Oppenheim v. Tobacco Securities Trust Co Ltd and Others

[1951] 1 All ER 31

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Between: Oppenheim
And: Tobacco Securities Trust Co Ltd and Others

Court:

Judges: Lord Simonds
Lord Normand
Lord Oaksey
Lord Morton of Henryton
Lord MacDermott

Subject References:
Charity
Education
Public character
Public nature of bond between beneficiaries
Gift for the education of the children of past and present members of limited company

Case References:
Re Compton - [1945] 1 All ER 198; [1945] Ch 123; 114 LJCh 99; 172 LT 158; 2nd Digest Supp
Re Hobourn Aero Components Ltd's Air Raid Distress Fund - [1946] 1 All ER 501; [1946] Ch 194; 115 LJCh 158; 174 LT 428; 2nd Digest Supp
Gilmour v Coats - [1949] 1 All ER 848; [1949] AC 426; [1949] LJR 1034; 2nd Digest Supp
Jones v Williams - (1767), Amb 651; 27 ER 422; 8 Digest 244, 36
Income Tax Special Purposes Comrs v Pemsel - [1891] AC 531; 61 LJQB 265; 65 LT 621; 55 JP 805; 3 Tax Cas 53; 8 Digest 241, 1
Re Grove Grady - [1929] 1 Ch 557; Digest Supp
Re Drummond - [1914] 2 Ch 90; 83 LJCh 817; 111 LT 156; 8 Digest 244, 28
Re Rayner - (1920), 89 LJCh 369; 122 LT 577; 84 JP 61; Digest Supp
Admiralty Comrs v Valverda (Owners) - [1938] 1 All ER 162; [1938] AC 173; 107 LJKB 99; 158 LT 281; Digest Supp
Hall v Derby Sanitary Authority - (1885), 16 QBD 163; 55 LJMC 21; 54 LT 175; 50 JP 278; 8 Digest 243, 26
Isaac v Defriez - (1754), Amb 595; 27 ER 387; 44 Digest 890, 7479
Gibson v South American Stores (Gath and Chaves) Ltd - [1949] 2 All ER 18; [1949] Ch 572; [1949] LJR 1228; affd in part and revsd in part; [1949] 2 All ER 985; [1950] Ch 117; 2nd Digest Supp
Spiller v Maude - (1881), 32 ChD 158 n; 8 Digest 348, 1412
Re Gosling - (1900), 48 WR 300; 8 Digest 244, 27
Re Buck - [1896] 2 Ch 727; 65 LJCh 881; 75 LT 312; 60 JP 775; 8 Digest 262, 246
Re Sir Robert Laidlaw's Will Trusts - (1935), unreported
Verge v Somerville - [1924] AC 496; 131 LT 107; sub nom A-G for Australia v Somerville; 93 LJPC 173; Digest Supp

Hearing date: 2, 3, 6 November 1950
Judgment date: 13 December 1950

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On 24 March 1930 J P and his wife, E M P, executed a settlement whereby they assigned to a trustee certain investments in the B A Co Ltd and certain real property to be held on certain trusts during the joint lives of the settlors and the life of the survivor of them and thereafter on trust to apply the income of the trust premises "in providing for or assisting in providing for the education of children of employees or former employees of B. A. Co., Ltd. ... or any of its subsidiary or allied companies in such manner and according to such schemes or rules or regulations as the acting trustees shall in their absolute discretion from time to time think fit and also at the discretion from time to time of the acting trustees to apply all or any part of the corpus of the said trust for the like purposes." On 8 October 1940, E M P died and on 26 June 1947 J P died. In view of the perpetuity created by the settlement, the question arose whether the trust was charitable. The number of persons employed by B A Co Ltd and its subsidiary and allied companies exceeded 110,000.

Held - Lord MacDermott dissentiente): the common employment of the beneficiaries would not be a quality which constituted them a section of the community so as to afford to the trust the necessary public character to render it charitable, and, there being for this purpose no distinction between the employees and their children, the gift was void for perpetuity.

Re Compton ([1945] 1 All ER 198) and Re Hobourn Aero Components Ltd's Air Raid Distress Fund ([1946] 1 All ER 501), approved.

Re Rayner (1920) (122 LT 577), doubted.

Per Lord Simonds: It was at one time suggested that the element of public benefit was not essential except for charities falling within Lord Macnaghten's fourth class "other purposes beneficial to the community." This is certainly wrong except in the anomalous case of trusts for the relief of poverty. It is not for me to say what fate might await the "poor relations" cases if in a poverty case this House had to consider them.

Notes

As To Gift For The Education of a Particular Class, see Halsbury, Hailsham Edn, Vol 4 pp 117, para 154; and For Cases, see Digest, Vol 8 pp 245-248, Nos 51-73.

Appeal

Appeal by an "acting trustee" of a settlement made on 24 March 1930, by John Phillips and his wife, Elizabeth Miller Phillips, from an order of the Court of Appeal dated 4 July 1949, affirming an order of Roxburgh J dated 10 February 1949.

Both in the Court of Appeal and at first instance the court's decision was formal, the question being regarded as concluded against the "acting trustee" by the decisions of the Court of Appeal in Re Compton ([1945] 1 All ER 198) and Re Hobourn Aero Components Ltd's Air Raid Distress Fund ([1946] 1 All ER 501). The relevant facts appear in the opinion of Lord Simonds, and are summarised in the headnote.

Their Lordships took time for consideration.

Appeal dismissed with costs.