COUNSEL: Gover K.C. and Errington for the plaintiff.

MacSwinney for the trustees.

Gurdon for the administrators of the estates of Counts Nicholas and Antoine.

Clayton K.C. and A. Adams for the testator’s  daughter.

 

SOLICITORS: Capron & Co.; Leader, Plunkett & Leader.

 

JUDGE: Russell J.

 

DATES: 1922 Nov. 15, 16; Dec. 4.

 

 

Conflict of Laws – Land devised on Trust for Sale – Movables or Immovables – Devolution – Lex situs – Lex domicilii.

 

When a person domiciled in a foreign country dies intestate leaving an interest in the proceeds of sale, of English freeholds which are subject to a trust for sale but not yet sold, such an interest is an immovable, and the succession thereto is governed by the lex situs.

 

ORIGINATING SUMMONS.

 

On April 2, 1906, Count Richard Berchtold died, being a person of Hungarian nationality and domicil. He left a will (dated March 2, 1901) in English form dealing with his estate in England. By that will he devised and bequeathed all his freehold estate in Birmingham and all other his real estate and all his personal estate in the United Kingdom (subject to the payment of his testamentary [*193] expenses and debts in the United Kingdom) to his trustees, Frederick William Capron and William Frederick Brabant, of London, upon trust for sale and conversion. In the events which happened the trusts of the proceeds and of the investments for the time being representing the same were as follows: In trust during the life of his wife (who died in 1913) to pay out of the income thereof the yearly sum of 500l. to his wife, and to stand possessed of the residue of the said income in trust for his son Count Nicholas, and, after the decease of his wife to stand possessed of the capital and the income thereof in trust for his said son. The will contained a power to postpone sale and conversion for so long as the trustees should think fit, and a declaration that the rents, profits, and income of such part of his estate as should for the time being remain unsold and unconverted should be paid to the persons to whom the income of the proceeds of such sale and conversion would for the time being be payable under the will if such sale and conversion had been actually made. Power was given to the trustees to let or demise any property remaining unsold; and the testator declared his wish to be that the property at Birmingham should not be sold before the year 1920, but stated that he did not intend by the expression of such wish to create any binding trust or to prevent the free exercise by his trustees of their discretion.

 

Apart from a small sum of money, which may be disregarded, the testator’s  English estate consisted wholly of the freehold estate at Birmingham, which was subject to a mortgage in favour of an insurance company to receive a principal sum of about 43,000l. Count Richard left him surviving his wife, his only son Count Nicholas, and an only daughter Countess Szokolyi, who is a defendant to these proceedings.

 

From the death of Count Richard during the remainder of the life of Count Nicholas, the Birmingham freeholds remained unsold. The balance of the rents remaining after payment of the mortgage interest was remitted from time to time to Hungary. Count Nicholas died on July 9, 1911, [*194] intestate. He was of Hungarian nationality and domicil. He left him surviving his widow the plaintiff and one child only, Count Antoine, who was then an infant aged sixteen, having been born on April 25, 1895. On February 24, 1913, letters of administration to the estate of Count Nicholas were granted by the Principal Probate Registry to the defendant David Maun Linley as attorney for the plaintiff. The estate of Count Nicholas in this country consisted of his beneficial interest in the Birmingham freeholds, and the proceeds of sale thereof, under the will of Count Richard, and a sum of some 760l., being rents from that property. The sum of 760l. was exhausted in payment of estate duty, the balance required for the payment of estate duty being raised by means of a further mortgage of the Birmingham freeholds. On August 1, 1913, the present summons was issued raising a number of questions. On February 19, 1914, Eve J. made an order disposing of many of the questions raised. By that order the trustees of Count Richard’s  will were ordered to retain unsold the Birmingham freeholds during the minority of Count Antoine (who was a defendant to the summons) or until further order, but without prejudice to any question as between the plaintiff and the infant defendant, and, during such period of retention, to pay the whole of the net rents and profits and accumulations to the plaintiff, she there out suitably maintaining the said infant. Question 2 of the summons was ordered to stand over. It was as follows: “Whether the persons or person beneficially entitled to the proceeds of sale of the said real estate (if sold) and to the rents and profits thereof (until sale) are the persons or person who would be entitled according to English law or the persons or person who would be entitled according to the law of Hungary.” In pursuance of that order the surplus income of the Birmingham freeholds was paid to the plaintiff down to the outbreak of war in August, 1914, since when the surplus income had been held up. Count Antoine was killed in action on October 23, 1915, under the age of twenty-one years. He was of Hungarian nationality and domicil. He left a will (dated April 12, 1914) which has been declared by the [*195] Hungarian Courts to be invalid. He accordingly died intestate, leaving his mother, the plaintiff, his sole next of kin. In pursuance of an order dated July 19, 1920, and made in this action, a small portion of the Birmingham freeholds was sold, and the net proceeds were applied in reduction of the mortgage. Except for this sale, no part of the Birmingham freeholds devised upon trust for sale by the will of Count Richard has ever been sold. They are still unsold and remain subject to the mortgage upon which principal moneys amounting to 42,846l. are due. On January 19, 1921, letters of administration to the estate within the United Kingdom of Count Antoine were granted by the Principal Probate Registry to the Public Trustee. The summons of August 1, 1913, was amended, (1.) by entitling it In the Matter of the Estate of Count Antoine and asking for administration of that estate so far as might be necessary, and, (2.) by adding as defendants the Public Trustee and Countess Szokolyi. Question 2 now comes for decision.

 

MacSwinney for the trustees.

 

Gover K.C. and Errington for the plaintiff. The question is whether the interests taken in the Birmingham freeholds by Counts Nicholas and Antoine under the will of the testator were immovable property or movable property according to the laws of England. The devolution of immovables is governed by the lex situs and that of movables by the lex domicilii: Dicey on Conflict of Laws, 3rd ed., rr. 150, 151.

 

It is submitted that when land is devised on trust for sale the proceeds of the sale are regarded as immovable. Immovable property includes all rights over things which cannot be moved, whatever be the nature of such rights or interests: In re Hoyles. (1)

 

When a person of foreign domicil dies intestate leaving English realty which has been converted into personalty the succession thereto is governed by the lex situs: Dicey on Conflict of Laws, 1st ed., p. 520, Note 2; Westlake on Private International Law, 3rd ed., p. 189, r. 158. Where a testator,

 

(1) [1911] 1 Ch. 179, 183. [*196]

 

of Irish domicil, left a leasehold house in England to trustees, upon trust for sale, it was held that the leasehold was an immovable governed by the lex situs, and that the proceeds of its sale followed the law applicable to the leasehold itself: Freke v. Lord Carbery (1); see, too, Duncan v. Lawson. (2) A rent charge on land in England is deemed to be of the nature of the land itself – namely, immovable: Chatfield v. Berchtold. (3) So, too, are Scotch heritable bonds; In re Fitzgerald (4); and mortgage debts secured by land: In re Hoyles. (5)

 

Murray v. Champernowne (6), though not binding on this Court as it was a decision of an Irish Court, is a direct decision in my favour. In that case land was vested in trustees upon trust for sale, the trusts of the proceeds being for such persons as M. should by his will appoint. M. exercised the power in favour of his wife. Thirty-one years later, the lands being still unsold, as in this case, on an application to revoke probate of M.’s  will, it was necessary to decide whether the property subject to the power was movable or immovable property, and the Court held that the property subject to the power was immovable.

 

Under various statutes an interest in the proceeds of land subject to a trust for sale has been held to be “an interest in land,” or “a sum of money payable out of land”: see Briggs v. Chamberlain (7) and Miller v. Collins (8) under the Act for the Abolition of Fines and Recoveries, 1833, s. 77; Brook v. Badley (9) under the Mortmain Act, 1736, s. 3; Bowyer v. Woodman (10) and In re Fox (11) under the Real Property Limitation Act, 1833, s. 42; and In re Thomas (12) under the Dower Act, 1833, s. 9.

 

These illustrations under particular Acts show that, although for purposes of devolution the law may recognize an interest in property such as is in question here as a movable, yet

 

(1) (1873) L. R. 16 Eq. 461.

 

(2) (1889) 41 Ch. D. 394.

 

(3) (1872) L. R. 7 Ch. 192.

 

(4) [1904] 1 Ch. 573.

 

(5) [1911] 1 Ch. 179.

 

(6) [1901] 2 I. R. 232.

 

(7) (1853) 11 Hare, 69.

 

(8) [1896] 1 Ch. 573.

 

(9) (1868) L. R. 3 Ch. 672.

 

(10) (1867) L. R. 3 Eq. 313.

 

(11) [1913] 2 Ch. 75.

 

(12) (1886) 34 Ch. D. 166. [*197]

 

for general purposes it is in the nature of an immovable. In some tax cases the opposite view was taken. But although land notionally converted into money may be subject to tax as personalty it is no ground for saying that for purposes of international law it is not an immovable: see Forbes v. Steven (1); In re Stokes (2); In re Piercy. (3)

 

In these circumstances it is submitted that this is a case where the subject matter is an immovable governed by English law although English law treats that subject matter as personalty.

 

Gurdon for the administrators of the estates of Counts Nicholas and Antoine.

 

Clayton K.C. and A. Adams for the testator’s  daughter. In determining whether property is movable or immovable you do not consider its physical state but what it is in the eyes of the law. In the case of a conflict of laws on the death of an intestate his immovables devolve according to the lex situs, and his movables according to the lex domicilii. The lex situs decides whether the property is movable or immovable. The effect of a trust for conversion is that, equity deeming that to be done which ought to be done, land directed to be sold and turned into money is to be considered as money: Fletcher v. Ashburner. (4) The direction to convert has in the eye of the law made the land money. Money is a movable, and therefore such property devolves according to the law of the intestate’s  domicil: see Westlake’s  Private International Law, 6th ed., § 158, and In re Piercy (3); Hanson’s  Death Duties, 6th ed., pp. 799 and 800; Attorney-General v. Brunning (5); Attorney-General v. Lomas (6); In re Gunn. (7) Where land in England is held upon trust for sale the right of the person entitled to the proceeds is a right to sue the trustee in England and compel him to carry out the trust. That is a right against the trustee and not against the land. Such a right is a movable

 

(1) (1870) L. R. 10 Eq. 178.

 

(2) (1890) 62 L. T. 176.

 

(3) [1895] 1 Ch. 83.

 

(4) (1779) 1 Bro. C. C. 497.

 

(5) (1860) 8 H. L. C. 243.

 

(6) (1873) L. R. 9 Ex. 29.

 

(7) (1884) 9 P. D. 242. [*198

 

 

(Dicey’s  Conflict of Laws, 3rd ed., pp. 75, 76, 77), and is an equitable chose in action: In re Smyth. (1) There is no decision in these Courts to the contrary. Lease holds in their nature are immovables which, according to English law, descend on intestacy according to the Statute of Distribution. In Duncan v. Lawson (2) and Pepin v. Bruyre (3) there was no trust for sale and therefore no right which was a movable. In Freke v. Lord Carbery (4) there was a trust for sale, but no question arose as to whether the next of kin entitled were entitled according to the law of England, or according to the law of the domicil.

 

As regards freeholds on trust for sale the only decision is that in Murray v. Champernowne (5), where the learned judge relied on the opinion of Mr. Dicey, expressed in the first edition of his Conflict of Laws but omitted in subsequent editions. That decision is not binding on this Court and the correctness of it is doubtful: Westlake’s  Private International Law, 6th ed., p. 209. In that case the beneficial interest was disposed of by the will and no question arose as to whether the heir at law or the next of kin took, nor, whether, if the next of kin took, they took according to the law of domicil or according to Irish law. A mortgage on freehold land differs essentially from a share of the proceeds of the sale of land held upon trust for sale. The mortgagee’s  debt is regarded as subordinate to his remedy and can only be enforced by recourse to the land. For some purposes such a mortgage is a movable: Lawson v. Inland Revenue Commissioners (6); for other purposes it is an immovable: In re Hoyles. (7) The cases cited on behalf of the plaintiff under the Dower, Mortmain, Fines and Recoveries, and Real Property Limitation Acts merely show that for certain purposes the proceeds of the sale of land held upon trust for sale are interests in land, and do not touch the question of whether they are movables or immovables. An interest in the proceeds

 

(1) [1898] 1 Ch. 89.

 

(2) 41 Ch. D. 394.

 

(3) [1902] 1 Ch. 24.

 

(4) L. R. 16 Eq. 461.

 

(5) [1901] 2 I. R. 232.

 

(6) [1896] W. N. 145.

 

(7) [1911] 1 Ch. 179. [*199]

 

of land devised on trust for sale is not an interest in land: Du Hourmelin v. Sheldon. (1)

 

In Forbes v. Steven (2) the question was whether duty was payable on the proceeds of sale of land in India which was partnership property. It was necessary to determine not only whether the proceeds were real or personal property but also, as the land was in India, whether the proceeds were an immovable, because then no duty would be payable, whereas if it were a movable it would be subject to the law of domicil and duty would be payable. The language of James V.-C. shows that conversion took place not only for the purpose of distribution but for all purposes, and that, as the interest of the testator in the property was an interest in the proceeds of the conversion, it was properly subject to duty in this country. That is, the interest was held to be a movable subject to English law.

 

In re Stokes (3) in terms decided that an interest in partnership land, or in land agreed to be sold, was a movable: see Hanson’s  Death Duties, 6th ed., p. 113. It is submitted that freehold land subject to an imperative trust for sale is money, and money is a movable which devolves, on the death of the owner, according to the law of his domicil, in this case Hungarian law.

 

Cur. adv. vult.

 

Dec. 4. RUSSELL J. It is conceded that when a conflict of laws arises on the death of an intestate, the devolution of his immovables is governed by the lex situs; the devolution of his movables is governed by the lex domicilii. It is further conceded that whether particular property is a movable or an immovable is decided according to the lex situs.

 

The questions which arise in the present case, arise in regard to (1.) the interest owned by Count Nicholas at his death in respect of the Birmingham freeholds which were subject to a trust for sale, and the other provisions contained in Count Richard’s  will; and (2.) the interest owned by

 

(1) (1837) 1 Beav. 79.

 

(2) L. R. 10 Eq. 178.

 

(3) 62 L. T. 176.

        

 

 

        

 

[1923]

        

          

200

 

 

Count Antoine at his death in respect of the same freeholds. If these respective interests are immovable property according to the lex situs (i.e., the law of England) the law applicable to their devolution will be the law of England, and being, according to English law, personal estate, they will devolve upon the persons entitled by English law to the intestate’s  personal estate. The result of this solution would be that the plaintiff would take one-third on the intestacy of Count Nicholas as his widow, and the remaining two-thirds on the intestacy of Count Antoine as his mother and sole next of kin. On the other hand, if these respective interests are movable property according to the lex situs, the law applicable to their devolution will be the lex domicilii or law of Hungary. The result of this solution would be that, subject to a usufruct in favour of the plaintiff as the widow of Count Nicholas (as to the extent of which usufruct there is a question) the whole devolves upon and belongs to the Countess Szokolyi as the only sister of Count Nicholas, Count Antoine having died intestate and without leaving him surviving any issue, or any brother and sister, or any issue of a deceased brother or sister, or a father, or any brother of his deceased father. It will thus be seen that the primary question for decision can thus be framed. Were the interests taken by Count Nicholas and Count Antoine under or by virtue of the will of Count Richard, so far as regards the Birmingham freeholds thereby devised upon trust for sale, immovable property or movable property according to English law? The distinction between real estate and personal estate under English law has nothing to do with the question. The alternatives and the only alternatives for consideration are immovable property or movable property. It is said that there is no decision of the English Courts directly upon the point. There is a decision on the exact point in the Irish Courts, which though entitled to the highest respect, is not binding on me. I will first consider the matter apart from that decision. Different classes of property have come under the consideration of the Courts of this country and have been held to be immovables. Leaseholds are immovables: [*201] Freke v. Lord Carbery (1), and Duncan v. Lawson. (2) A testatrix’s  share of a rent charge issuing out of lands during the lives of herself and two others and the life of the longest liver was held to be an estate pur autre vie applicable by law as personal estate and chargeable with duty as personal estate under the Legacy Duty Act, 1796; and was held not to be exempt from duty by reason of the foreign domicil of the testatrix because the property was as much land as if land to the annual value of the rent charge had been given, and was accordingly immovable property: Chatfield v. Berchtoldt. (3) Scotch heritable bonds are immovables: In re Fitzgerald. (4) A mortgage debt secured by land is immovable property: In re Hoyles. (5) Numerous authorities were cited for the purpose of showing that an interest in the proceeds of sale of real estate subject to a trust for sale was under different statutes treated as an interest in land. I will refer to a few. Such an interest of a married woman was held to be an interest in land which could pass by a fine, or by a deed having a like effect, under the Act for the Abolition of Fines and Recoveries: Briggs v. Chamberlain. (6) A sum, payable out of personalty and the proceeds of sale of real estate devised by a testator on trust for sale, was held incapable of being bequeathed by a testatrix for charitable purposes, the real estate not having been sold nor the sum raised. The sum was held to be an interest in land within s. 3 of the Mortmain Act, 1736: Brook v. Badley. (7) The share of a married woman in moneys arising from the proceeds of real estate devised upon trust for sale was held to be an interest in land and within the words of s. 42 of the Real Property Limitation Act, 1833: “Any sum of money charged upon or payable out of any land”: Bowyer v. Woodman. (8) The gift to a widow of a life interest in part of the proceeds of sale of real and personal estate devised upon trust for sale was held to be a gift of an interest in land

 

(1) L. R. 16 Eq. 461.

 

(2) 41 Ch. D. 394.

 

(3) L. R. 7 Ch. 192.

 

(4) [1904] 1 Ch. 573.

 

(5) [1911] 1 Ch. 179.

 

(6) 11 Hare, 69.

 

(7) L. R. 3 Ch. 672.

 

(8) L. R. 3 Eq. 313. [*202]

 

within s. 9 of the Dower Act, 1833: In re Thomas. (1) These authorities are only decisions that the property in question in each case fell within the wording of the relevant statute, but they certainly show that an interest in property such as I have to consider in the present case is aptly described as being “an interest in land,” or “a sum of money payable out of land.”

 

Let me now consider what rights existed in Count Nicholas during his lifetime and at his death in regard to the Birmingham freeholds by virtue of the dispositions contained in the will of Count Richard. Subject to his mother’s  500l. a year, he was absolutely entitled to the proceeds of sale if and when the sale took place. No sale in fact took place; the property continued to be land, immovable property. Subject to his mother’s  interest, Count Nicholas was entitled down to his death to the rents and profits of that immovable. It is arguable that under s. 63 of the Settled Land Act, 1882, he, or he and his mother together, would be deemed to be tenant for life of the Birmingham freeholds which would be deemed to be settled land, with the result that the land might have been sold by the tenant for life, or an order might have been made letting the tenant for life into possession: In re Bagot’s  Settlement. (2) Further, subject to the interest of the mother of Count Nicholas, the land was his in equity. As Lord Cairns said in Brook v. Badley (3), the land was in the hands of the trustees not for the benefit of those trustees but for the benefit of those to whom the proceeds of sale of the land were to be paid when the sale took place; the interest was an interest in land, and it would be right to say in equity that the land did not belong to the trustees but to those to whom the proceeds of sale were to be paid. Equally applicable to Count Nicholas is the language used by Cotton L.J. in Ashworth v. Munn (4), when, referring to Brook v. Badley (3), he says: “Although what the testator could get is money only, and although he leaves an interest which he can only get in the shape of money, still it is an

 

(1) 34 Ch. D. 166.

 

(2) [1894] 1 Ch. 177.

 

(3) L. R. 3 Ch. 672.

 

(4) (1880) 15 Ch. D. 363, 374. [*203]

 

interest in land, if at the time of his death what he devises is in the shape, not of money realized, but of money which is to be produced by the sale of land, he having an interest or charge upon the land till that money is realized, and in a state to be paid to him as money.” As to Count Antoine, his position was the same as regards so much of the benefit taken by Count Nicholas under Count Richard’s  will as passed to Count Antoine upon the intestacy of Count Nicholas, except that at the time of Count Antoine’s  death, the 500l. a year had ceased to be payable owing to the previous death of Count Nicholas’ mother, and except as to the possible position under the Settled Land Act, 1882. The rights and interests of Count Nicholas and Count Antoine, under or by virtue of the will of Count Richard in relation to the Birmingham freeholds and the proceeds of sale thereof being such as I have described, are those rights and interests more properly to be classified as immovable property, or as movable property? In my opinion, they should be classified as immovable property equally with the freehold land out of which the money is eventually to be paid. That is the conclusion to which I have come independently of the Irish decision to which I will now refer.

 

In Murray v. Champernowne (1) the facts were as follows: Real estate in Ireland was vested in trustees upon trust for sale. The trusts of the proceeds of sale (in the events which happened) were for such persons as Alexander Murray, a domiciled Scotsman, should by deed or will appoint. He died in 1865, having by a will made in 1862 given the residue of his property to his wife, Eugenia Grace Murray, for life, and appointed her his residuary legatee. It was held that the effect of this will was to vest in Eugenia Grace Murray absolutely all the property over which Alexander Murray had the before-mentioned power of appointment. Alexander Murray died in 1865. Probate of this will in common form was in 1866 granted by the Principal Probate Registry in Dublin to the executor therein named. It subsequently transpired that this will, though duly executed in accordance

 

(1) [1901] 2 I. R. 232, 236, 237. [*204]

 

with the Wills Act, was invalid according to the law of Scotland. Eugenia Grace Murray died in 1897, having by her will (which had been proved in England and resealed in Ireland) given the residue of her property real and personal to one Philip Murray whom she appointed her executor. The action was brought to obtain revocation of the probate granted in 1866. The real estate in Ireland, which was subject to the trust for sale under the settlement, was in fact still unsold. The probate was revoked, but the question arose whether, since the will was duly executed in accordance with the Wills Act, there should not be a decree for a limited grant; in other words, whether the will, being valid according to the law of Ireland (where the lands were situate), was not operative as an execution of Alexander Murray’s  general power of appointment over the proceeds of sale of the land. For this purpose it was necessary to determine whether the property subject to the power was immovable property or movable property. It was argued that the lands were equitably converted into money and that the property subject to the power was therefore movable property which the will was invalid to pass. In a considered judgment Andrews J. held that the property subject to the power was immovable, and gave Philip Murray liberty to apply for a grant to him of letters of administration with the will annexed, limited to such estate and interest in the lands, or the proceeds of sale thereof, as Alexander Murray had power to appoint, in so far as he did, by the paper writing purporting to be his last will, appoint the same, and in so far as the same, so appointed, passed under the will of Eugenia Grace Murray. The material portion of the judgment is at pp. 236 and 237 of the report. [His Lordship then read the passage: “It is settled law .... movable or immovable.”] The learned judge then proceeds to give another ground upon which the same result would be reached; but the primary ground for his decision is his conclusion that the property subject to the power must be treated as immovable property. That decision seems to me to cover the exact point and is in my opinion right. The note in the first edition of Dicey’s  [*205] Conflict of Laws (published in 1896) to which Andrews J. refers runs as follows: “A question may be raised whether, when a person domiciled in a foreign country, e.g. France, dies intestate leaving English realty which has been converted into personalty (see pp. 312, 313 ante) the succession thereto is governed by the lex domicilii or the lex situs? Semble, it is governed by the lex situs.” That note does not appear in the second edition or in the third edition; but curiously enough the second edition (published in 1908) contains no reference to Murray v. Champernowne (1), while the third edition (published in 1922) refers to the case more than once and without any adverse comment. In all three editions, however, is to be found the statement cited by the Master of the Rolls in In re Hoyles (2): “Immovable property includes all rights over things which cannot be moved, whatever be the nature of such rights or interests.” So far as another great English authority is concerned (I refer to the late Professor Westlake) the position is this. In his third edition (published in 1890) at p. 189, in § 158, he appears to contemplate that moneys produced by sale of immovables might, in their situs, be considered to represent the immovables and be subject to the same rights. In his fourth edition (published in 1905) at p. 203, and his fifth edition (published in 1912) at p. 221, the wording of § 158 is altered, and runs thus: “Money substituted for an immovable by the lex situs is subject to the same rights as the immovable, but, when an immovable is sold under a disposition made by the owner or in consequence of a dealing with it by the owner, the rights to which it was subject as an immovable do not affect its proceeds unless kept alive against them by the will of parties or by the lex situs.” Neither the fourth nor fifth editions refers to the case of Murray v. Champernowne. (1) In the sixth edition, however (published in 1922), Mr. Bentwich (at p. 209) refers to that case and throws doubt on the correctness of the decision. In my opinion this doubt is not well founded.

 

On behalf of the Countess Szokolyi it was argued that

 

(1) [1901] 2 I. R. 232.

 

(2) [1911] 1 Ch. 179, 183. [*206]

 

according to English law land directed to be sold and turned into money must be considered to be money; and that on the principle that equity considers done what should be done, the Birmingham freeholds are, in the eye of the law, money. This argument, to be effective, must add the words “for all purposes.” That the Birmingham freeholds are to be treated as money for some purposes, no one doubts. Thus the interest of the taker is personal estate. But this equitable doctrine of conversion only arises and comes into play where the question for consideration arises as between real estate and personal estate. It has no relation to the question whether property is movable or immovable. The doctrine of conversion is that real estate is treated as personal estate, or personal estate is treated as real estate; not that immovables are turned into movables, or movables into immovables. As Farwell L.J. pointed out in In re Hoyles (1) the fact that a mortgage is regarded as personal estate for certain purposes in questions between our fellow subjects here has no bearing on the question whether such a mortgage should be regarded as a movable or not in questions of international law.

 

Various authorities were cited in support of Countess Szokolyi’s  claim which I will now refer to. Forbes v. Steven (2) was a decision of Sir William James. The question for decision was whether legacy duty was payable under the will of a domiciled Englishman on his share of the proceeds of partnership real estate in Bombay which was sold after his death. The testator died in 1849. The real estate in question was not sold until 1864, and in 1867 the share of the testator in the proceeds of sale was transferred to the account of his executors. The Inland Revenue claimed that legacy duty was payable on this share as arising from property impressed by the partnership contract with the character of personal estate and devolving in that character on the testator’s  legatees. The Vice-Chancellor decided in favour of the claim on the ground that the produce of a partnership asset was personal estate, that the residuary legatees only took it because it was personal estate, and that they must take it

 

(1) [1911] 1 Ch. 179, 187.

 

(2) L. R. 10 Eq. 178. [*207]

 

subject to the legacy duty imposed on residuary legatees. That case had nothing to do with the question whether the interest in the Bombay real estate (which in equity was personal property) was movable property or immovable property. In re Stokes (1) was cited as a case in which North J. had in effect held that an interest in partnership land or in land agreed to be sold was movable property. The testator, Robert Stokes, was a domiciled Englishman, who was in partnership with his brother, John Stokes, in the business of sheep breeding. The testator was entitled to four-sevenths of the partnership property. Part of the partnership property consisted of a freehold estate in New Zealand called the Milbourne Estate. There was a question whether this was converted under an agreement between the partners, or whether it was converted by being part of the capital of the business. North J. held that, upon either view, the estate was subject to a trust for conversion. The testator by his will had disposed of all those, his four equal seventh shares and all other, if any, the estate and interest which he might at the time of his death possess or have power to dispose of in the Milbourne Estate upon certain trusts. North J. held that what was disposed of by the words of the will was his interest under his agreement with his brother by virtue of which he was entitled to receive: “not four-sevenths of the estate, or four-sevenths of the proceeds, but a share amounting to four-sevenths of the surplus after making all the deductions that were necessary in respect of expenses and also bringing into hotchpot any advances that either of the brothers had received and which ought to be set against his share.” The learned judge then describes that interest as personal estate, as a credit to which the testator was entitled in respect of the estate. In these circumstances North J. held that legacy duty was payable in respect of that interest. He followed Forbes v. Steven (2), the liability to legacy duty depending not on whether the interest was a movable or immovable but on whether or not it was personal estate. He nowhere decides that the interest was movable property. Du Hourmelin v.

 

(1) 62 L. T. 176, 178.

 

(2) L. R. 10 Eq. 178. [*208]

 

Sheldon (1) was also relied upon, as showing that an interest in the proceeds of sale of land devised upon trust for sale was not an interest in land. The question arose because some of the persons entitled to contingent reversionary interests in the proceeds of sale were aliens; it was alleged by the purchaser on a sale under order of the Court that such interests could not be held against the Crown, and that consequently the Crown had a title over which the vendors had no power. The Master reported that a good title could be made, to which report exceptions were taken. Lord Langdale overruled the exceptions, pointing out that there was no vested interest in any alien, and holding that the species of interest in land which the will gave to aliens did not entitle the Crown to take the benefit of the proceeds of sale given to such aliens. The case does not really assist me upon the question whether such interest is movable property or immovable property. So, too, with the case of In re Lyne’s  Settlement Trusts (2), which was merely a decision that an interest in the proceeds of sale of land held on trust for sale, but not yet sold, was personal estate within the meaning of Lord Kingsdown’s  Act. Peterson J. (construing the words “personal estate” in the latter Act by reference to the definitions of “real estate” and “personal estate” in the Wills Act) held it was an interest in real estate. The Court of Appeal held it was personal estate within the meaning of Lord Kingsdown’s  Act. Here again the question for decision did not raise the point whether being personal estate it was or was not a movable or an immovable. In re Gunn (3) decided that a will exercising a general power of appointment over the proceeds of sale of real estate settled upon trust for sale but still unsold was a will disposing of personal estate and entitled to probate. I get no assistance either from that case or the cases of In re Smyth (4), and In re Piercy (5), upon the question whether the property under discussion here is a

 

(1) 1 Beav. 79.

 

(2) [1919] 1 Ch. 80.

 

(3) 9 P. D. 242.

 

(4) [1898] 1 Ch. 89.

 

(5) [1895] 1 Ch. 83. [*209]

 

movable or an immovable. I can find no real ground in the various authorities which were cited on behalf of Countess Szokolyi for altering the view which I have already expressed, that the beneficial interest in relation to the Birmingham freeholds and the proceeds of sale thereof owned by Count Nicholas and Count Antoine at their respective deaths was immovable property according to English law.

 

I answer the second question in the summons by declaring that the persons or person beneficially entitled to the proceeds of sale of the Birmingham freeholds and to the rents and profits thereof until sale are the persons or person who would be entitled thereto according to the law of England.

 

The costs of all parties to the summons, incurred since the date of the order of Eve J. of February 19, 1914, must be taxed as between solicitor and client, and raised and paid by the trustees out of the Birmingham freeholds.