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Lord Simonds
MY LORDS,
Once more your Lordships have to consider the difficult subject of charit-
able trusts, and this time a question is asked to which no wholly satisfactory
answer can be given.
On the 24th March, 1930, John Phillips and Elizabeth Miller Phillips,
his wife, executed a settlement whereof the Respondent, Tobacco Securities
Trust Company Limited, were and are the trustees and thereby assigned to
them certain investments in the British American Tobacco Company Limited
(which I will call " the Company ") and its subsidiary and allied companies
and certain real estate in Trinidad (together with certain heritable property
in Scotland as to which no question arises in this appeal) to be held upon
certain trusts during the lives of the grantors and the survivor of them and
thereafter upon 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 British-American Tobacco Company Limited . . .
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 ". The expression " Acting
" Trustees " meant the grantors during their lives and the directors for the
time being of the Company or in the event of a reconstruction or amalga-
mation of the Company such other persons as were therein mentioned, in
which event a variation was made also in the beneficiaries under the trust.
Elizabeth Miller Phillips died on the 8th October, 1940, leaving John
Phillips, her universal legatee and devisee. He died on the 26th June, 1947,
and his will was duly proved by the Respondent Barclays Bank (Dominion,
Colonial and Overseas). The probate value of the trust premises was over
£125,000, including £2,000 which represented the proceeds of the property
in Scotland. It appears that in Trinidad the English common law and
doctrines of equity have been in force since 1848.
In these circumstances the question arose whether the trust that 1 have
set out is a valid trust. It is clear that it creates a perpetuity: it is therefore
invalid unless it can be supported as a charitable trust. The Appellant as
one of the directors of the Company and accordingly an " Acting Trustee "
contends in favour of its validity: the contrary is contended by the Respon-
dent Bank, since in the event of invalidity there is a resulting trust of the
trust premises to the estates of the grantors.
No evidence was given of any connection of the grantors with the Company
except that John Phillips was clearly a large stockholder. It appears that
the number of employees of the Company and its subsidiary and allied com-
panies was large. It exceeded 110,000.
This question coming before Roxburgh J. in the Chancery Division, it
was conceded and he held that, having regard to the decisions of the Courj
of Appeal in In re Compton [19451, 1 Ch. 123 and In re Hobourn Aero
Components Limited's Air Raid Distress fund [19461, Ch. 194, he was bound
to declare the trust void except as to the property in Scotland and on the
10th February, 1949, he made an order accordingly. Upon appeal to the
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Court of Appeal the same view was taken and the appeal was dismissed.
In neither Court was more than a formal decision given. Your Lordships
must look to the cases that I have cited for the reasoning which led to it
Before I turn to these authorities I will make some preliminary observations.
It is a clearly established principle of the law of charity that a trust is not
charitable unless it is directed to the public benefit. This is sometimes stated
in the proposition that it must benefit the community or a section of the
community. Negatively it is said that a trust is not charitable if it confers
only private benefits. In the recent case of Gilmour v. Coats 119491, A.C..
426, this principle was reasserted. It is easy to state and has been stated in, a4
variety of ways, the earliest statement that I find being in Jones v. Williams
(1767), Ambler 651, in which Lord Chancellor Hardwicke is briefly reported
as follows: " Definition of charity: a gift to a general public use, which
extends to the poor as well as to the rich. . . ." With a single exception,
to which I shall refer, this applies to all charities. We are apt now to classify
them by reference to Lord Macnaghten's division in Pemsel's case and, as
I have elsewhere pointed out, it was at one time suggested that the element
of public benefit was not essential except for charities falling within the
fourth class, " other purposes beneficial to the community ". This is certainly
wrong except in the anomalous case of trusts for the relief of poverty with
which I must specifically deal. In the case of trusts for educational purposes
the condition of public benefit must be satisfied. The difficulty lies in
determining what is sufficient to satisfy the test, and there is little to help
your Lordships to solve it.
If I may begin at the bottom of the scale, a trust established by a father
for the education of his son is not a charity. The public element, as I will
(Call it, is not supplied by the fact that from that son's education all may
benefit. At the other end of the scale the establishment of a college or
university is beyond doubt a charity. " Schools of learning and free schools
and scholars of universities are the very words of the preamble to the
Statute of Elizabeth. So also the endowment of a college, university or
school by the creation of scholarships or bursaries is a charity and none
the less because competition may be limited to a particular class of persons.
It is upon this ground, as Lord Greene M.R. pointed out in In re Compton,
that the so-called Founder's Kin cases can be rested. The difficulty arises
where the trust is not for the benefit of any institution either then existing or
by the terms of the trust to be brought into existence, but for the benefit of a
class of persons at large. Then the question is whether that class of persons
can be regarded as such a " section of the community " as to satisfy the test
of public benefit. These words " section of the community " have no special
sanctity, but they conveniently indicate first, that the possible (1 emphasise
the word " possible ") beneficiaries must not be numerically negligible, and
secondly, that the quality which distinguishes them from other members of
the community, so that they form by themselves a section of it, must be a
quality which does not depend on .their relationship to a particular
individual. It is for this reason that a trust for the education of members
of a family or, as in In re Compton, of a number of families cannot be
regarded as charitable. A group of persons may be numerous but, if the
nexus between them is their personal relationship to a single propositus or to
several propositi, they are neither the community nor a section of the
community for charitable purposes.
I come then to the present case where the class of beneficiaries is numerous
but the difficulty arises in regard to their common and distinguishing quality.
That quality is being children of employees of one or other of a group of
companies. I can make no distinction between children of employees and
the employees themselves. In both cases the common quality is found in
employment by particular employers. The latter of the two cases to which
I first referred, the Hobourn case, is a direct authority for saying that such
a common quality does not constitute its possessors a section of the public
for charitable purposes. In the former case, In re Compton, Lord Greene
M.R. had by way of illustration placed members of a family and employees
of a particular employer on the same footing, finding neither in common
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kinship nor in common employment the sort of nexus which is sufficient,
My Lords, I am so fully in agreement with what was said by Lord Greene
in both cases and by my noble and learned friend, then Lord Justice Morton.
in the Hobourn case, that 1 am in danger of repeating without improving
upon their words. No one who has been versed for many years in this
difficult and very artificial branch of the law can be unaware of its
illogicalities, but I join with my noble and learned friend in echoing the
observations which he cited from the judgment of Lord Justice Russell in
In re Grove-Grady and I agree with him that the decision in In re Drummond
" imposed a very healthy check upon the extension of the legal definition
of charity ". It appears to me that it would be an extension, for which
there is no justification in principle or authority, to regard common employ-
ment as a quality which constitutes those employed a section of the
community. It must not, I think, be forgotten that charitable institutions
enjoy rare and increasing privileges, and that the claim to come within that
privileged class should be clearly established. With the single exception of
In re Rayner 122 L.T. 577, which I must regard as of doubtful authority, no
case has been brought to the notice of the House in which such a claim as
this has been made, where there is no element of poverty in the beneficiaries,
but just this and no more, that they are the children of those in a common
employment. Learned counsel for the Appellant sought to fortify his case
by pointing to the anomalies that would ensue from the rejection of his
argument. For, he said, admittedly those who follow a profession or calling,
clergymen, lawyers, colliers, tobacco-workers and so on are a section of the
public; how strange then it would be if, as in the case of railwaymen, those
who follow a particular calling are all employed by one employer. Would
a trust for the education of railwaymen be charitable, but a trust for the
education of men employed on the railways by the Transport Board not be
charitable? And what of service of the Crown whether in the civil service
or the armed forces? Is there a difference between soldiers and soldiers of
the King? My Lords, I am not impressed by this sort of argument and
will consider on its merits, if the occasion should arise, the case where the
description of the occupation and the employment is in effect the same, where
in a word, if you know what a man does, you know who employs him to
do it. It is to me a far more cogent argument, as it was to my noble and
learned friend in the Hobourn case, that if a section of the public is con-
stituted by the personal relation of employment, it is impossible to say that
it is not constituted by 1,000 as by 100,000 employees, and, if by 1,000,
then by 100. and, if by 100, then by 10. I do not mean merely that there
is a difficulty in drawing the line, though that too is significant: I have it
also in mind that, though the actual number of employees at any one
moment might be small, it might increase to any extent, just as, being
large, it might decrease to any extent. If the number of employees is the
test of validity, must the Court take into account potential increase or
decrease, and. if so, as at what date?
I would end, my Lords, where I began, by saying that I concur in the
reasoning of the Court of Appeal in the Hobourn case, but there are cer-
tain points in the argument for the Appellant about which I should say
a few words. It was urged by counsel for the Attorney-General, who
was allowed to address the House, that there was here a valid charitable
trust created, since there was no private person who could sue to enforce
the trust. I am not persuaded that this would be so, if the trust were
otherwise enforceable. But in any case the test is not a valid one. If this
trust is charitable, the Attorney-General can sue to enforce it: it does not
follow that it is charitable because no one else can sue to enforce it. I
would also, as I have previously indicated, say a word about the so-called
" poor relations " cases. I do so only because they have once more been
brought forward as an argument in favour of a more generous view of
what may be charitable. It would not be right for me to affirm or to
denounce or to justify these decisions: I am concerned only to say that
the law of charity, so far as it relates to the relief of aged, impotent and
" poor people " (I quote from the statute) and to poverty in general, has
followed its own line. ,and that it is not useful to try to harmonise decisions
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on that branch of the law with the broad proposition upon which the deter-
mination of this case must rest. It is not for me to say what fate might
await those cases if in a poverty case this House had to consider them;
But, as was observed by Lord Wright in Admiralty Commissioners v.
Valverda [1938], A.C. 173 at 194, while this House has no doubt power to
over-rule even a long established course of decisions of the Courts, provided
it has not itself determined the question , yet in general this House
will adopt this course only in plain cases where serious inconvenience
or injustice would follow from perpetuating an erroneous construction or
ruling of law ". I quote with respect those observations to indicate how
unwise it would be to cast any doubt upon decisions of respectable anti-
quity in order to introduce a greater harmony into the law of charity as
a whole.
The appeal should in my opinion be dismissed with costs.
Lord Normand
my lords.
The trust is an educational trust and it therefore satisfies one of the
conditions for acceptance as a charitable trust. But there is another con-
dition which must also be satisfied, that it is a trust beneficial to the
community or to a section of the community.
No general rule has yet been formulated by which to distinguish trusts
which have this essential element of public benefit and those which have
not, and the valiant attempts of Counsel to arrive at a rule have failed to
convince me. I am, however, satisfied that the element of public benefit
must be found in the definition of the class of persons selected by the truster
as the objects of his bounty. That seems to me to follow from the principle
that the trust purpose must be directed to the benefit of the community or
a section of the community. (Tudor on Charities 5th Edn. p. 11, approved
by the Master of the Rolls in In re Compton [1945] 1 Ch. 123). The truster
may have selected a class of persons which forms an aggregate that is not
a section of the community, and if he has done that the trust will fail for
perpetuity. All depends on the attribute by which the selection of the
class is determined. It is on the difficulty of defining the attribute or
qualification which differentiates a section of the public from an aggregate
of persons which is not a section of the public that all attempts to define
the public element in charitable trusts have foundered.
I will confine myself to educational trusts. It is not obvious a priori that
a trust for the education of persons having the common qualification that
they have already had part of their education at a named school is public.
Yet there is no doubt that such trusts are public charitable trusts and arc
among the most securely established charitable trusts known to the law.
On the other hand, a trust for the education of the descendants of A.B.,
however numerous they may be, is not a charitable trust (In re Compton
[1945] 1 Ch. 123 per the Master of the Rolls at p. 136). These difficulties
come from the historical development of the law of charity. I remind your
Lordships of the observations of Lord Simonds in Gilmour v. Coats [1949]
A.C. 426, that the law of charity has been built up not logically but
empirically. It is this empirical development which has so often baffled
efforts to reduce the law to systematized definitions.
In the present instance this House has for the first time to declare whether
a trust for the education of the children of the employees of named
employers is a charitable trust. If there had been a long and uniform trend
of authority in favour of receiving such a trust as a charity, I apprehend
that your Lordships would have been willing to decide the appeal in accord-
ance with that trend. But as I shall later show, the authorities are with
one exception against the acceptance of trusts of this kind as a charity.
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If the issue is to be decided on principle and without reference to authority
the question is whether a class with the common attribute that the members
are the children of the employees of the same employer is a section of the
public or merely an aggregate of persons without public significance. The
fact that the children of the employees and not the employees themselves
are the beneficiaries does not help the Appellant, for there is no public
element in the relationship of parent and child. The common attribute
that each parent has a contract of service with the same employer remains
for consideration. A contract of service is in a high degree personal, and
it constitutes a personal and private relationship between the parties. What-
ever the number of the employees in the service of the same employer each
still stands independently in this personal and private relationship to the
employer. For certain purposes they are in relationship to one another,
the relation of common employment with the rights and duties which arise
from that relationship. These are private rights and duties and have no
public element, except the interest that the community has in the harmonious
and efficient operation of its industries and commerce and in the securing
of good and safe conditions of labour. But that interest is not concerned
with the employees of particular employers as such but with employees at
large or employees generally in particular occupations and is not an
element relevant to this issue. In principle 1 am unable to say that any
public element can be born out of the several private contracts between a
particular employer and his employees. The Appellant would not boldly
submit that when the common employer employed two servants the public
element at once emerged. He said it was a question of degree and the
Courts must take account of the number of employees, the magnitude of
the sum settled by the truster, the size of the employers' undertaking, the
non-contractual personal relationships (or their absence) between the
employer and his employees, and other circumstances. 1 am unable to
find any logical principle in these submissions. If there is no public element
to be found in the bare nexus of common employment all attempts to
build up the public element out of circumstances which have no necessary
relation with it but are adventitious, accidental and variable must be unavail-
ing when the truster has chosen to define the selected class solely by the
attribute of common employment. I would add that the Appellant's argu-
ment would lead to a degree of uncertainty in this branch of the law which
only compelling authority or logical necessity would induce me to accept.
It may be conceded that the distinction inherent in the view I have taken
between an educational trust for the children of all employees in the tobacco
industry (see Hall v. Derby Sanitary Authority (1885) 16 Q.B.D. 163) and
the present trust may appear to many over-refined and unpractical. But unless
it is accepted that all trusts for education are charitable, that is a criticism
which cannot be avoided. If a line must be drawn between public trusts
and trusts that are not public there will always be marginal cases and the
appearance of over-refinement.
Of the authorities, In re Drummond [1914) 2 Ch. 90, a case upon the fourth
of Lord Macnaghten's classes, is adverse to the Appellant. In re Rayner
(1920) 122 L.T. 577 is the only case which supports the Appellant's con-
tention. It was assumed rather than decided by the same learned Judge,
Eve, J.. who decided In re Drummond, that a bequest to the governors of a
commercial company of shares in the company with a direction to apply
the income to the education of children of persons who for five years
and upwards had been in the employment of the company was a charitable
trust. Both these cases were considered in In re Compton (1945) 1 Ch. 123,
and In re Drummond was approved and In re Rayner disapproved. I
respectfully agree with the comments of Lord Greene the Master of the
Rolls, as he then was, on both these cases. In re Hobourn Aero Com-
ponents Limited's Air Raid Distress Fund 119461 1 Ch. 194, was also a case
on Lord Macnaghten's fourth class. It decided that funds collected by the
employees of a company for their own benefit was not a fund applicable
for the benefit of the public or any section of the public, because the
purpose of the subscription was to benefit the subscribers themselves. ButMorton, L.J., as he then was, discussed (at pp. 207-9) the requirement that
a purpose in order to be charitable must be directed to the benefit of the
community or a section of the community with special relation to trusts
for the benefit of employees of a particular company. With all that he
said I respectfully agree.
I therefore consider that to admit the present trust to the category of
charity would be an innovation contrary alike to principle and to the
trend of authority and on these grounds I would dismiss the appeal.
Lord Oaksey
MY LORDS,
I have had the advantage of reading the opinion of the noble Lord on
the Woolsack and I agree with it.
Lord Morton of Henryton
my lords.
I have had the privilege of reading in print- the opinions which have just
been delivered by my noble and learned friends Lord Simonds and Lord
Normand. I agree with these opinions but, as 1 was a party to the decisions
of the Court of Appeal in In re Campion [19451 1 Ch. 123 and In re Hobourn
Aero Components Limited's Air Raid Distress Fund [1946] 1 Ch. 194, it
is perhaps appropriate that I should say a few words about these cases and
certain other cases.
Counsel for the Appellant submitted that the observations of Lord Greene,
M.R. (with which 1 concurred) in ihe former case and of myself in the latter
case, in regard to trusts for the employees of a particular company, were ill
founded. I have reconsidered these observations with great care in the light
on the arguments submitted on this appeal, and I see no reason to qualify any
of them.
In the last portion of his speech my noble and learned friend on the
Woolsack referred to the " poor relations" cases, of which perhaps the
most notable is Isaac v. de Friez (1754 2 Amb. 595). In In re Compton,
supra. Lord Greene, M.R. considered these cases and observed " the cases
must at this date be regarded as good law, although they are, perhaps,
anomalous ". In the course of the argument, your Lordships' attention
was called to a line of much more modern decisions which might possibly
be described as the descendants of the " poor relations " cases. Recently,
in the case of Gibson v. South American Stores (Gath and Chaves) Limited
[1950] 1 Ch. 177 the Court of Appeal had to consider the trusts of a fund
called " Employees' Health and Relief Fund " established by the defendant
company. The Board of the Company had executed a Deed vesting a
fund in trustees and declaring (by Clause 3) that it was to be used for grant-
ing, at the discretion of the Board, gratuities, pensions or allowances to
beneficiaries. By Clause 4 it was declared that the class of beneficiaries
included " all persons who, in the opinion of the London Board, are or
shall be necessitous and deserving and who for the time being are or have
been in the company's employ or in the employ of any agents of the com-
pany or in the employ of (a subsidiary company) and the wives, widows,
husbands, widowers, children, parents and other dependants of any person
who for the time being is or would, if living, have been himself or herself
a member of the class of beneficiaries ".
The Court of Appeal first held that, as a matter of construction, the trusts
established in Clauses 3 and 4 were limited to necessitous beneficiaries. Sir
Raymond Evershed, M.R. having stated the above decision continued: " That
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left as the next point for discussion what, it appeared, might well be a ques-
tion of law of great difficulty and of no little importance. The question
may, I think, be put thus: under the law as it has now been established,
and in the light of several recent decisions, both in this court and in the
House of Lords, is a trust for a class of poor persons defined by reference
to the fact that they are employed by some person, firm or company, a
good charitable trust, or does it fail of that qualification through the absence
of the necessary public element? " If one omits the word " poor " the
question thus posed is, in substance, the same as the question which arises on
the present appeal. The learned Master of the Rolls then went on to consider
the cases of Spiller v. Maude 32 Ch.D. 158, In re Gosling 48 W.R. 300, In re
Buck [1896] 2 Ch. 727 and In re Sir Robert Laidlaw, an unreported case
decided by the Court of Appeal in 1935, and felt constrained by the last men-
tioned authority to decide that the trust in Gibson's case was a valid charitable
trust, notwithstanding the limited nature of the class of beneficiaries.
The element of poverty of the beneficiaries was present in each of the
cases considered by the learned Master of the Rolls, and therefore each
case fell into the first of the four classes of charitable trusts laid down by
Lord Macnaghten in Pemsel's case [18911 A.C. 531 at p. 583, whereas the
present case falls into the second class. I think that for this reason your
Lordships are of opinion that it is neither necessary nor desirable to express
any view, on the present occasion, upon the cases to which I have just referred.
I am content to fall in with this opinion, only observing that they may require
careful consideration in this House on some future occasion.
I agree that the Appeal must be dismissed with costs.
Lord MacDermott
MY LORDS,
It is not disputed that this trust is for the advancement of education. The
question is whether it is of a public nature, whether, in the words of Lord
Wrenbury in Verge v. Somerville [1924] AC 496 at 499, "it is for the
benefit of the community or of an appreciably important class of the
community ". The relevant class here is that from which those to be
educated are to be selected. The Appellant contends that this class is public
in character; the Respondent Bank (as personal representative of the last
surviving settlor) denies this and says that the class is no more than a group
of private individuals.
Until comparatively recently the usual way of approaching an issue of this
sort, at any rate where educational trusts were concerned, was, I believe, to
regard the facts of each case and to treat the matter very much as one of
degree. No definition of what constituted a sufficient section of the public for
the purpose was applied, for none existed; and the process seems to have
been one of reaching a conclusion on a general survey of the circumstances
and considerations regarded as relevant rather than of making a single, con-
clusive test. The investigation left the course of the dividing line between
what was and what was not a section of the community unexplored, and was
concluded when it had gone far enough to establish to the satisfaction of the
Court whether or not the trust was public; and the decision as to that was, I
think, very often reached by determining whether or not the trust was private.
Now, if it is still .permissible to conduct the present inquiry on these broad
if imprecise lines, I would hold with the Appellant. The numerical strength
of the class is considerable on any showing. The employees concerned
number over 110,000, and it may reasonably be assumed that the children,
who constitute the class in question, are no fewer. The large size of the
class is not, of course, decisive but in my view it cannot be left out of account
when the problem is approached in this way. Then it must be observed that
the propositi are not limited to those presently employed. They include
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former employees (not reckoned in the figure I have given) and are, there-
fore, a more stable category than would otherwise be the case. And, further,
the employees concerned are not limited to those in the service of the
British American Tobacco Company Limited or any of its subsidiary or
allied companies "—itself a description of great width—but include the
employees, in the event of the British American Tobacco Company being
reconstructed or merged on amalgamation, of the reconstructed or amalga-
mated company or any of its subsidiary companies. No doubt the settlors
here had a special interest in the welfare of the class they described, but,
apart from the fact that this may serve to explain the particular form of
their bounty, I do not think it material to the question in hand. What is
material, as I regard the matter, is that they have chosen to benefit a class
which is, in fact, substantial in point of size and importance and have done
so in a manner which, to my mind, manifests an intention to advance the
interests of the class described as a class rather than as a collection or succes-
sion of particular individuals.
Proceeding on the basis I have mentioned, I find no difficulty in distinguish-
ing this trust from that considered by Eve, J. in In re Drummond [1914] 2
Ch. 90. There the class was narrowly defined by reference to the work-
people employed in a particular department in a particular business. I do
not question the correctness of the decision that that was a trust for private
individuals and therefore not public in the relevant sense. But I do not think
there is anything in the judgment of the learned Judge to warrant the view
that the conclusion he reached should prevail in all cases where, in the
qualifications for admission to the class of beneficiaries, there has somewhere
to be found, it may be at one remove or more, the fact of employment by
one of a number of designated employers. There is another difference to
'be noted between that case and the present one. Apart from the marked
contrast in the scope of the respective trusts, the trust purpose in In re
Drummond was not, prima facie, within any of the well-known classes of
legal charity. Here it is otherwise, for the trust is plainly one for the advance-
ment of education. Had Eve J. been able to hold in In re Drummond that
the trust was for the relief of poverty I think it is clear from his subsequent
decision in In re Rayner, 122 L.T. 577, that he would have reached a different
conclusion. It may be that in this respect the relief of poverty and the
(advancement of education do not stand on precisely the same footing. I
confess I do not see why in principle there should be such a distinction; but
even if there is, it is none the less true to say that in both fields the actual
work of the trust advances the public interest in some degree. If, then, the
class of potential beneficiaries in an educational trust is substantial, and not
obviously private in nature, I think one may reasonably commence, in the kind
of investigation I am considering, by assuming, until the contrary appears,
that the trust is for the benefit of the community.
The Respondent Bank, however, contends that the inquiry should be of
quite a different character to that which I have been discussing. It advances
as the sole criterion a narrower test derived from the decisions of the Court
of Appeal in In re Compton [1945] 1 Ch. 123, and in In re Hobourn Aero
Components Limited's Air Raid Distress Fund [1946] 1 Ch. 194. The basis
and nature of this test appear from the passage in the judgment of the Court
in In re Compton where Lord Greene M.R. says (at p. 129): " In the case
of many charitable gifts it is possible to identify the individuals who are to
benefit, or who at any given moment constitute the class from which the
beneficiaries are to be selected. This circumstance does not, however,
deprive the gift of its public character. Thus, if there is a gift to relieve the
poor inhabitants of a parish the class to benefit is readily ascertainable. But
they do not enjoy the benefit, when they receive it, by virtue of their
character as individuals but by virtue of their membership of the specified
class. In such a case the common quality which unites the potential
beneficiaries into a class is essentially an impersonal one. It is definable by
reference to what each has in common with the others, and that is something
into which their status as individuals does not enter. Persons claiming to
belong to the class do so not because they are A.B., C.D. and E.F. but
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because they are poor inhabitants of the parish. If, in asserting their claim,
it were necessary for them to establish the fact that they were the individuals
A.B., C.D. and E.F., I cannot help thinking that on principle the gift ought
not to be held to be a charitable gift, since the introduction into their
qualification of a purely personal element would deprive the gift of its
necessary public character. It seems to me that the same principle ought
to apply when the claimants, in order to establish their status, have to assert
and prove, not that they themselves are A.B., C.D. and E.F., but that they
stand in some specified relationship to the individuals A.B., C.D. and E.F.,
such as that of children or employees. In such a case, too, a purely personal
element enters into and is an essential part of the qualification, which is
defined by reference to something, i.e. a personal relationship to individuals
or an individual which is in its essence non-public."
The test thus propounded focuses upon the common quality which unites
those within the class concerned and asks whether that quality is essen-
tially impersonal or essentially personal. If the former, the class will rank
as a section of the public and the trust will have the element common to
and necessary for all legal charities; but, if the latter, the trust will be
private and not charitable. It is suggested in the passage just quoted, and
made clear beyond doubt in In re Hobourn, that in the opinion of the
Court of Appeal employment by a designated employer must be regarded
for this purpose as a personal and not as an impersonal bond of union.
In this connection and as illustrating the discriminating character of what
I may call " the Compton test" reference should be made to that part of
the judgment of the learned Master of the Rolls in In re Hobourn in which
he speaks of the decision in Hall v. Derby Sanitary Authority (1885) 16
Q.B.D. 163. The passage is to be found on page 206 of the report and
runs thus: " That related to a trust for railway servants. It is said that
if a trust for railway servants can be a good charity, so too a trust for
railway servants in the employment of a particular railway company is
a good charity. That is not so. The reason, 1 think, is that in the one
case the trust is for railway servants in general and in the other case
it is for employees of a particular company, a fact which limits the potential
beneficiaries to a class ascertained on a purely personal basis ".
My Lords, 1 do not quarrel with the result arrived at in the Compton
and Hobourn cases, and I do not doubt that the Compton test may often
prove of value and lead to a correct determination. But, with the great
respect due to those who have formulated this test, I find myself unable
to regard it as a criterion of general applicability and conclusiveness. In
the first place I see much difficulty in dividing the qualities or attributes,
which may serve to bind human beings into classes, into two mutually ex-
clusive groups, the one involving individual status and purely personal, the other
disregarding such status and quite impersonal. As a task this seems to
me no less baffling and elusive than the problem to which it is directed,
namely, the determination of what is and what is not a section of the public
for the purposes of this branch of the law. After all, what is more personal
than poverty or blindness or ignorance? Yet none would deny that a
gift for the education of the children of the poor or blind was charitable;
and I doubt if there is any less certainty about the charitable nature of
a gift for, say, the education of children who satisfy a specified examining
body that they need and would benefit by a course of special instruction
designed to remedy their educational defects. But can any really funda-
mental distinction, as respects the personal or impersonal nature of the
common link, be drawn between those employed, for example, by a par-
ticular University and those whom the same University has put in a certain
category as the result of individual examination and assessment? Again,
if the bond between those employed by a particular railway is purely per-
sonal, why should the bond between those who are employed as railway
men be so essentially different? Is a distinction to be drawn in this respect
between those who are employed in a particular industry before it is
nationalized and those who are employed therein after that process has been
completed and one employer has taken the place of many? Are miners in
the service of the National Coal Board now in one category and miners
10
at a particular pit or of a particular district in another? Is the relationship
between those in the service of the Crown to be distinguished from that
obtaining between those in the service of some other employer? Or, if not,
are the children of, say, soldiers or civil servants to be regarded as not
constituting a sufficient section of the public to make a trust for their
education charitable? It was conceded in the course of the argument
that, had the present trust been framed so as to provide for the education
of the children of those engaged in the tobacco industry in a named county
or town, it would have been a good charitable disposition, and that even
though the class to be benefited would have been appreciably smaller and
no more important than is the class here. That concession follows from
what the Court of Appeal has said. But if it is sound and a personal
or impersonal relationship remains the universal criterion 1 think it shows,
no less than the queries 1 have just raised in indicating some of the diffi-
culties of the problem, that the Compton test is a very arbitrary and artificial
rule. This leads me to the second difficulty I have regarding it. If I under-
stand it aright it necessarily makes the quantum of public benefit a con-
sideration of little moment; the size of the class becomes immaterial and
the need of its members and the public advantage of having that need met
appear alike to be irrelevant. To my mind these are considerations of some
account in the sphere of educational trusts for, as already indicated, 1 think
the educational value and scope of the work actually to be done must have
a bearing on the question of public benefit.
Finally, it seems to me that, far from settling the state of the law on
this particular subject, the Compton test is more likely to create confusion
and doubt in the case of many trusts and institutions of a character whose
legal standing as charities has never been in question. I have particularly
in mind gifts for the education of certain special classes such, for example,
as the daughters of missionaries, the children of those professing a particular
faith or accepted as ministers of a particular denomination, or those whose
parents have sent them to a particular school for the earlier stages of their
training. I cannot but think that in cases of this sort an analysis of the
common quality binding the class to be benefited may reveal a relationship
no less personal than that existing between an employer and those in his
service. Take, for instance, a trust for the provision of university educa-
tion for boys coming from a particular school. The common quality binding
the members of that class seems to reside in the fact that their parents or
guardians all contracted for their schooling with the same establishment
or body. That the school in such a case may itself be a charitable founda-
tion seems altogether beside the point and quite insufficient to hold the
Compton test at bay if it is well founded in law.
My Lords, counsel for the Appellant and for the Attorney General
adumbrated several other tests for establishing the presence or absence of
the necessary public element. I have given these my careful consideration
and I do not find them any more sound or satisfactory than the Compton
test. I therefore return to what I think was the process followed before
the decision in Compton's case and, for the reasons already given, I would
hold the present trust charitable and allow the Appeal. I have only to
add that I recognise the imperfections and uncertainties of that process.
They are as evident as the difficulties of finding something better. But I
venture to doubt if it is in the power of the Courts to resolve those diffi-
culties satisfactorily as matters stand. It is a long cry to the age of
Elizabeth and I think what is needed is a fresh start from a new statute.
(10962) Wt. 8109-108 35 12/50 D.L./PA/19