Scottish Court of Session Decisions

By trust-disposition and settlement, dated 18th August 1842, the late Mr Donald Maclean, W.S., conveyed certain heritable estate therein mentioned, and all other heritable estate which should belong to him at the time of his death, and his whole moveable estate, to certain trustees for the ends, uses, and purposes therein mentioned. He directed his trustees (1) to pay all his just and lawful debts; (2) to divide the whole of the residue of his means and estate into eight equal parts or shares, and apportion the same amongst his sons John, Charles, Archibald, and Fitzroy, and his daughters Mary, Lilias, Anne, and Margaret, each of his said sons and daughters being entitled to one of the said eighth parts or shares, but declaring that the respective shares of his said sons Charles, Archibald, and Fitzroy should suffer a deduction of £200 each, the sum of £600 so deducted to be applied as follows:—£200 each for his son John and his daughters Mary and Margaret, in addition to the one-eighth share bequeathed to each of his said three children. And further declaring “that the shares of my said estate to which my sons Archibald and Fitzroy are respectively entitled shall be payable to them as soon after my death as my said trustees shall deem proper, but the shares of the rest of my said children shall be retained by my said trustees until they judge it proper to invest and secure the same in the purchase of an annuity for the behalf of each of my said other children, it being my express wish and intention that my said trustees shall exercise their own discretion as to the propriety of purchasing an annuity for any of my said sons John and Charles, and for any of my said daughters, the annual produce of each of my said children's shares respectively being in the meantime applied for the maintenance and support of such child: And also declaring that in the event of the death of either of my said sons John and Charles, or in the event of the death of any of my said daughters Mary, Lilias, Anne, and Margaret, before an annuity has been purchased for behoof of him or her, or in the event of the death of either of my said sons Archibald and Fitzroy before the amount of ther provision is paid, the share of my said sons or daughters so deceasing shall be paid and divided amongst the lawful issue of such deceaser, and failing such issue the said share shall be divided and applied amongst my said sons and my said daughters and their lawful issue (such issue being entitled always to succeed to their parent's share) in the same manner as directed above in regard to their own respective shares, and that share and share alike, excepting always the portions of said deceaser's share which shall effeir to my said sons Archibald and Fitzroy, which portions shall suffer an abatement of twenty per cent. each, to be paid over to the other survivors of my said sons and daughters, share and share alike. But declaring in regard to the share of my said son Charles, that in the event of his

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dying before the same shall have been invested in an annuity for his behoof, and without leaving lawful issue in life, the annual produce of his share in my means and estate shall be paid over to his present spouse in the event of her survivance, and that during her lifetime.”

The truster then stated that he had purposely omitted to mention his son Andrew or his daughters Mrs Maclaine (Christian) and Mrs Crawford (Sibella), as they were established in life, and his son Andrew also had received during his lifetime as large an allowance as his means would admit of, for which considerations he had directed the distribution of his estate as above: “Declaring always that my said trustees shall have full power, in virtue of the powers hereinafter expressed, to sell the whole or any part of my said estates hereby conveyed, or to borrow money on the security thereof, and out of the produce to satisfy and pay the whole or such part of the debts, annuity, and provisions before expressed, as my trustees may deem necessary or expedient, or if my said trustees shall deem it expedient, they are hereby empowered to dispone, convey, and make over the whole or part of the subjects themselves hereby specially conveyed to the person entitled to succeed to them as general disponee and residuary legatee under the foresaid destination, but that always under the real burden of the said debts, annuity, and provisions, or such part thereof as they may think fit to have unliquidated, to be secured over the said subjects, and to be specially engrossed in the rights and infeftments thereof in favour of such general disponee or residuary legatee.”

By a codicil dated 12th February 1853 Donald Maclean, in consideration that he had made at various times large advances to his son Charles, amounting to more than the equivalent of a share of his estate, supposing the same were equally divided among his children, declared that Charles' participation in his estate after his death should be and was thereby restricted to the sum of £100, payable at the first term of Whitsunday or Martinmas after his death, and he thereby recalled all other provisions theretofore made in favour of Charles.

Donald Maclean died on 16th March 1853, predeceased by his son Archibald, who died in 1844, but survived by the following children, who stood in the following order of seniority:— Christian (Mrs Maclaine), Mary, Lilias, Anne, Margaret, Sibella (Mrs Crawford), John, Charles, Andrew, and Fitzroy.

Of the beneficiaries named in the will, Mary died in 1853, Fitzroy in 1858, Margaret in 1871, Charles in 1872, Lilias in 1876, and Anne in 1881. Of these none were married or testate except Charles, who left a widow and children.

Of the truster's other children, Mrs Maclaine died in 1873, leaving children, and Mrs Crawford in 1878, also survived by children.

The truster's heritable property at the date of his death consisted of—(1) The estate of Kinloch, in Mull, subject to a bond for £3000; (2) the house No. 21 Albany Street, Edinburgh, occupied by the family then and ever since, with coach-house and stable adjoining; (3) workshop in York Lane, Edinburgh, recently sold; (4) half-flat in No. 5 Earl Grey Street, Edinburgh; (5) feu-duties in Nicolson Square, Edinburgh, of small value. The personal estate of the truster, including furniture, &c., amounted to £1742, 6s. 10d.

The estate of Kinloch, which was burdened with a debt of £3000, was sold in 1860 at the price of £10,200, thus yielding a surplus of £7200. Till this sale was effected, the income remained insufficient for the expenditure, but thereafter the then acting trustee was able annually to lay aside a surplus, from which the whole encroachments previously made in maintaining the beneficiaries were replaced.

The trustees never carried out the direction to purchase annuities for any of the beneficiaries, and Fitzroy's share was never paid over to him, but the whole trust-estate was retained in the hands of the trustees, and the income divided among the surviving beneficiaries.

On 15th February 1887 Mr Sorley, C.A., Edinburgh, was appointed judicial factor on the estate. In September 1889, F. W. Martin, C.A., was appointed curator bonis to John Maclean.

The present case was presented for the purpose of obtaining the opinion of the Court, inter alia, on the following questions—“(1) Did the whole trust-estate vest in Mr John Maclean on the death of Miss Anne Maclean? (2) Did the share of the trust-estate which was originally bequeathed to the truster's son Archibald, and which is still retained as part of the general trust-estate, accresce to the surviving residuary legatees, or did it, in consequence of his predeceasing his father, fall into intestacy? (3) Did the share of the trust-estate which was originally bequeathed to the truster's son Charles, and which is also still retained as part of the general trust-estate, accresce to the surviving residuary legatees, or did it fall into intestacy in consequence of the codicil above quoted? (4) In the event of its being held that the said two shares originally bequeathed to Archibald and Charles or either of them fell into intestacy, do the said two shares or either of them or any part thereof fall to Mr John Maclean as heir-at-law of the truster, or do they fall entirely to the truster's heirs in moveables? (5) In the event of its being held that the said two shares fell to the heirs in moveables of the truster, did pro indiviso shares of so much thereof as consisted of heritage and remained unconverted at the death of Mary, Lilias, Anne, Margaret, and Fitzroy pass to Mr John Maclean as their heir in heritage, or are the proportions of these shares which fell to them to be regarded as entirely moveable quoad succession?”

The parties to the case were —(1) Mr Sorley, the judicial factor on the trust-estate; (2) Mr Martin, curator bonis to John Maclean; and (3) the truster's son Andrew, and the representatives of his three deceased children, Charles, Christian, and Sibella.

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The party of the second part maintained that the whole trust-estate vested in his ward as the last survivor on the death of Miss Anne Maclean, and now belonged to him, and that he was entitled, if he should see fit, to require the judicial factor to divest in his favour. If, however, it were held that the shares originally destined to his ward's brothers Charles and Archibald had fallen into intestacy, then he maintained that these shares, in so far as they at his ward's father's death consisted of heritage, fell to his ward as his father's heir-at-law; and should it be further held that these shares were wholly, to be regarded as moveable quoad the succession of his father, then he maintained that so much thereof as remained heritage unconverted and formed part of the portions of the said shares which fell to his sisters Mary, Lilias, Anne, and Margaret, passed on their respective deaths to his ward as their heir-at-law and in the like event the said Andrew Maclean, a party of the third part, maintained that the share of his brother Fitzroy fell to him as his heir-at-law.

The parties of the third part maintained (1) that by the predecease of the testator's son Archibald, one-eighth of the trust-estate, minus £200, fell into intestacy, (2) that by the recall of the bequest to the testator's son Charles another one-eighth of the estate, minus £200, fell into intestacy and that these two shares, with interest thereon from the date of the testator's death, fell to be distributed in equal shares amongst (1) John Maclean, (2) Andrew Maclean, (3) the executors and other representatives of Mrs Maclaine, (4) the representatives of Charles, and (5) the children of Mrs Crawford, as the heirs or as representing the heirs in mobilibus of the truster and of his now deceased children Mary, Lilias, Anne, Margaret, and Fitzroy.

Argued for the second party—The scheme of the trust-deed was clearly to the effect, that the residue was to be apportioned among eight of the trustee's children, and the last survivor of them was to get the whole. The trustees were directed to keep the estate in hand solely in the interest of survivors. In consequence of Archibald's death his share fell to be divided among the surviving beneficiaries— Muir's Trustees v. Muir, July 12, 1889, 16 R. 954. The effect of the codicil was to restrict Charles' equal share to £100, the balance having been paid to him during the testator's life. If the shares of Archibald and Charles fell into intestacy, there could be no constructive conversion quoad these shares, as ex hypothesi the deed did not apply to them, and the character of the succession would fall to be decided according to the character of the estate at the testator's death. The bulk of these two shares accordingly vested in John Maclean as the heir-at-law of the truster. Assuming it to be held that the deed applied to these two shares, they still must be considered as consisting largely of heritable estate, as the trustees were not directed to sell the heritable estate, but only received a discretionary power to do so. The propriety of purchasing annuities was also left to the trustees to judge of— Cowan v. Cowan, March 16, 1887, 14 R. 670; Muir's Trustees v. Muir, July 12, 1889, 16 R. 954.

Argued for the third parties—The direction to divide the residue into eight portions was equivalent to a division into separate estates, and the trust-estate was no longer a universitas— Paxton's Trustees v. Cowie, July 16, 1886, 13 R. 1191. Archibald having predeceased the truster, and Charles having been cut out of the will, their shares fell into intestacy, and the clause of accretion did not apply to them. Fitzroy's share had vested in him and fell to be divided among his heirs in mobilibus. Further, John had no right to have the capital of his own share made over to him — White's Trustees v. White, June 1. 1877, 4 R. 768; Smith and Campbell, May 30, 1873, 11 Macph. 639. The clause empowering the trustees to make over the whole or part of the trust-estate to the person entitled to succeed to them as residuary legatee under burden of the annuity and provisions was at variance with the terms of the rest of the deed, and must have been left in the deed by an oversight, having followed on some provision not now in deed. On the question of conversion—The whole estate was intended by the truster to be administered under the trust, and he intended to impress on the whole the character of moveable estate, as was clear from the directions with regard to the purchase of annuities and the power of sale given to the trustees. His intention was not to be frustrated in this respect because he died partially intestate. Cowan's case did not apply, as there the bulk of the estate had never been converted;here the power of sale had been exercised— Sheppard's Trustees v. Sheppard, July 2, 1885, 12 R. 1193, per Lord President 1197.

At advising—