In Re Creighton Estate, [1950] CTC 222

WILLIAMS, C.J.K.B. :—The Court is asked to interpret certain provisions in the will of the late Thomas Creighton, of Flin Flon, who died, unmarried, without issue, April 6, 1949, leaving a will dated February 28, 1930, which was proved June 16, 1949.

His father and mother predeceased him. He left four sisters. A fifth sister, Jane, died in 1940 unmarried, without issue. A brother, James, died 35 or 40 years ago, unmarried, without issue. Three other brothers predeceased him, each leaving a widow and issue: William, died 1940; Arthur, died 1942; and John, died 1944.

In May of 1948 the Northern Trust Company, the executor named in the will with whom the testator had deposited the will, wrote Creighton about the will saying in part:

"‘Asa long time has elapsed since it was made it may be that changes or additions may be necessary and in this respect we shall be glad to co-operate with you or your solicitor to see that it is kept up to date.”

After the testator ‘s death a document, in his handwriting, was found amongst his papers. It reads:

"‘Your letter of May 21st regarding my Will which was executed in February, 1930, has been received. As the Will was made so long ago the people who would have benefited by it have since died, therefore I wish you would please destroy it and when I have another Will made, I will send you a copy of it for safe keeping. ’ ‘

This is evidently a draft of a letter he thought of writing; it was unsigned, and was never sent. "‘Another will” was never made. The document was placed before the Court for its information, but all counsel agreed it was of no effect. I concur and should mention, too, that I have not taken it into consideration in interpreting this will.

The will provides:

"‘I direct that all Succession Duties whch may be assessed against my Estate shall be paid out of my general Estate so that any legacies or bequests herein contained shall be free from any deduction whatsoever for Succession Duty.

"‘I give, devise and bequeath the sum of One Hundred (100) shares of Northland Theatres, to Mary Emily Molineaux, of the Town of The Pas, in the Province of Manitoba, Secretary.

"‘I give, devise and bequeath all the rest and residue of my Estate to my Trustee upon the following trusts :

<f (a) To pay one-half of the said rest and residue of my Estate to my brother, Arthur Creighton, of the City of Victoria, in the Province of British Columbia, Druggist.

4< (b) To set aside and hold the remaining one-half of the rest and residue of my Estate and to pay out therefrom to such of my brothers and sisters, except my brother, Arthur Creighton, hereinbefore mentioned, such sum or sums as my said brother, Arthur Creighton, may from time to time direct in writing until the whole of the said one-half has been paid out. Provided, however, that if my said brother Arthur Creighton, shall die before the said one-half has been paid out, then the balance remaining in the hands of my Trustee is to be divided equally amongst such of my brothers and sisters as may be alive at that time.

"‘I authorize and empower my Executor to sell and convert the whole or any part of my Estate into money at such price and upon such terms as it may in its own absolute discretion deem advisable and in the best interests of my Estate. Provided, however, that my Trustee may pay my brother, Arthur Creighton, in kind by transferring and delivering to him such part or parts of my Estate and at such value as my Trustee decides in payment of the residue of my Estate.

"‘I further empower my Executor during the period when it may be holding funds on hand for distribution in the manner hereinbefore provided for my brothers and sisters, to invest the said money in investments authorized by law for investment of trust funds, with power to vary the same.”’

The questions propounded in the notice of motion are:

"‘1. Amongst whom and in what proportions should the ‘one-half of the said rest and residue’ referred to in clause (a)of the said will be divided?

"‘2. Is there an intestacy as to ‘the remaining one-half of the rest and residue’ referred to in clause (b) of the will?

‘*3. If no effect can be given to the last sentence of said clause (b), what effect, if any, is to be given to the first sentence of clause (b) ?

”4. If effect can be given to the last sentence of clause (b) who are the beneficiaries designated by the words ‘such of my brothers and sisters as may be alive at that time ? ’

“5. Amongst whom and in what proportions should ‘the remaining one-half of the rest and residue, ’ referred to in said clause (b), be divided?”

Mr. T. G. Wright appeared for the executors; Sir Charles Tupper, K.C. for the widow and daughter of Arthur Creighton; Mr. L. St. G. Stubbs and Mr. G. St. G. Stubbs for the estate of William Creighton; and Mr. A. R. Thompson for Mary Creighton, a sister of the testator. Mr. Thompson had been in communication with Vera Creighton, a daughter of John Creighton, but she did not wish to be represented. He also stated that Mrs. Dodds, another sister of the testator, did not wish to be represented if the bequest in clause (a) was held to be valid.

In the result John Creighton’s widow and children were not represented on the argument although all had been duly served with the notice of motion in the manner prescribed by an order of my brother Campbell. In my opinion all interested were represented before me and the order I propose to make will contain a declaration that it is binding on all parties served.

Sir Charles Tupper, under his instructions, only took part in the argument on Question 1.

Question 1 may, I think, be answered shortly. Counsel for Mary Creighton, sister of Thomas Creighton, submits that, as Arthur Creighton predeceased the testator, there is an intestacy as to the half of the residue referred to in clause (a). All the other counsel took the stand that this question is answered by sec. 30 of The Wills Act, R.S.M., 1940, ch. 234, which reads :

"130. Unless a contrary intention appears by the will, where any person being a child or other issue or the brother or sister of the testator to whom either as an individual or as a member of a class, any real or personal property is devised, or bequeathed for any estate or interest not determinable at or before the death of that person, dies in the lifetime of the testator, either before or after the making of the will, leaving issue, and any of the issue of that person are living at the time of the death of the testator, the devise or bequest shall not lapse, but shall take effect as if it had been made directly to the persons amongst whom and in the shares in which that person ’s estate would have been divisible if he had died intestate and without debts immediately after the death of the testator.”

Mr. Thompson, however, argues that the whole tenor of the will shows a "‘contrary intention’’ and points especially to the concluding sentence of clause (b) as indicating the testator’s intention that his estate should go only to the brothers and sisters who should be alive "‘at that time,’’ whenever that time might be.

With respect I cannot see that any contrary intention appears by the will. In my opinion sec. 30 applies and the answer to Question 1 will be that this half share will go to the persons and in the proportions provided for by that section.

Question 2 presents considerable difficulty. Mr. Stubbs and Mr. Thompson submit that there is an intestacy in respect of the portion of the estate mentioned in par. (b). This portion is valued at approximately $22,000.

If there is an intestacy, then, as the testator was domiciled in Manitoba at the time of his death, as his estate is here and is being administered here, the succession to the portion of the estate in question will be governed by Manitoba law, namely, The Devolution of Estates Act, R.S.M. 1940, ch. 53 : In re Forgie Estate [1948] 1 W.W.R. 793, 56 Man. R. 56; Re Nanton Estate [1948] 2 W.W.R. 530, 56 Man. R. 71.

In such an event the widows of the testator’s three deceased brothers would take no share; the child or children of each deceased brother would take the share to which their father would have been entitled: Zn re F'orgie Estate, supra.

If, however, clause (b) can be interpreted so as to give that portion of the estate to the brothers and sisters of the testator or to some of them, the widows of the brothers would be entitled to share in the portion of the estate to which their husbands would have been entitled.

If the second sentence of clause (b) is applicable, who the brothers and sisters will be who will be entitled to share will depend upon the meaning to be given to the words ‘ ‘ at that time,” as used in that sentence. Two interpretations were suggested on argument which would fix the time as (1) the date of the death of Arthur Creighton (1942), or (2) the date of the death of the testator. The first interpretation would permit the descendants of John, who died in 1944, to share; the second would exelude the descendants of John, and would give the whole portion to the four surviving sisters.

I set out some of the principles of construction which I should remember in construing a will, in Jn re Ridd Estate [1947] 2 W.W.R. 369, 55 Man. R. 300. In this case I should add the following quotations :

Prendergast, C.J.M., said in In re Stephenson Estate [1943] 3 W.W.R. 519, 51 Man. R. 221 (C.A.) :

“There are two main rules for the construction of wills. One, which Lord Esher, M.R., calls 'a golden rule’ in In re Harrison; Turner v. Hellard (1885), 30 Ch. D 390, 55 LJ Ch. 799, is that the Courts are adverse to finding an intestacy unless constrained to do so; and the other that the testator’s intention is to be gathered from the words he uses, subject however, as to a particular part, to consideration of the will as a whole and to certain special circumstances connected with the making of the will which may be shown.”

The presumption against intestacy is dealt with in many cases, and see 34 Halsbury, pp. 204 et seq.

Sir George Jessel, M.R., said in Zn re Roberts; Repington v. Roberts-Gawen (1881), 19 Ch. D. 520, at 529, 45 L.T. 450:

"‘But the modern doctrine is not to hold a will void for uncertainty unless it is utterly impossible to put a meaning upon it. The duty of the Court is to put a fair meaning on the terms used, and not, as was said in one ease, to repose on the. easy pillow of saying that the whole is void for uncertainty.’’

I draw attention to the fact that the will bequeaths all the residue to the trustee " " upon the following trusts. ’ ’ Furthermore, unlike the wills in all cases cited to me, the discretion given by clause (b) is given not to the executor or trustee but to a third person.

Notwithstanding this last-mentioned fact, I am of opinion that the first sentence of clause (b) gave a valid power of appointment to Arthur Creighton: Halfhead v. Sheppard (1859), 1 EI. & El. 918, 28 L.J.Q.B. 248, 120 E.R. 1155. But as Arthur died before the testator, the power never ‘‘accrued,’’ idem, and could never be exercised.

It, therefore, becomes necessary to consider whether the power was a simple power, or a power in the nature of a trust.

‘“The distinction between trusts and powers is that, while the Court will compel the execution of a trust, it cannot compel the execution of a power; but there are powers which in their nature are fiduciary, in the sense that the donee of the power is a trustee for the exercise of the power, and has an interest extensive enough to allow of its exercise, and in these cases the Court does not allow the non-execution of the power to defeat the intention of the donor:’’ 25 Halsbury, p. 596, see. 1052 (“Powers”).

The rule said to be applicable is then stated in see. 1053 as follows:

“If there is a power to appoint among certain objects, but no gift to those objects and no gift over in default of appointment, the Court may imply a trust for a gift to those objects equally if the power is not exercised; and the rule is the same whether there is a gift over in default of objects of the power or not, and although the donee has power to exclude one class entirely, if there is an intention to give the property to the objects ; but for the rule to apply there must be a clear intention that the donor intended the power to be in the nature of a trust, and any contrary intention defeats an implied trust.’’

Mr. Stubbs also referred to the statement of the rule in 33 Halsbury, p. 99, sec. 163 (‘Trusts and Trustees’’) reading:

‘Where a person, in terms which import a duty to exercise the power, is empowered to apply property for the benefit of such members of a specified class of beneficiaries as he in his discretion thinks fit, and there is no gift over in the event of his not exercising the power, a trust is created in favour of the class ; and the whole class, if and so far as the trustee does not exercise his discretion, takes the property in equal shares. The power does not, however, assume the nature of a trust if there is a gift over in the event of its not being exercised, or if the language does not intimate an intention to make the exercise of the power a duty, or to benefit the class otherwise than by the exercise of the power. A power given by will to trustees to confer a benefit on a person in an event which virtually takes place in the testator’s lifetime may confer the benefit on that person. ’’

The authorities do not seem to be entirely in harmony, as was remarked by Rose, C.J.H.C., in Re Lloyd, [1938] O.R. 32, and that is, of course, because in each of the many decisions from which the rule must be drawn the document under consideration differed from those before the Court in the other cases.

Now it is my duty to construe this particular will and as Rose, C.J.H.C., did in Re Lloyd, supra, I adopt the view expressed by Tomlin, J., as he then was, in In re Combe, [1925] Ch. 210, 94 L.J. Ch. 267, after consideration of the authorities, that this will ought to be approached for the purpose of construction in the Same spirit as I approach any other will and endeavour to construe it, and arrive at the testator’s meaning by examining the words, expressly used only implying those things which are necessarily and reasonably to be implied.

Tomlin, J., rejected the idea that he was to approach the will governed by an inflexible and artificial rule of construction that where he found a power of appointment to a class, not followed by any gift over in default of appointment, he was bound to imply a gift to that class in default of the exercise of the power.

Looking to the first sentence of (b) it seems to me that the objects of the power are a class in the sense that they are such objects: See per Rose, C.J.H.C., in Re Lloyd, supra, at p. 34. The testator selected his brothers and sisters, except his brother Arthur, for whom he had made separate provision: Per Rose, C.J.H.C., at p. 35. The exclusion of Arthur did not prevent the others being a class.

In Kingsbury v. Walter, [1901] A.C. 187, 70 L.J. Ch. 546, at 547, 548 referred to by Mr. Stubbs, Lord Macnaghten said :

“There may be, perhaps, some difficulty in reconciling all the cases, although I do not think that they are so much in conflict as the learned judges in the Court of Appeal seem to have thought. I do not think it is to be wondered at that there is a sort of conflict between them, because many of those cases lie so near the line that they might have been decided either way without violating any principle; and I cannot help thinking that in some cases the Judges who had to interpret the will concerned themselves more about the definition of ‘a class, ’ about what is or what is not a ‘ class, ’ than about actually considering the language of the testator. In my opinion the principle is clear enough. When there is a gift to a number of persons who are united or connected by some common tie, and you can see that the testator was regarding the body rather than the individuals constituting the body, and you can also see that the testator intended that if one of that body died in his lifetime the survivors should take, there is nothing to prevent your giving effect to that intention.”

Considering "‘the language of the testator” or, as Halsbury, L.C., said in the same case, "‘confining myself to what this instrument discloses,” I can come to no other conclusion than that the "‘brothers and sisters,’’ excluding Arthur, form a class.

The interests of the members of the class will vest in interest at the same time whatever that may be: See per Lord Davy in Kingsbury v. Walter, supra, p. 550. See also Re Cotter (1915), 34 O.L.R. 24.

Now I turn for guidance to what Kindersley, V.C., said in Lambert v. Thwaites (1866), L.R. 2 Eq. 151, at 155, 35 L.J. Ch. 406:

* * * it is necessary to bear in mind what has now

become an elementary principle in the doctrine of powers, although at one time it was disputed, and indeed held the other way—I mean the principle that the existence of a power of appointment does not prevent the vesting of the property until, and in default of, execution of the power. The exercise of the power will divest the estate; but until the power is exercised, it remains vested in those who are to take in default of appointment. That is now perfectly well settled, and has been so ever since the well-known ease of Doe v. Martin (1790), 4 Term KR. 39, 100 E.R. 882, in 1790. But where the instrument contains no express gift over in default of appointment, the difficulty is to determine who are to take in default of appointment. The general principle seems to be this: If the instrument itself gives the property to a class, but gives a power to

A. to appoint in what shares and in what manner the members of that class shall take, the property vests, until the power is exercised, in all the members of the class, and they will all take in default of appointment; but if the instrument does not contain a gift of the property to any class, but only a power to A. to give it, as he may think fit, among the members of that class, those only can take in default of appointment who might have taken under an exercise of the power. In that case the Court implies an intention to give the property in default of appointment to those only to whom the donee of the power might give it. ‘ ‘

In In re Arnold’s Trusts; Wainwright v. Howlett, [1946] 2 All E.R. 579, at 581, Wynn-Parry, J., said:

‘‘This statement of the law has so far as I am aware stood without criticism ever since, and, indeed, has from time to time been followed and applied.’’

The first sentence of (b) does not contain a gift “to any class but only a power to A. to give it as he may think fit among the members of that class,’’ to use the very words of Kindersley, V.C.

The fact that the power might be exercised from time to time or, as I read it, might be exercised once and for all, does not, in my opinion, make it any the less a power.

With some hesitation I have come to the view that there is no gift over in default of exercise of the power. The second sentence of (b) is a gift over in the event that the power has not been fully exercised. At first I thought that this sentence might be considered as a gift over of the whole of the fund, in the circumstances of this case, despite the facts that the reference is only to the ‘‘balance’’ and to ‘‘such of my brothers and sisters as may be alive at that time.’’ I now think it would be unduly straining the words of the testator to construe the last sentence as a gift over.

I now address myself to the difficult question: Is the power a power in the nature of a trust? Mr. Stubbs, in his valuable written argument, contends that it is not. He argues that:

“The exercise of the power is obviously discretionary or optional. In conferring the power the testator used the permissive or enabling 1 may’ and not the imperative or mandatory ‘shall.’ See Words and Phrases Judicially Defined, vol. 3, pp. 342-5. Equally obviously there is no intention to make the exercise of the power a duty. The language used does not import any duty or imply any obligation to exercise it. Likewise it is equally obvious that there is not intention to benefit the class otherwise than by the exercise of the power.”

This argument is plainly phrased with the rule as stated in 33 Halsbury, p. 99 (see supra) in mind. Mr. Stubbs also refers to 33 Halsbury, p. 95, sec. 156 :

“A trust can be created by any language which is clear enough to show an intention to create it. In order to create a trust there must be (1) a declaration which is or can be construed as imperative in its terms; (2) a designation of the subject-matter or property to be affected by it within the limits permitted by law; and (3) a designation of the object or the person or persons to be benefited by it within the limits permitted by law.’’

Looking only to the words used in the first sentence of clause (b), and notwithstanding the word ""may,” I am of opinion that the testator intended to impose, and did impose, a duty on Arthur Creighton to exercise the power, and that it was, therefore, a power in the nature of a trust.

Mr. Stubbs cited and relied upon In re Weekes’ Settlement, [1897] 1 Ch. 289, 66 L.J. Ch. 179, and In re Combe, supra, amongst other authorities. The earlier decision, along with other decisions, was considered by Tomlin, J., in In re Combe. In Re Lloyd, supra, also referred to by Mr. Stubbs, Rose, C.J.H.C., discussed these cases and said:

Proceeding in the manner in which Tomplin, J., proceeded, examining the words expressly used and implying only those things that are necessarily and reasonably to be implied, I have come to the conclusion that in Mrs. Lloyd’s will there is a gift to the objects of the power. The objects are a ‘class’ only in the sense that they are such objects. It is not the case that is found so frequently in which the testator makes his children or his family or his descendants or his brothers and sisters the objects of the power. On the contrary, the testatrix selected, no doubt for reasons which seemed to her to be sufficient, three of her five sisters and the daughter of one of the three, and excluded the other two sisters and the son of one of them as well as her three brothers and a son of one of them; and it appears to me that in selecting and naming three of her sisters and her niece she did clearly signify her intention that the power should be in the nature of a trust. Certainly there is no indication of a contrary intention; and I do not read either In re Weekes’ Settlement (supra), or In re Combe (supra), as authority for saying that when the intention to benefit the objects of the power seems, as it does in this case seem to me, to be evidenced by the words of the will, effect shall not be given to that intention unless there are found in the will some direct words of gift to the objects and the power itself is a mere power of selection of some or one of them or a mere power of apportionment amongst them.’’

Each case differs from the other and after studying them all I believe this case to be "‘a proper case’? in which the inference may be drawn.

I am now enabled to apply the applicable principle stated by Kindersley, V.C., quoted above, and imply "‘an intention to give the property in default of appointment to those only to whom the donee of the power might give it. ‘ ‘

I have come to the conclusion that those persons must be ascertained as of the date of the testator’s will, that is, as of February 28, 1930. This excludes only the brother James.

Mr. Stubbs and Mr. Thompson, arguing for an intestacy, relied upon sec. 20 of The Wills Act. It reads:

‘‘Unless a contrary intention appears by the will every will shall be construed with reference to the real and personal property comprised in it to speak and take effect as if it had been executed immediately before the death of the testator.’’

In my opinion this section has no application here. It refers only to the ‘‘estate’’ of the testator: Re Hicks, [1935] O.R. 535 (C.A.). As Middleton, J., said speaking of the similar Ontario section, in Re Karch (1921), 50 O.L.R. 509, at 511:

“It has often been erroneously said that a will speaks from the death of the testator, but it has been authoritatively determined that this is not the effect of the statute. The decision of the Court of Appeal in Jn re Chapman, [1904] 1 Ch.. 431, 73 L.J. Ch. 291, is conclusive upon this point, confirming what was determined in Bullock v. Bennet (1855), 7 De G.M. & G. 283, 44 E.R. 111 * * * . The true rule is that prima facie a will speaks from the date of its execution except as regards the property comprised in it, the statutory provision having only this limited effect.”

See also 34 Halsbury, pp. 236 et seq.

The rule of construction to be applied here must be found elsewhere, Middleton, J., continued in Re Karch :

1 " A will manifestly differs from almost every other document in that it becomes operative only upon the death of the testator. ’ ’

The rule applicable here seems to me be well stated in 34 Halsbury, p. 222, as follows:

“It is a matter of construction of the whole will whether a particular clause is intended to speak from the death of the testator, or the date of the execution of the will, or other time. When the testator uses words of futurity without clearly showing the time he contemplates, in a case where it is not a question of the real and personal estate comprised in the will, prima facie those words should be read as speaking from the date of his making the will and not from the date of his death; but if the context shows that the testator could not mean the time of making the will as the time contemplated by him, then he must prima facie mean the time of his death.’’

I can see nothing in the context to displace the prima facie rule that this will speaks from the date of its execution.

The estate vested in the brothers and sisters of the testator then living, as a class, subject to being divested by the exercise of the power of appointment (Lambert v. Thwates, supra)— a contingency that never arose.

At the time of the execution of the will those in whose favour the power could have been exercised were all the brothers and sisters of the testator except James, long since dead, and Arthur, the donee, who was specifically excluded. But the three brothers, members of the class, predeceased the testator. At common law their shares would not lapse but, the bequest being to a class, the whole would be divisible amongst those who survived the testator.

That was the law of Manitoba until 1936. In that year a new Wills Act was passed. It was largely a copy of a draft Act approved by the Conference of Commissioners on Uniformity of Legislation in 1929. During the years that draft was under consideration, sec. 31 of the Manitoba Act, R.S.M., 1913, ch. 204, and corresponding sections in the Acts of other provinces had been the subject of criticism. This section, which provided that gifts to children or other issue who leave issue living at the testator’s death should not lapse, was copied from sec. 33 of the English Wills Act, 1837, 7 Wm. & 1 Vict., ch. 26.

In In re Sinclair; Clark v. Sinclair (1901), 2 O.L.R. 349, Falconbridge, C.J.K.B., felt constrained to hold that the similar Ontario section applied only to cases of strict lapse and not to cases of gifts to a class. This principle was followed in a series of cases and Re Guthrie (1924), 56 O.L.R. 189, was the occasion of strong recommendations being made to the commissioners.

As a result they recommended a new section which would change the law and make the section applicable to gifts to a class. See Year Book, Canadian Bar Association (1939), vol. 14, p. 30.

This draft section only applied to the case of children of the testator. The matter received further consideration in Manitoba and when, in 1936, a new Wills Act was passed (S.M. 1936, ch. 52) sec. 30 took its present form (see supra) applicable to gifts to a class and its benefits extended to brothers and sisters of the testator.

Under the authorities to which I have referred the Court implies a gift to the class; there is, therefore, an implied bequest, a bequest in law, and I am of opinion that sec. 30 applies in such a case. That, I think, is the "‘apparent’’ purpose of the Act: Atty.-Gen. v. Lockwood (1842), 9 M. & W. 378, 152 E.R. 160 (see per Alderson, B., at p. 398; Inland Revenue Comnrs v. Dowdell, [1950] 1 All E.R. 969 [C.A.].

The three brothers were alive in 1936 when the new Act was passed; there was a vested interest in the class of which they were then members and I hold that sec. 30 applies.

Questions 2, 3, 4, and 5, are answered as follows:

Q. 2 : No.

Q. 3 : The residue referred to in clause (b) goes to the brothers and sisters of the testator, other than Arthur Creighton, who were alive at the date of the execution of the will, in equal shares; the shares which the deceased brothers would have taken will go according to see. 30 of The Wills Act.

Q. 4: This question now requires no answer.

Q. 5 : This question is answered by the answer to question 3.

Sir Charles Tupper asked that the costs incurred as a result of the submission of question 1 should be paid out of the portion of the estate disposed of by clause (b). I agree and the costs of Mrs. Arthur Creighton and her daughter, properly attributable to the issue raised by question 1, will be paid out of Mary Creighton’s share of the residue disposed of by clause (b), after taxation.

The costs of the William Creighton estate will be paid out of the residue disposed of by clause (b) after taxation.

Mary Creighton will have no costs of the issue under question 1. Her costs of the issue on clause (b) will be paid out of the residue disposed of by that clause, after taxation.

The costs of the executors, taxed on a solicitor and client basis, will be paid out of the residue disposed of by clause (b).

Besides the cases referred to herein, I have read all the cases cited in argument and many others. Mr. Wright referred me to Re Milne (1887), 57 L.T. 828, and after argument Mr. Thompson called my attention to Re Gilbert Estate (1948), 21 M.P.R. 196.