Scottish Court of Session Decisions

This was a Special Case, presented by Miss Mary Ann Dow and Miss Ellen Dow, residing at Oporto, Portugal, and Misses Mary Dick, Marjory Dick, and Catharine Mitchell, all living in Scotland, of the first part; and the trustees of the late John Cunningham Kilgour, merchant, Dundee, of the second part. The truster died on 15th July 1875; leaving a trust-disposition and settlement, dated 29th May 1875, by which inter alia he directed his trustees after the residue of his estate should be fully realised to divide the same into three equal shares, one of which should be invested by them in the purchase of a Government annuity, an annuity by the Scottish Widows' Fund and Life Assurance Society, and an annuity by the Scottish Provident Institution, each of these annuities being in favour of and payable to his cousins Mary Ann Dow and Ellen Dow, both daughters of the late James Dow of Oporto, in Portugal, his mother's brother, and then residing at No. 4 Entre Quintas, Oporto, jointly, and the survivor of them; another of the shares to be similarly invested by his trustees in purchasing similar annuities in favour of and payable to his cousins Mary Dick and Marjory Forbes Dick, both daughters of the late Catharine Dow or Dick, his mother's sister, and then residing at No. 1 East Adam Street, Edinburgh, jointly, and the survivor of them; and another of the shares to be invested by his trustees in the purchase of similar annuities in favour of and payable to his housekeeper Catharine Mitchell. He directed that in purchasing the annuities each of the three shares should be divided into three equal parts, and one of the said parts should, in the case of each of the said three sets of annuitants, be invested in the purchase of each kind of annuity. The truster further directed his trustees, “in purchasing the foresaid annuities, to provide as far as possible that the same shall be payable to the said annuitants, exclusive of the

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jus mariti and right of administration, and all other rights and interests which the husbands any of them may have married or may marry might have by the law of this or any other country, so that the same may be payable to themselves on their own simple receipt, without the consent of their said husbands.”

The trustees invested two third parts of the residue in the purchase of annuities as directed. But on making application to the proper department for the purchase of Government annuities with the remaining third part of the residue, the Government Annuity Office declined to grant an annuity to the Misses Dow, on the ground that they were resident out of the United Kingdom, and they made certain special requirements upon the Misses Dick which it was difficult and inconvenient for them to comply with. In consequence of this, all these intended annuitants requested the trustees, instead of purchasing any Government annuities, to pay them their respective shares of the remaining third part of residue which was directed to be so invested. The first parties maintained that they were entitled to payment of the money directed to be invested in Government annuities for their behoof, in respect that the annuities, if purchased, could be immediately converted into money by them. The Misses Dow further maintained that they at least were entitled to payment of the money, in respect that the Government declined to grant such an annuity on account of their residence abroad. The second parties maintained that, in so far as regards the shares falling to the Misses Dick, they were bound to purchase for them Government annuities. In regard to the share of residue falling to the Misses Dow, they doubted their power to pay it to them, notwithstanding the refusal of the Government; and they maintained that they were bound to purchase another annuity for ther behoof.

The following questions were submitted for the opinion and judgment of the Court—“(1) Are the first parties entitled to demand payment of the respective portions of the said remaining third part of said residue, which were directed to be invested in the purchase of Government annuities for their behoof, irrespective of the possibility of obtaining such annuities? (2) Assuming that the direction to invest the several shares of said one-third of the residue in the purchase of Government annuities has become imprestable, are the trustees bound to see that the said shares are invested in the purchase of annuities from a responsible life office, or are they entitled to pay the money to the legatees discharged of the condition of being invested in the purchase of life annuities.”

Argued for the first parties—The payment of the fund should be made directly to us ( Kippen v. Kippen's Trs.). They could if purchased at once be sold so that the testator's object would be defeated ( Tod v. Tod's Trustees).

Argued for the second parties—The annuity although defeasible affords a species of protection, and it is a question whether the Court will interfere. The English rule is, that if a legatee demand it, a trustee must pay in money which has been by the truster's direction laid aside to provide for the purchase of a specific article. The Scotch decisions do not go so far, though perhaps they tend that way. The Misses Dow can obtain their annuities by simply complying with the condition as to residence ( Gordon v. Gordon's Trustees).

Authorities— Tod v. Tod's Trustees, March 18, 1871, 9 Macph. 728; Kippen v. Kippen's Trustees, Nov. 24, 1871, 10 Macph. 134; Dunbar v. Scott's Trustees, July 18, 1872, 10 Macph. 982; Jarman on Wills, i. 367; Power v. Hayne, May 7, 1869, L.B., 8 Eq. 262; Gordon v. Gordon's Trs., March 2, 1866, 4 Macph. 501; Menzies v. Murray, 2 R. 507; White and Tudor's Leading Cases, vol. ii., p. 266.

At advising—