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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Special Case - Rodger and Others [1875] ScotLR 12_204 (9 January 1875) URL: http://www.bailii.org/scot/cases/ScotCS/1875/12SLR0204.html Cite as: [1875] SLR 12_204, [1875] ScotLR 12_204 |
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Page: 204↓
Husband and Wife — Succession — Income Tax — 5 and 6 Vict., cap. 35, § 103.
Husband and Wife — Succession — Annuity — Term of Payment.
A truster provided that his widow should have the liferent use of his house “free of rent, feu-duty, ground-annual, taxes, and all other deductions.” Held that this did not include gas and water-rates.
A husband directed his trustees to pay to his wife, if she survived him, “a free yearly annuity” of £1200, and he further provided that if she accepted this annuity it should be in full satisfaction of all her rights, legal and conventional. The wife survived and accepted the annuity. Held that it was unnecessary to decide whether the bequest of a free annuity was equivalent to the bequest of an annuity free of income tax, as the widow by accepting the annuity had entered into an agreement of the nature struck at by Act 5 and 6 Vict., cap. 35, § 103.
A husband directed his trustees to pay to his wife, in case of her survivance, an annuity “payable half-yearly, at the terms of Whitsunday and Martinmas, by equal portions, beginning the first payment at the first term of Whitsunday or Martinmas immediately succeeding my death, for the proportion of said annuity corresponding to the period from the date of my death to the said first term of payment, with the interest of each term's payment at the rate of 5 per cent, per annum from and after such term of payment.” Held that the payment of annuity was back-handed, and that the husband having died within four days of the term, the widow was only entitled at that term to payment of the proportion of the annuity due for the four days.
This Special Case was brought by the trustees of the deceased James Rodger, of the first part, and Mrs Rodger, his widow, of the second part.
Mr Rodger died in May 1873, leaving a trust-disposition and settlement of date 31st December 1872.
The third and fourth purposes of the deed were as follows:—“In the third place, I direct and appoint that the said Mrs Janet Smith or Rodger, my wife, shall, in the event of her surviving me, have the liferent use and enjoyment of the house in which I reside at the time of my death, free of rent, feu-duty, ground-annual, taxes, and all other deductions, together with the whole household furniture and plenishing, bed and table-linen, books, paintings and engravings, silver-plate and plated articles, jewels and other valuables belonging to me at my death; declaring that my said wife shall not be obliged to keep any inventory or list of the said household furniture and plenishing, and other articles to be so liferented by her, nor shall she or her heirs be accountable for the same, or any part thereof, to any persons or person, either during her life or after her decease, my wish and intention being that my said wife shall be entirely uncontrolled in the use and disposal of said furniture and others during her life, but only that she shall not have power to dispose of the same by any deed or writing to take effect at her decease: And further, I direct my trustees to make over absolutely to my said wife, in case she shall survive me, the whole wines and liquors which may be in my dwelling-house at the time of my death, and any carriages, harness, and stable furnishings that may then belong to me; declaring that my said wife shall have full power to present or give away during her lifetime, or to leave or bequeath by will at her death, to any of my neices that she may select, all or any of the articles of jewellery presented to her by me; but in the event of the said articles of jewellery, or any of them, not being so disposed of, they shall form part of the residue of my estate after her death; declaring, as it is hereby expressly provided and declared, that the liferent of the said house hereby provided to my said wife is intended to be exclusively for her own residence, and therefore she shall not be entitled nor have power to let or give the use of it to any person or persons, either furnished or unfurnished; and in the event of her giving up the use and occupancy of said house, her liferent of the same shall cease, and it shall then form part of the residue of my estate: In the fourth place, I
Page: 205↓
direct and appoint my trustees to pay to my said wife, in the event of her surviving me, a free yearly annuity of £1200 sterling during all the days and years of her life, payable half-yearly at the terms of Whitsunday and Martinmas, by equal portions, beginning the first payment at the term of Whitsunday or Martinmas immediately succeeding my death for the proportion of said annuity corresponding to the period from the date of my death to the said first term of payment, with the interest of each term's payment at the rate of £5 per centum per annum from and after such term until payment, and one-fifth part of each term's payment further in name of liquidate penalty in case of failure in the punctual payment thereof, besides the same itself and the interest thereof as aforesaid; which annuity to my said wife shall be strictly alimentary, and shall not be affectable by her debts or deeds, or attachable by the diligence of her creditors.” Mrs Rodger was duly put in possession of the house and furniture, but a question arose as to whether she or the trust-estate was liable—(1) For the various burdens, taxes, and assessments payable in respect of the occupancy of the said house, and in particular for the police assessments and poor and school rates, which are levied partly on owners and partly on occupiers, and inhabited house-duty, which is levied on occupiers alone. (2) For the property-tax on the house, payable under schedule A of the Act 5 and 6 Victoria, cap. 35, and subsequent statutes. (3) For the public water-rate on the said house levied by the Corporation of Glasgow on owners, and also for the domestic water-rate on the said house, levied by that corporation on occupiers in respect of water supplied from the Glasgow Corporation Water-Works. (4) For the amount paid for gas consumed in said house, the same being payable to the Corporation of Glasgow, and being charged according to the quantity of gas consumed as indicated by meter. (5) For the premiums of fire insurance payable for said house and furniture therein. (6) For the proportion of the expense effeiring to said house of the annual cost of keeping in order the pleasure-ground attached to the houses in Park Gardens, Glasgow, which, by the titles, is imposed on the proprietors of the houses. (7) For the cost of repairs on said house, and in particular for a sum of £13, 13s. recently paid for painting, and a sum of larger amount payable for renewing the hot and cold water pipes throughout the house. A question also arose as to whether Mrs Rodger was entitled to receive her annuity free of income-tax; and farther, whether she was entitled to receive a halfyear's annuity at the term of Whitsunday 1873, in addition to a sum proportioned to the period of four days between her husband's death and that term. Mrs Rodger maintained the affirmative on both questions. The trustees maintained the negative. In these circumstances, the parties, being agreed as to the facts, submitted for the opinion and judgment of the Court the following questions:—(1) Do the various charges set forth in article 4 hereof, or any, and which of them, fall to be paid by Mrs Rodger, or do they all, or any, and which of them, fall to be paid by the trustees? (2) Is Mrs Rodger entitled to receive her annuity from the trustees free of income-tax? (3) Was Mrs Rodger entitled to receive payment at Whitsunday 1873 of a full half-year's annuity for the half-year following, and also of a proportion of her annuity corresponding to the period between her husband's death and said term, or was she entitled to either and which of said payments?
Argued for the first parties—(1) The provision in the deed was that Mrs Rodger should have the house “free of rent, feu-duty, ground-annual, taxes, and all other deductions.” Under that there was certainly not included such burdens as water-rate or payment for gas, neither of these being taxes in the proper sense of the word, but payment for an article actually consumed. (2) The bequest of a free yearly annuity was not a bequest of an annuity free of income tax, and, even if it were so, the provision was illegal under section 103 of 5 and 6 Vict. c. 35. This was such an agreement as was struck at by the Act, for the widow was only entitled to accept the annuity if she agreed to accept it in lieu of her legal provisions. (3) Mrs Rodger was only entitled to receive a proportion of her annuity corresponding to the period between her husband's death and Whitsunday 1873. The annuity was to begin at the death of the testator, and the payment was backhanded.
Argued for the second party—(1) Mrs Rodger was entitled to have the house free, not only of taxes proper, but of such payments as water and gas rates, these being covered by the words, “all other deductions.” (2) There was no other interpretation which could be put upon the words “free yearly annuity,” than an annuity free of income tax; and it was quite competent for the testator to make such a provision. This provision was not struck at by the 103d section of the Act 5 and 6 Vict. c. 35, for what was contemplated there was not such a stipulation as there was in this case, but a specific bargain. (3) It was evidently the intention of the testator that his widow should receive payment for the half-year following the first term after his death, at that term, as well as for the proportion between his death and that term. The wording of the deed was blundered, but it was capable of bearing that meaning, and that was the meaning which, in doubt, it must be presumed to bear.
At advising—
As to the second question, I am not prepared to
Page: 206↓
As to the last question, I am not quite sure that I agree with Lord Ardmillan in an opinion which he expressed, that it is clear that there has been here a blunder, the clause is so distinctly expressed. If it is a blunder, it is a very singular one, as it arises not from the adoption of a style inapplicable to the case, but from the mixing up of different styles; and when that happens it is usually designedly done. In short, the annuity is backhanded, and, if that is assumed, the deed reads perfectly well. The annuity is to commence from the date of the truster's death, the first payment to be at the term of Whitsunday or Martinmas immediately after that event; but that payment is only to be for the interval between the death and the term. I cannot see that it is possible to construe that deed in any other way, and I am not prepared to say that that was not the intention of the testator.
The Court pronounced the following interlocutor:—
“The Lords having heard counsel on the Special Case—1st, Find and declare that the various charges set forth in article 4 of the case fall to be paid by the trustees, parties of the first part, with the exceptions of the domestic water-rate therein mentioned and the money paid for gas consumed in the house, also therein mentioned, which fall to be paid by the party of the second part.
2d, Find and declare that the party of the second part is not entitled to receive her annuity from the trustees, parties of the first part, free of income-tax.
3d, Find and declare that the party of the second part was entitled at Whitsunday 1873 to payment of a proportion of her annuity corresponding to the period between her husband's death and the said term, and was not entitled to any other payment on account of the said annuity at the said term of Whitsunday 1873; authorise the trustees to pay the expenses of both parties, as taxed, out of the fund in their hands; and decern.”
Counsel for the First Parties— Dean of Faculty (Clark), and Mackintosh. Agents— C. & A. S. Douglas, W.S.
Counsel for the Second Parties—Solicitor-General ( Watson) and Balfour. Agent— John Stewart, W.S.
