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In the Recent Case of Re Gauthier' the Testatrix, a British Subject, Made a Holograph Will in the Province of Quebec, Where She Was Then Domiciled

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In the Recent Case of Re Gauthier' the Testatrix, a British Subject, Made a Holograph Will in the Province of Quebec, Where She Was Then Domiciled THE CANADIAN BAR REVIEW is the organ of the Canadian Bar Associa- tion, and it is felt that its pages should be. open to free and fair discussionof all matters of interest to the legal profession in Canada . The Editorial oard, howev-3r, wishes it to be understood that opinions expressed in signed articles are those of the individual writers only, and that the REVIEW does not assume any responsibility for them. Articles and notes of cases roust be'typed before being sent to the Editor, Cecil A. Wright, Osgoode Hall Law School, Osgoode Hall, Toronto 1, Ontario . CASE CONFLICT OF LAWS-MORTGAGES OF LAND PERSONAL ESTATE WITHIN LORD KINGSDOwN'S ACT In the recent case of Re Gauthier' the testatrix, a British subject, made a holograph will in the province of Quebec, where she was then domiciled. She was domiciled there also at the time of her death. but this fact is immaterial to the case. The question was whether this will, admittedly valid by the domestic law of Quebec, was valid in Ontario under s. 19 (1) of the Wills Act, R.S.O. 1937, c 164 (which re-enacts aprovision of the WillsAct,1861, (U.K), commonly known as the Lord Kingsdown's Act), so as to pass the right of the testatrix, as mortgagee of land situated in Ontario, to the mortgage money. The provision of the Ontario Wills Act in question isasfollows; 19.-(1) Every will made out of Ontario by a British subject, whatever may be his domicile at the time of making the same or at the time of his death, shall, as regards personal estate, be held to be well executed for the purpose of being admitted to probate in Ontario, if the same was made according to the forms required either by the law of the place where the same was made, or by the law of the place where such person was domiciled when the same was made, or by the law then in force in that part of His Majesty's Dominions where he had his domicile of origin . The case invites comparison with the earlier case of Re Landry and Steinhof? The situation which arose in that case may be briefly restated. The testatrix, domiciled in Louisiana, and not being a British subject, was the mortgagee of land situated in Ontario. She made in Louisiana a holograph will, 1 [19441 O.R. 401, [194413 D.L.R. 401. 2 [19411 O.R. 67, [194111 D.L.R. 699. 714 The Canadian Bar Review [Vol. XXII valid as to both land and movables by the domestic law of Louis- iana, but not valid by the domestic law of Ontario and therefore, tinder Ontario conflict of laws, ineffective to pass to the sole beneficiary any interest of the testatrix in land in Ontario, although it would have been effective as regards movables situated in Ontario, if there had been any. The beneficiary, also named as executrix, obtained probate in Ontario limited to personal estate, but it was held that the will did not vest in her as executrix the mortgagee's interest in the land, and consequently she could not validly exercise the power of sale so as to convey the land to a purchaser, unless she obtained letters of administration in Ontario. In an annotation in the Dominion Law Reports', I ventured to state, somewhat dogmatically, that the result in Re Landry and Steinhof would have been different if the testatrix had been a British subject, because in that event the will would have validated in Ontario by the statute commonly known as Lord Kingsdown's Act, and subsequently adopted in Ontario and now being s. 19 of R.S.O. 1937, c. 164. In other words, whereas succession to any interest in land, including the interest of a mortgagee4, is governed in English and Ontario conflict of laws, as a general rule, by the lex ref staae, this statute provides in effect, by way of exception, that if the particular interest in land is "personal estate", a will, as to that interest, is also valid if it is made abroad in accordance with the forms prescribed by any of the three laws specified in the statute. My statement was based on the hypothesis that the interest of a mortgagee in the mort- gaged land is characterized as personal property, not real property. In one essential particular the situation in Re Gauthier corresponded with the hypothetical situation stated by me, but different from the actual situation in Re Landry and Steinhof. The testatrix was a British subject, and therefore her holograph will, valid by the domestic law of Quebec-the law of the place of making as well as the law of her domicile at the time of making- was, by virtue of Lord Kingsdown's Act, effective in Ontario as regards "personal estate". In another respect, however, the situation in Re Landry and Ste-inhof differed from that in Re Gauthier. In the former case the mortgagee's interest in the mortgaged land was specifically in question. In the latter case only the right to the mortgage money was in question; the mort- gagor in fact paid the money to the administrator who had been appointed in Ontario on the erroneous supposition that the 3 [19411 1 D.L.R. 703, at p. 705, cf. Immovables in the Conflict of Laws (1942), 20 Can. Bar Rev. at p. 125, and LAW OF MORTGAGES (1942) 809 . 4 Cf. In re Hoyles, [1911] 1 Ch. 179, at p. 187. 1944] Case and Comment ,715 testatrix had died intestate as regards her right to the mortgage money. Rose C.J., in a carefully reasoned judgment, which is notable for its accurate statement of conflict rules relating to land, held that the right of the testatrix to the money was "personal estate" within the meaning of Lord Kingsdown's Act and therefore passed to the executrix under the holograph will. He found, however, that it was not necessary for.him to decide, and therefore did not decide, whether the holograph will would have been effective to pass to the executrix all the rights of the testatrix as mortgagee.In other words he did not decide that on the facts of Re Landry and Steinhof the result would have been different if the testatrix had been a British subject. The question thus left undecided in Re Gauthier is specifically whether "personal estate" in Lord Kingsdown's Act includes a mortgagee's interest in the mortgaged land, that is, a freehold estate in land conveyed to the mortgagee subject to a condition subsequent expressed in a proviso for defeasance or a proviso for reconveyance. It is clear that a leasehold estate held either absolutely or by way of mortgage is personal property, and for a long time has been so regarded at law. So in equity, except that if the estate is held upon trust for sale and investment of the proceeds in real property, then what is in fact personal property may be virtue of the equitable doctrine of conversion be treated as already converted and therefore as being real property. Clearly, at law, a freehold estate is real property. ®n the death of the freeholder intestate the legal estate formerly des- cended to his heir, and under a general devise of real property the ~ legal estate passed, whether the freehold estate was held absolutely or by way of mortgage. In equity the freehold estate, if held upon trust for conversion into personality, might be treated as already converted. Apart from this possibility, which is mentioned only for the sake of completeness, equity, unlike law, differentiated between a freehold estate held absolutely and one held by way of mortgage. ®n the mortgagee's death his right to the mortgage money devolved upon his personal represent- ative, and, as will be stated more fully later, the mortgage was regarded as . merely security for the payment of the money. Consequently, although the legal estate in the land descended to the heir, the heir held, the legal estate as trustee for the personal representative, and under a general devise of real property the beneficial interest in the mortgaged land did not pass. (It may be noted in passing that a mortgage of- land does pass under a general bequest of personalty.') The incongruity between the 5 Re Dods (1901), 1 o.L.R. 7. 716 The Canadian Bar Review [Vol. XXII devolution of the right tothemoney upon the personalrepresentative and the descent of the legal estate to the heir was removed in England by the Conveyancing and Law of Property Act, 1881, s. 30, adopted in substance in Ontario in 1910, and now being s. 7 of the Devolution Estates Act, R.S.O. 1937, c. 163, under which the legal estate of the mortgagee devolves upon his personal representative. In the meantime, in Ontario by the Devolution of Estates Act of 1886, and in England by the Land Transfer Act, 1897, the broader principle was adopted that real property generally, like personal property, devolves upon the personal representative, so that devolution upon the personal representative has completely ceased to be a distinguishing characteristic of personal property. These statutes, which assimilated real property and personal property as regards devolution upon the personal representative, do not of course affect the question now under discussion, namely, whether a mortgagee's freehold estate in land is personal property. The answer to this question must be found in the former law, and particular reference must be made to the definitions of "personal estate" and "real estate" contained in the Wills Acts.
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