Scottish Court of Session Decisions

General Suetonius Tod died in September 1861, survived by a widow and two sons. Mrs Tod died in April 1866. In 1859 General Tod executed a trust-settlement of his whole estate. After certain provisions in favour of his widow, the trust-deed proceeded;—“ Fourth, I direct and appoint my said trustees to divide the residue of my said means and estate among my two sons, Suetonius Macdonald Tod and Ewen Menteith Tod, equally between them or the survivor of them, in manner following, viz.:—Should my said trustees consider it prudent and proper to advance to each of my said sons, for the purpose of setting them up in business, or of advancing their prospects in life, such a sum as shall not exceed the one-half of the share of the free residue of my said means and estate, to which each of them might be entitled in the event of my death, and the other half or balance of the said free residue shall be invested when my said trustees shall consider it proper and prudent to do so, in the purchase of two separate annuities for each of my said sons, or the survivor of them, declaring that, as said annuities are intended by me solely for their respective aliment and personal support, the same shall not be assignable, arrestable, or affectable, for the debts or deeds, legal or voluntary, of the said Suetonius Macdonald Tod or Ewen Menteith Tod.” General Tod left no heritable estate. The value of his moveable estate was about £12,000, one-half of which the trustees paid over to the two sons absolutely in equal portions, and the other half stood invested in the name of the trustees, who paid the interest to the sons. Mr Ewen Tod, who was now about thirty-two years of age, was desirous of entering into business, and accordingly requested payment of the remaining capital of his share of

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the trust-estate. The trustees were doubtful whether they were not hound by the trust-deed to invest at least one-half of each son's share in an alimentary annuity. A Special Case was consequently laid before the Court, in which it was stated that the trustees were satisfied that payment of his whole share would be of great advantage to Mr Ewen Tod, but that, in consequence of the manner in which the fourth purpose of the trust-deed was expressed, they were advised that it was doubtful whether they were entitled to make such payment.

The questions submitted to the Court were—

1. ‘1. Whether the trustees are bound to convey to Mr Ewen Menteith Tod the remaining capital of his share of his father's trust-estate?

2. “2. Whether (supposing the first question answered in the negative) the trustees are entitled and in safety, if they consider it prudent and proper, to make payment to Mr Ewen Menteith Tod of the said remaining capital?”

Gillespie, for General Tod's trustees, argued, that the direction of the truster to invest at least one-half of each son's share in an alimentary annuity, was imperative.

Lees, for Mr Tod, argued—No one except Mr Tod has any interest in the manner in which his share is dealt with. If he died, his children would be entitled to the uninvested funds; and the terms of the deed are not sufficient to protect the produce of the funds from being arrested by his creditors. He could sell the annuity, and so defeat the purpose of the trust; and in the principles of English Law and the analogy of the Cluny Entail case, he is therefore entitled to have the trustees restrained from implementing directions which he can defeat. As there is no destination over, no one could have any interest to challenge a conveyance of the capital by the trustees, if he gave them a formal discharge. A trust can always be terminated where fiar and liferenter concur, and are the only parties interested. Even if the trustees are not bound to convey, it is a matter for their discretion. They may never think it necessary to purchase an annuity, nor would they do so with propriety if the annuitant were ill of a mortal sickness. The terms of the trust-deed do not entitle them to retain the annuity in their own charge. Trustees are only justified in keeping up a trust where it is for the protection of some person's interest. Authorities— Nisbet v. Tod, 15 Jan. 1848; Wood v. Begbie, 7 June 1850; Gordon v. Gordon, 2 March 1866; Stokes v. Cheek, 2 July 1860, 29 L. J. (Ch. K.) 922; Browne, 29 July 1859, 27 Beavan's Rep. 324.

At advising—