Farrelly, Re; Howard v Shelley

• Jurisdiction: Ireland
• Judgment Date: 25 June 1941
• Date: 25 June 1941
• Court: King's Bench Division (Ireland)

In re Farrelly; Howard v. Shelley

In the Matter of the Estate of JOHN PATRICK FARRELLY, Deceased; PATRICK HOWARD

Plaintiff

and

DENIS SHELLEY AND SEAMUS SHELLEY (Infants), MARY SHELLEY AND WILLIAM NEWMAN

Defendants.

Will - Construction - Bequest of agent's interest in insurance collecting book - For benefit of testator's two nephews - To be divided between them on attaining the age at which the Insurance Society usually sanctioned the appointment of their agents - Agent entitled under rules of Insurance Society to appoint successor subject to approval of Society - Date of vesting of bequest - Both nephews minors at date of testator's death - Refusal by Society to appoint them agents - Whether condition attached to bequest condition precedent or condition subsequent - Non-performance of condition precedent - Condition deemed to have been performed - Bequest of investments in Irish Free State National Loan - Stock converted before date of testator's death - Whether new stock passed under the bequest - Ademption - Will construed not to speak from testator's death - "Contrary intention" of testator - Wills Act, 1837 (1 Vict. c. 26), s. 24.

A testator bequeathed his interest as agent in an insurance collecting book in the following terms:—"I leave my interest in the book I hold as an agent for the R.L.F. Society to my bister M. S. for the benefit of my said nephews D. S. and S. S. and direct that same be divided between them upon their respectively attaining the age at which the said Society usually sanctions the appointments of their agents. In the event of the said D. S. and S. S. refusing to accept such agency I direct my interests in said book to be sold to the best advantage by my executor and trustee and the proceeds of said sale divided equally between the said M. S. and my wife, but should only one of my said nephews agree to act as agent, then I direct that the share of the other of my said nephews who shall have refused to act as agent shall be sold and the proceeds of such sale applied as aforesaid."

Under the Rules of the Insurance Society an agent had an express contractual right to nominate a successor to his interest in the collecting book, and when his nominee had been approved, the book was handed to him, whereupon the retiring agent was to be entitled to receive from the nominee any premium agreed upon. But the property in the book, apart from this right of nomination, was vested in the Society's trustees.

At the date of testator's death the two nephews were minors, and the Society declined to appoint either of them an agent, and also declined to allow the agency to be held in trust until the said nephews attained their majority, and required the testator's interest in the book to be immediately sold. The book was accordingly sold in four parts and realised £810.

Held that the intention of the testator was to transmit the agency in moieties to his two nephews upon an uncertain contingency and not otherwise, and therefore neither nephew took a vested interest at the date of the testator's death, and the bequest to each was made subject to a condition precedent; further, that the condition precedent had proved impossible to perform, on account of the Insurance Society's refusal to appoint either of the two nephews an agent; this condition being a "mixed"one, the performance of which was partly within the legatees' power and partly within the power of another party, and the impossibility of performance of the condition being due to the action of that other party, the condition must be taken to have been fulfilled and the interest of the two nephews in the legacy became absolute.

Testator bequeathed, in trust for his sister for life and upon her death for his said two nephews, to be divided equally between them upon their respectively attaining 21 years of age, "my investments in Savings Certificates, Irish Free State National Loan, and Dublin Corporation Stock"; and he directed that "if the said Savings Certificates, Irish Free State National Loan and Dublin Corporation Stock should mature and be redeemed" while subject to the trusts, the proceeds of redemption were to be re-invested in trustee securities; he referred upon his sister's death to the "said investments or the securities then representing the same,"but there was no mention in the will of the "securities representing the same" at his own death.

The testator had at the date of his death £420 Irish Free State 3¹/₂ per cent. Fourth National Loan, 1950-1970, bought after the date of the will, and £600 Irish Free State 4 per cent. Conversion Loan, 1950-1970, which represented the statutory conversion of £600 Irish Free State 5 per cent. National Loan, 1935-1945, which the testator owned at the date of his will.

Held that the words in the will "if the said . . . Irish Free State National Loan . . . should mature and be redeemed while subject to the above trusts" disclosed "a contrary intention," within the meaning of s. 24 of the Wills Act, 1837 (which provides that a will shall be construed to speak from the death of the testator unless a contrary intention shall appear by the will), by indicating, quoad this bequest, that the testator meant the will to speak as at its own date. Consequently, as the testator's only holding at the time of the will was in the 5 per cent. National Loan, the holding in the 4 per cent. Conversion Loan would be excluded, and this particular bequest would fail for lack of a subject on which to operate unless the 4 per cent. Conversion Loan which, on conversion, replaced the 5 per cent. National Loan, was substantially the same. The Court heldthat, despite the differences in interest and redemption rights, the 4 per cent. Conversion Loan was substantially the same as the 5 per cent. National Loan, and therefore it passed under the bequest.

Construction Summons.

John Patrick Farrelly died on the 5th day of November, 1939. His will, made on the 9th day of December, 1932, after appointing Patrick Howard executor and trustee, proceeded as follows:—"I leave to my executor and trustee my investments in Savings Certificates, Irish Free State National Loan and Dublin Corporation Stock upon trust to pay the income thereout to my sister, Mrs. Mary Shelley, during her life for her own use and benefit. Upon the death of my said sister I direct the said investments or the securities then representing same to be held by my said executor and trustee for my nephews, Denis Shelley and Seamus Shelley, sons of my said sister, Mary Shelley, and to be divided equally between them upon their respectively attaining 21 years of age, the income thereof in the meantime to be applied towards their maintenance, education and advancement. Should either of them, the said Denis Shelley and Seamus Shelley, die before the age of 21 years the share of the one so dying is to go to the survivor of them and in the event of the death of both of them during the lifetime of their mother, the said Mary Shelley, I direct that on her death the said investments or the securities then representing same are to fall into and form part of my residuary estate. If the said Savings Certificates, Irish Free State National Loan and Dublin Corporation Stock should mature and be redeemed while subject to the above trusts I direct that the moneys received upon such redemption be re-invested by my executor and trustee in trustee securities. I leave my interest in the book I hold as an agent for the Royal Liver Friendly Society to my said sister, Mary Shelley, for the benefit of my said nephews, Denis Shelley and Seamus Shelley, and direct that same be divided between them upon their respectively attaining the age at which the said Company usually sanctions the appointments of their agents. In the event of the said Denis Shelley and Seamus Shelley refusing to accept such agency I direct my interests in said book to be sold to the best advantage by my executor and trustee and the proceeds of said sale divided equally between the said Mary Shelley and my dear wife, but should only one of my said nephews agree to act as agent then I direct that the share of the other of my said nephews who shall have refused to act as agent shall be sold and the proceeds of such sale applied as aforesaid. After payment of my just debts, funeral and testamentary expenses I leave all the rest, residue and remainder of my estate to my dear wife for her own absolute use and benefit."

At the date of his death the testator was a duly appointed agent of the Royal Liver Friendly Society holding a "Collecting Book" whereby he was entitled to receive commission on collecting premiums of about £50 a week and other remuneration, totalling about £12 a week. Under the rules of the Society an agent was entitled to nominate his successor subject to the approval of the Committee of Management of the Society. The testator's two nephews being aged only 17 years and 14 years, respectively, the Society declined to sanction their appointment. The Society, as a temporary provision, appointed testator's widow in testator's place but declined to appoint either testator's widow or his sister agent during the minority of the nephews, or to make any appointment in the nature of a trusteeship during such minority, and insisted on the"Book" being sold forthwith. The Society stated that if the nephews had been of age and otherwise suitable they would have been accepted as agents. The Society would not allow an agent to commence business with a greater debit than £15 and accordingly the sale had to be carried out in four parts and the total sum realised was £810.

The plaintiff as executor of the will brought this...