COUNSEL: Mr. Pearson, Q.C., and Mr. Kekewich, for the trustees.

Sir R. Baggallay, Q.C., and Mr. Charles Hall, and Mr. Southgate,Q.C., and Mr. J. W. Chitty, for next of kin of the testator.

Mr. Fry, Q.C., and Mr. Hornell, for parties interested under the trusts for accumulation.

 

SOLICITORS: Mr. H. H. Walford; Messrs. Cope, Rose, & Pearson;Messrs. Dawes & Son.

 

JUDGE: Lord Selborne, L.C.

 

DATE: 1873 July 3.

 

 

Will – Trust for Accumulation – Thellusson Act (39 & 40 Geo. 3, c. 98) – Bequest of Leasehold – Foreign Domicil – Lex loci rei sit3Ú4.

 

The validity of a testamentary disposition of an English leasehold is governed by the law of England, and not by the law of the testator’s domicil.

 

Where, therefore, a testator domiciled in Ireland by his will gave an English leasehold to trustees upon trusts for sale and investment, and directed the investments to be held upon such trusts as were thereby declared concerning his general personal estate, and the trusts declared of the general [*462] personal estate included trusts for accumulation extending beyond any of the periods allowed by the Thellusson Act (which does not apply to Ireland):–

 

Held, that although the validity of the trusts of the general personal estate was not questioned, still the Thellusson Act applied to the English leasehold and the proceeds of the sale thereof, and that the trust for accumulation of the investments of the proceeds of sale in excess of the periods permitted by that Act was invalid.

 

The meaning of the rule, “Mobilia sequuntur personam,” discussed.

 

THIS was a suit instituted by the trustees of the will, dated the 26th of April, 1845, of the late John Lord Carbery, for the purpose of obtaining the opinion of the Court on certain questions which had arisen in administering the trust. The only one of these questions which it is considered necessary to report arose under the following circumstances:–

 

The testator was a domiciled Irishman, and died on the 12th of May, 1845. At the time of his death he was entitled to Government stocks and funds and other pure personal estate of considerable value, and also to a leasehold house in Belgrave Square. By his will he gave the principal of all his property in the Governments stocks or funds and all other his personal property in any manner secured or invested so as to be productive and bearing interest, whether in England or Ireland or elsewhere, to trustees upon certain trusts, including trusts for accumulation of the income to arise therefrom, extending beyond any of the periods allowed by the Thellusson Act. The testator also by his will gave his leasehold house in Belgrave Square to the same trustees upon trust to sell the same as therein mentioned, and to apply the proceeds in discharge of any incumbrances which at the time of the testator’s death might affect the said house, and after payment thereof to invest the residue of the said moneys in Government or real securities, and hold the same upon such trusts as were thereinbefore declared concerning the principal of the testator’s Government stocks, funds, or other personal estate.

 

The Thellusson Act does not apply to Ireland, and the validity of the trusts for accumulation was not disputed so far as these related to the testator’s Government stocks and funds and other pure personalty; but the question was raised whether these trusts were valid as to the proceeds of the sale of the house in Belgrave Square. [*463]

 

Mr. Pearson, Q.C., and Mr. Kekewich, for the trustees, stated the questions to the Court.

 

Sir R. Baggallay, Q.C., and Mr. Charles Hall, and Mr. Southgate,Q.C., and Mr. J. W. Chitty, for next of kin of the testator:–

 

We submit that the validity of a testamentary disposition of a leasehold estate is governed by the lex loci rei sit3Ú4. A leasehold for years is immoveable property, and the devolution of such property is governed by the lex loci. This is the general principle, and there is no authority to the contrary. The opinion of Mr. Jarman was in accordance with our contention; he says (1): “Leaseholds for years, … though they are with us transmissible as personal estate, are governed by the lex loci, and do not follow the person; so that, if an Englishman domiciled abroad dies possessed of such property, it will devolve according to the English law.” It is true that the editors of that work add the following expression of opinion: “This conclusion, however, has not been acquiesced in by later text writers or annotators. It is said in Jarm. Byth. Conv. (2), that the lex loci must determine what part is real and what part personal; and that then the lex domicilii comes in and determines the distribution of that part of the property which the lex loci has determined to be personal: Deane on the Law of Wills (3), citing Price v. Dewshurst (4); Hayes & Jarm. Conc. Forms of Wills(5). The case of Jerningham v. Herbert (6) is in point on the same side; as also is a dictum of Sir J. Stuart in Pearmain v. Twiss (7). A similar expression of opinion is to be found in Davidson’s Conveyancing (8); but the authorities cited really have nothing to do with the matter. If, then, the trusts for accumulation would be invalid if declared respecting the house, they must be equally invalid if declared respecting the proceeds of sale; a testator cannot escape from an Act of Parliament simply by creating a trust for sale. Thus a devise of land in England upon trust for

 

(1) Jarm. on Wills, 3rd Ed. vol. i. p. 4, n. (k).

 

(2) Vol. xi. 3rd Ed. by Sweet, p. 15.

 

(3) Page 15.

 

(4) 4 My. & Cr. 81.

 

(5) Page 2, 4th Ed.; p. 25, 5th Ed.

 

(6) 4 Russ. 388.

 

(7) 2 Giff. 136.

 

(8) 3rd Ed. vol. iv. p. 264. [*464]

 

sale, coupled with a direction that the proceeds are to be laid out for charitable purposes in Scotland is bad, although the Mortmain Act does not extend to Scotland: Curtis v. Hutton (1).

 

Mr. Fry, Q.C., and Mr. Hornell, for parties interested under the trusts for accumulation:–

 

It must be admitted that there is no express authority on this point. In addition to the cases mentioned in the note by the editors of Jarman on Wills, reference may be made to Wallace v. Attorney-General (2).

 

When it is said, “mobilia sequuntur personam,” the term “mobilia” must be understood as meaning personal property. The English law knows nothing of moveable and immoveable property except as designations of personal and real estate. That this is so clearly appears from the following passage in the judgment delivered by Lord Loughborough in Sill v. Worswick (3), cited with approbation in Story’s Conflict of Laws (4): “It is a clear proposition, not only of the law of England, but of every country in the world, where law has the semblance of science, that personal property has no locality. The meaning of that is, not that personal property has no visible locality, but that it is subject to that law which governs the person of the owner. With respect to the disposition of it, with respect to the transmission of it, either by succession or the act of the party, it follows the law of the person. The owner in any country may dispose of his personal property. If he dies it is not the law of the country in which the property is, but the law of the country of which he was a subject, that will regulate the succession.”

 

All that the lex loci rei sit3Ú4 has to do in a case such as the present is, to determine whether or not the testator’s interest is to be deemed moveable or immoveable. “Not only lands and houses, but servitudes and easements and other charges on lands, as mortgages and rents, and trust estates are deemed to be, in the sense of the law, immoveables, and governed by the lex rei sit3Ú4. But in addition to these, which may be deemed universally to partake of the nature of immoveables, or (as the common law phrase is)

 

(1) 14 Ves. 537.

 

(2) Law Rep. 1 Ch. 1.

 

(3) 1 H. Bl. 665, 690.

 

(4) Sect. 380, 2nd Ed. [*465]

 

to savour of the realty, all other things, though moveable in their nature, which by the local law are deemed immoveables, are, in like manner, governed by the local law. For every nation having authority to prescribe rules for the disposition and arrangement of all the property within its own territory may impress upon it any character which it shall choose; and no other nation can impugn or vary that character. So that the question in all these cases is not so much what are or ought to be deemed ex suä naturä, moveables or not, as what are deemed so by the law of the place where they are situated. If they are there deemed part of the land, or annexed (as the common law would say) to the soil or freehold, they must be so treated in every place in which any controversy shall arise respecting their nature and character. In other words, in order to ascertain what is immoveable or real property, or not, we must resort to the lex loci rei”: Story’s Conflict of Laws (1). Again, Foelix, in his Traité du Droit International Privé (2) lays down the law in the following terms: “La loi de la situation de l’immeuble decide si un objet corporel ou un droit incorporel attaché â un immeuble est lui-même meuble ou immeuble sans egard â la personne du propriétaire ou créancier.” A leasehold interest is “un droit incorporel” within the meaning of this passage.

 

We say, then, that the English law alone can decide as to whether the interest in question is moveable or immoveable; that that law decides it to be moveable; that, consequently, the rule mobilia sequuntur personam applies, and the validity of the disposition must be determined by the law of the testator’s domicil, that is, in this case, by the law of Ireland. The Thellusson Act does not apply to Ireland; and therefore the trusts for accumulation of the proceeds of sale of the leasehold are equally valid with the trusts of the general personal estate.

 

Mr. Armstrong, for other parties.

 

LORD SELBORNE, L.C., after disposing of the other questions, continued:–

 

The only remaining question which has been argued is as to the leasehold estate. Now I confess that is a point upon which

 

(1) Sect. 447, 2nd Ed.

 

(2) Liv. I. Tit. II. pl. 36. [*466]

 

I need no authority. The territory and soil of England, by the law of nature and of nations, which is recognised also as part of the law of England, is governed by all statutes which are in force in England. This leasehold property in Belgrave Squareis part of the territory and soil of England, and the fact that the testator had a chattel interest in it, and not a freehold interest, makes it in no way whatever less so. An Act of Parliament, limiting the period for which accumulations are permitted, has as much force in Belgrave Square, and upon every part of the property in the land of Belgrave Square, as it has in any other part of England: and, for that purpose, it appears to me to be totally immaterial what is the quantity of interest dealt with by the will. All the general doctrines and maxims which are to be found in any of the books of authority really go the same way. The passage which Mr. Fry quoted from Story, in which the words of Lord Loughborough were cited with approbation, is simply a translation into the phraseology of the English law of the maxim of the general law, mobilia sequuntur personam, and is certainly not meant to apply arbitrarily in a new sense, because Lord Loughborough used the word “personal” instead of “moveable.” The doctrine depends upon a principle which is expressed in the Latin words; and that is the only principle of the whole of our law as to domicil when applicable to the succession of what we call personal estate. It is so, not by any special law of England, but by the deference which, for the sake of international comity, the law of England pays to the law of the civilised world generally. Domicil is allowed in this country to have the same influence as in other countries in determining the succession of moveable estate; but the maxim of the law of the civilised world is mobilia sequuntur personam, and is founded on the nature of things. When “mobilia” are in places other than that of the person to whom they belong, their accidental situs is disregarded, and they are held to go with the person. But land, whether held for a chattel interest or held for a freehold interest, is in nature, as a matter of fact, immoveable and not moveable. The doctrine is inapplicable to it; and Story, in that very passage cited by Mr. Fry from placitum 447, manifestly recognises that, where he says that all lands and all houses are necessarily [*467] immoveable; and then he speaks of their universally partaking of the law of immoveable property, or “property savouring of the realty,” – language which must be used with respect to an interest less than fee simple, and less than what we call freehold; because to speak of a thing “partaking” or “savouring” implies that, by the positive law of the country, they also are made to partake and savour in some respects of a law not applicable to all kinds of immoveable property. I think, therefore, that the doctrine, which appears to me to be clearly the true doctrine, is recognised by necessary implication in those passages to which reference has been made; and Story says, with regard to some things, such as fixtures, which may or may not le moveable or immoveable, which are ambiguous in their nature, if they are at all connected with immoveable property, then it belongs to the law of the country in which that property is situated to determine whether they shall be deemed moveable or immoveable. The attempt to infer, that things immoveable in their nature are to be considered moveable constructively, because the beneficial interest is allowed to go like the beneficial interest in and succession to moveables, appears to me to be quite turning away Story’s doctrine from its real substance, which is this, that so strong is the force of the immoveable character where it is found, that it will attract to itself primä facie things which are ambiguous, at least to the extent of obliging other nations to recognise the law of the place where the immoveable property is situate, as entitled to lay down the rule with regard to those ambiguous things connected with it.

 

I hold, therefore, that as to the proceeds of the house in Belgrave Square, they must necessarily follow the law applicable to the house itself, and are in no degree brought under a different law by the direction in the will; and that as to the house and the proceeds of the house the Thellusson Act does apply.