repugnant to a tenancy from year to year; ‘for’, he said, ‘it cannot be a characteristic of such a tenancy that one of the parties to it shall have no right to determine it’. His decision that the tenancy in question was from year to year was reversed ([1922] 2 Ch. 22), but it was not doubted by the judges in the Court of Appeal that if the tenancy had been a tenancy from year to year, the stipulation for perpetual renewal would, as Younger L.J. had held, be repugnant to it. Lord Sterndale said (at p. 28): ‘I agree with the learned judge that the two things are inconsistent, and that there cannot be a tenancy from year to year, qualified by a right to perpetual renewal which deprives the tenancy of a necessary incident, that is to say, the right of the landlord to terminate it by a six months’ notice to quit’. Of course the parties might agree upon a shorter notice. But, then Lord Sterndale’s dictum would only be modified accordingly. An option, the exercise of which during the currency of a tenancy from year to year would deprive the landlord of a necessary incident of such a tenancy, namely his right to terminate it by notice to quit, would seem to be repugnant to that kind of tenancy. The principle asserted in Gray v. Spyer ([1921] 2 Ch. 549; [1922] 2 Ch. 22) found clear expression
in Doe v. Browne (8 East 165); Browne v. Warner (14 Ves. 156, 409); Wood v.
Beard (2 Ex. D. 30, 38); Cheshire Lines v. Lewis (50 L.J.Q.B. 121) and in this country in Holmes v. Day (I.R. 8 C.L. 235); for, in this last case, although the Court was equally divided, no member of it disputed that, if the tenancy there was a tenancy from year to year, a clause which would prevent it from being determined by notice to quit would be repugnant to the nature of such a tenancy. If the agreement in the present case gave the tenant an option which might be exercised during the currency of the tenancy from year to year, then, if it was so exercised, the landlord could not determine that tenancy at the end of the current year or the following year by notice to quit.
Of course, if notwithstanding the foregoing considerations, the appellant’s op tion was carried into the tenancy from year to year, the rule against perpetuities would not affect it. But, in view of my doubt on that point, I must consider the position on the assumption that the exercise of the option now must depend on the original three-year agreement alone. What then? In England there can, I think, be no doubt that the option would continue exercisable as long as the supervening tenancy from year to year continues. So it was held in Moss v. Barton (L.R. 1 Eq. 474); Bucklandv. Papillon (L.R. 1 Eq. 477; L.R. 2 Ch. App. 67) andRiderv. Ford ([1923] 1 Ch. 541). The present appellant’s option could not be exercised until the end of the second year of his three-year term, but after that, no time whatever was specified within which it must be exercised. No doubt, in Ireland the relationship of landlord and tenant is based upon contract and not upon tenure, but I do not well see why this should prevent the option in the original agreement from being
exercised now, seeing that this agreement provided that, after the first two years, the option should be exercisable ‘at any time’. The words ‘at any time’ are, I think, plainly incompatible with a specification of a time limit. This view seems to be borne out by the decision of the former Irish Court of Appeal in Allen v. Murphy ([1917] 1 I.R. 484). In that case, a lease, originally for twenty-nine years, contained a covenant for renewal every thirty years during a period of 999 years, no time being fixed within which renewal might be demanded. Several renewals, each for thirty years, had been obtained. The last of these expired in 1904. After that, the then tenant remained on, paying rent to the original lessor’s successor in title, but sought no fresh renewal for a period of nineteen years. The tenant then sought and obtained a renewal for sixty years instead of thirty years. He then sold his interest and the purchaser objected to the title, alleging that the sixty-year renewal was inoperative, because it was granted nineteen years after the term granted by the last previous renewal had expired. The Court of Appeal held that this was not correct and expressly disapproved of the view of Bruce J. in Lewis v. Stephenson (67 L.J.
Q.B. 296) that application for renewal must be made before the expiration of the
lease. Sir Ignatius O’Brien C. adopted the statement in Fry on Specific perform ance (5th ed., p. 541) that ‘where no time has been originally limited within which a tenant’s option to have a lease must be exercised, and the landlord has never called upon the tenant to declare his option, mere lapse of time will not preclude the tenant or his assign or legal personal representative from exercising it’. The Lord Chancellor said (at p. 488): ‘The landlord continues to receive the rents. If a renewal is made ten, twenty, thirty or forty years after the expiration of the lease, is it to be presumed that it is not effective?’ His answer was in the negative. He also said (at p. 487) in commenting on the case of Lewis v. Stephenson (67 L.J. Q.B. 296): ‘If the case is an authority for the proportion that where no time is specified, the application for renewal must be made before the expiration of the lease, I dissent from that as a general proposition’.
Now, it seems to me that that proposition from which he dissented is the very proposition put forward in this case in support of the view that, unless the option was carried into the yearly tenancy, it must have been exercised during the term of the three-year lease and could not be exercised afterwards. In this three-year agreement, assuredly, no time was specified, to use the Lord Chancellor’s words. The words used were ‘at any time after the expiration of two years of the term’. We are asked to say that though ‘no time is specified within which the option must be exercised’ nevertheless it must be exercised ‘before the expiration of the lease’. I am equally unable to reconcile that contention with the following words of Lord Justice Ronan (at p. 491):
‘Where there is the exercise of a power of renewal. ; where no time is fixed
by the lease for applying for the renewal; where no notice has been served by the landlord calling upon the tenant to elect whether he will ask for a renewal or not; and where everything has gone on as if a renewal had been taken out, the reasonable presumption is that the parties had agreed to let the technicality of renewal lie over, and that neither party had any intention of raising any question as to the forfeiture of the tenant’s rights’. All the conditions postulated by Ronan L.J. exist here. There was a lease or letting for three years. It contained an option or right to get a renewal. No time was fixed for applying for the renewal. Everything went on as if a renewal had been taken out, the tenant continuing as tenant. Why then Lord Justice Ronan’s conclusion that the tenant’s right or option still remains does not clearly follow, I am unable to imagine. Moloney L.J. expressed his view to the same effect as the other judges.
The above pronouncements would seem to indicate that just as, on the facts of the present case, the English Courts following the principle of Moss v. Barton (L.R. 1 Eq. 474) and Buckland v. Papillon (L.R. 1 Eq. 477), would hold that the option did not expire with the original term, so our late Court of Appeal would have drawn the same conclusion in this country.
Accordingly, even if my doubts as to the option having been carried into the tenancy from year to year are not unjustified, I am of opinion that the appellant’s option, given him by the original agreement, is still exercisable and that his appeal should be allowed.
Murphy v. Murphy.
[1964] IR 309
Kenny J.
Michael Murphy, of Geoghanstown, County Kildare, a farmer, made his will on the 10th April, 1935. He appointed the defendants, Patrick Murphy and James J. Byrne, to be his executors and trustees and then provided:
“I leave my holding at Geoghanstown aforesaid to my said trustees in trust for my wife for life or until such time as she may remarry and after her death or on her remarriage in trust for my son Sean absolutely provided he has attained the age of twenty-five and in the event of my said son Sean predeceasing my said wife or dying before reaching the said age of twenty-five years then in trust for my son Michael provided he attains the said age of twenty-five years. I charge the said lands with the payment to each of my sons Michael and Brendan of the sum of £300 said sums to be paid to them at such times as my said executors may in their absolute discretion deem fit. In the event of the said lands passing to my said son Michael then I charge same with the payment of the sum of £600 to my said son Brendan to be paid by my executors in manner aforesaid and in which event the said charge of £300 in favour of my said son Michael is to be determined. I also charge the said lands with the payment of the debt due by me to the Munster and Leinster Bank. All the rest residue and remainder of my property of every nature and description I leave to my said trustees to apply the income or proceeds thereof in paying the outgoings of said lands and the support and maintenance of my wife and children and the education as befits their station in life of my said children and for the purposes aforesaid it is my will that my said trustees consult my wife’s wishes especially in respect to my children over whom I appoint her sole guardian.”
When this will was made, the testator had three sons, Sean, who was almost four, Michael, who was two and a half, and Brendan, who was one. The testator, who died on the 16th April, 1935, owned a farm which was registered under the Registration of Title Acts on Folio 5798R of the Register of Freeholders, County Kildare: it was valued for estate duty purposes at £1,850. The only other property which he had was livestock valued at £400.
The testator’s widow, Frances Murphy, died on the 1st November, 1937, without having remarried and Sean Murphy, his eldest son, attained the age of 25 years on the 13th May, 1956. The two sums of £300 mentioned in the will have been paid to Michael and Brendan Murphy. On the 30th October, 1961, an order for the administration of the estate of Michael Murphy was made and accounts and inquiries for this purpose were ordered. Before these can be taken, it is necessary to decide whether Sean Murphy had a vested or contingent estate in the lands at Geoghanstown between the 1st November, 1937, and the 13th May, 1956, and whether he was entitled to all the income of the lands between those two dates.
If I were not handicapped by three decisions of the House of Lords given before 1921 (and therefore binding on me) and by the rule of construction which they establish, I would unhesitatingly decide that Sean Murphy had no interest in the lands at Geoghanstown until he attained twenty-five and that the income of the lands until then passed under the residuary clause in the will. It has, however, been argued that the rule of construction, usually referred to as the rule in Edwards v. Hammond (1) and sometimes referred to as the rule in Phipps v. Ackers (2), compels me to hold that under the will Sean Murphy got a vested interest in the lands and, that on the death of his mother in 1937, this interest vested in possession but was liable to be divested if he died before he reached the age of twenty-five. The result of the application of this rule would be that the words, “in trust for my son Sean absolutely provided he has attained the age of twenty-five,”created a condition subsequent and not a condition precedent. In Hawkins on Wills (3rd ed., 1925), at p. 286 the rule is stated in these terms:If real estate be devised to A. ‘if,’ or ‘when,’ he shall attain a given age, with a limitation over in the event of his dying under that age, the attainment of the given age is held to be a condition subsequent and not precedent, and A. takes an immediate vested estate, subject to be divested upon his death under the specified age.” The rule has been held to apply when the condition attached to the devise or gift began with the word, “provided”: see Simmonds v. Cock (3).
The reason given to support this remarkable rule is that when property is given to a person when he attains a specified age and is then given over if he dies under that age, he takes all that the testator had to give except what is comprised in the gift over as any other construction would cause an intestacy. To give effect to the view that the testator must have intended to dispose of all his interest, the words of condition were treated as creating a condition subsequent so that the estate became vested before the specified age had been reached and was liable to be divested by death before the age was reached. The reasoning on which the rule was based is plainly fallacious when there is a residuary clause as it is then probable that the testator intended that the income of the property devised on condition should form part of the residuary estate until the attainment of the specified age. The rule did not have its origin in the reasoning which was subsequently developed in its defence but in the common law doctrine that the seisin and legal estate in freehold lands had to have an owner so that the subsequent estate which was contingent would not be destroyed by not having a particular estate to support it. The rule made its first appearance in Edwards v. Hammond (1), in which a copyholder surrendered lands to the use of himself for life and then to the use of his eldest son and his heirs if he lived to the age of 21 years provided, and upon condition, that if he died before 21 it should remain to the person making the surrender and his heirs. The lands were held under the tenure known as Borough English in which lands descended to the youngest son on an intestacy and when the surrenderer died the youngest son entered: the eldest son who was seventeen then brought an ejectment. The Court held that though the first words seemed to create a condition precedent, yet, taking all the words together, they were a present devise to the eldest son subject to and defeasible on the condition subsequent that he did not attain the age of 21. Another report of the case appears in a note, at p. 324, of 1 Bos. and P. N. R.
The rule was approved by all the judges of the Court of Common Pleas in Bromfield v. Crowder (2) in which the Master of the Rolls referred the construction of the will to the Court of Common Pleas for the advice of the judges of that Court, presumably because the devise was of freehold and copyhold lands. The existence of the rule was recognised by the House of Lords in Randoll v. Doe d. Roake (3) and in Phipps v. Ackers (4) it was held to apply to equitable interests. In the latter case the opinions in the House of Lords were given after the advice of eleven Common Law judges had been heard. In Phipps v. Ackers (4) the testator left his lands (other than the lands of Wheelock) to his trustees upon certain trusts: in relation to the lands of Wheelock the will provided:. . . my trustees shall stand seised and be possessed thereof in trust and to the intent and purpose to assign, convey and assure the same unto my godson, George H. Ackers . . . when and so soon as he, my said godson, shall attain his age of 21 years . . . But in case my said godson, G. H. Ackers, shall depart this life before he attains the said age of 21 years without leaving issue of his body, lawfully to be begotten, then and in such case the said messuages, lands and premises in Wheelock aforesaid, hereinbefore given and devised to him . . . shall sink into and become part of the residue of my real and personal estate, and go according to the disposition thereof hereinafter expressed and contained,” and the residue of the real and personal estate was then given to James Coops. At the date of the death of the testator, George H. Ackers was 12 years old: he subsequently attained the age of 21. The opinion of the Judges was sought on the question as to what estate George H. Ackers took in the lands at Wheelock. The Judges advised that the earlier cases went on the principle”that the subsequent gift over in the event of the devisee dying under 21, sufficiently shows the meaning of the testator to have been that the first devisee should take whatever interest the party claiming under the devise over is not entitled to, which of course gives him the immediate interest, subject only to the chance of its being divested on a future contingency.” They stated that the question whether the doctrine on which the cases rested was originally altogether satisfactory was a point which they had not to discuss as the rule of construction had been established and recognised as settled in all the Courts. The Lord Chancellor (Lord Lyndhurst) said that he agreed with the advice of the Judges and that the only question that remained to be considered was whether a different construction should be put on the will as it was dealing with an equitable estate: he said that he was of opinion that the same construction should be put upon the words when used in connection with an equitable estate as those which the rule required to be put upon them when they were used in connection with a legal estate. Lord Brougham, who did not like the rule, did not wish to extend it to equitable interests but said that the authorities required him to hold that it applied to them.
The existence of the rule was again recognised and affirmed by the House of Lords in Pearks v. Moseley (1).
The rule has been recognised and applied in many modern cases: it has been extended to personal estate (see In re Heath. Public Trustee v. Heath (2)) and was discussed by Black L.J. in the High Court in Northern Ireland in McGredyv. Inland Revenue Commissioners (3). The judgment of the Lord Justice contains the following passages (at p. 161):The rule,” [the rule in Edwards v. Hammond ] “though so firmly settled and repeated in almost identical terms in all the text books, can hardly fail to strike one as a somewhat artificial and technical rule, involving, to use Lord Selborne’s words, a rather violent and unnatural construction of words of contingency. The justification of the rule put forward in the authorities is the doctrine . . . that from the existence of the devise over the courts discover an intention that the first devisee shall take all that the testator has to give except what he has given to the devisee over, an intestacy in the meantime not being intended, and that in order to give effect to that intention they hold, by force of the language of the will, that the first devise is not contingent but vested, subject to be divested upon the happening of the event upon which the property is given over. To some minds this reasoning may not appear entirely convincing . . . But whatever doubts one may have about the soundness of the reasoning on which the rule has been sought to be justified, there can be no doubt that the rule itself, as now enunciated in all the text books, must, for good or for evil, be accepted as a settled rule of construction binding on our courts.”
I think it undesirable that I should be forced by any rule of construction to give a meaning to a will which I am convinced the testator and his legal advisers did not intend. While rules of construction are of assistance when the words used are ambiguous, I cannot see why a rule of construction should be recognised by our Courts when it fixes on the language used by Mr. Murphy a meaning which it may have had in 1683 in England but which it certainly had not in Ireland in 1935. The history of the rule shows that it was imposed on the Chancery Courts by the Common Law judges. However, despite my objections to it, I feel that the three decisions of the House of Lords compel me to recognise its existence as a rule of construction.
In my opinion, however, the rule does not apply to the will of Michael Murphy. The basis of the rule is that the first devisee is to take all that the testator had to give except what has been given to the person entitled under the gift over; if, however, there is a condition or words of contingency attached to the gift over, the whole basis of the rule disappears for there is not then any intention of the testator to dispose of all his interest in the property by the first contingent gift and the absolute gift over. This conclusion is stronger when there is a residuary clause, for then the testator has disposed of all his interest in the property by the combined effect of the first gift, the conditional gift over and the residuary clause. In this case the gift over which was expressed to take effect in the event of Sean Murphy predeceasing the testator’s wife or dying before reaching the age of 25 years was “in trust for my son Michael provided he attains the said age of twenty-five years.” The gift over is conditional and there is therefore no basis for applying the rule of construction and I can give the words their natural meaning.
The questions which have arisen on the taking of the accounts are referred to in the affidavit of the plaintiff, sworn on the 3rd May, 1962. The answers to the questions will be:
1, The farm at Geoghanstown passed to Sean Murphy absolutely on the 13th May, 1956, when he attained the age of twenty-five.
2, The income from the said farm between the 1st November, 1937, when Frances Murphy died, and the 13th May, 1956, was held by the trustees on the trusts declared by the residuary clause in the said will.
I express no opinion on the question whether the plaintiff is entitled to any share of the income captured by the residuary clause as this matter has not been argued.
In re Poe; Poe v. Poe.
[1942] IR 536
Black J.
The terms of the will of the late Major Poe raise in an acute form what is very often one of the most difficult of all technical legal problems, viz., the effect of the rule against perpetuities upon the validity of a particular testamentary disposition.
The material part of the will in question is as follows: [Read portions of the will, printed ante p. 535.]
The opening disposition of all the testator’s “land, money, investments, live stock, furniture, and all other property,”etc., in favour of the children of his brother, Captain Arthur Percy Poe, is virtually a bequest of the residue of his property after a number of specified legacies have been paid. Captain Poe is still living. He has three children, all of whom are also living, and all of whom had attained the age of 25 years at the date of the testator’s death. If the property in question was vested, and not merely contingent, at the testator’s death, the whole class in whose favour the disposition was made being ascertained and closed, there could be no question of remoteness or invalidity in the purported disposition. On the other hand, if the attempted disposition was contingent, and if the class was not closed, but possible future-born children of Captain Poe would legally form members of the class, assuming that the disposition were not invalidated by the rule against perpetuities, then, admittedly and obviously, the disposition in question in favour of such future children would be void for remoteness.
Now, while the problem before me raises some points that are controversial to the last degree, there are at any rate two initial propositions which are not open to question.
The first is that where there is an immediate disposition by will in favour of children as a class, and there are such children alive at the death of the testator, then these children then so living and no others compose the class and are objects of the disposition, unless a contrary intention is to be found in the will. It was not always so. According to older cases, the objects were to be ascertained at the date of the will. But, the rule in question, which has been called “a rule of convenience”in both Jarman and Theobald, is now axiomatic. If there be nothing in the present will to displace it, the late Major Poe’s provision for the children of Captain Poe was a valid disposition in favour of the three children’ living at the testator’s death and still living, and future-born children, if there should be any, can have no interest in it.
The second indisputable rule is that where such a disposition in favour of children as a class is accompanied by a provision postponing payment or distribution of the share of each of the children until the attainment of a certain age, then when the first child attains that age, the class is automatically closed, and children born after that are excluded. This might be referred to as the rule in Andrewsv. Partington (1), although it has been re-stated in other decisions too numerous to mention. It also, and more generally, perhaps, than the first rule I have mentioned, has been called a rule of convenience, although, as Chitty J. said in In re Wenmoth’s Estate, Wenmoth v. Wenmoth (2),it is a rule that must be very inconvenient to those children who may be born after the period of distribution. Its convenience consists in obviating the inconvenience of making the child who has attained the age of distribution wait an indefinite, and possibly very lengthy, period for his share. Of course if there be other children then living, the eldest child’s ultimate and maximum share cannot then be ascertained, for some of the other children may die before reaching the prescribed age, and the child who has reached the required age will then be entitled to his proportion of any share or shares so falling in. But his minimum share can be ascertained when the class is closed by reason of his having attained the prescribed age. Now, if the first rule I mentioned be displaced here by the terms of the will, then the rule in Andrews v. Partington (1), if it also be not excepted by the will, would equally save the disposition with which I am dealing, inasmuch as the three existing children had attained 25 years of age at the testator’s death, and the class would then have been closed.
This rule as to the closing of the class can sometimes operate so as to save a devise or bequest from being invalidated by remoteness. An illustration is the case of Picken v. Matthews (3) where property was left on trust for such children of the testator’s daughters as should attain 25. One daughter had a child who had attained 25 at the testator’s death. As this closed the class and confined it to children living and ascertained at the testator’s death, subject to their attaining a certain age, the gift was valid. In the same way, it may be invoked if that be necessary in the present case. That depends upon whether a contrary or inconsistent intention is to be gathered from the rest of the will.
Before considering that, yet a third rule may be mentioned. It is that when some of the objects that form a class are too remote and others were born within the period permitted by law, the disposition cannot be split into portions, treating it as invalid only as affecting the objects that would be too remote, but valid as regards the objects, being persons, born within the permitted limits of time. In other words, if the vice of remoteness may affect any unascertained member of the class, if affects the class as a whole. For this purpose, the disposition cannot be treated like the curate’s egggood in parts. This principle might perhaps be looked upon as the rule in Leake v. Robinson (1).It was supported by the Court of Appeal in Smith v.Smith (2) and in Hale v. Hale (3). On the other hand, in In re Moseley’s Trusts (4), Malins V.C. held that in such a case the whole gift was not void as infringing the rule against perpetuities, but that it might be severed, and the limitation held good as to some shares, and bad as to others. The same clause of the same will was considered by Jessel M.R. (5), who held the exact contrary of what had been decided by the Vice-Chancellor. On appeal, the Court of Appeal felt bound by the decision of a former Court of Appeal to affirm the Master of the Rolls; the second Court of Appeal at the same time indicating that it favoured the view of the Vice-Chancellor, and only affirmed the. Master of the Rolls in deference to the decision of the former Court of Appeal in Smith v.Smith (2).
As there were three Judges in the second Court of Appeal and only two in the first, this furnishes a curious instance of a principle being settled for the time being by a minority decision of the appellate tribunal. However, the matter was finally concluded by the House of Lords, reportedsub. nom. Pearks v. Moseley and Others (6) when it was settled once for all that in such a case as indicated, there could be no severance, and that if any unascertained member of a class may be too remote, the whole disposition in favour of the class is invalidated. The result is that, if under Major Poe’s will the class of children comprises children of Captain Poe who may yet be born, the entire disposition fails, and it cannot be upheld evenquoad the three children who were living at the testator’s death and are still living.
I have now to consider two other provisions in the will, and in my opinion they involve most perplexing difficulties which I have found intensified by many of the cases and judgmentsoften conflictingwhich I have felt it necessary to study in seeking to unravel the problem.
First, there is a provision empowering the trustees to dispose of the property in question, “and to use the money and property for the best advantage of the children of my brother A. Percy Poe until each of them shall reach the age of twenty-five years, when each is to receive his or her share on reaching the age of twenty-five years.” Now, this clause purports to postpone the distribution of the property left to the children until they attain the age of twenty-five. That clause, if it is not to be disregarded, would bring the rule in Andrews v. Partington (1) into operation, unless there is somthing else in the will to prevent that result. If the rule in Andrews v. Partington (1)operates, it would seem to me to lead to the same result as it did in Picken v. Matthews (2), namely, to close the class when the eldest child attained 25 years of age, thus excluding future born children, and getting rid of all question of the rule against perpetuities.
I defer for the moment considering the final words of the will saying that the children are to include any children Captain Poe may have at a future date.
Now, there are a number of reported cases in which the Courts have had to consider the effect upon the period of distribution of a provision making a gift to a class payable only on the attaining of a certain age. Most of these cases did not involve any question of the rule against perpetuities; but some of them did involve that question, and even those that did not are germane to the present problem. First, there is the case of Fox v. Fox (3). It has been distinguished, criticised, and dissented from; but never, so far as I am aware, actually overruled. In that case a testator directed his trustees, after the determination of same prior life interests, to divide and transfer a portion of £15,000 to and amongst the children of a named party equally as and when they should respectively attain the age of 25 years. He also directed the trustees to apply from time to time the income of the presumptive share of each child, or so much thereof as they should think fit, for his, her, or their maintenance and education until such share should become payable as aforesaid. If there should be no children surviving the testator, or if they should die before attaining 21, there was a gift over. Jessel M.R. said at p. 290:”Being opposed to the frittering away of general rules, and thinking that such rules, so long as they remain rules, ought to be followed, I hold that a gift contained in a direction to pay and divide amongst a class at a specific age, followed by a direction to apply the whole income for maintenance in the meantime, is vested, and not the less so because there is a discretion conferred on the trustees to apply less than the whole income for that purpose.” He added at p. 291, “I also think that the gift over, if not conclusive on the question, certainly aids the construction adopted by me.” This was a strongly expressed decision by a great Judge. It will be seen from the words I have quoted, that his opinion was formed quite independently of the gift over, his reference to which was only a confirmatory addendum. I note this because in the 7th edition of Jarman on Wills, p. 1388, it is submitted that the approval of Fox v. Fox (1) given by the Court of Appeal in In re Turney (2) “had reference to the effect of a gift over in conferring vested interests subject to be divested.” On the other hand, in Vawdryv. Geddes (3) Leach M.R. took the view that a gift over, so far from aiding the presumption of an immediate vesting, caused that presumption to fail entirely. But certainly in In re Turney (2), the gift over seems to have been the decisive point in favour of immediate vesting. See the judgment of Romer L.J. particularly (4),The Court of Appeal said that Fox v. Fox (1) was very good sense and very good law. Nevertheless, in In re Wintle, Tucker v. Wintle (5) North J. expressly dissented from it. There was a great similarity between the respective dispositions in Fox v. Fox (1) and those in the later case of In re Mervin, Mervin v. Crossman (6)which was decided in the opposite sense, it being held that the children, in spite of the discretionary power to pay all or part of the income for their maintenance, did not take vested interests, and the gift over was void for remoteness. In In re Williams, Williams v. Williams (7), Fox v. Fox (1) was distinguished on the words of the will there, Neville J. doubting whether Fox v. Fox (1) and in In re Wintle (5) could stand together. It may seem equally difficult for Fox v. Fox (1) and in In re Mervin (6) to stand together. In In re Grimshaw’s Trusts (8), Hall V.C. seems to explain Fox v. Fox (1) on the ground that “the first trust there was of the capital fund, and after the gift of that in the first instance to the children there followed, as a sort of annex to that trust, these words” the words referred to being those empowering the trustees to pay the income for maintenance. But in In re Mervin (6),the first trust was also of the capital fund, followed by an “annex” providing for maintenance.
I am inclined to think the most plausible distinction between the cases is that suggested by Stirling J. in In re Mervin (1). He said of Fox v. Fox (2):”There, however, the fund was divided into as many shares as the son had children, and the income of each share was directed to be applied for the maintenance of the particular child for whom the share was destined. Here the income of the whole fund is made applicable for the maintenance of all the children.” Again, in In re Parker, Barker v. Barker (3), the trustees were to hold certain investments upon trust to pay the income thereof, or such part of the same as they should deem expedient, for the maintenance and education of the children of the testatrix until they attained 21, and then upon trust to pay them the capital, following which provision the trustees were empowered “to dispose of any competent part, not exceeding one half of the presumptive share of any of my Children” for their advancement in life. The same Judge who decided Fox v. Fox (2)Jessel M.R.held that an infant who had died did not take a vested interest in his share. He said at p. 45;”When a legacy is payable at a certain age, but is, in terms, contingent, the legacy becomes vested when there is a direction to pay the interest in the meantime to the person to whom the legacy is given; and not the less so when there is superadded a direction that the trustees ‘shall pay the whole or such part of the interest as they shall think fit.'” If this be right, and I should be ready to follow it, the fact that the trustees’ power is discretionary to pay all or only part of the income, does not matter. But Jessel M.R. continued at p. 46:”But I am not aware of any case where, the gift being of an entire fund payable to a class of persons equally on their attaining a certain age, a direction to apply the income of the whole fund in the meantime for their maintenance has been held to create a vested interest in a member of the class who does not attain that age.”He added that there was nothing in the will before him”giving an aliquot share of income to any individual child.” Similarly, in In re Gossling, Gossling v. Elcock (4),where each child was held to take an immediate vested interest in his or her share, the very feature was present which Jessel M.R. held to be absent in In re Parker (3),as by the terms of the will in Gossling’s Case (4) the testator “intended that the income of the aliquot share coming to the particular child should be payable for the maintenance of that child until he or she attained the age of 21.”
In view of these quotations, I think that Fox v. Fox (1)and In re Mervin (2) can be distinguished and may stand together; but the presence or absence of anything giving an aliquot share of income to any individual child does not seem to me to enable Fox v. Fox (1) and In re Wintle (3)to be reconciled, in view of the wording of the maintenance provision in In re Wintle (3), which I find hard to distinguish from the like clause in the will in Fox v. Fox (1).The maintenance clause in the will of Major Poe stands out by itself; but I do not think it makes clear that each child is to get an aliquot share of the income. Taking the cases I have quoted together, I think it is very doubtful whether Fox v. Fox (1) coud be applied in the interpretation of the present will.
Whether it is necessary for those representing the existing children’s interest to invoke Fox v. Fox (1) at all is another matter. Before coming to that, I must consider the last words of the will, which clearly define the term”children” by saying that they are to include any children of the said A. P. Poe which he may have at a future date. If the gift in this case were not immediate, those words would not affect in any way the old rule that such words of futurity do not let in children born after the first share has become payable. In Hawkins on Wills, 2nd ed., p. 93, the view is taken that in the case of an immediate gift also, such words will generally be considered as intended only to provide for the case of children coming into existence between the date of the will and the testator’s death. A number of cases are cited in support of this rule. One of them Sprackling v. Ranier (4) turned upon the use of the word “then,” and is perhaps in no way an authority for the proposition that such words do not enlarge the class. See note (t) at page 1695 of the 6th edition of Jarman. But there is ample authority left. There are the decisions in Storrs v. Benbow (5); Butler v.Lowe (6) and the dicta in Mann v. Thompson (7). As against this, Mogg v. Mogg (8) is undoubtedly a decision in the contrary sense. In accordance with the practice at the time, and the circumstances, no reasons were given for it. Besides this, its authority is not increased by the way it was dealt with in the Privy Council in Dias v. De Livera (1). In the latter case the authorities in support of the old rule that such words as “born and to be born”in a bequest which is immediate to children as a class do not enlarge the class to let in those born after the testator’s death, are reinforced by a citation of the weighty opinion of Mr. Justice Williams. See p. 134. The case of Defflisv. Goldschmidt (2) which may be said to support Mogg v.Mogg (3) turned upon very special wording not present in Major Poe’s will. I should not be satisfied that these two cases suffice to supplant the old rule as to the effect of such words of futurity as “to be born” or “to be begotten.”
In Bateman v. Gray (4) the words were “to the children of A. now or hereafter to be born who shall attain the age of 21 years.” These were followed by a power of advancement out of the vested or presumptive share of any object of the gift. Lord Romilly M.R. thought the word “vested”was very strong, and held that the class of children to take was not ascertained when the eldest attained 21. The word “vested” does not appear in the clause of the present will authorising the use of the money until the children reach 25. A like decision was given in Iredell v.Iredell (5). But there the clause authorising the maintenance contained the words “whether the child should or should not attain 21.” In In re Deloitte, Griffiths v.Allbeury (6), Eve J. said that Bateman v. Gray (4) was not satisfactorily reported, and that the matter before the Court of Appeal could not be concluded in any way by that case. In Gimblett v. Purton (7) Malins V.C said at p. 431, that even if he was dealing with a clause for advancement similar to that in Bateman v. Gray (4)he would have declined to follow that decision “as it tends to throw a doubt upon a rule which is as well settled as any rule of interpretation in the Courts.” He held in that case that a power to apply the interest of the presumptive shares of grandchildren towards their maintenance did not prevent those born after the eldest attained the age of distribution from being excluded. It is true that in this case there were no words of futurity such as”to be born”; but the case is none the less relevant, and also of interest for the view the Vice-Chancellor took of Bateman v. Gray (4).
Upon all the authorities, I should not be prepared to hold that in the present case children born after the eldest child attained 25 years of age form members of the class of children in whose favour the testator made his disposition. On the other hand, I do not think the matter is free from doubt, and I can quite understand that it might present itself differently to another mind. The view to which I incline tends to avoid intestacy and to evade the rule against perpetuities. Both Judges and text-writers have complained that various questionable decisions have been given under the influence of a desire to evade that rule. I can only hope that I am not adding to the number of these errors so influenced. The words of Lord Selborne L.C. in Pearks v. Moseley and Others (1)were impressed on me. He said at p. 719:”You do not import the law of remoteness into the construction of the instrument, by which you investigate the expressed intention of the testator. You take his words, and endeavour to arrive at their meaning exactly as if there had been no such law, and as if the whole intention expressed by the words could lawfully take effect.” But I think that pronouncement cannot be taken to mean that I must leave the law of remoteness entirely out of account in all circumstances. I think there are circumstances in which I may take it into account. Indeed, the very next words of Lord Selbourne make that clear. He proceeds to say:”I do not mean, that, in dealing with words that are obscure or ambiguous, weight, even in a question of remoteness, may not sometimes be given to the consideration that it is better to effectuate than to destroy the intention.” I consider the words of the will before me to be ambiguous and indeterminate, and such that in construing them, I should be justified in giving some weight, if necessary, to the consequences that would ensue from adopting a construction that would admit afterborn children to the class in whose favour the disposition was made a construction which I do not think would give effect to the testator’s intention. But, even without any such consideration of consequences, I should take the same view, albeit with the doubt which so many conflicting authorities appear to me to render inevitable.
But, apart from all the foregoing considerations, I am of opinion that the words of Major Poe’s will are more like the words used in the will in Kevern v. Williams (2)than those in any of the cases I have referred to. In that case the property was given in trust for the grandchildren in the first instance, and then followed the words “to be by them received in equal proportions when they shall severally attain the age of 25 years.” It was held that the class was limited to those born in the lifetime of the person who took the anterior life interest. Here there is likewise in the first instance an unqualified disposition in favour of the children. In a much later part of the will there is a distinct provision”a sort of annex” as it was called in In re Grimshaw’s Trusts (1) to the effect that each child is to receive his share on reaching the age of 25 years. Paraphrasing the words of Mr. Jarman at p. 1399 of the 6th edition, it would seem to me that futurity is not annexed to the substance of the gift, but appears rather to relate to the time of payment. Kevernv. Williams (2) has not escaped criticism, including that of the learned author of “Gray on Perpetuities.” Yet it is said in Gray that “assuming that the postponement of payment was too remote, it is submitted that the decision was correct.” It was suggested that on the facts in that case, the time of payment was not too remote. (See Gray on Perpetuities, 2nd edn., p. 480, s. 638.) If that be so, the postponement of payment in this present case would surely be too remote. I am not aware that Kevern v.Williams (2) has ever been overruled. In most of the cases quoted, the postponement of payment was part and parcel of the gift itself. If the two can be divorced here, the postponement of the period of distribution not being annexed to the substance of the prior unqualified gift, then the vesting would have been instanter, and Mr. McCann would have been right in his contention that what he was pleased to call “the tags”at any rate, the postponement clausecould be disregarded.
If the gift here and the quite separate clause regarding postponement of distribution can be treated as disconnected and there are a series of legacies sandwiched between themthen I think the cases cited in argument of Cookev. Cooke (3) and In the matter of the Estate of Herbert Clarke (4) would be illustrations of a principle that might be applied to the construction of this will. I incline to the view that they may be regarded as distinct.
Therefore, on the several alternative grounds I have indicated, I take the view upon the whole that the disposition in favour of the children of Captain Poe was valid, and that children born after the eldest child attained 25 years of age, if there had been any, would have been excluded. For the same reason, future children, if there should ever be any, would have no claim upon the property left to the children of Captain Poe.
Jameson v. Squire.
[1948] IR 157
Gavan Duffy P.
MAGUIRE C.J. :
4 March 1948
This is an appeal from a judgment in favour of the defendants, pronounced by the President of the High Court on the trial of the action.
The action was brought for a declaration that an option contained in an agreement, dated the 15th of October, 1941, was a valid and subsisting option, and for an order that, on payment of the sum of £1,720 by the plaintiff to the defendants, the defendants do execute to the plaintiff a proper sub-lease of the premises the subject of the option. There was also a claim for damages, but this part of the claim is not persisted in.
After the expiration of the term of three years the plaintiff remained on in possession as a tenant, and on payment of rent, which was accepted by the defendants, he became a yearly tenant. On the 28th November, 1945, he gave notice to the defendants that he intended to exercise the option contained in the agreement. The defendants, through their solicitor, replied that the option was “not exercisable in the events which have happened.” Thereupon the plaintiff commenced these proceedings.
The President of the High Court held that, on the fair reading of the agreement, the option was a right given to the tenant conditionally on its exercise within the term of three years created by the agreement. Holding that the tenant’s attempt to exercise the option came too late, he dismissed the action.
I find myself unable to agree with the learned President in his interpretation of the agreement. The provision that the option might be exercised “at any time” after the expiration of two years, and the omission of words limiting the period during which it might be exercised, make it plain to my mind that the option was to continue as long as the relationship of landlord and tenant under the agreement lasted. Consequently I hold that, being a term of the original agreement which was not inconsistent with the yearly tenancy which arose after the expiration of the original lease it was carried into the yearly tenancy.
It is contended however that the option is rendered invalid by the rule against perpetuities. If the agreement is to be read as giving only an option to the plaintiff personally, or to his assignee, and is exercisable only during the life of the plaintiff, no question would arise as to the rule against perpetuities. This Court has not been asked to read the agreement in that way. The case has been argued on the basis that, provided it be held that the option to purchase is incorporated in the yearly tenancy, it is capable of being exercised beyond the period permitted by the rule. The appellant contends that, although the option is styled an option to purchase, the rule against perpetuities does not apply because the agreement is to grant a new lease on payment of a premium or fine. If the option was to purchase the fee, it is clear that it would be void for remoteness. Whether the exception of covenants to renew a lease from the rule against perpetuities can be justified on principle, (Romer J. in Woodall v. Clifton (1) expressed the view that it cannot) it is settled by a long series of decisions that they are outside the rule.
Can the option given here be regarded as a covenant for renewal of a lease? The lease to be granted is a new lease on completely different terms to the original lease. It is to commence at a date which overlaps the original lease. It is to be a sub-lease at a rent which appears to be but a portion of the head-rent reserved by the lease under which the defendants hold the premises. A very substantial purchase money is to be paid. The covenants which it is to contain are such covenants in the superior lease as are applicable to the premises. McGowan v. Harrison (1) was relied on by the respondents as showing that the transaction to be carried through on the exercise of the option is a sale and not a lease. It was argued that if it is to be regarded as an option to purchase the land it is against the rule against perpetuities. Rider v. Ford (2) was cited by counsel for the appellant. The facts there were that an agreement for a lease provided that a prospective tenant should “take the house for three, five, or seven years, and have the option of purchasing either the freehold . . . or a lease of ninety-seven years.” Russell J. held that the option to purchase the freehold was inoperative and invalid because of the rule against perpetuities. At p. 546 he says:”As to the right to call for a lease of the premises the position is different; it is not disputed that under the authorities a covenant for what is called a renewal of the lease is outside the rule against perpetuities. It was argued that this was not a covenant for the renewal of a lease because the agreement in terms describes it as a right to purchase. That is merely a question of language, and it is quite inaccurate to describe as a right to purchase a lease that which is really a right to call for a lease. It was further argued that although a right to renew a lease was outside the rule this was not such a right because it was a right to call for a lease on different terms from the original. But the right to renew is a right to call for a fresh lease. The new lease is the result of a fresh demise. Even if all the provisions in the fresh lease were the same as in the old lease it would none the less be a fresh demise, and a fresh term with fresh covenants. I am unable to see any reason why the position as regards the rule against perpetuities should be any different in the case of a right to call for a lease, even though the terms may not be in all respects the same as the terms of the original lease, and in the case of a right to call for a lease in which every provision may be word for word the same as in the old lease. In my opinion the right to call for the lease of ninety-seven years, to run from the expiration of the existing tenancy, is not invalidated by the rule against perpetuities and may be exercised by the defendant.”
It is said, however, that this decision, which is not binding on this Court, is in conflict with the decision of this Court in McGowan v. Harrison (1). I do not consider that there is a conflict. In McGowan v. Harrison (1) the ratio decidendiwas that the fact that a sale of a house was carried out by means of an under-lease did not suffice to establish that the purchaser was a tenant, holding under “a contract for letting for habitation of a dwelling-house,” within the meaning of s. 31, sub-s. 1, of the Housing (Miscellaneous Provisions) Act, 1931. The case is, in my view, clearly distinguishable from Rider v. Ford (2).
The important point is that although the option given here may be described as a sale by means of sub-lease, the question as to whether it is outside the rule against perpetuities depends upon the nature of the interest in the land which is to be granted, not on whether it is described as a sale. The new lease will, in its terms, differ greatly from those in the original lease. I accept the reasoning of Russell J. in Rider v. Ford (2) as sound. Applying it to this case I am of opinion that the plaintiff is entitled to the declaration which he seeks.
Since the case was argued my attention has been drawn by Mr. Justice Murnaghan to the case of the South Eastern Railway v. Associated Portland Cement Manufacturers (1900)Ltd (3), where it was held by the Court of Appeal, consisting of Cozens-Hardy M.R., Fletcher Moulton L.J. and Farwell L.J., affirming Swinfen Eady J., that as against the original covenantors the provision in an agreement was a personal contract and was not obnoxious to the rule against perpetuities. Swinfen Eady J. (at p. 25) says:”In the present case the plaintiffs themselves entered into the contract to grant and granted the easement of tunnelling and they are the very parties who now wish to restrain the defendants from exercising that easement. There is no question here as to the validity of the grant of an easement in futuro . . . Again I wholly fail to appreciate why the plaintiffs are not bound by their own personal contract, which has nothing whatever to do with the rule against perpetuities.” Cozens-Hardy M.R. (at p. 28) said:”I have listened with some amazement to the contention that the rule of perpetuities applies where the action is brought, not against an assign of the covenantor, but against the covenantor himself, . . .”Fletcher Moulton L.J. agreed with this view stating (at p. 32) that personal covenants do not fall within any rule against perpetuities. Farwell L.J. (at p. 33) took it to be “settled beyond argument that an agreement merely personal not creating any interest in land is not within the rule against perpetuities.”
If this is good law, as I am inclined to think it is, it rules the present case. The case was not cited in argument and accordingly I am content to rest my opinion on the grounds already stated in this judgment.
I have had an opportunity of reading the judgment of Mr. Justice Murnaghan. I have not considered the grounds upon which he rests his judgment. If he is right in his view as to the effect of Deasy’s Act upon the relationship of landlord and tenant, the reasoning upon which he bases his conclusion in this case seems unassailable. As, again, this line of reasoning was not developed so as to become the subject of critical discussion in argument, I prefer not to express an opinion upon it.
Accordingly, in my opinion, this appeal should be allowed. The plaintiff should have a declaration that the option contained in the agreement of the 15th October, 1941, is a valid and subsisting option and an order that, on payment of the sum of £1,720, the defendant do execute a sub-lease of the premises in accordance with the terms of clause IV of the agreement.
MURNAGHAN J. :
It appears to be common ground that on the 15th October, 1943, and until the 14th October, 1944, the tenant could have exercised the option. If he did so exercise it on the 15th October, 1943, it seems to me that the residue of the three years’ term would have ceased by merger in the sub-lease which he would acquire under the option.
At the end of the three years’ term Thomas H. Jameson remained on in possession and he subsequently paid rent which was accepted by the landlord. A tenancy from year to year arose by implication of law. On the 28th November, 1945, the tenant purported to exercise his option. The learned President of the High Court has ruled that he is not entitled to do so. He said: “I have reached the conclusion that on the fair reading of the tenancy agreement the option was a right given to the tenant conditionally upon its exercise within the third year of the term of three years created by the agreement, provided the tenancy still subsisted when the option was exercised. In my opinion, the tenant’s attempt to exercise the option came too late and this action fails.”
The argument for the appellant was mainly, if not altogether, based on the view that the option clause contained in the written agreement was a separate and distinct agreement and was not merely part of the terms of the three year tenancy. If this can be established, it seems to me impossible to limit the words “at any time after the expiration of two years of the term hereby granted and provided that the tenancy shall not have been determined in pursuance of the provisions of paragraph 3 hereof” to the period of the third year of the term. Clauses of this kind have been considered by Courts in England: see Moss v.Barton (1) and Buckland v. Papillon (2). In the latter case, where a term of three years had come to an end and a tenancy from year to year had been raised by implication of law, Lord Chelmsford held that the option clause was not part of the terms of the yearly tenancy so created, but he seems to have regarded the clause in the original agreement as subsisting as long as the relation of landlord and tenant remained. In England, the relation of landlord and tenant is based upon tenure, and it may be that Lord Chelmsford did not consider an option to purchase as in any way regulating the relation of landlord and tenant, and that it must be an independent agreement. In Lewis v. Stephenson (3)Bruce J. said: “As to the period within which the option is to be exercised when nothing is specified, I think I am doing no violence to the ordinary canon of construction when I say I think that must be taken to mean within a reasonable time before the expiration of the original lease.” This opinion was disapproved of by the Court of Appeal in Ireland in Allen v. Murphy (4), but in the present case the time is specified and it is merely a question of construction as to what this time may be. If the principle stated by Lord Chelmsford applied in Ireland, I should feel it impossible to limit the period of exercise of the option to the third year of the original tenancy.
In Ireland, however, under Deasy’s Act (23 & 24 Vict., c. 154), s. 3, it is expressly enacted that the relation of landlord and tenant shall be deemed to be founded on the express or implied contract of the parties and not upon tenure or service. This distinction is emphasised by FitzGibbon L.J.
in his judgment in O’Connor v Foley (1) in the Court of Appeal in Ireland where he says: “Deasy’s Act, section 3, founds the relation of landlord and tenant in Ireland upon the express or implied contract of the parties, and, as at present advised, I think that possession of a tenancy, when acquired under the Statute of Limitations, carries with it terms oftenancyas distinguished from terms of personal contract the same as those on which the barred tenant held, and that, in Ireland, those terms are founded on contract.”
Apart, however, from the particular question dealt with by FitzGibbon L.J., the general principle stated in s. 3 of Deasy’s Act seems to me clearly to involve that the clause in the agreement of the 15th October, 1941, giving the option to purchase, is part of the contract of tenancy, and as much part of that contract as any other term of the agreement. The entire terms of the agreement were to govern the relations of the parties during the term and did not, in my opinion, extend to govern these relations after the end of the term. The plaintiff can, in my opinion, therefore, derive no help from the option contained in the agreement of the 15th October, 1941.
The case does not, however, end here. When the term of three years expired, the parties, by their conduct, created a new tenancya tenancy from year to year. In Meath v.Megan (2) in the Court of Appeal in Ireland, FitzGibbon L.J. says (at p. 479):”Where a tenant holds under a lease or agreement in writing, for a term which comes to an end, and he continues in possession without making any fresh agreement, there is a presumption that all the terms of the old agreement continue to apply, except so far as they are rendered inapplicable by the change in the duration of the tenancy.” In the third year of the old term one of the contractual terms of the tenancy was that the tenant had an option to purchase during the tenancy, and, in my opinion, this contractual term was applied and made applicable as a contractual term of the tenancy from year to year. I see no difficulty in the textual wording of the clause “at any time after the expiration of two years of the term.” In substance and in fact, the tenant had an option in the third year of the term, and this option was, I think, a term of the old agreement which continues to apply and there is nothing in the terms of the tenancy from year to year which renders this option inapplicable.
I am therefore of opinion that subject to the question of application of the rule against perpetuities the plaintiff is entitled, under the terms of his tenancy from year to year, to exercise the option.
It is not denied that the plaintiff, at the date of the notice of his intention to exercise the optionthe 28th November, 1945was in possession and in occupation of the premises as tenant from year to year.
There was considerable discussion whether the rule against perpetuities did or did not apply. This discussion can reasonably arise if the right depends upon a contract contained in the original agreement, but I can see no application for the rule if, as I hold, the option arises upon the terms of the tenancy from year to year. The option in such case lasts for one year only, and is renewed each time the tenancy is continued by the conduct of the parties for a further year. Either party can end the tenancy by giving due notice and thus put an end to the option applicable during the year. Of course the parties may not determine the tenancy from year to year and it may last for many years. But during no year can it be said that the option is entitled to be exercised at a time beyond that allowed by the rule against perpetuities. For this reason, in my opinion, the rule against perpetuities does not apply.
There is another aspect of the case which I think it right to mention, although it was not discussed in argument. In South Eastern Railway v. Associated Portland Cement Manufacturers(1900) Ltd. (1), the Court of Appeal in England emphatically laid down the proposition that no question of perpetuity arises where the original contractor is sued on his personal contract. Cozens-Hardy M.R. referred to London and South Western Railway Co. v. Gomm (2), which affirmed that the rule against perpetuities had the widest scope, but quoted Jessel M.R. in that case as stating that the rule against perpetuities had no application where the original contracting party was sued. Fletcher Moulton L.J. said (at p. 32):”They are bound by that agreement because, as the Master of the Rolls said, personal covenants do not fall within any rule of perpetuities and they are the actual covenantors.” Farwell L.J. stated his opinion that the rule against perpetuities has no application to a personal covenant. The learned authors of Gray on Perpetuities do not approve of the law as stated in South Eastern Railway v. Associated Portland Cement Manufacturers (1900) Ltd. (1) and consider this ruling as a newly created exception. It seems to me, however, that any action against the original contracting partyespecially a living personmust be brought within a life in being. It is interesting to observe that as far back as the year 1852, Romilly M.R. in Stocker v. Dean (1) intimated his opinion that a right of pre-emption “at all times thereafter” could be enforced during the life of the owner.
O’BYRNE J. :
I have read the judgment of Mr. Justice Murnaghan: I agree with it and have nothing to add.
BLACK J. :
Our problem in this case can, I think, be reduced to two net questions: 1, was the plaintiff’s option ever a valid right unaffected by the rule against perpetuities? and 2, if it was, had it ceased to be a live right at the date when the plaintiff sought to exercise it? These questions are capable of raising several points as abstruse as they are important.
The preceding judgments agree that the rule against perpetuties has no application, but differ as regards the reasons for that conclusion. When the judge appealed from, or a member of this Court, makes a certain reason part of his ratio decidendi, it is my principle not to ignore it, but if I cannot presently accept it, to explain why, both in deference to the learned judge and to prevent silence from being deemed to imply consent. I shall, therefore, state my position in regard to certain reasons which have been referred to.
The first is that the tenancy from year to year “lasts for one year only, and is renewed each time the tenancy is continued by the conduct of the parties for a further year.”As I understand this reason, it is that the option, like the tenancy into which it is supposed to be incorporated, ends each year, and therefore can never be exercised at a date later than one year from its creation or re-creation, and thus can never infringe the rule against perpetuities. This conception of a tenancy from year to year seems to be founded on Wright v. Tracy (2), where the Exchequer Chamber, by a bare majority of four to three, held that a tenancy from year to year is not greater in duration than a tenancy for a year certain, within the meaning of s. 69 of the Landlord and Tenant Act, 1870. Since the Exchequer Chamber was constituted by judges of the King’s Bench, Common Pleas, and Exchequer, it was possible for a minority of those judges to override the opinion of a majority of their number, if that minority happened to be sitting for the occasion, and to constitute a majority, in the Exchequer Chamber. That is what happened in Wright v. Tracy (2). Four judges in the Exchequer Chamber overbore the opinion, not only of their three colleagues sitting with them, but also of three judges of the Common Pleas. It was thus really a minority decision, taking the judges of equal status as a whole. It had other enfeebling factors also. First, in Lord Arran v. Wills (1)Lawson J. declared that he was not bound by Wright v.Tracy (2), suggesting that Palles C.B., one of the bare majority in that case, had since changed his view. I do not know whether this was so or not, but if it was, the decision should have been different. Next, another member of the majority, Whiteside C.J., in so far as he expressed any reasons of his own, relied on the decision of the Queen’s Bench in Gandy v.Jubber (3), ignoring, doubtless per incuriam, that the decision he thus relied on had been reversed unanimously by seven judges in the Exchequer Chamber (4).
Nevertheless, I do not say that the foregoing strange factors are reasons for rejecting Wright v. Tracy (2), but I do suggest that they are reasons for confining it to the irreducible minimum of what it actually decided. It was concerned with the nature of a tenancy from year to year within the meaning of s. 69 of the Landlord and Tenant Act, 1870 (33 & 34 Vict. c. 46) which made notice to quit necessary in all tenancies less than from year to year. It was held that “less” meant “less in duration,” and the majority thought that the Legislature meant to include only tenancies of which the duration was necessarily less than the definiteduration of a tenancy from year to year. Thus, Palles C.B. said (at p. 499) that s. 69 “constitutes a tenancy from year to year a standard of duration, . . . and the use of such a tenancy as a standard of time would appear to me, per se,to show that the Legislature regarded its duration as fixed and certain.” He added “We are thus driven to ascertain what is the necessary duration incident to such a tenancy. . . . We find that such duration is a term fixed and certainthe term of one year.” It will be noted that he spoke of such a tenancy’s necessary duration.
Fitzgerald B., another member of the majority, with whom Whiteside C.J. agreed, expressed the same idea. He said (at p. 496) that the words “lesser period” must mean “lesser definite period,” and that he knew of no “definite” period created by a tenancy from year to year greater than one year certain. Assuming the majority was right about the aim of the section; the language, just quoted, means no more than that, for the purposes of the particular section, the intention was to treat a tenancy from year to year as a standard of duration and, therefore, to regard only its definite and necessary duration. It does not seem to follow that, apart from that section and its purposes, a tenancy from year to year should not also, by its very nature, have an unnecessary and indefinite duration. To read the decision as meaning that every tenancy from year to year lasts for one year only, so that where there is neither surrender nor notice to quit, and the tenant remains on and pays rent, there is an implied recommencement or re-letting for another year and so on indeterminately would be to suppose that the majority in Wright v. Tracy (1) intended to reject the unanimous decision of the Exchequer Chamber in Gandy v.Jubber (2) which has been accepted uniformly as settled law for the last eighty years. If the majority intended to do that, I am sure they would have said so; yet although Dowse and Deasy BB. who were in the minority, both quoted and relied on Gandy v. Jubber (2), no member of the majority even mentioned it, except Whiteside C.J., who, as I have said, mistook the overruled decision for the final one. Indeed, this leading decision was anticipated in Ireland in Hayes v. Fitzgibbon (3) by Fitzgerald and Deasy BB., the former being one of the majority in Wright v. Tracy (1), though he also seems to have mistaken the overruled decision for the final one, and he therefore questioned it. Hence he would have approved of the final decision. With Deasy B. he quoted and approved of Mackay v. Mackreth (4) as holding that a tenancy from year to year does not end each year and then get re-created as a new letting, but is a continuing tenancy which leaves the tenant a reversion after a demise by deed for twenty-one years on which an action of covenant could be maintained. Gandy v. Jubber (2) has been quoted and applied to weekly and monthly tenancies in various cases such as Bowen v. Anderson (5), Mellows v. Low (6), Queen’s Club Gardens Estates, Ltd. v. Bignell (7) and Precious v. Reedie (8). In Jones v. Mills (9), Williams J. said (at p. 798): “It cannot be said that there was a new contract each week. . . . If it had been a tenancy from year to year, it would have undoubtedly subsisted until it was terminated by a proper notice.” As Furlong on Landlord and Tenant (2nd ed., vol. 1, at p. 224) expresses it:”a tenancy from year to year is a tenancy for a term; and the holding is considered a lease for so many years as the party shall occupy, unless in the meantime it shall be determined by notice to quit upon one side, or notice of surrender on the other; so that if the lessee occupy for ten years or more, such period by computation from the time past makes a lease for so many years; and either the landlord or the tenant may declare on the demise as having been made for such number of years.”
Nobody will deny that a tenancy from year to year is a continuing tenancy and may continue for many years. If, according to the proposition I am considering, “it lasts for one year only and is renewed each time the tenancy is continued,” it must surely follow that it comes to an end each year and recommences at once for another year. That is precisely what the Exchequer Chamber in Gandy v.Jubber (1) said that it did not do. Here are the relevant words of the judgment (at p. 18 of the report),”There is not in contemplation of law a recommencing or re-letting at the beginning of each year.” I have sought to show that the decision in Wright v. Tracy (2) is consistent with that pronouncement. In my opinion, the theory that the tenancy”lasts for one year only and is renewed each time the tenancy is continued” is not consistent with the said pronouncement. I cannot, therefore, agree that the present plaintiff’s tenancy from year to year, which supervened on the expiration of his three-year term and has lasted since for a number of years as one continuing tenancy, was ever a tenancy lasting for one year only, so as to make the option it is said to have incorporated an option for one year only, and on that account outside the rule against perpetuities.
A second reason for getting rid of the rule against perpetuities has been extracted from the decision of the English Court of Appeal in South Eastern Railway v. Associated Portland Cement Manufacturers (1900) Ltd. (3) to the effect that that rule does not apply where the action is brought against the covenantor himself. I do not think any previous authority was produced really supporting this proposition. It has evoked very outspoken criticism from the most reputed expert writers upon this subject. Thus in Gray on Perpetuities (4th ed., at pp. 366, 367, n) it is suggested that”the learned judges seem to have decided the case quasi in furore.” The learned author points out what he considers a vital oversight in the decision and cites American cases in which the Courts refused to follow it. His view seems to have been fully shared by another outstanding specialist in the law of real property. In an elaborately reasoned article in the Solicitors’ Journal (Vol. 54, pp. 471 and 501), Mr. T. Cyprian Williams subjects this decision to a criticism which
appears to me, on the first reading, to be of the most devastating character. An earlier article in 42 Solicitors’ Journal, p. 650, is of equal interest. I shall confine myself to one summarising extract from the second article in 54 Solicitors’ Journal. The learned author writes:
“The Court” (in South Eastern Railway v. Associated Portland Cement Manufacturers (1900) Ltd. (1)) “declared that the rule laid down in London & South Western Railway Co. v. Gomm (2) has no application where the action is brought against the original contractor, but relates solely to actions against the original contractor’s assigns. The reader will remember that in Gomm’s Case (2) the Court of Appeal declined to enforce specifically . . . a contract giving an option to re-purchase a piece of land at any future time on the ground that if such a contract were specifically enforceable, it would in effect create an equitable interest in the land, which might arise at a time remoter than the end of the period allowed by the rule against perpetuities. . . . If the rule in Gomm’s Case (2) should indeed have no application where an action is brought against the original contractor, the result would be that a corporation (which enjoys immortal existence) could make a valid contract specifically enforceable against itself to make some executory limitation of land to take effect at any future time (however remote), notwithstanding that such limitation, if actually attempted to be made by deed at the time of the contract, would at once be void for remoteness. This appears to be an absurd conclusion. And yet (with the greatest respect be it spoken) this was the conclusion at which the Court of Appeal actually arrived in the South Eastern Railway’s Co’s Case (1); for if Lord Justice Farwell’s dictum be correct, an actual grant by that company . . . by deed (without any prior contract) of the right of future entry and future easement in question would have been void. . . . The true doctrine of Gomm’s Case (2) is that a contract to make some executory limitation of land, which may take effect at a future time more remote than the end of the period allowed by the rule against perpetuities, shall not operate to confer an equitable interest in that land,in whosesoever hand it may be.” The italics are in the original article. Mr. Williams respectfully suggests that this doctrine is properly applicable where the land remains in the original contractor’s hands as well as where it has been assigned over.
I do not express any final opinion on this controversy (3).The doctrine in South Eastern Railway v. Associated Portland Cement Manufacturers (1) may be right. But, I make it a rule never blindly to accept any pronouncement other than that of a Court that binds me, if I happen to know that leading specialists in the branch of law involved have analysed and rejected it, unless I feel able to formulate a satisfactory answer to their criticism and to explain that answer in my judgment. That, I am at present unable to do in relation to the reasoned criticism of Mr. Cyprian Williams in the elaborate articles to which I have referred. If I should ever have to decide the matter ad hoc, I should hope to have the aid of an intensive argument by counsel and more time than I have thought necessary to employ on the present occasion to weigh and re-weigh that argument. Hence, I am not prepared to base any conclusion, in this appeal, on the doctrine enunciated in South Eastern Railway v. Associated Portland Cement Manufacturers (1).
There is, however, another reason quite different from those I have been considering which, in my view, does justify me in holding that the rule against perpetuities does not affect the plaintiff’s option in this case, assuming that that option is otherwise valid. It is a rule so well settled as not to require the citation of the authorities, namely, that the rule against perpetuities has no application to covenants for the renewal of a lease. I need not go into the several suggestions that judges and text writers have made to explain the existence of this somewhat anomalous exception. No lawyer, I think, questions its existence to-day. In my view, the plaintiff’s option here is, in reality and in substance, an option to call for the renewal of his lease. Two objections to this have been suggested: first, that the agreement, in terms, describes the option as an option for purchasing, and secondly, that the lease for which it entitled the appellant to call was a lease quite different, in its terms, from the original lease. However, both these factors were present in Rider v. Ford (2), and they did not prevent Russell J. from holding that the option in that case was for the renewal of a lease and unaffected by the rule against perpetuities. I think the reasons assigned by Russell J. were sound and that Rider v. Ford (2) is a good decision.
Then, a distinction is suggested between that case and the present one, because here the lessor reserved only a nominal reversion. In Rider v. Ford (2) the option was alternative, namely to purchase the fee or for a renewal. It would thus seem that the lessors were owners in fee, and if so, they would have had a valuable reversion after the expiration of the lease for which the lessee had an option to call. The
suggestion is that the option in the present case is only colourably an option to call for a lease, and is substantially an option to purchase the fee. McGowan v. Harrison (1) was said to conclude the case on this point. I think it does not. There, as Sullivan C.J. pointed out, the lease was of the lessor’s entire interest. Here there was at least a nominal reversion. But, putting aside that point, McGowan v.Harrison (1) was decided on the presumed intention of the Legislature in the Housing Act, 1931, which, according to Meredith J., was that the relevant section, s. 31, sub-s. 1,”is to be restricted to lettings which are not sales” meaning which are not sales in substance. This Court did not say that a transaction might not be a sale and a lease at one and the same time, and thus in a sense dimorphous. The making of such a lease was held to be a valid exercise of a power of sale in In re Judd and Poland and Skelcher’s Contract (2), being, as was said, “a conveyancer’s expedient”and “a mere piece of machinery for carrying out a sale where the property was held with other property under one lease, the object being to avoid any difficulty about rent apportionment.” Again, in In re Webb, Still v. Webb (3) an under-lease was held a sale for a particular purpose, namely, preventing the solicitor from charging double costs for one and the same transaction. In neither case was it held that the lease was not a lease for any purpose or in any sense, though for a particular purpose it was treated as a sale. In the Housing Act, 1931, which imposed a serious burden on those making lettings, the Legislature may well have intended to confine that new burden to lettings which could not possibly be treated as sales in substance. There is no ground for supposing that the judges who evolved the principle which places renewals of leases outside the rule against perpetuities, had any analogous or other special reason for confining that principle to leases where the lessor retained a substantial reversion.
Having thus got rid of the rule against perpetuities, there remains the question whether the option had not ceased to exist before the appellant sought to exercise it. In the preceding judgments it is agreed that this option passed into the tenancy from year to year which supervened when the appellant continued to occupy and pay rent after his original three-year term expired, and he certainly did so continue up to and after the date on which he sought to exercise his option. I am afraid I am unable to feel so sure about this point. No doubt, both in England and in this country,
when a tenancy from year to year supervenes in the way indicated upon the expiration of a lease, all the terms of the lease are carried into the tenancy from year to year so far as they are consistent with the character of such a tenancy. In the present case, after the first two years of his term the appellant had an option to get a new lease for 150 years save one day from the 1st May, 1939. His original three-year term commenced from 15th October, 1941. If, then, he exercised the option and got the promised lease during the currency of any year of the tenancy from year to year, the lessor would, thereupon, he deprived of his right to terminate the tenancy from year to year, at the end of the year in question, by notice to quit. The right to determine a tenancy from year to year by notice to quit is a necessary incident in such a tenancy. So it is expressed in Woodfall’s Landlord and Tenant (1934 ed., p. 429) and I think never disputed. The exercise of the option would thus take away from the tenancy from year to year “a necessary incident.”Would such an option be consistent with the nature of a tenancy from year to year? There are many express decisions which seem to make this, at least, doubtful. In Gray v.Spyer (1) there was an agreement which Younger L.J. held to create a tenancy from year to year. There was a stipulation in this which purported to give the tenant a right to get a perpetual renewal. Younger L.J. held that such a right would be repugnant to a tenancy from year to year; “for,”he said, “it cannot be a characteristic of such a tenancy that one of the parties to it shall have no right to determine it.” His decision that the tenancy in question was from year to year was reversed (2), but it was not doubted by the judges in the Court of Appeal that if the tenancy had been a tenancy from year to year, the stipulation for perpetual renewal would, as Younger L.J. had held, be repugnant to it. Lord Sterndale said (at p. 28):”I agree with the learned judge that the two things are inconsistent, and that there cannot be a tenancy from year to year, qualified by a right to perpetual renewal which deprives the tenancy of a necessary incident, that is to say, the right of the landlord to terminate it by a six months’ notice to quit.” Of course the parties might agree upon a shorter notice. But, then Lord Sterndale’s dictum would only be modified accordingly. An option, the exercise of which during the currency of a tenancy from year to year would deprive the landlord of a necessary incident of such a tenancy, namely his right to terminate it by notice to quit, would seem to be repugnant
to that kind of tenancy. The principle asserted in Gray v.Spyer (1) found clear expression in Doe v. Browne (2); Browne v. Warner (3); Wood v. Beard (4); Cheshire Lines v.Lewis (5) and in this country in Holmes v. Day (6); for in this last case, although the Court was equally divided, no member of it disputed that, if the tenancy there was a tenancy from year to year, a clause which would prevent it from being determined by notice to quit would be repugnant to the nature of such a tenancy. If the agreement in the present case gave the tenant an option which might be exercised during the currency of the tenancy from year to year, then, if it was so exercised, the landlord could not determine that tenancy at the end of the current year or the following year by notice to quit.
Of course, if, notwithstanding the foregoing considerations, the appellant’s option was carried into the tenancy from year to year, the rule against perpetuities would not affect it. But, in view of my doubt on that point, I must consider the position on the assumption that the exercise of the option now must depend on the original three-year agreement alone. What then? In England there can, I think, be no doubt that the option would continue exercisable as long as the supervening tenancy from year to year continues. So it was held in Moss v. Barton (7); Buckland v. Papillon (8)and Rider v. Ford (9). The present appellant’s option could not be exercised until the end of the second year of his three-year term, but after that, no time whatever was specified within which it must be exercised. No doubt, in Ireland the relationship of landlord and tenant is based upon contract and not upon tenure, but I do not well see why this should prevent the option in the original agreement from being exercised now, seeing that this agreement provided that, after the first two years, the option should be exercisable”at any time.” The words “at any time” are, I think, plainly incompatible with a specification of a time limit. This view seems to be borne out by the decision of the former Irish Court of Appeal in Allen v. Murphy (10). In that case, a lease, originally for twenty-nine years, contained a covenant for renewal every thirty years during a period of 999 years, no time being fixed within which renewal might be demanded. Several renewals, each for thirty years, had been obtained. The last of these expired in 1904. After that, the then tenant remained on, paying rent to the original lessor’s successor in title, but sought no fresh renewal for a period of nineteen years. The tenant then sought and obtained a renewal for sixty years instead of thirty years. He then sold his interest and the purchaser objected to the title, alleging that the sixty-year renewal was inoperative, because it was granted ninteen years after the term granted by the last previous renewal had expired. The Court of Appeal held that this was not correct and expressly disapproved of the view of Bruce J. in Lewis v. Stephenson (1) that application for renewal must be made before the expiration of the lease. Sir Ignatius O’Brien C. adopted the statement in Fry on Specific Performance (5th ed., p. 541) that “where no time has been originally limited within which a tenant’s option to have a lease must be exercised, and the landlord has never called upon the tenant to declare his option, mere lapse of time will not preclude the tenant or his assign or legal personal representative from exercising it.” The Lord Chancellor said (at p. 488):”The landlord continues to receive the rents. If a renewal is made ten, twenty, thirty or forty years after the expiration of the lease, is it to be presumed that it is not effective?” His answer was in the negative. He also said (at p. 487) in commenting on the case of Lewis v.Stephenson (1):”If the case is an authority for the proposition that where no time is specified, the application for renewal must be made before the expiration of the lease, I dissent from that as a general proposition.”
Now, it seems to me that that proposition from which he dissented is the very proposition put forward in this case in support of the view that, unless the option was carried into the yearly tenancy, it must have been exercised during the term of the three-year lease and could not be exercised afterwards. In this three-year agreement, assuredly, no time was specified, to use the Lord Chancellor’s words. The words used were “at any time after the expiration of two years of the term.” We are asked to say that though “no time is specified within which the option must be exercised” nevertheless it must be exercised “before the expiration of the lease.” I am equally unable to reconcile that contention with the following words of Lora Justice Ronan (at p. 491):
“Where there is the exercise of a power of renewal. . .; where no time is fixed by the lease for applying for the renewal; where no notice has been served by the landlord calling upon the tenant to elect whether he will ask for a renewal or not, and where everything has gone on as if a renewal had been taken out, the reasonable presumption is that the parties had agreed to let the technicality of renewal lie over, and that neither party had any intention of raising any question as to the forfeiture of the tenant’s rights.” All the conditions postulated by Ronan L.J. exist here. There was a lease or letting for three years. It contained an option or right to get a renewal. No time was fixed for applying for the renewal. Everything went on as if a renewal had been taken out, the tenant continuing as tenant. Why then Lord Justice Ronan’s conclusion that the tenant’s right or option still remains does not clearly follow, I am unable to imagine. Moloney L.J. expressed his view to the same effect as the other judges.
The above pronouncements would seem to indicate that just as, on the facts of the present case, the English Courts following the principle of Moss v. Barton (1) and Buckland v.Papillon (2), would hold that the option did not expire with the original term, so our late Court of Appeal would have drawn the same conclusion in this country.
Accordingly, even if my doubts as to the option having been carried into the tenancy from year to year are not unjustified, I am of opinion that the appellant’s option, given him by the original agreement, is still exercisable and that his appeal should be allowed.
Solicitors for the plaintiff: McKeever and Son.
Solicitors for the defendants: T. W. Hardman and Sons.
G. G.
In re Smyth, Deceased. Sealy v. Smyth.
[1965] IR 595
Budd J.
These proceedings have been brought by the plaintiff as executor of the late Weber Smyth for the determination of certain questions arising on the administration of his estate.
By his will, dated the 17th November, 1959, the said Weber Smyth devised and bequeathed inter alia his houses, nos. 6 and 7 St. Stephen’s Green, North, in the City of Dublin, to his wife for life, with remainder to his son, Francis Gerald Weber Smyth. All the rest, residue and remainder of his property after payment of his debts and funeral and testamentary expenses he gave, devised and bequeathed to his executors and trustees upon trust for his wife for life and after her death upon trust to his son, Francis Gerald Weber Smyth, and his daughters, Cathleen Sydney Grace Sealy and Avril Isabella Blanche Rice, as tenants in common in equal shares absolutely. He appointed his wife, Emily Helen Smyth, and the plaintiff to be the executors and trustees of his will. He died on the 29th July, 1960, and probate of his will was granted to the executors thereof on the 29th April, 1961.
The questions asked in the summons relate only to the property, 6 and 7 St. Stephen’s Green, which is freehold property and subject at the date of the death and thereafter to a number of leases and letting agreements with various tenants. The premises have since been sold and the purchase money is held in investments in the hands of the trustees to the approximate value of £25,000.
At the time of the testator’s death, the premises, 6 and 7 St. Stephen’s Green, were in a bad state of repair. After the death of the testator the executors and trustees expended a sum in excess of £3,000 doing the necessary repair work. No question arises as to the propriety of this expenditure, it being regarded as in the interests of all parties, but questions arise as to who shall bear the ultimate liability. The summons raises the following questions. Are the various costs and expenses to be paid out of the residue or out of the proceeds of sale of the hereditaments or out of the income arising from the investments which represent the proceeds of sale of the hereditaments? In other words, there is a contest between the tenant for life, the residuary legatees and the devisees. The devisees are the tenant for life and remaindermen of the specifically devised premises. The defendant, Francis Gerald Weber Smyth, has, in a sense, a dual interest since he is the remainderman of the specifically devised premises and also one of the residuary devisees and legatees, but it is to his interest to throw as much of the expenditure as he can on the residue. The other two residuary legatees and devisees have a contrary interest to him in this respect. In so far as the cost of repairs is not to be borne by the life interest, the widow and the testator’s son are in the same interest as being together the devisees of the freehold property.
There were some matters disposed of during the hearing which to some extent lead up to the matter now mainly in dispute between the parties, and I will refer to them now so as to clear the way for the main issue.
With regard to the tenant for life’s personal liabilities, the following proposition was accepted by the parties as a correct statement of law and it is one with which I agree, namely, that a tenant for life of freeholds is liable only for those repairs for which there is a contractual liability (or such as may be imposed by the settlement) and even then the tenant for life is not liable in respect of such repairs as were necessitated by the state of the premises at the commencement of the tenancy for life. This proposition I may say was derived from a consideration of the principles stated in In re Courtier (1); Kingham v. Kingham (2); In re Betty Betty v. Attorney-General (1) and the note contained in Williams on Executors, 11th edition, vol. 2, at p. 1342.
Applying this principle in these cases I have apportioned portion of the expenditure on repairs on the tenant for life, to be met out of the accumulated income or by the tenant for life personally. These amounts have been determined as the quantum of the tenant for life’s liability of a contractual nature and I can pass from this aspect of the case.
The next matter that I have to refer to arose in connection with a portion of the premises occupied at the date of the testator’s death by Mr. Leslie Kearon. The agreement under which this portion of the premises was held contained an agreement on the part of the landlord to keep the premises in proper order and repair. In the month of June, 1960, shortly before his death, the testator had obtained a report and valuation on this portion of the premises let to Mr. Kearon which went to show that they were in a poor state of repair and it recommended that in the future the responsibility for interior repairs should be placed on the tenant. He then entered into negotiations with Mr. Kearon for the termination of the tenancy and the granting of a new lease upon the basis of the valuation and report. As a result, agreement was reached between the parties as to the granting and acceptance of a new lease, subject to a stipulation by the tenant that the premises were first put into repair by the deceased, to which the deceased agreed. Contractors were asked to report and estimate on the repairs necessary, but the report did not come to hand until after the death of the deceased. Instructions were then given to the contractors to proceed. It was found during the course of the work that the premises were affected by dry rot and an architect was called in to advise and instruct the contractors as to the work necessary. Work in accordance with the estimate and further work necessitated by the dry rot was duly carried out at a cost of £705 4s. 8d.. After this work was done, the tenant for life by indenture of lease, dated the 1st day of June, 1961, demised this portion of the premises to Mr. Kearon for a term of twenty-one years. By the lease the lessor covenanted to keep the outer walls, roof and outside of the demised premises in proper and substantial repair and condition and the lessee covenanted to keep the interior thereof in good order and condition except repairs rendered necessary by structural defects. On the 1st December, 1961, Mr. Kearon drew attention to an outbreak of dry rot on the first and second half-landings of the stairs serving his portion of the premises (which stairs and landings were not included in the demise
to him or any other tenant) and to an extension of this dry rot into the premises included in his demise. He complained again in March, 1962, and later served a schedule of dilapidations. Agreement was reached between the executors’ solicitor and architect and Mr. Kearon and his architect upon the work that was necessary. The work was done at a cost of £284. An apportioned part of this sum (£24) has been found to be the tenant for life’s liability, but the liability in respect of the remaining £260 still remains to be determined.
Another portion of the premises was, at the date of the death of the deceased, held by Messrs. Robert Smyth and Sons Limited under a Lease dated the 1st April, 1960. During negotiations for the lease the deceased agreed with the company to effect certain alterations to the premises demised and also to carry out certain repairs. The alterations were effected by the deceased in his lifetime but the extent and cost of the repairs was not settled or agreed before the deceased’s death. Subsequent to the death of the deceased, a claim was made by the lessee company to have the repairs in question carried out and a claim was also later made by the company to have further repairs done, the grounds of such further claim being dry rot due to structural failures the responsibility of the lessor. Certain of the repair work was carried out by the lessees and they made a formal claim for the sum of £868 16s. 2d. in respect of this and also to have the remainder of the work completed at an estimated cost of £300. Negotiations ensued between the executors and the lessees and the total claim was settled by payment to the lessees of a sum of £750. The matter of the liability in respect of these three several sums of £705 4s. 8d., £260 and £750, was originally in issue, but during the hearing the incidence of portion of the liability was agreed on, leaving, however, certain matters of liability still to be determined.
With regard to the incidence of the liability in respect of these items of expenditure, Mr. Parke’s contention on behalf of the remainderman was this: that where a testator, who has devised freehold property subject to a lease or leases to another, has prior to his death contracted to do something involving expenditure on the leaseholds or agreed to make certain expenditure as a pre-requisite of a tenancy coming into operation but has not made such expenditure in his lifetime, then the liability in respect thereof will fall on the testator’s residuary estate and not on the specific devisee. These propositions are drawn from, and are said to have their authority in, Holt v. Holt (1); Eccles v. Mills (2) and Re Day’s Will Trusts (1). What was said and determined in those cases has a bearing on certain matters to be decided in this case and I therefore refer to so much as was said and determined therein as I consider relevant to these proceedings.
The first of those cases, as Buckley J. observed in Re Day’s Will Trusts (1), has long been regarded as authority for the proposition that if a person enters into a contract for some work to be done on his property which will enhance the value of that property and then dies before the work has been done, having specifically devised that property, then the devisee is entitled to have the work carried out at the expense of the testator’s estate.
Eccles v. Mills (2) was a case where the lessor had demised a farm by a lease in which he covenanted that he would at his own expense lay down part of the property in grass. That was not done in the lifetime of the lessor and the question arose whether the cost of implementing the covenant fell on the general estate or should be borne by the specific devisee of the farm. The Privy Council, before whom the case came on appeal, took the view that on the construction of the particular terms of the lease the covenant was not one which ran with the reversion and therefore the obligation was not binding on the devisee, but should be implemented out of the general estate of the deceased. They went on to consider, however, what the position would be on the basis that the covenant did run with the reversion and made certain observations on that basis. Lord Macnaghten, who stated the advice of the Privy Council, expressed the view that the nature of the obligation in each particular case must determine the question. He then, at p. 371, said this:”If it is in its nature incident to the relation of landlord and tenant, it would only be fair that the burthen should be borne by the devisee as between him and the testator’s estate . . . On the other hand, if the covenant is not in its nature incident to the relation of landlord and tenantif the thing to be done is something preparatory to the complete establishment of that relation, it would seem to be fair and in accordance with the probable wishes of the testator that the burthen of the covenant unperformed by him in his lifetime, should be borne by his estate rather than by the specific devisees. In the present case the object of the covenant was to ensure the premises being put into a condition fit for the occupation of the tenant under the lease. Such a covenant is intended to be performed forthwith, not to remain attendant on the lease during its currency.”
In the case of Re Day’s Will Trusts (1) the facts were
these. A testatrix was the owner in fee simple of a house. She made a will in 1957 by which she devised the house to her niece and gave her residuary estate on trusts under which the niece had a life or lesser interest. During 1958 she told the director of a building firm to do certain work for her which he had recommended to be done and later asked him for an estimate for putting the house in “apple pie order.”She died on the 3rd January, 1960, at which date none of the work had been done and the estimate had not been prepared. On the 16th June, 1959, the testatrix granted a lease of a maisonette comprising two floors of the house to certain lessees. By that lease she covenanted with the tenants to keep the exterior of the house in good and tenantable repair and condition. After her death, the question arose whether the niece, as devisee, was entitled to have any of the work carried out at the expense of the residuary estate of the testatrix. On the facts it was held by Buckley J. that as the testatrix had not bound herself contractually to employ the builders to carry out any particular work, the principle exemplified in Holt v. Holt (1) had no application and the devisee could not succeed on that basis. He made it abundantly clear, however, that if a binding agreement had been established he would have applied the principle exemplified in Holt v. Holt (1). Buckley J., however, held that the devisee was entitled to require the cost of such repairs as the testatrix’ repairing covenant in the lease of the maisonette required to be done in her lifetime in order to put the exterior of the property into good repair to be borne by the testatrix’ residuary estate; that was because a covenant to keep in repair imported an obligation to put into repair what was in disrepair and an obligation of a deceased lessor to put premises into repair (which was an obligation that was intended to be performed as a condition of a tenant accepting the position of tenant) was one which ought to be borne by the lessor’s estate rather than by the devisee of the premises under his will as successor to the reversion.
In the course of his judgment Buckley J. referred to the observations made by Lord Macnaghten and to which I have referred. At page 705 of the report, Buckley J., with regard to the obligations arising under the covenant, said:”At first glance one could say that a covenant to keep the exterior of the demised premises in repair was essentially a covenant of a kind incident to the relationship of landlord and tenant. Indeed Lord Macnaghten in the passage which I have cited (2) expressly referred to such a covenant as a covenant of the kind incident to that relationship. If, however, the fact be that the property was in disrepair, the effect of the covenant was to impose an obligation to put the property in repair and continue to keep it in repair: then it seems to me the obligation to put the property in repair falls fairly and squarely on the estate within the words of Lord Macnaghten, that is to say, the object of the covenant was that the premises should be put in a condition fit for the occupation of the tenant under the lease. Such a covenant would be one which would impose a burden which ought to be borne by the estate of the deceased rather than by the devisee as successor to the reversion. Such a covenant would not be one which, again to quote the language of Lord Macnaghten would ‘remain attendant on the lease during its currency.’ It was rather a covenant intended to be performed as a condition of the tenant accepting the position of a tenant at all. It seems to me, that on the authority of Eccles v. Mills (1) which as a decision of the Privy Council I recognise is not binding on me, but which nevertheless is an authority of the greatest force and weight, and taking into account the observations of Warrington J., in Re Hughes (2)founded on Eccles v. Mills (1)I ought to come to the conclusion that, so far as the covenant in this lease imposed on the testatrix an obligation to put the premises in repair, the obligation is one which ought to be discharged at the expense of the estate and not devolve on the specific devisee of the property.”
Now it will be seen that the basis of the decision was this: the fact was that the property was in disrepair so that the effect of the covenant was to impose an obligation to put the property into repair or, in other words, the object of the covenant was that the premises should be put into a condition fit for the occupation of the tenant. That was much the same position as if something had to be done preparatory to the complete establishment of the relationship. Put negatively, it was not such a covenant as would remain attendant on the lease during its currency, this latter phrase being one used by Lord Macnaghten. It was on this basis that Buckley J. came to the conclusion that the obligation fell to be discharged out of the deceased’s estate.
Now in the present case the sum of £705 4s. 8d. expended on the repairs to Mr. Kearon’s portion of the premises has been accepted as having been spent in respect of the agreement made between Mr. Kearon and the deceased to put the premises into repair, that is to say, expended on something to be done preparatory to the relationship of landlord and tenant and under the agreement to be performed as a condition of the tenant accepting the position of a tenant. The liability is, therefore, in accordance with the principles stated or accepted in the cases just cited, a burden to be borne by the estate and I have accordingly so ruled.
With regard to the sum of £750 expended at the request of Messrs. Robert Smyth and Sons Limited, the position may not have been quite so clear in that some of the expenditure may have gone beyond the agreement made with the deceased, but since it was not desired to suggest that there was any improper expenditure on the part of the executors and trustees and since it was thought that there was difficulty in fixing the devisees with liability because they were under no contractual liability to the lessees to do repairs, there being no such covenant in the lease, liability was also accepted on behalf of the residuary estate in respect of this expenditure and I have also accordingly placed the liability for this sum on the residuary estate.
With regard to the sum of £260 expended on repairs either to Mr. Kearon’s portion of the premises or other portions thereof adjacent thereto, no accord was reached and the incidence of the liability has to be decided. With regard to so much of this latter sum as was expended in repairing Mr. Kearon’s portion of the premises, Mr. Matheson’s contention on behalf of the residuary legatees was that, once the sum of £705 4s. 8d. had been expended on Mr. Kearon’s portion of the premises and he had accepted the lease of the 1st June, 1961, the estate of the deceased ceased to be under any liability and that liability thereafter was traceable to the covenant in the lease. The fact is, however, that a binding agreement had been made between the deceased and Mr. Kearon that the premises should be put into a state of repair in consideration, inter alia, of Mr. Kearon undertaking liability for internal repairs. The complaint was made by Mr. Kearon within eighteen months of the death of the testator and the main source of the trouble was the extension of dry rot. The most reasonable inference is that this existed before the death of the testator, but appears not to have been discovered when the first series of repairs was being done. I am unable to see why Mr. Kearon’s acceptance of the lease should debar him from pursuing a remedy against the testator or his estate on foot of the agreement entered into, Mr. Kearon being unaware that the agreement had not been complied with. Suppose none of the repairs had been done and Mr. Kearon had taken the lease, would he then be deprived of his remedy? I would think not. It was conceded that the expenditure by the trustees was not improper. They would only properly have expended so much as was expended on Mr. Kearon’s part of the premises on foot of the agreement. It would seem to me, therefore, that so much of this sum of £260 as was thus properly expended by the trustees on foot of the testator’s liability to Mr. Kearon in respect of his take falls to be discharged by the estate.
As regards so much of this latter expenditure as was referable to repair work done on the landings, not part of Mr. Kearon’s premises, this did not fall within the ambit of the agreement between Mr. Kearon and the deceased and could not properly be described as something undertaken to be done preparatory to the granting of the lease. In as much, however, as the repairs done outside Mr. Kearon’s take appear to have been regarded by the trustees as something necessary to be done as ancillary to the repairs done to Mr. Kearon’s portion of the premises and since there was no contractual liability on the part of the devisees to do themvis-a-vis Mr. Kearon (the landings being outside Mr. Kearon’s take) and it not being suggested that the expenditure was improper, it would seem to me that the liability for the expenditure in respect of this repair work properly falls also on the residue.
Before dealing with the main bone of contention, some other matters may be disposed of. A sum of £64 16s. 5d. was expended by the trustees in respect of the repairs to a drain and kindred matters. The remainderman accepts liability for this. It was also agreed that of the sum expended in architects’ fees the sum of £95 should be apportioned between the residuary estate and the devisees’ interest in proportion to the amount of the ultimate liability found to rest on these interests respectively. I should mention also that in respect of two small sums of £18 and £12 12s. 8d., respectively, it was clear that the liability fell on the tenant for life and that has perforce been accepted.
I now turn to deal with the remaining items at issue between the parties interested in the residue and the specific devise. Three items of expenditure fall to be considered.
In or about December, 1960, the roof of the premises suffered extensive storm damage. As a result, the roof had to be repaired and in the course of such repair, decayed timbers in the roof were discovered which required to be replaced or treated. The cost of the work amounted to £159 19s. 6d. in respect of which it has been determined that the life tenant’s responsibility amounted to the sum of £29 19s. 6d., leaving a balance of £130 to be borne either by the residuary estate or the capital sum now representing the subject-matter of the specific devise.
Further repair work had to be done in December, 1960, at a cost of £930 6s. 6d.. Of this sum, £30 6s. 6d. has been found to be the liability of the tenant for life and accordingly liability in respect of the expenditure of £900 has also to be determined as between the same interests.
It is agreed that the above repair work was done in connection with that part of the premises held by Mr. Seán O’Sullivan from the deceased under an agreement of the 21st March, 1956. The term was for ten years running from the 25th September, 1954. The agreement contained an agreement on the part of the tenant to keep the interior of the premises in good tenantable order, repair and condition, and by the deceased to maintain the outside of the premises in good repair and condition.
In March, 1961, as a result of complaints it became also necessary to effect repairs to the roofs of that portion of the premises comprised in the tenancy of the representatives of the Society of Dublin Painters. This portion of the premises was held under an agreement, dated the 19th December, 1950, whereby portion of no. 7 St. Stephen’s Green was held by the tenants as quarterly tenants. The agreement contained an agreement by the tenants to keep the premises in good tenantable repair and condition, reasonable wear and tear excepted, and by the deceased to maintain and keep the outside main walls and the roof staunch. The total costs of the repairs amounted to £269 10s. 6d.. From a letter written on behalf of the tenants on the 18th November, 1960, that is to say, shortly after the death of the deceased, it is apparent that they had been urging the carrying out of these repairs for some eighteen months.
From the available evidence it is evident that the expenditure on the repairs mentioned above was necessitated by the state of disrepair which the premises were in at the date of the testator’s death save in so far as the expenditure was a liability of the tenant for life. The position then with regard to the premises in connection with which the expenditure was incurred was that the lessor was, by the terms of the agreements under which the premises were held, under covenant to keep the outside in repair and that the outside of these premises was in disrepair at the date of the testator’s death, involving ultimately the expenditure stated.
It was contended on behalf of the remainderman in the specific devise of nos. 6 and 7 St. Stephen’s Green that the residuary estate and not the corpus of the devise was liable to bear all the last-mentioned items of expenditure. The proposition made by Mr. Parke on his behalf was as follows:where a testator devises freehold premises, subject to a lease containing a covenant on the part of the lessor to keep the exterior in repair, to a specific devisee and at the date of the testator’s death the premises are out of repair in such fashion that the testator could have been sued for breach of his obligations to the tenant, the position is the same as if he had agreed to do the necessary repairs preparatory to the lease coming into operation and the liability would thus fall on the estate and would not be a liability of the specific devisee. He said that this might also be put in another way, namely, that where there were unfulfilled obligations on the part of the testator under a lease or tenancy agreement, the liability for those obligations falls on the residue. It was, as I understood it, sought to extend the reasoning underlying the decisions in the cases of Eccles v. Mills (1) and Re Day’s Will Trusts (2) to the extent necessary to cover the facts of this case.
A number of cases were cited in support of and against this proposition and it is as well at the outset to say that they were nearly all cases of bequests of leasehold interests subject to a covenant on the part of the tenant to repair, but on the question as to where the liability falls the principle is the same as in the case of a devise of freeholds subject to covenants on the part of the lessor, as was indeed pointed out in some of the cases.
Reliance was placed on the case of In re Betty . Betty v.Attorney-General (3). It was there held that an equitable tenant for life of leaseholds under a will is liable as between himself and his testator’s estate during the continuance of his interest to perform the tenant’s continuing obligations under the lease but he is not liable for repairs necessary at the commencement of his interest or in respect of breaches of covenant which had arisen before the testator’s death. During the course of his judgment, North J. made reference to several casesto some of which I shall later referand deduced from them that the question was, as Lord Macnaghten put it in Eccles v. Mills (1), what are the covenants incident to the relation of landlord and tenant? It is these covenants incident to that relationship of landlord and tenant which the devisee of freeholds has to perform. Towards the end of his judgment North J. made some observations which are relevant to what I consider to be a fallacy in the arguments and to which I refer later. His words were:”It seems to me that the question arises between the persons entitled to the leasehold on the one hand, and the persons entitled to the residue on the other hand, and it cannot matter whether the leasehold is given to A. for life with the remainder to B., or to A. absolutely; because A. and B. in the one case, and A. in the other, take the whole leasehold interest, and they are the persons who, in my opinion, should bear the burdens.”
The next case relied on was that of Kingham v. Kingham (1).In that case Vice-Chancellor Chatterton held that a tenant for life of leaseholds under a will was not liable to pay for any repairs which became necessary before her occupation.
Relying on these cases and others cited during the argument, to some of which I shall refer, Mr. Parke says that if a tenant for life of leaseholds bequeathed by will by the lessee thereof is not liable in respect of repairs which became necessary before his occupation and which in the case of leaseholds were subject to a covenant to repair on the part of the testator unfulfilled at the date of his death, why should the remainderman of a specific devise of freeholds subject to a lease containing a covenant to repair on the part of the lessor be liable in respect of repairs existing long before his occupation and at the time of his testator’s death? He pointed out that such remainderman had, at least during the currency of the tenant for life’s occupation, done nothing wrong and indeed might not come into occupation for some considerable time. There is, however, I think, a fallacy in this argument. The cases cited are only authority for the proposition that the tenant for life is not liable for the capital expenditure involved in putting premises into repair where the premises were out of repair at the date of the testator’s death, but they do not touch upon the broader question as to liability between the testator’s estate and specific devisees of leaseholds. In that case, as North J. pointed out in In re Betty (2), it cannot matter whether the leasehold is given to A. for life with remainder to B. or to B. absolutely because in the former case A. and B. take the whole leasehold interest. In such case, if the burden is to be placed on the specific devisees, the tenant for life does not in fact escape because he is liable to a diminution in income even though the capital expenditure falls on the remainderman.
Mr. Parke also made the point that the general rule is that persons entitled to leaseholds successively subject to a liability to repair are liable only in respect of defects occurring during the currency of the interest. That may be true as far as it goes, but here a further and more far-reaching question arises, namely, who is to bear the expenditure as between residuary legatees and specific devisees necessitated by the disrepair of freehold premises (which are subject to a covenant to repair on the part of the lessor) at the date of the testator’s death?
Next in support of his argument Mr. Parke cited Breretonv. Day (1). In that case the decision was that as between a tenant for life of a leasehold, specifically bequeathed, and the general assets of the testator there is no equity in favour of the latter to throw on the tenant for life the obligation of putting the premises, which were dilapidated at the time of the testator’s death, into repair. The nature of the gift in that case was of some importance. The testatrix directed that her trustee should stand possessed of her house and premises in Merrion Square and the contents, save as provided, upon trust to permit one, Maria O’Grady, if she should so desire, to make the said house and premises with the contents thereof her residence during her life subject to her paying the head rent and other outgoings. The Master of the Rolls, Sir Andrew Marshall Porter, in reference to the matter of a legatee or devisee taking cum onere, said (at p. 529):”In cases where it is sought to apply the maxim ‘qui sentit commodum idem sentire debet et onus’ there is always a preliminary question, what is the commodum? and the case I have quoted shows that in this case the commodum was meant to be the house in that state in which the testatrix was as between herself and the head landlord legally bound to leave it. If so, the legatee does not receive the commodumtill the repairs are effected, and the onus which attaches to it is that which is expressed, namely, the payment of the rent and other outgoings, including (no doubt) the maintenance of the place in tenantable order when once repaired.”It seems to me, therefore, that the case was a somewhat special one in that the intention of the testator was that Maria O’Grady was to have a place of residence and she could not get that, in the view of the Master of the Rolls, unless the repairs were effected, because otherwise the interest in the lease might be forfeited. The terms of the covenant had to be fulfilled to avoid that forfeiture.
It is true that the Master of the Rolls in the course of his judgment did refer to the liability to do the repairs as a”debt” of the testatrix, a matter contended to be of much importance in the light of certain authorities I refer to later. An obligation under a covenant to repair may, however, well be referred to as either a “liability” or a “debt”when the distinction between the two words is not a vital matter in determining where liability lies. From the point of view of what the Master of the Rolls had to decide it did not much matter which expression he used and therefore I am not inclined to place the weight that I was asked to do upon his use of the word, “debt,” in this connection.
Countering this last point, Mr. Matheson, for the residuary legatees, during the course of his argument, pointed out that no liability falls on a lessor of leaseholds where the lease contains a covenant to repair on his part until a demand for the repair is made, that condition being imported into the covenant: Makin v. Walkinson (1); Foa on Landlord and Tenant, 6th ed., at p. 269. A distinction is drawn, he points out, in at least two cases between an obligation of a lessor or lessee under a covenant which has crystallised into a debt and a liability which has not so crystallised and which in fact may never become a debt. He also pointed out that in respect of the agreements now under review there could be no question of there being any liability on the lessor in respect of the lessor’s covenant to repair or to put the premises into repair having regard to the respective dates of the two agreements relating thereto, these agreements having been made in 1956 and 1950, respectively, and this is, I think, the appropriate point at which to deal with any suggestion of extending the principle of the decision in Re Day’s Wills Trusts (2) to the present case. In my view the observations of Buckley J., at p. 705 of the report of that case (quoted above), indicated clearly enough that he took the view that ordinarily a covenant on the part of the lessor of freeholds to keep the exterior of demised premises in repair was essentially a covenant of a kind incident to the relationship of landlord and tenant, the liability in respect of which would fall on the devisee of such premises as being incident to the relationship of landlord and tenant. It was only because the object of the covenant in that instance was that the premises should be put into a condition fit for occupation by the tenant under the lease that the liability was cast upon the estate of the deceased lessor. Since no such obligation could arise from the circumstances now being considered, having regard to the dates of the agreements, I take the view that the observations of Buckley J., as applied to those circumstances, do not support Mr. Parke’s propositions. Rather indeed do they support Mr. Matheson’s contentions.
Mr. Matheson’s main proposition in reply to Mr. Parke’s contentions was that, in the circumstances of a case such as this, the devisee takes cum onere and he contended that there was no case supporting Mr. Parke’s proposition made on behalf of the remainderman.
The general rule appears to be stated in Williams on Executors, 11th ed., 1921, vol. 2, at p. 1382. It is as follows”Unquestionably, the general rule is, that the legatees of leasehold estates must take them cum onere, and notwithstanding the general personal estate may remain liable to the lessor by reason of the covenants contained in the lease.”There is certainly a volume of support for this proposition which is, of course, having regard to its source, entitled to great respect.
The then Lord Chancellor, Lord Truro, deals with the point at issue in Hickling v. Boyer (1). One, Zillah Taylor, bequeathed certain leasehold property to Richard Ashby absolutely during the residue of her term therein, subject to the payment of the rent and performance of the covenants reserved in the lease. She bequeathed her residuary estate, subject to the payment of her debts, to one, James Boyer. The lease under which the premises were held contained a covenant by the lessee to keep them in repair. At the time of the testatrix’s death, dilapidation had taken place. An order had been made letting Richard Ashby into possession but setting aside a sum of stock out of the testatrix’s estate to indemnify the executors. The Lord Chancellor held that both on the language of the will and on general principles Richard Ashby took the property cum onere and was liable as between himself and the executor and residuary legatee to do the repairs in respect of dilapidations existing at the testatrix’ death. But he also held that as the executors were, as between themselves and the lessor, liable in respect of dilapidations which had taken place during the testatrix’s lifetime, they were entitled to receive from Richard Ashby an indemnity in respect of such liability before he was let into possession.
Before I refer to what Lord Truro said, I should like to reiterate a remark which I made in another case to the effect that where a judge gives two reasons for his decision it is not necessarily to be thought that that which he deals with last has necessarily any less force than that which he deals with in the first place. Immediately on the close of the arguments Lord Truro said:”I have no doubt that the leaseholds which were specifically bequeathed to R. Ashby went to him subject to the charge, and that having adopted the gift he must be held to take it cum onere.” He said, however, that he would consider the matter of an indemnity. Having taken time for consideration, he first stated his opinion that by the express terms of the will Richard Ashby was to take the leasehold property cum onere. It will be remembered
that the bequest was subject to the performance of the covenants in the lease. He undoubtedly gives his reasons for that, pointing out that the words, “subject to” etc., when used with reference to leasehold property, are mere surplusage unless they are used to signify that the bequest is to be subject to the performance of the covenants to repair.
He then goes on to deal with his second reason in these words:”Independently, however, of any direction in the will, it appears to me to be only natural, and in accordance with the presumable intention of a testator who makes a specific bequest of leaseholds, that the legatee should take them subject to the burden of putting them in repair.”Dealing then with the existing law as to the distinction between the case of a bequest of property subject to a mortgage and a bequest of leaseholds subject to a covenant to repair, he ends that dissertation by saying:”Then if there is a distinction between an ordinary mortgage and a provision in a settlement as regards exoneration, there is at least an equal distinction between mortgages and the present case. The general personal estate of the testatrix never received anything which it was under a natural obligation as it were to return or replace, as in the case of a mortgage debt; nor was the liability in respect of the dilapidations in strictness an actual debt of the testatrix, for non constat but that as soon as the lessor should require repairs to be done the under-lessees would do them. On both these grounds therefore, namely, the language of the will and general principles, or on either of them singly, I am of opinion, that Richard Ashby was liable, as between himself on the one hand and the executors of the testatrix and her residuary legatees on the other hand, to do the repairs in respect of dilapidations existing at the time of the testatrix’s decease.”
He then went on to point out that, as between themselves and the lessor, the executors of the testatrix were liable in respect of the dilapidations and therefore entitled to an indemnity in respect of such liability. He then proceeded to provide that, failing the repairs being done, Richard Ashby should indemnify the executors against their liability. I am not at all so sure that the Lord Chancellor did not state the general principle first. But even if the right approach is that he stated it in the considered part of his judgment in the second place, he certainly stated the principle with equal emphasis and I consider it correct to say that his judgment rested on both points. That being so, the judgment is authority for the proposition that, where there is a bequest of leaseholds to a specific legatee and there is a covenant to repair in the lease and the premises are out of repair at the date of the testator’s death, the legatee takes cum onere and is liable as between the executors and the residuary estate of the testator to do the repairs in respect of dilapidations existing at the date of the testator’s death. If that be the law, then in the present case, on principle, as between the specific devisees and the residuary legatees, the specific devisees take the burden.
Notwithstanding that great respect is due to Lord Truro’s views, one must proceed further to see if later research led to any divergence from his views. Fitzwilliams v. Kelly (1)was decided in the following year. The case is of considerable interest in that it deals with the distinction between property bequeathed subject to a debt and property bequeathed burdened with a liability and as to where the ultimate liability lies in either case. In that case a lessee held certain lands from the trustees of a charity subject to a covenant to pay the fines incurred in filling up the number of trustees of the charity when they fell below a given number. The lessee devised the leasehold estate along with other property on trust for her nieces for life with remainders over to their children. One fine became payable in the testatrix’s lifetime and another became payable after her death. The first fine was held to be payable out of the general estate because it had ripened into a debt during the testatrix’s lifetime and, referring to that fine, the Vice-Chancellor (at p. 273) said:”The first question is, whether the covenant as to that fine is or is not to be exclusively satisfied out of the leasehold estate. I am of opinion that it is not. It was a debt contracted by the testatrix for the benefit of the leasehold estate. It was a debt which became due in her lifetime, and for which she might have been sued, and, if sued, would have been compelled to pay. There is no warrant for the proposition, that the devisee of the leasehold estates is to take them subject to liabilities which had already ripened into debts in the lifetime of the testatrix. The debt being due by the testratrix at the time of her decease, it might have been properly paid by her representatives out of her general personal estate, and it is still payable out of that estate.”
The Vice-Chancellor then went on to deal with the matter of the second fine. He posed the question as to how this fine was to be borne as between the leasehold estate and the general residue of the personal estate; and then (at p. 276) he said:”The second fine does not stand on the same footing as the first. It was not a debt due at the decease of the testatrix, but a mere liability entered into by her in respect of her leasehold property, with which neither the testatrix nor the estate might ever become actually chargeable. Now, what is the nature of the liability into which she thus entered. There is, as was admitted, a provision of re-entry by the lessors, in case the testatrix did not perform the covenants of the lease. The testatrix, therefore, had an estate defeasible in case of nonperformance of the covenants contained in the lease, and what she gave by her will was the same thing, a lease subject to be defeated by the nonperformance of the covenants which it contained. I do not know how I can hold that the devisee of an estate liable to be defeated has a right, against the general estate of his devisor, to have that defeasible estate turned into an indefeasible one, or to be indemnified against the consequences of his own neglect in suffering it to be defeated. The payment of this fine is an element necessarily incident to the preservation of the lease, and the person taking the benefit of the lease must take its burdens also. If the covenants be not performed, the lessor may re-enter, and the devisee must take the estate subject to that power in the lessor so to determine it. He cannot require that the personal estate of the testatrix shall be applied to put him in a better position than he was in at the time of the death of the testatrix.” The decision was that the latter fine of £2,000 was to be borne wholly out of the leaseholds and not out of the general personal estate.
The decision in that case turned upon the nature of the obligation. The obligation which had ripened into a debt of the deceased fell to be borne by the estate. On the other hand, a liability which had not at the date of the death crystallised into a debt was not a liability to be borne by the estate but, if to be borne at all, fell as a burden on the person taking the benefit of the lease as an element necessarily incident to the preservation of the lease.
Three years later sir John Romilly, Master of the Rolls, referred to the last-mentioned decision in an illuminating way in Armstrong v. Burnet (1). He was dealing with a somewhat analogous matter, namely, the liability for calls on shares specifically bequeathed as between the specific legatee and the estate. He said that the case of Fitzwilliams v. Kelly (2)appeared to him to lay down a principle and to draw a valuable distinction affecting this subject. He added (at p. 432):”That the devisees of leasehold estates take the property cum onere cannot be doubted; but that case establishes, that although every thing that is due from the testator at his death must be paid out of his residuary personal estate, yet that what may become due subsequently
to his death is not so payable, although, by reason of his covenant, his personal estate may remain liable thereto, so far as regards the covenantee, but that this amount is properly payable by the devisee of the leasehold interest.”
That a liability under a covenant to repair in a lease in respect of dilapidations existing at the time of a testator’s death in respect of leaseholds specifically bequeathed is not a debt of the testator is amply borne out by the case of Hawkinsv. Hawkins (1). In that case a testator specifically bequeathed certain personal estate upon trusts to one, Sarah Hawkins, and her children after payment thereout of his debts. He bequeathed the residuary estate to the plaintiff. Part of that residuary estate consisted of a leasehold house considerably out of repair. The leasehold was worthless and the plaintiff surrendered it to the landlord who would only accept a surrender on payment of a certain sum for rent and a sum for dilapidations. It was held by the Court of Appeal that the plaintiff was not entitled to have the sum which he had paid to the landlord for dilapidations paid out of the specifically bequeathed property as being a debt of the testator.
During the course of his judgment Sir George Jessel, the Master of the Rolls, stated (at p. 473):”The leasehold house in question was included in the residue bequeathed to the plaintiff, which residue the plaintiff elects to accept. There was a specific gift to Sarah Hawkins for life, and after her death to her children, of certain property, subject to their payment of the testator’s debts and funeral expenses and a legacy. The question is whether the liability of the testator’s estate to pay the future rent, and its liability to damages for the dilapidations, are debts within the meaning of that clause as between the residuary and the specific legatees. I am of opinion that they are not. These are not debts, but liabilities. Under the covenant to keep the house in repair the testator’s estate is liable to pay damages, the measure of which would be the damage done to the reversion by allowing it to be out of repair. This liability is not a debt. There are cases where the word ‘debts’ has been held to include liabilities of this nature, as, for instance, in the case of a charge of debts on real estate, but not as between legatees. A specific legatee takes a propertycum onere.”
Lord Justice Baggallay concurred in the view that as regards dilapidations they were a liability of the testator’s estate but not a debt due at his decease: while Lord Justice Cotton said this (at p. 474):”Strictly speaking, this liability for dilapidations is not a debt. In some cases such a liability may be held to be included in the word ‘debts,’ but not as between specific and residuary legatees. The question is not whether the executor would not have been held justified in making these payments if there had been a deficient estate, but whether, there being a residue, they are payments which, as between the person taking the leasehold as part of the residue and the persons taking the property charged with the testator’s debts, ought to be charged against the specifically bequeathed property, and I am of opinion that they are not.”
There is a statement on the general principle also by Sir George Jessel M.R., in Bothamley v. Sherson (1), at p. 316 of the report, where he says:”In fact the distinction seems to turn on this, is the charge one created by the testator for what has been called a temporary purpose, that is, with the view of raising money or of making use of the property (as in the case of the wines, for the purpose of the testator making use of the wines and getting them to this country), or is it from its nature a charge incident to the property, as in the case of rent on leaseholds or calls payable on railway shares? In the first case the specific legatee is entitled to have the legacy redeemed or freed from the charge. In the second case he is not so entitled, because the testator is supposed to give the thing as it is, and the charge upon it is really not in strictness an incumbrance, but something incident to the nature of the thing.”
There is thus weighty authority for the proposition that where dilapidations exist at the date of the testator’s death in relation to leaseholds which he has bequeathed specifically, the burden arising from a covenant to repair such leaseholds falls on the specific legatee. The same principle applies to freeholds specifically devised subject to a lease containing a covenant to repair on the part of the lessor. As between the residue of the testator’s estate and the corpus of the specific devise, the specific devisee takes cum onere. The liability is attendant on the lease during its currency. In the circumstances now being considered it never crystallised into a debt during the testator’s lifetime and is therefore, following the cases above cited which are relevant to the point, not a burden to be cast on the residue. It matters not that the devise is to two persons in succession, the one for life and the other in remainder. The tenant for life as devisee for life bears portion of the burden in that his income is reduced. The fact that it is well established that the tenant for life does not have to bear the capital expenditure does not seem to me to lead either necessarily or logically to the conclusion that the estate is to bear the burden where the issue is between the estate and the specific devisees. No case has been cited to support such a conclusion. The reasoning leading to the decisions in Eccles v.Mills (1) and Re Day’s Will Trusts (2) does not in my view apply to the facts of this case. In my opinion, therefore, in this present case the expenditure in respect of the items under consideration falls to be borne by the corpus of the specific devise and not by the residue and I shall answer the questions asked in the special summons accordingly.
Meagher, Deceased;
Bank of Ireland v. Meagher and Others.
[1951] IR 100
Kingsmill Moore J.
KINGSMILL MOORE J. :
The weight of authority is such that I do not find it necessary to reserve my decision.
The action is brought by the trustees of the will of Thomas Meagher, deceased, asking the assistance of the Court in determining the question as to what they should do with a sum of £3,125, British Transport 3 per cent. Guaranteed Stock, received by them as such trustees from Thomas Tilling, Limited, and transferred to them by the Company under the description of a “capital profits dividend.”
By virtue of the trusts of the will of the testator the trustees were possessed of a sum of stock in Thomas Tilling, Limited, which was settled on the defendantEmma Imelda Meagherfor her life with remainder to the other defendants, who are her infant children, as she should appoint and failing appointment with remainder to them equally. On the one hand, it is contended that as the Transport Stock was transferred to the trustees as a dividend the whole of the stock can be taken by the tenant for life. On the other hand, it is argued that as the Transport Stock in effect represents the purchase price for the bulk of the capital undertaking of the Company it should be regarded as capital and held by the trustees on trust to pay only the interest to the life tenant and to preserve the stock as a capital asset for the remaindermen.
The Company of Thomas Tilling, Limited, came into existence in 1897. It prospered exceedingly and at the date when the Transport Act, 1947, came into effect the Company was perhaps the largest private transport undertaking in England. The result of the Act was that the Company’s road transport undertaking was compulsorily acquired by the British Transport Commission, and the consideration for the acquisition of the undertaking was a sum of £20,806,000 of British Transport 3 per cent. Guaranteed Stock, roughly speaking, £5 of British Transport Stock for each ordinary share issued by the Company. The Company’s shares prior to the acquisition stood at a figure of about £6 5s. 0d.. After the acquisition and after the distribution to the shareholders of the British Transport Stock the shares of the Company stood at £1 5s. 0d., and accordingly it is obvious that the practical result of the acquisition and the distribution was to reduce the capital value of the shares in the market to one-fifth of what they were worth before the Company’s undertakings were taken over. Where the shares of the company were in settlement remaindermen will in fact be seriously prejudiced inasmuch as the capital value of their shares has been reduced by four-fifths. Similarly, a tenant for life, if he is entitled to receive the whole of the Transport Stock distributed in respect of a holding of shares in Thomas Tilling, Limited, will receive an exceedingly substantial windfall. It is to be noted that it was within the power of the Company to distribute the Transport Stock, either by way of a dividend as has been doneor, by adopting a more complicated procedure, in the form of a capital repayment. There was nothing to prevent them from increasing their capital to a figure representing the amount of stock which had been transferred to the Company, and then, under the powers given them in their Articles and Memorandum, coming to the Court and obtaining sanction for a scheme of reduction of capital and capital repayment. The Company did not take that course. Instead it passed a resolution:
“That a special capital profits dividend on the Ordinary Stock of the Company of £20,806,000 payable out of the profit realised by the Company on the recent sale of part of its undertaking to the British Transport Commission be and the same is hereby declared and that such dividend be payable to the Ordinary Stockholders on the register on the 21st day of February, 1949, in proportion to their holdings of, Ordinary Stock and be paid and satisfied by the distribution amongst them as at the 1st day of April, 1949, of £20,600,000 British Transport 3 per cent. Guaranteed Stock, 1968-1973 (part of the consideration received by the Company from the British Transport Commission for the sale above referred to) taken at its issue price of 101 per cent., being in the proportion of £5 British Transport Stock for every £1 Ordinary Stock of the Company held by them.”
In other words, although the Company indicated the reality of the position by the use of the words, “special capital profits dividend,” it in fact distributed the stock in the form of an ordinary dividend. A company is only allowed to pay a dividend out of profits, though it may take the course which I have already indicated of first capitalising the profits, and then distributing them with the sanction of the Court as capital. What the Company has actually done is to distribute an ordinary dividend and to call it a special capital profits dividend. I have very
great sympathy with the point of view put forward by Mr. McGonigal and Mr. Ellis. They ask me to hold first that although the Company distributed the stock as a dividend, the trustees received it as capital; and secondly, that if that was not so, and if the trustees were bound to hand the stock over to the tenant for life, then the tenant for life when she received it held it on a constructive trust whereby she was bound to re-invest it (or to allow the trustees to re-invest it) as a capital sum which would pass after her death to the remaindermen, but the interest on which she would be entitled to take for her own benefit during her life. That some such arrangement would, in the circumstances of this case, reflect the realities of the position I have no doubt, but I fear that the authorities to which I shall refer very briefly are mandatory and prevent me from holding either that the property when it reaches the hands of trustees can be regarded as capital or that any trust attaches to it in the hands of the tenant for life. It is clear that there must be some generally applicable rule to decide the destination as between the tenant for life and remaindermen of moneys paid by a company to its shareholders, whether in the form of dividend or in the form of a capital repayment, and it appears to me that such a rule was laid down as far back as 1887 by Lord Herschell, adopting the words of Lord Justice Fry. In the case of Bouch v.Sproule (1), half-way down p. 397, Lord Herschell says as follows:”I quite agree with the Court below that, apart from the authorities to which I have alluded, the general principle for the determination of such a question as that before us, and in my opinion the only sound principle, is that which is well expressed in the judgment of Lord Justice Fry: ‘when a testator or settlor directs or permits the subject of his disposition to remain as shares or stocks in a company which has the power either of distributing its profits as dividend or converting them into capital, and the company validly exercises this power, such exercise of its power is binding on all persons interested under the testator or settlor in the shares, and consequently what is paid by the company as dividend goes to the tenant for life, and what is paid by the company to the shareholder as capital, or appropriated as an increase of the capital stock in the concern, enures for the benefit of all who are interested in the capital.’ And it appears to me that where a company has power to increase its capital and to appropriate its profits to such an increase, it cannot be considered as having intended to convert, or having converted, any part of its profits into capital when it has made no such increase, even if a company having no power to increase its capital may be regarded as having thus converted profits into capital by the accumulation and use of them as such.”
That case and that passage has been repeatedly followed and approved of both in England and in Ireland and a recent authoritative, though not binding, decision of the Privy Council in England has summarised with considerable particularity the principles which are applicable. In Hill v.Permanent Trustee Co. of New South Wales (1) the judgment of the Privy Council laid down (at pp. 730-32) the following principles:
“(1) A limited company when it parts with moneys available for distribution among its shareholders is not concerned with the fate of those moneys in the hands of any shareholder. The company does not know and does not care whether a shareholder is a trustee of his shares or not. It is of no concern to a company which is parting with moneys to a shareholder whether that shareholder (if he be a trustee) will hold them as trustee for A. absolutely or as trustee for A. for life only.
(2) A limited company not in liquidation can make no payment by way of return of capital to its shareholders except as a step in an authorised reduction of capital. Any other payment made by it by means of which it parts with moneys to its shareholders must, and can only, be made by way of dividing profits. Whether the payment is called ‘dividend’ or ‘bonus,’ or any other name, it still must remain a payment or division of profits.
(3) Moneys so paid to a shareholder will (if he be a trustee) prima facie belong to the person beneficially entitled to the income of the trust estate. If such moneys or any part thereof are to be treated as part of the corpus of the trust estate there must be some provision in the trust deed which brings about that result. No statement by the company or its officers, that moneys which are being paid away to shareholders out of profits are capital, or are to be treated as capital, can have any effect upon the rights of the beneficiaries under a trust instrument which comprises shares in the company.
(4) Other considerations arise when a limited company with power to increase its capital and possessing a fund of undivided profits, so deals with it that no part of it leaves the possession of the company, but the whole is applied in paying up new shares which are issued and allotted proportionately to the shareholders, who would have been entitled to receive the fund had it been, in fact, divided and paid away as dividend.
(5) The result of such a dealing is obviously wholly different from the result of paying away the profits to the shareholders. In the latter case the amount of cash distributed disappears on both sides of the company’s balance sheet. It is lost to the company. The fund of undistributed profits which has been divided ceases to figure among the company’s liabilities; the cash necessary to provide the dividend is raised and paid away, the company’s assets being reduced by that amount. In the former case the assets of the company remain undiminished, but on the liabilities’ side of the balance sheet (although the total remains unchanged) the item representing undivided profits disappears, its place being taken by a corresponding increase of liability in respect of issued share capital. In other words, moneys which had been capable of division by the company as profits among its shareholders have ceased for all time to be so divisible, and can never be paid to the shareholders except upon a reduction of capital or in a winding up.”
Now the passage which I have read is clear and definite in its statement that no payment by a company can be a return of capital unless the company is in liquidation or unless it is a step in an authorised reduction of capital, and that if money is distributed to shareholders otherwise than in one of those two ways, then it can only be a payment by way of division of profits, whatever name is given to it by the directors or by the company itself as the result of the passing of a resolution. Applying that to the facts of Thomas Tilling, Limited, I find that there was no liquidation. I find that there was no reduction of capital in an authorised scheme, and I find that money has been repaid to shareholders. It appears to me that that must be regarded, from the decision I have quoted, as being a repayment by way of division of profits. It appears further that the Company is not interested in the question as to whether the shares are settled or not and is entitled to repay the money in such a way as to earmark it either, on the one hand, as division of profits or, on the other hand, as capital. And it appears from the judgment of Lord Herschell and the judgment of Lord Justice Fry that a settlor who does not make special provisions in his deed, or a testator who does not put special provisions in his will, must be deemed to have put himself at the mercy of the company and its directors to decide for all purposes whether a repayment of money in respect of shares forming part of a trust estate is to rank as a dividend going to the tenant for life or a capital repayment which is available for the remaindermen after the death of the tenant for life. It could hardly be contended that such a rule may not work injustice, sometimes on the tenant for life, and sometimes on the remaindermen, but it seems to me that any alternative rule would involve in each case an elaborate inquiry as to how far the moneys being repaid in fact represented accumulated profits or represented capital accretionan inquiry which would be difficult, if not impossible, for a Court to undertake, and which could only be given effect to if the directors or the auditors of the company were authorised by legislation to give something in the nature of a binding certificate as to the proportions which profit and capital bore to each other in the constitution of the sums returned. The rule may be one of expediency, but it seems to me to be so firmly settled that I am not at liberty to depart from it. It is possible that acquisitions such as that of the undertaking of Thomas Tilling, Limited, and other acquisitions of similar great businesses, may force legislatures to make a provision whereby a more equitable distribution between the tenant for life and remaindermen may be produced than is likely to result from leaving the nature of the payment made to be decided at the will and pleasure of the directors of the company. But no such legislation has yet been passed. Accordingly, the answer to the question raised in the Summons is that the British Transport 3 per cent. Guaranteed Stock is to be treated as income payable to Mrs. Meagher, the tenant for life of the settlement constituted by the will of Thomas F. Meagher.
Re Davoren Decd
[1994] IEHC 3
Judge: Mr. Justice Francis D. Murphy
This is a claim by the above-named Plaintiff as Executor of the Willdated the 13th May, 1967 of Mary Davoren deceased who died a spinster onthe 8th December, 1990 for the determination of certain questionsarising on the construction of the Deceased’s will.
The residuary bequest contained in the said Will is expressed in thefollowing terms:-
“I give devise and bequeath all the rest, residue and remainder of myestate both real and personal unto my TRUSTEES UPON TRUST to sell callin and convert the same into money (with power in their discretion topostpone such sale, calling in and conversion as hereinafter set out)and after payment thereout of my debts, funeral and testamentaryexpenses to hold the residue UPON TRUST for the post-primary educationof such of the under mentioned as my trustees as in their discretionshall decide will be likely to benefit most namely:-
The grandchildren and direct descendants of James Nagle of Castletown,Carron,
The children and direct descendants of Patrick (Burke) Davoren ofKilcorney and of his brother Austin Davoren, Whitemount, Corofin andalso the children and direct descendants of Michael Davoren ofBallyaliban, Ballyvaughan and of his brother Martin Davoren ofCahirconnell and also the children and direct descendants of JohnDavoren of Ennistymon (born at Ballyconnoe) and of his brother whomarried Miss Rynne and who resides at Ballyconnoe in the County ofClare.
AND I DECLARE that my said trustee may in their absolute discretiondecide which of the aforesaid children may benefit and also decide onthe secondary, technological or university colleges or professionalinstitutions where the aforesaid children take their courses AND IDECLARE that it is my intention that the income of the trust should beapplied in the first instance for payment of fees and provisions oftextbooks and secondly for the maintenance while attending such schoolscolleges or courses AND I DECLARE that my Executors may postpone thesale,calling in or conversion of any part of my real and personal estate forsuch period as they in their absolute discretion may deem fitnotwithstanding that it may be of a wasting, speculative or reversionarynature”.
The first-named Defendant Michael Davoren is sued as representing thosepersons who are potential beneficiaries under the residuary clause andthe secondly-named Defendant, Anne Coughlan, who is a niece of thedeceased, was joined as a Defendant to represent those persons who wouldbe entitled to benefit in the event of the residuary estate passing ason an Intestacy.
In these circumstances three questions were canvassed, namely:-
(1) Whether the residuary bequest aforesaid constituted a validcharitable gift.
(2) Whether the bequest offended the Rule against Perpetuities.
(3) Whether the bequest failed for uncertainty.
Having regard to the decisions in In Re: McEnery 1941 I.R. 323;In re Compton 1945 Ch. D. 123 and Oppenheim and TobaccoSecurity Trust Company 1951 A.C. 297 it was conceded by all partiesthat the gift could not be sustained as a valid charitable bequest as itdid not possess the requisite public character.
The first question to be addressed is the extent of the class from whichthe particular beneficiaries may be chosen. Is the class confined to theparticular categories of relations of the identified persons living atthe date ofdeath of the deceased or could relations of the particular kinship bornafter that date benefit from the trust? If the class did not close as atthe date of death of the deceased then the class would be susceptible ofenormous variations either by expansion or contraction and this wouldraise questions as to whether the gift possessed the requisite degree ofcertainty either on the basis that it was a beneficial trust or what isdescribed as “a purpose” trust. However, the answer to that question iseven more important in the context of the Rule against Perpetuities. Ifthe class did not close as of the date of death then there could be nodoubt at all but that the Rule was breached and the gift void abinitio.
The widest and remotest of the degrees of kinship referred to in thebequest are the “descendants”. That word was defined in Halsbury’s Lawsof England (4th Edition) Volume 50 at paragraph 521 in the followingterms:-
“Whatever may have been its meaning in earlier times, ‘descendants’ nowordinarily refers to children, grandchildren and other issue of everydegree of remoteness in descent. Although the word may be confined tomean children by a sufficiently strong context, the Court does notrestrict the word to that sense merely because the Testator speaks ofthe descendants taking their parents share.”
It would appear from the same textbook that such misgivings as may haveexisted about the meaning of the word “descendants” in earlier timesconcerned whether or not collaterals were included within its meaning.It does notever appear to have been doubted that descendants included issue ofevery degree of remoteness in descent. That being so a gift todescendants if not otherwise qualified expressly or by implication wouldappear to include all children of children indefinitely and withoutlimit. It was argued by Counsel representing the potential beneficiariesunder the will that the class should be treated as having closed at thedate of death of the deceased on the basis of the rule in Andrews-v- Partington 1791 3 B.C.C. 401. It cannot be doubted that the lawfavours an early as opposed to a later vesting of interests in property.Whilst this rule has been criticised many times it has endured for overtwo hundred years. Under the rule it is presumed that where there is animmediate gift to a class without any provision as to the time of thisvesting then if any members of the class are born at the time of thetestator’s death they take to the exclusion of after born members. Itis, however, accepted by Counsel on behalf of the potentialbeneficiaries under the trust that this rule could not be applieddirectly to the facts of the present case as there is no gift to themembers of the class but merely an obligation on the trustees to employthe trust funds for a purpose which would be of benefit to some membersof that class. In the circumstances the argument under this heading canbe put no further than saying that the rule in Andrews v. Partingtonmight be applied by analogy.
In any event the identification of the class or more correctly the dateas of which it is to be ascertained is essentially a matter for theconstruction of the will itself with the aid of the appropriateprinciples governing such construction.
Unlike the wills in In re Compton (above) and Kilroy v.Parker 1966 I.R. 309, the residuary bequest in the present casegives no specific guidance as to when the relevant class is to beascertained. In the Compton case there was a trust for education ofdescendants of three named persons and it was expressly provided thatthe trust was to be “forever”. In Kilroy v. Parker where income from afund was to be paid amongst the testators necessitous nieces and nephewsand their children. It was expressly provided that the nephews andnieces who might benefit were those “alive at the date of mydeath”.
The researches carried out by the executors have established that thenumber of persons who would constitute the class of potentialbeneficiaries if it were to be established as of the date of death ofthe deceased would be in the order of sixty. Moreover, it would bepossible to estimate with reasonable accuracy the capital and likelyincome of the trust fund. However, these are not factors which are ofmuch assistance in ascertaining the wishes of the deceased. It seems tome that the only guidance to be obtained from the will of the late MaryDavoren is the express trust for the sale and conversion of herresiduary estate and the payment thereout of her debts funeral andtestamentary expenses and the additional and express declaration thatthe trustees might “postphone the sale calling in or conversion of anypart of my real and personal estate for such period as they in theirabsolute discretion may deem fit, notwithstanding that it may be of awasting speculative or reversionary nature”. Whilst those provisionshave some significance it is obvious that they representstandard machinery to facilitate the administration of the estate andthe trust fund to be created thereout. In particular the express powerto postphone the realisation of the estate – even estate of “a wastingspeculative or reversionary nature” – is clearly a protection for thetrustees who might otherwise be liable for a breach of their duty ratherthan an indication of some particular policy or intention on the part ofthe deceased. Apart from the purpose of the trust and the selection ofthe beneficiaries the only special if somewhat ambiguous provision ofthe residuary bequest is expressed in the following terms:-
“And I declare that it is my intention that the income of the trustshould be applied in the first instance for payment of fees andprovision of text books and secondly for maintenance while attendingsuch schools, colleges or courses”.
As it is clear that both the capital and income of the residuary estateare subject to the trusts declared by the deceased the question must beasked, why did the deceased focus attention in this very specific wayupon the manner and order in which the income of the trust fund shouldbe applied. It seems to me that at the very least the deceased intendedthat the capital of the fund should be conserved if not actuallypreserved. It would be meaningless to prescribe an order in which resortwas to be had to income if the trustees had an unfettered discretion toresort to capital for any of the purposes identified in the foregoingdeclaration. Such an action would appear to frustrate thewishes of the testatrix without expressly defying them. By this specialdeclaration it seems to me that the testatrix revealed an expectationand intention that recourse would be had primarily to the income of thefund with a view to conserving the capital as a fund for indefiniteduration. Moreover, this has a certain logic. The testatrix would notwish her trustees to deplete excessively the trust fund at any one timewhen their task would involve a review of their duties and an exerciseof their discretions over a long period of time. When one accepts theconcept of preserving the capital of the trust fund over a lifetime oreven the infancy of the youngest members of the class living at the dateof death of the deceased, the question would then arise as to how or whythe trust should be wound up and the balance of the capital and incomedistributed amongst a diminishing class. It seems to me that the logicof the situation as best it may be inferred from the very limitedevidence available, is that the testatrix intended to create a fundwhich would be available indefinitely for the children, grandchildrenand descendants whenever born of the persons named in her will, and sucha gift is unfortunately invalid as contravening the ancient but stillrespected Rule against Perpetuties.
Whilst that conclusion disposes of the issue as to the validity of thebequest I think it may be helpful having regard to the arguments whichwere addressed to the Court (and to the state of the law on the topic)to express my views on the other issues raised.
Prior to the decision of the House of Lords in McPhail -v-Doulton 1971 A.C. 424, it was generally accepted that theobjects of a trust must be certain, that is to say, that the languageemployed must be certain and that the trustees must at any time be ableto ascertain definitely the persons who would have a vested interest inthe capital and income of the trust property. On the other hand wherethe trustees were not bound by a trust but merely a power or discretionwhether to confer or withhold a benefit then the requirement ofcertainty was recognised as being far less stringent. These rulesappeared clearly from the decisions in I.R.C. -v-Broadway CollegesTrust 1955 Ch. 20 and Gulbenkian’s Settlement Trusts 1970A.C. 508. As Lord Upjon pointed out in the Gulbenkian Settlement case(at page 521) the then recent authorities were to the effect that:-
“The rule is, that provided there is a gift over or trust in default ofappointment – a mere or barepower of appointment among a class is validif you can with certainty say whether any given individual is or is nota member of the class; you do not have to be able to ascertain everymember of the class”.
In the comprehensive judgment of Mr. Justice Budd in Kilroy -v- Parker 1966 I.R. 309 he accepted and applied that principle (at page 318) inthe following terms:-
“From a perusal of this case and those referred to therein, I amsatisfied they establish in cases of the type under review, on the onehand, that in cases where the trustees have a duty to distribute theincome in question it is essential that they shouldknow, before they perform their duties, who are the potentialbeneficiaries among whom they have the right of selection, and, on theother hand, in the case of a power with a gift over that there is noreason why trustees, before exercising their power, should have to beable to survey the whole field of objects, the practical result is thata mere power to apply income for the benefit of the members of a class,all of whom cannot be ascertained, with a gift over in default, isvalid, and an appointment can validly be made to a person who canproperly be said to be a member of the class. But an imperative trustfor the division of income between such members of the class as thetrustees may select is invalid unless the whole class of potentialbeneficiaries can be ascertained. It is not suggested, nor do I thinkthat it could be, that there is any distinction in principle betweenEnglish and Irish law on these matters.”
The statement contained in the final sentence quoted above ceased to betrue as and from the decision of the House of Lords in McPhail -v-Doulton (above). In that case the House of Lords by a majority of threeto two overruled the decision in the Broadway Colleges case and heldthat the test to be applied in determining the validity of imperativetrusts was substantially the same as that applicable to discretionarytrusts. That is to say, the trust was valid if it could be said withcertainty that any given individual was or was not a member of the classdesignated as potential beneficiaries.
Not only is the judgment of the late Mr. Justice Budd a precedent ofgreater authority for me than a judgment (particularly a majorityjudgment) of the House of Lords but I confess that I find the reasoningof the Irish judgment (and indeed the earlier English judgments) moreconvincing than that contained in what was admittedly a conscious effortat law reform made in the McPhail case.
In the Kilroy case the Court had to consider whether a trust todistribute the income of a fund amongst the necessitous nieces andnephews of the deceased and such of their children as the executorsmight think fit. As I have already remarked the category of nieces andnephews were expressly identified in the will as those being alive atthe date of the death of the testatrix. It was, however, an imperativetrust though confined to the income of the fund accruing over a periodof ten years from the date of death of the testator. In thosecircumstances no question arose with regard to the Rule againstPerpetuities nor in the identification of the class of potentialbeneficiaries insofar as it consisted of nephews and nieces of thetestator, living at his death and their children. The major problemrelated to identifying and perhaps re-identifying the “inner” class of ” necessitous” nephews and nieces. What degree of poverty orhardship is involved in that adjective? Was the standard to be anobjective one or in some way related to the standard of living of thetestator? What was to happen if during the ten years during which theincome of the trust fund was to be distributed the financialcircumstances of particular nephews or nieces altered significantly? Tomy mind a significant feature of the judgment is the dedication anddetermination with which Mr.Justice Budd addressed and resolved those and other difficultproblems.
Having accepted the need for certainty in the creation of the trust Mr.Justice Budd considered the principles upon which a Court approaches theproblem of having to decide whether or not a gift is to be held void foruncertainty. He pointed out (at page 320) that:-
“The difficulties in interpreting a disposition which is ambiguouslyexpressed are not enough to render the disposition void for uncertainty.To be void for this reason it must be utterly impossible to put ameaning on it”.
He went on (at page 321) to quote a passage previously cited withapproval by Mr. Justice Murnaghan in the following terms:-
“Another principle is equally clear: we ought not, without absolutenecessity, to let ourselves embrace the alternative of holding a devisevoid for uncertainty. Where it is possible to give a meaning, we shouldgive it so that the will of the testator may be operative; and where twoor more meanings are presented for consideration, we must be wellassured that there is no sort of argument in favour of one view ratherthan another, before we reject the whole”.
He accepted, as all of the parties would, that the presumption is that”when a man makes his will he does not intend to die intestate as to anypart of his property”.
It was those principles which imposed on the learned judge the duty toseek a construction of the will and an approach to the problemscanvassed in relation to the administration of the trust which wouldresolve ambiguities and uncertainties where this was compatible with theexpressed or implied wishes of the testator. Whilst the particular factsof the Kilroy case are unique, the significance of the judgment of Mr.Justice Budd thereon, as I see it, is the determination with which hesought to salvage the validity of the particular testamentary trustnotwithstanding the difficulties created by the manner in which thetestatrix had expressed her intentions. Again I could respectfully agreethat the learned judge was entirely correct in that course and as far aspossible I believe that a similar approach should be taken in thepresent matter. It is noticeable that Mr. Justice Budd recognised thatthe class of potential beneficiaries might fluctuate from year to yearas would happen in the present case depending upon the educationalrequirements of the relatives of the persons designated by thetestatrix. It was of that problem that the learned judge said (at page334):-
“The fact that the class in the present case may fluctuate doesundoubtedly increase the difficulty of ascertaining the class, butdifficulties and impracticabilities should not be allowed to stand inthe way if by any possibility the trust can be executed”.
It seems to me that the helpful decision of Mr. Justice Budd in Kilroy -v- Parker would be of decisiveimportance in upholding the validity of the residuary bequest in thepresent case if, but only if, the class of relatives out of whom thebeneficiaries were to be selected was limited to those living at thedate of death of the deceased and as I have held that the contrary is -regretfully – the true construction of the will, my conclusion in thisregard can be of no comfort to the designated class ofbeneficiaries.
In the circumstances it seems to me that the questions raised in theStatement of Claim herein should be answered as follows:-
(a) The trust purported to be created by the residuary clause doesnot constitute a trust of a charitable nature.
(b) The words creating the trust are sufficiently certain for thatpurpose.
(c) The terms of the trust do offend against the rule against trustsof perpetual duration.
However, I will hear the parties in relation to any matter of detail asto how the questions raised should be dealt with.
Corrigan v Corrigan
[2016] IESC 56
Ms. Justice LaffoyGrounds of appeal
20
The notice of appeal filed by the solicitors then on record for the Appellant on 12th December, 2007 set out nine grounds on which it was alleged that the trial judge had erred in law and in fact. It was submitted on behalf of the Residuary Legatee that two of the grounds were not advanced in the High Court and should be struck out, that is to say, ground (1), in which it is contended that the trial judge had failed to vindicate the property rights of the Testator and his children pursuant to Article 40.3.2 and Article 43.1.2 of the Constitution, and ground (9), in which it is contended that the trial judge’s construction of the Will was incompatible with s. 117 of the Act of 1965 and repugnant to the Appellant’s constitutional rights pursuant to Article 40 and 43 of the Constitution. The Appellant, who is a qualified and practising lawyer and who appeared in person on the hearing of the appeal, did not in fact pursue those grounds and, accordingly, it is unnecessary to consider them. The remaining grounds are that the trial judge erred –
(i) in holding that Clause 1 of the Will did not contain a condition;
(ii) in holding that Clause 1 created a determinable fee;
(iii) in holding that Clause 1 ‘was made’ while the Testator acted under a mistake of fact;
(iv) in holding that the bequest in Clause 1 was void and thus denying the Appellant of any share of his late father’s estate;
(v) in failing to give words drafted by the solicitor their legal and technical meaning;
(vi) in admitting illegible hand-written unendorsed attendance notes that contained factual errors as extrinsic evidence; and
(vii) in not adopting the ‘armchair’ principle, thereby failing to interpret the Will as a whole to give effect to the Testator’s intentions.
21
In his submissions on the appeal, the Appellant invokes certain provisions of the Land and Conveyancing Law Reform Act 2009 (the Act of 2009), in particular –
(a) s. 16, which abolished certain common law rules, for example, the rules known as ‘the common law contingent remainder rules’,
(b) s. 17 which defines the scope of s. 16, and which, the Appellant submits, citing Wylie on The Land and Conveyancing Law Reform Act 2009: Annotation and Commentary (Dublin, 2009), introduced an element of retrospectivity, and
(c) s. 18 which deals with trusts of land.
In this context, the Appellant does not allude to the observations of Pearce and Mee quoted earlier (at para. 13). The Act of 2009 came into force on 1st December, 2009, that is to say, over two years after the decision of the High Court against which the Appellant appeals. The position of the Personal Representative, which is endorsed by the Residuary Legatee, is that, as the trial judge did not find the disposition in Clause 1 void for offending any of the rules relating to future interests which were abolished by the Act of 2009, the Appellant’s reliance on the Act of 2009 is not understood and it is misconceived. Further, it is submitted that the law applied by the trial judge was not altered by the Act of 2009. I am satisfied that the reliance by the Appellant on provisions of the Act of 2009 is misconceived and that the provisions of the Act of 2009 invoked by the Appellant do not bear on any of the issues which this Court has to determine on the appeal, to which I now turn.
Issues on the appeal
22
In the light of the findings of the trial judge and the remaining grounds of appeal, the issues on the appeal can be netted down to three issues. First, the core issue is whether the Testator intended that the disposition of the farmlands created in Clause 1 would be a determinable fee, as the trial judge found, as distinct from a fee simple upon condition. Secondly, if he did, it is necessary to consider whether, as a matter of law, as was found by the trial judge, the determining event is void for uncertainty. Thirdly, if the determining event is void for uncertainty, the remaining issue is to whom do the farmlands pass in accordance with the provisions of the Will as a whole and, in particular, do they fall in the residuary estate, as the trial judge held. Before addressing those issues, it is appropriate to make a number of general observations in relation to the application of the provisions of the Act of 1965.
23
First, s. 89 provides as follows:
‘Every will shall, with reference to all estate comprised in the will and every devise or bequest contained in it, be construed to speak and take effect as if it had been executed immediately before the death of the testator, unless a contrary intention appears from the will.’
No contrary intention appears from the Will and, accordingly, Clause 1 must be construed having regard to the circumstances which prevailed on 5th March, 2000.
24
Secondly, in applying s. 90 and in determining whether the extrinsic evidence adduced on behalf of the Personal Representative, which has been outlined earlier, is admissible to show the intention of the Testator, as was found by the trial judge, the test to be applied is the test laid down by this Court in Rowe v. Law [1978] I.R. 55. The test as identified in the judgment of Henchy J. (at p. 72) has –
‘… the double requirement of
(a) showing the intention of a testator, and
(b) assisting in the construction of, or explaining any contradiction in, a will.’
(Emphasis as in original)
25
Thirdly, s. 91 provides that, unless a contrary intention appears from the will, any estate comprised in any devise contained in the will which fails or is void or is otherwise incapable of taking effect, shall be included in any residuary devise contained in the will. No contrary intention appears in the Testator’s Will.
26
Finally, the interest of the Testator in the farmlands at the date of his death was a fee simple interest and he was registered as full owner of the lands on Folio 13658, County Westmeath. Section 94 of the Act of 1965 provides:
‘Where real estate is devised to a person (including a trustee or executor) without any words of limitation, the devise shall be construed to pass the whole estate or interest which the testator had power to dispose of by will in the real estate, unless a contrary intention appears from the will.’
By virtue of the operation of s. 94, the fee simple passed to the Personal Representative on the death of the Testator. The issues of construction which arise relate to the beneficial interest or interests which the Testator intended to create in Clause 1 in the farmlands held by the Personal Representative on trust.
Determinable fee or Conditional fee: the law
27
In outlining the relevant legal principles applicable to this very arcane area of law, it is convenient to follow the format adopted in the most recent text on land law in this jurisdiction relied on by the parties, that is to say, Wylie on Irish Land Law 5th Ed. (Dublin, 2013).
28
In classifying the types of fee simple interests in land, Wylie identifies two main categories: a fee simple absolute and a modified fee simple, the latter category consisting of two types, namely, a determinable fee, and a fee simple upon condition.
29
As is explained by Wylie (at para. 4.47), a determinable fee is a fee simple which will determine automatically on the occurrence of an event which may or may not happen. In the case of a determinable fee the determining event is specified by the original grantor of the estate. The grantor retains some interest in the property, which is called a possibility of reverter, i.e. the possibility of acquiring an estate in the future. A fee simple upon condition, or a conditional fee, on the other hand, as is pointed out by Wylie (at para. 4.49) is a fee simple to which is attached a condition subsequent, which may cause the estate to be brought to an end. As Wylie points out (at para. 4.47), often it is a difficult matter of construction whether the estate is a determinable fee or a fee simple upon condition, emphasising also that the consequences and incidents of the estates are different. Wylie goes on to consider the distinction between the two estates, first by reference to how one recognises which estate is created by the wording used in the relevant deed or will, and then identifying the different rules applying to the two types of modified fee.
30
As to identifying whether a particular document creates a determinable fee or a fee simple upon a condition, Wylie points out (at para. 4.50) that this is largely a matter of the precise wording of the document. From a theoretical standpoint, the position is clear: in the case of a determinable fee the words describing the determining event are part of the words of limitation, i.e., they delimit the estate granted. In the case of a fee simple upon a condition, however, the words containing the condition are not part of the words of limitation, but rather are independent words of condition, which confer a right of entry on the grantor or his successor, which must be exercised to determine the fee simple. In relation to deciding the effect of the particular words used in a particular document, which Wylie acknowledges is not always an easy problem to solve, he states as follows (at para. 4.50):
‘The courts have adopted over the years some “rules of thumb” whereby particular words or phrases are taken to indicate one type of estate rather than another. Thus words like “while”, “during”, “until” and “as long as” tend to be interpreted as words of limitation creating a determinable fee; words like “provided that”, “on condition that” and “but if” are usually taken to mean words of condition.’
Attorney General v. Cummins’ Ors. [1906] 1 I.R. 406 is cited as authority for the statement that the first group of words referred to tend to be interpreted as words of limitation creating a determinable fee. That authority will be considered later.
31
Turning to the distinguishing features in relation to determination (that is to say, the end point) of each of the modified fees, Wylie points out (at para. 4.51) that, in the case of a determinable fee, when the specified event occurs, the fee simple comes to its natural determination according to the words of limitation, and the possibility of reverter takes effect automatically to confer the fee simple absolute on the grantor (or his successor, if he has since died). On the other hand, in the case of a fee simple upon a condition, the occurrence of the specified event, or satisfaction or breach of the condition, merely gives the grantor a right of entry so as to forfeit the grantee’s estate.
32
Of more particular significance for present purposes is Wylie’s commentary on the approach of the courts to a determinable fee and a fee simple upon condition having regard to matters of public policy. As Wylie points out (at para. 4.54), the courts will treat as invalid any condition which is illegal, immoral, a violation of constitutional rights under the Constitution or which otherwise contravenes what they regard as public policy. Moreover, it is clear that a condition may be declared void for uncertainty. If a condition subsequent is void for uncertainty, or as being contrary to constitutional rights or public policy, the fee simple becomes a fee simple absolute and, as is explained, only the condition fails and the fee simple itself remains in effect, provided it is conveyed with appropriate words of limitation. However, the contrary is the position in the rare case of a limitation in a grant of a determinable fee being held void as against public policy. In such case, the words of limitation themselves are defective and so fail to pass the fee simple; the whole grant is ineffective and the grantee is left with nothing. Although not expressly mentioned by Wylie in this context, by analogy the same principle obviously applies where the determining event is void for uncertainty. It is convenient at this juncture to consider the only authorities to which this Court has been referred in which a finding of a determinable fee was made by a court.
33
While the decision in Attorney General v. Cummins dates from 1895 it was reported in 1906 as an addendum to Switzer v. Rochford [1906] 1 I.R. 399. The dispute in Attorney General v. Cummins concerned the effect of letters patent whereby King Charles II granted to the Earl of Castlehaven specified quit rents ‘to hold the same to the [E]arl, his heirs and assigns, till he or they should receive and be paid the sum of £5,000 sterling at one entire payment’. The application before the court in 1895 was an application by the Attorney General seeking that the Crown should be at liberty to redeem the quit rents by paying £5,000 and that the Crown be at liberty to pay that sum into court. In his judgment Palles C.B. held that the estate created was a determinable fee. He stated as follows (at p. 406):
‘The grant passed the quit rents in fee subject to a condition determining that fee upon payment by the Crown at any time of the sum of £5,000. Under such a grant the grantee, until the happening of the determining event, has the whole estate in him, and the old Common Law doctrine was undoubtedly that a possibility of reverter, a possibility coupled with an interest, remained in the grantor, and that the fee of the rents would, upon performance of the condition, revert to the Crown. “If,” says Plowden (p. 557), “land is given to a man and to his heirs so long as he shall pay 20s. annually to A, or as long as the Church of St. Paul shall stand, his estate is a fee-simple determinable, in which case he has the whole estate in him, and such perpetuity of an estate which may continue forever, though, at the same time there is a contingency which when it happens will determine the estate”.’
34
There was a dispute in Attorney General v. Cummins as to whether the common law doctrine which was outlined in that passage still prevailed, notwithstanding the modern rule against perpetuities. The court rejected the arguments advanced on behalf of the defendants that the rule against perpetuities applied and defeated the estate of the Crown. In a passage on which the Appellant relies, Palles C.B. stated (at p. 409):
‘Now, there is not a trace in the books of any rule which limited the period during which the determination of an estate by condition should take effect, and it is abundantly clear that the modern rule could not have applied, because the donor took not by way of new limitation, but by the determination of the estate given.’
35
One other authority in which a finding of a determinable fee was made has been put before the Court, but that authority – In re King’s Trusts (1892) 29 LR Ir. 401– is more renowned for the observations of Porter M.R. than for the finding on the facts. There the testatrix by her will bequeathed an annuity of £50 per annum to each of the five children of her deceased brother and directed that the said several annuities should be payable half-yearly from the date of her decease, for their respective lives, or until any of them should marry, and that, on the death or marriage of any of the said children of her deceased brother, the annuity to any such child should cease and determine. It was held that the proviso determining the annuities on death or marriage was a limitation and not a condition subsequent or defeasance. In the oft-quoted passage (at p. 410) Porter M.R. stated:
‘The case is an instance of the very unsatisfactory state of the law on this question. It is little short of disgraceful to our jurisprudence that in reference to a rule professedly founded on considerations of public policy, a gift of an annuity to AB for life, coupled with a proviso that if he married the annuity should cease, whether there be a gift over or not, gives AB a life estate, whether he marries or not; while a gift to CD until he marries or dies, with a gift over, is at an end if CD should marry. The distinction is intelligible to a lawyer; but no testator except a lawyer could be expected to understand it, much less to have regard to it in framing his will. We must, however, take the law as we find it.’
36
In Pearce and Mee ( op. cit.) (at p. 78) that passage is referred to in the context of stating that the distinction between a determining event and a condition subsequent is very narrow. The authors also refer in that context to Re Sharp’s Settlement Trusts [1972] 3 All ER 151. There, delivering judgment in the Chancery Division of the English High Court, Pennycuick V-C referred to the description ‘in an Irish case’ of the distinction as ‘little short of disgraceful to our jurisprudence’ and he continued (at p. 156):
‘I am bound to say that according to modern ideas this criticism appeals to me. However, the distinction is well established and must be accepted so far as it is comprehensible.’
Allowing Wylie the last word on the observations of Porter M.R., it is suggested (at para. 4.50) that the Master of the Rolls seems to have had in mind wills, which the court usually interprets more liberally than conveyances inter vivos, but the author goes on to state:
‘But however nonsensical the distinction may appear to the layman the fact remains that much depends upon it. The legal system has devised different rules with respect to the two estates …’
Determinable fee or Conditional fee: application of the law to Clause 1 of the Will
37
Reading Clause 1 of the Will, being, to use the words of Lowry L.C.J., ‘the immediately relevant portion’ thereof, in his words as ‘a piece of English’, in the first step of the procedure advocated by him, with a view to deciding ‘if possible, what it means’, Clause 1 starts with an introduction or preamble which contains a description of the property the subject of the disposition in Clause 1, the farmlands, and a statement of what the Testator had been advised as to the zoning status of all or part of the farmlands. On a plain reading of the introduction, it was clearly intended merely to describe the property being disposed of under Clause 1 and it was not intended to be a dispositive provision. The actual disposition of the farmlands follows. As regards the beneficial interest or interests intended to be created, it is helpful to consider the disposition by reference to the two elements embodied in it.
38
The words contained in Clause 1 intended to create the beneficial interest or interests follow the direction given by the Testator to the Personal Representative to hold the farmlands upon ‘the following trusts’. The first element directs the Personal Representative to allow the Appellant ‘to hold and enjoy the profits of the [farmlands] for his own benefit until’ the happening of a specified event. Those words are properly construed as having been intended to be words of limitation, not in a technical sense, but in the sense that they were intended to delimit the duration of the Appellant’s beneficial interest. Accordingly, those words must be construed as having been intended to create a determinable fee. Despite the approach adopted in the grounds of appeal, on the hearing of the appeal on 14th July, 2016, the Appellant accepted that the words in Clause 1 do create a determinable fee, but he argued that the determining event is not void for uncertainty.
39
It was not argued by the Appellant on the hearing of the appeal that the Court should look to the instructions given by the Testator to his solicitor for assistance in the construction of that element of Clause 1. Indeed, as outlined earlier, it was asserted in the grounds of appeal that the trial judge had erred in admitting the attendance notes. Being conscious, however, of the fact that the instruction given by the Testator to his solicitor, as recorded by the solicitor, was that the farmlands were to go to the Appellant, but that was qualified by the happening of an event which was introduced by the phrase ‘but if’, which traditionally has been treated as a phrase giving rise to a condition, for completeness, I propose to consider whether the Court should have regard to the wording of the instruction in the attendance notes under s. 90 of the Act of 1965 in construing the first element. That raises the question whether the second requirement in the test set out in Rowe v. Law is met. In other words, do the contents of the attendance note assist in the construction of, or explain any contradiction in, that element of the disposition? There is no suggestion of there being, and there is not, a contradiction in the first element of the beneficial provisions of Clause 1, which is being considered. The question remains whether the contents of the attendance notes would assist in the construction of Clause 1. In my view, they would not. The element of Clause 1 which is being addressed is open to only one construction: that the interest thereby granted to the Appellant would endure until the happening of the specified event. To substitute the phrase ‘but if’ for the word ‘until’ in Clause 1 would amount to more than the construction of the will. It would amount to a re-writing of it, which is not permissible. Accordingly, the first element of the beneficial provisions of Clause 1 must be construed as being intended to create a determinable fee.
40
However, it remains to consider the second element of the beneficial provisions, which is the remainder of Clause 1, and which defines the determining event by reference to the words which follow the word ‘until’. The issue of construction which arises in relation to the second element is whether the trial judge was correct in finding that the determining event is void for uncertainty.
Determining event void for uncertainty?
41
There is no doubt but that the Testator prefaced the disposition of the farmlands in Clause 1 by an equivocal and incorrect statement of fact in relation to the zoning status of the farmlands. The affidavit of Ms. Fahy established that on 5th March, 2000 neither all of the lands registered on Folio 13658, County Westmeath nor any part thereof was zoned ‘for residential and/or industrial development’. However, on a plain reading of the words of Clause 1 of the Will, the determining event was not related to the existing or future zoning of the farmlands. It was specifically related to and dependent on ‘acquisition’ of the farmlands ‘for residential and/or industrial development’. As the Appellant put it on the hearing of the appeal, it was the acquisition, not the zoning, of the farmlands which had the ‘triggering effect’. The trial judge in his judgment highlighted the problem created by the use of the words ‘acquisition’ and later the words ‘not so acquired’ in that context. He rightly pointed out that it is unclear whether the Testator had in mind the farmlands being compulsorily acquired for the purposes mentioned or whether he had in mind the children of the Testator, other than the Appellant, being in a position to compel the executors to sell the farmlands. Another question which arises from the use of those words is whether the Testator intended the determining event to be a single acquisition or, possibly, a series of acquisitions.
42
This Court has been referred to quite a number of authorities in which consideration was given to whether part of a limiting or provisional clause in a will was void for uncertainty, the clause in issue in most of the cases, predictably, being a condition subsequent. As Wylie points out (at para. 4.54), where non-compliance will involve forfeiture of an already vested estate, courts will require sufficient certainty that it can be seen precisely and distinctly from the date of the condition coming into operation what events will cause a forfeiture. The earliest authority cited by Wylie for that proposition, Clavering v. Ellison (1859) 7 HLC 707, is frequently cited and the following passage from the opinion of Lord Cranworth (at p. 725) is frequently quoted:
‘I consider that, from the earliest times, one of the cardinal rules on the subject has been this: that where a vested estate is to be defeated by a condition on a contingency that is to happen afterwards, that condition must be such that the Court can see from the beginning, precisely and distinctly, upon the happening of what event it was that the preceding vested estate was to determine.’
43
By analogy, where a fee simple is to be automatically determined by the happening of a specified determining event, as a matter of construction, when that event may happen must be ascertainable from the beginning, precisely and distinctly.
44
Reading the words which come after the word ‘until’ and define the determining event in Clause 1, no certainty can be gleaned, whether conceptually or otherwise, as to when the determining event may occur, and, adopting the words of Pearce and Mee quoted above (at para. 13) there is ambiguity in the description of the determining event. Apart from uncertainty as to what constitutes ‘acquisition’, the uncertainty is aggravated by the fact that in the last sentence in Clause 1 there is uncertainty as to how frequently the Testator intended that a determining acquisition could occur. The precision and distinctness from the beginning as to the happening of the determining event, which Lord Cranworth considered necessary, is definitely absent. Accordingly, having regard to the words used in the Will, the provision in relation to the definition of the determining event in Clause 1 is void for uncertainty and the entire disposition is thus rendered void.
45
For completeness, I would add that the instructions given by the Testator to his solicitor, as recorded in the attendance notes, do not explain any contradiction as to when the determining event would occur, nor do they assist in construing that element of the beneficial provisions of Clause 1, with a view to ascertaining when the determining event intended by the Testator would occur. On the contrary, as the words used in the attendance notes to record the instructions differ from the words deployed in the Will, consideration of the instructions in the attendance notes adds to, rather than eliminates, the uncertainty in the Will. The following examples illustrate that. First, rather than the words ‘acquisition’ and ‘not so acquired’ in the Will, the attendance notes contain the word ‘sold’. Secondly, whereas the Will refers to acquisition for ‘residential and/or industrial development’, the attendance notes refer to the farmlands being sold for ‘residential or commercial purposes’. Thirdly, while the Will refers to any section of the farmlands ‘not so acquired’ becoming the absolute property of the Appellant, the attendance notes refer to the Appellant keeping ‘what is not required for residential purposes’. The Testator, having had the opportunity to consider the draft will which accompanied the letter of 28th August, 1997, made one single amendment to Clause 1 of the draft, which has been outlined earlier. Having regard to all of the foregoing factors, it cannot be concluded that the instructions received by the solicitor from the Testator, as recorded in the attendance notes, assist in any way in clarifying the Testator’s intention as to when the determining event provided for in Clause 1 would occur and they are irrelevant to the construction of Clause 1.
46
Similarly, a number of other matters raised in the submissions which are irrelevant to the Court’s task, which is the proper construction of Clause 1 of the Will, will now be considered.
Bank of Ireland v Gaynor (Extract)
[1999] IEHC 210
: Mrs Justice Fidelma Macken
The Rule Against Perpetuities
Before I indicate my view as to the appropriate date on which the trust failed or determined, pursuant to the terms of the 1919 Settlement, I should consider the arguments put forward on the Rule against Perpetuities, since my decision on this may assist in determining part of the other issues which arise.
The issue of the Rule against Perpetuities was raised on behalf of the third named Defendant. Essentially, Mr Cregan says that, so far as concerns the 1919 Settlement, some or other of its clauses, or perhaps even the entire of the settlement, infringe the Rule.
Simply put, the Rule against Perpetuities is designed to limit a grantor’s power to postpone indefinitely the vesting of ownership of his property in the future. So, in brief, the vesting must occur during a reasonable period of time. That period of time is known as the perpetuity period. The modern perpetuity period has been established by the Courts as being “life or lives in being, plus a further period of 21 years”.
The essential requirements of the Rule is that a future interest in property must vest within the perpetuity period. The vesting is sufficient if it is a vest ing “in interest”, since the rule does not require that there must be vesting in possession. This means that it is enough if the donee is ascertained, his precise share of the property is determined and he is ready to take it, subject only to any prior interest in it. His taking possession of the property outside the perpetuity period (as opposed to taking an interest in it) does not invalidate it.
Another fundamental principle of the Rule is that there can be no “wait and see” approach, by which is meant that the gift must be looked at the time of operation of the instrument (in this case 1919) and at that point, the possibilities, not the probabilities, must be taken into account.
So, the important thing, in the context of the Rule against Perpetuities, is to ascertain firstly the life or lives in being in respect of any gift, apply that to the terms of the settlement, and ascertain whether the settlement or any of the gifts are void. I deal separately with the arguments made on the Rule being offended by the terms relating to the powers of appointment found in the 1919 settlement. Mr Cregan made another, somewhat related argument, that one quarter share of the settlement failed for want of certainty, or the entire failed for want of certainty, because one of the marriage settlements was missing. He said, that if no marriage settlement now exists, that one quarter falls back into the estate.
Mr Cregan cited Wiley paragraph 5.056 – 5.057 on the general definition of the Rule and the requirements of vesting, which I have set forth in general terms above. He submitted that a distinction must be drawn between a vesting in the son and in the children of the son (if any). He submitted that Gerald Henry Maynard Denny is a life in being. He also submitted that his wife is a relevant life for the purposes of the perpetuity period, that time runs from 1919 and that, as of 1919 it was possible that she was born after that date. While he accepted that she was, in fact, born before 1919, and the marriage was in 1937, nevertheless, if Charles Henry Maynard Denny could have married someone not born in 1919, then his wife could not be an appropriate life in being.
He submitted that the Rule, being based on possibility, not probability, means that this is so. If the wife of Gerald Henry Maynard Denny was born in 1920 (a possibility) she could not be a legitimate life in being and therefore the settlement failed. In that regard, he cited Megarry & Wade. 5th Edn. p. 250 and Coughlan. p. 162/3. Again, these extracts set out the general principles for ascertaining the consequences of applying the possibility test.
Since the risk of vesting must be determined at the time when the disposition takes place, in this case, in 1919, it was clear, he argued, that the settlement was void for offending the Rule against Perpetuities, and he submitted that the decision in Exham -v- Beamish (1939) I.R. 336 did not over-rule the general principle. And he further argued that the “wait and see rule” simply did not apply in the present circumstances.
He submitted that if he was correct, then the effect of this was that the property the subject of the 1919 settlement fell back into the residuary estate of the Settlor.
This contention on behalf of the third named Defendant is contested by all of the Defendants, for a variety of reasons. In brief, the arguments against the applicability of the Rule in the context of the 1919 settlement may be summarised as follows:-
(a) The settlement was drawn inter alia on the basis that the wife of the son might not have been born in 1919.
(b) It is only the particular interest, if any, which falls foul of the Rule which is then void ab initio.
(c) The interest of Charles Denny was not in any way affected by the matter since it is accepted by all parties that he was an appropriate life in being;
(d) The interest of persons entitled upon a failure are not caught, because the Rule only affects contingent interests;
(e) The argument concerning the presence of absence of any of the marriage settlement was not capable of affecting the matter, since the settlement had to be interpreted as of the date of the creation of the gift in 1919, at a time when the marriage settlements were, most likely, all available.
(f) Even if the marriage settlement was lost, the settlement was not uncertainty nor did any part of it fail. It would simply have the effect, if Mr Cregan were correct, that the affected share would swell the size or value of the residuary estate of the Settlor;
(g) The settlement is drafted to refer to the Rule of the unborn widow. There is power to pay the income to such widow in such a manner as to vest the property before it fell outside the perpetuity term. A similar term is found in relation to the clause which permits the trustees to vest the property during the life of the Settlor with his consent, in the son or the son’s widow. As to the possibility of the son marrying an unborn widow, the Settlement also covers that possibility, it provides that “after the death of the son…” and specifically restricts the vesting to the son’s issue. It had to vest within 21 years of the death of the son.
(h) There is no possibility of the interest of any child or children of Gerald Henry Maynard Denny vesting an interest outside the perpetuity period. On his death and the death of his widow the interests become vested being male on attaining the age of 21 or being female attaining that age or marrying.
I have come to the view that neither the settlement nor any of its terms infringe the Rule against Perpetuities. I come to this view because it seems to me that the settlement is drawn in such a careful manner as not to offend the Rule. It is clear that at the date of the settlement, being the relevant date, the son, Gerald Henry Maynard Denny was a life in being. So too in my view is his wife Eleanor Florence Denny. Insofar as she might have been unborn at the date of the settlement (whether she was or not) the settlement is drawn in such a manner as to ensure any vesting occurs within the perpetuity period. So too does the settlement provide for a vesting date in respect of the children of Gerald Henry Maynard Denny by providing that such vesting must occur no later than at age 21 whether male or female, or even earlier, if female.
As to Mr. Cregan’s argument on behalf of the third Defendant that Eleanor Florence Denny could not be a life in being and therefore the rule is also infringed because the vesting provisions relate only to the income of the settled funds as opposed to the settled funds themselves, it seems to me that this is not a valid argument. I do not consider it correct to interpret the terms of the settlement so as to draw the distinction sought to be drawn between the settled fund on the one hand and the income thereof. It is all the same trust, but the son and his widow have an interest in the income, of a discretionary nature, at the date of the creation of the trust. All the possible beneficiaries of the discretionary trust were ascertained or ascertainable in accordance with the principles in Gilroy v. Parker [1966] l.R. 308.
As to the absence of any one or more of the marriage settlements. I agree with the argument made that such absence has no effect save that the consequences of its absence may result in monies going to the residuary estate of the Settlor. Its absence does not in any way render the settlement, or its terms, void.
I find the true intention of the Settlor, as gleaned from the meaning of the words used by him in Clause 1 and in the lengthy Clause 2 of the 1919 Settlement is as follows:-
(a) The son is to be provided for handsomely during his life.
(b) After the son’s death, the trustees are to provide for the son’s widow, his children and the Settlor’s own descendants then living (including his daughters) but on a discretionary basis, during the life of the widow.
(c) After the death of the son and his widow the trustees are to hold the settled funds, howsoever comprised, for all or any of the children or remoter issue of the son. If there were children, the Settlor intended by the words used that they would have the benefit of the settled funds and all accrued income. If there had been children of the son the allocation or division of the fund and/or its income was to be dealt with at the discretion of the trustees, or at the discretion of any person(s), and in such manner, as the son shall by deed or Will appoint. In my view, the words in Clause 2 giving the son a discretion to appoint do not permit the son to appoint the settled fund to anyone, but only to appoint a person in place of the trustees to exercise the discretion which the trustees otherwise have in respect of the sons” interests in the settled fund. I am of the view that the words are quite capable of bearing such a meaning and, having regard to the overall settlement, I am of the view the Settlor never intended, by the use of the words, to permit his son to alienate the entire of the settled funds to persons outside the “family”, a clear consequence which would arise if the alternative interpretation of the words proposed by the third Defendant is adopted.
(d) In default of any appointment by the son as envisaged at (c), then the trustees held the settled funds for all or any of the children of the son who shall be 21 (if male) or at that age or on marriage (if female), in equal hares.
(e) In the event of a failure of any of the t rusts only then were the settled funds to be held for or vested in someone other than the son, his widow and/or the son’s children.
(f) The daughters were not to receive funds outright. These were to be dealt with in accordance with their several marriage settlements only.
However, as I have mentioned, there was a special provision made in respect of the interest, if any, of Cecil Violet Campbell. In her case, if she was one of the daughters of the Settlor living at the relevant time, then the trustee of her marriage settlement was to hold the settled funds upon trusts which “corresponded as nearly as possible” to those in the marriage settlement after the death of Cecil Violet Campbell and also, subject to the trust in favour of Cecil Violet Campbell’s husband, Gordon Campbell, (found in the marriage settlement). In default, then the share of the settled funds transferring to the trustee of the marriage settlement of Cecil Violet Campbell under the 1919 Settlement was to be held upon trust for such of the daughters of the Settlor as Gordon Campbell appointed by Will, and in default of such appointment by him upon the trusts earlier declared in the 1919 Settlement in respect of the shares of the settled funds (other that the share of Cecil Violet Campbell), namely, for the one or more of the remaining daughters of the Settlor, if any.
It seems to me that the Settlor by these last two parts of Clause 2 intended that the funds would be, initially, for the children of his son, if any. But if there were none, then they still remained in “the family” so to speak. No monies at all would be given directly to his daughter Cecil Violet Campbell, even if she was alive at the date of failure or determination of the trusts. However, he was intent on giving her some benefit by giving her interest to the trustee of her marriage settlement. By the words used, the Settlor intended that she would have no control over or benefit from the funds during her life. And finally, while recognising the life interest of the 1902 marriage settlement given to Gordon Campbell, the Settlor trusted Gordon Campbell to appoint, if he wished, by Will, absolutely or on trusts for any or all of the daughters of the Settlor and their issue, including in my view, because of the absence of any words to the contrary, the issue of Cecil Violet Campbell. And if Gordon Campbell did not so appoint or direct by Will, the entire of what might be called “Cecil’s Fund” would be transferred, in the same manner as the remainder of the “equal funds” namely to the trustees of the several other marriage settlements of the remaining daughters of the Settlor, if any, living at the failure or determination. I will return, however, to consider this section of the clause again.
Overall in my view, the Settlor by the words chosen intended to benefit (i) his son, (ii) his sons widow, (iii) any children or remoter issue of the son, and (iv) his daughters and their issue, and, in particular, his daughters and their issue if there was no widow or no children of the son. If there was a widow but no sons, then the daughters would benefit after the death of the widow. I find nothing in the Settlement which would preclude the children of Violet Campbell from benefiting, so long as they were alive at the appropriate time, and otherwise entitled.
I am of the view that, on a true construction of the 1919 Settlement, there is not a series of trusts or of consecutive trusts of the particular type contended for by some of the Defendants, but rather one trust, with various limitations or remainder interests, each of which must be considered so as to ascertain, if, and when, any failure or determination occurred. The trust in my view is that of the settled funds and its accruing income. As to the income of the settled funds that was to be utilised by the trustees in a particular way, first as to the son, then to his widow and children and the Settlor’s descendants then alive.
Clause 2 of the Settlement is indicative of what is to happen to the income of the settled funds after the death of the son, firstly with a widow surviving him with children. It was suggested by Miss Pilkington that this clause is merely a direction to the trustees to pay a sum of money from the income of the settled funds to the widow. Eleanor Florence Denny survived her husband, who died in 1949. She survived him by a very considerable number of years, but for the purposes of the application of the terms of the 1919 Settlement, it does not seem to me that this matters, save that the precise time at which the interest of others in the settled funds is determined. If she survived the son, as she did, the trustees were to continue to hold the settled funds to provide an income for her and any children of the son and any descendants of the Settlor. They were the several objects.
I am of the view that the trust comprising the settled fund continued for so long as the widow survived, namely, until 1996. It is true that this part of Clause 2 refers to “trusts” in the plural, as Mr. Ferguson says, but it will be clear that at 1919 there were, possibly, more than one trust, had there been children or remoter issue of the son. So I do not think that the use of the word “trusts” in the plural is indicative that a separate trust existed in the settled funds and the income of the settled funds. There was (a) a trust of settled funds and the income thereof in favour of the son as to income only, and (b) a trust in favour of the widow, the children and the descendants of the Settlor, again as to income. That trust, with income payable in the manner described, did not determine until the widow died. But one of the classes of objects did not ever exist. Any income not paid to the widow/sons/descendants alive of the Settlor was to be held upon the further trusts.
The next matter concerns a further part of Clause 2, where it provides for what was to happen after the death both of the son and his widow. Briefly, the settled funds and the income thereof were to be held in trust for the children or remoter issue of the son.
As we know there were no children or remoter issue of the son. Since I have already found that the true meaning to be attached to this part of Clause 2 is that the son had power to appoint a person who would determine how the monies might be allocated between his children or remoter issue, nothing else arises under this part of Clause 2.
The last trust of the settled fund and the income only arose in the event of the death of the widow without there being children of the son, at that time, in 1996. The words “in case the trusts …. concerning the settled funds shall fail or determine” are not meant to be taken as excluding the income generated by the settled fund.
And I agree with Mr. Ferguson’s contention that it would be an extraordinary result to hold that the daughters (however many were alive in 1949) should have the settled funds and the income divided equally between them, for to do so then triggered a situation where the trustees of the several marriage settlements would have control over the interests of each of the daughters in the settled funds and the income (even if not vested in possession) leaving the trustees of the 1919 Settlement to control the payment of the income to the widow or children of the son or to the daughters of the Settlor then alive, being the acknowledged prior interests. I think this would be a very strange argument in favour of a vesting in 1949.
Since I have held that there was no failure of the trusts “hereinbefore declared concerning the settled funds” on the death of the son in 1949, what then is the position?
The Settlor died in August 1927. During his life, there is no evidence that the Trustees of the 1919 Settlement exercised any of the powers vested in them under Clause 3 of the settlement, which permitted them to pay the whole or any part of the settled funds (and not just the income thereof) to the son, or to any widow of the son, provided the Settlor gave his consent to this in writing. I find that this did not occur.
The son, Gerald Henry Maynard Denny, married in the year 1937. He did not have any children.
The son died in 1949, leaving his widow Florence. During the lifetime of the son. there is no evidence to suggest that his interest in the income of the settled funds became vested in or charged in favour of any other person within the meaning of Clause 1 of the settlement. Such an event, if it had occurred, would have resulted in the trust in his favour failing or determining during his life. The words of Clause 1 make it clear that it concerns only a failure or determination during his life, since the power of the trustees is to pay the income or part of it to “the son and his wife” (jointly), and/or to others. Since the part of that clause relating to the manner in which the balance of the income was to be held by the trustees is only applicable in the event of a failure or determination “during his lifetime”. I do not believe any such income existed or exists.
Next, one must look at the events which have occurred, and ascertain whether, as of 1996, there were:-
(a) daughters of the Settlor then living; or
(b) living issue of a daughter who had previously died.
To decide this, one must look at the events surrounding the several daughters, their marriages, and their issue.
(a) As to Eileen R. Heather. Her husband predeceased her, and there were no children of the marriage. She, having died in 1954, therefore does not come within the terms of that part of Clause 2 which 1 am considering.
(b) Cecil Violet Campbell. She died on the 26th December 1962. According to the evidence presented, however, it is said that she had given birth to a daughter Cecil Bettina Campbell at Kingston, Surrey, in England. For the purposes of this judgment, I am assuming that she is and was the daughter of the late Cecil Violet (Denny) Campbell, although the registration of her birth, as exhibited in the affidavit of Paula Fallon, does not disclose any relationship with any parent. However, the affidavit which exhibited the registration of the birth, described it as a faxed extract, and I am satisfied that the appropriate, detailed original or certified copy will be made available. The evidence is that the child Cecil Bettina Campbell married (twice) and is now a Mrs. Van Eyk, and she lives in South Africa. She is a granddaughter of the Settlor. Cecil Bettina Campbell, an issue of Cecil Violet Campbell, is a person who was alive at the date of the failure of the trust in 1996, and I will deal with her interest in due course, because of the proviso relating to Cecil Violet Campbell.
(c) As to Edith Mabel Coates. She died on the 2nd day of July 1959. She had issue, Dorothy Brand, who died in 1966 with no children.
(d) Mary Olive Olive died in 1954 but had one child, Eileen Maddison who died in 1964. She in turn had a number of children whose identities are set out in the Affidavits of Tessa Marion Erskine.
(e) As to the proviso relating to Cecil Violet Campbell, I am of the view-that the Settlor did not, by any of the words used, intend to prevent the issue of Cecil Violet Campbell from benefitting under the 1919 Settlement. I find that the intention of the Settlor by the use of the proviso in Clause 2 concerning her was to ensure that if Cecil Violet Campbell herself were alive, she would not herself be enntitled to or benefit (even through her marriage settlement) during her life. But if she was a daughter who was dead at the date of failure, as she was. and had issue alive at that time, as she did, I find that the proviso did not apply at all. It would have been quite simple for the Settlor to have provided that Cecil Violet Campbell’s issue should not benefit, but he did not do so. On the contrary, he specifically allowed any issue of any daughter to benefit.
In the foregoing circumstances, both Mrs Van Eyk and the estate of Mary Olive Olive are each entitled to a one half interest.
I now turn to the issues which arise for consideration in the Amended Special Summons concerning the Will of the late Charles E. Denny, deceased.
Charles E. Denny died on the 29th August 1927, having made a Will on the 2nd March 1926 and three codicils. For the purposes of this action, the three codicils are only material in that they, together with the Will, were proved and probate was granted to the named executors. As to their individual contents, the codicils are irrelevant to any of the matters arising for consideration.
The questions which arise for consideration in respect of the Will Settlement are as follows:-
(a) Do the proceeds of the fund, referred to in the said Will as “the son’s fund” fall into the residuary estate of the said Charles E. Denny, deceased;
(b) Do the funds, the subject matter of the fund referred to in the Will as “the widow’s fund” fall into the residuary estate of the said Charles E. Denny, deceased;
(c) Do the proceeds of sale of the property at Ballybrado, in the events which have happened, fall into the residuary estate of the said Charles E. Denny, deceased;
(d) Who, in the events which have happened, has become entitled to the residuary estate of the said Charles E. Denny, deceased;
(e) Has the estate of Eileen Rose Heather any interest in the residuary estate of the said Charles E. Denny, deceased;
(f) Does the residuary estate fall to be distributed between the estates of Mary Olive Olive and Edith Mabel Coates, in the events which have happened;
(g) Does the residuary estate fall to be distributed to the remoter issue of Mary Olive Olive;
(h) Do the trusts created in respect of the residuary estate of the said Charles E. Denny, deceased fail by reason of uncertainty of objects of offending against the rule against Perpetuities or otherwise;
(i) In the event that the trusts in relation to the residuary estate do fail, did the said Charles E. Denny die partially intestate;
(j) In the event that the said Charles E. Denny did die partially intestate, did the real property of the said Charles E. Denny pass to the only son of the deceased, Gerald Henry Maynard Denny, as his heir at law.:
(k) Such directions in relation to the administration of the trust created by the Will with three codicils of the said Charles E. Denny, deceased as to this Honourable Court shall seem proper;
(l) The answers to such further or other questions that may arise in the course of the trial of the matter in relation to the trusts created by the Will with three codicils thereto of the said Charles E. Denny deceased or such further or other question as to this Honourable Court shall seem proper;
(m) All necessary accounts, directions and enquiries in relation to the trust created by the Will and three codicils thereto of the said Charles E. Denny deceased.
Bank of Ireland v Goulding
[1972] 11 JIC 0201, 1965 WJSC-HC 2103
No questions arise in relations to the devise of the residuary real estate because the rule against perpetuities does not apply to this. The first and main argument on the gift of the residuary personal estate was that the gift to Sir Basil’s eldest son which is expressed to be for his life should be read as being for an estate tail therein so that he would have an absolute interest on the death of Sir Basil. It was said that the testator’s intention was that the personal property was to go in tail to the holder of the title and that this could be effected only if Sir Basil’s son was given an estate in tail in the personal property. But sir Basil was given an interest for his life in the personal property and the gift for life to his eldest son was not an error. The testator shows by his reference to twenty-one years that he understood the difference between an interest for life and an absolute interest. The court has power when there is an inaccurate expression of the testator’s intention to substitute appropriate words for the purpose of deciding the meaning of the will but before doing this, the court must be satisfied that there has been an inaccurate expression of his intention and must be reasonably certain of the words which he intended to insert when he made the error. (See re Follett deceased, Barclays Bank .v. Dorrell (1955) 2 All E.R. 22.) The life estate in the personalty given to Sir Basil’s son if he should be born within twenty-one years from the death of the testator seems to me to have been consciously and deliberately created and was not an inaccurate expression of the testators intentions. It is significant that a few lines further down the words “intail” are used and if the testator intended Sir Basil’s son to get an estate of that type, it is impossible to understand why the words “for his life” were used.
The next question debated was whether the words “such grandson” in the phrase “and in case of failure of male issue of such grandson” meant such greatgrandson so that they referred to Walter and not to Sir Basil. When the whole clause is read I think the words “such grandson” referred to Walter and should be read as such great-grandson. Shortly after this clause the testator uses the words “my said grandson’s sons successively” and a distinction has been drawn between “such grandson” and “my said grandson”. Also, the immediately preceding gift is an estate for life to Sir Basil’s son and grammatically the words “such grandson” refer to Sir Basil’s son and not to Sir Basil.
The next and most difficult question is the effect of the rule against perpetuities on the gifts made in the event of the failure of male issue of Walter. No authorities on this controversial topic were cited but it was argued that if Walter died without male issue, Timothy would become entitled to an estate for his life in the residuary personalty. Walter is given an estate for life and there is then a provision that in case of the failure of his male issue the property is to go to Sir Basil’s **query There is therefore an implied gift to Walter’ male issue for it would have been futile to insert a provision dealing with the failure of the male issue of Walter unless such issue took and interest. The lives in being for the purposes of the perpetuity rule were Sir Lingard and Sir Basil and therefore the interest created had to vest within their lives and twenty-one years after the death of the survivor of them. Walter’s sons could however be born outside this period and therefore the implied gift to them is void because it contravenes the rule against perpetuities. In addition, the gift to Sir Basil’s second son is conditional upon the failure of male issue of Walter. The effect of s. 29 of the Wills Act 1837 is that the question whether there has been a failure of male issue of Walter is to be judged at the date of his death and this event could take place at a date which would be outside the perpetuity period whether that is the lives of Sir Lingard and Sir Basil and twenty-one years after the death of the survivor or twenty-one years after the death of the testator. Timothy was born within the perpetuity period and the questions therefore are whether a gift void because it contravenes the rule against perpetuities invalidates subsequent gifts and whether a gift to a living person conditional upon an event which may happen outside the perpetuity period is void.
All the authorities on this matter were reviewed by Mr. Justice Buckley inRe Hubbards Will Trusts (1963) Ch. 275. In the course of his judgment he said: “If a testator or other settlor settles property in such a way as to create a series of successive interest each intended to take effect on, and only on, the exhaustion or termination of all antecedent interests in the chain, and one of those interests is void for remoteness, all the ulterior interests will fail, and this will be so even in the case of such an interest as a life interest given to a living person which, if it were ever to take effect at all, would necessarily do so within the limits of perpetuity. In such a case the invalidity of one of the successive interests for perpetuity breaks the chain and all interests below the point of fracture fall away”. (See also re Ramadges Settlement 1919 1 I. R. 205 and Re Bucktons Declaration of Trust (1964) 2 All E.R. 487
The implied gift to Walter’ son is void and therefore all gifts which follwo it are void even though Timothy was born within the perpetuity period. In addition, the gift to Timothy, whether it was a life estate or expressed as an estate tail so that it would create an absolute interest, is also invalid because it is expressed to vest on an event, the failure of male issue of Walter, which could occur outside the perpetuity period. The rule against perpetuities invalidates gifts which may vest outside the perpetuity period and if a gift is made to a living person and is expressed to vest on an event which way take place outside that period, the gift is invalid.
It follows that all the gifts which are dependent on the failure of the male issue of Walter are invalid. The result is that the residuary clause in relation to the personal property was effective to give successive life estates to Sir Lingard, Sir Basil and Walter. When Walter dies, (assuming that he survives Sir Basil), there will be an intestacy and the residuary personal estate will be distributed between the next-of-kin of the testator.
I have got considerable assistance on the difficult questions about the rule against perpetuities from the full discussion of the matter in the successive editions of “The Law of Real Property” by Megarry and Wade.
The Supreme Court
Griffin J.
The facts and the relevant portion of the will of the late Sir william Joshua Goulding (“the testator”) are fully set out in the judgments of Mr. Justice kenny and of the Chief Justice and repetition thereof is not necessary. The only question for the determination of this Court on the hearing of this appeal is whether, on the true construction of the will of the testator, the defendant Walter Goulding (“Mr. Goulding”) is, or the next-of-kin of the testator are, entitled absolutely to the residuary personal estate of the testator.
By his will, the testator, having made certain specific bequests, gave the residue of his propery “of every nature and kind” to his trustees upon trust to pay an annuity to his wife for her life. After her death, he provided for the creation and disposition of the Baronetcy fund, obviously with the intention of ensuring that the person who had title had sufficient funds to keep up the dignity of the title. Having given the residue to his son for his life, he made provision for the disposition of the residuary real estate. He them dealt with the residuary personal estate in the following terms:
” And with regard to so much of the residue of my estate as is not real estate I give the same after my said son’s death to his first son for his life and after his death to his eldest son for his life if he shall be born within twenty-one years from my decease but if he shall not be so born then I give it to him absolutely but my desire is that such property shall go in tail to the holder of the said title and in case of the failure of male issue of such grandson to the second or other of my said grandson’s sons successively in so far as I can do so for the same estate and in failure of male issue of my son’s eldest son then in similar estates to his second and other sons successively and in default or failure of issue male of my said son upon trust for my eldest grandson them living who shall take the surname of Goulding as the last name and failing such grandson or his assuming the name of Goulidng aforesaid to my four daughters or their children or other issue in equal shares as tenants in common the children or other issue of any of my said daughters who shall have died prior to such failure to take his or her parent’s share in equal shares.”
There is clearly an error in the reference “such grandson” in the passage “and in case of failure of male issue of such granson” and I agree with the learned trial judge and the learned Chief Justice that “sush grandson” should be read as “such great grandson”. The overall impression obtained on reading this will is that the testator intended, in so far as he could do so, to tie up his property so that it descended in the same manner as the baronetcy. Counsel on behalf of Mr. Goulding submit that in the events that have happened and on the true construction of the will, Mr. Goulding should take not just a more life estate but absolutely. That result is to be achieved in the following manner. They contend that the words “but my desire is that such property shall go in tail to the holder of the said title” were intended by the testator to be words of limitation controlling the words which followed and were not referable only to the absolute interest to be taken by Mr. Goulding in the event of his not being born within twenty-one years of the death of the testator. It is submitted that the life estate given by the will to Mr. Goulding, followed by the implied gift to his male issue and the limitations over in the event of failure of his male issue, in the context of the whole will and in particular in view of the expression of the testator’s desire that the property should go in tall to the holder of the title, should, by the application of the doctrine of cy pres be construed as an estate tail to Mr. Goulding. Since the gift to the issue of Mr. Goulding would offend the rule against perpetuities, it was argued that this was a proper case in which the cy pres doctrine should be applied, the effect of which would be to give to Mr. Goulding an estate in tail male after the life estate given to Sir Basil.
In my opinion, the words “but my desire is that such property shall go in tail to the bolder of the said title” are, on the true construction of this will, to be read as if they were in parenthesis and were intended by the testator to apply only in the event of Mr. Goulding taking absolutely, i.e. his not being born within twenty-one years of the death of the testator. Read in this way, the words fall naturally into place in the will. The testator would appear erroneously to have believed that if Mr. Goulding was born within twenty-one years of his (the testator’s) the gift would offend the rule against perpetuities and was providing against this contingency by giving to Mr. Goulding absolutely. It seems to me that the precatory words which followed were intended in that event to impose a moral obligation on Mr. Goulding to carry out the wishes expressed in the will if the testator was unable legally to ensure that his wishes would be complied with.
But even if these words be read as contended for on behalf of Mr. Goulding, this would not in my view achieve the result for which he contends, It is not disputed that the implied gift to the male issue of Mr. Goulding and the subsequent limitations over offend the rule against perpetuities and it is for this reason that it is sought to have the cy pres doctrine applied. The doctrine ofcy pres is a rule of construction of wills by which effect is given to a testator’s intention as nearly as possible (“cy pres”) by substituting an effective entailed interest for a devise which beyond the limits allowed by law. It is based on the presumed intention of the testator, and in may cases, limitations ofreal estate, in themselves void for perpetuity, have been made good by the application of the doctrine. Where therefore in a will there is a limitation for life to an unborn person, with remainders in tail to the first and other sons, as they could not take as purchasers, and as the estate is clearly intended to go in a course of descent, it is to be construed as an estate tail in the person to whom it is given for life (see Arden M.R. in Routledge v. Dorril 2 VES 357 at p. 365). The same doctrine is to be applied in the case of a perpetual series of life estates to the issue of the unborn person (see Eumberston v. Humberston 1716 1 P.W.M.S. 332). The cy pres doctrine cannot, however, be applied in the present case, as the doctrine does not apply to personalty – see Routledge v. Dorril (supra) at pages 364-365, where it was so held. This case has since been accepted as laying down this principle – see for example: “The Rule Against Perpetaities” by Morris and Leach at page 256; Theobald on Wills, 10th Edition, page 409; Gray on Perpetuities, 2nd Edition, page 486; “The Law of Real Property” McGarry and wade, 3rd Edition, page 212, Halsbury, “Laws of England”, 3rd Edition, Vol. 30, page 237. A reservation is contained in Jarman on Wills, 6th Edition, page 294 where it is stated that the doctrine “cannot be fully applied to limitations of personal estate. But the principle of carrying out the general intention of a testator is applied to such cases as far as possible” and he refers to Mackworth v. Hinxman 2 Kee 658, a case relied on by Counsel for Mr. Goulding. In that case the testator bequeated personalty to trustees to pay the interest to his nephew Sir Gilbert Afflech for life and after his death to pay the interest to his eldest son for the time being but in case he should die leaving no son in trust to pay the interest to the person on whom the baronetcy should devolve, each succeeding baronet to enjoy the interest during his life. The nephew died without issue and his brother James succeeded him in the baronetcy. Lord Langdale, M.R. held that Sir James took the personalty absolutely. In the course of his judgment he said at page 662: “giving a life estate to each baronet successively would have the effect of defeating the general intention of the testator, and for the purpose of accomplishing the intention, I think it must be hold that Sir James took a quasi estate tail in the property and that the property being personal was absolutely at his disposal”. This case is in my view not a very satisfactory one and is against the current of authority. In effect, the Master of the Rolls, although not expressly doing so, did apply the cy pres doctrine so as to give a quasi-entail to the first successor to the title (Sir James) and as a bequest of personalty to person in tail is a bequest to him absolutely, the result was that Sir James as first survivor took absolutely. In Ker v. Lord Dungannon 1 Drury and Warren 1843, 509 at page 537-538 the decision was questioned by Lord St. Leonards who doubted whether what was decided in that case effectuated the testator’s intention although the decision rests on that ground, and it was also questioned by Gray on Perpetuities, 2nd Edition, page 334-5 where it is stated that Lord St. Leonards criticism is “with reason”. Many judges have pointed out that the cy pres doctrine is an anomaly and is not to be extended – a number of the cases in which this was stated are to be found noted in Morris and Leach at page 256 and in Gray on Perpetuities, 2nd Edition at page 489. It seems to me that if that case were to be applied in the present case, the result would be open to the same criticism as that expressed by Lord St. Leonards. The intention of the testator would not be effectuated, as he had provided that Mr. Goulding was to take absolutely but only in the event of his not being born within 21 years of the death of the testator.
In the result, the successive life estates given to the testator’s son (Sir Lingard), to his grandson (Sir Basil) and to Mr. Goulding are valid but the implied gift to the male issue of Mr.Goulding is void. In relation to the gifts over in case of failure of the male issue of Mr. Goulding, in my view the law is correctly stated in the passage of the judgment of Mr. Justice Buckley inRe Hubbards Will Trusts (1963)Oh. 275 referred to by the learned trial judge in his judgment, and the invalidity of one of the successive interests for perpetuity (in this case the gift to the male issue of Mr. Goulding) breaks the chain and all interests below the point of fracture fall away. Mr. Justice Kenny was, in my view, correct in holding that as the implied gift to the male issue of Walter is void, all gifts which follow it are void. For the reasons stated by him, these void gifts include the gift to Sir Basil’s second son (Timothy) even though he was born within the perpetuity period. In my judgment, Mr. Justice Kenny was correct in helding that when Mr. Goulding dies, (on the assumption that he survives Sir Basil) there will be an intestacy and that the residuary personal estate will be distributed among the next-of-kin of the testator. I would accordingly dismiss this appeal.
14th November 1975
Appeal by second-named defendant (great-grandson) from the determination by Kenny J. of certain questions involving the rule against perpetuities, arising on the construction of Teststor’ s Will -settlement of personalty -Fund intended as provision for successive persons entitled to baronetcy -Attempt to create quasi entail of personalty.
Judgment by Griffin J.(Budd J. and Jenohy J. concurring) Dismiss appeal and affirm order of the High court.Dissenting Judgment by’ Higgins C. J.(Walsh J. concurring)
Bank of Ireland v. Gaynor
High Court, June 29, 1999, Macken J.
JUDGMENT of Mrs Justice Fidelma Macken delivered on the 29th day of June 1999
1. This is a complex and complicated case arising out of two settlements. These are, firstly, the Deed of Settlement executed by the late Charles Edward Denny on the 11th August 1919, (“the 1919 Settlement”) and secondly, the settlement created by the Will of the late Mr. Denny made on the 2nd March 1926 (“the Will Settlement”). Charles Edward Denny died on the 29th August 1927 and probate of his Will (together with three codicils) was granted on the 3rd December 1927. Charles Edward Denny had married and there were issue of the marriage, namely one son (who also married), and four daughters, all of whom married, and all of whom survived the Settlor.
2. The Plaintiffs in these proceedings are the successors to the original trustees appointed pursuant to the 1919 Settlement and were appointed pursuant to a Deed of Appointment dated the 22nd July, 1954. The Plaintiffs are also the successors to the trustees originally appointed pursuant to the Will of the late Charles E. Denny and were so appointed pursuant to a Deed of Appointment, dated the 15th May 1964. They come to Court seeking the Court’s directions as to the appropriate interpretation of certain provisions arising in respect of both settlements, and the answers to a series of questions posed in the Special Summons issued and served in the matter. The appointment of new trustees to both settlements is of no materiality and the Deeds of Appointment have been adequately proved by exhibit before the Court.
3. As to the Defendants, the first Defendant is the legal personal representative of the late Gerald Henry Maynard Denny, the only son of the Settlor, Charles E. Denny. The first and second Defendants are together the legal personal representatives of the late Eleanor Florence Denny, widow of Gerald Henry Maynard Denny. Gerald Henry Maynard Denny died in 1949 without issue. Eleanor Florence Denny, his widow, died in 1996.
4. The third Defendant is the legal personal representative of the estate of Eileen R. Heather (nee Denny) one of four daughters of the late Charles E. Denny. She died on the 12th or 13th of June 1962 (the difference in dates is not material). Although the third named Defendant is also a trustee of the 1919 Settlement and of the Will Settlement, the third Defendant is a party to these proceedings only in its capacity as a Defendant representing the estate of the late Eileen R. Heather, and not as a trustee of either settlement.
5. The fourth Defendant is the legal personal representative of the estate of Cecil Violet Campbell (nee Denny), another daughter of Charles E. Denny. Cecil Violet Campbell died on the 26th December 1962.
6. The fifth Defendant is the legal personal representative of Edith Mabel Coates (nee Denny) yet another daughter of Charles E. Denny. Edith Mabel Coates died on the 2nd July 1959.
7. Finally, the sixth Defendant is the legal personal representative of Mary Olive Olive (otherwise Olive Mary Olive) (nee Denny) another daughter of Charles E. Denny. She died on the 17th September 1954.
8. The matter comes before me on the application of the trustees of each of the settlements. During the course of the opening it became clear that one at least of the questions posed by the trustees was no longer germane to the action and that a further question should be added. I have received from Mr. Spierin, for the Plaintiffs, an amended list of questions, copies of which were furnished to all other parties, and those questions have been agreed between Counsel representing all parties.
9. I propose to deal with the questions raised by the Plaintiffs in the Special Summons, firstly with respect to those concerning the 1919 Settlement, and thereafter with respect to those arising under the Will Settlement.
10. The questions raised in respect of the 1919 Settlement are as follows:-
(i) Did the primary trusts created by the Deed of Settlement fail or fail in part upon the death of Gerald Henry Maynard Denny without issue on the 21st May 1949;
(ii) If the answer to question (i) is in the affirmative who is entitled to the property the subject matter of the trust created by the Deed Settlement;
(iii) Did the primary trusts created by the Deed of Settlement fail upon the death of Eleanor Florence Denny on the 31st July 1996
(iv) If the answer to question (iii) is in the affirmative who is beneficially entitled to the property the subject matter of the Trust created by the Deed Settlement;
(v) Upon the death of Eleanor Florence Denny on the 31st July 1996 did the property the subject matter of the trust created by the Deed of Settlement fall to be distributed in accordance with the terms of the respective marriage settlements of some or of all four daughters of the deceased;
(vi) If the answer to question (v) is in the affirmative which of the marriage settlements apply?
(vii) If the answer to question (v) is in the affirmative how are the trustees to administer the trust of the fund in the absence of all of the marriage settlements;
(viii) Are the trusts created by the Deed of Settlement void in the events which have happened or by reason of the terms thereof by reason of uncertainty of objects;
(ix) Are the trusts created by the Deed of Settlement void in the events which have happened or otherwise for offending against the Rule against Perpetuities;
(x) If the said trusts created by the Deed of Settlement are void for uncertainty of objects or as offending against the Rule against Perpetuities or otherwise if the trust fund the subject matter of the trust created by the Deed of Settlement to be held by the trustees upon a resulting trust for the estate of the Settlor;
(xi) If the answer to the preceding question is in the affirmative, does the trust fund form part of the residuary estate of the said Charles E. Denny deceased;
(xii) The answer to any other question that may arise in respect of the trusts created by the Deed of Settlement at the trial of the matter before the Court or to such further or other question as to this Honourable Court shall seem proper;
(xiii) Such directions in relation to the administration of the trusts created by the Deed of Settlement as to this Honourable Court shall seem proper;
(xiv) Such accounts directions and enquiries in relation to the administration of the trusts created by the said Deed of Settlement as to this Honourable Court shall seem proper.
Provisions of the 1919 Settlement
11. In order to answer the questions raised with any degree of clarity or certainty, it is important to consider the terms of the Deed of Settlement and I exhibit the relevant parts of the 1919 Settlement as “Schedule A” to this judgment. I should, however, say that having regard to the evidence before the Court and the legal arguments made, I am not satisfied that all the above questions can be responded to, nor that all of them arise comfortably within these proceedings. It may therefore be that some will remain unanswered in these particular proceedings.
12. By the 1919 Deed of Settlement Charles E. Denny irrevocably settled certain property subject to a trust or trusts declared in the settlement. The Settlor settled this property (stocks, shares, etc.) upon trust with various limitations in the following terms (in brief and in general):-
(a) for his son Gerald Henry Maynard Denny for life;
(b) for the widow of the son (Eleanor Florence Denny) and/or any children of the son and/or any descendants of the Settlor for the life of the widow;
(c) after the death of the son and his widow, for any children of the son;
(d) in the event of a failure or determination of the trust(s) covering the settled funds then upon trust for those daughters of the Settlor in equal parts who are living at the date of failure, in accordance with the terms of their respective marriage settlements or for the issue of any
deceased daughter such issue to be living at the date of failure.
13. The Plaintiffs, while making no argument one way or the other as to their chosen interpretation of the terms of the 1919 Settlement, indicated the general law on its interpretation, and in particular Counsel drew attention to the following principles citing, inter alia, Norton on Deeds which he said the Court should apply:-
(a) the document should be construed on its own, without reference to other documents, at least initially;
(b) the document should be construed as of the date of its execution and not with hindsight;
(c) the Court should examine whether the settlement terms fail by virtue of infringing the Rule against Perpetuities [citing In re Davoren, decd ;
O’Byrne v. Davoren (1994) I.R. 373].
(d) the Court should ascertain whether the settlement terms fail for lack of certainty of objects;
(e) in the event that the provisions of the trust document are not void, then the Court should apply the correct construction to the events which have occurred;
(f) in construing the document, if words are capable of having more than one effect, they should be construed so as to carry into effect the general intention of the Settlor.
(g) The Court should ascertain what is the meaning of the words used, not what the Settlor intended to say.
14. Bearing these principles in mind and the applicable case law and commencing with the 1919 Settlement, the Settlor settled the trust property on the trustees to hold the funds and the income from the funds on the following terms (according to
Clause 1):-
15. The trustees shall pay the income of the settled fund to “the son during his life” and in the event of the trust determining or failing in his lifetime (for particular stated reasons), the trustees “shall during the remainder of his life or during other periods as the trustees shall think fit” pay all or part of the income or apply the income for the maintenance of:
(a) the son and his wife if any, and (b) his children or remoter issue; and (c) any other descendants of the Settlor for the time being in existence, and
“the remainder of the income as shall not be applied under the aforesaid discretionary powers, upon the trusts and for the purposes upon and for which the said income would for the time being be held if the son were then dead without leaving a widow him surviving”.
16. It seems to me that a correct reading of this clause is that the Settlor intended that the trustees should pay the entire of the income to the son during his life. If there was a failure or determination of the trust during the life of the son then during those periods or even during the remainder of the son’s life the trustees may pay in their absolute discretion to one or more of the son and his wife; and/or any children of the son and his wife; and/or any descendant of the Settlor alive at the time.
17. If there is income from the settled property not so applied, then that income would be held by the trustees upon the trusts for which the income would be held if the son were dead but did not leave a widow.
18. The events provided for in the 1919 Settlement by way of failure or determination during the life of the son did not arise and the trust did not thereby fail or determine during his life.
19. Clause 2 of the 1919 Settlement then provided by means of lengthy subclauses for what would happen in various events. In the event the son died and left a widow, then the trustees had power to pay all or any part of the income of the settled funds, in their absolute discretion, to any or all of the following:
(a) the widow; (b) any children or remoter issue of the son; (c) any other descendants of the Settlor for the time being in existence.
20. The son, Charles Henry Maynard Denny died in 1949, leaving a widow but no children. At that date, all four daughters of the Settlor were alive, and were “other descendants of the Settlor for the time being in existence”.
21. In the event of all of the income not being applied by the trustees in the case of the widow surviving, the remainder was again to be held by the trustees upon the trusts upon which it would be held if the son had died without having left a widow. This is in terms similar to the proviso applying to income remaining in the event of a failure of the trust during the lifetime of the son.
22. The next provision of importance in the 1919 Settlement (also included in Clause 2) provided for what would happen after the death of the son and of his widow. The settled funds and the income were to be held in that event by the trustees (in general terms) for
(a) one or more of the children or remoter issue of the son at the discretion of the trustees,
(b) in default of any appointment by the son, for all or any of the children of the son who reach 21 (if male) or who reach that age or marry (if female).
23. These latter parts of the clause are subject to debate and controversy.
24. As I have mentioned, Charles Henry Maynard Denny had no children and the widow, Eleanor Florence Denny died many years after her late husband, in 1996.
25. The final important provision (again in Clause 2) of the 1919 Settlement provides that in case the trusts concerning the settled funds fail or determine, then the Settlor provided that the settled funds and the income shall be held by the trustees upon trust:-
(a) to divide the same into as many parts:
(i) as there shall be daughters of the Settlor living at the date of such failure or determination; or
(ii) who shall have died leaving issue who shall be then living; and
(b) to pay or transfer the same to the trustees or trustee for the time being of each of the marriage settlements of such daughters of the Settlor;
(c) if there is only one such daughter then the whole to the trustees of her marriage settlement; and the trustee(s) of the marriage settlement(s) shall hold such share (or the whole of the settled funds) … and the income thereof upon the trusts declared by such marriage settlement(s).
26. But there is a proviso to this part of Clause 2. If the Settlor’s daughter Cecil Violet Campbell was living at the date of failure or determination, the trustee of her marriage settlement were directed, notwithstanding the trusts thereby declared, to hold the share or the whole of the settled fund and the income, upon trusts corresponding as nearly as may be to the trusts declared by the marriage settlement, after the death of Cecil Violet Campbell, as if she had died immediately before the date of failure or determination.
27. In the course of submissions, the following arguments were made by the several defendants, on the issues arising (other than on the question of the Rule against Perpetuities, which I propose to deal with separately). All the Defendants agree that the real issue is when the trust failed or determined.
28. Mr Cregan, on behalf of the third defendant (the estate of the late Eileen Rose Heather), submitted that the question to be decided is whether or not the trust(s) did fail or determine prior to 1996, when the widow died, and if so the question was whether the trust determined in 1949. If the trust failed in 1949 the estate of Eileen Rose Heather, his client, would have been entitled to one quarter as she was a daughter of the Settlor who was then living. He accepted that this quarter interest would have vested in the trustees of her marriage settlement, and would, in the circumstances which had arisen, revert back into the estate of Charles Denny.
29. Mr. Ferguson, for the fourth Defendant (the estate of Violet Campbell) says that the correct vesting date is 1996. He argued that the words appearing at the commencement of Clause 2 did not bring about a life interest for the widow but rather she, together with others, simply had a discretionary interest in the income. This he said was so until 1996. Until that time, an element of discretion existed and this discretion was not confined to the son or the widow of the son. The original trust was in good health and all that occurred in 1949 was that there was at that time no issue of Gerald.
30. Mr. Ferguson submitted that there were a number of trusts which took effect in succession. He argued that from the words used in respect of “failure or determination” and in particular the use of the words “in case” in Clause 2, it was made clear that there were prior trusts, namely (a) to the son (which had protective and discretionary elements), (b) to the widow – a discretionary element (to be applied not just for her however but for others), and (c) to the sons. In addition the word “trusts”, in the plural, is used. Mr. Ferguson submitted that all the prior trusts must fail before the words “fail or determine” have any application, and argued that none of the trusts failed. No one in 1949 needed to look at the trust at that time, and if the trustees had looked at it, this would have been supererogatory. He argued that the trustees’ duties upon a failure were to divide the settled funds and the income into the daughters’ equal shares. For a 1949 failure or determination to be recognised, the trustees would have a duty to separate out but not to pay until 1996 and this would be an extraordinary construction to put on the words.
31. If the principal trust failed only in 1996, the proviso relating to the share of Cecil Violet Campbell does not apply because she was not living at that time. However, Mrs. Van Eyk, her issue, was alive in 1996. She is the issue of a daughter “who had previously died” as provided for in the middle of the “failure or determination” clause, and was entitled to a share in the estate.
32. Mr. Ferguson argued that if, however, the trust failed in 1949 then Gordon Campbell had died in 1935 intestate and there was likely no appointment by him. Mr Ferguson argued that the terms of the 1919 Settlement did not take away Mr. Campbell’s power to appoint to his own child. Mrs. Campbell’s Will establishes that she exercised her own power of appointment. In the circumstances the Court may hold that the trustees of the Campbell marriage settlements are entitled to have her interest regardless. The trustees of that settlement would then get the money. He submitted that the word “trusts hereinbefore declared” in the proviso to Clause 2 refer to those in the 1919 Settlement and not to the trusts of the marriage settlements. This, however, does not concern the Court if the trusts ended in 1996.
33. Miss Pilkington on behalf of the fifth defendant (the estate of Edith Mabel Coates) submitted that as to time, the trust failed or determined in 1949. She argued that the trust failed then because of the absence of issue of the son, which was clear once he died without issue. His death without issue was the trigger for the failure. She argued that by 1949 the interests of the daughters in the settled fund and the income were vested in interest, but not in possession. She submitted that this latter interpretation is consistent with the wishes of the Settlor from the words used in the settlement. Nothing more was required to be done in 1949 to act or to vest the interest in each of the daughters. The daughters had to wait for possession because the life tenant (the wife) did not die until 1996. Miss Pilkington argued that for the purposes of construction, the death of the widow is irrelevant because of the factor which triggered the failure, namely the absence of issue of the son. She submitted that the words in Clause 2 meant that the widow is a life tenant in respect of whom a discretionary trust exists, and also in favour of any children of the son and his widow, or any descendants of the Settlor. The provision at Clause 2 is merely one by way of direction for the payment to the widow during her life of some or all of the income under the settlement. This clause merely postponed the vesting in possession of the daughters’ interests but no more.
34. She said her client is entitled to one quarter or alternatively one third share. This is because, as to one quarter, in 1949 all four daughters were then alive . As to one third, this arises if the Court were satisfied having regard to the proviso that as to Cecil Violet Campbell, in the absence of a power of appointment being exercised by Gordon Campbell her share would be redirected back to the remaining three daughters of the Settlor.
35. Mr. McBratney, for the sixth defendant (the estate of Mary Olive Olive) submitted that, as to the 1919 Settlement, the date of determination of the trust (s) was 1996. He says that Mr. Ferguson identified three prior trusts. Mr. McBratney says a third trust was not created and argued that the second is the most important, namely, a trust in favour of the widow (Clause 2), a trust being a “hereinbefore declared trust”. The phrase “any other descendants of the Settlor” included in 1949, each of the four daughters. There was, however, a wider class of potential beneficiaries than merely the children of the son after his death. His death did not exclude the trustees exercising a discretion and to that extent only he disagrees with Mr. Ferguson. The trustees, following the death of Gerald in 1949, still had a trust to consider. He submitted that there were a series of consecutive trusts. Initially the trustees were concerned only with Gerald. During his life there was a defeasance provision, and on his death another trust was created. He submitted that both he and Mr. Ferguson had identified the trust for the issue of the son and the son’s remoter issue.
36. Mr. McBratney further submitted that as to a 1996 date of determination, there were two possible consequences, one in favour of the sixth defendant being entitled to all the funds, or one which provides that the sixth defendant and the fourth defendant would share the fund equally. He submitted that if one read the defining part of Clause 2 there are two daughters whose estate are entitled, namely Mrs. Campbell and Mrs. Olive, both of whom have issue living and who are entitled to have the monies paid to the trustees of their two respective marriage settlements. On the unique proviso in respect of Mrs. Campbell, he argued that the true interpretation of the 1919 Settlement is that the Settlor, as regard her, was using the trusts of her marriage settlement to graft on another trust, in favour of the 1902 trustees.
37. He submitted it was quite clear from the 1919 Settlement that the Settlor trusted Gordon Campbell and gave him a power over this second bundle of funds. In default of an appointment as provided for the money was to be paid to those trustees of the other marriage settlements of the remaining daughters. The proviso in Clause 2, he says, governs the entire of the gift to Mrs. Campbell’s marriage settlement and not only if Mrs. Campbell were alive at the date of failure or determination. He says therefore that he client is entitled to the whole of the fund. If otherwise, he is entitled to one half.
38. As to a 1949 date of determination, and the consequences for this, all four daughters were then alive. The funds were to go to the trustees of four marriage settlements. Even if he is not correct on the defeasance being 1996, the position is even more clear in 1949. Mr. Ferguson’s argument is not relevant at all to a 1949 determination. If one takes 1949 as being the appropriate date, then the funds are divided three ways, namely, to Mrs. Olive, Mrs. Campbell and Mrs. Heather.
The Rule Against Perpetuities
39. Before I indicate my view as to the appropriate date on which the trust failed or determined, pursuant to the terms of the 1919 Settlement, I should consider the arguments put forward on the Rule against Perpetuities, since my decision on this may assist in determining part of the other issues which arise.
40. The issue of the Rule against Perpetuities was raised on behalf of the third named Defendant. Essentially, Mr Cregan says that, so far as concerns the 1919 Settlement, some or other of its clauses, or perhaps even the entire of the settlement, infringe the Rule.
41. Simply put, the Rule against Perpetuities is designed to limit a grantor’s power to postpone indefinitely the vesting of ownership of his property in the future. So, in brief, the vesting must occur during a reasonable period of time. That period of time is known as the perpetuity period. The modern perpetuity period has been established by the Courts as being “life or lives in being, plus a further period of 21 years”.
42. The essential requirements of the Rule is that a future interest in property must vest within the perpetuity period. The vesting is sufficient if it is a vesting “in interest”, since the rule does not require that there must be vesting in possession. This means that it is enough if the donee is ascertained, his precise share of the property is determined and he is ready to take it, subject only to any prior interest in it. His taking possession of the property outside the perpetuity period (as opposed to taking an interest in it) does not invalidate it.
43. Another fundamental principle of the Rule is that there can be no “wait and see” approach, by which is meant that the gift must be looked at the time of operation of the instrument (in this case 1919) and at that point, the possibilities, not the probabilities, must be taken into account.
44. So, the important thing, in the context of the Rule against Perpetuities, is to ascertain firstly the life or lives in being in respect of any gift, apply that to the terms of the settlement, and ascertain whether the settlement or any of the gifts are void. I deal separately with the arguments made on the Rule being offended by the terms relating to the powers of appointment found in the 1919 settlement. Mr Cregan made another, somewhat related argument, that one quarter share of the settlement failed for want of certainty, or the entire failed for want of certainty, because one of the marriage settlements was missing. He said, that if no marriage settlement now exists, that one quarter falls back into the estate.
45. Mr Cregan cited Wiley paragraph 5.056 – 5.057 on the general definition of the Rule and the requirements of vesting, which I have set forth in general terms above. He submitted that a distinction must be drawn between a vesting in the son and in the children of the son (if any). He submitted that Gerald Henry Maynard Denny is a life in being. He also submitted that his wife is a relevant life for the purposes of the perpetuity period, that time runs from 1919 and that, as of 1919 it was possible that she was born after that date. While he accepted that she was, in fact, born before 1919, and the marriage was in 1937, nevertheless, if Charles Henry Maynard Denny could have married someone not born in 1919, then his wife could not be an appropriate life in being.
46. He submitted that the Rule, being based on possibility, not probability, means that this is so. If the wife of Gerald Henry Maynard Denny was born in 1920 (a possibility) she could not be a legitimate life in being and therefore the settlement failed. In that regard, he cited Megarry & Wade , 5th Edn. p. 250 and Coughlan, p. 162/3. Again, these extracts set out the general principles for ascertaining the consequences of applying the possibility test.
47. Since the risk of vesting must be determined at the time when the disposition takes place, in this case, in 1919, it was clear, he argued, that the settlement was void for offending the Rule against Perpetuities, and he submitted that the decision in Exham -v- Beamish (1939) I.R. 336 did not over-rule the general principle. And he further argued that the “wait and see rule” simply did not apply in the present circumstances.
48. He submitted that if he was correct, then the effect of this was that the property the subject of the 1919 settlement fell back into the residuary estate of the Settlor.
49. This contention on behalf of the third named Defendant is contested by all of the Defendants, for a variety of reasons. In brief, the arguments against the applicability of the Rule in the context of the 1919 settlement may be summarised as follows:-
(a) The settlement was drawn inter alia on the basis that the wife of the son might not have been born in 1919.
(b) It is only the particular interest, if any, which falls foul of the Rule which is then void ab initio.
(c) The interest of Charles Denny was not in any way affected by the matter since it is accepted by all parties that he was an appropriate life in being;
(d) The interest of persons entitled upon a failure are not caught, because the Rule only affects contingent interests;
(e) The argument concerning the presence of absence of any of the marriage settlement was not capable of affecting the matter, since the settlement had to be interpreted as of the date of the creation of the gift in 1919, at a time when the marriage settlements were, most likely, all available.
(f) Even if the marriage settlement was lost, the settlement was not uncertainty nor did any part of it fail. It would simply have the effect, if Mr Cregan were correct, that the affected share would swell the size or value of the residuary estate of the Settlor;
(g) The settlement is drafted to refer to the Rule of the unborn widow. There is power to pay the income to such widow in such a manner as to vest the property before it fell outside the perpetuity term. A similar term is found in relation to the clause which permits the trustees to vest the property during the life of the Settlor with his consent, in the son or the son’s widow. As to the possibility of the son marrying an unborn widow, the Settlement also covers that possibility. it provides that “after the death of the son…” and specifically restricts the vesting to the son’s issue. It had to vest within 21 years of the death of the son.
(h) There is no possibility of the interest of any child or children of Gerald Henry Maynard Denny vesting an interest outside the perpetuity period. On his death and the death of his widow the interests become vested being male on attaining the age of 21 or being female attaining that age or marrying.
50. I have come to the view that neither the settlement nor any of its terms infringe the Rule against Perpetuities. I come to this view because it seems to me that the settlement is drawn in such a careful manner as not to offend the Rule. It is clear that at the date of the settlement, being the relevant date, the son, Gerald Henry Maynard Denny was a life in being. So too in my view is his wife Eleanor Florence Denny. Insofar as she might have been unborn at the date of the settlement (whether she was or not) the settlement is drawn in such a manner as to ensure any vesting occurs within the perpetuity period. So too does the settlement provide for a vesting date in respect of the children of Gerald Henry Maynard Denny by providing that such vesting must occur no later than at age 21 whether male or female, or even earlier, if female.
51. As to Mr. Cregan’s argument on behalf of the third Defendant that Eleanor Florence Denny could not be a life in being and therefore the rule is also infringed because the vesting provisions relate only to the income of the settled funds as opposed to the settled funds themselves, it seems to me that this is not a valid argument. I do not consider it correct to interpret the terms of the settlement so as to draw the distinction sought to be drawn between the settled fund on the one hand and the income thereof. It is all the same trust, but the son and his widow have an interest in the income, of a discretionary nature, at the date of the creation of the trust. All the possible beneficiaries of the discretionary trust were ascertained or ascertainable in accordance with the principles in Gilroy v. Parker [1966] I.R. 308.
52. As to the absence of any one or more of the marriage settlements, I agree with the argument made that such absence has no effect save that the consequences of its absence may result in monies going to the residuary estate of the Settlor. Its absence does not in any way render the settlement, or its terms, void.
53. I find the true intention of the Settlor, as gleaned from the meaning of the words used by him in Clause 1 and in the lengthy Clause 2 of the 1919 Settlement is as follows:-
(a) The son is to be provided for handsomely during his life.
(b) After the son’s death, the trustees are to provide for the son’s widow, his children and the Settlor’s own descendants then living (including his daughters) but on a discretionary basis, during the life of the widow.
(c) After the death of the son and his widow the trustees are to hold the settled funds, howsoever comprised, for all or any of the children or remoter issue of the son. If there were children, the Settlor intended by the words used that they would have the benefit of the settled funds and all accrued income. If there had been children of the son the allocation or division of the fund and/or its income was to be dealt with at the discretion of the trustees, or at the discretion of any person(s), and in such manner, as the son shall by deed or Will appoint.
54. In my view, the words in Clause 2 giving the son a discretion to appoint do not permit the son to appoint the settled fund to anyone, but only to appoint a person in place of the trustees to exercise the discretion which the trustees otherwise have in respect of the sons’ interests in the settled fund. I am of the view that the words are quite capable of bearing such a meaning and, having regard to the overall settlement, I am of the view the Settlor never intended, by the use of the words, to permit his son to alienate the entire of the settled funds to persons outside the “family”, a clear consequence which would arise if the alternative interpretation of the words proposed by the third Defendant is adopted.
(d) In default of any appointment by the son as envisaged at (c), then the trustees held the settled funds for all or any of the children of the son who shall be 21 (if male) or at that age or on marriage (if female), in equal shares .
(e) In the event of a failure of any of the t rusts only then were the settled funds to be held for or vested in someone other than the son, his widow and/or the son’s children.
(f) The daughters were not to receive funds outright. These were to be dealt with in accordance with their several marriage settlements only.
55. However, as I have mentioned, there was a special provision made in respect of the interest, if any, of Cecil Violet Campbell. In her case, if she was one of the daughters of the Settlor living at the relevant time, then the trustee of her marriage settlement was to hold the settled funds upon trusts which “corresponded as nearly as possible” to those in the marriage settlement after the death of Cecil Violet Campbell and also, subject to the trust in favour of Cecil Violet Campbell’s husband, Gordon Campbell, (found in the marriage settlement). In default, then the share of the settled funds transferring to the trustee of the marriage settlement of Cecil Violet Campbell under the 1919 Settlement was to be held upon trust for such of the daughters of the Settlor as Gordon Campbell appointed by Will, and in default of such appointment by him upon the trusts earlier declared in the 1919 Settlement in respect of the shares of the settled funds (other that the share of Cecil Violet Campbell), namely, for the one or more of the remaining daughters of the Settlor, if any.
56. It seems to me that the Settlor by these last two parts of Clause 2 intended that the funds would be, initially, for the children of his son, if any. But if there were none, then they still remained in “the family” so to speak. No monies at all would be given directly to his daughter Cecil Violet Campbell, even if she was alive at the date of failure or determination of the trusts. However, he was intent on giving her some benefit by giving her interest to the trustee of her marriage settlement. By the words used, the Settlor intended that she would have no control over or benefit from the funds during her life. And finally, while recognising the life interest of the 1902 marriage settlement given to Gordon Campbell, the Settlor trusted Gordon Campbell to appoint, if he wished, by Will, absolutely or on trusts for any or all of the daughters of the Settlor and their issue, including in my view, because of the absence of any words to the contrary, the issue of Cecil Violet Campbell. And if Gordon Campbell did not so appoint or direct by Will, the entire of what might be called “Cecil’s Fund” would be transferred, in the same manner as the remainder of the “equal funds” namely to the trustees of the several other marriage settlements of the remaining daughters of the Settlor, if any, living at the failure or determination. I will return, however, to consider this section of the clause again.
57. Overall in my view, the Settlor by the words chosen intended to benefit (i) his son, (ii) his sons widow, (iii) any children or remoter issue of the son, and (iv) his daughters and their issue, and, in particular, his daughters and their issue if there was no widow or no children of the son. If there was a widow but no sons, then the daughters would benefit after the death of the widow. I find nothing in the Settlement which would preclude the children of Violet Campbell from benefiting, so long as they were alive at the appropriate time, and otherwise entitled.
58. I am of the view that, on a true construction of the 1919 Settlement, there is not a series of trusts or of consecutive trusts of the particular type contended for by some of the Defendants, but rather one trust, with various limitations or remainder interests, each of which must be considered so as to ascertain, if, and when, any failure or determination occurred. The trust in my view is that of the settled funds and its accruing income. As to the income of the settled funds that was to be utilised by the trustees in a particular way, first as to the son, then to his widow and children and the Settlor’s descendants then alive.
59. Clause 2 of the Settlement is indicative of what is to happen to the income of the settled funds after the death of the son, firstly with a widow surviving him with children. It was suggested by Miss Pilkington that this clause is merely a direction to the trustees to pay a sum of money from the income of the settled funds to the widow. Eleanor Florence Denny survived her husband, who died in 1949. She survived him by a very considerable number of years, but for the purposes of the application of the terms of the 1919 Settlement, it does not seem to me that this matters, save that the precise time at which the interest of others in the settled funds is determined. If she survived the son, as she did, the trustees were to continue to hold the settled funds to provide an income for her and any children of the son and any descendants of the Settlor. They were the several objects.
60. I am of the view that the trust comprising the settled fund continued for so long as the widow survived, namely, until 1996. It is true that this part of Clause 2 refers to “trusts” in the plural, as Mr. Ferguson says, but it will be clear that at 1919 there were, possibly, more than one trust, had there been children or remoter issue of the son. So I do not think that the use of the word “trusts” in the plural is indicative that a separate trust existed in the settled funds and the income of the settled funds. There was (a) a trust of settled funds and the income thereof in favour of the son as to income only, and (b) a trust in favour of the widow, the children and the descendants of the Settlor, again as to income. That trust, with income payable in the manner described, did not determine until the widow died. But one of the classes of objects did not ever exist. Any income not paid to the widow/sons/descendants alive of the Settlor was to be held upon the further trusts.
61. The next matter concerns a further part of Clause 2, where it provides for what was to happen after the death both of the son and his widow. Briefly, the settled funds and the income thereof were to be held in trust for the children or remoter issue of the son.
62. As we know there were no children or remoter issue of the son. Since I have already found that the true meaning to be attached to this part of Clause 2 is that the son had power to appoint a person who would determine how the monies might be allocated between his children or remoter issue, nothing else arises under this part of Clause 2.
63. The last trust of the settled fund and the income only arose in the event of the death of the widow without there being children of the son, at that time, in 1996. The words “in case the trusts …. concerning the settled funds shall fail or determine” are not meant to be taken as excluding the income generated by the settled fund.
64. And I agree with Mr. Ferguson’s contention that it would be an extraordinary result to hold that the daughters (however many were alive in 1949) should have the settled funds and the income divided equally between them, for to do so then triggered a situation where the trustees of the several marriage settlements would have control over the interests of each of the daughters in the settled funds and the income (even if not vested in possession) leaving the trustees of the 1919 Settlement to control the payment of the income to the widow or children of the son or to the daughters of the Settlor then alive, being the acknowledged prior interests. I think this would be a very strange argument in favour of a vesting in 1949.
65. Since I have held that there was no failure of the trusts “hereinbefore declared concerning the settled funds” on the death of the son in 1949, what then is the position?
66. The Settlor died in August 1927. During his life, there is no evidence that the Trustees of the 1919 Settlement exercised any of the powers vested in them under Clause 3 of the settlement, which permitted them to pay the whole or any part of the settled funds (and not just the income thereof) to the son, or to any widow of the son, provided the Settlor gave his consent to this in writing. I find that this did not occur.
67. The son, Gerald Henry Maynard Denny, married in the year 1937. He did not have any children.
68. The son died in 1949, leaving his widow Florence. During the lifetime of the son, there is no evidence to suggest that his interest in the income of the settled funds became vested in or charged in favour of any other person within the meaning of Clause 1 of the settlement. Such an event, if it had occurred, would have resulted in the trust in his favour failing or determining during his life. The words of Clause 1 make it clear that it concerns only a failure or determination during his life, since the power of the trustees is to pay the income or part of it to “the son and his wife” (jointly), and/or to others. Since the part of that clause relating to the manner in which the balance of the income was to be held by the trustees is only applicable in the event of a failure or determination “during his lifetime”, I do not believe any such income existed or exists.
69. Next, one must look at the events which have occurred, and ascertain whether, as of 1996, there were:-
(a) daughters of the Settlor then living; or
(b) living issue of a daughter who had previously died.
70. To decide this, one must look at the events surrounding the several daughters, their marriages, and their issue.
(a) As to Eileen R. Heather. Her husband predeceased her, and there were no children of the marriage. She, having died in 1954, therefore does not come within the terms of that part of Clause 2 which I am considering.
(b) Cecil Violet Campbell. She died on the 26th December 1962. According to the evidence presented, however, it is said that she had given birth to a daughter Cecil Bettina Campbell at Kingston, Surrey, in England. For the purposes of this judgment, I am assuming that she is and was the daughter of the late Cecil Violet (Denny) Campbell, although the registration of her birth, as exhibited in the affidavit of Paula Fallon, does not disclose any relationship with any parent. However, the affidavit which exhibited the registration of the birth, described it as a faxed extract, and I am satisfied that the appropriate, detailed original or certified copy will be made available. The evidence is that the child Cecil Bettina Campbell married (twice) and is now a Mrs. Van Eyk, and she lives in South Africa. She is a granddaughter of the Settlor. Cecil Bettina Campbell, an issue of Cecil Violet Campbell, is a person who was alive at the date of the failure of the trust in 1996, and I will deal with her interest in due course, because of the proviso relating to Cecil Violet Campbell.
(c) As to Edith Mabel Coates. She died on the 2nd day of July 1959. She had issue, Dorothy Brand, who died in 1966 with no children.
(d) Mary Olive Olive died in 1954 but had one child, Eileen Maddison who died in 1964. She in turn had a number of children whose identities are set out in the Affidavits of Tessa Marion Erskine.
(e) As to the proviso relating to Cecil Violet Campbell, I am of the view that the Settlor did not, by any of the words used, intend to prevent the issue of Cecil Violet Campbell from benefitting under the 1919 Settlement. I find that the intention of the Settlor by the use of the proviso in Clause 2 concerning her was to ensure that if Cecil Violet Campbell herself were alive, she would not herself be enntitled to or benefit (even through her marriage settlement) during her life. But if she was a daughter who was dead at the date of failure, as she was, and had issue alive at that time, as she did, I find that the proviso did not apply at all. It would have been quite simple for the Settlor to have provided that Cecil Violet Campbell’s issue should not benefit, but he did not do so. On the contrary, he specifically allowed any issue of any daughter to benefit.
71. In the foregoing circumstances, both Mrs Van Eyk and the estate of Mary Olive Olive are each entitled to a one half interest.
72. I now turn to the issues which arise for consideration in the Amended Special Summons concerning the Will of the late Charles E. Denny, deceased.
73. Charles E. Denny died on the 29th August 1927, having made a Will on the 2nd March 1926 and three codicils. For the purposes of this action, the three codicils are only material in that they, together with the Will, were proved and probate was granted to the named executors. As to their individual contents, the codicils are irrelevant to any of the matters arising for consideration.
74. The questions which arise for consideration in respect of the Will Settlement are as follows:-
(a) Do the proceeds of the fund, referred to in the said Will as “the son’s fund” fall into the residuary estate of the said Charles E. Denny, deceased;
(b) Do the funds, the subject matter of the fund referred to in the Will as “the widow’s fund” fall into the residuary estate of the said Charles E. Denny, deceased;
(c) Do the proceeds of sale of the property at Ballybrado, in the events which have happened, fall into the residuary estate of the said Charles E. Denny, deceased;
(d) Who, in the events which have happened, has become entitled to the residuary estate of the said Charles E. Denny, deceased;
(e) Has the estate of Eileen Rose Heather any interest in the residuary estate of the said Charles E. Denny, deceased;
(f) Does the residuary estate fall to be distributed between the estates of Mary Olive Olive and Edith Mabel Coates, in the events which have happened;
(g) Does the residuary estate fall to be distributed to the remoter issue of Mary Olive Olive;
(h) Do the trusts created in respect of the residuary estate of the said Charles E. Denny, deceased fail by reason of uncertainty of objects of offending against the rule against Perpetuities or otherwise;
(i) In the event that the trusts in relation to the residuary estate do fail, did the said Charles E. Denny die partially intestate;
(j) In the event that the said Charles E. Denny did die partially intestate, did the real property of the said Charles E. Denny pass to the only son of the deceased, Gerald Henry Maynard Denny, as his heir at law.;
(k) Such directions in relation to the administration of the trust created by the Will with three codicils of the said Charles E. Denny, deceased as to this Honourable Court shall seem proper;
(l) The answers to such further or other questions that may arise in the course of the trial of the matter in relation to the trusts created by the Will with three codicils thereto of the said Charles E. Denny deceased or such further or other question as to this Honourable Court shall seem proper;
(m) All necessary accounts, directions and enquiries in relation to the trust created by the Will and three codicils thereto of the said Charles E. Denny deceased.
The Will Settlement
75. Again, to answer the questions raised with any degree of certainty, it is important to consider the precise terms of the Will Settlement and I exhibit the relevant parts of the Will of the late Charles E. Denny as “Schedule B” to this judgment. Again, I should point out that, having regard to the evidence before the Court and the legal arguments made, and having regard to the parties before the Court, I am not satisfied that all the above questions can be responded to, nor do all of them arise comfortably within these proceedings.
76. By his Will, he provided (in brief and in general):-
(a) A fund, described as being the “son’s fund” which was to be held by trustees for the benefit of the son during his life, and after his death for his (the son’s) children.
(b) In the event of a failure of the “son’s fund”, that fund was to form part of the residuary estate of the late Charles Denny.
(c) A property, called Ballybrado, to be held upon trust for the use and enjoyment of his wife for her life, and after her death for the use and enjoyment of his son, and after the death of the son, upon the trusts relating to “the son’s” fund.
(d) Another fund which is called in the Will the “wife’s fund” [upon trust/] for the benefit of the wife for her life. After her death two-thirds of that fund was to form part of the residuary estate of Charles E. Denny and one-third was to be held upon the trusts relating to the “son’s fund”.
(e) The entire residue of his estate upon trust for sale, to hold the proceeds and divide them into three equal parts upon the trusts in the Will for the benefit of three of his four daughters, namely, Mary Olive Olive live, Edith Mabel Coates and Eileen Rose Heather. There is a proviso in relation to this element in the Will, namely, that if any of these three daughters dies in the lifetime of Charles E. Denny, leaving issue, then such issue takes his/her/their mother’s entitlement, and in the event that any of the three daughters died during his lifetime, without issue, then her share was to be held in trust for the other or others of his daughters.
77. Insofar as the residuary estate is concerned, the Will provided that the shares to which the daughters were entitled were not to be held by the daughters absolutely. Instead it was provided by the Will that their shares would be held by the trustees of the Will upon trusts declared in the Will, namely (in brief):-
(a) During the life of the daughters, the trustees were to pay the income of such share(s) to such daughter.
(b) After the death of a daughter then the share and the future income was to be held in trust for the children or remoter issue of such daughter at the discretion of the trustees or pursuant to an appointment.
(c) In default of any such appointment, in trust for all or any of the children of such daughter who is living at the date of death of Charles E. Denny.
(d) If the share of any daughter fails, then her share or augmented share should go to such of the other daughters of Charles E. Denny.
(e) Finally the Will provided that the monies given to his daughters on marriage or for their advancement was to be called into account in respect of the share of any such daughter.
78. The clauses of the Will are reasonably straightforward, but submissions have been made as to the true meaning of those clauses which give rise to some requirement for interpretation. Although not material for the purposes of interpreting the terms of the Will, I should say again that the son Charles Henry Maynard Denny died in May 1949. He was married but had no children. His widow, Eleanor Florence Denny survived him and died in 1996. Of the four daughters of Charles E. Denny, it will be recalled that, on the face of the Will, his daughter Cecil Violet Campbell was not provided for. Eileen Rose Heather died in 1962 without issue. Edith Mabel Coates died in 1959 and left a daughter who died in 1966. Mary Olive Olive died in 1954. She had a daughter who died in 1964, who had issue.
79. Mr. Spierin, on behalf of the Plaintiffs, drew the Court’s attention to the general principles to be applied in construing the Will, including the following:-
(a) That the Will speaks from the date of death of the testator (S. 24 Wills Act, 1837 – S. 89 Succession Act, 1965).
(b) The intention of the testator is paramount (as per Curtin & Curtin v. O’Mahony and Others (1991) 2 I.R. 562).
(c) The Court must construe the wills and codicils as a whole, as of the date of death to ascertain their true meaning and then apply that construction to the events which have occurred.
(d) In seeking to ascertain the intention of the testator, the Court is required to adopt the “armchair” principle at the date just prior to the death of the testator as to his intentions to dispose of his property.
(e) The Court is entitled to have regard to the terms of the inter vivos settlement, with which the testator was fully familiar, and which he bore in mind in drawing up his Will, and there is express reference in the Will (and in the third codicil) to the inter vivos trust.
80. In addition, Mr. Spierin drew the Court’s attention to the decision in Heron v. Ulster Bank Limited (1974) NI 44, which was approved by Carroll J. in Howell, Deceased, Howell v. Howell (1992) 1 I.R. 290. These cases suggest the following approach which I propose to adopt:-
(a) Read the immediately relevant portion of the Will as a piece of English and decide, if possible, what it means;
(b) Look at the other material parts of the Will and see whether they tend to confirm the apparently plain meaning of the immediately relevant portion or whether they suggest the need for modification in order to make harmonious sense of the whole or alternatively, whether an ambiguity in the immediately relevant portion can be resolved;
(c) If ambiguity persists, have regard to the scheme of the Will and consider what the testator was trying to do;
(d) One may, at this stage, have resort to rules of construction, where applicable, and aids, such as the presumption of early vesting and presumptions against intestacy and in favour of equality;
(e) See whether any rule of law prevents a particular interpretation being adopted; and
(f) Finally, one may get help from the opinion of other Courts on similar words (with some caution in the approach to be taken).
81. The apparent scheme of the Will is as follows. The testator left specifically devised property to his wife for her life that property, known as the “Wife’s Fund”, was left for the benefit of the wife of the Testator for her life and after her death that fund was to pass into and become part of the “son’s fund”. As to the “son’s fund” – whether the original fund or as augmented by any part of the “wife’s fund”, this was for the benefit of the son for his life, and then the income to the son’s wife, Eleanor Florence Denny, for her life, and then on trust for the children or remoter issue of the son. If there was a failure of the “son’s fund” it thereupon passed into the residuary estate, subject only to the interest of Eleanor Florence Denny.
82. Once it passed into the residuary estate, it was left for the benefit of three named daughters, with provision in the event of any one of them dying prior to a particular ascertainable date, during the life of the Testator.
83. The fourth named Defendant, the estate of Cecil Violet Campbell makes no claim under the Will. The first and second Defendants, the estates respectively of Charles Henry Maynard Denny and Eleanor Florence Denny also make no formal submission on the Will and its interpretation save in relation to the possible consequences arising from the Court adopting as correct the contention of the third named Defendant as to the provisions of Clause 11 and 7. Submissions were therefore made on behalf of the estates of Eileen Rose Heather, Edith Mabel Coates and Olive Mary Olive.
84. One of the issues which arises for consideration is the meaning of Clause 11(b) of the Will. It provides as follows:-
“(b) After the death of such daughter my trustees shall hold such share and the future income thereof in trust – for all or such one or more exclusively of the others or other of the children – or remoter issue of such daughter – at such age or time or respective ages or times if more than one – in such shares and upon such trusts – for their respective benefit and such provisions for their respective advancement and maintenance and education – at the discretion of my trustees – or any other person or persons as such daughter shall from time – by deed or deeds revocable or irrevocable or by will or codicil – with transgressing the rule against perpetuities – appoint”.
85. The thrust of the guidance given to the Court on behalf of the Plaintiffs and by the Defendants, save the third Defendant, is that “the Ballybrado Property”, “the son’s fund” and “the wife’s fund” all form part of the residuary estate.
86. Counsel for the third Defendant contends that while the three funds have fallen into the residuary estate, the provisions of the Will make it clear that each of the daughters was entitled to appoint her share to another person, that Eileen Rose Heather had so appointed his client by Will and therefore his client was entitled to a one-third share of the residuary estate.
87. On the construction of Clause 11(b) of the Will, Mr. Cregan contended that on a proper construction of that clause, it was clear on its face that the words “any other person” refers to any other beneficiary which the daughter may by Will appoint. He argued that the scheme of the Will provided for the following in respect of the residuary estate:
(a) To the three daughters of the settlor;
(b) For their life (lives) on trust;
(c) After their death for the children of any such daughter, or
(d) For any other person the daughter (s) shall appoint;
88. This is contested by the Defendants on several grounds, which I do not require to go into detail. However, the thrust of their argument is that the clause confines the entitlement of the daughters to appoint an alternative trustee who shall have the discretion vested in the Will settlement trustees, and no more.
89. I do not necessarily agree that Mr. Cregan’s client puts forward a correct construction of the words found in this part of the – admittedly – complex and complicated Will. Following on the principles adopted by the Court in Howell, supra, I look first to the words of the clause under construction to see whether, using ordinary English language, it can readily be interpreted. When viewed in that light, it seems to me that there is room for interpreting the clause in a manner which supports Mr. Cregan’s view and the view of the other Defendants. The sub clause is not so clear as to be without doubt.
90. In these circumstances I look to see what other parts of the Will may assist in ascertaining what the testator intended. As with the 1919 Settlement, which is referred to in the Will, the testator I believe was intent on ensuring, while providing for his own widow, his son, his son’s widow, their children and his own daughters, so had his Will drafted as to ensure that where there was any default, the interests remaining in this property at all times reverted back into what I call “the family”. In other words, where possible, he endeavoured to ensure that the money was not put beyond the reach of the family and into the hands of strangers. He did this in a number of ways. For example, at all times he provided that if there was a death of a son with no issue, the intended issue’s interests reverted back to another member of the settlor’s immediate family, or their issue. If there was a death of a daughter, without issue, then her share reverted back to be divided between the remaining daughters. In case there were children of the son, he gave the son the power to appoint another person to exercise the discretion otherwise to be exercised by the trustees of the 1919 Settlement, and I am of the view that he evidenced exactly the same intention in the case of the Will settlement.
91. For example, a consideration of Clause 9 of the Will makes it clear that the “wife’s fund” after her death is to be divided on trusts similar to those found in respect of the “son’s fund” and the residuary estate (by which he provided for his daughters). Similarly Clause 8 of the Will stipulates that after the widow of the settlor and their son shall have the use and enjoyment of the Ballybrado property it shall be held on trusts similar to those in respect of the “son’s fund”.
92. Clause 10 of the Will makes it clear that in case a daughter dies without issue, that daughter’s share was to be held in trust for the remaining daughters who survive him.
93. Clause 7 (b) of the Will relates to the “son’s fund”. It reads:-
“After the death of my said son Gerald Henry Maynard Denny my trustees shall hold my son’s fund and the income thereof in trust for all or such one or more exclusively of the others or other of the children or remoter issue of the said Gerald Henry Maynard Denny at such or time or respective ages or times and if more than one in such shares and with such future of other trusts for their respective benefit and such provisions for their respective advancement and maintenance and education at the discretion of my trustees or any other person or persons and in such manner in all respects as the said Gerald Henry Maynard Denny shall from time to time by any deed or deeds revocable or irrevocable or by Will or Codicil appoint” .
94. This Clause 7 then goes on to provide that, in default of any such appointment, that is to say, appointment by Gerald Henry Maynard Denny, then the fund is to be held for all or any of his children at 21. In the event that there is any failure of that trust, then all of the son’s fund falls into and forms part of the residuary estate.
95. Having regard to the foregoing provisions, I am of the view that the testator intended, by the use of the words in Clause 11 (b) to do no more than to provide that each of the daughters was given a power to appoint a person who would exercise the same discretion as is by the Clause to be otherwise exercised by the trustees of the Will settlement..
96. I am fortified in my view that this is what was intended by a consideration of a further clause. Clause 11(e) of the Will provides specifically for the daughters to have a power to appoint the whole or part of the income of her share to her husband, but only during his life. In other words, Clause 11(e) does not permit the daughter even to appoint her share to her husband simpliciter. If it were the intention to permit any of the daughters by the terms of Clause 11(b) to appoint to anyone, including a stranger, then the testator would not have needed to insert a specific term concerning the entitlement to give the income to the husband during his life, it being certain that the husband could well have survived his wife.
97. Since I have come to the view as to the correct interpretation of the terms of Clause 11(b), I find that Eileen Rose Heather was not entitled by her Will to appoint her interest to any other party, but that, pursuant to Clause 11(b) of the Will, any interest of Miss Heather accrued to the Coates and Olive interests.
98. Since Eileen Rose Heather died leaving no children, then her estate cannot take any benefit pursuant to the provisions of Clause 11(c) of the Will either.
99. I should, for completeness, deal with the alternative argument made by the third Defendant arising out of the inclusion of the words “without transgressing the Rule against Perpetuities” which appears at the end of Clause 11(b) but not at the end of Clause 7, and upon which the third Defendant also relies. I have come to the view that the inclusion of the words is appropriate in the case of the future exercise of a power of appointment, because in its exercise, there might be circumstances in which the Rule would be offended, particularly in the case of an exercise of such power by Deed. On the other hand the use of the words was not necessary in the case of Clause 7, because there the interests are vested and the Rule would not apply, and in the circumstances there was no need to include in that Clause any exhortation concerning the Rules against Perpetuities. This principle applied equally in the case of the 1919 Settlement and did not render that settlement void either.
100. Having regard to the foregoing, I now turn to the series of questions raised for answers, and I give the following answers, dealing first with those arising under the 1919 Settlement and then with those arising under the Will Settlement.
As to the 1919 Settlement :
1(a) (i) No.
(ii) Not applicable.
(iii) Yes.
(iv) The estate of the issue of Cecil Violet Campbell and the estate of Olive Mary Olive.
(v) Yes.
(vi) Those of Cecil Violet Campbell and Olive Mary Olive. In this regard, further issues may arise in the case of the marriage settlement of Cecil Violet Campbell but they do not arise for consideration in these proceedings.
(vii) This cannot be answered in the context of the present proceedings, unless the parties agree that further submissions be made on the matter, there having been no submissions on this issue to date.
(viii) No.
(ix) No.
(x) Not applicable.
(xi) Not applicable.
(xii) Further or other questions may arise, inter alia on (vi) above, and I will permit the parties to apply in relation to this if the matter requires further consideration by the Court.
(b) and (c) No directions were sought from the Court and no suggestion that any account of further enquiries were sought. Again, under the proposed liberty to apply, if any matter arises requiring further consideration, I will hear submissions.
As to the Will Settlement :
2(a) (i) Yes.
(ii) Yes.
(iii) Yes.
(iv) The estates of Edith Mabel Coates and Olive Mary Olive.
(v) No.
(vi) Yes.
(vii) The question may be slightly ambiguous. If it is intended to request an answer to a question “Is the residuary estate to belong exclusively to the remoter issue of Olive Mary Olive and not to the estate of Edith Mabel Coates”, the answer is no. If the question is intended to seek answers to a question arising out of the manner in which the estate of Olive Mary Olive is to be distributed, there was no submission made on this and I am not satisfied that it arises within these present proceedings.
(viii) No.
(ix) No applicable.
(x) Not applicable.
(xi) None have been sought.
(b) and (c) I give the same answer to these two matters as I gave in relation to the same questions raised in respect of the 1919 Settlement.
Byrne v Byrne and Others
25 July 1952
[1953] 87 I.L.T.R 183
Budd J.
July 24th, 25th, 1952
Budd J.:
The matter at issue concerns the construction of the will of Patrick Byrne, deceased. The will is dated the 1st day of October, 1930; the testator died on the 15th day of February, 1931. Probate was granted to the three executors who have been joined as defendants so as to bind them by the order. The plaintiff, Anthony, and the firstnamed defendant are brothers, and both are nephews of the deceased, being sons of his brother James. Frances Finigan is a niece of the deceased and is joined as defendant to represent the next-of-kin.
The question that arises is whether the restraint on alienation, which the testator has attached to his gift of two farms to his nephew the plaintiff, is void as being repugnant to the nature of the gift. Counsel for all parties agree that the same principles of law apply in this respect to the construction of restraints on alienation attached to gifts of chattel real interests as would apply to gifts of fee simple interests. If I hold that the restraint is void the other questions which appear on the summons do not require to be *184 dealt with. The farms in question are Irishtown and Lamb town. They contain some 44 acres, and came under the Land Purchase Acts being subject to the annual sum of £12 16s. 4d.
The relevant portions of the will with which I have to deal are as follows: “I bequeath my two farms of Irishtown and Lambtown to my nephew Anthony Byrne now in Australia, son of my brother James Byrne, together with all the buildings, stock, crops, implements and household furniture and chattels of every kind and description therein and thereon, and all the residue of my estate after payment of the legacies left in this my last will, just debts and funeral and testamentary expenses, and I appoint my said nephew, Anthony Byrne, residuary legatee. … In the event of my nephew, Anthony Byrne, attempting to sell the said farms of Irishtown and Lambtown or in any way parting with the possession of them I revoke the bequest of the said farms to him and in that event I leave them to the next heir on the same condition as it is my intention that my said nephew should work and keep my said farms, and that they should remain the property of one of my kin of the name of Byrne.” There is a codicil but it is not relevant to the matters with which I have to deal.
The first point to decide is whether there is a total or only a partial restraint on alienation. I should, perhaps, for convenience sake, refer at the outset to Mr. Finlay’s argument. He adroitly puts his legal argument first. On the assumption that the clause in question is construed as being a restraint on alienation outside a class, his submission was that the present case is distinguishable from In Re Rosher 26 Ch. D. 801. He pointed out that Jessell M.R. in In Re MacLeay 20 L. R. Eq. 186 held that the restraint he had to deal with in that case gave the devisee such a wide choice, that in substance he was still enabled to alienate. He asked me to hold that the position is the same here, and stressed the fact that Pearson J. in Rosher’s Case (supra) was dealing with a sale to one person at one price, and submitted that what Pearson J. said in In Re Rosher (supra) was to a great extent obiter. He also pointed out that in Rosher’s Case (supra) Pearson J. seems to accept Lord Coke’s observations on the general rule without referring to the exceptions which Lord Coke made. But his argument all depends on the clause being construed as creating only a partial restraint.
Mr. Finlay submits that the clause under consideration must be construed as a whole; that it is imperative to construe it as a clause restricting alienation, not absolutely, but merely to persons not members of a particular class. Construed in that fashion he says that the case falls within the decision in In Re MacLeay (supra) and he supports his argument by saying that having regard to the words “It is my intention that my said nephew should work and keep my said farms, and that they should remain the property of one of my kin of the name of Byrne” it would be anomalous if alienation to a member of the family should involve a forfeiture. He submitted that if the clause is taken as a whole, it is plain that the testator’s intention is as he suggests. It seems to me that what in effect Mr. Finlay asks me to do is to take the testator’s statement of the reason for his inserting the restrictive clause, and to mould the words of the whole clause to conform with the reason, but no authority was cited in support of this method of construction. I am not aware of the existence of any such authority, nor do I think that such a method of approach is correct.
Looking at the clause I find it expresses in the clearest possible words an absolute restraint. The words are “In the event of my nephew Anthony Byrne attempting to sell the said farms of Irishtown and Lambtown or in any way parting with the possession of them I revoke the bequest of the said farms to him and in that event I leave them to the next heir on the same condition.” I think that is clear, and I do not think that the expression of a testator’s reasons for inserting such a clause in his will can alter the plain meaning of the words he has used.
No doubt the testator’s intention is paramount; that is a general rule of construction applicable to every will, but one must go to the words used to discover the testator’s intention. If the intention is clear that ends the matter, even if the words used do not sometimes carry out his true purpose. It may be that it becomes otherwise apparent that what the testator has done does not in fact achieve the desired end, but such a situation would not entitle me to re write a clause for the testator. The only fair meaning also of the clause containing the words as to working the farm to my mind is that Anthony could only alienate the farms by will or by dying intestate. For these reasons I interpret this clause as being one in total restraint of alienation and it seems to me that the case then falls within In Re Rosher (supra); thus the criticisms levelled at the portions of the judgment described by Mr. Finlay as obiter do not apply on this finding. In any event I find that the decisions in our own courts *185 cited to me are against the contentions of Mr. Finlay even as regards a limited restraint.
Pearson J. has dealt very fully with the general principle in Rosher’s Case (supra). There is little more to be said regarding it. He says at p. 811: “In order to determine this question we must go back to that which is to a great extent the fountainhead of the English Law, I mean “Coke upon Littleton”. There it is said ( Co. Litt. (3)): ‘also if a feoffment be made upon this condition, that the feoffee shall not alien the land to any, this condition is void; because when a man is enfeoffed of lands or tenements he hath power to alien them to any person by the law. For if such a condition should be good, then the condition should oust him of all the power which the law gives him, which should be against reason; and therefore such a condition is void.’” Again, at p. 813, having quoted from Lord Coke, the learned Judge says. “And so in the case of a devisee in fee simple, if I may translate it adapting this illustration of Lord Coke’s, ‘I devise Black Acre to A. and his heirs in fee simple, and I give him power to mortgage, lease or sell the estate, or any part or parts thereof, from time to time, and at all times or any time, in any market, to any person or persons, upon such conditions or terms as he shall from time to time in his own absolute will and pleasure determine. Provided always, that he shall not sell either during his own life or during the life of B.’ I think when you write out the devise in full in that way, everyone would say that the condition is repugnant to the grant which has been previously made, and, of course, if the matter had stopped there, there would have been no difficulty whatever in this case. The question to be determined would have been simply whether the condition was in whole or in part repugnant to the gift to which it was annexed and if so, it would necessarily be void.”
Regarding the exceptions to the general principle I think it would be still open to me to follow the reasoning of Pearson J., were I dealing with the matter solely on the authority of the other English cases, which, of course, is not the position. Turning from the English decisions to those of our own Courts, I find in the case of Billings v. Welch I. R. 6 C. L. 88, that the point there in issue was whether a condition restricting a fee farm grantee from assigning to any person other than the child or children of the grantee was repugnant to the nature of the estate given. The certain and specified class were the children of the fee farm grantee. It was held that the condition was void for repugnancy. O’Brien J., at p. 101, says: “The general principles upon which covenants against alienation contained in a deed granting lands in fee simple are held to be void, as being repugnant to the estate granted by that deed, are laid down in several passages of Sheppard’s Touchstone Vol. 1, pp. 129 and 130 (Preston’s Edition). In p. 129, it is stated that no condition or limitation, whether by act executed, limitation of use, or devise, that contains in it matter repugnant to the estate is good. It is true (as stated in pp. 129 and 130) that if a feoffment or other conveyance be made of land, upon condition that the feoffee or grantee should not alien to certain persons, such condition would be good; but the author adds (p. 130), that if the condition be that the feoffee or grantee should not alien the thing granted to any person whatsoever, or that, if he do alien to any person, he shall pay a fine to the feoffor, such a condition is void in the case of a common person, as repugnant to the nature of the estate. The Editor adds the reasons, because the condition would take away one of the incidents of ownership, namely, the right of alienation, a right which the policy of the law encourages. The author then refers to a case in which Dodridge and Chamberlane JJ. held that if a feoffment be on condition that if the feoffee alien he shall pay £10 to the feoffor the condition would be good; but in which case the Chief Justice and Haughton J. held the contrary, on the ground that this would be a circumvention of the law.
“In our opinion, the ruling of the Chief Justice and of Haughton J. was the correct one. If a covenant be held good which, in the event of a grantee in fee simple aliening the land, merely imposes a fine upon him (or an additional rent on the lands, as in the case before us) the general rule might be evaded, and the principles of it isolated by fixing such an amount of fine or additional rent as would effectually prohibit the alienation, which would clearly be a circumvention of the law; and on that ground we think that the argument of the plaintiff’s Counsel, that the covenant in the present case is good, because it only imposes an increased rent, cannot be sustained.”
That is the view of the Queen’s Bench Division and it is a case of a restriction to a class. There seems to be no reason why I should not follow that decision in this case. I should, however, mention that the actual decision itself was overruled in In Re M’Naul’s Estate [1902] I. R. 114, (36 I. L. T. R. 45), but the overruling turned upon another point. Fitzgibbon L.J. said (pp. *186 124-125), that “the doctrine of repugnancy applicable at common law to an estate in fee is modified in the case of fee farm grants founded on renewable leases, by whatever obligations are lawfully inserted in the grants. The object of the Act was to give a perpetual estate, which was not a common law estate in fee, but was an estate created under the statute, which was to remain subject to all covenants and conditions which had bound the pievious leasehold estate, save so far as they were got rid of in the manner provided by the Act. When not so got rid of, they were to be retained in the grant, and the decision in Billings v. Welch (supra) cannot be sustained in so far as it avoids such obligations upon the ground of repugnancy to a common law estate in fee.” It is clear that the decision of the Court of Appeal turned on the wording of the particular statute, but as I read the decision of the Court of Appeal it does not interfere in any way with the principles of law as enunciated by O’Brien J.
Turning to more recent authorities I find that Crofts v. Beamish [1905] 2 I. R. 349 was also a case of restriction of alienation save to a limited class. There, the testator by his will, left all his property to his wife for life, and after her death he devised to each of six of his seven sons a specific portion of his landed property, with the proviso that no devisee should be at liberty to sell his share to any person save one of his brothers, and, at a price to be fixed by arbitration. Gibson J. (at p. 356) expressed his view on the question of repugnancy in the following terms. “I am of opinion that the clause at the end of the will does not restrict the inherent power of alienation attached to the devised estates. It is not expressed to be a condition, and although the testator may have thought that his direction effectually prevented alienation outside the family, I doubt if he intended or desired that, on breach by the devisee, the estate should be defeated and the property re-vest in himself discharged of the limitation over. Even if the clause was a condition, the class of possible purchasers is not the family, or all blood relations but the brothers surviving at the time are contemplated, and the condition is plainly inconsistent with freedom of disposition, not merely as to the purchasers, but as to the price which is to be ascertained by third persons. The restriction is repugnant to the nature of the estate devised, and is void. The purchasing brothers must be alive at the time of sale, and if all but one were to die, there would be no effective power of sale.” Boyd and Wright JJ. expressed their concurrence in the opinion that the restriction was repugnant and void. Crofts v. Beamish (supra) also went to the Court of Appeal, and was there decided on another point. The Lords Justices of Appeal did not deal with the question of restriction of alienation, already dealt with by the three Judges of King’s Bench Division.
I was also referred to In Re Bourke’s Estate 27 L. R. Ir. 573 and to Dugdale v. Dugdale 38 Ch. D. 176 as authorities for the proposition that the doctrine applies to personalty as well as to realty, which was accepted by all parties.
Coming to more modern cases I find that the Master of the Rolls in McGowan v. Grimes and Others 55 I. L. T. R. 208 follows the decision in Rosher’s Case (supra) and of our own Courts in Crofts v. Beamish (supra).
For all these reasons, and having regard to the decisions referred to, my view is that the restriction on alienation which the testator has attempted to impose on his nephew Anthony Byrne in this case is void as being repugnant to the nature of the estate granted by the testator.