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since been wholly unoccupied and unproductive, and Ex. ATTORNEY-GENERAL V.
that during no portion of that time had any income LORD SEFTON. or annual profit been derived from it; and the portion
thereof which had been sold as before stated had, ever Succession Duty-16 & 17 Vict. c. 51--Un- since the defendant became entitled thereto, up to the
occupied and Unproductive Land-Annual times when the same was sold, been wholly unoccupied Value-Duty payable.
and unproductive, and that during no part of that
time was any income or annual profit derived from In 1855, the defendant succeeded under his father's such portion. will, to real property, which, at the testator's death was, and for ten years previously had been, unoccupied and The Attorney-General, The Solicitor-General, Locke, un productive. Por building purposes, however, the land Q.C., and A. Hanson, for the Crown. This is a claim vas of great ralue; but there was no demand for it in under the Succession Duty Act, 16 & 17 Vict. c. 51. the market at the time of the succession ; and from that there can be no doubt this is a succession. Beyond lime, until 1862, the land remained wholly unoccupied all question the land was of value, and what took and unproductive, nor was any income or annual | place in 1862, should be considered with regard to profit derired from it. In 1862, part of the land was the quantum of value. Section 37 shows that duty is sold at a high price, and the Crown having claimed payable if the land is of any value when the duty duty in respect thereof at the rate of 1l. per cent. it becomes payable. The Crown, at any rate, is entitled to
have the land valued as at the time of the late Earl's Held, by POLLOCK, C.B.,'ond WILDE, B., that the death, and to have the amount of duty payable in dejerdant was not liable to pay the duty claimed, and respect of such value. The defendant has had the that annual ralue in the 21st section meant present “ beneficial enjoyment” of the land within the meanactual annual value.
ing of sect. 21 of the Act, and several clauses of Per MARTIN, B., that the defendant was liable to pay that Act show, that when the beneficial enjoyment is the duty; that the 39th section showed that all beneficial postponed, the Crown may delay their claim until the succession to real property was to be subject to the duty; additional value has accrued. The 2nd sect. of the or that the defendant might be made liable under the Act defines what a succession is, the 10th states the 37th and 26th sections.
amount of duty, and the 39th concludes the matter
with respect to the present claim. We rely, however, This was an information to recover succession duty
upon sect. 10. from the defendant at the rate of 1l. per cent., in
Astbury v. Henderson, 24 L. J. C. P. 20, respect of property left to him by his father's will.
was cited in the course of the argument. The late earl died in 1855, and under his will the defendant became entitled to certain real property, for Mellish, Q.C., and 0. Hutton, for Lord Sefton. the greater part of which he paid succession duty at The property must produce an income, either certain the rate of Il. per cent., but as to the remainder
or fluctuating, to render it subject to succession duty. disputed his liability. The defendant in 1862 sold Succession duty is not payable in respect of an unsome part of this land, viz., 1,561 square yards, at opened mine. The counsel for the Crown have strained 16s. per square yard, and a second portion, containing the cases in which there was some present value, in about 1,000 square yards, at 6s. per square yard, and order to make them applicable to this case, where there upion the land so sold succession duty at the rate
Assessment must be according to the aforesaid was claimed in the information.
annual value, and it matters not whether he is tenant alleged, as the information showed, by the defendant, for life or in fee. If it were not for the 24th sect., and not disputed by the Crown, that at the time of a successor would not be chargeable with duty in the testator's death, and when the defendant became respect of an advowson ; and there is no similar exentitled as aforesaid to the land in respect of which he ception in the Act which affects property like the declined as aforesaid to pay succession duty, the same present. There is again the case of an unopened mine. was not in demand, nor marketable as building land, Anything which did not yield a present income was nor was it capable of being sold or let profitably as intended to be exempt from duty. Was there any sneh, and that the custom in Liverpool (where the annual value here so as to bring the caso within the land was situate) was for the owner of land, which was
21st sect. ? The exceptional cases which follow that building land, to sell it absolutely for building on, and section are in the defendants' favour rather than that not to let it upon long leases or otherwise for building; of the Crown. and that the said land was not, at the time of the defendant's becoming entitled thereto, capable of The Attorney-General, in reply. The argument on being used productively for agricultural or other the part of the defendant amounts to this ; viz., that paurposes, and that such land was then, and had the words "annual value” must be read as meaning ben for ten years previously, and (except that portion annual income. thereof which had been sold as before stated) ever (WILDE, B.-The two important sections are the
10th and 21st, and when you have arrived at the value property, although there be no annual income, there of the land, have you not also arrived at the annual is conferred upon him a succession. Now the de
fendant became entitled to the property. It is true Even supposing that the 21st sect. does not apply, that it would not have been wise or prudent in him still there is nothing to discharge the defendant from to have sold it immediately upon his father's death ; liability to pay duty under the 10th sect.
but, nevertheless, it could have been sold, and many
Cur. adv. vult. successors to it would, by reason of their pecuniary There being a difference of opinion between the circumstances, have been compelled to sell it, and it learned Barons, judgment was delivered on the 6th of would, in comparison with ordinary land, have produced July as follows :
an enormous money price. The succession to the pro
perty was, therefore, a benefit, and a great one to the MARTIN, B.—This is a question of considerable defendant. The 10th section imposes a duty, and importance. The late Earl of Sefton died on the enacts that there shall be paid in respect of every 2nd of August, 1855. He was the owner of land in succession, according to the value thereof, a duty upon Toxteth Park, Liverpool. This land then, and for ten such value. years previously, had been wholly unoccupied and un- Now, as regards individual cases, except in the cases productive, and was incapable of being used produc- specially provided for, as timber by the 23rd section, tively for agricultural or other purposes, and no income and advowsons by the 21st, the duty is to be calcuor annual profit had been derived from it. It was not lated upon the value of an annuity ; and there must, then in demand, or marketable building land, nor therefore, be an annual sum for the basis of the capable of being sold or let profitably as such, and it is calculations, and unless one can be attained to, the stated that by the custom of Liverpool, owners of such taxation cannot be effected. land sell it absolutely for building, and do not let it The argument on the part of the defendant was, upon long leases, or otherwise dispose of it. It is not first, that such property as the present was intended stated whether the land was of value on the 2nd of by the Legislature not to be subject to the tax, but in August, 1855, when the defendant, the present Earl, this I cannot concur. became possessed of it; but it must have been of great It was said to be like an unopened mine, which it value, for in 1862 he sold part of it at the rate of was said is not to be considered in the value for the upwards of 40001. an acre, which is forty times the taxation; but, I think, this is not so. By the 21st value of the best agricultural land.
section, the interest of the successor to be taxed is The question is, whether he is liable to succession the value of an annuity equal to the annual value of duty ? and it is of importance, for a great quantity of the property. Now, suppose land containing coal, by far the most valuable land in the kingdom is which the owner did not think fit to let, was situated similarly circumstanced. When noblemen and gentle in a district where the landowners generally let their men are owners of land in the immediate neighbour-coal at rents, which is very generally the case ; I hood of large towns, and new streets and buildings think, in estimating the annual value, the rent which come close to it, such land is liable to constant and the owner could get from the coal ought to be taken perpetual trespass ; people walk over it, carpets are into consideration, although the mere circumstances beaten upon it, children play on it, and except a wall of there being coal under land in the neighbourhood, be built round it, which is frequently of little avail, of which no coal was being worked, night be consior constant and perpetual legal proceedings for trespass dered as not materially adding to it. If this were be kept up, it gets into the condition in which the otherwise, the consequence would be, that one owner defendant's land was. The present income is nil, but of land, precisely similarly circumstanced, who let his the land is of enormous value,—thousands of pounds coal, would pay a higher tax than another, who, for per acre ; more valuable than the very best agri- his own convenience, and possible future benefit, at his cultural land.
own mere will, did not let it. Mines may afford a fluctu. The contention is, that the succession to such land ating yearly income in two ways, first, to any person is not liable to succession duty. This depends upon actually working the mines; and, secondly, to the owner the construction of the Succession Duty Act, the of the mine who does not work it himself, it being a 16 & 17 Vict. c. 51. It may be that the case is one | very frequent practice for the owner of land under omitted, but I cannot believe it was the deliberate which there is a mine to let it at a minimum rent intention of the Legislature to relieve such land from certain, but to increase it according to the quantity of the payment of duty. That Act enacts that the term mineral got. I do not think that any inference could succession shall denote property chargeable with be drawn from this, that an unopened mine is to be duty, and by section 2, a devolution of property, by excluded from the calculation of value under the 31st reason whereof any person shall become beneficially section. The 26th section was relied upon to show that entitled to property or the income thereof, shall be this was so, but I do not think it does. The section deemed to confer a succession.
deals with property of a fluctuating yearly income, If, therefore, a man becomes beneficially entitled to and the first instance is a manor which is clearly of
that character; the second instance is an opened mine. the way proposed, without some clause in the Act to It was argued that the 22nd and 26th sections showed authorise it ; and lastly, because, if the principle on that real property to be taxed, except that in respect which the present claim is made be a sound one, it of which express provision was made, must be capable must apply to cases where the present annual value is of Fielding yearly income, either not of a fluctuating less than prospectively it will probably become, as character or of a fluctuating one; but the 39th section, well as to cases where it is absolutely nothing, and it in my opinion, conclusively shows that it was the is to my mind perfectly clear that the Act was not intention of the Legislature that all real property, framed with any such intention. however disposed or circumstanced, should be subject The real question before us is, what is the meaning to the tax, and the inference from it seems to me
of "annual value” in the 21st section? Does it mean irresistible, that all beneficial succession to real pro- present actual annual value, or does it mean the perty should be subject to the duty.
annual value which the owner might immediately It was, secondly, contended on behalf of the defen- obtain from it were he minded to apply it to a dants, what, in my opinion, is the real difficulty in different purpose, or the possible prospective value the case, that the statute has not expressly provided which there is every reason to suppose it will obtain for it.
in a very few years ? I am of opinion that it means If the 39th section had been framed like the 26th, present actual value. The 23rd section makes especial there would be no difficulty ; for the latter provides provisions for timber-trees or wood, which timber is first for an agreement between the Commissioners and to be paid for when sold. The successor to timber is the successor, and if this cannot be done, it enacts a not bound to sell it ; he may, if so minded, allow it to very reasonable rule, viz., that the principal value of stand as an ornament to his estate, till it has lost all the property shall be ascertained, and the annual value as timber, and then he will pay nothing. The valce shall be considered to be 3 per cent. on the 24th section makes a similar provision as to an advowamount of principal value.
son. A successor to an advowson is chargeable only for The result of the argument is, that, in my opinion, any profit he may make by selling it, or by selling a the Legislature did not intend that property circum- next presentation; but he is not chargeable on account stanced like the present should be free from the tax. of the possibility of profit, if he does not avail himself It would be most unjust and unfair to owners of agri- of it by disposing of either the advowson or the next cultural or grazing lands – which constitute the great presentation. The 25th section provides for fines on bulk of the land of the kingdom,—that a tax should beneficial leases. The 26th section gives the rule for be imposed upon them in respect of land, not one manors, opened mines, and other real property of hundredth part of the value of the land alleged to be fluctuating value ; but a successor having valuable frze; and, in order to prevent such injustice, I am mineral property is not bound to open mines or to prepared either to apply the 37th section, and hold pay for their value if for any reason he determines not this case to be within it; viz., that the defendant did to open them. When opened and worked they would not at the time of his father's death obtain the whole come into charge as part of the succession, and may of his succession, and that he is chargeable with duty have an annual value or be wholly unproductive; but on the value of the property, or benefit from time to if they are to be charged with succession duty every time titne obtained by him, to be calculated according to there is a succession, whether they are opened or not, the mode prescribed by the 26th section--that is, at the effect may be that in the result they would be the rate of 3 per cent. upon the amount of the sales ; | paid for ten times over. The value of timber when or that the word “compound” in the 39th section actually sold, of an advowson turned into money or Ileans to fix or assess, and give the Commissioners money's worth, or a fine on renewing a beneficial lease, authority to impose a duty, which, of course, must be of the income of an opened mine, after deducting all done in conformiiy with the spirit of the Act of Par- necessary outgoings, are easily ascertained; but the liament. I am, therefore, of opinion, that the Crown possible future demand for land as building land (not is entitled to our judgment.
at the time of the succession, in respect of which the
duty is claimed in demand at all, which is the case POLLOCK, C. B.-In this case I am of opinion that here) is utterly incapable of present appreciation, and the defendant is entitled to our judgment; first, there are obvious reasons why the fluctuating value of becanse I think, on the true construction of the Act real property should not be an element in fixing the mder which the claim of the Crown is made, actual amount of duty to bo paid by a successor. If the annual value is the basis on which the succession duty probable increase in value were to be estimated, the is to be calculated, and not possible or prospective probable decrease ought to be taken into account. If ammal value ; secondly, because the special provisions increased duty is to be paid when land rises in value rade in certain cases, such as timber-trees and wood, after a successor has obtained possession of it, duty adcowsons, fines on beneficial leases, and opened ought to be returned should its value fall. But if the mines, afford, in my judgment, strong evidence that principle of this claim be correct, the successor to a such a case as the present was not to be dealt with in mansion and park close to a large town, and adapted
immediately for building, ought to pay, not according the ordinary reference of the fairness of the commissions to the fair rental of the estate as it is, but according to the Registrar and merchants. to the increased value of it when sold for building The existence of such a local law may be properly land, a claim which I think could not be made, and if pleaded as material evidence to support an allegation made could not be supported. The proprietor of pro- that the agreement was to make advances on the credit perty in this country has, in my judgment, a right to of the ship and freight, and that the commissions were make what reasonable use of it he pleases, and some customary. times even an unreasonable use, and he is not bound The existence of such a law will be assumed by the so to use it as to yield the largest revenue to the Court, unless contradicted by plea. If contradicted, government, or to pay taxes as if he did. A landed either party may produce evidence, the party failing in proprietor whose park is over the most valuable the particular issue to pay the costs of it. mineral property, has a right, in my judgment, to
This was a motion to strike out the 3rd article of say, I prefer living where my ancestors have lived to
the plaintiffs' reply. obtaining the wealth which opening the mines would afford ; and on a succession to such property, in my
The plaintiffs, Finlay, Hodgson, & Co., in their judgment, the duty ought to be calculated on the fair petition, sued as holders of a bottomry bond, dated rental which such a residence and park would command,
the 13th December, 1862, given upon the ship and without any reference to the value of the undis
Laurel,” and her freight, to Messrs. MacLaine turbed minerals. The last consideration which I shall
Watson & Co., Batavia. The defendants, John
Willis & Son, in their answer, pleaded that the present is this ; according to the principle involved in the present claim, if the proprietor of a large estate
“Laurel,” being on a homeward voyage from China, did not make the most of it, and exact the largest
with a valuable cargo of tea and silk, was forced to rent it was capable of affording on a succession, the put into Batavia for repairs ; that the master there successor might be called upon to pay according to a
consigned the ship to the firm of MacLaine Watson valuation to be made, not of what its annual value & Co., who accepted the consignment, and agreed to actually was, but upon that which it might be made make the necessary advances on the personal credit of to produce, a proposition which I think wholly unten
the owners without bottomry ; that, on the repairs able
. For these reasons, I think our judgment ought being completed, MacLaine Watson & Co., furnished to be for the defendant. My brother Wilde, who is the master with an account, which charged not only not here, concurs in the judgment I have just delivered.
13281. 6s. on account of disbursements, but also He has sent a written judgment, which I do not think 27741. 3s., as a commission of 2} per cent. on the it necessary should be read.
estimated or assumed value of the cargo : that for the
aggregate amount of these two sums they required CHANNELL, B.- I was obliged to leave the Court in the master to give a draft on the defendants, and also the course of the argument to attend Chambers, so the bottomry bond ; that no maritime premium was that I heard only part of Mr. Mellish's argument, and charged in the bond; and it was averred that, notno part of the reply on the part of the Crown. Under withstanding the form of the bond, the repayment of these circumstances, I take no formal part in the judg- the money was not dependent on sca-risk. The plainment delivered by the Court. At the same time, I tiffs, in their reply, denied the agreement alleged in beg leave to say that I have carefully read and con the answer; and in their 3rd article further pleaded, sidered the judgments prepared by my brother Martin, that by the law of Java MacLaine & Co. were entitled by the Lord Chief Baron, and by my brother Wilde, to a lien on the “Laurel " and her freight for the and as far as I can properly take any part in the several items in the bond, and to enforce payment of decision, I agree in the result at which the Lord Chief the items by arrest and sale of the “Laurel," and Baron and my brother Wilde have arrived.
arrest of her freight; and that, had not such bond Judgment for the defendant. been given, they would have proceeded to enforce
payment accordingly. By the 5th article, they pleaded that the commissions included in the bond were the
ordinary commissions according to the custom of Adm. THE LAUREL.
Batavia, 10 Nov. 1863.
Lushington now moved that the 3rd article should Before the Right Hon. Dr. LUSHINGTON. be struck out. Bottomry-Pleading-Lien under Local Law The law of Java is immaterial to the issue, which is, Commissions-Costs separable.
whether or not the agreement was made for advances
or personal credit : for A lien on the ship and freight existing by local law 1st. Supposing a lien to exist, an agreement on perfor advances and commissions, cannot convert a trans- sonal credit would operate as a waiver.
action on personal credit into a bottomry transaction
, so 2nd. A lien could not render valid a bottomry bond
as to render valid a bond subsequently given, or prevent given subsequent to advances made on personal credit,
for, if so, every bond would be valid, the lien being after the actual advance : if for personal credit, the miversal,
bond is not valid, and Lord Stowell's judgment in the Aunusta, 1 Dod. 288.
Augusta shows that a lien existing by the local law Aurora, 1 Wheaton, R. 104.
cannot convert a transaction on personal credit into a Nor even, if the consideration were release from an bottomry transaction, so as to render valid a bond actual arrest,
subsequently given. Such a law is, however, material Osmanlé, 3 W. R. 214 ; notwithstanding the evidence in support of an allegation that the advances
dictum in Prince George, 4 Moore, P. C. 25. were made upon the credit of the ship and freight, as 3rd. The Court looks only to the law maritime, appears hy the decision of the same Judge in the Bonaparte, 3 W. R. 306 ;
Alexander. But, it cannot be conclusive, for the Eliza Cornish, 1 Spinks, 45.
agreement might have waived the lien, and accepted Carmell y. Sewell, 3 H, & N. 617.
personal credit. In the same manner the fact, if 4th. In any case no local law could justify the exor it be a fact) that the commissions are justified by local bitant commissions in the bond. The Court always custom and enforced by lien under the local law, conexamines for itself into the fairness of the charges, stitutes some evidence that they are not exorbitant, Glenmanna, 1 Lush. 123.
but not conclusive, for they are always referred to the Clarkson, contra.
registrar and merchants who decide upon equitable ist. The local law, allowing a lien, is material evi- considerations. I shall therefore admit the 3rd article ; dence in support of an allegation that the advances but, in order to prevent either party from creating were not made on personal credit,
unnecessary expense and delay by demanding an inAlexander, 1 Dod. 280.
vestigation into the local law, I shall assume the Vibilia, 1 W. R. 7.
existence of a local law granting a lien, unless it be 2nd. As to the commissions, they will be matter for counter-pleaded by the defendant. If contradicted by reference to the registrar and merchants : the plea plea, both parties are at liberty to produce evidence as alleging that the law allowed a lien for them is good.
to the local law, but the party failing on this issue will
have to pay the costs of the issue, whatever be the Dr. LUSHINGTON.—Everything depends upon what ultimate result of the whole litigation. I pass no was the original agreement. If the agreement was opinion as to the validity of the bond. Costs of the for bottomry, the bond is valid though executed long motion to be costs in the cause.