Upon the third point I am unable to agree with the result at which the Lord Ordinary has arrived. The question is a question of fact which I am bound to dispose of as a jury upon an issue of fact. Now, the facts here are not left to be drawn by inference from testimony; they are settled by a joint minute of admissions. This seems to me to exclude all inference except such as falls to be drawn from the terms of the admissions themselves. What then do we find? First, we find that seven years before her death Mrs Ommanney M'Taggart, so far as conveyance is concerned, made a complete transference of her property. The conveyance was completed in every way it could be—infeftment was taken on the heritable property—in the case of incorporeal moveables which required written transference, such written transference was effected by transfers of stocksand shares, and in the case of corporeal moveables, physical possession was taken of the furniture. No one doubts that supposing, for instance, in 1900 Lady M'Taggart
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Stewart had become bankrupt, her creditors could have sold the stocks and shares and the furniture and attached the rents of Ardwell. As to all this the Lord Ordinary takes the same view, but his Lordship points out that the statute demands something more, viz., that the possession and enjoyment of the thing transferred must be assumed by the transferree and retained by him “to the entire exclusion of the person who had the estate or interest limited to cease as aforesaid, and of any benefit to him by contract or otherwise”; and he holds that the fact that Mrs Ommanney M'Taggart continued to occupy a bedroom in Ardwell and to have the use with the rest of the house party of the public rooms shows that she was not entirely excluded from any benefit. In his judgment on this point the Lord Ordinary treats the matter as if it was one of degree, and says that by using the general words “benefit” and “otherwise” the statute says that greater or less degree is not to make a difference. In this view I agree. If it once comes to a question of degree I think the Lord Ordinary's view of the statute is right. But before it comes to a question of degree there is I think something else to be noticed. I hold it clear that the benefit from which the cedent must be excluded must be a benefit which was part of his property before the cession. Any other reading would I think drive the clause mad, because it would mean that if the cedent was after the cession even allowed again to set foot on the ceded property, the whole transaction for the purpose of duty is held as non-existent. It therefore in the end comes to be a question of fact whether the occupation of the bedroom and other rooms of the house which Mrs Ommanney M'Taggart had after the cession is in truth the same as that she had before. It seems to me that the admissions in the joint-minute show conclusively it was not. Before the cession her occupation was one of the incidents of her proprietorship; after, it was only the privilege of a guest. To say in general terms, as was said in the argument for the Crown, that she “got the good of the estate” as much after the cession as before seems to me to beg the question. Very likely her actual enjoyment of life was not made less because she no longer pocketed the rents or sat at the head of the table. I do not think one can analyse existence in such a fashion. Two of the prime necessities—air and sunshine—never depended on her proprietary rights. The question seems to me always to revert to a simple question of fact, namely, after the cession was she the old proprietrix retaining a benefit of her old estate, or was she a guest getting as a guest what the new proprietrix chose to give her. As a juryman reading the minute of admissions I pronounce unhesitatingly for the latter view. On this point I am therefore of the opinion that judgment should go against the Crown.
There remains, however, one other matter to dispose of which the Lord Ordinary in the view he took was not obliged to consider. I allude to the position of Mrs M'Taggart's half of the illegal accumulations. These had fallen to Mrs M'Taggart but nobody had adverted to it. They were carried by the generality of the words in the deed of gift, but then as no one had thought of it no further steps were taken to carry into effect the transference. It was argued for Lady Stewart that as Sir Mark knew of the deed of gift, and as he happened to be a trustee of Sir John, this knowledge was equivalent to a formal intimation to the trustees. I doubt if this was sufficient, but at any rate I think such an implied intimation, without anything more, falls quite short of the assumption of possession by the transferee which is necessary under the statute, and which was really and effectively done in the case of all the other property falling under the deed of gift.
Lord M'Laren —I concur.
Lord Kinnear —I also concur.
Lord Pearson —I agree with your Lordships on the first point arising on the construction of the marriage contract of Mr and Mrs Church.
I also agree that duty is payable in respect of the residue and the “lawful” accumulations as on the death of Mrs Ommanney M'Taggart. I have some difficulty in adopting your Lordships’ ground of judgment on that part of the case, because I think it really assumes that the fund produced by the residue and the “lawful” accumulations was settled property within the meaning of the Act, that being the most familiar case to which the enactments as to the cesser of an interest apply. This view elides the application of the provisions of sec. 23, sub-secs. 14 to 17, as to Scotch entailed estate, which seem to me to apply here. But whichever ground of judgment is adopted, the result, I take it, is the same.
On the question as to the effect of the deed of gift and the deed of propulsion I regret I am unable to coneur in the judgment proposed, so far as it is adverse to the Crown. I may be excused from going into the subject at length, as I have already done so in the note to my interlocutor. But I may say that in my view the sections have been carefully framed so as to avoid as far as possible all questions of degree, and to bring the matter to the simple test of “entire exclusion.” For my part I think the main difficulty in applying the statute to the case of a complex gift, such as we have here, lies in ascertaining how far the subject-matter of the gift is to be regarded as one and indivisible, when you come to apply to it the statutory words as to the possession and enjoyment of the donee and the entire exclusion of the donor. But these difficulties are here in great measure avoided by the circumstance that the claim is limited to three subjects—the entailed estate, the furniture and plenishing, and one-half of the “unlawful” accumulations. Each of these may in my opinion be regarded as a unum quid , and as to each the test provided by the statute itself is of comparatively easy application. The subject of the gift is to be chargeable with duty unless the bona fide possession and enjoyment of it shall have been assumed by the donee, and retained by him to the entire exclusion of the donor, or of any benefit to him by contract or otherwise. Applying these words to the admitted facts, I hold that the whole claim for duty on this head should be sustained.
The Court pronounced this interlocutor—“Affirm findings (1) and (2) in said interlocutor; Quoad ultra recal finding (3), and in place thereof find that the provisions of the Finance Act 1894, section 2, sub-section 1, head b , and of the Finance Act 1900, section 11, do not apply so as to make the entailed lands and others subject to estate duty as property passing on the death of Mrs Ommanney M'Taggart; and find further that settlement estate duty is not payable in respect of the entailed estate, but that succession duty is payable : Recal finding (4), and in place thereof find that the provisions of the Finance Act 1894, sec. 2, sub-sec. 1, head c, do not apply so as to make the furnishing and plenishing in the mansion-house of Ardwell subject to estate duty as property passing on the death of Mrs Ommanney M'Taggart: Further find that Mrs Ommanney M'Taggart's share of the accumulations of the income arising from the residue of Sir John M'Taggart's trust estate from and after 13th August 1888 is subject to estate duty as property passing on her death : Find no expenses due to or by either party, either in this Court or in the Outer House, and remit to the Lord Ordinary in Exchequer Causes to proceed as may be just.”
Counsel for the Reclaimers and Defenders—The Dean of Faculty (Campbell, K.C.)— Clyde, K.C.—Earl of Cassilis. Agents— Tods, Murray, & Jamieson, W.S.
Counsel for the Respondents and Pursuers—The Solicitor-General ( Ure, K.C.)— A. J. Young. Agent— Solicitor of Inland Revenue.