Scottish Court of Session Decisions

This Special Case was presented for the opinion and judgment of the Court in the following circumstances:—

The deceased Mrs Flora Hill, widow of William Hill of Hillwood, by her trust disposition and settlement, dated 25th March 1865, conveyed her whole moveable property to her daughter Mrs Finnie, as her sole executrix and trustee.

The purposes of the trust were as follows, viz.,

(1) to defray the expenses of the trust and paying the deathbed and funeral expenses of the truster; (2) for payment of certain special bequests of certain articles of plate and furniture, and of certain funds therein mentioned; (3) for payment to the truster's sister Margaret Pretsell of a free yearly annuity of £ 50 sterling, and to Mrs Helen Hill or Veitch a free yearly annuity of £ 40 sterling, which last-mentioned annuity was by the codicil to her said trust-settlement increased to £ 50 per annum; (4) for payment of certain pecuniary legacies to relatives of the truster and charitable institutions.

The last purpose of the trust is expressed as follows:—“Lastly, to the end and intent that after the special and primary provisions and purposes of this trust as before specified, and any other provisions and purposes which I may hereafter direct and appoint shall have been fully paid, implemented, or provided for, my said trustee may divide the whole residue and remainder of my said moveable estate and effects into three equal parts or shares, and that she shall retain in her own hands one of the said parts or shares, and apply the same for the use and behoof of the surviving children of the marriage between the Rev. William Thomson, my son-in-law, and Catherine Hill or Thomson, my daughter, now deceased, and that at such time or times, and in such way and manner as my said trustee, in whose judgment and discretion I have perfect confidence, may think most conducive to the welfare of the said children, with full power to her to divide and apportion the said provision among the said children, or to apply the same for their behoof, in such shares and proportions as she may think proper, without the interference or control of any one or more of the said children, who shall have no vested interest therein; and the other two third parts or shares of the residue of my said moveable estate and effects shall belong to my said trustee herself, and be retained by her as her own absolute property: and I hereby revoke all former settlements or testamentary deeds executed by me at any time prior to the date hereof; reserving always to myself full power and liberty at any time of my life, and even on deathbed, to alter, innovate, or revoke these presents, either in whole or in part, and either onerously or gratuitously, at pleasure. But declaring that the same, in so far as not altered or revoked, shall be a good and valid deed, though found in my custody, or in the custody of any other person for my behoof, undelivered at the date of my death; dispensing with the delivery hereof.” The trust-deed contained no power of assumption of new trustees. The said Mrs Flora Pretsell or Hill died on 12th April 1868, and her daughter Mrs Finnie accepted of the offices of trustee and executrix under the said settlement, and entered on the possession and management of the trust-estate, which consisted entirely of moveable property, which was duly realized, and she paid such of the debts and legacies as were immediately payable.

After payment of these there remained a sum of £ 6827, 2s. 10d. to be applied to the purposes of the trust; and after setting apart a sum of £ 2500, to be invested for the purpose of yielding a yearly interest sufficient to provide for the two annuities of £ 50 each bequeathed to Margaret Pretsell and Mrs Veitch, there remained a free residue of £ 4327, 2s. 10d., which was divisible between Mrs Finnie herself and the surviving children of Mr and Mrs Thomson, in the proportion of two-thirds

to Mrs Finnie, amounting to	£2884	15	2
and one-third to the children of Mr and Mrs Thomson,	1442	7	8
	£4327	2	10

At the death of Mrs Hill there were in life five children of Mr and Mrs Thomson, viz., William, John, Mary, Catherine, and Margaret.

Under the discretionary power conferred upon her by the trust-settlement Mrs Finnie paid to the children of Mr and Mrs Thomson sums amounting in all to £ 1042, 7s. 6d. There was then left in Mrs Finnie's hands a balance of £ 400, 0s. 2d., with the reversion of one-third of the sum of £ 2500 on the falling in of the annuities to Miss Pretsell and Mrs Veitch, divisible amongst the

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children at the sole discretion of Mrs Finnie. In February 1873 Mrs Hill executed a deed of assumption in favour of John Hill, farmer in Carlowrie, by which he was to act along with herself in the execution of the trust.

In May 1873, Mrs Finnie having fallen into a state of mental incapacity, Mr A. T. Niven, C.A., Edinburgh, was appointed her curator bonis.

In consequence of Mrs Finnie's continued incapacity, Mr Hill became sole trustee, and he, in March 1874, assumed Mr Adam Curror to be his co-trustee, under the 11th section of the Trusts (Scotland) Act.

By the death of one of the annuitants the sum of £ 1250 was set free, of which one-third became available for distribution amongst the children of Mr and Mrs Thomson. The whole sum so available at the presentation of the case was thus £ 816, 12s. 6d.

The beneficiaries having applied to the trustees for payment of their share of this residue, a difficulty arose as to the proportion each beneficiary should take, the power of determining which was reposed in Mrs Finnie alone.

In these circumstances, it was agreed that the present case should be presented to the Court by the various parties, viz., John Hill and Adam Curror, of the first part; Alexander Niven, of the second part; and William Hill Thomson and others, of the third part.

The questions submitted for opinion and judgment were two;—“(1) Whether the parties of the first part, as the acting trustees and executors under the trust-disposition and settlement of Mrs Hill, are, during the incapacity of Mrs Finnie, entitled to distribute among the parties hereto of the third part the whole or any part of the one-third share of the residue which the truster directed Mrs Finnie to retain and apply for behoof of the children of Mr and Mrs Thomson? (2) Whether the sums presently available for division are to be distributed equally among the parties hereto of the third part, or in such proportions as, when added to the payments to account previously made, will make the payments to all the five children of equal amount?”

At advising—