1897 In re GAME. GAME v. YOUNG. STIRLINGJ. not have governed the question of conversion. It was said that, although the word was not used there were the words 'messuages,' lands,' and by the Wills Act 'lands' was sufficient to pass leaseholds in the absence of freeholds; and that the words 'rents and profits' were tantamount to a sufficient designation of leasehold property. This is a fallacy, for the testator had freeholds, and it was unnecessary to resort to the word 'lands.' If the question was whether leaseholds passed, clearly they did; but that is not the point, and such an argument cannot prevail," and he held that the use of the words "rents and profits" did not indicate any intention to exclude the general rule. On the other hand, there are at least three cases before Lord Romilly in which a different view has been expressed. The first is Crowe v. Crisford. (1) There a testator gave his freehold, copyhold, and leasehold estates, and all his stocks, shares, and personal estate to trustees in trust to receive the rents, issues, and profits, and thereout to keep the houses and buildings in tenantable repair and renew his leaseholds, and then to pay the net income arising from the residuary real and personal estate to his wife for life, and it was held that the wife was entitled to enjoy the leaseholds in specie. The Master of the Rolls there says: "This is not a case for conversion. A current of authorities has established the rule that where 'rents' are referred to, the person taking a life estate is entitled to the enjoyment of the property in specie; and besides, the provision as to paying fines for renewal and keeping in repair, with respect to the leaseholds, shews, that they were not to be converted." As far as decision goes, that case is not in point, because the Master of the Rolls did not rely exclusively on the word "rents"; but still he says this: "A current of authority has established the rule that where 'rents' are referred to, the person taking a life estate is entitled to the enjoyment of the property in specie." That current of authorities was not cited in the argument, and the learned judge did not himself mention the cases to which he referred. The learned reporter, however, in a note to this passage referred to Goodenough v. (1) 17 Beav. 507, 509. 1897 In re GAME. GAME v. YOUNG. Tremamondo. (1) That was a case in which the word "rents " STIRLING J. was used, but there were no freeholds, and the Master of the Rolls (Lord Langdale) held that it would be striking the word out of the gift if he did not infer an intention that the property should be enjoyed in specie. I have not to deal with that case, but I may observe that in Pickup v. Atkinson (2) Wigram V.-C. did not adopt the same view, and held that the use of the word "rents "did not afford a sufficient indication of such intention, even though the testator had no freeholds to which the word could apply. The next case is Wearing v. Wearing. (3) There the Master of the Rolls gives no reasons for his decision. He merely says this: "Morgan v. Morgan (4) ” (which was cited in the argument) "was a different case. In that case there was a bequest of the personal estate, separate and distinct from the devise of the real estate, in which the word 'rents' was used." I may mention that this case was referred to by Kindersley V.-C. in Craig v. Wheeler (5), and evidently was not approved by him. Lastly, in Vachell v. Roberts (6), the Master of the Rolls says: "The word 'rents' being used, I think that I must follow the authorities cited. Where there is both freehold and personal estate the expression 'rents' would refer to and include leaseholds as well as freeholds. I will make a declaration that the trustees are not bound to convert." The authorities cited in that case in favour of the view of the Master of the Rolls were Goodenough v. Tremamondo (1), Crowe v. Crisford (7), and Alcock v. Sloper. (8) In Goodenough v. Tremamondo (1), as I have already stated, there were no freeholds. In the two last cases there were other circumstances besides the use of the word "rents," pointing to an intention not to convert. These cases make it difficult to say what is the true state of the law, and I must use my own judgment upon the question. I agree with Kindersley V.-C. that where a testator has both freeholds and leaseholds, the mere use of the word "rents" is not an indication of intention that the (1) (1840) 2 Beav. 512. (3) 23 Beav. 99. (5) 29 L. J. (Ch.) 374. (6) 32 Beav. 140, 142. (7) 17 Beav. 507. (8) (1833) 2 My. & K. 699. STIRLING J. property is to be enjoyed in specie, inasmuch as the use of that word can be satisfied by applying it to the freeholds. 1897 In re GAME. GAME v. YOUNG. The second indication which has been relied on to exclude the general rule is the power of distress conferred on the annuitants. It was obviously the intention of the testator that the annuitants should have a power of distress on land. But what land? The direction may refer to the freeholds. There is no necessary implication that the distress should be on the leaseholds. In my opinion neither of these circumstances, nor both taken together, can afford a sufficient indication of intention that the property shall be enjoyed in specie. Therefore the rule in Howe v. Earl of Dartmouth (1) must be applied, and there must be a declaration that the testator's leasehold premises ought to have been sold and the proceeds invested in Consols at the expiration of a year from the testator's death. Solicitors: Peters & Bolton; Marshal & Co., Hammersmith; Hartcup, Davis & Cobbold, for W. T. Hartcup, Norwich. H. B. H. STIRLING J. 1897 April 8. In re SAUNDERS. [1896 S. 3699.] Appointment-Succession Duty-Stock "sufficient to raise” a net sum. A tenant for life under a marriage settlement, in exercise of a power of appointment in favour of the children of the marriage, appointed so much of the stock held under the settlement as should be sufficient to raise the net sum of 20007. : Held, that the appointee took subject to succession duty. ADJOURNED SUMMONS. By a settlement dated January 15, 1855, made on the marriage of Hugh Ward Saunders with Ellen Anne Bannerman, certain funds were in the events which happened settled upon trust for the wife for life, and after her decease upon the children of the marriage as she should by deed or will appoint. (1) 7 Ves. 137 a. 1897 In pursuance of the power of appointment conferred by this STIRLING J. settlement, Mrs. Saunders, by several deeds-poll respectively dated in 1894, appointed to her son, Edward George Saunders, portions of the settled funds sufficient to raise three sums of 2000l., 3000l., and 40007. All the appointments were made in the same form. By the deed relating to the 2000l., she appointed "that so much of the stock, funds, shares and securities now held by the present trustees of the said indenture of settlement upon and subject to the trusts thereof as shall be sufficient to raise the net sum of 20007. shall, subject to the life interest therein of the said Ellen Anne Saunders, henceforth belong and be vested in the said Edward George Saunders and be held in trust for him the said Edward George Saunders, his executors, administrators and assigns." Mrs. Saunders also made appointments in similar terms in favour of other children of the marriage, and ultimately by a deed-poll, dated February 14, 1895, she appointed the whole of the unappointed funds to her son Hugh Ettrick Saunders. Hugh Ettrick Saunders subsequently assigned his interest in these funds, and was adjudicated a bankrupt. This was an originating summons taken out by Edward George Saunders against the trustees of the settlement, the trustee in bankruptcy of Hugh Ettrick Saunders, and the assignees of his interest, to determine whether the plaintiff was entitled to receive the sums appointed to him free from succession duty. C. S. Medd, for the plaintiff. "Net" is equivalent to “clear," and it is well settled that a gift of a clear sum means clear of duty: Hanson's Death Duties, 4th ed. p. 464; Peareth v. Marriott (1); In re Currie (2); Haynes v. Haynes (3); Wilks v. Groom. (4) Those cases are decisions on legacy duty; but there is no difference for the present purpose between legacy duty and succession duty. In re SAUNDERS. SAUNDERS v. GORE. In re STIRLING J. In re Higgins (1) is distinguishable. There a father cove1897 nanted to pay to the trustees of his daughter's marriage settlement a sum free from all deductions, and it was held that SAUNDERS. that did not include succession duty, for which as predecessor he was in no way liable; but there is a distinction between a covenant to pay and an appointment of a portion of a fund which is itself liable to pay duty. [He also referred to In re Gray (2); In re Shaw (3); and Ex parte Sitwell. (4)] SAUNDERS V. GORE. Godefroi, for other parties in the same interest. W. A. Peck, for the trustees of the settlement. A. F. Peterson, for the assignees of H. E. Saunders' interest. The cases do not apply to the language of this appointment. This is not an appointment of a net sum, but of a sum of stock sufficient to raise a net sum, or the word "net" is confined to the expenses of raising that sum. This case falls within Sanders v. Kiddell (5) and Pridie v. Field. (6) In both those cases the gift was of a fund sufficient to produce a clear annual sum which was settled on several persons in succession, and no doubt the circumstance that different rates of duty would be payable by the several annuitants was relied on as shewing that the fund was not intended to be exempted from legacy duty; but the Court also relied upon the distinction between a gift of a fund sufficient to produce a clear annuity and a direct gift of a clear annuity. Medd, in reply. That distinction is said to be untenable in Jarman on Wills, 5th ed. vol. i. p. 151, n. [STIRLING J. It is recognised in Banks v. Braithwaite. (7)] STIRLING J. The question which I have to consider in this case is whether, under certain appointments, made in pursuance of a power, the appointees are entitled to take the appointments duty free; or, in other words, whether the amount of duty which would be payable in respect of the appointed funds has been given to them by the appointor as well as the sums themselves. (1) (1885) 31 Ch. D. 142. (4) (1888) 21 Q. B. D. 466. (7) (1862) 32 L. J. (Ch.) 35. |