HC Deb 11 March 1847 vol 90 cc1138-48

drew the attention of the House to a petition which he presented some evenings since, from Sir Thomas Mackdougal Brisbane, of Brisbane and Mukerston, Baronet, G.C.B., and William Malcolm Fleming, of Barochan, two of the executors acting under the will of the deceased Henry Douglas, Esq., late of Patna, Bengal, East Indies. The petitioners complained that in their capacity of executors, they had been compelled to pay to the Comptroller of Legacy Duties in Edinburgh, on account of duties which they contended were not properly exigible, the sum of 9,284l. 6s. 4d. The facts of the case were to be found in the petition, which had been printed by order of the House, and were as follows:— Henry Douglas was a native of Scotland, and went in very early life to the East Indies, where he spent the rest of his life, and realized a large fortune. In the year 1779, he was nominated a writer on the Bengal Presidency; and on the 11th day of April, 1780, he was appointed to the service of the Honourable East India Company, in which service he remained until the 1st day of May, 1836, when he resigned the service, receiving the usual pension from the Company. After his resignation, he continued to reside at Patna until his death, which took place at Patna, on the 18th day of November, 1839. By his last will and testament, dated the 14th day of October, 1837, the said Henry Doug- las appointed the petitioners, who, at that time, resided in Great Britain, and also William Lambert, George King, and Major Charles Rogers, who, at that time, resided in India, his executors; and, after making certain special bequests, he directed that the residue of his estrate should be divided among several residuary legatees, some of whom were relations, and others not, and some of whom resided in India, and others in Great Britain. Henry Douglas was, at the time of his death, domiciled at patna, and, indeed, he had never once visited Great Britain during his long residence of upwards of sixty years in India. But from time to time during his lifetime, he had invested large sums of money in the public funds of Great Britain; and, at the time of his death, he was possessed of divers sums secured in the public funds, amounting in value to 154,738l. 17s. 4d. sterling money. William Lambert, George King, and Major Charles Rogers proceeded to administer the estate in India; and the petitioners, being resident in this country, obtained a probate of the will of Henry Douglas from the Prerogative Court of the Archbishop of Canterbury, on the 11th day of April, 1840, and subsequently realized the said estate in this country, and divided the same among, and remitted the same to or among the residuary legatees, but retaining a sum equivalent to what would be the amount of the legacy duty, in case legacy duty should be chargeable thereon. On the 2nd day of September, 1841, the petitioners received an application from the Comptroller of Legacy Duties in London, to render an account of the personal estate of Henry Douglas to the Office of Stamps and Taxes, in order that the clear residue thereof might be ascertained, and the proper duty thereon assessed and paid. On the 9th day of September, 1841, Messrs. Hunter, Campbell & Co., of the city of Edinburgh, writers to the signet, as agents of the petitioners in Edinburgh, in answer to this application, wrote and sent, to the Comptroller of Legacy Duties in Edinburgh, a letter, containing a statement of the facts, and submitting their opinion, that, under the circumstances, legacy duty was not exigible, for that 'the principle of law is that a testator has all his personal property beside him at his death:' and in the said letter the said Messrs. Hunter, Campbell & Co. wrote further as follows, viz.:—'We beg your attention in the consideration of the question to the recent decisions in the Exchequer Court in England in similar cases, as we understand that they support the view that we have submitted.' On the 10th day of September, 1841, the Comptroller caused an answer to be sent to the Messrs. Hunter, Campbell & Co., to the effect that he held it to be free from all doubt that your petitioners, as executors, were liable for legacy duty 'upon all the funds situated in this country, and appropriated and divided by them under the English probate among the legatees.' The petitioners, not being satisfied of their liability to pay the duties claimed, delayed doing so for some time; but after they had received further urgent applications threatening proceedings against them for the duties claimed, and penalties; they, on the 19th day of January, 1842, in order to avoid the proceedings threatened, and the penalties to which they might have been liable had the duties claimed been properly exigible, made payment to the Stamp Office in Edinburgh of 69,284l. 6s. 4d., being the amount calculated according to the rates exigible on the different shares of the residuary legatees in the said sum of 154,738l. 17s. 4d. At the time the said correspondence took place, in September, 1841, there was pending in the House of Lords, a writ of error from the judgment of the Court of Exchequer in Scotland, in a cause 'Thomson v. Her Majesty's Advocate General,' in which the question at issue was, whether personal estate, situated in Great Britain, belonging to a native of Great Britain, who died domiciled in one of the British Colonies, was, or was not, chargeable with legacy duty; and considerable progress had been made in the cause, and it had actually been set down for hearing at the time the application was made for the legacy duty. This cause was heard before the House of Lords in August, 1842, and was directed to stand over for further hearing in the presence of Her Majesty's Judges of England; and this further hearing was ordered, not in consequence of their Lordships entertaining any difficulty in the question at issue, but because of its importance and extensive application, as will appear from the judgment of the Lord Chancellor, delivered when the cause was further heard in February, 1845. His Lordship said—"I think it proper to state that it was not from any serious doubt or difficulty which we considered to be inherent in this question in the former argument that we thought it right to ask the opinion of the Judges, but it was on account of its extensive nature; and, because though the question applied only to Scotland in the form in which it was presented to your Lordships' House, it did, in reality and in substance, apply to the whole Empire—not only to Great Britain, but in substance to Ireland, and to all the British possessions.' The cause was further heard on the 18th day of February, 1845, when, without calling on the counsel of Thomson, the plaintiff in error, to reply, and after receiving a unanimous opinion from Her Majerty's Judges present, to the effect that legacy duty was not exigible, their Lordships gave judgment in favour of the plaintiff in error, thereby declaring that the liability of personal estate to legacy duty depends on the domicile of the testator, or intestate, at the time of his death. The petitioners and their agents, at the time they paid the said duties, were ignorant of the fact that the case of 'Thomson v. the Advocate General' was in dependence before the House of Lords. But the Commissioners of Stamps and Taxes, and their officers engaged in the collection of the said revenue, were not only aware of this, but the Solicitor for Stamps and Taxes acted as the solicitor for Her Majesty's Advocate General in the said cause; and during the time the said cause of 'Thomson v. Her Majesty's Advocate General' was in dependence in the House of Lords, numerous cases of claims for legacy duty on the succession of natives of Great Britain dying domiciled in the British colonies, or elsewhere abroad, were under discussion, and the Commissioners of Stamps and Taxes allowed such claims to stand over until the cause of 'Thomson v. Her Majesty's Advocate General' was disposed of; and, after it was so disposed of in February, 1845, the Commissioners abandoned, or did not further insist on, the claims which were allowed so to stand over. After the judgment in the writ of error was pronounced, the petitioners consulted an eminent counsel, Mr. (now Commissioner) Burge, who advised them to memorialize the Commissioners of Stamps and Taxes for a restitution of the said sum of 9,284l. 6s. 4d.; at the same time observing, 'I cannot suppose the Commissioners will hesitate to restore the duty, after the decision in 'Thomson v. Her Majesty's Advocate'—a decision which, independent of the high authority by which it has been pronounced, rests upon principles of international law of such undoubted universal application, that I confess I was greatly surprised to find the question ever treated as one of doubt.' In accordance with this advice, in June, 1845, they presented a memorial to the Commissioners of Stamps and Taxes, praying that directions might be given to the proper officer for a return of the said sum of 9,284l. 6s. 4d., together with interest thereon from the 19th day of January, 1842; in reply to this memorial, they received a letter from the Secretary of the said board, in the following terms:—'I am directed, in reply, to observe, that the payments of the legacy duty in question were made according to the then construction of the law, and were made without any question being made by the executors, or you as their law agents, that such duties were not legally due and payable. I am to add, that, as the duties were paid with a full knowledge of all the facts and of the law as then expounded, the board do not consider that a subsequent decision, giving a different construction to the law, is a sufficient authority for a repayment of monies paid under the former construction.' Again they presented a memorial to the Lords of Her Majesty's Treasury, praying for a return of the said duties. But, by a letter of the Secretary of the Treasury, dated the 11th day of July, 1845, he intimated to them, 'that, in cases similar to that which is represented in your memorial, it has been the uniform practice to adhere to charges of duty made in conformity with the law as declared by the judicial decisions received at the time, although subsequent decisions may have given another interpretation to the law in favour of or against the revenue; and that my Lords do not think they would be justified in departing from the practice in the present case.' In July, 1846, they presented a further memorial to the Lords of the Treasury, and on the 14th day of July, 1846, received from the Secretary of the Treasury an answer in the terms following:—'Having laid before the Lords Commissioners of Her Majesty's Treasury your further memorial, praying a return of the legacy duty paid by you, as executors of the late Henry Douglas, Esquire, who died in the East Indies, I am commanded to acquaint you, that, as there are no now facts stated therein which would alter their Lordships' view of the case, they can only refer you to the answer of the Treasury Board of 11th July, 1845, from which they see no reason to depart.' Such were the facts of the case, and as to these facts, there could be no question. And what was the point at issue? The deceased had undoubtedly a foreign domicile; and was his property liable to legacy duty? That matter had been decided by the unanimous opinion of the Judges in the case of Thomson v. Her Majesty's Advocate, which was delivered in the following terms:— The question which your Lordships have put to Her Majesty's Judges is this: A. B., a British-born subject, born in England, resided in a British colony; he made his will and died domiciled there. At the time of his death he had debts owing to him in England; his executors in England collected these debts, and, out of the money so collected, paid legacies to certain legatees in England. The question is, Are such legacies liable to the payment of legacy duty? In answer to this question, I have the honour to inform your Lordships that it is the opinion of all the Judges who have heard this case argued, that such legacies are not liable to the payment of legacy duty. It is admitted in all the decided cases, that the very general words of the statute, 'every legacy given by any will or testamentary instrument of any person,' must of necessity receive some limitation in their application, for they cannot in reason extend to every person every where, whether subjects of this kingdom or foreigners, and whether, at the time of their death, domiciled within the realm or abroad; and, as your Lordships' question applies only to legacies out of personal estate strictly and properly so called, we think such necessary limitation is, that the statute does not extend to the wills of persons, at the time of their death, domiciled out of Great Britain, whether the assets are locally situated within England or not; for we cannot consider that any distinction can be properly made between debts due to the testator from persons resident in the country in which the testator is domiciled at the time of his death, and debts due to him from debtors resident in another and different country, but that all such debts do equally form part of the personal property of the testator or intestate, and must all follow the same rule, namely, the law of the domicile of the testator or intestate. And again in the case of Arnold v. Arnold, where the testator, a natural-born Englishman, but domiciled in India, died there, it was held by Lord Cottenham that the legacy duty was not payable upon the legacies under his will; his Lordship adding, 'It is fortunate that this question, which has been so long afloat, is now finally settled by an authoritative decision of the House of Lords.' And as to the argument at your Lordships' bar, on the part of the Crown, that the proper distinction was, whether the estate was administered by a person in a representative character in this country, and that in case of such administering, the legacy duty was payable; we think it is a sufficient answer thereto, that the liability to legacy duty does not depend on the act of the executor in proving the will in this country, or upon his administering here; the question, as it appears to us, not being whether there be administration in England or not, but whether the will and legacy be a will and legacy within the meaning of the statute imposing the duty. For these reasons, we think the legacies described in your Lordships' question, are not liable to the payment of legacy duty. In giving judgment, the Lord Chancellor said— We thought it right, therefore, in consequence of the extensive nature and operation of the question, that the case should be argued a second time, and we also thought, from the nature of the question, that it was proper to request the attendance of Her Majesty's Judges upon the occasion, because we thought that the opinion of your Lordships' House being in concurrence with the opinion of the learned Judges, would possess that weight with your Lordships, and that weight with the country which, upon all occasions, the opinions of Her Majesty's Judges are entitled to receive. And again— Also, my Lords, it has been decided in the case of British subjects domiciled in India, and having large possessions of personal property in India, that the legacy duty imposed by the Act of Parliament does not apply to cases of that description, although the property may have been transmitted to this country by executors in Iudia to executors in this country for the purpose of being paid to legatees in England. Those are the limitations which have been put upon the Act by judicial decisions. But then this distinction has been attempted to be drawn, and it is upon this distinction that the whole question turns. It is said, that in this case a part of the property was in England at the time of the death of the testator—a circumstance that did not exist in the case of the Attorney General v. Jackson, and which did not exist in the case of Arnold v. Arnold; and it is supposed that some distinction is to be drawn with respect to the construction of the Act of Parliament arising out of that circumstance. I apprehend that that is an entire mistake—that personal property in England follows the law of the domicile—that it is precisely the same as if the personal property had been in India at the time of the testator's death. That is a rule of law that has always been considered as applicable to this subject; and, accordingly, the case which has been referred to by the learned Chief Justice, the case of Ewin, was a case of this description. An Englishman made his will in England—he had foreign stock in Russia, in America, in France, and in Austria; the question was, whether the legacy duty attached to that foreign stock, which was given as part of the residue, the estate being administered in England; and it was contended, I believe, in the course of the argument, by my noble and learned Friend who argued the case, in the first place, that it was real property: but finding that that distinction could not be maintained, the next question was whether it came within the operations of the Act; and although the property was all abroad, it was decided to be within the operation of the Act as personal property on this ground only, that though it was personal property, it must in point of law be considered as following the domicile of the testator, which domicile was England. Now, my Lords, if you apply that principle, which has never been quarrelled with, which is a known principle of our law, to the present case, it decides the whole point in controversy; the property, or part of the property, being in this country at the time of the death of the testator, it is personal property, and, taking the principle laid down in the case of Ewin, it must be considered as property within the domicile of the testator in Demerara; and it is admitted that if it was property within the domicile of the testator in Demerara, it cannot be subject to legacy duty. Now, my Lords, that is the principle upon which the case is decided—the only distinction is that to which I have referred, and which distinction is decided by the case in re Ewin, to which the learned Chief Justice had referred. Now, my Lords, that being the case, and the principle upon which I think this question should be decided, I was desirous of knowing what were the grounds of the judgment of the Court below. I find that the judgment was delivered by two, or rather that the case was heard by two very learned Judges, Lord Gillies and Lord Fullerton. The judgment was delivered by the late Lord Gillies. I was anxious, therefore, from the respect which I entertain for those very learned persons to know what were the grounds upon which their judgment was rested. The first case to which they referred, for it was principally decided upon authority, was a case decided before Sir Samuel Shepherd, Chief Baron of Scotland. That case, in the judgment, was very shortly stated; and I am very happy that the Solicitor General gave us the particulars of that case, for it appears that the legacy was charged upon real estate, and therefore it would not come within the principle which I have stated, and there might therefore have been a sufficient ground for the decision in that case. It is sufficient to say, that it does not apply to the case which is now before your Lordships' House. Then the next case which was referred to was the case of the Attorney General v. Dunn; but, my Lords, that could hardly be cited as an authority. It is true, the point was argued, but it was not necessary for the decision of the case, and no decision in fact was given upon the point. The Chief Baron expressly reserved his opinion, and said that he should not express what his opinion was. Also the learned Judge near me, Mr. Baron Parke, expressed the same thing. It is true that one of the learned Judges said, that at that moment, according to the impression upon his mind, he rather thought the duty would be chargeable; he expressed himself in those terms according to his immediate impression, but no decision was given upon the point—it was a mere obiter dictum; and surely such a dictum as that ought not to be cited as the foundation of a judgment of this description. Looking at the authorities, therefore, they appear to me not properly to support the judgment of the Court below. A third authority was that of my Lord Cottenham. Now my Lord Cottenham, in the case of Arnold v. Arnold, expressly states in terms that the two cases, The Attorney General v. Cockerell, and The Attorney General v. Beatson, he considered to have been overruled. He states that in precise terms. A particular passage is selected from the judgment of my Lord Cottenham, to support the opinion of the learned Judges in the Court below: but I am quite sure, when that passage is read in connexion with the whole judgment of that very learned person, every person reading it with attention must be satisfied that the inference drawn from that particular passage that was cited is not consistent with the whole tenor of the judgment. It appears to me, therefore, that none of the authorities which were cited by the Court below sustained the judgment; and I am of opinion, therefore, independently of the great respect which I entertain for the judgment of the learned Judges who have assisted us upon this occasion, that, upon the true construction of the Act of Parliament, and applying the known principles of the law to that construction, the legacy duty is not, in a case of this description, chargeable. I shall move, therefore, with your Lordships' consent, that the judgment in this case be reversed. The result then of this matter was, that the Treasury had received 9,284l. 6s. 4d., to which they had not a shadow of a right. They had received it contrary to the law, as declared by all the Judges—by the highest law authorities, and by the House of Lords—and they retained it. They retained it, not because they had obtained it by right, but by coercion. They had no right previous to 1842, when they enforced their claim—they had no right, that was still more clear, since 1842. As between man and man—if under such circumstances money had been paid, it would not be retained for an hour after the fact was established, that it had been wrongfully paid; and Government was amenable to the same claims of honesty and probity. He therefore hoped that an inquiry would be instituted with a view to redress; and moved that a Select Committee be appointed for that purpose.


admitted the facts as stated in the petition presented by the hon. and learned Gentleman, with the single exception that no means had been used to compel the payment of the money. The case in no respect differed from ordinary revenue cases, and no threats had been adopted except the common one of process in case of refusal. But the fact was that from 1796, when the duty itself had been imposed, it had, until the recent case in the House of Lords, been held that the legacy duty followed the place where letters of administration were taken out, and not the place of the domicile of the deceased; and the case of Arnold v. Arnold and the others relied upon by the hon. and learned Gentleman were not analogous, inasmuch as in those cases the property had not been—as in this case it was—in England. As to the substantial justice of the case, there was really no reason why the property in question should not pay the legacy duty in compensation for the protection it had received from its investment in the British funds. It was true that for future property, in the same situation as the property in this case, legacy duty, under the decision of the House of Lords, would not be paid; but it was impossible to give a retrospective operation to such decisions. If they did so in this case—in which the property was large—they would be compelled to do the same in every individual case which had occurred since 1796. He saw no ground for the especial interference of the House, and must therefore oppose the Motion.


said, it appeared in this case that the Crown was not prepared to refund money which, according to the decision of the Judges and of the highest tribunal in the country, was not due to the Crown. Then, in no case where the Crown had possessed itself wrongfully of the money of the subject, would it ever be recovered. Because the money had been paid to the Crown under a mistake or misapprehension of the law, that was no reason why it should not be repaid to the party. The distinction attempted, and upon which the whole question turned, was this: part of the property was in England at the death of the testator, which, it was said, distinguished it from the cases of "The Attorney General v. Jackson," and "Arnold v. Arnold." He apprehended that this was a mistake, and that the law of England, as to personal property, followed the law of the domicile. He knew, that of all descriptions of funding with the Treasury, refunding was the worst; but, if this money was not paid, no money wrongfully acquired by the Crown would ever be repaid.


said, the hon. Member for Kendal, at the beginning and end of his speech, had begged the whole question. It was the whole question whether the money was "wrongfully" withheld or not. Up to the very morning of the 18th of February, 1845, when the House of Lords pronounced its judgment in the case of "Thomson v. the Advocate General," the legacy duty was due, according to the construction of the law. He concurred in the view of the case taken by the hon. Secretary of the Treasury.


said, in June, 1838, a similar case occurred, in which a person died in Jamaica, and when his representatives in this country resisted the payment of the legacy duty, the Government withdrew its claim.


said, since the decision of the House of Lords, no legacy duties in such cases had been or would be demanded. But the hon. Mem- ber for Bolton (Dr. Bowring), when he cited the opinion of Sir W. Follett, had forgotten that it was founded upon a private case, not brought before the Government, and, therefore, in fact, it was no authority whatever. The Legacy Duty Act, passed in 1796, and the opinion of the Attorney and Solicitor General (Lord Eldon and Lord Redesdale) was taken on a similar case, and they stated that the legacy duty was payable; that the test was not the domicile of the party, but that when the property was administered in this country, and administration was granted in this country, the legacy duty attached. Many cases had been decided in the Court of Exchequer founded upon that principle. In the case of "Thomson v. the Advocate General," which was argued in the House of Lords, before Lord Cottenham, Lord Lyndhurst, Lord Campbell, and Lord Brougham, the judgment of the House would probably have been in favour of the Crown, that the place of administering the will governed the legacy duty, but for a doubt in the mind of Lord Brougham; in consequence of which the Judges were called in, who laid it down as a general rule, that the legacy duty was governed, not by the place of administration, but by the domicile. If the present Motion was acceded to, every shilling that had been paid in these cases since 1796 must be refunded. The same principle should be adopted in this case as in cases between subject and subject, where, if money were paid not under duresse of law, but by mistake of the law, it ought not to be returned. In a case between subject and subject, if one was deceived as to the law, and under that mistake paid money to another, he could not recover it.


denied that the case was the same as one between subject and subject. If it were, and if a man, who had claimed and received money to which he was not entitled by law, declined to return it, his character would be blasted. No mercantile firm in the country would act as the Crown had done in this case.


said he had been in office during the time when the case of "Thomson v. the Advocate General" was argued in the House of Lords; and he could confirm the statement of the Attorney General, that it was the impression of the profession that administration or probate was the test of the right to the legacy duty, and not domicile. It was a surprise on the profession when the House of Lords for the first time decided in this case that the criterion should be domicile and not administration. He should support the Government on this occasion.


said, that the hon. and learned Gentleman had evaded a material point in the case, if the petition was correct, namely, that what amounted to a protest on the part of the executors took place before they paid the duties to the Legacy Office. That took the case out of the narrow circle of technicalities to which the hon. and learned Gentleman had wished to confine it. The analogy to the case of payments between individuals was wholly inadmissible; and, in his opinion, wherever the subject was contending with the Crown, the House of Commons ought to lean in favour of the subject. It was essential to justice that the facts of the case should be elucidated, and the truth elicited. Either a protest before payment of the duty was made or not. Which was the case ought to be discovered. But if there was any other way in which the truth could be elicited, he should advise the hon. Member to take that way, rather than seek to bring the matter before a Committee of the House.


, after what had passed, should certainly consider what should be the form in which to pursue his object in this case. After the statements that had been made that evening by the Gentlemen who were authorities on legal questions, it was perfectly impossible that the matter could remain as it was. All the Judges and the House of Lords had decided what was good law; and was the subject to be robbed of 9,000l. or 10,000l. under bad law? Such a state of things was intolerable. He would ask leave to withdraw his Motion; but he could assure the House that the matter should again and again be brought before them until justice was done.

Motion withdrawn.