O'Flaherty v Browne

• Jurisdiction: Ireland
• Judge: K. B. Div.
• Judgment Date: 19 April 1907
• Court: Court of Appeal (Ireland)
• Date: 19 April 1907

O'Flaherty

and

Browne(1).

K. B. Div.

Appeal.

CASES

DETERMINED BY

THE KING'S BENCH DIVISION

OF

THE HIGH COURT OF JUSTICE IN IRELAND,

AND ON APPEAL THEREFROM IN

THE COURT OF APPEAL,

AND BY

THE COURT FOR CROWN CASES RESERVED.

1907.

Gift — Incompleteness — Intended transfer of money — Deposit receipt of money in bank — Invalid declaration of trust — Charity.

Held, by the King's Bench Division, that the gift of £60 for Masses and £100 for repairs of the church were good charitable gifts, and that the successor of O. as parish priest of B. was entitled to the amount.

Held, by the Court of Appeal (reversing the decision of the King's Bench Division), that, as the money on deposit receipt remained in the possession and under the control of O.during his life, the relationship of the bank and O. was that of debtor and creditor, and that a valid trust had not been created.

The Rev. Maurice O'Flaherty, who was for a number of years parish priest of Barraduff and Glenflesk, in the county of

Kerry, was a customer of the National Bank, and kept his account at their branch in Killarney.

On the 30th May, 1905, the Rev. Michael Costelloe, his curate, and Miss Mary Griffin, his niece, called at the bank in Killarney, at the request of Father O'Flaherty, and withdrew all his money standing in the bank to the amount of £881 5s. 2d.

On the 15th June, 1905, Mr. O'Bryen, the bank manager, had an interview with Father O'Flaherty at his residence, when he told him that it was foolish to keep his money locked up in boxes in his house. Father O'Flaherty replied that he did not wish to make a will, and that he wished to leave all his money, free of expense, to his two nieces—Mary Griffin and Hannah Griffin. He further stated that it was his wish to leave to his successor, as parish priest of the said parish, a sum of £60 for Masses, and a sum of £50 for the repair of the Barraduff chapel; but that he was in a difficulty as to these gifts of £50 and £60, since he did not know who was to succeed him as such parish priest.

At the request of Father O'Flaherty, O'Bryen then filled up request notes for deposit receipts for £60 and £50.

The request notes were in the following form:—

The National Bank, Limited, Killarney.

15th June, 1905.

Wanted a Deposit Receipt in favour of the Parish Priest of Glenflesk and Barraduff for the sum of £50. church.

(Signed) M. O'Flaherty, P.P., Applicant.

Entd. £50. C. P., Teller.

The National Bank, Limited, Killarney.

15th June, 1905.

Wanted a Deposit Receipt in favour of the Parish Priest of Glenflesk and Barraduff for the sum of £60. Masses.

(Signed) Maurice O'Flaherty, P.P., Applicant.

Entd. £60. C. P., Teller.

The deposit receipts subsequently issued in pursuance of these request notes were in the following form:—

The rest of the £881, after deducting the £110, namely £771, was lodged on two deposit receipts of £385 each, one in the name of the Rev. Maurice O'Flaherty and Mary Griffin, and the other in the name of the Rev. Maurice O'Flaherty and Hannah Griffin.

Two days afterwards, Father O'Flaherty, being in need of money for his personal expenses, went to the bank at Killarney, drew out the £50 placed on deposit receipt for the repairs of the chapel, and lodged the amount to the credit of his current account, and this sum of money was from time to time spent.

On the 20th September, 1905, Mr. O'Bryen had a further interview with Father O'Flaherty at his residence, in the presence of Father Costelloe and Mary Griffin, as to a deposit receipt for the repair of Barraduff chapel. Father O'Flaherty said that he desired to leave £50 to his successor for the purpose, but on the suggestion of Father Costelloe he decided to increase the amount to £100. Accordingly, Mr. O'Bryen filled up a request for a deposit receipt bearing date the 21st September, 1905, in favour of the parish priest of Barraduff for repairs and rebuilding of the church for £100. The deposit receipt for this sum of £100 was in exactly the same form as the former deposit receipt for £50, and the amount was made up by taking £50 from each of the deposit receipts of £385 lodged for the Misses Griffin. Fresh deposit receipts were then made out for £335 each for the Misses Griffin, and the amount was lodged in each case in the name of Father O'Flaherty and each of the nieces as before.

Father O'Flaherty died on the 15th of November, 1905, having previously made his will, dated the 22nd August, 1887, and administration with the will annexed was granted to Timothy O'Flaherty. The Rev. John Browne succeeded him as parish priest of Barraduff, and he claimed the two sums of £100 and £60 so lodged on deposit receipts. Timothy O'Flaherty, having issued a writ against the National Bank for the £160, the bank applied for an interpleader order, whereupon a consent order was made that the claimants' rights be determined on motion as if an originating summons in chancery had been issued.

The arguments were in substance the same as on the appeal, reported infra, pp. 428, 429.

O., who was parish priest of B. in the county of Kerry, on the 15th June 1905, lodged a sum of £60 for Masses on deposit receipt in the branch of the National Bank at Killarney. The deposit receipt was in the form— “Received from the parish priest of Barraduff the sum of £60 for Masses, to be accounted for at our office here.” On the same day he lodged on deposit receipt in the same bank in a similar form a sum of £50 for the parish priest of B., for repairs and building to church. On the same day he also lodged two sums of £385 each in the joint names of himself and each of two nieces. This was done in consequence of a conversation with the bank manager, during which O. stated that he wished to give the two sums of £50 and £60 for the purposes mentioned; but he did not wish to make a will. Two days after O. drew out the £50 lodged on deposit receipt for repairs to the church, and placed the amount to the credit of his current account.

On the 21st September, 1905, O. lodged a sum of £100 on deposit receipt in the same bank for the parish priest of B., for repairs and building to church. This was done in consequence of a conversation with the bank manager, at which two other persons were present, in which O. stated that he desired to leave this sum of money to his successor for repairs to the church. This £100 was made up by taking £50 from each of the deposit receipts in favour of the nieces. O. died on the 15th November, 1905:—

A. M. Sullivan, for the plaintiff.

D. F. Browne, K.C., and James Reardon, for the defendant.

Lord O'Brien, L.C.J.:—

This is not an uninteresting case. The question is whether a complete trust has been created with reference to the sums of £60 and £100—moneys which had belonged to the Rev. Maurice O'Flaherty. By complete trust I mean a binding irrevocable trust of what may be the subject-matter of a trust (moneys in this case) in the hands of a trustee. I do not mean the disposition of money in which he who is said to create a trust retains a beneficial interest in the subject-matter of the trust, or a power to revoke what he has done. I mean a binding complete disposition of money, irrevocable by the donor. Two things we must remember in limine—that a good trust may be declared by parol; and that a binding trust may be in favour of a volunteer—that is, in favour of a person who has not contributed any consideration for its creation. Now then, what are the facts of this case? A good priest, the Rev. Maurice O'Flaherty, being mindful of a future state, and being naturally anxious to give back to the church some of the money he made by it, placed two sums in the hands of the manager of the National Bank at Killarney, under circumstances which are set forth in an affidavit made by that gentleman. I think it well to read the material passages of the affidavit—[His Lordship read the affidavit, which set out the facts as stated above].

Now, these are the facts, and, looking at them as a whole, I think they establish the creation of a binding trust—a trust of moneys in which the Rev. Mr. O'Flaherty retained no interest whatsoever—irrevocable by him. There are three important factors in the case—the conversations between the Rev. Maurice O'Flaherty and Mr. O'Bryen, the bank manager; the request note; and the deposit receipts. It is quite plain that the two sums of £60 for Masses and £100 for repairs and rebuilding of the church were, by the direction of the Rev. Mr. O'Flaherty, segregated by Mr. O'Bryen for the purposes indicated. These two sums were, with the consent of the bank manager, and by the direction of Rev. Maurice O'Flaherty, to await the appointment of his successor, and were then to be handed to him on demand that he might effectuate the charitable objects for which they were dedicated. The trust was a charitable trust; the trustee, until the person to administer the trust arrived, was the bank, and on the appointment of a successor to Father O'Flaherty the trust funds to which a charitable character was attached were to be handed over to him. The bank for the time was the trustee—a trustee to keep, to preserve, but not to administer the fund. The bank manager accepted this position—he accepted either for himself or for the bank. If he could not accept it for the bank, he must be taken to accept it for himself. But I see no reason why he should not accept it for the bank. There was no suggestion whatever made on any occasion by Mr. O'Bryen why the bank could not or should not perform this function. On the contrary, Mr. O'Bryen, the bank manager, who represented the bank, dealt with the Rev. Maurice O'Flaherty on the basis that there was nothing in the constitution of the bank or otherwise to prevent this being done.

It has been gravely...