United Kingdom House of Lords Decisions

The Court of Exchequer (consisting of Lord Jeffrey and Lord Cuninghame) were of opinion that inventory duty was demandable; and judgment was therefore entered for the Queen.

The grounds of this judgment were fully stated by Lord Jeffrey, who held that the instrument of the 26th January, 1825, was of a two-fold nature; operating partly as a present conveyance, and partly as a last will and testament. His Lordship's reasoning, though abridged, is here set out in substance, because it will be found that the Lord Chancellor criticises it very specially in recommending the final judgment of the House, which, without Lord Jeffrey's argument, would be less easily intelligible.

Lord Jeffrey's argument was as follows:—

I am inclined to hold, that, by the terms of this extraordinary instrument, each of the parties (and Grace Brown, of course, as one of them) was finally divested of all the articles of property that had previously belonged to her. The words of Conveyance are very precise and special; and as they expressly make over to her sisters, inter alia, all her body clothes, jewels, and trinkets, I am of opinion, that, after the execution of that deed, she had no longer any separate property in her own slippers or under petticoats—and could not give a cast gown to her waiting woman, without a vote of the whole sisterhood: and I think, further, though this is less absolutely declared, that she was under an obligation to throw into this common fund all that might afterwards come to her, by succession or otherwise—and was tied up, by the special clause of warrandice, from defeating this ample and somewhat lavish conveyance, by any separate, gratuitous, or testamentary deed. But though thus effectually stripped of all her original property, I take it to be equally clear that she was, by the same deed, simultaneously vested with other property, of an equivalent or superior value; and took at least as much as she gave by this mutual conveyance. She finally made over, no doubt, four-fifths of all her peculiar property to her four sisters; but she got from each of them, in return, one-fifth of all they severally had at the time, or might ever afterwards acquire; with an equal right to the use, management, disposal, and enjoyment of the fund thus created by their mutual contributions. That this common fund was thereafter to be held by the whole five as joint, but unlimited proprietors, and not in any sense or degree in trust,

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or for life-rent or alimentary purposes, I take to be manifest from the whole tenor of the deed, and every separate provision it contains.

I hold it to be perfectly clear, that, while they all survived, these five ladies were the joint but full proprietors of all that had previously belonged severally to each; and consequently, that each of them was vested in one equal fifth share of the fund created by this collation of their several properties; the whole effect of the mutual conveyance, in so far as it was operative, and implied a contract or agreement inter vivos, being to commute or convert the right they severally had before, to certain articles of individual property, into a right to an equal fifth share of the joint stock or fund now created—and to restrain them by the clause of warrandice from dissolving this union, or dilapidating the common fund, by separate gratuitous acts of alienation.

But while such was the condition of the parties as to acts of this description, it is very material to observe, that the share of the common fund thus belonging to each was all along attachable by their several creditors, either during the life of the individual debtor or after her death. The deed recognises this liability without even limiting the obligation to the actual value of the succession.

Such, then, being the nature of the deed, and such the rights of the parties under it, when considered as an agreement and regulation of these rights inter vivos, it remains to be determined what was the true character and legal effect of the mortis causa destination which it also contains. This ultimate destination is essentially, and in its own nature, distinct from any arrangement of the joint rights of parties while all of them were alive.

The argument is, that because everything belonging to each of the sisters was onerously conveyed to the whole, by the deed of 1825, the whole were entitled, as a body, to retain it against any claim of the individual creditors of each and all of these sisters. But this seems too palpably extravagant to require a serious refutation. The only truly onerous part of the agreement of 1825 was the exchange or substitution of the exclusive right which each previously had to the separate articles of her property, for a fifth share of the mass formed by their union. The day before they entered into that agreement the whole of that mass belonged to the whole sisters; each, however, having then only an exclusive right to certain articles of it. But the day after the agreement, the whole mass still belonged, as before, to the whole sisters; only that the former right of each to particular articles was now converted into a right to one-fifth of the whole united fund. None of them, therefore, was divested of any property by this arrangement. A change was merely made in the specific form or description of that property. But their new shares of it were as fully vested in each of them, as the whole had ever been; and were consequently, it

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would seem, as open to attachment by their creditors. It would be strange indeed, if by a mere mutual conveyance to each other, parties could thus withdraw the property they all continued to hold and enjoy from the claims of their lawful creditors.

The pretence of onerosity, too, in so far at least as relates to the rights inter vivos, appears to me little less extravagant. The exchange of an exclusive right to certain articles of property, thrown into a common fund, for a general right to a certain share of that fund, might, in one sense, be said to be onerous; but, in truth and reality, it was a mere exchange. The contract itself might, perhaps, be onerous and irrevocable; but the subject taken under it became as much the exclusive property of the party taking it as that was formerly which had been surrendered in exchange.

The great objection which was pressed upon us was, that the deed under which the defendants claim and have taken the succession, was onerous, and was not revocable; and it may be right to say a few words as to each of these allegations separately.

As to onerosity, it is plain, as no separate consideration is alleged to have been given for the bequest, that there was none, except what may be supposed to have arisen from the mortis causa destination having been mutual—or made in common by and to all the parties to the deed. Now, is it possible to say, that this constitutes any proper onerosity, or obligation to pay, or to do something in return for a valuable consideration actually received? or is it anything else in effect, but a mere cross-fire of gratuitous legacies or bequests, with substitutions?—which are always given from some motive or inducement—and may be given on the inducement arising from the knowledge that a similar bequest has been made by the intended legatee without losing their proper character of bequests? And indeed, if this be not the true view of the law, the objection would obviously be equally available against all Mutual Testaments, which, especially among near relations, are by no means unusual. But I have never heard that the surviving parties ever hesitated in such cases to act and confirm as executors, and consequently to pay inventory duty, since that impost has been exigible; and I understand the practice in this respect to have been invariable. Yet all such testaments are obviously just as onerous as this can be pretended to be. In substance and reality this is a mutual or joint testament, and nothing else. It makes over only the free succession of the several parties from and after the period of their respective deaths, and it anxiously describes what is so made over as “all that may belong or be owing to us at the time of our decease,” a form of expression peculiarly appropriate to testamentary instruments, as was well remarked by Lord Fullerton in the case of Trotter, ^* in 1847. So completely, indeed, does this

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* Advocate-General v. Trotter, 10 Second or New Series, 56.

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mutual destination to survivors coincide with the nature and substance of a testament, that it would plainly have been no way inconsistent with its actual tenor, but, on the contrary, a very suitable and proper following out of its undoubted object, if it had contained an express nomination of the said survivor or survivors, as executors and sole residuary legatees of those predeceasing; or had in terms bequeathed a number of special legacies to other parties, payable either at the death of the last survivor, or even by instalments on that of each of the several testators. But if there would have been no incongruity in the introduction of these or similar appointments while their insertion would have fixed its character beyond all question, can it be seriously doubted that its true and substantial description was from the beginning that of a testamentary instrument?

The objection chiefly relied on, however, though substantially based on this allegation of onerosity, was, that the deed was irrevocable—and so, it was said, inconsistent with the nature of a testament; to which it was assumed to be essential, that it should be revocable up to the moment of death. Now there are various good answers, as it seems to me, to this allegation. In the first place, it is, like the last, equally applicable to the case of proper mutual testaments, with nomination of executors and bequests of legacies in strict technical terms. These, too, when once executed and delivered into neutral custody, for mutual behoof, I take to be legally irrevocable; and they are so, beyond all doubt, after the death of any of the parties. But it has never been doubted, that they must, notwithstanding, be dealt with in all respects as testaments. In the next place, is it true, either in law or in fact, that the deed now in question is really irrevocable? It may not be revocable by any one of the conjunct testators; but it is certainly revocable by the whole; and the whole is, in such a case, the only true or legal testator; and so the joint testament is truly revocable, exactly as any other testament is, by the will and act of the proper testator—the only party who did or could make it, in the form in which it was made. That testator was, no doubt, in these cases, a plural or composite person; but a person entitled to make such an instrument—and afterwards to unmake it, exactly as any other maker might do. Lord Fullerton, I observe, takes the same view of the law in the case of Trotter. He there says, “Mutual testaments may not be revocable by one of the parties; but most unquestionably they might be recalled if both parties agree; so that they are, in truth, revocable.”

By the law of Scotland, testaments may be made both onerous and irrevocable, without losing, in any respect, their proper character of testaments; or entitling those who take benefit by them to exemption from any of the consequent liabilities. Lord Stair's

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authority on this matter is precise and positive ^(a). And, finally, the statutes are so far from requiring a proper or regular testament, with nomination of executors, &c., to warrant the exaction of the duties they impose, that they have, as it were, studiously enlarged and varied the expression, and declared they should be exigible upon all succession, either under testaments or “ testamentary dispositions” of any kind. These are the expressions of the schedule. But the words in the body of the act are still more general and comprehensive—being “any Testament or other writing relating to the disposal of such personal estate and effects, or any part thereof, which the person exhibiting such inventory shall have in his custody or power” ^(b).

Against this judgment Agnes and Mary Brown sued out a Writ of Error to her Majesty in Parliament.

Mr. Bethell and Mr. Anderson, for the Plaintiffs in Error: The instrument of 26th January, 1825, is a deed of gift de præsenti founded upon contract for onerous consideration. It is not testamentary. It is not revocable. The sisters might bind their interests. There is given to each a right of present enjoyment with a future contingent limitation. The reasoning of the Court below is hard to understand. The case of the Attorney-General v. Jones ^(c) cited on the other side is erroneous. [ Lord Chancellor: That case is quite wrong ^(d).] This instrument has no such double aspect as has been attributed to it in the Court below. It is a conveyance de præsenti, and gives estates for life till the last survivor who takes an estate of inheritance. Such arrangements are binding in Scotland. Thomson v. Thin ^(e), Grant v. Grant ^(f), Braidwood v. Braid-wood ^(g), Curdy v. Boyd ^(h), Advocate-General v. Trotter ⁽ⁱ⁾.