Scottish Court of Session Decisions

James M'Culloch of Trees, near Barrhead, in the county of Renfrew, died on 17th June 1871 leaving a trust-disposition and settlement dated 6th December 1870, whereby he conveyed his whole real and heritable estate, as also his whole personal and moveable means and estate, to the trustees and for the trust purposes therein mentioned.

After providing for payment of debts, sick-bed, and funeral charges, making certain provisions in favour of his wife and others, and directing his trustees to hold the lands of Trees for behoof of his wife in liferent, and after her death for behoof of his son Andrew Mair M'Culloch in liferent and his children in fee, and to hold a cottage at Grahamston for behoof of his son George M'Culloch in liferent and his lawful issue in fee, the testator directed as follows:—“( Thirteenth) I hereby direct and appoint

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that on the death of my said wife, whereby the liferent before provided to her shall cease, my said trustees shall hold my said means and estate other than the lands of Trees, and furniture, and Grahamston Cottage, for behoof of my said children in liferent, and equally among them and their lawful issue in fee; and I direct that the said free income, after deducting all charges and expenses, shall be divided among and paid to my said children, equally share and share alike: Declaring and specially providing that the whole of said income shall be an alimentary provision for the better aliment and support of my said children respectively, and that their several shares thereof shall not be assignable by them, nor arrestable, nor affectable by their respective debts or deeds or the diligence of their creditors, all which are hereby expressly secluded and debarred: ( Fourteenth) In the event of any of my said children dying leaving lawful issue the share of the income of such deceaser shall belong to such issue, and shall be paid to them and applied for their aliment, support, and education; and in the event of any of my children dying without leaving lawful children, the share of my estate liferented by such deceaser shall revert to and form part of the income for division among the survivors and the issue of any deceaser who shall have died leaving issue, who shall always succeed in the parent's place to the share to which the parent would have been entitled if in life: ( Fifteenth) In the event of the death of my eldest son Andrew Mair M'Culloch without leaving lawful issue, my trustees are authorised and empowered to sell the said property of Trees to any of my said children who may wish to take it over at a valuation to be obtained by my trustees from persons of skill, the eldest having the first choice in preference to the younger, but if none of them shall elect to take it, then the same shall be sold, and the proceeds shall form part of the residue of my estate for division: ( Sixteenth) On the death of all of my said children I direct that my said estate shall be winded up by the real or heritable portion thereof still remaining unsold being sold and converted into money except the property of Trees, which shall be conveyed to the children of my eldest son if he shall leave issue, and after deducting all charges and expenses the free proceeds shall along with my personal estate be divided among the children of my said sons and daughters who shall have left children per stirpes—that is, the family or children of each of them shall succeed in the parent's place to the share or proportion of capital which was liferented by the parent, and equally share and share alike among themselves.”

By the seventeenth purpose the testator authorised and empowered his trustees at any time during the subsistence of the trust to sell the whole or any part of his heritable estate not specially destined.

The testator died on 17th June 1871 survived by his wife, his sons Andrew Mair M'Culloch and George Wallace Macculloch, and his daughters Miss Mary Elizabeth M'Culloch, afterwards Mrs Brown, and Mrs Jane Louisa M'Culloch or Maclachlan. The testator's widow died on 19th January 1878. Andrew Mair M'Culloch died unmarried on 25th October 1878. George Wallace Macculloch died on 3rd February 1880 survived by an only child, Bertram Douglas Macculloch, who had been born on 3rd March 1877. Mrs Brown and Mrs Maclachlan both had issue.

Bertram Douglas Macculloch attained majority on 3rd March 1898, and thereupon requested the trustees to pay or make over to him the one-third share of the residue of the trust-estate in which he was interested as the only child of George Wallace Macculloch. The trustees were of opinion that he was not entitled to make this demand, and the present special case was presented for the opinion and judgment of the Court.

The testator's estate at the date of his death had consisted of a copyhold property in England called Springvale (since enfranchised and carried into freehold), of the property of Trees, and the cottage at Grahamston, in Scotland, and of personal or moveable estate in Scotland, England, and abroad. The property of Trees was sold after Andrew Mair Macculloch's death, and the price added to residue. The cottage at Grahamston was, on George Wallace Macculloch's death, conveyed to Bertram Douglas Macculloch. At the date of the presentation of this case the residue of the trust-estate consisted of Springvale, having a rental of about £800 per annum, and of personal estate amounting to about £40,000.

The parties to the present case were (1) the trustees, and (2) Bertram Douglas Macculloch.

The second party maintained that the right to the fee of one-third of the residue, both moveable and heritable, having vested in him, he was entitled to immediate payment of one-third of the residue so far as it consisted of moveables, and also to either a conveyance of a one-third share of Springvale or payment of one-third of the value of Springvale, as that value might be determined by sale or otherwise.

The parties of the first part maintained that, looking to the terms of the trust-disposition and settlement, and more particularly the sixteenth purpose thereof, the second party was not entitled to demand from them, prior to the death of the survivor of Mrs Brown and Mrs Maclachlan, payment of his share of the residue of the moveable estate or a conveyance of his share of Springvale.

The questions of law were—“(1) Is the second party now entitled to payment of one-third of the residue of the said moveable estate? (2) Is the second party now entitled to ( a) a conveyance of one-third share of Springvale, or ( b) payment of one-third of the value of Springvale ?”

The parties were agreed that a conveyance of an undivided third share of the entirety of the freehold premises at Springvale could be granted according to English law.

After the case had been partly heard the trustees lodged a minute, in which they stated that Mrs Brown and Mrs Maclachlan,

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and those of their families resident in this country who were major, were unanimously and strongly in favour of the first parties retaining Springvale as an investment, and that, after careful consideration, the trustees did not see any reason why their discretionary powers of selling Springvale should be exercised at present.

Argued for the first parties—The first parties were prepared to concede that a pro indiviso share in the residue had vested in the second party. But the period of payment had not yet arrived, as both of the truster's daughters were still alive, and the trust purposes had not yet been fulfilled. Before the death of the last surviving daughter the estate might shrink, and the second party was not entitled to be paid out a third share of the amount at which the estate was valued at present— Haldane's Trustees v. Haldane, December 13, 1895, 23 R. 276. That case ruled the present. The amount payable to the beneficiaries was to be determined by sale of the whole residue after the death of all the testator's children. The trustees were not bound to sell until that period arrived, and they were not entitled to pay out the share of any beneficiary upon the basis of a valuation except by consent of all parties interested. In particular, the Court had no power to compel the trustees to realise the real property in England, or to convey a one-third pro indiviso share of it to the second party. Such a pro indiviso conveyance would have the same effect as a sale, because the second party as a pro indiviso owner could compel a sale. Even if he did not, the result would be that the remaining two-thirds would be unsaleable. The case of Miller's Trustees v. Miller, December 19, 1890, 18 R. 301, and the other cases following upon it did not apply here. This case fell under the exception recognised by Lord President Inglis in that case at p. 305, and given effect to in the case of Graham's Trustees v. Graham, November 30, 1899, 37 S.L.R. 163, for there were here trust purposes which could not be secured without the retention of the vested estate or interest of the beneficiary in the hands of the trustees. In Miller the estate vested in the beneficiary was finally ascertained, whereas here the amount due to each set of beneficiaries could not be ascertained until the death of the last survivor of the daughters.

Argued for the second party—It was admitted here that the second party's share had vested. That being the case he was entitled to immediate payment unless there was some good reason to the contrary. No such good reason could be stated by the trustees. This case was ruled by the cases of Miller's Trustees v. Miller, cit.; Wilkie's Trustees v. Wright's Trustees, November 30, 1893, 21 R. 199; Stewart's Trustees v. Stewart, December 14, 1897, 25 R. 302; and Ballantyne's Trustees v. Kidd, February 18, 1898, 25 R. 621. In the last-mentioned of these cases the period of division had not arrived, but notwithstanding it was held that as the shares had vested those of the children who had attained majority were entitled to payment. All the cases in the books were in favour of the second party's contention except Haldane's Trustees v. Haldane, cit. That case was special, and turned upon the form of the question of law stated for the opinion of the Court.