Beswick v Beswick

JurisdictionEngland & Wales
CourtCourt of Appeal
JudgeThe Master of the Rolls,Lord Justice Danckwerts
Judgment Date22 June 1966
Judgment citation (vLex)[1966] EWCA Civ J0622-1
Date22 June 1966

[1966] EWCA Civ J0622-1

In The Supreme Court of Judicature

Court of Appeal

From Vice-Chancellor Burgess

Chancery of the County Palatine of Lancaster

Before:

The Master of the Rolls

(Lord Denning)

Lord Justice Danckwerts and

Lord Justice Salmon

Ruth Beswick
Plaintiff Appellant
and
John Joseph Beswick
Defendant Respondent

Mr H. E. Francis, Q.C, and Mr D.G. Nowell (instructed by Messrs Ogden Lyles & Fox, Manchester) appeared as Counsel for the Appellant.

Mr C. A. Settle, Q.C. and Mr J. Fitzhugh (instructed by Messrs Slater Heelis & Co., Manchester) appeared as Counsel for the Respondent.

The Master of the Rolls
1

Old Peter Bewick was a coal merchant in oles, Lancashire, He had no business premises. All he had was a lorry, scales and weights. He used to take the lorry to the yard of the National Coal Board, where he bagged coal and took It round to his customers in the neighbourhood. His nephew, John Joseph Beswick, helped him In the business.

2

In March 1962 old Peter Beswick and his wife were both over 70. He had had his leg amputated and was not in good health. The nephew was anxious to get hold of the business before the old man died. So they went to a solicitor, Mr Ashcroft, who drew up an agreement for them. The business was to be transferred to the nephews old Peter Beswick was to be employed in it as a consultant for the rest of his life at £ 6. 10s.0d. a week. After his death the nephew was to pay to his widow an annuity of £5. 0s.0d. per week, which was to come out of the business. The agreement was quite short and I will read it in fulls:

1. Peter Beswick to assign to John Joseph Beswick the Goodwill, motor lorry, scales, weights and other trade utensils of the business of a coal merchant hitherto carried on by him in consideration of the Transferee employing the Transferor as consultant to the said business for the remainder of the Transferor's life at a weekly salary of £6. 10s.0d.

2. For the like consideration the Transferee, in the event of the death of the Transferor to pay to the Transferor's widow an annuity to be charged on the said business at the rate of £5. 0s.0d. per week.

3. The Transferee not to sell the said business in any way freed from his liability to the Transferor which liability shall cease only on the death of the survivor of them the Transferor and his said widow.

4. The agreement between the parties to be deemed for all purposes to have commenced to operate as from the 2nd March, 1962.

5. The Transferor to be free to devote only such time to the conduct of the said business as he shall find convenient or shall at his own absolute discretion decide.

6. For the consideration aforesaid the Transferee to take over the Transferor's liability to the following creditors of the Transferors George and Lydia Turner in the sum of £187

3

Joseph Beswick in the sum of £250 or such lesser sums as shall be agreed with the said creditors whether by compounding or otherwise.

4

After the agreement was signed, the nephew took over the business and ran it. The old man seems to have found itdifficult at first to adjust to the new situation, hut he settled down. The nephew paid him £6. 10s.0d. a week. But, as expected, he did not live long. He died on the 3rd November, 1963, leaving his widow who was 74 years of age and in failing health. The nephew paid her the first £5. But he then stopped paying her and has refused to pay her any more.

5

On the 30th June, 1964, the widow took out lettern of administration to her husbandle estate. On the 15th July, 1964, she brought an action against the nephew for the promised £5 a weak. She sued in the capacity of administratrix of the estate of Peter Beswiok, deceased, and in her personal capacity she claimed £175 arrears and a declaration. By amendment she claimed specific performance and the appointment of a receiver. She action came for hearing before the Vice-chancellor of the County Palatine of Lancaster, who held that she had no right to enforce the agreement. He dismissed the action.

6

If the decision of the Vice-chancellor truly represents the law of England, it would be deplorable. It would mean that the nephew could keep the business to himself, and at the same time repudiate his promise to pay the widow. Nothing could be more unjust. I am sure the Vice-chancellor would have decided in favour of the widow if he had not felt himself bound by the decision of Mr Justice Wynn-Parry in Re Miller's Agreement, 1947 Ch. 615. That case is cited in the text books as if it were the last word on the subject, see Anson on Contracts (1964, 22nd Edition, p. 381): Cheshire & Fifoot on Contracts (1960, 5th Edition, p. 377). It is very like this case. So we must examine it with some care. In Re Miller's Agreement there were three partners. One of them had retired and transferred his interest to the other two. By a deed of covenant made by the three partners the two continuing partners agreed to pay the retiring partner £5,000 a year during his life, and after his death to pay £1,000 a year to his three daughters during their lives. The two continuing partners also charged their interestin the fine with payment of those sums. The Revenue Authorities claimed that estate duty was payable on the annuities payable to the daughters. That depended on whether the daughters had such an interest in property as would he protected in a court of law or equity. Sir Justice Wynn-Parry held that they had no such interest. "At common law", he said, "so far as the daughters are concerned, the deed is res inter alios acta, and they have no right thereunder". As to Section 56 of the law of Property Act, 1925, "the section", he said, "has not the effect of creating rights, but only of assisting rights shown to exist". As to the charge, "the central function of a charge is to secure the performance of an obligation, and the charge is essentially ancillary". He concluded: "I cannot find that the deed confers upon any of the daughters any right to sue….the payments, if and when made, will be no more than voluntary payments". He held, accordingly, that estate duty was not payable on the daughters' annuities.

7

I can understand the desire of the Judge in that case to save the daughters from death duties, but I cannot subscribe to the way he did it. He was wrong in saying that the daughters had no enforceie interest. We have here the standard pattern of a contract for the benefit of a third person. A man has a business or other assets, transfers them to another and, instead of taking cash, takes a promise by that other that he will pay an annuity or other sum to his widow or children. Can the transferee take the assets and reject the promise? I think not. In my opinion a contract such as this, for the benefit of widow and children, is binding. The party who makes the promise must honour it, unless he has some good reason why he should not do so. He may, for instance, be able to say that the contract should be rescinded as be induced induced by fraud or misrepresentation, or that it was varied or resciaded by agreement between the parties, before the widow or children knew about it and adopted it. But unless he has some good reason,he is hound. She executor of the dead man can e to enforce it on behalf of the widow and children. She widow and children can join with the executor as plaintiffs in the action. If he refuses to sue, they may sue in their own names joining him as a defendant. In this way they have a right which can be enforced. I will prove this by reference to the common law, reinforced by equity, and now by statute.

8

The Common Law

9

The common law on this subject was much considered in Dutton v. Poole in 1678. It was regarded at the time as a case of great consequence and is reported by no less than five of the old reporters: Sir Thomas Raym p. 302; 2 Levinz p. 210 1 Ventris p. 318, p. 332 3 Keble, p. 786 Sir T. Jones, p. 102. It was similar in principle to our present case. The facts were These: Sir Edward Poole owned timber trees in a wood in Oaksey Park, Wiltshire. He had several children, including his son and heir, Nevil, end a daughter Grizel. Sir Edward proposed to out down the trees and sell them so as to raise portions for the younger children. The eldest son did not want him to do this, because he was the heir and would inherit the tress if they were left standing. There was a meeting between the father and mother and the eldest son. The son asked the father not to cut down the trees, and promised him that, if he did not cut them down, he would pay £1,000 to the daughter Grigel. In reliance on the promise, the father did not cut down any of the trees, and died. The eldest son inherited and had the benefit of them. The daughter Grizel (who had married Sir Ralph Dutton) claimed £1,000 from the eldest son. He refused to pay it to her.

10

The mother was the executrix of the father's estate. She could as executrix have sued to enforce the agreement. But she was the only person present when it was made, and if she brought the action, she would not be a competent witness (see 3 Keble at p. 786). So the daughter and her husband themselves sued the eldest son for the £1,000, In that action the motherwas a competent witness. She proved the agreement, and the plaintiffs obtained judgment for £1,000. She eldest son appealed to the Court of King's Bench sitting in bang. The case was argued twice. John Holt, as he then was, appeared for the eldest son. He said that the action ought to be brought by the father's executor for the benefit of the daughter; and not by the daughter herself, as she was "not privy to the promise or the consideration" (see 2 Levins, p. 211). Pollesen appeared for the daughter. He said that the action was maintainable either by the party to whom the promise was made, or by the daughter (see Sir T. Raymond at p. 303). When the case was first argued, two of the four Judges were disposed to...

To continue reading

Request your trial
63 cases
2 books & journal articles
  • A Birthday Present for Lord Denning: The Contracts (Rights of Third Parties) Act 1999
    • United Kingdom
    • The Modern Law Review Nbr. 63-5, September 2000
    • 1 September 2000
    ...KB 500, 514; DriveYourself Hire Co vStrutt [1954] 1 QB 250, 272; Scruttons Ltd vMidland Silicones Ltd [1962] AC446, 483; Beswick vBeswick [1966] Ch 538, 557.6Drive Yourself Hire Co vStrutt [1954] 1 QB 250, 272. For discussion of the issue of the existence ornon-existence of the privity rule......
  • Performance, Punishment and the Nature of Contractual Obligation
    • United Kingdom
    • The Modern Law Review Nbr. 60-3, May 1997
    • 1 May 1997
    ...for reasons that have nothing to do with the above justifications for example, to get aroundthe privity rule: Beswick vBeswick [1966] 3 All ER 1.59 Other examples of attempts to avoid the obligation to pay damages include cases where the breachingparty attempts to conceal what she knows to ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT