United Kingdom House of Lords Decisions

Lord Chancellor ( haldane)—I cannot say that I entertain much doubt about this case. The appellants are the persons who, in the events which have happened, are entitled to the residuary estate of a certain Colonel Walford. The respondent is a legatee under Colonel Walford's will. The question in controversy is whether the legacy which was given to the legatee carries interest as from a year after the death of the testator, or whether the right to interest upon it is postponed until the falling in of a reversionary fund out of which payment of the legacy was directed.

The facts of the case are shortly these—Mrs Walford the mother of the testator died in 1900. At her death she had a testamentary power of appointment, exercisable in favour of her children by her husband Mr Walford under a marriage settlement. That settlement comprised certain property of the value of some £22,000, in which she had a first life interest under the settlement, and her husband had a subsequent life interest. By her will, which was made in 1891, she referred to the settlement, and then, in the exercise of her power of appointment, gave and appointed her estate under the settlement to her son Colonel Walford, the testator, absolutely, on the decease of her husband. Colonel Walford thus took a reversionary interest in the corpus of the ꀃ22,000. She then gave and bequeathed all her residue belonging to her for her separate use to her husband for life, with remainder as he should by deed or will appoint, and subject thereunto between her children Colonel Walford and his sister, the legatee, the respondent in this case.

Colonel Walford survived his mother and died in 1903. He was survived by his father, the tenant for life of the settled fund. The father did not die till 1910. Colonel Walford by his will, which was made abroad, gave to his sister the respondent “the sum of £10,000 sterling as her sole and absolute property, to be paid”—and these are the words on which the question of construction is raised—“out of the estate and effects inherited by me from my mother in terms of her last will and testament dated the 20th February 1901.… And as regards the residue of the estate and effects of my said mother so to be inherited by me in terms of her aforesaid will, and of all my estate and effects at present in my possession,” these he gave to whosoever should be the heir or heirs succeeding to the estate of his father under his father's will; and he appointed his father executor.

The question is shortly this —£10,000 under Colonel Walford's will are bequeathed to his sister the respondent, to be paid out of the estate and effects inherited by him from his mother. Then he gives the residue of what is so inherited from his mother under her will, and all his own residue to, in the events which have happened, the persons who are the appellants in this case. The question is whether there is in this will such a direction as debars the respondent from claiming interest, now that the fund has fallen in on the death of the father, as payable to her as from a year after the death of the testator.

The principles which govern cases of this kind are fairly well settled. Legacies are of three kinds—there is the specific legacy, which is a specific res secured under the testator's will on his death; and of course it does not abate if the rest of the assets are insufficient for the payment of the general legacies; but it has this disadvantage, that if the particular res which is the subject of the specific legacy disappears in the meantime, then the legatee gets nothing. The class of legacy at the other extreme is a general legacy which comes out of the residue, and abates if the residue is insufficient, but, prima facie, under a rule of administration of the Court, carries interest as from a year after the testator's death. There is an intermediate class of legacy—namely, a demonstrative legacy, which is simply a general legacy, with the quality attached to it that it is directed to be paid out of a specific fund, and if there is a shortage of assets, and that fund remains, is paid out of that fund without abating. On the other hand, if the fund does disappear, then it has this advantage over a specific legacy, that it is still payable, in virtue of its quality as a general legacy, out of the testator's residue along with other general legacies. The consequence is that if the trust fund disappeared in this case Miss Walford's legacy would have become payable out of such residue as her brother left behind him along with other legacies which he might have given. Now it seems to me that in order to make out that the legacy of £10,000 to Miss Walford, which her brother's will directed to be paid out of the reversionary fund, is to be postponed, so far as the title to interest is concerned, until the reversionary fund falls in, you have to make out that there is, expressly or by implication, a direction that the legacy is not to be payable, that there is to be no right to payment, until a certain time, and therefore that the right to interest is postponed.

The principle of law is laid down by Lord Cairns in a passage in his judgment in Lord v. Lord ( L.R. 2 Ch. 782) which is quoted by Cozens-Hardy, M.R., in his judgment in this case. Lord Cairns says —“The rule of law is clear and there can be no controversy with regard to it, that a legacy payable at a future day carries interest only from the time fixed for its payment. On the other hand, where no time for payment is fixed, the legacy is payable at and therefore bears interest from the end of a year after the testator's death, even though it be made payable out of a particular fund which is not got in until after a longer interval.” The question therefore is, whether, upon the words in controversy in this case, the legacy is not directed to be paid until a future date. The burden appears to me to be upon those who assert that it is so to make it out, because otherwise the general rule applies, as pointed out in Lord v. Lord, that the right to the payment of the money arises at once, although it is directed to be paid out of a particular fund which will not fall in until afterwards.

It may be that in this case, if the testator had had his attention called to the point, he would have expressed himself differently, and would have said, “I do not intend my sister to have the reversionary legacy, or to claim interest upon it, until the falling in of the reversionary fund.” That may be so, but in my opinion courts of justice are precluded from entering into such speculations. They are confined, and rightly confined, to applying common sense to the words which the testator used in his will read as a whole. If within that you can spell out an intention such as I have referred to, well and good. If not, you must not supply it by any conjectures as to what the testator would probably have said if his attention had been called to the point on which it was desirable that he should say something.

Then there is another general observation which I wish to make. In cases of this kind—cases of wills of personal estate—it is in nearly all cases useless to try to compare the will under consideration with some other will upon which there has been a decision. The will in each case must be read as a whole, and unless the words are substantially identical very little light can be got from a decision on some other will, except so far as that decision lays down some such general principle of construction of wide application as was laid down in Lord v. Lord. Therefore I do not pause to make observations on the case of Earle v. Bellingham (No. 2) (1857, 24 Beav. 448) which was decided one way, nor on the case of Wood v. Penoyre ( 13 Ves. 325) which was decided another way, nor on the Irish case of In re Gyles (1907, 1 Ir.R. 65), because those cases were decided on wills the wording of which was very different from the wording here. What I do look at is the language which the testator has used; and the question which I put to myself is, Is there to be found here a direction that the legacy is not to be paid till the fund falls in, which displaces what would be the ordinary principle of administration? I am unable to find such a direction; and therefore I come to the conclusion that the view taken by Joyce, J., was wrong, and the view taken by the Court of Appeal was right. I agree with the judgments delivered by Cozens-Hardy, M.R., and Farwell, L. J., and I move your Lordships that this appeal be dismissed with costs.

The Earl of Halsbury and Lord Ashbourne concurred.

Lord Macnaghten—I agree with the learned counsel for the appellants that the question in this case is not to be solved by simply styling this bequest a demonstrative legacy. I think, having regard to the circumstances of the case, the relationship of the parties, and the language of the mother's will, which is pointedly referred to in the testator's will, and also to the testator's own language, that it is more probable than not that the testator intended that his sister should have no claim for payment until the death of the father. At the same time I must say that if that was his intention he has not made it sufficiently plain to authorise your Lordships to give effect to it in this appeal.

Lord Atkinson—I concur. I think that there is not to be found in the will any sufficiently clear expression of an intention that the payment of the legacy should be postponed until the reversionary fund had come into possession.

Judgment appealed from affirmed, and appeal dismissed with costs.