Scottish Court of Session Decisions

This was an action of multiplepoinding and exoneration at the instance of the trustees of the late Francis Gordon of Kincardine O'Neil against Elizabeth Isabella Johnstone Gordon or Scott, wife of Hugh Scott, of Gala, and grand-daughter of the truster.

The circumstances of the case were as follows:—

The late Mr Francis Gordon of Kincardine died on 27th January 1857, leaving a trust-disposition and settlement, dated 13th November 1851, and five codicils thereto, dated respectively 20th December 1852, 26th December 1853, 28th November 1854, 19th January 1855, and 22d January 1856.

In this deed the trustees are directed to employ the whole heritable and moveable estate. “First, For payment of all my just and lawful debts, and deathbed and funeral expenses, and the expense of executing this trust: Secondly, In the event of my said son marrying with the consent of my said trustees, or quorum foresaid, and having a family, for the purpose of conveying and disponing to his eldest son, and the heirs-male of his body, the said lands of Kincardine O'Neil, and my said other lands above described, all lying within the said parish of Kincardine O'Neil, under strict entail, with all necessary clauses; whom failing, to his second son, and the heirs-male of his body, and so on through the other sons of my said son; whom failing, to the eldest daughter of my said son, and the heirs-male of her body; whom failing, to the second daughter of my said son, and to the heirs-male of her body, and so on through the other daughters of my said son; whom failing, to the eldest son of my said daughter by her present or any future husband, and the heirs-male of his body; whom failing, to the second [son of my said daughter by her present or any future husband, and the heirs-male of his body, and so on through her other sons; whom failing, to the eldest daughter of my said daughter by her present or any future husband, and the heirs-male of her body; whom failing, to the second daughter of my said daughter by her present or any future husband, and the heirs-male of her body, and so on through the other daughters of my said daughter; whom all failing, to my own nearest heirs and assignees; Thirdly, For the purpose of realising my other estate, heritable and moveable, and above conveyed, and of fulfilling and discharging the obligations contained in the marriage-contract executed by me and my dear spouse, Isabella Gordon, as well as for implementing and paying the legacies and donations which may be left by me in any last will or other writing, however informal, which I may execute, or which may be found in my own custody or that of any other person after my death.” By the fourth purpose Mr Gordon provided for the comfortable maintenance of his son James; and by the fifth and sixth purposes he provided for certain additional provisions to his daughter and his widow. By the eighth purpose he provided for the event of his son marrying and having a family, which event did not happen. The seventh purpose of the said trust-disposition has reference to the occupation of the house, offices, and garden at Kincardine Lodge by the widow unless the son married with the approbation of the trustees, in which case he was to be entitled to the sole possession of the house, offices, and garden.

The truster proceeds to provide that; “Ninthly, Failing my said son marrying and having lawful issue, for the purpose of paying and applying the residue and remainder of my said means and estate, heritable and moveable (excepting the said lands directed to be entailed as aforesaid), on my said son's death, to the children of my said daughter, whether of her present or any future marriage, and that equally; and in that event, the said lands directed to be entailed shall be entailed by my said trustees, or quorum foresaid, as aforesaid, so far as the foregoing destination in article second hereof will then apply, excepting always from any share of said residue the person or persons succeeding to the said entailed lands, who shall have right only to £1000 sterling out of such residue on my son's death: Declaring hereby that the period of vesting of the provisions hereby made in favour of the children of my said daughter shall be as at the death of their mother if she shall have survived my said son, or as at the death of my said son if she shall have predeceased him; but providing nevertheless that if any child or children of my said daughter shall die before the period of vesting above mentioned, leaving lawful issue, such issue shall be entitled to the share of said residue to which their deceased parent or parents would have been entitled if alive: And declaring further, that in no event shall any of the persons who succeed as aforesaid to the said lands directed to be entailed enter into the management thereof until his or her arrival at twenty-one years of age, and that in regard thereto, and also to the moveable property before conveyed, the same shall, during the minority of those having right thereto, be under the management of my said trustees for such minor's behoof.”

By the contract of marriage between Mr Francis Gordon and his second wife, entered into in the year 1826, the said Francis Gordon bound and obliged himself, his heirs, and executors, to pay to the said Isabella Gordon, her heirs, executors, or assignees, a free yearly annuity of £400 sterling, after his decease. It was declared by the contract of marriage that in the event of the said Isabella Gordon entering into a second marriage, the foresaid annuity of £400 should be and the same was thereby restricted to £300 yearly after such second marriage.

Mr Francis Gordon was survived by his second wife, who isstill alive, and who occupies the mansion—house, garden, and offices at Kincardine Lodge, with a home-farm adjoining, in terms of the seventh purpose of the trust-deed. Mrs Gordon has not again married, and her annuity has been regularly paid to her by the trustees. She is believed to be now from seventy-six to eighty years of age. The truster was also survived by two children of his first marriage, viz., a son, James Gordon, and a daughter, Elizabeth Shepherd Johnstone or Gordon, who died on 20th January 1863, survived by four daughters, one of whom died unmarried; another of whom, Elizabeth Isabella Johnstone Gordon, married Hugh Scott, Esq. of Gala, and has issue; and the other two, Augusta Elizabeth Anne, and Emily Matilda Elibank, are unmarried, but have arrived at majority.

The truster's son, who never recovered his mental powers, died unmarried on 27th March 1871. His sister, Mrs Johnstone Gordon, predeceased him, having died on 20th January 1863, survived by her husband, who is since dead.

On James Gordon's death it became incumbent

Page: 193↓

on the trustees—(1.) To entail the lands of Kincardine on Mrs Scott of Gala (Mrs Johnstone Gordon's eldest daughter), and the substitute heirs of entail, in terms of the ninth purpose of the trust deed, and subject to the burdens or limitations imposed by the other provisions of the deed and by the truster's marriage contract; (2.) To pay over the residue to the two younger daughters of Mrs Johnstone Gordon, with the exception of £1000 thereof, payable under the trust-deed to Mrs Scott, who has succeeded to the estate of Kincardine.

At the date of the death of the truster's son the trust-estate consisted of the estate of Kincardine, having a gross rental of about £1100; of cash some£500. On the one hand, Mrs Scott of Gala called on the trustees to execute a deed of entail of the what over £7000, and the furniture valued at nearly estate of Kincardine in her favour, unburdened with the annuity of £400 to the truster's widow; while, on the other hand, Miss Ann Elizabeth Augusta Johnstone Gordon, and Miss Emily Matilda Elibank Johnstone Gordon, demanded payment of the residue (less the £1000 payable to Mrs Scott), without any deduction on account of this annuity. Further, the truster's widow claimed right to occupy the house, offices, and garden, at Kincardine Lodge, and the farm which was set apart to her by the trustees during her life, while Mrs Scott denied her right to occupy these after the death of the truster's son, and claimed them for herself as heiress of entail. There was also a question relative to the erection of offices on the estate,—whether the burden of these should fall on the heiress of entail or on the residuary legatees.

The Lord Ordinary (Mackenzie) pronounced the following interlocutor “Finds that, according to the true construction of the said trust-disposition and settlement, the free yearly annuity of £400 provided to Mrs Isabella Gordon, the widow of the said Francis Gordon, by the antenuptial contract of marriage entered into between them of date 1st and 4th September 1826, is primarily a burden upon the residue of the trust-estate of the said Francis Gordon, other than his lands of Kincardine O'Neil, and the other lands specified and described in his said trust-disposition and settlement, and thereby directed to be entailed; sustains the first claim stated for Mrs Elizabeth Isabella Johnstone Gordon or Scott and her curator ad litem, and repels the first and second claims stated for the claimants Anne Elizabeth Augusta Johnstone Gordon and Emily Matilda Elibank Johnstone Gordon, and decerns: Reserves all questions of expenses, and appoints the cause to be put to the roll with a view to further procedure.”

And in his Note added—

“ Note.—By the antenuptial contract of marriage entered into between the truster, Mr Gordon of Craig and Kincardine, and his wife, the claimant Mrs Gordon, he bound and obliged himself, his heirs and executors, to pay her a free yearly annuity of £400 during her life after his decease, restricted to £300 in the event of her entering into a second marriage. By his trust-disposition and settlement, in which he conveyed his whole estate, both heritable and moveable, to his trustees, for the purposes therein set forth, he directed his estate of Kincardine and others to be entailed, and failing his son marrying and having lawful issue, he appointed the residue of his means and estate thereby conveyed, which should remain after satisfying other trust purposes, to be paid to the children of his daughter, excepting such of them as should succeed to the entailed estate. The estate of Kincardine now falls to be entailed upon his granddaughter, the claimant Mrs Scott of Gala, and the substitute heirs of entail mentioned in his settlement, and the residue remaining after satisfaction of the other trust purposes falls to her two sisters, the claimants Misses Gordon. The estate of Kincardine and the said free residue are each of them sufficient to meet Mrs Gordon's annuity, and the question on which these claimants are at issue, and which has now been decided by the Lord Ordinary in the competition between them, is whether that annuity is a primary burden upon the estate of Kincardine or upon the free residue. The decision of that question depends upon the construction of Mr Gordon's trust-disposition and settlement.

“The Lord Ordinary understands the rule of law, as fixed by the decisions, to be that the heritable and the moveable succession must respectively bear the debts or burdens appropriate to each, unless the testator in his settlement gives express directions to the contrary, or gives directions with reference to the disposal of his means and estate which by clear and necessary implication plainly show that a particular burden or debt is to be paid out of that part of his succession upon which it would not fall but for these directions ( Macleod's Trustees, 28th June 1871, 9 M'P 903, and cases there cited). In the present case the Lord Ordinary is of opinion that the directions expressly given by Mr Gordon to his trustees in his settlement, with reference to the disposal of his estate, clearly show that it was his intention that they should fulfil and discharge the obligations contained in his marriage contract out of the estate, heritable and moveable, thereby conveyed to them, other than the estate of Kincardine, which he directed them to entail.

“The third trust purpose is in the following terms:—‘Thirdly, for the purpose of realizing my other estate, heritable and moveable, and above conveyed, and of fulfilling and discharging the obligations contained in the marriage-contract executed by me and my dear spouse Isabella Gordon, as well as for implementing and paying the legacies and donations which may be left by me in any last will or other writing, however informal, which I may execute, or which may be found in my own costody or that of any other person after my death.’

“The period when the entail of Kincardine fell to be executed was his son's death. This is shown by the directions to the trustees contained in the fourth, seventh, eighth, and ninth trust purposes. Until that entail came to be executed on the son's death, the duty of the trustees was to hold the lands of Kincardine and others directed to be entailed—to realize the whole other trust estate, and fulfil and discharge the widow's annuity and other marriage-contract obligations—to pay the testator's legacies and donations, among which are included the sum of £1000, which he directed the trustees (sixth purpose) to pay to his widow, ‘besides the allowances made by her marriage contract and to apply the free yearly revenue remaining for the maintainance of his son, and also of his son's family should he marry with the approbation of the trustees. The trust-disposition and settlement is not well drawn; but upon a careful consideration of its provisions it seems to the Lord Ordinary to be clear that the testator's intention was, and that the directions which he accordingly gave to his trustees are, that his widow's annuity should be

Page: 194↓

fulfilled and discharged, and that the legacies and donations left by him should be paid out of the means and estate thereby conveyed to his trustees other than the estate of Kincardine, which he directed them to entail, and that the said estate of Kincardine should upon the death of his son be entailed free from the burden of these legacies and donations, and of the widow's annuity. This construction is in accordance also with the directions contained in the ninth trust purpose, whereby the trustees are directed, on the failure of his son without issue, to pay' the residue and remainder of my said means and estate, heritable and moveable (excepting the said lands directed to be entailed as aforesaid)’ to the children of his daughter, excepting such of them as should succeed to the entailed lands,—that is, as the Lord Ordinary considers, the residue of the trust estate, exclusive of the lands directed to be entailed which should remain after fulfilling and discharging the marriage—contract obligations, paying legacies and donations, and maintaining his son.”

Miss Gordon and the Trustees having reclaimed, it was argued for the reclaimers that the heritable estate should bear the whole burden. Was it, or was it not, the primary intention to burden that portion of the means of the testatator? The fact of its being an annuity would seem to raise a presumption in favour of this view, such being a natural burden to lay on a heritable estate. Provisions of this kind are extremely common, and we are fairly entitled to take into consideration this usual practice. The payment of the residue and the entailment of the estate are moreover directed to be simultaneous. The residue could not be at once paid over, in the view maintained by Mrs Scott, but both directions could be carried out immediately supposing the £400 of annuity were thrown on the estate of Kincardine. As to the annuity there is no express direction, but the testator had contemplated a large residue in place of the £7,000 which alone remains as a provision for his younger grandchildren.

Authorities— Mackintosh's Trustees, 8 Macph. 627. 7 Scot. Law Rep. 340; Macleod's Trs. 9 Macph. 903.

The pursuers argued—A money annuity is not a natural burden on heritage. The phrase is, “my other estate,” which is equivalent to all my estate not otherwise destined. Mrs Scott comes forward and says, ‘Give me Kincardine O'Neil,’—just as she would say ‘Give me a heritable bond due to me’ This the trustees must do, and they must give it as a subject without burden; it carries none. The trustees are directed to pay the widow £400, and they have abundant money to provide this annuity. They are “to realize the estate heritable and moveable other than Kincardine,” that they are not to realize. It is to fulfil the obligations contained in the marriage contract that this realization is to be made, and there is not any reason for their nonfulfillment or for transference of this burden to that portion of the truster's means which is excepted from such realization.

At advising —