Scottish Court of Session Decisions

William Adam of Easter Beltie, advocate in Aberdeen, died on 28th April 1881 unmarried, leaving a trust-disposition and settlement dated 20th December 1878, and codicils thereto, dated respectively 17th May 1879, 16th February 1880, and 7th October 1880, whereby he gave, granted, assigned, and disponed to his nephews Andrew Wilson, farmer, Easter Beltie, Andrew Davie, farmer in Mid Beltie, and Andrew Douglas, farmer in Corfidlie, and the survivors or survivor, acceptors or acceptor of them, and to such other persons as should be assumed by them for the trust-purposes therein mentioned, (1) the lands of Easter Beltie, (2) the lands of Westown of Ranna, and (3) generally all the estates, heritable and moveable, real and personal, of whatever kind or nature, or wherever situated, then belonging or which should belong and be indebted to him at the time of his death.

After providing for (1) payment of debts, deathbed and funeral expenses, and the expense of executing the trust; and (2) for giving over certain articles to his housekeeper if in his service at his death, and for payment to her if in his service at his death of an annuity of £10 secured on Easter Beltie, the truster by the said trust-disposition and settlement provided as follows:—“( Thirdly) I hereby direct my said trustees, as soon as they can conveniently do so after my death, to dispose of my property of Westown of Ranna in the parish of Tarland, and apply £4000 sterling of the price thereof in part payment of the heritable bond of £14,000 presently affecting my estate of Easter Beltie, and this being done I appoint and direct my said trustees to hold said estate of Easter Beltie under the burden of the balance of said heritable debt (which will then be reduced to £10,000), and under the burden of said annuity of £10 to my said housekeeper, and also to hold my whole other property, heritable and moveable, in trust during my brother Alexander's lifetime, and until the first term of Whitsunday which shall happen after his death, for the purposes hereinbefore and after mentioned, or which I may specify in any writing to be executed by me hereafter clearly expressive of my will, although the same may not be formally executed. ( Fourthly) As soon after my death as my said trustees may find it convenient to do so, I appoint them to dispose of my household furniture and whole other effects in my house in Aberdeen, except those articles directed to be given over to my housekeeper Mrs Wyness, and excepting also” a portrait and a French clock, piece of plate, and books presented to him, and relative presentation address, “which portrait, French clock, and other articles, and the address which accompanied them, I do not wish to be disposed of, but to be delivered over to the parties hereinafter mentioned appointed to succeed me in the estate of Easter Beltie, to be retained by them as a memorial of the donor. ( Fifthly) As soon after the first term of Whitsunday which shall happen after the death of my said brother Alexander as may be found convenient, I appoint my said trustees to realise my whole remaining property, heritable and moveable, falling under this trust (excepting the estate of Easter Beltie, which along with the portrait and other articles excepted under the previous head will fall to be conveyed and delivered by them in manner after mentioned), and out of the proceeds thereof to pay in the first place to those having right to the same in terms of law, the sum now in my hands, amounting to £1298, 18s. 8d. sterling, which fell to my brother Alexander Adam as his share of the personal estate of his late brother George; and in the next place, to pay the following legacies which I leave and bequeath to the persons after named and designed, whom I hereby constitute my residuary legatees, viz.”—[ Here followed a list of legacies consisting of sums

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of money to various persons, and, inter alia, a legacy of £50 to the wife of Andrew Wilson, one of his trustees] “and to each of my said trustees, Andrew Wilson, Andrew Davie, and Andrew Douglas, the sum of £19, 19s. sterling as a mark of my regard for them; and whatever residue may be over of my trust-estate after paying the above-mentioned legacies and bequests and defraying the expense of executing this trust, I appoint my said trustees to divide and pay the same to my said legatees in proportion to the amount of the legacies left to them respectively, as above specified.”

By the sixth purpose the truster gave certain directions and expressions of his wishes with regard to his brother Alexander.

By the eighth purpose it was, inter alia, provided as follows:—“As soon after the death of the said Alexander Adam as may be found possible, my said trustees shall be bound to convey, and I hereby direct and appoint them to convey, under the burdens and conditions after written, my foresaid lands and estate of Easter Beltie to George James Wilson, the oldest son of the said Andrew Wilson, in liferent, but for his liferent use only, and after his death to the heirs of his body in fee; whom failing, to John Simpson Wilson, second son of the said Andrew Wilson, in liferent, but for his liferent use only, and after his death to the heirs of his body in fee; whom failing, to Andrew Wilson, third son of the said Andrew Wilson, in liferent, but for his liferent use only, and after his death to the heirs of his body in fee; whom failing, to William Adam Wilson, fourth son of the said Andrew Wilson, in liferent, but for his liferent use only, and after his death to the heirs of his body in fee; whom all failing, to myself and my own heirs whomsoever: But always with and under the burdens, conditions, and provisions after written; that is to say, the conveyance of said lands of Easter Beltie shall be granted subject to the real burden of the bond presently affecting said lands to the extent of £10,000 sterling, part of the principal sum of £14,000 sterling therein contained (the sum of £4000 sterling being payable by my trustees in part of the said principal sum as hereinbefore provided), with corresponding interest and penalties, and to the real burden of the foresaid life annuity of £10 sterling to my housekeeper Mrs Wyness,—she being in my service at the time of my death,—as also the said conveyance shall be so granted under the fetters of a strict entail to subsist and be effectual so long as but not longer than any sons or daughters of my grand-nephews the said George James Wilson, John Simpson Wilson, Andrew Wilson, and William Adam Wilson shall be in life and in the line and hope of succession to the said lands; and for effecting said entail my trustees shall be bound, and I hereby direct them, to insert in said conveyance a clause for the registration thereof in the Register of Tailzies, and also in the Books of Council and Session, in terms of the Statute 31 and 32 Vict. chap. 101, and to record said conveyance accordingly.” Said purpose also provided for the exclusion of heirs-portioners.

By the codicil dated 17th May 1879 the truster appointed Mr James Meston, Accountant, Aberdeen, and his housekeeper Mrs Wyness, to be trustees, and left a legacy of £19, 19s. to Mr Meston if he should agree to act as a trustee, but did not give him any right to a proportionate share of the residue.

The truster was survived by his brother Alexander Adam, who died on 21st February 1897.

The trustees exposed the property of Westown of Ranna to public sale on 28th October 1881 at the upset price of £4500, and again on 8th July 1887 at the upset price of £4000, but no offers were made on either occasion. They also, in the month of May 1887, advertised the property for sale by private bargain, but no offer was received. In June 1897 the trustees had the truster's heritable properties valued by Mr George James Walker, land valuator, Aberdeen.

He valued Easter Beltie at	£11,500
And Westown of Ranna at	2,050
Total	£13,550

On 12th May 1898 the trustees applied to the Court for authority to sell Westown of Ranna at such price (whether less or more than £4000) as they could obtain therefor, and by interlocutor, dated 9th June 1898, they were so authorised to sell it. On 22nd July 1898 the trustees exposed Westown of Ranna to public sale at the upset price of £2200, but no offer was received. On 5th August 1898 the property was again exposed at the upset price of £2000, and after competition was sold at the price of £2455. The sellers' share of the expense of the disposition to the purchaser was about £38, 18s. 8d. The expenses of the sale and of previous exposures were estimated at £75, 2s. 1d. The expenses of the application to the Court for authority to sell amounted to £45. If these sums fell to be deducted from the price, the net proceeds of the estate were reduced to £2295, 19s. 3d., being £1704, 0s. 9d. less than the amount which the truster directed to be applied out of the price in reducing the debt on Easter Beltie.

The trust-estate consisted of (1) moveable property left by the truster, which at his death was of the value of £2000 or thereby, but which through increment in the value of shares held by the truster, and with the revenue of the moveable estate and the surplus rents of the heritable properties accumulated since the truster's death, as at November 1898 amounted to about £6000; (2) The estate of Easter Beltie, in the parish of Kincardine O'Neil, which the truster purchased in 1874 at the price of £14,556. The principal farm on this estate had for long been tenanted by the Adam family, and the truster was born on it; and (3) The proceeds arising from the sale by the trustees of the farm of Westown of Ranna. The truster succeeded to this property in 1873. It had been purchased by his predecessor in 1868 at the price of £4500. At the

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date of the truster's death the two heritable properties above mentioned were together burdened with two bonds and dispositions in security granted by the truster, the one for £12,000, and the other for £2000—together £14,000.

The amount required to meet the legacies mentioned in the trust-disposition and settlement, at the amounts therein stated, was £629, 16s.,—which left a residue, subject to residue-duty and expenses, of £5370, 4s. or thereby. Between the date of the truster's death and the date of the sale of Westown of Ranna there had accumulated out of the rents of Westown of Ranna, after charging against the rents of that property a proportional part of the interest on the debt of £14,000, a surplus amounting to £263, 17s. 5d. This surplus was included in the sum of £6000 above mentioned.

The trustees named in the trust-disposition and settlement itself, viz., Andrew Wilson, Andrew Davie, and Andrew Douglas above mentioned, all survived the testator and accepted office as trustees. Andrew Davie and Andrew Douglas both predeceased Alexander Adam, but Andrew Wilson survived him.

In these circumstances various questions arose in connection with the trust, and accordingly this special case was presented for the opinion and judgment of the Court.

The parties to the special case were:—(1) The trustees; (2) The persons in whose favour the first parties were directed to convey and entail the estate of Easter Beltie; (3) Certain of the surviving legatees and representatives of deceased legatees, being the persons in right of the legacies above mentioned other than the legacies bequeathed to the trustees; (4) The representatives of the trustees to whom legacies were bequeathed in the trust-disposition and settlement itself; (5) The person called first and nominatim under the destination contained in the eighth purpose of the settlement; (6) The other persons nominatim called under said destination.

The third and fourth parties included the whole parties interested in the residue.

The second parties maintained that, as in a question with the third and fourth parties, they were entitled to have the debt on Easter Beltie reduced to £10,000 by the application for that purpose of so much of the trust funds as might be necessary. In the event of its being held that only the price of Westown of Ranna was applicable under the settlement to the reduction of the debt on Easter Beltie, the second parties maintained that the whole price, under deduction of the sellers' share of the expense of the disposition to the purchaser, was so applicable, and that the expenses of exposure and sale and of the application to the Court were payable out of the residue of the testator's estate. They also maintained that the surplus rents of Westown of Ranna should be applied along with the price of the estate in reducing the debt on Easter Beltie. The third and fourth parties on the other hand maintained that as between the second parties and the residuary legatees only the free proceeds of the estate of Westown of Ranna, after deducting the expenses of exposure and sale and of the application for authority to sell, were applicable to the reduction of the heritable debt on the estate of Easter Beltie.

The fourth parties maintained that, as representing Andrew Wilson, Andrew Davie, and Andrew Douglas, who were nominated as trustees by the settlement, and who survived the testator and accepted office, they were entitled to a share of residue corresponding to the legacies of £19, 19s. each bequeathed to their authors by the truster.

The third parties on the other hand maintained that they alone were entitled to the residue.

Under reservation of any right which the first parties (the trustees) might have or acquire to retain possession of the portrait, French clock, and other articles referred to in the fourth purpose of the settlement, until the debts of the deceased had been fully paid or provided for, the parties desired to have the rights of the legatees to these articles determined. The fifth party maintained that he was entitled under the fourth purpose of the settlement to the unconditional delivery of these articles. The sixth parties, on the other hand, maintained that the fifth party was entitled to obtain delivery of said articles only in the event of his taking the entailed estate, and in that case only on the footing and condition of holding the same in trust for succeeding heirs of entail.

The questions of law for the opinion and judgment of the Court were as follows:—“(1) Are the second parties entitled, in a question with the third and fourth parties, to have the debt on the estate of Easter Beltie reduced to £10,000 by the application for that purpose of so much of the residue as may be necessary along with the price of Westown of Ranna? or (2) Is the price of Westown of Ranna alone applicable towards reduction of the debt? or (3) Are the surplus rents of Westown of Ranna applicable along with the price towards reduction of the debt? (4) If the second question is answered in the affirmative, are the expenses of exposure and sale, and of the application for authority to sell Westown of Ranna payable out of the price, or out of the residue of the trust estate? (5) Are the fourth parties entitled to a share of the residue in proportion to the amount of the legacies bequeathed to their authors? (6) As in a question between the fifth and sixth parties—( a) Is the fifth party entitled unconditionally to the portrait and other articles mentioned in the fourth purpose of the testator's settlement? or ( b) Is the person taking the entailed estate of Easter Beltie entitled to delivery of the said portrait and other articles? and ( c) If the preceding question is answered in the affirmative—(1) Is the person taking the entailed estate entitled unconditionally to said articles? or (2) To said articles only upon condition that he holds them for succeeding heirs of entail?”

Argued for the third parties—(1) The rule

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was that where a testator gave a sum of money to a legatee, and merely desired or indicated that it should be paid out of a particular fund, his whole estate was liable if the fund referred to proved insufficient; but, on the other hand, if the testator gave to the legatee a certain sum of money out of a fund named, then the mention of the fund was not merely demonstrative but taxative, and if the fund named was insufficient the legacy must suffer abatement, and the legatee was not entitled to have the deficiency made up from residue— Douglas' Executors, February 5, 1869, 7 Macph. 504; Wauchop v. Wilson, July 3, 1724, M. 8063; Duncan v. Duncan (1859), 27 Beavan, 386. Here there was not an absolute gift of £4000, and the mention of the fund from which that sum was to come was not merely demonstrative but taxative. The heirs of Easter Beltie, and not the residuary legatees, must bear the loss. (2) As regards the surplus rents, the general rule was that accumulations of rents fell into residue, and there was nothing here to justify this case being treated as an exception to that rule—M'Laren on Wills, vol. i.585 (3rd ed.); Pursell v. Elder, June 13, 1865, 3 Macph. (H.L.) 59; Sturgis v. Meiklam's Trustees, June 13, 1865, 3 Macph. (H.L.) 70. (3) All the expenses incident to the sale of Westown of Ranna and occasioned by it should come out of the price of that estate and not out of the residue. (4) The legacies to the trustees were personal to them, and given to them in consideration of their acting as trustees. Their representatives were not entitled to any share of the residue. It was not intended that the trustees should have any share of the residue. In the codicil a legacy of the same amount was given to a subsequently appointed trustee upon condition of his agreeing to act as a trustee, but no proportionate share of the residue was given to him.

Argued for the second parties—(1) The leading purpose of the testator's settlement was to create an entail of the estate of Easter Beltie, and to give that estate to the series of heirs mentioned, burdened with debt to the extent of £10,000 only. It was clear that if the lands were to continue to be held as an entailed estate, which was obviously the testator's intention, it was necessary that the debt should be reduced at least to the extent of £4000, and the testator plainly intended this to be done as essential to the main purpose of his settlement. It was also clear that he wished to favour the heirs of Easter Beltie rather than his residuary legatees. If the residuary legatees' contention were upheld they would derive the chief benefit from the will, and it was doubtful whether the succession to Easter Beltie would be anything better than a damnosa hæreditas. There was nothing in the words used by the testator to express his intention which necessitated an interpretation which would defeat his purpose in this way. The indication of the fund out of which the £4000 was to come was merely demonstrative and not taxative. The deficiency should therefore be made up out of residue. The case of Douglas' Executors, cit., was an authority in the second parties' favour. (2) At least the surplus rents of Westown of Ranna should be applied in reducing the debt on Easter Beltie. They should be treated as a surrogatum for interest on the price. (3) In any view, the whole of the price, less only the seller's half of the expense of the disposition, should be applied in reducing the debt, so that as large a sum as possible should be devoted to that purpose in accordance with the testator's wishes, and all incidental expenses should come out of residue.

Argued for the fifth party—An entail of moveables was not allowed by our law. Apparently this was what the testator desired to effect with regard to the portrait and other articles mentioned. He had not provided any trust for their protection. All that could be done therefore was to hand them over to the fifth party.

Argued for the fourth parties—These parties were entitled to a share of residue. Their legacies were just in the same position as the others. They were named, and they were designed not merely as trustees but as individuals by reference to the designations given in the earlier part of the deed where they were first mentioned.

The argument for the sixth parties sufficiently appears from their contention, supra.