ATTORNEY-GENERAL v. FLOYER-ATTORNEY-GENERAL v. SMYTHE.

H. OF L.] same property under appointments made by the will and codicils.

ATTORNEY-GENERAL v. FLOYER-ATTORNEY-GENERAL v. SMYTHE.

The questions raised in this appeal are the same as in the suit below, namely, at what rate the duties on the various successions herein before mentioned are to be calculated.

The judgment of the court below declared in effect that duty is payable by the resps. upon the succession of the said George Bankes at the rate of 21. per cent., but that in consequence of his death within eighteen months after his succession to the said estates, only one of the eight equal instalments in which the said duty ought to be paid, according to the provisions of the Succession Duty Act, had become payable. Also that the same rate of duty was payable in respect of the succession of the said Edmund George Bankes. And, further, that duty at the rate of 17. per cent. was payable in respect of the succession of the younger children of the said George Baukes to their respective

interests.

The circumstances giving rise to the questions in dispute may be shortly stated as follows:

Corfe Castle, with other estates in Dorsetshire, were formerly the absolute property of Henry Bankes, called in the information, for the sake of distinction, the testator. He by his will, made in the year 1774, devised them to his son, Henry Bankes, for life, with remainder to the first and other sons of the said Henry Bankes, the son, in tail male.

Under this disposition, Henry Bankes, the son, was in 1810 tenant for life in possession, and William John Bankes, who was of full age, was his then eldest son and tenant in tail male in remainder, immediately expectant on his father's death.

By an indenture dated the 28th June 1810, and a concurrent recovery suffered in 1810, W. J. Bankes and his son disentailed the estates, and limited them as to part thereof to the use of Henry Bankes, the son, in fee. And as to the other part thereof, being the portion to which the present question relates, to such uses as Henry Bankes (the son) and W. J. Bankes should jointly appoint; and in default of such appointment to the use of Henry Bankes, the son, for life, with remainder to such uses as William John Bankes should appoint, in the event of his surviving his father. And in default to such uses as were contained in the said will of Henry Bankes, the testator.

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Henry Bankes, the son, died in the year 1834, and was succeeded in the beneficial enjoyment of the said estates by his son William John Bankes.

William John Bankes died on the 15th April 1855, without issue, and thereupon George Bankes, his brother, became teuant for life in possession of the said estates.

On the 2nd July 1855 Edmund Georges Bankes, the eldest son of George Bankes, as tenant in tail male expectant on his father's decease, and his father, as protector of the settlement, executed a disentailing deed of the property, and he and his father conveyed the same to such uses as they should jointly appoint. mund

On the following day George Bankes and George Bankes executed a resettlement (dated the 3rd July 1855) of the estates comprised in the deed of the 2nd June 1821, such estates comprising not merely the estates devised under the will of Henry Bankes, the testator, but the estates which were, as above stated, for the first time settled by Henry Bankes, the son, by the deed of 2nd June 1821. By such resettlement all the estates were settled to such uses as Georges Bankes and Edmund Georges Bankes should jointly appoint, subject thereto to the use of trustees for 500 years, for the purpose of securing an annuity of 800%, to Edmund George Bankes, during the joint lives of George Bankes and Edmund George Bankes, and other annuities therein mentioned, and subject thereto to the use of Georges Bankes for life; then to the use of trustees for the term of 1000 years, for the purpose of raising portions for the younger children of George Bankes, according to his appointment, and subject thereto to the use of trustees in trust for Edmund George Bankes for life, with divers remainders over.

George Bankes, by his will dated the 28th July 1855, in exercise of the power reserved for him in the last-mentioned settlement, charged the estates with the sum of 10,000l. for his son Henry Hyde Nugent Bankes; 50001. for each of his sons, William George Hawtrey Bankes and Wynne Albert Bankes; 5000% for each of his daughters, Georgina Frances, now the wife of the said John Floyer, Adelaide, now the wife of the said Charles Wriothesley Digby, Augusta Anne, now the wife of the Hon. Edward William Douglas, and Octavia Elizabeth Bankes, since deceased.

By a codicil to his will, George Bankes, after noticing the death of his daughter Octavia Elizabeth Bankes, in further exercise of his said power of appointment, further charged the estates with the sum of 3000% for each of his three remaining daughters.

In 1821 Henry Bankes (the son) and William John Bankes, in pursuance of their joint power, executed a deed, dated the 2nd June 1821. Such deed, after reciting the will of Henry Bankes, the testator, and the bargain and sale and common recovery of 1810, recites the seisin in fee-simple of Henry Bankes, the son, of By a further codicil George Bankes declared that divers hereditaments in the county of Dorset, in certain provisions which he had made for his daughter addition to those settled as above mentioned, and that Adelaide Bankes were in lieu of the two sums of 5000% he was possessed of certain leasehold heredita- and 3000l. by his said will and codicil charged in her ments in the same county. And then recited in favour upon the said estate. By a third codicil George effect that such several hereditaments were covenanted Bankes bequeathed a sum of 10,000l. to his daughter to be held with the said settled estate; and that Georgina Frances Floyer, in case his real estate was Henry Bankes (the son), and William John Bankes, not charged by him in her favour with that amount. had, by way of family arrangement, agreed to join in George Bankes died on the 6th July 1856, and a settlement of all the above-mentioned estates, and thereupon his son Edmund George Bankes became for that purpose to execute their joint power of ap-tenant for life in possession of the said estates. pointment, and to convey such of the estates as were not subject to such power; and accordingly they did by such deed appoint the said settled estate, and Henry Bankes, the son, conveyed his own estates, and all the estates were thereby assured and limited, subject to a joint power of appointment, which was never executed, to the use of Henry Bankes, the son, for life, with remainder for William John Bankes, for life, with remainder to his first and other sons successively in tail male, with remainder to George Bankes, a younger son of Henry Bankes, the son, for life, with remainder to the first and other sons of George Bankes successively in tail male.

The Crown claimed duty at the rate of 3 per cent. in all the cases, viz.-(1.) in respect of the succession of George Bankes, as having been wholly derived from his elder brother William John Bankes as predecessor; (2.) in respect of the succession of Edmund George Bankes, under sect. 12 of the Succession Duties Act, as having been derived under a disposition made by himself, at the date of which he was expectantly entitled to the settled estates as a succession derived from his uncle William John Baukes as predecessor, and in respect of which he must consequently have paid duty at that rate if no such disposition by himself had been made; (3.) in respect of the successions of the younger

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ATTORNEY-GENERAL v. FLOYER-ATTORNEY-GENERAL v. SMYTHE.

children of George Bankes, as being derived from either their uncle William John Bankes or their own brother Edmund George Bankes as predecessor.

The sections of the Succession Duty Act, 16 & 17 Vict. c. 51, which bore upon the case, were the following:

Sect. 2. "Every past or future disposition of property by reason whereof any person has or shall become beneficially entitled to any property, or the income thereof, upon the death of any person dying after the time appointed for the commencement of this Act, either immediately or after any interval either certainly or contingently, and either originally or by way of sabstitutive limitation, and every devolution by law of any beneficial interest in property, or the income thereof, upon the death of any person dying after the time appointed for the commencement of this Act, to any other person, in possession or expectancy, shall be deemed to have conferred or to confer on the person entitled by reason of any such disposition or devolution a succession; and the term successor' shall denote the person so entitled; and the term 'predecessor' shall denote the settlor, disponer, testator, obligor, ancestor, or other person from whom the interest of the successor is or shall be derived."

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the app.-First, as to the succession of George Bankes, the decision of the Court of Ex. is inconsistent with the rule laid down by Attorney-General v. Lord Braybrooke, 8 H. L. Cas. 802. According to that case the predecessor whom George succeeded was his brother William John, the former tenant in tail, and the father Henry Bankes was not the predecessor either wholly or in part. The father's estate and interest contributed nothing to the interest derived under the succession, for his life-estate was never abridged or diminished by that transaction. The circumstance of the limitation being made in exercise of a joint power limited by the recovery deed to the father and son does not affect the result. The court below treated this as a case of joint predecessors, as if the father were predecessor as to one moiety, and the brother predecessor as to the other moiety. Secondly, as to the succession of Edmund George Bankes, the case of Attorney-General v. Lord Braybrooke is also conclusive. It shows that Edmund George was his own predecessor, for he took 3200%. a-year under a disposition made by himself, and his earlier title shows that he derived an interest from his uncle William John Bankes. Thirdly, as to the succession of the younger children, the portions were derived either from the estate of William John Bankes or of Edmund George Bankes, and in either case the duty would be 3 per cent. Even independently of Lord Braybrooke's case, the rule of law is that the appointment under a power must be read back into the instrument creating the power, and the author of that instrument is taken to be the predecessor: (Re Lovelace, 4 De G. & J. 340; Re Barker, 7 H. & N. 109.)

Sect. 10. "There shall be levied and paid to her Majesty in respect of every such succession as aforesaid, according to the value thereof, the following duties (that is to say): Where the successor shall be the lineal issue or lineal ancestor of the predecessor, a duty at the rate of 17. per centum upon such value: Where the successor shall be a brother or a sister, or a descendant of a brother or sister of the predecessor, a Rolt, Q. C., M. Smith, Q. C., and C. Hall, for the duty at the rate of 31. per centum upon such value: resps.-This case is distinguishable from that of Lord Where the successor shall be a brother or sister of the Braybrooke. In Braybrooke's case the question was, father or mother, or a descendant of a brother or sister what duty was payable by the tenant in tail, who, on of the father or mother of the predecessor, a duty at a resettlement by himself and his father, has had his the rate of 51. per centum upon such value: Where estate tail cut down to an estate for life? In the the successor shall be a brother or a sister of the grand-present case the question is, what duty is payable by a father or grandmother, or a descendant of the brother or sister of the grandfather or grandmother of the predecessor, a duty at the rate of 6. per centum upon such value: Where the successor shall be in any other degree of collateral consanguinity to the predecessor tan is herein before described, or shall be a stranger in blood to him, a duty at the rate of 107. per centum upon such value."

third person to whom the father and the son, on the settlement of the estate, have limited some estate or interest? That distinction was obviously kept in view by the House in Attorney-General v. Lord Braybrooke. In the present case the true view of the deeds was-First, that George Bankes derived his succession from his grandfather Henry Bankes, the testator, or at all events from Henry Bankes (the son) and William John Bankes, as joint predecessors. As regarded the estates for the first time brought into settlement in 1821, George Bankes derived his succession thereto solely from his father, and therefore ought to pay only 1 per cent. duty. Secondly, Edmund George Bankes derived his succession from his grandfather, and was not chargeable with a higher rate of duty than his father was, and he was entitled to an allowance in respect of the 8004. annuity. Thirdly, the younger children derived their interests either from their father or grandfather. Cur. adv. vult.

Sect. 12. "Where any person shall take a succession under a disposition made by himself, then, if at the date of such disposition he shall have been entitled to the property comprised in the succession expectantly on the death of any person dying after the time appointed for the commencement of this Act, and such person shall have died during the continuance of such disposition, he shall be chargeable with duty on his succession at the same rate as he would have been chargeable with if no such disposition had been made; bat a successor shall not in any other case be chargeable with duty upon a succession taken under a disposition made by himself, and no person shall be chargeable with duty upon the extinction or determination of any charge, estate, or interest created by himself, unless a the date of the creation thereof he shall have been entitled to the property subjected thereto expectantly In 1811 Sir Edward Joseph Smythe Bart. (the on the death of some person dying after the time ap-resp.'s late father) settled certain real property upon pointed for the commencement of the Act." his marriage to the use of himself for life, with remainder to the use of the first and other sons of his marriage in tail male.

Sect. 13. "Where the successor shall derive his succession from more predecessors than one, and the proportional interest derived from each of them shall not be distinguishable, it shall be lawful for the commissioners to agree with the successor as to the duty payable; but if no such agreement shall be made, the ence:ssor shall be deemed to have derived his succession in equal proportions from each predecessor, and shall be chargeable with duty accordingly.”

The Solicitor-General (Palmer) and Hanson for
No. 151.

ATTORNEY-GENERAL v. SMYTHE.

This was an appeal from a decree of the Court of Ex. as to the rate of succession duty chargeable in the following circumstances:

In 1840 Edward Joseph Smythe (the settlor's eldest son), being under the settlement tenant in tail in remainder expectant on his father's death, with the consent of his father as protector of the settlement, executed a disentailing deed, and conveyed the settled property to such uses as his father and himself should jointly appoint, and in default of appointment to the old uses.

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THE LAW REPORTER.

ATTORNEY-GENERAL v. FLOYER-ATTORNEY-GENERAL v. SMYTHE.

[Vol. 7.

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Two days afterwards, on the marriage of Edward | eldest son, who had then attained his age of twentyJoseph Smythe the son, with Miss Boughery, articles of agreement, to which both the father and son were parties, were entered into for settling the real property comprised in their joint power, upon the father for life, in restoration of his old estate, with remainder to the son for life, with remainder to the first and other sons of his marriage in tail male, with remainder to the father's second son Richard Peter Carrington Smythe, for life, with remainder to his first and other sons in tail male, with remainder to the resp. Charles Frederick Smythe (the father's third son) for life, with remainder to his first and other sons in tail male, with remainders over; with an ultimate limitation to the right heirs of Edward Joseph Smythe the son.

No settlement was made in pursuance of these articles, but the son's marriage with Miss Boughery took place, and in 1841 he died without issue.

In 1842 Richard Peter Carrington Smythe, the next surviving son of the original settlor, being then tenant in tail in remainder expectant on his father's death, under the original settlement (assuming that it were still subsisting), with the consent of his father as protector of the settlement, executed a disentailing deed, and conveyed the settled property to such uses as his father and himself should jointly appoint, with remainder in default of appointment to the old uses.

In 1843 the father and son executed this joint power, and appointed and conveyed the settled property to the use of the father for life, in restoration of his old estate, with remainder (subject to a jointure secured to the deceased son's widow) to Richard Peter Carrington Smythe for life, with remainder to his first and other sons in tail male, with remainder to the resp. Charles Frederick Smythe for life, with remainder to his first and other sons in tail male, with remainders

over.

one, in barring the entail and resettling the estate, subject to his own life-estate under the will, and subject also to certain terms of years for securing the payment of some annuities and other charges, to such default of appointment to the use of his said son for uses as he and his said son should appoint, and in life, with remainder to his first and other sons in tail male, with remainders over. brooke and his said son exercised their joint power, and appointed the estates, subject to certain annuities In 1850 Lord Brayand charges, to the same uses as had been declared by the deed of 1841. The third Lord Braybrooke died in 1858, and the question then arose as to the succession Lord Braybrooke. He took an estate for life under duty payable by his son, who then became the fourth the joint appointment of his father and himself. And charged, it was necessary to ascertain who was his in order to determine at what rate the duty was to be predecessor within the meaning of the Succession Duty Act, the rate of duty in all cases depending on the degree of relationship subsisting between the predeargued that, as he took on the death of his father and cessor and the successors. On behalf of the son it was himself, the father was the predecessor, in which case a duty of 1 per cent. only would be payable on the son himself were joint predecessors, in which case a whole estate; or, if not so, then that the father and the duty of 1 per cent. only would be payable on a moiety. But the Court of Ex. first, and afterwards the H. of L., held that the father was not either solely or jointly a predecessor, that the son was the sole predecessor, and that in the language of the 2nd section, he alone was the settlor from whom the interest of the son was derived. That being so, the case was clearly one to which the 12th section was applicable, for that section sition made by himself, the same duty shall be payable provides that when a successor takes under a dispoas would have been payable if no disposition had been made by the person thus filling the character both of predecessor and successor. sition had been made by the son, he would If no dispooriginal devisor, a stranger in blood, in which case a have taken on his father's death as successor to the duty of 10 per cent. is payable, and the Court of Ex. first, and the H. of L. afterwards, held, accordingly, that duty was payable at that rate. The son was held to be the sole predecessor. The ground of decision evidently was, that although the estate of the son arose under a joint appointment made by his father and himself, and although the father was in a sense one of the settlors, yet he was not a settlor "from whom the interest or any part of the interest of the son in his character of successor was derived wholly out of his own prior successor was derived." The interest of the son as estate tail, and in no respect from the estate of his father. present case. This decision appears to me to govern the William John concurred in 1810 in suffering a reHere Henry Bankes and his eldest son covery of certain settled estates, and in 1821, by virtue of a joint power of appointment reserved to Fleming, Q.C. and Phipson, Q.C. for the resp. them by the deed creating the tenant to the præcipe, they resettled the estate to the use of Henry, the Lord CRANWORTH.-My Lords, I do not think that his life, with remainder to his first and other sons in Cur, adv. vult. father, for life, with remainder to William John for this case can be distinguished from Lord Braybrooke's tail male, with remainder to George, second son of There a stranger in blood devised real estates Henry, for his life, with remainder to his first and to Richard Aldworth Neville for life, with remainder other sons in tail male, with remainder over; Henry, to his other son Richard Neville for life, with remainder the father, died in 1834, and William John, the son, to his first and other sons in tail male. Richard A. then succeeded to the estate, and he died without Neville, who had become the second Lord Braybrooke, issue in 1855. died in 1825, and on his death Richard Neville, his the passing of the Succession Duty Act, the precise As he succeeded to the estate before son, who then became the third Lord Bray-question which was decided in Lord Braybrooke's case brooke, became tenant for life under the will, never arose; but if Henry, the father, had lived till with remainder to his first and other sons in tail male. 1854, instead of dying in 1834, it is certain, on the In 1841 the third Lord Braybrooke concurred with his authority of Lord Braybrooke's case, that William

Richard Peter Carrington Smythe died in his father's lifetime without issue, and upon the father's death which took place in 1856, after the commencement of the Succession Duty Act, the resp. Charles Frederick Smythe, as his next surviving son, became tenant for life in possession.

Under these circumstances the Crown claims duty at the rate of 3 per cent. in respect of the succession of the resp. Charles Frederick Smythe, as having been wholly derived by him from either one or other of his elder brothers, Edward Joseph Smythe or Richard Peter Carrington Smythe, as predecessor. The Court of Ex. has decided that the rate of duty is 3 per cent. on one moiety only, as being derived from one or other of the brothers, and 1 per cent. on the other moiety, as being derived from the father Sir Edward Joseph Smythe.

The Solicitor-General (Palmer) and Hanson, for the app., contended that the resp. derived the whole of his succession either from his brother Edward Joseph Smythe under the disentailing deed of 1840, or else from his brother Richard Peter Carrington Smythe under the deed of 1842 and the appointment of 1843, and, in either case, was chargeable with 3 per cent. duty.

case.

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He

ATTORNEY-GENERAL v. FLOYER-ATTORNEY-General v. SMYTHE. [H. OF L. John, on succeeding in 1854, would have been held to contended for. In both those cases the court conbe the sole settlor for the purpose of ascertaining the sidered that the tenant for life had, in the result of succession duty payable. If he would have been the his dealings with the property, become a creditor on sole settlor for that purpose, I cannot understand on the estate for a sum of money payable on a future what principle it can be contended that the interests of day. That being so, the persons who under the disthose coming after him in the settlement were derived position which he made of the money became entitled from any other source than that from which his own to it at his death, were properly held to be successors interest was derived. If he would have been held to deriving title from him as their sole predecessor. be, within the meaning of the Act, the sole settlor from was, according to the decision, absolute owner of the whom his own tenancy for life was derived, he was the money. But here the interests of the younger children sole settlor from whom the interests of his children, if were not derived from any fund to which George was he had had any, and these coming after in the settle- entitled. He never was a creditor on the estate. The ment, were derived. Those interests all come out of cases are therefore altogether different. It was further the same estate as that out of which his own tenancy pressed that, in holding the brother or uncle to be the for life was derived; and the decision of the House settlor from whom the younger children derive their shows, that in order to ascertain who is the settlor portions, and not the father, we shall be coming to a within the 2nd section, i. e. the settlor from whom decision at variance with all the ordinary notions of the interest of the successor is derived, we must mankind; that, in a popular view of the case, every inquire, not who are the parties by whose con- one would say that the portions were derived from the voyance the estate has been created, but who is the father. To a certain extent that is true, but what we conveying party out of whose estate the interest in have to decide is, who is the settlor within the meaning question has been derived. It can make no difference of the statute; and, as I have already explained, I as to the rate of duty payable, that William John think that the decision in the Braybrooke case nenever was himself liable to duty by reason of his father cessarily leads to the conclusion that the settlor having died before the passing of the Act. I am within the true meaning of the 2nd section must therefore of opinion that George, on succeeding to his be a settlor out of whose estate the succession brother, was liable to duty at 3 per cent. The next is derived, and so that though the act of the father's question is, as to the rate of duty payable by Edmund making the appointment was necessary to the creation George, the eldest son of George, on the death of his of the portions, yet, as they did not to any extent father. The same principles are applicable to this come out of his estate, he was not the settlor within case as to that of George, and his eldest son Edmund the meaning of the statute. I observe that the judges George became, respectively, on the death of William of the Court of Ex. say that their judgment, now John, tenant for life in possession and tenant in tail in under review in this house, was prepared before your remainder. They executed a disentailing deed, re- Lordships had decided Lord Braybrooke's case, though serving to themselves a joint power of appointment, they further state that the decision of your Lordships under which they made a joint appointment resettling is not inconsistent with their judgment. It will be the estate, so that George continued to be tenant for apparent from what I have said that in that statement life, but Edmund George was content to take, instead I am unable to concur. The judges say that George of his remainder in tail, an annuity of 4000l. a-year got his estate not by his own act, but by the joint act for his life, charged on the settled property, to com- of his father and his brother. The same thing premence at his father's death. George, the father, died cisely might have been said in Lord Braybrooke's case. in 1856, on which event Edmund George became a The fourth lord got his estate not by his own act but successor to the extent of 4000%. a-year. Who was by the joint act of his father and himself. With all his predecessor? The Braybrooke case has decided deference to the judges of the Court of Ex., I cannot that he was his own sole predecessor; and, therefore, see the difference in principle between the two cases, under the 12th section, duty is payable at the rate and therefore I thick their judgment is wrong. The at which it would have been payable if the entail result is, that in my opinion the rate of duty payable of 1821 had not been barred in 1855. This rate is, in on the succession of George, of Edmund George, my opinion, 3 per cent., as I have already explained and of George's younger children, is 3 per cent. in the case of George. The only remaining question It was not disputed by the Solicitor-General is as to the rate of duty payable on the portions of the that, in calculating the sum, due allowance must younger children of George. I am unable to distin- be made for the annuity to which the parties guish this from the two former cases. The portions chargeable with duty were already entitled when the are in substance a part of the inheritance. If instead duty accrued. There will, I presume, be no difficulty of arising under the exercise of a power given to the in adjusting the amount due, taking it as established parent, they had been at once fixed by the settlement that the rate chargeable is 3 per cent. on the estates which created the power, there could surely be no included in the recovery of 1810. It was, however, doubt but that they must have followed the fate of the admitted that a part of the estates included in the inheritance. And I am of opinion that the circum- settlement of 1821 were fee-simple estates of Henry. stance of their arising under a power can make no As to these, the duty is certainly payable only at the difference. Indeed, this seems to be expressly pro-rate of 1 per cent., and with respect to the portions, vided for by the 4th section of the Act. The interest they must, for the purpose of regulating the duty, be created by the power must, on well-known principles, apportioned rateably between the settled and fee-simple be treated as arising from the deed creating the power. estates according to their value. The duty on so much And in this case it is unnecessary to consider whether as is attributable to the original settled estates will be we are to refer to the settlement of 1821, or to that assessed at 3 per cent; that assessed on the feeof 1855, as the source of the power. The rate of duty simple estates brought into settlement for the first time will be the same to whichever settlement we refer. It in 1821 will be assessed at 1 per cent. I have given was argued that here the father ought to be considered my opinion at length with reference to the case of the as a purchaser of the right to appoint the portions, and Attorney-General v. Floyer. With respect to the so that he was the settlor from whom the interests of other case of the Attorney-General v, Smythe, I can the younger children were derived; and this view only say that, having looked at it very attentively, I of the case was attempted to be supported by re- I am unable to discover any distinction whatever in ference to Jenkinson's case, before the M. R., 24 | principle between the two cases. It was argued that, Beav. 64; and Yelverton's case, 7 H. & N. 306. in the case of Smythe, the tenant for life took not his But those cases do not support the proposition original estate for life, but a new estate created for the