Report No. 70
22.21. Comparison.-
In order that the points to be made hereafter may be properly appreciated, it may be convenient to give, in a brief, a comparison of the English common law rule and the Indian statutory law.
According to the English law, the vesting of property might be postponed for any number of lives in being and an additional term of 21 years, and for as many months in addition as are equal to the ordinary period of gestation, should gestation exist (Jee v. Audley, 1 Cox 324) and the additional term of 21 years might be independent of the minority of any person to be entitled (i.e., irrespective of the fact whether such person is a minor or not).
Indian law, however, allows the vesting to be delayed beyond the life-time of persons in being, for the period only of the minority of some person born in their life-time; the addition of an absolute period of 21 years has not been adopted by this section. So, whereas under the English law the additional period allowed after lives in being is a term of twenty-one years in gross, without reference to the infancy of any person, under the Indian Statute the term is the period of minority of the person to whom, if he attains full age, the thing bequeathed is to belong-at 21, if he has a guardian appointed by the Court; at 18 in other cases.1
In short, at common law, property must best within the period of a life or lives in being, or within twenty-one years after the end of that life.
1. Mukhopadhyaya's Law of Perpetuities, p. 29.
22.22. Life interest.-
This is perhaps a convenient point for dealing with life interest. When some portion of the rights of full ownership is given to a person other than the owner to be exercised by such person to the exclusion of the owner, such detached rights were called in Roman law jura in re aliena.
"Servitudes" were a familiar example. If the rights of ownership are limited in duration-an estate for life in land is one example-then there emerges a class that is differently described in different systems of law.1 In England, life interest is generally spoken of a limited interest. In Rome, a life interest was regarded not as a form of ownership, but as the "antithesis" of ownership, a subtraction from the ownership or a burden upon it-in a word, a servitude.2
Technically, then, this term was also applied to the indefinite use of land-for example, the Roman usufruct or estate for life.
The usufruct in Roman law is the right of using something belonging to another, coupled with the right of taking the fruits of that thing. Unless a shorter period was expressed, it was understood to be given for the life of the receiver.3
1. Hunter Introduction to Roman Law, (1921), p. 74.
2. Hunter Introduction to Roman Law, (1921), p. 74.
3. Hunter Introduction to Roman Law, (1921), p. 75.
22.23. Reform by legislation in England.-
Need for reform of the rule against perpetuities-in the sense employed in the present discussion, as dealing with the aspect of remoteness of vesting-was felt in England for a long time but in general, such reforms have to wait until the legislature intervenes. The only noteworthy "amelioration" of the rule by judicial action is the judgment in the famous Thelusson case wherein it was specifically held that the 'lives in being' for the purposes of the common law formulation of the rule, need not be lives of persons who take interest under the will or transfer, nor need they be lives of persons related to the testator or transferor or his acquaintances.
They must be persons in existence at the date when the transfer takes effect. On this view, theoretically, property could be tied up for a period specified with reference to any number of lives in being at the date when the transfer takes effect. It is not necessary to discuss in detail the repercussions of this doctrine in the contemporary legal world. It is enough to state that major reforms in the field had to await legislative action.
22.24. Act of 1925.-
The Law of property Act, 1925 represents the first major step. Section 163(1) provided that1 where the vesting of property is made to depend on the attainment by the beneficiary of an age greater than twenty-one and that by virtue of that condition the gift would be void for remoteness, the age of twenty-one is to be substituted for the age stated in the instrument. The section applies only when the gift would have been void for remoteness.
It may be noted that so far as regards instruments coming into operation after July 15, 1964, section 163, Law of Property Act, 1925, has been replaced by section 4 of the Act of 1964. By this section, there is not substituted the age of twenty-one, but the age nearest to the age which would have prevented the disposition from being void. Under the Act of 1964, therefore, the instrument is altered only to the extent necessary to save the disposition from offending against the rule. This is because the Act of 1964 reformulates the main rule in different terms. We shall deal with that Act later.
1. Section 163(1), Law of Property Act, 1925.
22.25. Developments leading to Act of 1964.-
While, thus, reform of the rule in regard to the condition of age was effected in 1925, there still remained a need for rectifying other anomalies, including, in particular, the anomaly that even possible events might defeat an interest violating the rule though actual events showed that the property did not actually come to be tied up for an unduly long period.
This point received the attention of courts and legislatures in other countries, and was the subject-matter of articles in learned journals in England as well as elsewhere. As we have already stated,1 legislative measures on the subject were first enacted in some parts of the Commonwealth and in some States of the U.S.A. In England, it was in 1964 that the major legislative reform was effected by the Perpetuities and Accumulations Act.
1. Para. 22.13, supra.
22.26. The Act of 1964-The principal rule.-
The Act of 1964 came into force on July 16, 1964, but, in general, applies only to instruments taking effect after July 15, 1964. The common law rule is thus state-
"No interest is good unless it must vest, if at all, not more than twenty-one years after some lift in being at the creation of the interest.1 A gift by deed is created on delivery of the deed; a gift by will is created on the testators death."
In contrast, if the interest is created by an instrument taking effect after July 15, 1964, the interest is good if, in fact, it vests within twenty-one years after some life in being at the creation of the interest.2
In both cases, an interest is not vested until: (a) an ascertained beneficiary stands ready to take on the determination of a prior interest, and (b) the size of the beneficiary's interest is ascertained. This later requirement is in addition to the normal rules as to vesting, and has important consequences in the field of class gifts.
1. Gray Rule Against Perpetuities, 4th Edn., section 201.
2. Section 3, Perpetuities and Accumulations Act, 1964.
22.27. The Act of 1964-The period.-
Let us deal in greater detail with the permissible time limit. At common law, the perpetuity period is the duration of any relevant life or lives in being plus twenty-one years, or, if no life in being is applicable, a period in gross of twenty-one years. A life in being is any person expressly chosen as a measuring life, or any person impliedly mentioned in the gift and who is alive at the date of the gift; for example, a living ancestor of a beneficiary.
Under the Act of 1964, a period in gross not exceeding eighty years may (but need not) be chosen as the perpetuity period instead of the common law period.
Section 1 of the Act reads-
"1.(1) Subject to section 9(2)1 of this Act and sub-section (2) below, where the instrument by which any disposition is made so provides, the perpetuity period applicable to the disposition under the rule against perpetuities, instead of being of any other duration, shall be of a duration equal to such number of years not exceeding eighty as is specified in that behalf in the instrument.
(2) Sub-section (1) above shall not have effect where the disposition is made in exercise of a special power of appointment, but where a period is specified under that sub-section in the instrument creating such a power the period shall apply in relation to any disposition under the power as it applies in relation to the power itself."
This section creates an entirely new power to specify a perpetuity period as a term not exceeding eighty years.
1. Section 9(2) relates to options in gross to purchase land.
22.28. Act of 1964-Fertility.-
Another matter in respect of which the English Act has made a change relates to what may be conveniently called the presumption of fertility. The position at common law and apart from the Act is illustrated by the leading English case on the subject which went upto the House of Lords.1 A testator by his will left property in trust for his wife for life and then for his children, but if he should have no children then for the children of his brothers and sisters.
By a codicil, the testator revoked the gift in the will and provided that after the death of his wife, the property should be held on trust for the children of his brothers and sisters, who being a son attained the age of twenty-one or being a daughter attained that age of married. At the date of the will (1915), the testator's father and mother, both of whom survived him were both aged sixty-six. The testator died without issue in 1916 and his father died in 1921. All the testator's brothers and sisters were over thirty years of age at the date of the testator's will and all had children. The question arose whether the gift in the codicil was void for perpetuity. If it was void, the original gift took effect.
It was held that the fact that the testator's mother was past the age of childbearing when the will took effect was inadmissible to prove that after the date of the will (1915) and certainly after the date of death, no brother or sister could be born subsequently so that every brother and sister who could take under the will would necessarily constitute a life in being at the date when the will took effect. The argument that the testator must have intended to refer to his brothers and sisters already born and to no others, was also rejected, since the phrase in the will described a class "general in its extent and clear in its description".
This was the principal conclusion, Lord Blanesburgh, while reluctantly agreeing with this conclusion in view of the past precedents observed that "it is the legislature alone which, maintaining the salutary purpose of the rule in its proper application, can, if it pleases, remove from it those incidents or excrescenses which, without assisting to achieve its legitimate object, have done must mischief in other directions."
1. Ward v. Van Der Loeff, 1924 AC 653 (HL).
22.29. Section 2(1).-
Lord Blanesburgh's prophetic observations1 came true in 1964 when section 2(1) of the Act2-to state its terms in non-technical language-provided, in paragraph (a), that, subject to paragraph (b) below, it shall be presumed that a male can have a child at the age of fourteen years or over, but not under that age, and that a female can have a child at the age of twelve years or over but not under that age, or over the age of fifty-five years. According to paragraph (b) of section 2(1) of the Act of 1964, in the case of a living person, evidence may be given to show that he or she will, or will not, be able to have a child at the time in question.
It may be stated that the provision for admitting other evidence-this will be mostly medical evidence-to prove infertility, inserted in the 1964 Act, is in conformity with the judicial view taken for other purposes in the law of property. In a case reported in 19633, for example, a life tenant under a protective trust, with discretionary trusts over to herself, her husband and children, applied for an order under the Variation of Trusts Act, 1958 on the basis that she was past the age of child-bearing.
That Act, inter alia, empowers the court to vary the terms of the trust deed in certain circumstances, even in the case of a private trust. Medical evidence was admitted in proof of infertility in this case. The solution adopted by the 1964 Act became necessary because in the field of law of perpetuity, past judicial decisions4 had laid down a rigid rule that it is conclusively presumed that any person however old, is capable of having children.
Conversely, there have been rare cases of girls below the age of 12 years becoming mothers. A case5 recorded in medical journals in 1939 would seem to furnish an instance of an extraordinary character-fertility at the age of six years. These very rare situations would, in any case, be taken; care of by section 2(1)(b) of the Act of 1964.
1. Wards case, supra.
2. Section 2 is quoted in para. 22.30, infra.
3. Westminster Bank Ltd.'s Declaration of Trust (in re:), (1963) 1 WLR 820.
4. lee v. Audley, (1787) 1 Cox 324.
5. Discussed in 65 Harvard Law Review 725.
