The Lord Chancellor desires me to say that he agrees with this judgment that I am about to read.
My Lords, the question raised on this appeal is one which in various forms has for over two hundred years been the subject of vexed controversy. It may be stated by asking to what extent is it possible to give effect to testamentary intentions that are at variance with the provisions first of the Statute of Frauds and later of the Wills Act. That some deviation from the strict letter of these statutes has been permitted and has now become settled law is not disputed.
If a testator in his will makes a gift to a named legatee who at the time of making the will has promised he will hold the benefit of the gift for certain defined and lawful purposes, the Court will enforce against the legatee the trust in promised obedience to which he received the gift. (McCormick v. Grogan, 4 E. and I. Appeals 82.)
This, however, does not directly govern the present case as the following facts will show. The Testator at the time of his death had a son of 16 years, the child of a woman, also living, who was not his wife. He was ill for many weeks before he died and was much concerned as to how he should make provision for this woman and her child without disclosing all the circumstances in his will.
He expressed this view to the Respondents Barnett and Wettern, who were his personal friends, and they agreed to act as trustees. What took place between them is best described in the words of Mr. Barnett, who said : He was urgently desirous of effecting at once, or as soon as possible, what he had talked about to me for '' the preceding two years or so. He mentioned the two beneficiaries, the mother and the son, and the sum of Â£12,000, and he also mentioned that it was his desire, if we would accept service, for my friend Wettern and myself, Mark Oliver, and Harrison, to act as Trustees in a secret trust which he had proposed to effect, the legal side of which would be carried out by Mr. Percy Cowley of the Isle of Man. I agreed to act as a trustee.
The testator, therefore, caused the Respondent, W. P. Cowley, who had for some time acted as his solicitor, to be summoned. He arrived on the 13th February and saw the Testator alone, who gave him instructions to the above effect.
These instructions he incorporated in a fourth codicil to the will. At his instance a Mr. Oliver was added to the trustees, and the codicil was then signed. It is in the following terms:-
THIS IS A CODICIL to the last Will of me, JOHN DUNCAN BLACKWELL. I GIVE AND BEQUEATH to my friends, Mark Oliver, Arthur Ernest Harrison, Fred Wettern, Edward Watson Barnett, and William Percy Cowley the sum of Twelve thousand pounds free of all duties UPON TRUST to invest the same as they in their uncontrolled discretion shall think fit and to apply the income and interest arising therefrom yearly and every year for the purposes indicated by me to them with full power at any time to pay over the capital sum of Eight thousand pounds to such person or persons indicated by me as they think fit, and to pay the balance of Four thousand pounds to my trustees as part of my residuary estate, and upon the same trusts as are declared in my Will and previous codicils.
Mr. Cowley then made a memorandum of the terms of the trust which has been accepted by Eve J. and the Court of Appeal as accurate. It is as follows :—
Re Mr. J. D. BLACKWELL.—MEMORANDUM of Verbal Instructions given to me at execution of Codicil 13/2/25. INCOME of Â£12,000 to be paid to Mrs. Edith Burrows, 4, Wilbury Crescent, Hove, Sussex, or applied at discretion of Trustees for benefit of herself and her son, Dennis Burrows. At any time Trustees may pay over Â£8,000 of capital either to her or Dennis Burrows or both of them. In such event Â£4,000 is to go back to Testator's Trustees on same trusts as his residuary estate.- W. PERCY COWLEY.
The Testator died on the 3rd June, 1925, and his will and four codicils were duly proved. The named trustees in the fourth codicil are ready and willing to carry out the trust evidenced by the memorandum, but the testator's widow and her son object that the trusts fail and contend that the trustees hold the Â£12,000 as part of the residue. It is first argued that Mr. Cowley's memory is faulty so that his recollection cannot be accepted as to the actual terms of the trust, and further that if the terms in the memorandum are the true record, they are too vague to be enforced.
It is, in my opinion, unnecessary to add anything on these points to the judgment of Eve J. and the Court of Appeal. There can be no reasonable doubt about the accuracy of the memorandum, and none about its efficacy if it can be admitted in evidence.
The real difficulty lies in considering whether the fact that in the will itself it is made plain that the gift is fiduciary destroys the principle upon which verbal evidence has been admitted to show the nature of a gift purporting to be absolute and beneficial.
The argument in favour of the appellants on this point cannot be put more forcibly than in Lewin on Trusts, 10th Ed., p. 65, and its strength lies in this—that while in a beneficial gift! the imposition of a trust does not contradict the terms of the will but merely adds to them, where the gift is made on trust and no beneficiaries are specified the trust operates either for the residuary legatees or the next of kin and heir at law, so that the admission of verbal evidence showing the trusts contradicts the will. It must be observed, however, that this reasoning in strictness applies to a case where land is devised to trustees on trust and nothing more is said so that on the will there is a complete trust for the heir at law, but that is not the case here where the intention to benefit persons outside the will is manifest, and further a will is in fact contradicted when a gift complete made to a beneficiary without the hint of a trust is converted into a fiduciary gift for the benefit of some one never mentioned in the will. It is also urged that the underlying principle admitting extraneous evidence is that the legatee cannot profit by his own fraud, a principle that does not apply where, on the face of the will, his interest is fiduciary.
This principle is easily understood and may be also stated by saying that he cannot defraud beneficiaries for whom he has consented to act by keeping the money for himself. Apart, however, from the personal benefit accruing to the trustee, the real beneficiaries are equally defrauded in both cases, and the faith on which the testator relied is equally betrayed. Further, if the trustee was the heir or one of the next of kin or a residuary legatee, thefraud would be just the same. The Counsel for the appellants seemed at one time to argue that in such a case and to such an extent as to defeat the beneficial interest of the trustee the outside evidence might be admitted, but it is difficult to Bee on what principle of reasoning the evidence can be admitted in the one case and rejected in the other, when in both cases the, fact of the trust appears in the will itself. Again, in the case where no trusts are mentioned the legatee might defeat the whole purpose by renouncing the legacy and the breach of trust would not in that case ensure to his own benefit, but I entertain no doubt that the Court, having once admitted the evidence of the trust, would interfere to prevent its defeat. If this be so the personal benefit of the legatee cannot be the sole determining factor in considering the admissibility of the evidence.
It is, I think, more accurate to say that a testator having been induced to make a gift on trust in his will in reliance on the clear promise by the trustee that such trust will be executed in favour of certain named persons, the trustee is not at liberty to suppress the evidence of the trust and thus destroy the whole object of its creation, in fraud of the beneficiaries.
I now turn to the authorities to ascertain how far this question has been the subject of decision. These authorities are of ancient lineage and the first striking fact is that in no single instance has any case been quoted that in terms supports- the appellants' view, but there are numerous cases—some of long standing—against their contention.
The strongest statement in their favour is to be found in McCormick v. Grogan, 4 E. and 1. Ap. p. 83, where Lord Hatherley said:—
But this doctrine evidently requires to be carefully restricted within proper limits. It is in itself a doctrine which involves a wide departure from the policy which induced the Legislature to pass the Statute of Frauds, and it is only in clear cases of fraud that this doctrine has been applied—cases in which the Court has been persuaded that there has been a fraudulent inducement held out on the part of the apparent beneficiary in order to lead the testator to confide to him the duty which he so undertook to perform.
In that case, however, the present point was not argued and as pointed out by Hall, V.-C., in the later case of re Fleetwood 15 C. D. the earlier authorities were not cited.In the first case of Crook v. Brooking (2 Vernon, p. 98), decided by Lord Chancellor Jeffreys in 1688, the testator devised Â£1,500 to two people, Simon and Joseph, to be disposed of by them on a secret trust that he had revealed to Simon. Simon, who knew the trusts, after the death of the testator revealed them to Joseph, the trusts being that, if the testator's daughter died in the lifetime of her husband, the Â£1,500 should go to the children of another daughter as the first daughter should direct. The first daughter did die in her husband's lifetime and the children of the second daughter claimed as beneficiaries under the verbal trust. This is a perfectly clear case of a trust being revealed upon the face of the will, the terms of which were communicated to one of the executors. It was held that the trust was well and sufficiently declared, although the actual method of distribution among the beneficiaries was uncertain. The Lords Commissioners approved this decision, as is found in the Report page 107.
In Pring v. Pring (2 Vernon, p. 50) in the following year a man gave properties to his executors, directed that they should be sold in trust and the testator's wife brought a bill declaring that the trustwas in her favour. It was decided that, as the will had declared that the executors are only in trust and not declaring for whom, the person may be averred and the wife's claim was accordingly admitted.
These cases were followed in Smith v. Attersoll (1 Russ, p. 266) where again the gift was to executors in trust for purposes explained outside the will, and to the same effect was Podmore v. Gunning (7 Simon, 644), though in that case the outside trust was not proved. These cases are before the Wills Act, but the principle applicable is the same, as wills were, by the Statute of Frauds, obliged to be in writing though if of personalty an attested signature was not required. After the Wills Act the cases proceed in the same channel.
In the case of Johnson v. Ball (5 D.J. and S., p. 85), a testator determined to settle upon his mistress and illegitimate children a policy of insurance for Â£2,000, and by his will of the 21st February, 1844, he gave to two named trustees a policy to hold the same upon the uses appointed by letter " signed by them and myself " and he signed a declaration of the trusts by a subsequent document dated 4th August, 1845. The Vice-chancellor held that the trusts could not be carried out but the reasons for his judgment are most instructive. The learned judge points out that the letter referred to in the will had no existence at the time when the will was made and that, supposing it referred to a letter afterwards signed, it is impossible to give effect to it as a declaration of the trusts since it would admit the document as part of the will and it was unattested. The learned Vice-Chancellor adds:-
Cases in which there is no trust appearing on the will and where the Court establishes a trust on the confession of the legatee have no application to the present nor, as it appears to me, have those cases cited in argument in which " the will refers to a trust created by the testator by communication with the legatee antecedently to or contempo raucously with the will.
It is clear, therefore, that this authority does not affect the present case and it points to a case where the actual trusts were left over after the date of the will to be subsequently determined by the testator. It does not even cover the case where the trusts being already determined, they were subsequently communicated.
I omit the detailed examination of other cases for they are all carefully considered and dealt with by Hall, V-C., in the case of In re Fleetwood (15 Chancery Division; 594), an authority which indisputably covers the present case if it be accurately decided. In that case the testatrix left to a named person all her personality, to be applied as I have requested him to do. The request was made out and the named trustee jotted down in the presence of the testatrix the names of the persons and the amounts which the testatrix desired to give and, after this, the codicil was executed. The point raised was the same as in the present case, viz., that when the trusteeship appears upon the instrument the trust must be for the next-of-kin or residuary legatees and that the Wills Act prevented effect being given to a trust to be effected by parol evidence. The learned Vice-Chancellor went through all the cases, including The case of McCormick v. Grogan, and decided that the trusts should be executed. That decision has never been definitely disapproved in any decided case for the statements in Le Page v. Gardom 84 L.J. Ch. p. 749 and In re Gardner 1920, 2 Ch. are mere dicta in cases where the point raised here was not material, and, in my opinion, it was in fact followed in In re Huxtable in. 1902, 2 Chancery, p. 793. In that case a testatrix bequeathed a sum of Â£4,000 for the charitable purposes agreed upon between us." The .testatrix had, in fact, verbally communicated to the legatee her intention to leave him the sum of Â£4,000, the income of which he was to apply during his life for the relief of sick and necessitous persons being members of the Church of England and that he was to dispose of the principal as his own property. Mr. Justice Far we 11 admitted the evidence, including that which conferred upon the trustee power of disposing of the principal after his death. The Court of Appeal held that the evidence was admissible as to the trusts of the Â£4,000 which upon the face of the will, was wholly given for charitable purposes but was not admissible for the purpose of providing for the Â£4,000 after the death of the trustee, since the will had given the whole Â£4,000 and such evidence would contradict the will. All the learned Lords Justices agreed that the affidavit of the trustee was admissible for the purpose of showing what were the charitable purposes but for no further purpose. There is nothing in the judgments that shows that this decision was affected by the fact that the gift was a charitable gift, nor on principle can I see that such distinction could be maintained for, if a general charitable purpose only were disclosed by the will, a scheme might be prepared for carrying it into effect and unless evidence were admitted the testatrix's specific instructions could have been disregarded; but they were not, they were distinctly carried out.
I agree with the Court of Appeal in thinking that this also is an authority in support of the doctrine laid down in In re Fleetwood. In these circumstances, even if the antecedent decisions had been less definite, it would require a very clear conviction that In re Fleetwood was wrongly decided to render it right and proper that it should now be over-ruled. The case of Bourne and another v. Keane and others (L.R., A.C., 1919, 815), was referred to for the purpose of showing that this House had over-ruled an authority of West v. Shuttleworth which declared a gift of money for the purpose of saying Masses to be illegal notwithstanding the fact that it had remained for seventy years. The circumstances were however entirely different from those in the present case, for the effect of that decision was to place a fetter upon the disposition of estate and there is a great difference between removing a restriction which ought never to have been imposed and curtailing a liberty which has been long enjoyed. It is impossible to know the extent to which during the period of nearly fifty years the decision in In re Fleetwood has been used by people similarly circumstanced to the testator in this case and, in these circumstances, it would not be right in the absence of very special circumstances after this lapse of time to declare that such dispositions were bad.
In my opinion, however. In re Fleetwood was not wrongly decided. It was decided in accordance with the series of authorities by which the law was established and which it is now too late to question or to over-rule.
I am satisfied that In re Fleetwood, which is not distinguishable from the present case on the facts, was affirmed by the Court of Appeal in In re Huxtable and that professional opinion generally has accepted these decisions as correct. In argument, however, counsel for the Appellants treated it as almost self-evident that they conflicted with Section 9 of the Wills Act, and counsel for the Respondents, while making no admission, elected to rely mainly on the time that has passed and the probable volume of rights that have arisen, since these cases were decided, and in consequence of them. I do not think that this question ought to turn merely on the dates of the decisions and the extent of their adoption in practice. It is a grave thing to affirm a doctrine that violates the prescriptions of a statute and especially such a statute as the Wills Act, even though the error is of long standing. In view of this, and also in deference to the reservations of opinion expressed by Lords Dunedin and Parker of Waddington in Lepage v. Gardom (84 L.J. Ch. p. 749) and Lord Warrington of Clyffe in Gardner's Case (1920, 2 Ch. p. 532) I venture to examine this aspect of the matter.
In itself the doctrine of equity, by which parol evidence is admissible to prove what is called " fraud " in connexion with secret trusts, and effect is given to such trusts when established, would not seem to conflict with any of the Acts under which from time to time the Legislature has regulated the right of testamentary disposition. A Court of conscience finds a man in the position of an absolute legal owner of a sum of money, which has been bequeathed to him under a valid will, and it declares that, on proof of certain facts relating to the motives and actions of the testator, it will not allow the legal owner to exercise his legal right to do what he will with his own. This seems to be a perfectly normal exercise of general equitable jurisdiction. The facts commonly but not necessarily involve some immoral and selfish conduct on the part of the legal owner. The necessary elements, on which the question turns are intention, communication, and acquiescence. The testator intends his absolute gift to be employed as he and not as the donee desires; he tells the proposed donee of this intention and, either by express promise or by the tacit promise, which is signified by acquiescence, the proposed donee encourages him to bequeath the money in the faith that his intentions will be carried out. The special circumstance, that the gift is by bequest, only makes this rule a special case of the exercise of a general jurisdiction, but in its application to a bequest the doctrine must in principle rest on the assumption that the will has first operated according to its terms. It is because there is no one, to whom the law can give relief in the premises, that relief, if any, must be sought in equity. So far, and in the bare case of a legacy absolute on the face of it, I do not see how the statute-law relating to the form of a valid will is concerned at all, and the expressions in which the doctrine has been habitually described seem to bear this out. For the prevention of fraud equity fastens on the conscience of the legatee a trust, a trust, that is, which otherwise would be inoperative; in other words it makes him do what the will in itself has nothing to do with; it lets him take what the will gives him and: then makes him apply it, as the Court of conscience directs, andit does so in order to give effect to wishes of the testator, which would not otherwise be effectual.
To this two circumstances must be added to bring the present case to the test of the general doctrine, first, that the will states on its face that the legacy is given on trust but does not state what the trusts are, and further contains a residuary bequest, and, second, that the legatees are acting with perfect honesty, seek no advantage to themselves, and only desire, if the Court will permit them, to do what in other circumstances the Court would have fastened it on their conscience to perform.
Since the current of decisions down to In re Fleetwood and In re Huxtable has established that the principles of equity apply equally when these circumstances are present as in cases where they are not, the material question is whether and how the Wills Act affects this case. It seems to me that, apart from legislation, the application of the principle of equity, which was made in Fleetwood's and Huxtable's cases, was logical and was justified by the same considerations as in the cases of fraud and absolute gifts. Why should equity forbid an honest trustee to give effect to his promise, made to a deceased testator, and compel him to pay another legatee, about whom it is quite certain that the testator did not mean to make him the object of this bounty In both cases the testator's wishes are incompletely expressed in his will. Why should equity, over a mere matter of words, give effect to them in one case and frustrate them in the other? No doubt the words " in trust " prevent the legatee from taking beneficially, whether they have simply been declared in conversation or written in the will, but the fraud, when the trustee, so called in the will, is also the residuary legatee, is the same as when he is only declared a trustee by word of mouth accepted by him. I recoil from interfering with decisions of long standing which reject this anomaly unless constrained by statute.
The answer is put in the phrase, " this is making the testator's will for him," instead, that is, of limiting him to the will made in statutory form. What then of the legislation? Great authorities seem to have expressed an opinion, that this equitable principle, as a whole, conflicts with Section 9 of the Wills Act. Lord Cairns in 1868 says that when a devisee seeks to apply what has been devised to him otherwise than in accordance with the testator's intentions, communicated by him and accepted, it is in effect a case of trust and the Court will not allow the devisee to set up the Statute of Frauds—or rather the Statute of Wills—but in this the Court does not violate the spirit of the Statute but for the prevention of frauds it engrafts the trusts on the devise, by admitting evidence, which the 'Statute would in terms exclude, in order to prevent the devisee from applying property to a purpose foreign to that, for which he under-took to hold it."—(Jones v. Badeley; 3 Ch. App. at p. 363.).
In the following year in McCormick v. Grogan (L.R. 4.E. and I. App. p. 82) Lord Hatherley (p. 88) says that this doctrine, that equity interferes to prevent a breach of an undertaking given to a testator, '' is in itself a doctrine involving a wide departure from legislative policy in the Statute of Frauds, but is established with reference to the jurisdiction of Courts of Equity to interpose in all cases of fraud, and Lord Westbury (p. 97) says : it is a jurisdiction by which a Court of Equity, proceeding on the ground of fraud, converts the party who has committed it into a trustee for the party who is injured by that fraud. The Court of Equity has from a very early period decided that even an Act of Parliament shall not be used as an instrument of fraud, and if, in the machinery of perpetrating a fraud, an Act of Parliament intervenes, the Court of Equity does not avoid the Act of Parliament but it fastens on the individual, who gets a title under that Act, and imposes on him a personal obligation because he applies the Act as an instrument for accomplishing a fraud. In this way the Court of Equity has dealt with the Statute of Frauds and in this manner it deals with the Statute of Wills.
My Lords, I venture to think that when, on the strength of these or similar general statements of the doctrine, it has been said that in this connexion equity has " given the go-by " to the Wills Act (In re Pitt-Rivers 1902 1 Ch. 403), less than justice has been done to equity and these great masters of it. When Lord Cairns speaks of equity not letting the devisee, set up the statute it would seem that a fortiori equity would not set up the statute for itself to prevent the devisee from doing what it would have, itself compelled him to do, if he had been negligent or dishonest in his trust, and when he speaks, in a figure, of " engrafting " the trusts on the devise surely he is saying in condensed words, that evidence, which could not be admitted to fill in what the testator's will leaves out, may yet be admissible to inform the Court what duty, onerous or not", it must bind on the conscience of the devisee, taking him as being with regard to legal title such a devisee as the will has made him according to its terms. This exactly conforms to Lord West-bury s phrases " converts " into a trustee one, who was not such under the will, and " imposes a personal obligation" on an individual, who under the Wills Act would get a title, not in itself so fettered.
In the authorities it has been common to classify these cases according as the terms of the will make the gift in question absolute or fiduciary. If it is by force of the words of the will that the residuary legatee takes, what is given in trust without any specification of the trust, then parol evidence to show what that trust is would contradict the written will. Accordingly the crucial point is whether or not it is the will itself that gives this fund to the residuary legatee in such a case. Now Section 9 of the Wills Act prescribes the form, in which any disposition in a will must be testified, if it is to be valid, but it does not deal with the construction of wills, or the application of the general law of trusts to interests created by wills. It is one thing to say that in itself the trust cannot be given effect to, not being expressed in the will, hut it is quite another to say that, when for this reason the trust fails, the will gives the fund to the legatee in trust for the residuary legatee, as if the document, signed and witnessed, had said so in words. The question appears to be whether the resulting trust in favour of the named residuary legatee in such a case arises as part of the will or only as the result of the application of equitable doctrines to a portion of the testator's estate, which in the circumstances of the will has not been consistently disposed of.
The Wills Act is an amending Act, of which it may be said in no merely theoretical sense that the Legislature was acquainted with the existing state of the law, as enacted and decided, to which it proceeded to apply amendments, for two Royal Commissions—the Real Property Commission of 1828 and the Ecclesiastical Commission of 1830—after enquiring inter alia into the subject of wills of real and personal property had reported before the Wills Act came before Parliament as a Bill. The extent to which parol evidence was admissible under existing practice for various purposes and the evils thereout arising were known. The equitable doctrine which is now before your Lordships was on record ever since Pring v. Pring. In Smith v. Attersoll, 1826 (1 Russell 266) it had been contended, as the Appellants contend now, that the admission of evidence dehors the will was forbidden by statute, and its admission against the trustees to show the terms of their trust was supported by the Master of the Rolls on the doctrine of Jones v. Nabbe (Gilbert's Equity Reports 146), that the Statute of Frauds was an Act to prevent frauds and perjuries, and that, where no question of fraud or perjury arose since the trustees admitted their trust, evidence could be referred to. The Wills Act made no attempt to correct this quaint way of regarding aStatute. So far as Section 9 is concerned it simply increased and denned the formalities already required by law. Similarly there had long been litigation between executors and next of kin on the question how far a specific bequest to an executor a deemed his general right to take surplus personality undisposed of, and on this intricate conflicts of evidence frequently took place and a separate statute, 11 Geo. IV and 1 William IV c. 40, had been passed to cover it by expressly providing how such surplus should go. No similar remedy is attempted by the Statute of Wills for the mischiefs that might arise from admitting evidence in a case like the present. Accordingly I think the conclusion is confirmed, which the frame of Section 9 of the Wills Act seems to me to carry on its face, that the legislation did not purport to interfere with the exercise of a general equitable jurisdiction, even in connexion with secret dispositions of a testator, except in so far. as reinforcement of the formalities required for a valid will might indirectly limit it. The effect, therefore, of a bequest being made in terms on trust, without any statement in the will to show what the trust is, remains to be decided by the law as laid down by the Courts before and since the Act and does not depend on the Act itself.
The limits, beyond which the rules as to unspecified trusts must not be carried, have often been discussed. A testator cannot reserve to himself a power of making future unwitnessed dispositions by merely naming a trustee and leaving the purposes of the trust to be supplied afterwards, nor can a legatee give testamentary validity to an unexecuted codicil by accepting an indefinite trust, never communicated to him in the testator's lifetime (Johnson v. Ball, 5 de G and S 85; re Boyes, 26 Ch. D. 531; Riordan v. Banon, 10 Irish Eq. Rep. 469; re Hetley, 1902 2 Ch. D. 66). To hold otherwise would be to enable the testator to "give the go-by" to the requirements of the Wills Act, because he did not choose to comply with them. It is communication of the purpose to the legatee-coupled with acquiescence or promise on his part, that removes the matter from the provision of the Wills Act and brings it within the law of trusts, as applied in this instance to trustees, who happen also to be legatees. If I am right in thinking that there is no contradiction of the Wills Act in applying the same rule, whether the trustee is or is not so described in the will, and the whole topic is detached from the enforcement of the Wills Act itself, then, whether the decisions in equity are or are not open to doubt in themselves, I think that, in view of the subject matter of these decisions and the length of time during which they have been acquiesced in, your Lordships may well in accordance with precedent refuse to overrule them lest titles should be rendered insecure and settlements, entered into in reliance on their authority, should now be disturbed. It is to be remembered that the rule as to trusts not expressed in a will is not limited to relations such as the testator in this case was concerned to provide for, but may have been applied in many other connexions. I pretend to no means of knowledge of my own but it seems to me probable that effect has been given to these cases to a substantial extent and therefore that, to avoid possible injustice, your Lordships should refuse to interfere with them now. Accordingly in my "opinion the appeal fails on all grounds.
Lord Warrington of Clyffe.
The testator John Duncan Louis Blackwell on the 13th February 1925 made a fourth codicil to his will in the following terms so far as it is material to the question raised by this Appeal :— I give and bequeath to my friends Mark Oliver, Arthur Ernest Harrison, Fred Wettern, Edward Watson Barnett, and William Percy Cowley the sum of Â£12,000 free of all duties upon trust to invest the same as they in their uncontrolled discretion shall think fit and to apply the income and interest arising therefrom yearly and every year for the purpose indicated by me to them with full power at any time to pay over the capital sum of Â£8,000 to such person or persons indicated by me as they think fit and to pay the balance of Â£4,000 to my trustees as part of my residuary Estate and upon the same trusts as are declared in my will and previous codicils.
The testator died on the 3rd June, 1925.
As to the facts it is only necessary to state that the evidence if admissible established First the names of the persons intended to be benefited and the purposes for which the capital and income of the fund were to be applied and Secondly that all the five trustees—four of them before and one after the execution of the codicil—accepted the trust and either expressly or by necessary implication promised the testator to carry it into effect.
It has long been settled that if a gift be made to a person or persons in terms absolutely but in fact upon a trust communicated to the legatee and accepted by him the legatee would be bound to give effect to the trust, on the principle that the gift may be presumed to have been made on the faith of his acceptance of the trust, and a refusal after the death of the testator to give effect to it would be a fraud on the part of the legatee. Of course in these cases the trust is proved by parol evidence and such evidence is clearly admissible.
It is also settled that in such cases it is immaterial whether the trust is communicated and accepted before or after the Execution of the will, inasmuch as in the latter case the testator, if it had not been accepted, might have revoked the will.
Further in Moss v. Cooper (5 and H 367), Wood V. C. said "If " on the faith of a promise by a gift is made in favour of A and "B the promise is fastened on to the gift for both for B cannot " profit by A's fraud."
I think the principle on which this doctrine is founded is that the parol evidence is not adduced for the purpose of altering or affecting the will itself, the legatee still takes under the will, but is under a personal obligation the breach of which would be a fraud on the testator (Cullen v. The A. G. for Ireland L.R., 1 E. and I. 190).
The question is whether the same principle applies where as in the present case the fact that the gift is upon trust is mentioned in the will though the terms of the trust can only be established by parol.
Eve J. and the Court of Appeal (The Master of the Rolls and Lawrenceand Russell L.JJ.) have answered the question in the affirmative, basing their decisions on the judgment of Hall V. C.in re Fleetwood 15 Ch. D. 694, the Court of Appeal also expressing the view that that judgment was followed by the Court of Appeal in re Huxtable 1902 2 Ch. 793.
I confess to having felt considerable doubt during the argument whether to apply the principle in such a case as the present would not be to give validity to a parol will in spite of the provisions first of the Statute of Frauds and secondly of the Wills Act. Subsequent reflexion however and a careful perusal of the judgment of Hall V. C. in re Fleetwood (u.s.) wherein the earlier authorities under both statutes are cited and discussed have satisfied me that that case and, in consequence, the present case in the Courts below were rightly decided. I think the solution is to be found by bearing in mind that what is enforced is not a trust imposed by the will, but one arising from the acceptance by the legatee of a trust, communicated to him by the testator, on the faith of which acceptance the will was made or left unrevoked as the case might be. If the evidence had merely established who were the persons and what were the purposes indicated it would in my opinion have been inadmissible, as to admit it would be to allow the making of a will by parol. It is the fact of the acceptance of the personal obligation which is the essential feature, and the rest of the evidence is merely for the purpose of ascertaining the nature of that obligation.
It was contended for the Appellant, who claims as Residuary Legatee to be entitled to the fund should the trust not be established, that the fraud for the avoidance of which the trust is enforced must be the personal fraud of the legatee, but I think the answer is that, if it would be a fraud on the part of the legatees to refuse to carry out the trust, the residuary legatees cannot take advantage of and thus make themselves parties to such fraud. On this point I agree with the view expressed by Wood V. C. in Moss v. Cooper u.s.and by Hall V. C. in re Fleetwood u.s.
The authorities prior to re Fleetwood u.s. some of them dating as far back as 1688 and 1689 were carefully analysed by Hall V. C. in his judgment and I see no necessity for referring to them again. They were conflicting and it was quite open to the learned judge to follow those which supported his own view. I think also that) re Unstable 1902 2 Ch.793 could not have been decided as it was unless the Court had approved of the decision in re Fleetwood.
For these reasons I think that this appeal should be dismissed with costs.
My noble and learned friend Lord Carson desires me to say that he agrees with the views that already have been expressed.