Re Nottage; Jones v Palmer

[1895] 2 Ch. 649
[1895 N. 368.]

(Judgment by: Kekewich J (24 May 1895), Lindley LJ, Lopes LJ, Rigby LJ)

Re: Nottage
Between: Jones
And: Palmer

Court:
Court of Appeal

Judges:
Kekewich J (24 May 1895)

Lindley LJ

Lopes LJ

Rigby LJ

Subject References:
WILL
GIFT, WHETHER CHARITABLE
Purpose beneficial to the Community
Gift to encourage Sport of Yacht Racing
Perpetuity

Judgment date: 12 July 1895


Judgment by:
Kekewich J (24 May 1895)

Lindley LJ

Lopes LJ

Rigby LJ

A testator bequeathed a fund in trust to provide annually for ever a cup to be given to the most successful yacht of the season, stating that his object in giving the cap was to encourage the sport of yacht-racing:-

Held (affirming the decision of Kekewich J.), that a gift for the encouragement of a mere sport, though it might be beneficial to the public, could not be upheld as charitable.

ADJOURNED SUMMONS.

Charles George Nottage, who died on December 24, 1894, by his will dated October 27, 1894, made the following bequest:


"I bequeath to the Yacht Racing Association of Great Britain, out of such part of my estate as may be legally bequeathed for such a purpose, the sum of 2000 l. , the same to be invested in the names of three trustees to be appointed by the council of the said association, and to be invested in the debenture bonds or debenture stock of any railway in the United States of America paying at the time of investment not less than four per cent. per annum upon the amount invested, but so that not more than one-fourth of the capital shall be invested at the same time in the same security, or in such other securities as the trustees so to be appointed as aforesaid shall deem expedient.

And I direct that the trustees so to be appointed as aforesaid shall out of the annual income of the trust fund purchase annually a cup to be called 'The Nottage Cup,' which is to be given to the most successful yacht of the season of over nineteen rating or what may in future be held to be the equivalent of that rating, and the council of the said association shall decide annually which yacht has in their opinion the best claim to the cup, and in the event of there being any difference of opinion the vote of the majority of the said council is to decide the question, or the said council may if they think fit order the said cup to be specially raced for. My object in giving this cup is to encourage the sport of yacht-racing.

And I declare that in the event of the Yacht Racing Association being dissolved or ceasing to exist, the trustees of the said fund shall pay and make over the same to three trustees to be appointed by the council or committee of the Royal Thames Yacht Club by whom the said fund shall be held upon similar trusts to those hereinbefore declared with regard to the purchase of a cup to be called 'The Nottage Cup'."

An originating summons was taken out by the executors of the will as plaintiffs against the Yacht Racing Association of Great Britain and other persons beneficially interested under the will as defendants, asking for the determination of various questions, and in particular whether the legacy of 2000l. given by the will to the Yacht Racing Association was a valid bequest.

The summons was heard before Kekewich J. on May 24, 1895.

Fawcus, for the plaintiffs.

Warrington, Q.C., and Kenyon Parker, for the Yacht Racing Association. This is a good charitable gift. It comes within the wide definition of charity given in Commissioners for Special Purposes of Income Tax v. Pemsel; [F1] it is for a purpose "beneficial to the community" within the words of Lord Macnaghten in that case, and "useful to mankind" within the words of Sir J. Romilly M.R. in University of London v. Yarrow. [F2] In In re Lord Stratheden and Campbell [F3] Romer J. held that a gift of an annuity to be provided to a volunteer corps on a specified event was a gift for charity. The promotion of yacht-racing is highly beneficial to seafaring men and to the community at large.

[They further contended that if the gift was not charitable, it was valid as being

(a)
a gift to the association absolutely, who alone were interested in the subject-matter; or
(b)
a gift with a trust appended, which trust being void for perpetuity, the gift prevailed.]

Pattullo, for the residuary legatees. The purpose of this gift was not charitable. Yacht-racing is the sport of a privileged few; and if this gift could be upheld as charitable, so might a gift for a prize to the most successful jockey of the year. The case of a volunteer corps is entirely different. Volunteers are within the very words of the preamble of the statute of 43 Eliz. c. 4 (reproduced in the Mortmain Act, 1888 (51 & 52 Vict. c. 42), s. 13, sub-s. 2), which refers to the "settinge out of souldiers." The support of a volunteer corps is a relief to taxation, and there is no analogy between such a corps, which is formed for the public defence, and a purely voluntary association for the purposes of sport. The object of the testator was not to benefit the community, but to perpetuate his own memory. Even if the gift can be treated as made for the benefit of a class, that class, namely, yachtsmen, is not sufficiently large to render the gift charitable; but it is within such cases as Carne v. Long, [F4] where a gift for the benefit of the Penzance Public Library was held not to be charitable, Thomson v. Shakespear [F5] and Re Dutton; [F6] and see In re Dean. [F7] In every case where a gift has been held to be charitable the effect of the gift has been to relieve some one from a legal or moral obligation. There is no legal or moral obligation on any one to provide a prize for a mere sport. [He was not called upon to argue upon the other two points.]

Pattullo, Freeman, and W. A. Peck, appeared for other parties.

Warrington, Q.C., in reply. The preamble of the statute of Elizabeth refers to "the aide or case of any poore inhabitant concerninge paymente of fifteenes, settinge out of souldiers and other taxes." It is therefore the aid of the poor, and not the setting out of soldiers, which is declared to be a charitable object; and Romer J. appears to have decided In re Lord Stratheden and Campbell [F8] solely on the general ground that the object of the gift was beneficial to the community. This gift is for the purpose of encouraging yacht-racing, and not for the benefit of the individual members of the association, and that circumstance takes the case entirely out of such authorities as Carne v. Long, [F9] Thomson v. Shakespear, [F10] and Re Dutton. [F11] The promotion of yacht-racing conduces to the building of ships and the acquisition of a higher degree of skill in navigation - objects which in a country like England must be beneficial to the community.

[KEKEWICH J. referred to Incorporated Society v. Richards.] [F12]

KEKEWICH J. I regret to find myself compelled to say that this gift is not good, and cannot be supported on the ground that it is a charitable gift. [His Lordship read the words of gift above set out, and continued:-]

The terms of the gift over are important in reference to the first question - namely, whether the gift is a perpetuity. The testator has carefully provided for the event of the Yacht Racing Association being dissolved or ceasing to exist, and has substituted for them in that event the Royal Thames Yacht Club; and although there is no further gift over, and the testator has not in words contemplated the possibility of the non-existence of the last-mentioned club, yet I think he has clearly shewn his intention that the fund should be applied in perpetuity upon trust to provide a cup to be continued annually for ever. Those considerations dispose, I think, of the argument which was addressed to me that the gift is a gift out and out, and not in perpetuity, and I can only uphold this gift, if at all, on the ground that it is for a charity.

Upon that question I confess that I have felt considerable doubt, because I think it is clear that the building of yachts, and the employment of persons in sailing them from time to time, is an object of great public advantage, coming within the words used by Lord Macnaghten in the case of Commissioners for Special Purposes of Income Tax v. Pemsel, [F13] as being a purpose "beneficial to the community." Anything which upholds the reputation and promotes the maritime influence of England must be for the benefit of the community. If, therefore, I could see my way to holding that to be an object of this gift, I think I should be right in holding it to be a charitable gift, in the same way as in the case of In re Lord Stratheden and Campbell [F14] Romer J., without apparently hearing much argument on that particular point, held that a gift for the benefit of a volunteer corps was a charitable gift - not, it would seem, because it came within the actual words of the statute of Elizabeth, but because it was for a purpose directly beneficial to the community. In order to uphold this gift as charitable, I think I ought to see that it is by itself, directly and as its necessary and intended result, beneficial to the community. Almost any gift may in some sense be said to be beneficial to the community. The gifts which were held not to be charitable in such cases as Carne v. Long [F15] and Thomson v. Shakespear [F16] were for purposes beneficial to the community, though perhaps only to a small portion of it. A testator may direct that money shall be spent in such a way as will be beneficial to the community indirectly, not in the particular way contemplated by him, but in some other way. Any man who spends his income, whether large or small, benefits the community by putting money in circulation. But in order to find that a gift is charitable, the Court must come to the conclusion that the benefit of the community is the direct, and not the remote, object of the gift.

What, then, is the meaning and object of this gift? It has been argued that all that this testator cared for was the honour and glory of the "Nottage Cup." I do not think it was only that. His own words are: "My object in giving this cup is to encourage the sport of yacht-racing." As I have said, yacht-racing implies the building of yachts and the employment of a large number of persons in constructing, not merely the hulls, but all the fittings and equipments of yachts in the largest sense. The racing of the yachts when built employs a large number of men, who are educated in the management of vessels which may become useful for the defence of the realm. But this testator had not these objects in view when he made this gift. He has told us that his object was to encourage the sport of yacht-racing. I cannot bring myself to hold that the sport of yacht-racing is beneficial to the community in the sense in which that phrase is used by Lord Macnaghten in the case in the House of Lords and by other learned judges. I cannot see that the benefit of the community is the natural direct and necessary result of this gift; and though I am far from saying that the result of the gift is not beneficial, I must hold that it is not beneficial to the community so as to constitute this a charitable gift. The consequence is that the gift fails.

C. C. M. D.

The Yacht Racing Association appealed. The appeal was heard on July 12, 1895.

Warrington, Q.C., and Kenyon Parker, for the appeal. This gift comes within the wide definition of a charity given by Lord Macnaghten in Commissioners for Special Purposes of Income Tax v. Pemsel. [F17] Yacht-racing tends to train sailors and to encourage shipbuilding; it employs a large number of the seafaring population, and makes them handy in the management of vessels; it is therefore highly "beneficial to the community." In In re Lord Stratheden and Campbell [F18] a gift in favour of a volunteer corps failed because it was not to come into effect till after a period exceeding the limit allowed by the rule against perpetuities; but Romer J. gave his opinion that it was a charitable gift. So in In re Stephens [F19] a gift to the National Rifle Association to be expended in teaching shooting at moving objects was held charitable.

[RIGBY L.J. referred to Thomson v. Shakespear.] [F20]

The ratio decidendi there was that it was a gift to establish a museum for the benefit of the owners of a particular house. In Loscombe v. Wintringham [F21] a gift "for the increase and encouragement of good servants" was held charitable; and in Beaumont v. Oliveira [F22] the diffusion of geographical knowledge was held a charitable object. It is difficult to draw the line as to what is sufficiently beneficial to the public to be a charitable object. It may be said that every healthy sport is beneficial to the public; but where its object is the amusement of those who engage in it, and it is only beneficial to the public so far as it promotes their health and bodily well-being, it is, we admit, without the line. Here there is a public benefit - not merely a benefit to those who engage in the sport of yacht-racing.

Pattullo, for the residuary legatees, was not called upon.

LINDLEY L.J. I cannot go the length of holding this to be a charitable gift. There is great difficulty in drawing the line between gifts which are charitable, in the wide sense in which lawyers use the term, and gifts which are not charitable; but this gift is, in my opinion, decidedly beyond the line. It is a prize for a mere game. The testator himself tells us what was in his mind: "My object in giving this cup is to encourage the sport of yacht-racing." Now, I should say that every healthy sport is good for the nation - cricket, football, fencing, yachting, or any other healthy exercise and recreation; but if it had been the idea of lawyers that a gift for the encouragement of such exercises is therefore charitable, we should have heard of it before now. I do not attempt to draw the line. The authorities shew that sometimes a case is a little on one side of it, sometimes a little on the other; but I deal with the present case on the broad ground that I am not aware of any authority pointing to the conclusion that a gift for the encouragement of a mere sport can be supported as charitable.

LOPES L.J. It is most difficult to draw a line separating charitable gifts from gifts not charitable; and the only safe course is to say that a particular class of gifts do not come within the definition of a charitable gift. I am of opinion that a gift, the object of which is the encouragement of a mere sport or game primarily calculated to amuse individuals apart from the community at large, cannot upon the authorities be held to be charitable, though such sport or game is to some extent beneficial to the public. If we were to hold the gift before us to be charitable we should open a very wide door, for it would then be difficult to say that gifts for promoting bicycling, cricket, football, lawn-tennis, or any outdoor game, were not charitable, for they promote the health and bodily well-being of the community.

RIGBY L.J. It is probably impossible to define what is a charitable bequest; and it is certainly not advisable to attempt to do so. We must always go back to the analogy of the statute, which furnishes the only test that can be applied, to see whether a gift is charitable or not. If the present gift is to be supported as charitable, it must be on the ground that it is for a general public purpose. It is however plain from the words of the testator himself that he was not contemplating any such purpose. The Yacht Racing Association is a society of yacht-owners, the prizes are to be won by yacht-owners, and the testator tells us that his object in founding the prize is to encourage the sport of yacht-racing. There are many things which are laudable and useful to society which yet cannot be considered charitable, and this, in my opinion, is one of them.


[1891] A.C. 531 , 583.


23 Beav. 159; affirmed on appeal, 1 De G. & J. 72.


[1894] 3 CH. 265 .


2 D. F. & J. 75.


1 D. F. & J. 399.


4 Ex. D. 54.


41 Ch. D. 552, 556.


[1894] 3 CH. 265 .


2 D. F. & J. 75.


1 D. F. & J. 399.


4 Ex. D. 54.


1 D. & War. 258.


[1891] A.C. 531 , 583.


[1894] 3 CH. 265 .


2 D. F. & J. 75.


1 D. F. & J. 399.


[1891] A.C. 531 , 583.


[1894] 3 CH. 265 .


W. N. (1892) 140.


1 D. F. & J. 399.


13 Beav. 87.


L. R. 4 Ch. 309.