Re Compton, Powell v Compton and Others

 

Re Compton, Powell v Compton and Others

SUCCESSION; Gifts, Wills, Family Provision: TRUSTS

CHANCERY DIVISION

ROMER J

6 NOVEMBER 1945

Perpetuities – Will – Gift for education of children of named families – “Children” to be “the lawful descendants” of three named individuals – Money to be

invested by trustees “under a trust for ever to be called” after testatrix and her mother – Trust void for perpetuity.

By her will the testatrix provided that certain money was to be held by her trustees “and invested in trustee stocks under a trust for ever to be called” after the

testatrix and her mother “for the education of Compton and Powell and Montagu children as scholarships for the time thought best by the trustees,” such

scholarships to be held “at the pleasure of the trustees.” She then added: “Compton children are the lawful descendants of H C Compton Powell children are

the lawful descendants of Weyland Powell and Montagu children the lawful descendants of William Earl of Sandwich. The trustees are always to be one

Compton and one Powell at the least.” The question to be determined was whether the trust was void for perpetuity, or was valid for any and what period. It

was contended (i) that the words in the will, if properly construed, did not indicate an intention to create a perpetual trust; (ii) that, even if the gift were not

confined to persons ascertained at the death of the testatrix, it would not be void for perpetuity because, under the provisions of the trust, the trustees could, at

their discretion, use up and exhaust the corpus of the fund, and, therefore, the principle followed in Re Taylor applied; (iii) that, even if the testatrix had

attempted to set up a perpetual trust, the court could hold that the gift was valid for a reasonable period of time:—

Held – (i) In view of (a) the terms in which the trust was constituted (viz, “under a trust for ever to be called”) and (b) the definition clause at the end of the

disposition, (“Compton children are the lawful descendants” of the three persons named therein) the testatrix intended to set up for an indefinite period a trust

to benefit in a specific way the lawful descendants of the three named persons.

(ii) the principle followed in cases where the corpus of a trust fund could without infringing the terms of the gift, be dealt with in the discretion of the

trustees, did not apply, because the real object of the testatrix was to set up a perpetual investment fund to be retained by the trustees and used by them in a

particular manner; the trustees merely had a discretion as to which persons among the specified class were to have scholarships, and for how long.

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Re Taylor distinguished.

(iii) since there were no words in the will limiting the operation of the trust to a period permitted by law, the will did not contain the essential elements

required to enable the court to hold that the gift was valid for a limited period.

Re Hooper and Pirbright v Salwey distinguished.

(iv) upon the true construction of the will, the trust was void for perpetuity.

Notes

All England Law Reports 1936 - books on screen™

All ER 1946 Volume 1

Preamble

The gift in issue in this case was decided in earlier proceedings (see [1945] 1 All ER 198), to lack the public character necessary to make it a charitable trust.

It is now held to be void as a perpetuity, being for an indefinite period. The possibility that the trustees might have recourse to the corpus is not sufficient to

save it from failure, since the real object of the testator was to set up a permanent fund. It cannot be held valid for a limited period, since no phrase equivalent

to “so far as they legally can do so” (as in Re Hooper, or “so long as the law for the time being permits” (as in Pirbright v Salwey) appears in the will.

As to Gifts Void for Perpetuity, see Halsbury, Hailsham Edn, Vol 34, pp 220–222, paras 275, 276; and for Cases, see Digest, Vol 44, pp 766–768, Nos

6248–6265.

Cases referred to in judgment

Re Taylor, Midland Bank Executor and Trustee Co Ltd v Smith [1940] 2 All ER 637, [1940] Ch 481, 109 LJCh 188, 163 LT 51.

Re Hooper, Parker v Ward [1932] 1 Ch 38, Digest Supp, 101 LJCh 61, 146 LT 208.

Pirbright v Salwey [1896] WN 86, 8 Digest 261, 230.

Adjourned Summons

Adjourned Summons to determine whether a trust set up under the will of the testatrix was void for perpetuity or uncertainty, or was valid for any and what

period. The facts and the relevant provisions of the will are fully set out in the judgment.

N C Armitage for the trustee.

J Neville Gray KC and B G Burnett-Hall for the next of kin.

C E Harman KC and H E Salt for one of the Montagu children.

6 November 1945. The following judgment was delivered.

ROMER J. This summons raises a question under the will of the late Alice Theophila Compton, who died on 14 November 1941. Her will, which is dated 29

May 1906, is obviously a home-drawn document and is ungrammatical and, to some extent, ill-spelt. In the first place, she bequeathed, in effect, what she had

inherited from her mother to the plaintiff, Edward Weyland Martin Powell. Then she dealt with money which was not brought into the family by her mother,

and directed as follows:

‘The money which was not brought into the family by my mother is to be held by my trustees and invested in trustee stocks under a trust for ever to

be called the Mary Catherine Compton and her daughter Alice Theophila Compton Trust for the education of Compton and Powell and Montagu

children but Compton and Powell children are to have the preference as scholarships for the time thought best by the trustees not over the age of 26

years. It is not to be used as a pension or income for anyone and is to be held as scholarships at the pleasure of the trustees. It is to be used to fit the

children to be servants of God serving the nation not as students for research of any kind. No person shall be allowed as a family who is not born in

wedlock and who is not of sound mind and body. compton children are the lawful descendants of H. C. Compton of Manor House Minstead Powell

chidn (sic) are the lawful descendants of Weyland Powell of Foxhan Park Lyndhurst and Montagu children the lawful descendants of William Earl of

Sandwich father of the Earl of Sandwich hereinbefore mentioned. The trustees are always to be one Compton and one Powell at the least and are never

to be less than four.’

The fund, which is the subject of that disposition, is a considerable one, amounting in value to something over £100,000. The summons asks whether the

trust is a valid charitable trust, or is void for perpetuity or uncertainty, or is valid for any and what period. The question as to whether it was a valid charitable

trust came before Cohen J some little time ago. He took the view that it was a valid charitable trust, but the Court of Appeal took a different view and held

that it was not a valid charitable trust. The matter now comes before me to decide whether it is void for perpetuity or uncertainty, or is valid for any and what

period. The Court of Appeal assumed, for the purposes of the discussion and for the purposes of its decision, that this gift was intended to go on for an

indefinite period of time, without expressing any view one way 􀂭 118􀀉 or the other as to whether that was so or not. The first question that I have to decide

is: Who are the objects of the trust? Are they the children of the Compton and Powell and Montagu families who should be living at the time of the testatrix’s

death, or are they persons who, from time to time, for an indefinite period, may be able to say of themselves that they are the lawful descendants of H C

Compton, Weyland Powell or the Earl of Sandwich? If the gift is confined to those persons who were children, in the strict sense, of those three families at the

date of the testatrix’s death, or to a class which is confined to persons who were living at the testatrix’s death, then it is reasonably clear that the gift would be

perfectly valid and would not fail by reason of perpetuity or uncertainty or anything else. If, on the other hand, it was intended that the objects of the gift

should embrace people who might from time to time be able to say of themselves that they were the lawful descendants of these three persons, then—at first

sight—it would seem that the perpetuity rule had been infringed.

It seems to me that the testatrix did have in mind the class of persons who might from time to time be able to describe themselves as the lawful

descendants of these three families because that is what she says in the definition clause:

‘Compton children are the lawful descendants of H.C. Compton of Manor House Minstead Powell chidn (sic) are the lawful descendants of

Weyland Powell [and similarly with regard to the Montagu children].’

I read that as meaning “by ‘Compton children’ I mean the lawful descendants,” and so on. So read, the effect would be that the money is to be invested under

a trust for ever to be called the Mary Catherine Compton and her daughter Alice Theophila Compton Trust, for the education of the Compton and Powell and

Montagu descendants as thereinafter defined. Having regard to the definition clause which she puts in later on, it is not possible, in my opinion, to hold that

she had in mind only those persons who were children of these families at the time of her death. Therefore, I start off on the footing that she had in mind all

those persons who might at any time thereafter be described as the lawful descendants of these three people. It seems to me that that is also very strongly

corroborated by the terms in which the trust is constituted. It is:

‘… to be held by my trustees and invested … under a trust for ever to be called the Mary Catherine Compton and her daughter Alice Theophila

All England Law Reports 1936 - books on screen™

All ER 1946 Volume 1

Preamble

Compton Trust.’

In my view, that means that the trust, the objects of which are set out directly afterwards, is to be continued for an indefinite period of time; and whether you

read it as “to be held by my trustees and invested in trustee stocks under a trust for ever” or “under a trust for ever to be called the Mary Catherine Compton

and her daughter Alice Theophila Compton Trust” one arrives at the same result, that the testatrix is indicating an intention to set up a trust for purposes which

may last for an indefinite period of time. I am mindful of the fact that later on the phrase “the trustees are always to be one Compton and one Powell at the

least” is used. It was suggested that that is a common form phrase in wills and merely means “for as long as the trust subsists,” and does not indicate an

intention to create a perpetual trust. But, even so, it seems reasonably plain that the idea or conception which the testatrix had in mind was to set up, for an

indefinite period, a trust to benefit, in a specific way, the lawful descendants of those three respective persons, those lawful descendants being described, for

the sake of brevity, in the early part of the disposition as “children.”

If the effect of the gift is that the trustees are to hold this fund in that way, it would appear, at first sight, that the rule against perpetuity is

infringed—under certain rules (which are well known, and which are referred to in Jarman on Wills, at pp 278, 279 and 304), dealing with powers and

discretionary trusts which are created for a period which may exceed that allowed by the rule against remoteness. But it is said that, even if the gift is not

confined to persons who were ascertainable at the testatrix’s death—and I have held that it is not—nevertheless, by reason of the provisions under which the

scholarships are set up, the rule against perpetuities is not infringed because the trustees could, if they liked, have distributed, and, indeed, might conceivably

be driven to distribute, the corpus, or use it and exhaust it; and that being so, the rule, which has been observed over and over again, (ie, that, if the donee of a

gift 􀂭 119􀀉 can, without infringing the terms of the gift, spend the money as he chooses, no question of perpetuity can arise), would apply. Re Taylor was

referred to as one of the most recent cases on the subject.

I do not, however, think that the principle of these cases has any application here. It seems to me that the real object of the testatrix was to set up a

perpetual investment fund which was to be retained by the trustees and used, at their discretion, for the purpose of providing scholarships (as distinct from

providing income) for the benefit of the persons who qualified. This idea of the testatrix as expressed by the language she has used, necessarily involves the

notion of an indefinite and possibly perpetual trust, and, although one naturally would give effect, so far as one legitimately can, to the express wishes of a

testator or testatrix, if, in fact, one finds that she has expressed her bounty in terms which run counter to established principles and rules of law, no effect can

be given to them and they must fail. It seems to me that the testatrix, in attempting, as she has done, to set up a perpetual trust for the benefit of persons who

are not charitable objects, has done what she cannot do, and the gift must fail.

Assuming that to be the case, it is then said that there is no reason why the gift should not be held to be perfectly valid for a limited period of time, and a

term of 21 years is suggested as being a reasonable period and one which the law could sanction and which should be approved in the present case. I was

referred to Re Hooper, before Maugham J in which the headnote reads:

‘A testator bequeathed to his executors and trustees money out of the income of which to provide, “so far as they legally can do so and in any

manner that they may in their discretion arrange,” for the care and upkeep of certain graves, a vault, certain monuments, a tablet and a window. On a

summons to determine whether the bequest was valid in whole or in part: Held, that (the rule against perpetuities not applying to the trust for the

upkeep of the tablet and the window) the trust for the upkeep of the graves, the valut and the monuments was valid for 21 years from the testator’s

death.’

Maugham J, founded himself, in arriving at that conclusion, on a previous decision of Stirling J in Pirbright v Salwey. In Pirbright v Salwey the trustees were

directed to employ income for a particular purpose, viz, in keeping up a certain inclosure in a churchyard and decorating the same with flowers “so long as the

law for the time being permits”; and there Stirling J, held that the gift was valid for at least a period of 21 years from the testator’s death. In Re Hooper the

words qualifying the period of time during which the money had to be expended were “so far as they” (ie, the trustees) “legally can do so.” Maugham J held

([1932] 1 Ch 38, at pp 40, 41), that the phrase “so long as the law for the time being permits” was in effect the same as the language in the gift before him, viz,

“so far as they legally can do so”; so he followed Pirbright v Salwey, and held that the trust for the upkeep of the graves, the vault and the monuments was

valid for 21 years from the testator’s death. There is nothing here which, in my opinion, amounts to a direction similar to that which resulted in the decision in

those two cases. There are no words here such as “so long as may be legally necessary,” or to that effect. It is merely a trust which is to go on, not for so long

as the law may permit, but so long as there may be from time to time lawful descendants of H C Compton, Weyland Powell or the Earl of Sandwich. The

essential elements, which enabled the judges in Re Hooper and Pirbright v Salway to arrive at the decisions which they expressed, are absent from the present

case, and there is nothing of their nature to be found which can take their place, and which could provide the ground for coming to the same conclusion.

Therefore, I must arrive at the conclusion that the children whom the testatrix had in mind were not confined to persons living at the date of her death, but

would embrace all persons who, from time to time, could say of themselves that they were the lawful descendants of those three named persons. As I come to

the conclusion that the fund which is to be set aside for the benefit of those persons has to be retained and invested by the trustees for ever, and held under a

particular name, the income being disposed of by the trustees in scholarships in the manner which is indicated, and as I have no language in the will before me

which enables me to limit the operation of the trust to 21 years, or any other definite and legitimate period of time, I have no course open to me but to say, and

I so declare, that the gift is void for perpetuity.

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Declaration accordingly.

Solicitors: Lovell, Son & Pitfield agents for Nantes, Maunsell & Howard, Bridport (for the trustee); Farrer & Co (for the next of kin); Royds, Rawstorne & Co

(for one of the Montagu children).

B Ashkenazi Esq Barrister.

[1946] 1 All ER 121