Report No. 70
26.11. Modern decisions.-
It is now time to refer to the modern doctrines as to charity found in judicial decisions. Without necessarily implying that every rule of English law in this field will be valid in India also, we would like to draw upon the rich material presenting a variety of fact situations available in English decisions. In order that a trust may be legally charitable, its purposes must, in England, fall within the spirit and intendment of the preamble to the Statute 43 Elizabeth I, Chapter 4, often referred to as the Charitable Uses Act, 1601.
Though that statute was repealed by the Mortmain and Charitable Uses Act, 1881, its preamble was preserved by section 13(2) of that Act. Later, by the Charities Act, 1960, the preamble was also repealed, but section 38(4) of the Act of 1960 provides that any reference in any enactment or document to a charity within the meaning, purview and interpretation of the Charitable Uses Act, 1601, or of the preamble to it shall be construed as a reference to a charity within the meaning which the word bears as a legal term according to the law of England and Wales.
The general understanding is1 that even now, in order for a trust to be legally charitable, its purposes must fall within the spirit and intendment of the aforesaid preamble-a proposition which has been re-affirmed by the House of Lords.2 The same opinion has been expressed in one of the annual reports of the Charity Commissioners in England.3
1. O.R. Marshall, (1961), 24 Modem Law Review 444; Spencer Maurice in (1960) 24 Conveyancer 390.
2. Scottish Br. etc. Society v. Glasgow City Corporation, (1967) 3 All EA 215.
3. Report of the Charity Commissioners in 1966, para. 31.
26.12. Statute of Elizabeth I.-
Every reported English case has been1 decided, or ought to have been decided, with the preamble to the Statute of Elizabeth I in mind. The objects enumerated in the preamble to the Statute were:
"The relief of aged, important, and poor people; the maintenance of sick and maimed soldiers and mariners, schools of learning, free schools and scholars of universities; the repair of bridges, havens, causeways, churches, sea banks and highways; the education and preferment of orphans; the relief, stock or maintenance of houses of correction; marriages of poor maids; supportation, aid and help of young tradesmen, handicraftsmen and persons decayed; the relief or redemption of prisoners or captives, and the aid or ease of any poor inhabitants concerning payment of fifteens, setting out of soldiers and other taxes."
1. Tudor on Charities.
26.13. Case-law based on the statute (Romilly).-
Looking to the preamble, and not behind it, the courts have built up a great body of case law. "Often it may appear illogical and even capricious. It could hardly be otherwise when its guiding principle is so vaguely stated and is liable to be so differently interpreted in different ages.1" For more than 200 years after the enactment of the Statute of Elizabeth 1, no attempt was made to classify the objects or purposes which had been held to be charitable as being within the letter or the spirit and intendment of the preamble.
However, in 1805, Sir Samuel Romilly (then Mr. Romilly), arguing in Morice v. Bishop of Durham, (1805) 10 Ves 583, put forward a classification under four heads. These heads were-first, relief of indigent, second, advancement of learning, third, the advancement of religion, fourth, (which is the most difficult), the advancement of objects of general public utility.
1. See Gilmour v. Coats, 1949 AC 426 (443), (per Viscount Simonds).
26.14. Pemsel's case.-
Lord Macnaghten, in Income-tax Commissioners v. Pemsel, 1891 AC 531 (583), substantially accepted Sir Samuel Romilly's classification with two significant variations. He classified charitable purposes under four heads:
(1) The relief of poverty;
(2) The advancement of education;
(3) The advancement of religion;
(4) Other purposes beneficial to the community not falling under any of the preceding heads.
A significant variation in contrast with Romally's classification is the substitution of the advancement of "education" for the advancement of "learning". In this respect, Lord Macnaghten's language was more accurate than the language used by Sir Samuel Romilly.
26.15. Genesis of section 18.-
It is well known that the enunciation in Pemsel's case was based on the classification put forward by Sir Samuel Romilly as counsel in the case of Morice.1 Section 18 was inserted at a time when the decision in Pemsel's case had not been rendered, although the arguments of Sir Samuel Romilly in the case of Morice were perhaps known to the draftsman of our Act. It is not very clear whether the enumeration in section 18 deliberately adds certain objects-such as "commerce"-which were not usually mentioned in the judicial formulations of charity in England.
It is, however, possible that the mention of "commerce" was suggested by the enumeration, in the preamble to the Statute of Elizabeth, of certain objects, such as the "repair of bridges, ports, havens, causeways sea banks and highways and the supportation, aid and help of young tradesmen, handicraftsmen.". Specific mention of "commerce", in any case, creates no anomaly, since the dominant requirement of the public object is very much there.
1. Morice v. Bishop of Durham, (1805) 10 Ves 522.
26.16. Question of law.-
It is to be noted that whether or not a trust is charitable is a question of law, and the same principle would apply to the construction of words referable to public benefit even in a statutory formulation. The question has to be decided by the judge in the light of the circumstances in which the institution or trust came into existence and the sphere in which it operates.1 In arriving at his conclusion on this point, the judge is completely unaffected by the opinion of the settlor or testator as to whether the purpose which he has chosen is charitable or not.
This has been settled long ago in England, and is the law in India. It is equally well settled that the opinion of the trustees in this respect is not binding.2 It was on this principle that in the oft-cited case of Hummeltenberg,3 Russell J. observed that trusts might be established in perpetuity for the promotion of "all kinds of fantastic (though not unlawful) object, of which the training of poodles to dance might be a mild "example.".
Conversely, even if the motive of the stipulation is not necessarily that of generosity, the purpose may still be regarded as charitable if it is charitable in the eye of the law. In another case decided in the same year as Hummeltenberg, it was held4 that a bequest to provide for the erection of a stained glass window in a church was charitable even though the motive of the testatrix was to perpetuate her memory and not to beautify the church or to benefit the parishioners.
1. Incorporated Council of Law Reporting v. Attorney-General, (1971) 3 All ER 1029 (1033).
2. Wooten's Will Trust (in re:), (1968) 2 All ER 618.
3. Hammeltenberg, (1923) 1 Chancery 237 (242).
4. King (in re:), (1923) 1 Chancery 243.
The spirit and intendment of the Statute of Elizabeth has received considerable attention in recent times. In a case which arose in West Indies1, a tax payer had covenanted to make an annual payment to a "Citizens Advice and Aid Service", and the issue before the court was whether this was a charitable purpose. Lord Wilber force observed that the object of the service did not reveal any single dominant purpose of a manifestly charitable character and held that the trust was not charitable.
This was primarily for the reason that the trust was expressed in language that was vague as to permit the property to be used for non-charitable purposes. In order that a trust may be valid under the fourth head of the enumeration in C.I.T. v. Pemsel, it must be for the purpose sufficiently definite and specific to enable the court to control and, if necessary, administer its application in a manner recognised as charitable.
1. D'Aguiar v. Commissioner of National Inland Revenue, (1970) 15 West Indies Reports 198: 1970 Tax Reports 31: 1970 Current Law 178 (PC); see 85 Taxation 286.
26.18. Public purpose.-
The aspect of benefit of the community was given a wide construction in a fairly recent English case relating to Law Reports,1 where it was held that the role which the Law Reports play in the development and administration of judge made law was a purpose beneficial to the community, since without them the administration and development of the law would be difficult, if not impossible.
1. Incorporated Council of Law Reporting etc. v. Attorney-General, (1971) 3 All ER 436.
26.19. Recent cases.-
As to the word "charitable" or "charity" appearing in a statute, after some vacillation, there has emerged a judicial opinion that a strong presumption exists in favour of their interpretation in a legal sense. In England, by this is meant the interpretation given by the House of Lords in Income-tax Special Purposes Commissioners v. Pemsel, 1891 AC 531. It was there laid down that the words "for charitable purposes" and "charity" have a clearly defined legal meaning in English (and, since that case, United Kingdom) laws, i.e., a meaning which is to be derived from that which the courts, including particularly the House of Lords in Pemsel, placed upon that expression by reference to the "index or chart" provided by the preamble to the Statute of Eliz. 1 (Charitable Uses Act, 1601).
We may now deal with a few important points concerning some of the heads of charity.
"Poverty" has been dealt with in some of the judicial decisions. To quote Lord Evershed M.R.:1
"Poverty, of course, does not mean destitution. It is a word of wide and some what indefinite import, and, perhaps, it is not unfairly paraphrased for present purposes as meaning persons who have to 'go short' in the ordinary acceptation of that term, due regard being had to their status in life and so forth."
As Lord Smonds observed,2 "there may be a good charity for the relief of persons who are not in grinding need or utter destitution but relief connotes need of some sort, either need for a home, or for the means to provide for some necessity or quasi-necessity, and not merely an amusement however healthy."
1. Coulthurst's Will Trusts (in re:), (1951) 1 All ER 774 (776): 1951 Ch 661 (666) (CA) (Evershed M.R.).
2. I.R. Commrs. v. Saddeley, (1955) 1 All ER 525 (529): 1955 AC 572 (585) (HL) (Lord Simonds).