Scottish Court of Session Decisions

Kenneth Sutherland Brodie died in 1868 leaving a trust-disposition and settlement dated 4th May 1863 (with codicil dated 9th February 1864), by which he conveyed his whole means and estate, heritable and moveable, to trustees, whom he directed—“In the fifth place, to transfer, convey, and make over to and in favour of my eldest son Arthur James Brodie, on his arriving at the age of twenty-five years complete, so as effectually to vest the same in his person (if not previously disposed of), all my Zemindary Talook landed property in the district of Mymonsing, Bengal, and all lands there held by me in lease, with their balances and obligations. In the sixth place, to transfer, convey, and make over to and in favour of my second son William Alexander George Brodie, on his arriving at the age of twenty-five years complete, so as effectually to vest the same in his person (if not previously disposed of), my indigo factories called and known as the Bagganbarry Indigo Concern, in the said district of Mymonsing, with the houses, cattle, stock of every kind, and whole appurtenances thereto belonging. In the seventh place, to set aside the sum of £2000 sterling for each of my daughters, Margaret Alice Brodie, Flora Jane Brodie, Isabella Brodie, Ethell Brodie, Edith Brodie, and Anne Sutherland Brodie; and to lay out and invest on such securities, real or personal, in Great Britain or in India, as to my trustees shall appear eligible, the said respective sums, and pay and apply the interest and produce thereof, or accumulate the same, for behoof of my said daughters respectively until they shall severally attain the age of twenty-one years or be married; and on either of these events happening, to pay or make over the said respective sums and the accumulated interest thereof to my said daughters respectively. … In the tenth place, to apply for the suitable maintenance and education of each of my said two sons the sum of £200 sterling per annum, or such other annual sum, less or more, as in the judgment of my said trustees, and considering the profits that may be derived from the estates in India specially destined to them, shall appear proper, and that until they respectively attain twenty-five years of age, and in addition to the sum before provided to be paid to my wife for the maintenance of our children. And lastly, to divide, pay, and make over the whole residue and remainder of my said means and estate, after satisfying the purposes here-in before written, equally among my said children and the survivors of them, on their respectively attaining twenty-one years of age; but declaring, as it is hereby provided and declared, that in the event of there being more children of the said marriage than those above mentioned, such children shall be entitled to share in my said means and estate along with my children before named—that is, such children, if daughters, shall each receive a sum corresponding to the special provisions hereinbefore conceived in favour of each of my daughters above named, and if sons, shall each receive a sum corresponding to the special provisions hereinbefore conceived in favour of each of my sons before named, and shall all participate equally in the residue of my said means and estate with my said other children, all of whose special provisions and shares of residue shall accordingly in that event suffer a proportional abatement… . And I empower my said trustees and executors to sell, realise, and convert into money whatever portion of my said means and estate, real or personal, as to them shall appear proper or expedient, and that either by public roup or private bargain, and to grant, subscribe, and deliver all necessary transferences, conveyances, and acquittances in favour of the purchasers and others; and in the event of any of the properties hereinbefore specially destined to my said sons being sold or disposed of by my said trustees, the price or proceeds thereof shall come in place of the properties themselves, and be invested for behoof of and paid over to my said sons respectively.”

Mr Kenneth Brodie was survived by three sons, Arthur, William, and Alexander—the youngest having been born 4th October 1864—and by several daughters.

His eldest son, Dr Arthur James Brodie, was in 1872, at the age of twenty, assumed as a trustee, and acted upon his reaching twenty-one. In 1876 Dr Brodie executed a trust-disposition by which, after reciting the provisions of his father's trust and referring to the fact of his youngest brother having been born after the date of that trust, he declared that it having been found expedient “in respect of the losses which attended the same, to abandon the working of the Indigo factories called and known as the Bagganbarry Indigo Concern, before mentioned, and that in consequence thereof the provision specially destined to my brother William Alexander George Brodie by my father's said settlement has become valueless and does not now exist for his benefit, and that in consequence thereof, and of the birth of my youngest brother Alexander Kenneth Brodie since the date of said settlement as before mentioned, I have resolved to make a division of the special provision in my favour between myself and my two brothers in equal shares, so as to carry out what I believe to have been my father's wishes and intentions in regard to the succession of his sons to his estate in India; therefore I do hereby direct and appoint …. as the surviving accepting original and assumed trustees acting under the foresaid trust-disposition and deed of settlement and codicil, and the

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survivors and survivor of them, to hold the whole of the Zemindary Talook landed property in the said district of Mymonsing, Bengal, and all lands there held by them in lease as trustees foresaid, with their balances and obligations (and which are directed by the said trust-disposition and settlement to be transferred, conveyed, and made over to me on my arriving at the age of twenty-five years complete, so as effectually to vest the same in my person), for behoof, as after mentioned, of myself, the said Arthur James Brodie, and of William Alexander George Brodie and Alexander Kenneth Brodie, my brothers, in equal shares: … And further, I do hereby exoner, acquit, and simpliciter discharge … as trustees foresaid, of the obligations imposed upon them as trustees foresaid by the foresaid trust-disposition and settlement of my said father, to transfer, convey, and make over to me the Zemindary Talook landed property foresaid, and all lands there held by them in lease as trustees foresaid, with their balances and obligations; and I also discharge the said … as trustees foresaid, and the factors employed by them, or either of them, of the whole actings, transactions, and management had by them, or either of them, with the trust-estate of the said Kenneth Sutherland Brodie, my father, or in relation thereto in any manner of way, and of the said trust-disposition and settlement and codicil itself, and whole clause therein contained, with all that has followed or is competent to follow thereon, and of all omissions that can be laid by me to their charge in any manner of way, dispensing with the generality hereof, and declaring that this discharge shall be as valid and effectual as if every particular of the said trustees' actings or intromissions had been herein specially engrossed or referred to.”

Until Dr Brodie became twenty-five years of age in 1877 the Zemindary Talook estate and its income were treated by his father's trustees as part of the trust-estate.

In March 1879 this property was sold for £29,738, but before this sum was remitted to this country £3000—being the loss upon W. A. G. Brodie's Indigo Concern—were deducted. Mr Brodie's trustees made an annual allowance out of the general trust-estate of £200 to each of his three sons until they reached twenty-five years of age, and upon the death of two of his daughters in 1873 and 1881 respectively, unmarried and minors, they treated the sum of £2000 destined to each of them as having vested in them a morte testatoris.

On 1st April 1891 Dr Brodie wrote to Messrs Dall & Miller, C.A., Edinburgh, as follows:—“Gentlemen—I hereby request and authorise you, the accountants upon the trust-estate of my father, the late K. S. Brodie, to examine and audit the state of my account with the agents, Messrs Horne, Horne, & Lyell, W.S., to 31st January last, and likewise to audit and tax the business accounts of these gentlemen embraced in said state, and thereafter to debit my share of my late father's estate with the balance found due to Messrs Horne, Horne, & Lyell.” And upon 11th May 1883 he wrote to the same firm thus:—“Gentlemen—I hereby request and authorise you, the accountants upon the trust-estate of my father, the late K. S. Brodie, Esquire, to examine and audit the whole accounts and vouchers kept by the agents, Messrs Horne & Lyell, W.S., from 31st January 1881 to this date, and likewise to audit and tax the business accounts of these gentlemen for said period, … and thereafter to debit my share of my late father's estate, as hitherto, with said whole accounts, vouchers, business accounts, and disbursements, as audited and taxed by you; and I instruct and authorise you, until further notice from me, to continue to examine, tax, and audit Messrs Horne & Lyell's accounts, vouchers, and business accounts against me annually, and to charge same against my share of my late father's estate in the usual way.”

Dr Brodie married in 1881, went to America in 1884, and died there in 1888. The accounts were annually duly audited and reported upon by Messrs Dall & Miller up to his death.

In May 1892 Dr Brodie's widow, Mrs Mary Sutherland or Brodie, as his executrix, and her attorney Alfred Sutherland, W.S., brought an action of count, reckoning, and payment against the then acting trustees on Mr Brodie's estate, mainly on the ground that the trust had been erroneously administered in the following ways—(1) that the trustees had not treated the Zemindary Talook property as vesting in Dr Brodie upon his father's death; (2) that they had charged this property with a debt of £3000 incurred in connection with the Indigo Concern; (3) that they had continued the annual allowance of £200 to Dr Brodie's younger brothers notwithstanding the provision made for them by his trust-deed of 1876; and (4) that they had treated the provisions to the deceased daughters of Mr Brodie as vested in them and not as falling into residue.

The pursuers also averred (Cond. 21)—“In addition to the foregoing specific items falling to be added to the late Dr Brodie's share of capital derived from his father's trust, the said share of capital falls to be further increased by addition thereto of various sums improperly deducted for commissions, expenses of management, business charges, &c. The share of revenue effeiring to Dr Brodie and his representatives falls to be similarly augmented. The said trust accounts, as also the business accounts submitted by the present trustees, contain numerous payments and charges, affecting both capital and income, for which the deceased Dr Brodie was not liable. In particular, the trustees have made payments out of the trust funds of the Kenneth Sutherland Brodie trust which they are not empowered to make under the trust-deed, and the business accounts contain numerous charges for work performed by the agents which have no relation to either that trust or the 1876 deed trust. In addition the said trustees debit the deceased

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with business accounts and heavy commissions, the whole, or at least the largest part of which they incurred for work done in the general trust-estate administered by the Kenneth Sutherland Brodie trustees. The estate of Arthur James Brodie is not liable for the said accounts or commissions. Even if to a certain extent his estate is liable for the said accounts and commissions, the same have been grossly overcharged. The sum credited by the trustees in the said accounts by way of home business accounts and home commissions amount to some £ £4300 up to April 1888. Among the business charges are overcharges to at least a sum of £600, even assuming that none of said charges have been covered by the heavy commissions and factor's fees allowed the trust agents for trouble in connection with the administration of the home trust. This sum is in excess of the full charges allowed by the professional table of fees, and in some instances three distinct charges have been made for the same item of work. Further, the trustees have failed to credit several sums received by way of commission from companies to whom they lent trust money from time to time, and on the sale of stocks the trustees have deducted sums by way of commission as well as brokers' commission before crediting the proceeds of the sales in the trust accounts.”.

The pursuers also sought to make the representatives of Mr Leckie and Mr Lyell, who were trustees on Mr Brodie's trust-estate in 1876, but had since died, personally liable for a loss of £20,000, with £95, 8s. 5d. of interest. They averred (Cond. 24)—“In 1879 a proposal for a loan of £20,000 on postponed heritable security over heritable properties in Caithness and Orkney belonging to the same proprietors (Traill's trustees) as owned the subjects of a previous loan of £3000 was submitted to Mr Brodie's trustees by Messrs Horne, Horne, & Lyell, who acted as agents both for borrower and lenders, and was accepted under a guarantee of 4 1 2 per cent. interest by that firm” [the guarantee in the proposal to borrow was, “Messrs Horne, Horne, & Lyell so long as they continue agents for the trust became responsible for the regular payment of interest”]. This loan would have expired in 1884, but instead of its position being then brought before the trustees an arrangement was in February 1884 made between Mr Leckie and Messrs Horne & Lyell, which firm then included Mr Lyell, S.S.C., one of the Kenneth Sutherland Brodie trustees, and Mr David Lyell, W.S., who subsequently became a trustee, to the effect that the loan should be renewed for three years from Whitsunday 1884 at the reduced rate of 3 3 4 per cent. interest. By this proceeding, which was ultra vires of Messrs Leckie and Lyell, S.S.C., as trustees foresaid, the said Messrs Leckie and Lyell rendered themselves personally responsible for this loan, and also became bound to make up the abatement in the rate of interest below the amount guaranteed to the trustees. They were well aware that the reason for seeking reduction of interest was the impoverished condition of the borrower, and his inability to meet his obligations, and that had the whole circumstances been disclosed to their co-trustees, the continuance of the loan would not have been authorised. It was not until 1887, when the borrower removed his agency from the said Messrs Horne & Lyell that the real position of these bonds was brought before the other trustees. In particular, Dr Brodie, who went to America in 1884, was not made aware of the said transaction. The difference between the rate of interest guaranteed and that actually received down to 1st May 1892 on the £20,000 loan is £95, 8s. 5d. The said securities cannot now be realised except at a very serious loss, if indeed they have not become absolutely valueless.

In connection with these averments the pursuers pleaded—“(4) The sum of £20,000, and the guaranteed interest thereon at the rate of 4 1 2 per cent. per annum, having been wholly or partially lost to the said trust-estates, or one or other of them, through the fault or negligence of the deceased Mr Leckie and Mr Lyell, S.S.C., the defenders, the representatives of Mr Leckie and Mr Lyell, S.S.C., in their individual capacity, are bound to make good the deficiency in said sum and interest, and to account on that footing to the pursuer as executrix foresaid.”

There were no conclusions in the summons specially directed against the representatives of Mr Leckie and Mr Lyell on account of this renewed loan.

The defenders pleaded, inter alia—“(1) No title to sue. (2) The trust-disposition, conveyance, and discharge of 16th September 1876 excludes any accounting prior to its date, and, standing said deed, the pursuers are barred from demanding such an accounting.” (3) The pursuers' averments are irrelevant. “(6) The pursuers are barred from maintaining their present demands, in respect that Dr Arthur James Brodie was himself a party to, and approved and adopted all the actings and dealings of the trustees now complained of.”

Upon 22nd November 1892 the Lord Ordinary ( Low) pronounced the following interlocutor “Finds (1) that upon a sound construction of the trust-disposition and settlement of the deceased Kenneth Sutherland Brodie, the deceased Arthur James Brodie was not entitled to the income and profits of the estates in India, specially destined to him in the said settlement, between the date of the death of the said Kenneth Sutherland Brodie and the date when the said estates fell to be conveyed to the said Arthur James Brodie in terms of said settlement; (2) That the trustees under the trust-disposition granted by the said Arthur James Brodie in 1876 were not entitled to charge the price of the Zemindary Talook estates and others conveyed to them by the said trust-disposition with the sum of £3000, being the loss incurred in connection with the Bagganbary Indigo Concern; (3) That the trustees

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under the said settlement were not entitled to make payment to William Alexander George Brodie or Alexander Kenneth Brodie of the sum of £200 a-year each annually after the said trust-disposition of 1876 came into operation: (4) That the special provision of £2000 made for each of the daughters of the said Kenneth Sutherland Brodie by his said settlement vested in his daughters a morte testatoris, and that the provisions falling to the deceased Isabella Brodie and Barbara Innes Brodie were properly dealt with as intestate succession to them; (5) That the pursuer is not barred from having the trust accounts re-stated so as to give effect to the foregoing findings by reason of the deceased Arthur James Brodie having been a trustee under the said settlement and the said trust-disposition of 1876, or by reason of the discharge contained in the said trust-disposition, or by reason of the letters granted by him authorising Messrs Dall Miller, chartered accountants, Edinburgh, to audit and tax the trust accounts; (6) That the pursuer's averments are not relevant to support the claim made by her in the 24th article of the condescendence against the representatives of the deceased William Leckie and David Lyell for £95, 8s. 5d.: With these findings appoints the cause to be enrolled for further procedure: Reserves all question of expenses, and grants leave to reclaim.

“ Opinion.—The first and most important question raised in this case is in regard to Dr Brodie's right to the income derived from the Zemindary Talook properties, which the trustees under his father's trust-disposition and settlement were directed to convey to him ‘on his arriving at the age of twenty-five years complete.’ The truster died in 1868, and Dr Brodie attained twenty-five in 1877. His executrix, the pursuer, now claims the income of the estate between 1868 and 1876, when Dr Brodie executed a trust-deed, to which I shall afterwards refer in detail. The pursuer does not claim that the income should have been paid to Dr Brodie year by year, but contends that it was the duty of the trustees to accumulate the income and pay the accumulated amount to him when the conveyance of the property fell to be made.

The pursuer's claim is, in the first place, rested upon the contention that under the terms of the settlement the property vested in Dr Brodie a morte testatoris.

The considerations mainly relied upon by the pursuer are the following:—1st. There is no ulterior destination of the properties in the event of Dr Brodie dying before he attained the age of twenty-five. 2nd. The trustees are authorised in their discretion to sell the properties, and if they do so, it is provided that ‘the price or proceeds thereof shall come in place of the properties themselves, and shall be invested for behoof of and paid over to’ Dr Brodie. The pursuer argued that the direction to invest the price for behoof of Dr Brodie, and no one else, showed that the testator intended it to be vested in him, and it could not be said that he was intended to have a higher right in regard to the price than that which he was given to the property if it was not sold. 3rd. The trustees are directed to pay and make over the residue equally among the truster's children on their respectively attaining twenty-one years of age. The pursuer argued that the residue plainly vested a morte testatoris, and that if the Indian properties did not vest in Dr Brodie until he attained the age of twenty-five, and he died before attaining that age, he would still be entitled to a share of the properties as residuary legatee. Such a peculiar result would require to be plainly expressed, and in the absence of such plain expression the sound construction of the settlement was that Dr Brodie was given an indefeasible right to a share of the residue, and also to the Indian estate, although in the one case payment was postponed until he was twenty-one, and in the other until he was twenty-five.

The pursuer contended, in the second place, that even if vesting was postponed, Dr Brodie having attained twenty-five years of age, took not only the properties but also the intervening profits.

In support of this view the pursuer founded upon the fact that the intervening profits were not otherwise expressly disposed of, and she argued that they must be dealt with as accessories of the properties. She also founded upon the terms of the fifth purpose of the settlement, whereby the trustees were directed to convey to Dr Brodie not only the properties themselves, but also ‘their balances and obligations.’ These words, she contended, included the whole free income and profits of the estate while under the management of the trustees prior to the period of conveyance.

There is much force in these considerations, but in my opinion there are others of greater weight tending in an opposite direction.

In the first place, in regard to the question of vesting, there is not here, first, a destination of the Indian property to Dr Brodie, and then a direction to the trustees to convey it to him when he attained twenty-five. The estate is conveyed to the trustees, and Dr Brodie's only right is derived from a direction to the trustees to convey it to him ‘on his arriving at the age of twenty-five years complete, so as effectually to vest the same in his person.’ The direction, therefore, which is the foundation of Dr Brodie's right, is to convey only in the uncertain event of his attaining twenty-five.

Then in the tenth purpose of the trust the trustees are directed ‘to apply for the suitable maintenance and education of my said two sons’ (i.e., Dr Brodie and another son of the testator, to whom a similar provision of an Indian property had been made) ‘the sum of £200 sterling per annum, or such other annual sum, less or more, as in the judgment of my said trustees, and considering the profits that may be derived from my estates in India specially destined to them, shall appear proper, and that until they respectively attain twenty-five.’

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The truster therefore made provision for the maintenance of Dr Brodie until the period of conveyance of the Indian estate, and the provision was payable out of the general estate, although it was to have some not very well defined relation to the profits of the Indian estate.

It seems to me that when a beneficiary's right depends upon a direction to pay or convey when he attains a certain age, when the period of payment or conveyance is not postponed for the purpose of protecting an intermediate interest such as that of a liferenter, and when express provision is made from another source for the maintenance of the beneficiary until the period of payment or conveyance, there is a concurrence of elements which point strongly to a postponement of vesting, and which I do not think are overcome by the fact that there is no destination-over, and that the beneficiary participates in the residue, which if he died before attaining twenty-five would include this special provision.

There is another consideration, however, which seems to me to deserve notice, although it was not mentioned in argument, probably because it was not consistent with the position which the pursuer takes up in another part of the case. The special provision to Dr Brodie is in the fifth purpose of the trust; a precisely similar provision is made for his brother William Brodie in the sixth purpose; and in the seventh purpose a special provision of £2000 is made for each of the truster's daughters. I think that the latter provisions vested in the daughters a morte testatoris, and it is difficult to understand why the provisions to daughters should vest and those to sons should not do so. There is, however, one important distinction between the two sets of provisions. The trustees are directed to apply the interest of each daughter's provision for her behoof, or to accumulate it until the period of payment, when the accumulated interest is to be paid to her as well as the capital. There is no such direction in the case of sons, but, on the contrary, the sons are, until the period of conveyance, to be paid £200 a-year out of the general estate. I therefore do not think that much aid is to be derived from the terms in which the provisions to daughters are made.

The question appears to me to be one of difficulty, but upon the whole I think that the balance of the considerations upon which such questions fall to be determined, points to the postponement of the vesting until the period of payment.

But whatever may be the sound view in regard to vesting, I am of opinion that Dr Brodie was not entitled to the profits of the Indian estate between the death of his father and his own attainment of twenty-five years of age. The special provision to which I have referred—of £200 a-year for the maintenance of Dr Brodie during that period—is, I think, inconsistent with the idea that he had right to the whole profits of the estate. Then the seventh purpose of the trust shows that when the testator intended accumulation he said so. Further, the settlement includes various purposes, for which immediate income was required, and which the testator might well have looked to the Indian property to provide. Indeed, if it had not been for the profits of the Indian property the trust could not have been carried on at all.

As I have mentioned, the pursuer relied greatly upon the fact that the trustees were directed to convey to Dr Brodie not only the Zemindary Talook properties, but also ‘their balances and obligations.’ I think that these words are explained by the character of the properties. I understand that the testator held the land of the Crown for a certain yearly payment. The land was cultivated by natives who grew indigo crops. The testator advanced money at interest to the cultivators, and he also intervened in the preparation of the crop for the market. The returns therefore from the properties were not of the nature of rent, but were rather profits (as the testator himself calls them) of a business. In such circumstances, I think that the direction to convey the properties ‘with their balances and obligations, meant that when the appointed time arrived Dr Brodie was to step into the trustees’ place, and to take the properties with any balances then outstanding and under the burden of any obligations then current.

I am therefore of opinion that the claim for the income of the Indian estate prior to Dr Brodie attaining twenty-five falls to be repelled.

The next question has regard to a sum of £3000 which the pursuer alleges the trustees have improperly charged against the Indian properties specially destined to Dr Brodie. The circumstances under which this question arises are as follows:—By the sixth purpose of his trust Mr Brodie, the testator, directed his trustees to convey his indigo factory called the Bagganbary Indigo Concern to his second son William Brodie on his arriving at the age of twenty-five years complete, in precisely the same terms as those which he had used in regard to the Zemindary Talook properties in the fifth purpose of the trust. Then in the residuary clause, after providing that the residue should be divided equally among his children, the testator proceeded:—‘But declaring, as it is hereby provided and declared, that in the event of there being more children of the said marriage than those above mentioned, such children shall be entitled to share in my said means and estate along with my children before named—that is, such children, if daughters, shall each receive a sum corresponding to the special provisions hereinbefore conceived in favour of each of my daughters above named, and if sons shall each receive a proportion corresponding to the special provisions hereinbefore conceived in favour of each of my sons before named, and shall all participate equally in the residue of my said means and estate with my said other children, all of whose special provisions and shares of residue shall accordingly in that event suffer a proportional abatement.’

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One son, Alexander Brodie, was born after the date of the settlement.

The Bagganbary Indigo Concern turned out to be unprofitable, and resulted in a loss of £3000. There was therefore no estate to be conveyed to William Brodie under the seventh purpose of the trust.

In these circumstances Dr Brodie in 1876 executed a trust conveyance in favour of the trustees acting under his father's settlement of the Zemindary Talook properties. The deed proceeded upon the narrative of the special distinations of the Indian properties in the fifth and sixth purposes of the settlement, and of the declaration in the residuary clause which I have quoted. It also narrated the birth of Alexander after the date of the settlement, and the failure of the special provision of the Indigo Concern to William. The deed then proceeds:—‘I have resolved to make a division of the special provision in my favour between myself and my two brothers in equal shares, so as to carry out what I believe to have been my father's wishes and intentions in regard to the succession of his sons to his estate in India.’ Dr Brodie then directed his father's trustees to hold the Zemindary Talook properties, and disponed the properties to them as if they had been already conveyed to him in trust for behoof of himself and his brothers in equal shares pro indiviso, and directed the trustees to pay and apply the free rents, proceeds, and profits thereof for behoof of himself and his brothers in equal proportions.

The Zemindary Talook estates were subsequently sold, and realised it is said about £29,000. The trustees have debited the price with the loss of the £3000 incurred upon the indigo business, and the question is whether they were entitled to do so. I am of opinion that they were not. I can find no authority given in the settlement of Mr Brodie senior for charging the estate specially destined to Dr Brodie with the loss upon the estate specially destined to William Brodie, and it is clear that no power is given to the trustees to do so under Dr Brodie's trust, The trustees say that they regarded all the Indian properties as forming one estate, and also as forming a separate trust-estate, seeing that Mr Brodie senior provided that certain of the trustees who were resident in India should have the entire management of the Indian properties. I do not think that that view is sound, but it seems in any case to be met by the fact that Mr Brodie had large means in India to which the £3000 could have been debited.

The next question has regard to a sum of some £1900 said to have been improperly paid to William and Alexander Brodie. It appears that after Dr Brodie's trust came into operation the trustees paid to each of William and Alexander, not only one-third of the income of the Talook property (or of the price after it was sold), but also £200 a year out of the general estate of Mr Brodie senior. The trustees say that they paid the £200 a-year to each of the brothers in terms of the tenth purpose of Mr Brodie's settlement. They contend that they were bound to make these payments in terms of the settlement, and that they were also bound, as trustees under Dr Brodie's trust, to make the payments directed in his deed.

It seems to me that in this case also the trustees have gone wrong.

As regards the younger brother Alexander, I have great difficulty in understanding where the trustees found their authority in the settlement to pay him £200 a-year. The tenth purpose is limited to the two sons in existence when the settlement was made, viz., Dr Brodie and William Brodie. I suppose that the trustees would justify their action by the part of the residuary clause (which I have already quoted), in which the testator provides for the case of sons born after the date of the settlement. The clause is no doubt very obscure, but I think that it is difficult to spell out of it a direction to the trustees to pay £200 a-year to a son in a position which Alexander occupied.

As regards William the action of the trustees is more intelligible, but I do not think that the payments to him now in question can be sustained. Dr Brodie's deed no doubt in one sense constituted a trust distinct and separate from that of his father, but the trustees were the same, and Dr Brodie's object as declared in his deed was to carry out what he believed to be his father's intention, which had been defeated by the failure of the indigo business. Dr Brodie's trust was therefore truly supplementary to that of his father. He in substance threw his estate into his father's trust, in order that his father's wishes might be carried out. In such circumstances I do not think that William (and the argument applies as strongly to the case of Alexander) could claim both the third of the Talook estate, capital and income, and the £200 a-year provided to him under the tenth purpose of the settlement. The latter provision was made for him only until he attained the age of twenty-five, the intention obviously being to give him a fund of maintenance until he succeeded to his special provision. But his special provision having failed, he accepted in lieu thereof one-third of Dr Brodie's provision. It seems to me that he could not be allowed to do so, and also to retain an annuity, provided only until his special provision should become exigible.

Further, the tenth purpose of the settlement does not direct the trustees in any event to pay the £200 a-year. They are to pay that sum to each of the sons, ‘or such other annual sum, less or more, as in the judgment of my said trustees, and considering the profits that may be derived from the estates in India specially destined’ to the sons, should appear proper. The trustees therefore were authorised to reduce the amount of the annuity, and the main consideration which was to guide them was the profit which might be derived from the respective Indian properties. The property destined to William having become not only worthless, but in debt, I think that it is difficult for the trustees to maintain that

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they had no choice but to continue to pay the £200. It seems to me that in the circumstances which have emerged, viz., the extinction of the indigo business and the provision made by Dr Brodie, it would have been quite consistent with the tenth purpose of the settlement to have stopped the annuity altogether, while, on the other hand, that course was the only one which was consistent with Dr Brodie's trust.

The next question has regard to the share to which Dr Brodie was entitled of the special legacies of £2000 each to two of his sisters who died in minority, unmarried and intestate. The legacies were divided as intestate succession upon the assumption that they had vested in the sisters upon their father's death. I think that the legacies were properly so dealt with, because, as I have already said, the daughters in my opinion took a vested right a morte testatoris.

I have dealt with all the questions, which I have up to this point considered upon their merits, without adverting to the first and sixth pleas for the defenders. Both of these pleas are founded upon the fact that Dr Brodie was himself one of the trustees, and it was argued that it is incompetent for his executrix to challenge payments or accounts for which he himself was responsible.

Now, in the first place, there is no question here of demanding repayment of sums already paid away by the trustees, nor (so far as regards the questions with which I have dealt) is there any question of personal liability of trustees. It is not disputed that the trustees have considerable funds in their hands, and that if the pursuer's objections are given effect to, it involves nothing more than a re-statement of accounts, and a re-adjustment of the manner in which the estate remaining in the hands of the trustees is to be distributed.

Then it is important to observe that the payments and statements of accounts now challenged were not made as the result of any transaction to which Dr Brodie was a party, nor is it said that the questions now raised were ever brought under the notice of or considered by him or by his co-trustees. Further, I see no reason to doubt, notwithstanding the suggestions to the contrary which are made in record, that everything was done in good faith, and if the trust funds were dealt with contrary to the legal rights of the beneficiaries, it arose from error on the part of the trustees, or of the law-agents by whom they were advised.

In such circumstances I do not think that Dr Brodie would have been barred, if he had been alive, from asking that the common error should be put right, and that the accounts should be re-stated and the balance of the estate divided according to the legal rights of the parties. The pursuer cannot, of course, be in a better position than Dr Brodie, but I do not see why, in regard to the questions with which I have dealt, she should be in a worse position. I am therefore unable to sustain the first and sixth pleas-in-law for the defenders.

The next question is in regard to certain very general allegations in the twenty-first article of the condescendence, to the effect that the trust accounts contain certain payments which the trustees were not authorised to make, and that there have been overcharges in the business accounts of the law-agents of the trust, and in regard to commissions.

I am not sure whether the pursuer demands that the whole accounts of the trust from its commencement in 1868 should now be investigated, but I understand that that is her claim. The defenders, on the other hand, maintain that the accounts cannot be opened up, at all events upon mere general averments, because, as regards the accounts prior to 1876, Dr Brodie granted a full discharge to his father's trustees in the trust-deed executed by him in that year; and as regards the subsequent accounts, they have been audited by Messrs Dall & Miller, chartered accountants, Edinburgh, with the consent of Dr Brodie, as evidenced by letters written by him to Messrs Dall & Miller authorising them to examine, tax, and audit the accounts.

The pursuer seeks for reduction of the general discharge in the trust-deed of 1876, and also of the letters to Messrs Dall & Miller, but it seems to me that the averments which she makes are not sufficient, assuming them to be well founded, to entitle her to reduction. The question therefore is, how far the discharge and the letters debar the pursuer from challenging the accounts.

I am of opinion—and in considering the points with which I have already dealt I have proceeded upon the view—that where the pursuer can point to any specific error, or omission, or overcharge, it is competent for her to ask that matters shall be investigated and put right. The onus, however, is on the pursuer, and I think that the defenders are entitled to demand that before accounts discharged by Dr Brodie, or audited in the way authorised by him, are opened up, there must be specific objections to specific items, and not mere general averments such as are contained in the 21st article of the condescendence.

The averments in that article, however, although general, are — or at all events some of them are—of such a nature, that if they were made specific the pursuer might be entitled to investigation. Further, it is said that certain of the accounts are subsequent to Dr Brodie's death, and that it cannot be pleaded that any audit which may have been made of them was by his authority or acquiesced in by him. If, therefore, the pursuer had asked that she should be allowed to lodge a statement setting forth her objections specifically and in detail, she might perhaps have been allowed to do so, but no such proposal was made.

In the 22nd article of the condescendence there is another specific objection, to the effect that the trustees have charged

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Dr Brodie with interest upon the income which was payable to him under the two trusts. The answer of the trustees is that the objection proceeds upon an entire misapprehension of the position of matters. The trustees say that Dr Brodie and his brother were in the habit of getting advances from them against future income, and that in order to keep equality it was necessary to credit and debit interest upon these advances. The question is therefore one of bookkeeping, and if the parties themselves cannot adjust the matter—which I think they should have no difficulty in doing—I must make a remit to an accountant.

The only remaining question has regard to a claim for £95, 8s. 5d., for which two of the trustees, Mr Leckie and Mr Lyell (both now dead), are said to have incurred personal liability.

“It appears that £20,000 of the trust-funds were invested in a bond and disposition in security over certain properties in Caithness and Orkney. The pursuer avers that the loan, which bore interest at the rate of 4 1 2 per cent, would have expired in 1884, and that in that year Messrs Leckie and Lyell took it upon themselves, without consulting their co-trustees, to renew the loan for three years at 3 3 4 per cent interest. The reason for the reduction of interest is said to have been the impoverished condition of the borrower, and his inability to meet his obligations. The claim made against the representatives of Messrs Leckie and Lyell is for the difference between 4 1 2 per cent. and 3 3 4 per cent. upon the sum of £20,000 between 1884 and 1892.

I am of opinion that the pursuer has not stated a relevant case upon the point. Granting that it was ultra vires of two out of four trustees to agree to continue the loan at a reduced rate of interest, it does not necessarily follow that the beneficiaries have any claim against them. The beneficiaries can only claim if they have been injured. Now, to continue the loan at a reduced rate of interest might quite well be the most prudent thing which could be done in the administration of the trust. The pursuer does not say that payment of the principal sum could have been obtained, nor that interest at a higher rate could have been obtained. She no doubt avers that, if the whole circumstances had been disclosed to the other trustees, the continuance of the loan would not have been authorised. In my opinion, however, that averment is much too vague and general to entitle the pursuer to a proof. The amount at stake is small, but that does not the less render it incumbent upon the pursuer, claiming as she does upon the ground that the trustees have incurred personal liability through fault or failure of duty, to state with the utmost precision the ground of her claim.”

The pursuers reclaimed, and argued—(1) As to vesting—The Lord Ordinary had found this question attended with difficulty. Admitted presumption was against vesting where there was a dies incertus, but here attaining twenty-five years of age was not a condition of the grant, but only of its enjoyment. The power of sale was not destructive of this argument, because the price was to be carefully earmarked. Further, a slight indication of contrary intention was sufficient to overcome the presumption. That was to be found here in the absence of any destination-over, and also in the curious fact that if the estate did not vest in Dr Brodie until twenty-five, had he died between twenty-one and twenty-five, it would have fallen into residue in which he had a share vesting at twenty-one. Therefore ( a) the estate vested a morte—M'Laren on Wills, ii. 22; Burnet v. Forbes, 1783, M. 8105; Ralston, July 8, 1842, 4 D. 1496; Hewat v. Grant, November 22, 1867, 6 Macph. 47; Alves' Trustees v. Grant, June 3, 1874, 1 R. 969; Hay's Trustees v. Hay, June 19, 1890, 17 R. 961—but alternatively (b) upon Dr Brodie attaining twenty-five he took the estate “with its balances and obligations.” viz., with its whole income and accumulations since his father's death— Pursell v. Elder, 1865, 3 Macph. (H. of L.) 59; Fergusson v. Smith, December 4, 1867, 6 Macph. 83. (2) It was agreed that the second finding of the Lord Ordinary should be remitted to his Lordship on amendment being made in one of the defenders' answers (3) The Lord Ordinary was right in treating Dr Brodie's trust as supplementary to and requiring to be read with his father's, and not as conferring double provisions upon his brothers. (4) They acquiesced in the fourth finding. (5) The Lord Ordinary was with them in holding they were not barred by Dr Brodie having been a trustee, but he required more specific objections. They had made as specific averments upon record as they could or required to— Laing v. Laing, July 17, 1862, 24 D. 1362. More specific objections could only be stated after they had got access to the accounts. (6) The averments in Cond. 24 were sufficient to found a case of personal liability against trustees not only for loss of interest but also for that of the principal— Binnie v. Binnie's Trustees, 1889, 16 R. (H. of L.) 23. The guarantee by Horne, Horne, & Lyell was to be read as a guarantee of 4 1 2 per cent. interest while the loan lasted.

Argued for respondents—(1) The Lord Ordinary was right. The terms of the deed were plainly against vesting. There was not a direction here to hold and at twenty-five to pay over, but a distinct instruction upon Dr Brodie reaching twenty-five to convey to him “so as effectually to vest the same.” The power of sale was against vesting, and Dr Brodie's discharge in 1876 was against his reserving any right to claim income. It was said the words “with its balances and obligations” implied vesting. They merely meant the estate when it was conveyed was to be conveyed with its claims or debts as they then stood. On vesting— Bryson's Trustees v. Clark, November 26, 1880, 8 R. 142; Reeve, July 14, 1892, 19 R. 1013. On the third finding the Lord Ordinary was wrong. Dr Brodie's trust conferred benefits on his younger brothers at once, and not merely upon

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their reaching twenty-five. Although made in consequence of his father's settlement it no way affected it. He did not put his brothers to any election, and his father's trustees remained as free as ever, even if not bound, to allow the younger sons £200 a-year each. Upon the fifth finding, Dr Brodie's discharge of 1876 unless reduced—and the Lord Ordinary found there were not averments upon which to found a reduction—was a complete bar to any claim for accounting before that date. Since that date it was now admitted the accounts had been taxed by a firm of accountants of whom Dr Brodie approved. Admitted that would not be a bar to any specific objections, but these, as the Lord Ordinary finds, have not been made. The case of Laing was very special. It was a question between a committee and their inspector, who was virtually charged with fraud. (6) As to the guarantee of interest, it was clearly to continue only while Horne, Horne, & Lyell remained agents of the borrower's trust. There was no relevant averment of loss to Dr Brodie's estate due to the actings of the trustees. It was not said that the renewal of the loan at a lower rate of interest was unwise. It was not said wherein the trustees had acted wrongly, nor that they could have realised the sum lent if they had called up the bond. Even if the averments were relevant, the action as laid was incompetent, as there were no conclusions under which the question could be raised— cf. Barr v. Neilsons, March 20, 1868, 6 Macph. 651; and Taylor v. M'Dougall & Sons, July 15, 1885, 12 R. 1304.

At advising—