Beaumont v Oliveira

(1869) L.R. 4 Ch.App. 309

(Judgment by: Sir C J Selwyn LJ)

Between: Beaumont
And: Oliveira

Court:
Court of Appeal in Chancery

Judge:
Sir C J Selwyn LJ

Subject References:
CHARITY
Royal Society
Direction to pay Charitable Legacies out of Pure Personalty

Hearing date: 13, 15-16 January 1869
Judgment date: 21 January 1869

Judgment by:
Sir C J Selwyn LJ

A testator, after giving several legacies, gave a legacy of £4000 to the Royal Society, £4000 to the Royal Geographical Society, and three other sums of £4000 to three other institutions, directed that all his charitable legacies should be paid out of his pure personalty, and bequeathed the residue of his property to the Plaintiffs, his executors, for their own use. The object of the Royal Society is "for improving natural knowledge," that of the Royal Geographical Society "the improvement and diffusion of geographical knowledge." The testator left pure personalty very much less than the amount of charitable legacies, a larger sum of mixed personalty, and a small real estate in Madeira:-

Held (affirming the decision of Stuart, V.C.), that the Royal Society and the Royal Geographical Society were charitable institutions within the meaning of 9 Geo. 2, c. 36:

Held (varying the decision of the Vice-Chancellor), that the debts, funeral and testamentary expenses, and costs of suit, ought not to be thrown upon the mixed personalty in exoneration of the pure personalty, but ought to be apportioned rateably between the two funds. That the charities should then be paid out of the residue of the pure personalty so far as it would extend, and claim for the residue against the rest of the estate, such claim abating in the proportion which the mixed personalty bore to the proceeds of sale of the Madeira estate.

This case came before the Court on two petitions of appeal against an order made by Vice-Chancellor Stuart on the second further consideration of the cause. [F1] The suit was for the administration of the estate of Benjamin Oliveira, who, by his will, dated the 11th of September, 1865, after appointing the Plaintiffs executors, and giving a legacy of £2000 to his daughter Emma, and certain other legacies, and an annuity, bequeathed "to the treasurer for the time being of the Royal Society the sum of £4000," and in similar terms he bequeathed legacies of the same amount to the Royal Geographical Society, the Royal Humane Society, the Marylebone School for Girls, and the Albert Orphan Asylum, in all five sums of £4000 each, and added, "I direct all the said charitable legacies to be paid out of my pure personal estate." The testator gave the residue of his real and personal estate to the Plaintiffs, his executors, for their own use. The decree directed the usual accounts and inquiries, including an inquiry what real estate there was and where situate. The Chief Clerk certified that the pure personalty was £6711, that certain leasehold property had realized £8045, and that the only real estate was a small one in the island of Madeira, which had been sold with the sanction of the Court, and was represented by a sum of £866 12s. 6d. £3 per Cent. Bank Annuities.

By the order under appeal it was declared that the several legacies to the five societies mentioned were given for charitable purposes within the meaning of the statute of 9 Geo. 2, called the Mortmain Act, and that they were payable out of the testator's personal estate in no wise connected with any interest in land, in precedence to any payment thereout of the debts, funeral and testamentary expenses of the said testator, and the other legacies given by his will, and the costs of this suit; and it was also declared that the sum of £866 12s. 6d. £3 per Cent. Bank Annuities, which represented the proceeds of the sale of the Madeira estate, was not such an interest in land as that a bequest thereof for charitable purposes was within the operation of the Mortmain Act, and that the same was to be dealt with as personal estate in no wise connected with any interest in real estate, and applied accordingly.

The first of the appeals was by the Royal Geographical Society and Reginald Thistlethwaite Cox their officer, and by the president, council, and fellows of the Royal Society of London, and the question raised by it was, whether the bequests of £4000 to each of the societies ought to have been declared to be legacies given for charitable purposes within the meaning of 9 Geo. 2, c. 36, and the Appellants also complained of the order because it gave the costs of the Royal Geographical Society and Cox only out of their share of the pure personalty, and gave no costs to the president, council, and fellows of the Royal Society.

The Royal Geographical Society is a corporation the objects of which, as defined by its constitution, are "the improvement and diffusion of geographical knowledge." The Royal Society is also a corporation, incorporated "for improving natural knowledge."

The second appeal was by the Plaintiffs, and raised the question in what way the debts, and funeral and testamentary expenses of the testator, and the costs of the suit, ought to be provided for, the Plaintiffs contending that the pure personalty ought to bear a pro ratâ share of them.

Mr. Dickinson, Q.C., Mr. Archibald, Smith, and Mr. Bagshawe, for the Royal Society and the Royal Geographical Society, in support of their appeal:-

These institutions are not charitable: Attorney-General v. Heelis; [F2] Thomson v. Shakespear; [F3] Whicker v. Hume; [F4] Morice v. Bishop of Durham; [F5] Mayor, c & ., of Faversham v. Ryder; [F6] Denton v. Lord Manners; [F7] Jones v. Williams; [F8] Townley v. Bedwell; [F9] Carne v. Long; [F10] James v. Allen; [F11] Attorney-General v. Mayor of Dublin; [F12] Trustees of British Museum v. White; [F13] Kendall v. Granger; [F14] Nightingale v. Goulburn; [F15] President of United States v. Drummond. [F16]

Mr. Greene, Q.C., and Mr. Davey, for other societies.

Their Lordships, without calling on the other side, stated their opinion to be that the Appellant societies were charitable foundations, but deferred giving their reasons until they disposed of the other appeal.

Sir Roundell Palmer, Q.C., and Mr. Langworthy, for the Plaintiffs, in support of their appeal:-

The charitable legacies are not demonstrative legacies, and no case decides them to be so, though they have some similarity to the character of a demonstrative legacy. The authorities are against throwing the debts and costs exclusively on the mixed fund: Philanthropic Society v. Kemp; [F17] Sturge v. Dimsdale; [F18] Robinson v. Geldard; [F19] Tempest v. Tempest; [F20] Hobson v. Blackburn; [F21] Davidson's Conveyancing, "Wills". [F22]

Mr. Dickinson, Q.C., Mr. Archibald Smith, and Mr. Bagshawe, for the Royal Society and the Royal Geographical Society:-

Tempest v. Tempest [F23] is expressly in our favour, and the reversal [F24] proceeded on the words of the will, which indicated an intention contrary to the view taken by the Vice-Chancellor. The principle of Robinson v. Geldard is, that these legacies are demonstrative legacies, and if they are, the costs and debts must, in their favour, be thrown on the other funds: Williams' Executors. [F25] Philanthropic Society v. Kemp, and Sturge v. Dimsdale, are distinguishable, owing to the special wording of the wills. The legacies are charged on all the property: Greville v. Browne; [F26] and therefore, so far as we are not paid out of pure personalty, we can come against the Madeira property, which can legally be given to charity, though we cannot support the view that it is pure personalty.

Mr. Davey, for the Royal Humane Society:-

These are demonstrative legacies: Acton v. Acton. [F27]

The Madeira estate is pure personalty for the present purpose: Noell v. Robinson, [F28] referred to without disapprobation in Williams' Executors. [F29]

Mr. A. Bailey, for other charities:-

A gift in these terms to an individual would clearly be a demonstrative legacy, and it cannot make any difference that the legatee is a charitable body.

Mr. Langworthy, in reply:-

If the charities come upon the Madeira property under the charge of legacies, there must be an apportionment of the surplus of the charitable legacies between the Madeira property and the impure personalty, and so much as falls on the latter must fail. Robinson v. Geldard [F30] does not lay down that such legacies as these are demonstrative legacies, but only that they have something in common with them. A direction that charitable legacies shall be paid out of pure personalty is really nothing more than a declaration that there shall be marshalling.

Jan. 21. SIR C. J. SELWYN, L.J. , delivered the judgment of the Court as follows:-

The Royal Geographical Society is a corporation, and its objects are stated to be and are, "the improvement and diffusion of geographical knowledge." The Royal Society is also a corporation, and its objects are "for improving natural knowledge." The objects of both these societies are public, and they are both societies for the advancement of objects of general public utility; and the Vice-Chancellor has referred to the judgment of Sir John Leach, in Attorney-General v. Heelis, [F31] in which he said:


"I am of opinion that funds supplied from the gift of the Crown, or from the gift of the Legislature, or from private gift, for any legal public or general purpose, are charitable gifts, to be administered by Courts of Equity."

It was said by the counsel for the Appellants that Lord Eldon, in Attorney-General v. Mayor of Dublin, [F32] had expressed his dissent from the judgment of Sir John Leach in Attorney-General v. Heelis; but in the case of Attorney-General v. Eastlake [F33] the present Lord Chancellor, when Vice-Chancellor, pointed out that this expression of dissent on the part of Lord Eldon related to a different part of the judgment of Sir John Leach. After stating [F34] that the exception taken by Lord Eldon to the judgment in Attorney-General v. Heelis was, that the source from which the funds came is not material, as stated by Sir John Leach, but that the criterion is the purpose to which they are applied, and the question is whether that is a charity or not, he says:


"It is sufficient to say it is a large and general purpose for this town, although not beyond the limits of the town."

In the case of Trustees of the British Museum v. White, [F35] a devise to the British Museum was held to be within the statute of Geo. 2; and in the case of President of the United States v. Drummond [F36] a gift of residue to found at Washington, under the name of the Smithsonian Institute, an establishment for the increase of knowledge among men, was sustained as being a charity.

In our judgment, the case of Whicker v. Hume [F37] is in no degree inconsistent with these authorities, for the decision in that case, so far as relates to this, point, cannot be taken as amounting to more than this - if the terms "advancement of learning" mean advancement of education the case is not an arguable one.

Again, the case of Thomson v. Shakespear, [F38] which was relied upon by the Appellants, was a case in which a legacy was given to be laid out by the testator's executors, with the concurrence of the persons described in the will as trustees of Shakespeare's House, in forming a museum in Shakespeare's House, and for such other purposes as the trustees of the will, in their discretion, might think fit, for the purpose of giving effect to his wishes, and it was held that the gift could not be supported either as a charity or as a gift for the benefit of private persons. Even in that case the Lord Justice Knight Bruce stated,


"that perhaps, if the object of a museum could be dissociated from Shakespeare's House, it might be possible to support the gift."

The case of Carne v. Long [F39] was also relied on by the Appellants, but the Lord Chancellor considered the devise in that case as being a devise for a society of individuals at Penzance. In the case now before us, both the bequests are bequests to corporations, the objects and purposes of which are the diffusion and improvement of particular branches of knowledge. They subsist for these purposes and no others, therefore for public purposes - therefore, for the advancement of objects of general public utility - therefore for purposes analogous and similar to those mentioned in the statute of Elizabeth - therefore for charitable purposes; and this being so, we agree with Vice-Chancellor Sir John Stuart that the legacies given to them are charitable legacies, and applicable only to the purposes for which the recipients exist as corporations.

The second appeal is that of the Plaintiffs, and the substantial question which is raised upon this appeal is, in what manner the administration charges, that is, the debts, and funeral and testamentary expenses of the testator, and the costs of the suit, ought to be provided for.

On the part of the Plaintiffs it has not been seriously contended that the proceeds of the sale of the Madeira estate can be considered as falling within the words "my pure personal estate," which are found in the will, and it is also admitted that as the Madeira estate is only included in the general residuary gift the residuary devisees and legatees can only take it subject to the payment of the legacies.

It was argued on behalf of the charitable legacies, that those legacies are demonstrative legacies, and that they are, therefore, not liable to abate with the other legacies, and that the whole of the administration charges ought to be thrown exclusively upon those portions of the estate which do not consist of pure personalty, and the case of Robinson v. Geldard was cited as a conclusive authority in support of this proposition. Robinson v. Geldard was first heard before the Lord Justice Knight Bruce when Vice-Chancellor [F40] and the Vice-Chancellor said in his judgment,


"Had it not been for the recent decisions at the Rolls which have been referred to, I might possibly have thought that consistently with all the modern decisions the debts, and funeral and testamentary expenses, might be borne by the different descriptions of personalty pro ratâ; and that then the pure personalty should be applied in the first instance, under the directions of this particular will, in payment of the charity legacies.

But I should, by acceding to the argument in favour of the charities, be acting against the opinion which is the foundation of the judgment in Sturge v. Dimsdale". [F41]

In deference to those decisions at the Rolls the charitable legacies were ordered to abate, but nevertheless, and in accordance with the opinion expressed by the Vice-Chancellor, the administration charges were ordered to be borne rateably by the pure personal estate and the personal estate savouring of realty. It is true that the petition of appeal (which we have inspected, and which bears the signature of Sir James Parker as counsel), did not complain of so much of the order as directed the administration charges to be borne rateably by the two funds, but was confined to that portion of the order which directed that the charitable legacies should abate, and to the consequential directions. Lord Truro upon the hearing of this Petition [F42] reversed so much of the order of the Vice-Chancellor as directed the charitable legacies to abate; but His Lordship nowhere expresses any dissent from the opinion which had been expressed by the Vice-Chancellor Knight Bruce, as to the manner in which the administration charges ought to be borne, and, on the contrary, at the conclusion of the judgment, Lord Truro says:


"The result therefore is that the Vice-Chancellor's decision, made in deference to the language used by Lord Langdale, must be reversed, while at the same time the opinions of both those learned Judges will be affirmed."

The opinion of the Vice-Chancellor which is thus affirmed, was that to which we have just alluded, and which was actually carried into execution in the order which was then before the Court in an administration suit. In the same judgment, Lord Truro says, [F43]


"These authorities appear to me to shew that the charitable legacies in the present case are demonstrative legacies, or analogous thereto, but whether this is the precise character of these legacies, so that had there been a deficiency of assets they would have been entitled to be paid in full in priority to the other legacies, it is not necessary to decide; all that I need determine in the present case is, whether the legacies to individuals are to be paid partly out of the pure personalty or whether they are to be paid exclusively out of the personalty savouring of realty, which is sufficient for the full payment of those legacies,"

and he further says, [F44]


"by directing that the charitable legacies shall be paid exclusively out of the pure personalty he [the testator] has plainly shewn his intention that they shall be satisfied out of the pure personalty in preference to the legacies to individuals, whether they are strictly demonstrative legacies or not."

In the case now before us it is clear that the charitable legatees are entitled to be paid out of the pure personalty in priority to the other legatees, and on this point, also, we agree with the learned Vice-Chancellor, but we think that the case of Robinson v. Geldard [F45] cannot be considered as an authority in support of the further contention on the part of the charitable legatees, that the administration charges ought to be thrown exclusively upon the rest of the estate. It is true that this contention is supported by the decision of the present Lord Chancellor, when Vice-Chancellor, in Tempest v. Tempest, [F46] but as that decision was overruled by the Lord Chancellor Cranworth, [F47] we are bound to accept the decision of the Court of Appeal as an authority superior to that of the judgment of the Vice-Chancellor which was reversed.

The counsel for the charities treated this decision as resting on a very narrow ground, and in a manner not warranted by the terms of the judgment, when they argued that it depended entirely on the insertion by the testator in that case of the words "in precedence of the other pecuniary legacies." Lord Cranworth observed, that in Robinson v. Geldard, [F48] Lord Truro had said that he must take the direction in the will that the charities were to be paid out of the pure personalty to amount to a declaration of intention that the charitable legacies were to be paid out of the pure personalty in preference to the other legacies, and after commenting on the nature of demonstrative legacies, and saying that he need not puzzle himself with the inquiry whether the legacies were or were not demonstrative legacies, he proceeds to state that the


"testatrix has not directed that her debts or funeral or testamentary expenses should be paid out of that part of her personalty which savours of realty, nor has she expressed any intention to release the pure personalty from its legal liability to contribute to the payment of debts which by law are payable rateably out of both classes of personalty."

It having thus been held that a direction to pay charitable legacies out of the pure personalty amounts to a declaration of intention that they are to be paid thereout in preference to the other legacies, it would be a strange result of the authorities if the declaration by a testator in express terms of this preferential payment should place the charitable legacies in a worse position than they would have been in, if the testator had left the same intention to be implied from the simple direction to pay out of the pure personalty.

If we consider the case before us independently of the authorities, and as a question of the intention of the testator as expressed in his will, we are led to the same conclusion as that at which Lord Cranworth arrived in Tempest v. Tempest. [F49] It is clear that the testator had present to his mind the effect of the statute of 9 Geo. 2, c. 36. Mr. Joshua Williams, in his book on Personal Property, says: [F50]


"A bequest to a charity ought to be directed to be paid out of such part of the testator's personal estate as he may lawfully bequeath for such a purpose. For if this precaution should be neglected, the charitable legacies will fail in the proportion which the personal assets savouring of the realty may bear to those which are purely personal."

We have referred to this passage because in our judgment it defines precisely what was the intention of the testator, and what was the precaution which he did not neglect. But we cannot find in this will any expression of an intention to relieve the pure personalty from its obligation to contribute rateably with the rest of the estate to the burden of the administration charges, nor to cast that burden exclusively upon the rest of the estate, and we do not feel ourselves at liberty to imply any such intention. We think, therefore, that the order must be varied by directing that the administration charges be paid rateably out of the whole estate, and the charitable legatees will then take what remains of the pure personalty in part payment of their legacies, and they will have a claim upon the rest of the estate for so much of their legacies as shall remain unpaid; but as they are precluded by the statute from taking any part of the personalty savouring of realty, this claim must abate in the proportion which the personalty savouring of realty bears to the proceeds of the Madeira estate which are not subject to the provisions of the statute.

We think that the charitable legatees must be allowed their costs of the suit out of the estate, and that the Appellants in the first appeal must bear their own costs of that appeal; but the costs of the Respondents to that appeal, and the costs of all parties of the second appeal, must be paid out of the estate, and the deposits will be returned.

We have prepared minutes in accordance with these views, and they shall be handed to the Registrar.

The following is an abstract of the most important parts of the minutes:-


"One order on both Petitions of appeal.

"On both Petitions affirm so much of the order appealed from as declares that the five several legacies of £4000 bequeathed to the respective treasurers for the time being of the Royal Society, c & ., were given for charitable purposes within the intent and meaning of the stat. 9 Geo. 2, c. 36, and as declares that the sum of £806 12s. 6d. Bank Annuities standing in trust in this cause, being the proceeds of the sale of the property at Madeira mentioned in the Chief Clerk's certificate, and £15, being the rent which had been received in respect of the said property since the death of the testator, were not such an interest in land as that a bequest thereof for charitable purposes was within the operation of the said Act.

"Vary the rest of the order, and instead thereof declare that the costs and the funeral and testamentary expenses and debts of the testator are payable rateably out of his pure and impure personal estate, and the proceeds and rents of the Madeira property; and that, subject thereto, the said five legacies of £4000 each, being charity legacies, are payable out of the testator's pure personal estate in preference to his other legacies, and his other legacies out of his impure personal estate, the charity legacies being by law excluded from participation therein. And declare that the charity and other legacies, so far as they are not paid out of the pure and impure personal estate as aforesaid, ought to participate in the proceeds and rents of the Madeira property; but that in such participation the charity legacies, so far as they are unpaid as aforesaid, ought to abate in the proportion which the testator's impure personal estate bears to the proceeds and rents of the Madeira estate."


Law Rep. 6 Eq. 534.


2 S. & S. 67.


1 D. F. & J. 399.


7 H. L. C. 124.


9 Ves. 399; 10 Ves. 522.


5 D. M. & G. 350.


2 De G. & J. 675.


Amb. 651.


6 Ves. 194.


2 D. F. & J. 75.


3 Mer. 17.


1 Bli. (N.S.) 312.


2 S. & S. 594.


5 Beav. 300.


5 Hare, 484; 2 Ph. 594.


Cited 7 H. L. C. 155.


4 Beav. 581.


6 Ibid. 462.


3 Mac. & G. 735.


7 D. M. & G. 470.


1 Keen, 273.


Page 67.


2 K. & J. 635.


7 D. M. & G. 470.


Page 1078, 6th Ed.


7 H. L. C. 689.


1 Mer. 178.


2 Ventr. 358.


Page 1539, 6th Ed.


3 Mac. & G. 735.


2 S. & S. 67.


1 Bli. (N.S.) 312.


11 Hare, 205.


Ibid. 222.


2 S. & S. 594.


Cited 7 H. L. C. 155.


7 H. L. C. 124.


1 D. F. & J. 399.


2 D. F. & J. 75.


3 De G. & Sm. 499, 500.


6 Beav. 462.


3 Mac. & G. 735, 753.


3 Mac. & G. 746.


Ibid. 752.


3 Mac. & G. 735.


2 K. & J. 635.


7 D. M. & G. 470.


3 Mac. & G. 735.


7 D. M. & G. 470.


5th Ed. p. 321.