COUNSEL: Rigby, Q.C., and Brodie Innes, for the Petitioners.

Sir H. Davey, Q.C. (Renshaw, Q.C., and Younger, with him), for the Respondent.

 

SOLICITORS: Faithfull & Owen, agents for Morton, Smart, & Macdonald, W.S., Edinburgh; Neish & Howell, agents for Davidson & Syme, W.S., Edinburgh.

 

JUDGE: Kay, J.

 

DATES: 1889 March 30; April 6.

 

 

Domicil – Intestacy – Lex Loci – Leaseholds – Bequests invalid by English Law – Devolution of English Leaseholds belonging to domiciled Scotchman.

 

Leaseholds in England, belonging to a domiciled Scotchman, devolve, in case of his intestacy, upon the persons entitled according to the English Statute of Distributions.

 

PETITION for the opinion of the Court upon a special case remitted by the Court of Session in Scotland, pursuant to the Law Ascertainment Act (22 & 23 Vict. c. 63), as to questions arising in an action of declarator, &c., in that Court, in which the Petitioners, Alexander Duncan, David Sim White, and John Blairwere Pursuers, and the Respondent, William Lawson, was Defender.

 

David Gavin Hewit, a domiciled Scotchman, who died on the 1st of August, 1887, left a trust disposition and settlement dated the 21st of May, 1887, whereby he gave all his real and personal property to the Petitioners and Respondent upon trust to pay certain annuities and pecuniary legacies, including legacies to charitable institutions which he named, and as to the residue of his estate directed his trustees, in the event (which happened) of the failure of his child or children and their issue before the period therein mentioned, to pay certain pecuniary legacies to his wife and three nephews, and to divide and apportion the balance in such shares as they (his trustees) might consider best among certain specified charitable institutions. The testator empowered his trustees to sell and convert into money the whole of his estate or any part thereof, and appointed them his executors.

 

The testator's residuary estate included freehold and leasehold property, situate in England.

 

By the case remitted the opinion of the Court was requested as to the validity of the charitable bequests so far as payable out of the testator's English freehold and leasehold property, and, amongst other questions submitted, the Court was requested to advise, assuming that the charitable bequests, so far as payable out of such property, were null and void, who would be entitled to take the sums which would have gone to satisfy those bequests. [*395]

 

It was not disputed that the charitable bequests were void by English law, and the only question argued was whether the persons beneficially entitled to such of the sums last referred to as represented leasehold property of the testator were to be ascertained according to the law of England, or according to the law of Scotland.

 

Rigby, Q.C., and Brodie Innes, for the Petitioners, submitted the case to the Court.

 

Sir H. Davey, Q.C. (Renshaw, Q.C., and Younger, with him), for the Respondent: –

 

The law of Scotland must be regarded in order to ascertain the persons beneficially entitled to the leaseholds. As they are immobilia the rule mobilia sequuntur personam does not apply; and they pass by the lex loci rei sit3Ú4, the law of England, to the executor as heir in mobilibus. But then the question arises how the executor is to deal with the beneficial interest. By the law of England he is to deal with that interest as with the other personal estate of the deceased, that is, according to the law of his domicil. The cases are quite consistent with that view. Freke v. Lord Carbery (1) merely decided that the rule mobilia sequuntur personam does not apply to leaseholds. And in the case of In the Goods of Gentili (2) the husband of a deceased Italian woman who possessed leaseholds in Ireland was held entitled by the lex loci to general administration, although by the law of Italy he was beneficially entitled to a limited interest only.

 

[He referred also to Dicey on Domicil(3); Jarman on Wills(4), and Du Hourmelin v. Sheldon (5).]

 

Rigby, in reply: -

 

The law of England, the lex loci rei sit3Ú4, and that law alone, must determine the devolution of these leaseholds. The executor is not heir in mobilibus; his title is not complete until probate. He is no more heir in mobilibus than is an administrator, who may be a mere creditor of the deceased. The law of England is not

 

(1) Law Rep. 16 Eq. 461.

 

(2) I. R. 9 Eq. 541.

 

(3) Page 191.

 

(4) 4th Ed. vol. i. p. 4, note.

 

(5) 4 My. & Cr. 525. [*396]

 

that leaseholds follow the devolution of the other personal estate of the deceased owner, but that they are personal estate, and that they go, in case of intestacy, to the persons entitled under the Statute of Distributions, that statute being in effect, as was said by Lord Cairns in Cooper v. Cooper (1) a will made by the Legislature for an intestate. The law of England is not that personal estate follows the person, but only that moveables do so. The cases of Freke v. Lord Carbery (2) and In the Goods of Gentili (3), are express authorities that the lex loci determines the devolution of all immobilia alike – of leaseholds as fully as of real estate.

 

1889. April 6. KAY, J. : –

 

The opinion of the Court is required by the Court of Session in Scotland, which has approved and remitted to this Court a case under the Act 22 & 23 Vict. c. 63. Upon several of the matters submitted no doubt can be entertained. One question of considerable interest has been argued.

 

The question arises under a Scotch will – more properly a trust disposition and settlement – of David Gavin Hewit. He was a domiciled Scotchman, and possessed freehold and leasehold estate in England. He gave all his real and personal property to trustees, with power to convert, and directed them to pay certain pecuniary legacies to charities in England and Scotland. And he disposed of the ultimate residue of his trust estate, on failure of his issue, among certain specified charities.

 

The validity of these gifts, so far as they are payable out of the proceeds of English freehold or leasehold property, must depend on the lex loci rei sit3Ú4, which in England renders charitable gifts by will of real or leasehold property void. The contest arises upon the question who are to take the English property which would have gone to satisfy these bequests. The pecuniary legacies in an English will so framed would, so far as they failed, fall into and increase the residue. The gifts of residue, so far as they failed, would be undisposed of and devolve as upon an intestacy. This, as all the residue is divided among charities, would not alter the quantity of property undisposed of.

 

(1) Law Rep. 7 H. L. 53, 66.

 

(2) Law Rep 6 Eq. 461.

 

(3) I. R. 9 Eq. 541. [*397]

 

There is no doubt as to the devolution of the English freeholds so far as undisposed of by the will. These, or the proceeds of any converted under the will, would descend as real estate, and would belong to the testator's heir-at-law at the time of his death, assuming that the testator had acquired them as a purchaser and not by inheritance: see 3 & 4 Will. 4, c. 106.

 

The question which has been argued is whether the next of kin of the testator according to English or Scotch law are entitled to the undisposed of leaseholds or the proceeds thereof. Mobilia sequuntur personam; and the law of the domicil undoubtedly regulates succession to moveable property; but the reason for this is that moveables have no locality in law. It is argued that the leaseholds undisposed of, although immobilia,belong to the executor, who would be bound to deal with the beneficial interest in them as with other undisposed of personal estate, treating them as personal property by the lex loci, and therefore dealing with the beneficial interest in mobilia and these immobilia in the same way; and that accordingly the beneficial interest must devolve according to the law of the domicil. But the lex loci governs the devolution of immobilia in case of intestacy, just as it does of freehold property. There is no possibility of doubt that, if the Scotch heir and the English heir were different persons, the English heir and not the Scotch heir would take the undisposed of freeholds in England. The executor is merely the hand to effect the distribution of personal estate. As to the persons entitled under the distribution to succeed to the undisposed of leaseholds, the lex loci must govern, or it would practically have no effect at all. The matter is more clear if you take the case of an absolute intestacy, where no executor has been appointed. As to English leaseholds, the Probate Court in England would in that case be called on to appoint an administrator. No doubt such administrator would be chosen from the next of kin according to English law, and it would be his duty, subject to the satisfaction of the testator's debts, probate duty, and the like, to distribute the leaseholds among the persons entitled. At this stage of the proceeding the lex loci must determine, independently of the testator's domicil, to whom such distribution must be made. [*398] Such authority as there is upon the subject is in favour of this view. In Freke v. Lord Carbery (1), where an Irish testator bequeathed, amongst other property, a leasehold house in Londonupon trust to accumulate the rents, Lord Selborne held that the Thellusson Act applied, although it is not operative in Ireland. In answer to the argument that, according to the lex loci, leaseholds in London are personal estate, and therefore come within the rule mobilia sequuntur personam, Lord Selborne said: "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."

 

In In the Goods of Gentili (2), a married woman domiciled in Italy died there possessed of leaseholds in Ireland. Her husband, who survived her, was only entitled by Italian law to a limited interest in these leaseholds, but by the law of Ireland, the lex loci,he was entitled absolutely. It was held that the grant of administration should be unqualified. In the very lucid and able judgment in that case, Freke v. Lord Carbery is referred to as a distinct authority "that the succession to chattels real depended on the lex loci," which the learned Judge(3) states to be his own opinion also(4).

 

His Lordship then answered in detail the several questions propounded for the opinion of the Court, and expressed the opinion that the persons entitled to take the sums which would have gone to satisfy the charitable bequests, so far as they were payable out of English freehold and leasehold estates, if such bequests had not been invalid, were, as to the leasehold property or the proceeds thereof, the persons entitled to the testator's personal estate according to the English Statute of Distributions.

 

(1) Law Rep. 16 Eq. 461, 466.

 

(2) I. R. 9 Eq. 541.

 

(3) Warren, J,

 

(4) See also De Fogassieras v. Duport, 11 L. R. Ir. 123.