Kennedy v Keogh

• Jurisdiction: Ireland
• Judgment Date: 02 November 1932
• Date: 02 November 1932
• Docket Number: (1929. No. 4410-29.)
• Court: High Court (Irish Free State)

In re Keogh; Kennedy v. Keogh

JOHN KEOGH, Deceased; REV. PATRICK KENNEDY AND OTHERS

Plaintiffs

and

AGNES MARY KEOGH AND OTHERS

Defendants.

(1929. No. 4410-29.)

Will - Construction - Gift of licensed premises to trustees for benefit of son for life - Discretion of trustees to sell within three years and pay specified income to son - Gift over on death of son - Death of son within three years - Whether gift over dependent on exercise of trustee's discretion - Settlement of leaseholds - Settlor acquiring superior leasehold interest - Surrender of superior leaseholds - Acquisition of new lease - Subsequent acquisition of fee by settlor - Fiduciary capacity of settlor - "Graft."

By his will J. K. devised and bequeathed to trustees certain premises and the business of licensed vintner carried on therein upon trust to permit his son J. to have the rents and profits of the premises, and carry on the business for a period of three years after the death of the testator. If at the end of that period his son J. had carried on the business profitably and to the satisfaction of the trustees, or married within that period, the trustees were directed to convey the premises and business to J. for life. During the period of three years and before the marriage of J., the trustees, if they decided that it was not in the interest of J. that he should keep the premises and business, were empowered to determine J.'s benefit from them. Should the trustees determine the benefit, they were directed to dispose of the premises and business, to invest the proceeds and pay to J. a portion of the resultant income, the portion to be increased in the event of J.'s marriage, and, if there were children of the marriage, on the birth of each child. On the death of J. the trustees wore directed to pay his widow £500, or such sum not exceeding £1,000 as should be equivalent to her marriage portion, and, subject thereto, the testator bequeathed the residue of the capital moneys in equal shares to all his grandchildren living at the death of J. The estate given to J. was declared charged with the payment to the testator's daughter, A. M., of an annuity of £100 per annum, and if the premises were sold, they were to be sold subject to the annuity.

After the testator's death J., with the consent of the trustees, went into possession of the rents and profits of the premises and carried on the business; but he died, unmarried and intestate, within the specified period of three years, the trustees not having exercised the powers conferred on them.

Held, that there was a clear intention to grant A. M. an annuity charged on the premises, and not dependent on J.'s life estate; and equally a clear intention to benefit the grandchildren in remainder, and in the events that had happened they were entitled to the premises and business.

By an indenture of assignment made in 1880, J. K. acquired the lessor's interest under a sub-lease for 14 years, from 1880, in portion of certain premises and the retail spirit licence attached thereto. By a settlement made in 1881, J. K. assigned the sub-lease to a trustee upon trust for J. K., his wife and children, in succession. The premises out of which the portion granted by the sub-lease was taken, together with other adjoining premises, were held from the owner in fee under two leases, made respectively in 1835 and 1837 which were due to expire in 1896; and in 1885 J. K. purchased the lessor's interest in those two leases. In the following year, in consideration of the surrender of the leases of 1835 and 1837 and a covenant to rebuild the premises, J. K. acquired a new lease of the premises for 150 years; and in 1892 he purchased the fee simple interest in the property, the indenture of conveyance containing a declaration that the 150 year term should not merge in the fee. The sub-lease was not surrendered or renewed, and expired in 1894.

Held, that when the settlor acquired the new lease and the fee simple interest he did not do so in a fiduciary capacity, and the sub-lease having expired, the premises were no longer subject to the trusts of the settlement.

Dempsey v. Ward, [1899] 1 I. R. 463 applied; Phillips v. Phillips, 29 Ch. D. 673 distinguished.

Summary Summons for the determination of certain questions arising on the construction of the will of John Keogh, who died on May 7th, 1929, the plaintiffs being the executors and trustees of the will, and the defendants being the children and grandchildren of the testator and beneficiaries under his will.

The testator, by his will, dated May 14th, 1928, appointed executors and trustees, to whom he gave legacies, and made several charitable legacies, and continued as follows:—

"As to the rest, residue and remainder of my property, of every nature and kind, both real and personal (save and except my licensed house No. 19 Stoneybatter, stock, furniture, fittings and effects therein, and the book debts due to the business carried on by me therein, and my houses Nos. 20 and 21 Stoneybatter), I direct my trustees, as soon after my death as may be convenient and expedient, to dispose of same either by public auction or private contract, and with any cash or moneys then remaining forming part of my said residuary estate to pay to my daughter Kitty Norton the sum of £500 absolutely, and to invest out of my said residue the sum of £1,500 and to pay the income therefrom to my daughter Josephine Norton for her life and, after her death leaving children her surviving, then I direct said income to be applied for the benefit of the children of the said Josephine Norton as my trustees in their discretion shall think fit, and each child on attaining the age of 21 years, or, being a daughter, marrying under that age, is to be paid his or her share in the capital moneys for his or her absolute benefit. To my daughter Agnes Mary Keogh the sum of £2,500 for her absolute use and benefit. To my son Patrick Keogh the sum of £500 for his absolute use and benefit. To my son John Keogh the sum of £2,000 for his absolute use and benefit. And as to the then residue of my estate (exclusive of my said premises 19, 20 and 21 Stoneybatter, stock, furniture, fittings and effects of 19 Stoneybatter and said book debts) I give, devise and bequeath same amongst all my children in equal shares, the shares of these predeceasing me and leaving children living at my death to be applied for the benefit of his or her children in like manner as the bequest to the children of my daughter Josephine Norton hereinbefore mentioned."

The testator then continued:—"I give, devise and bequeath my licensed house and premises No. 19 Stoneybatter, together with the stock-in-trade, furniture, fittings and effects therein, and the book debts due to the business carried on by me therein, and my houses Nos. 20 and 21 Stoneybatter to my trustees upon trust to permit my son John Keogh to have the houses and receive the rents and profits of the same premises and to carry on the said business for a period of three years from the date of my death, and if at the end of the said period of three years my said son John Keogh shall have conducted himself to the satisfaction of my trustees and carried on the said business profitably, or if my said son John Keogh shall have married within said period of three years I direct my trustees, on the happening of either event, to convey and assign the said premises, stock, furniture, fittings and effects to my said son John Keogh, to be enjoyed by him for his life only. Provided that should my trustees at any time during the said period of three years and before the same has expired or previous marriage of my said son be of opinion (and in all respects their decision shall be final and they shall not be bound to give any reason for any decision) that it is not in the interest of my son John Keogh that he should be permitted to enjoy the said premises and the income thereof and carry on the said business, they shall be at liberty and entitled to determine the said benefit without notice to my said son John Keogh, or they may in their absolute discretion give him one or more warnings that unless he conducts himself to their satisfaction that they will exercise the power given them by this my will. I declare that the estate hereby given to my said son John Keogh in the said licensed house and premises Nos. 19, 20 and 21 Stoneybatter, shall be charged with the payment to my daughter Agnes Mary Keogh during her life of the sum of £100 per annum, to be paid quarterly, the first payment to be made three months after my death."

The testator then proceeded:—"I direct that should my trustees in their discretion exercise the power hereinbefore given to them over the limited estate of the said John Keogh that they shall forthwith proceed to realise my said licensed house and premises No. 19 Stoneybatter, together with the stock-in-trade, furniture, fittings and effects therein, and my houses Nos. 20 and 21 Stoneybatter, either by public auction or private contract, and call in and collect the book debts then due to the business and invest the proceeds thereof and with power at their discretion to vary such investments (all said premises to be sold subject to said annuity to my said daughter) to hold such proceeds and the investments for the time being representing same upon trust to pay thereout to my said son John Keogh, while he remains a bachelor, the sum of £200 per annum, payable in instalments of £16 13s. 4d. on the first day of each month, and on the marriage of my said son John Keogh said income, so far as same is available from the investments aforesaid is to be increased to £400 per annum and should there be issue of the marriage of my said son John Keogh, then on the birth of each child said income, so far as same is available or sufficient, is to be increased by a sum of £25 for each child so born and continuing to live, and I direct that the balance of the income from such...