Scottish Court of Session Decisions

Thomas M'Dougal, paper maker, Esk Mills, Penicuik, died on October. 12, 1871, leaving a trust-disposition and settlement dated February 28, 1862, and several codicils thereto.

By the said trust-disposition and settlement Mr M'Dougal assigned, disponed, and conveyed to and in favour of certain trustees his whole estate heritable and moveable. The truster, after providing for certain legacies and provisions, including an annuity to his wife if she should survive him, directed as follows:—“( Seventh) At the first term of Whitsunday or Martinmas after the youngest of my surviving children shall have attained the age of twenty-one years, or as soon thereafter as conveniently can be, I hereby direct and appoint my trustees … to divide the residue of my estate heritable and moveable above conveyed into six equal parts or shares, three-sixth shares whereof my trustees shall hold for behoof of my daughters Dinah M'Dougall, Flora M'Dougal or Williams, and Henrietta M'Dougal, equally among them in liferent for their liferent and alimentary use allenarly … and on the death of my said daughters respectively … my trustees shall pay the interest of their respective mother's shares to or for behoof of their respective children, my grandchildren, equally among them until they respectively attain majority, when the fee or capital thereof shall be payable equally among them share and share alike, … and in case of the death of any of my said children before me or before the first term of Whitsunday or Martinmas after my youngest child shall have attained majority (which is hereby declared to be the term of vesting of their provisions under this settlement) without leaving issue, then the share of such predeceaser shall go to increase the shares of the surviving children; but in the event of such predeceaser leaving issue, then such issue shall succeed equally among them, if more than one, to their parent's share; and in the event of any of my daughters dying after the date of the period of division foresaid without leaving children, then the share of the daughter so deceasing shall go to increase the shares of my surviving children, whether sons or daughters, my daughters' shares thereof to be held by my trustees in trust in like manner with their original shares …”

By codicil dated 4th February 1870 Mr M'Dougal, in respect that his daughter Flora M'Dougal or Williams had predeceased him, directed, inter alia, that the share of his estate, the liferent of which was intended for his said daughter, should be held by his trustees for behoof of her children in the manner and proportions mentioned in the settlement; and further provided as follows:—“I declare that in case of the death of any of my other children before the period of my death (which, now that all my children have attained majority, I declare to be the time of vesting of their provisions under my settlement) without leaving issue, then the share of such predeceaser shall go to increase the shares of my other children and the issue of children deceased, … and in case of either of my two surviving daughters dying after me without leaving children, the share liferented by such daughter shall go to increase not only the share of my remaining children but the shares falling to the children of any of them who may have died leaving children, such grandchildren being entitled equally among them to the share which would have gone to or been liferented by their parent had he or she survived, my daughters' share thereof or the shares falling to children of daughters deceased to be held by my trustees in like manner with their original shares … further, I declare that notwithstanding the liferent conferred on the children of my daughters and the powers given to my trustees to make advances to them as mentioned in my settlement, the fee or capital of the shares of the children of my daughters in the residue of my estate shall not vest in them until they respectively attain majority, and in the event of the death of all my said daughters' children before attaining majority and without issue, such share, subject always to the right of liferent conferred on my sons-in-law, shall go to my other children or their issue as before provided.”

The testator was predeceased by his wife and by one daughter, Mrs Flora M'Dougal or Williams, and was survived by three sons, Edward Sambourne M'Dougal, Thomas M'Dougal, and James Brown M'Dougal, and by two daughters, Dinah M'Dougal and Henrietta M'Dougal (afterwards Mrs Hosack).

Mrs Flora M'Dougal or Williams, who predeceased the testator, left issue.

Thomas M'Dougal, son of the testator, died on March 8, 1898, leaving two children.

James Brown M'Dougal died on October 5, 1899, without issue.

Henrietta M'Dougal (afterwards Mrs Hosack), died on May 24, 1901, survived by her husband, but without any surviving issue, her only child having predeceased her.

Page: 377↓

Two children of the testator survived Mrs Hosack, viz., the said Edward Sambourne M'Dougal and Dinah M'Dougal.

On the death of Mrs Hosack the capital of the share of residue liferented by her became available for division. Questions having arisen as to the interpretation of the trust settlement and as to the persons who were entitled to participate in the said share of residue, the present special case was presented for the opinion and judgment of the Court.

The parties to the special case were (1) the trustees; (2) the surviving son and daughter of the testator and a daughter of the deceased Thomas M'Dougal (a son of the testator), and a son of the deceased Flora M'Dougal or Williams, the testator's daughter; (3) the testamentary trustees of the deceased Thomas M'Dougal and of the deceased James Brown M'Dougal (sons of the testator), a son of the testator's son Thomas M'Dougal, and a son and the marriage-contract trustees of two daughters of the testator's daughter Mrs Williams, who predeceased him, these three children of Mrs Williams being the residuary legatees under the trust-disposition and settlement of James Brown M'Dougal.

The second parties maintained that vesting of the fee of the share of residue which was liferented by Mrs Hosack was suspended until her death; that the beneficiaries entitled to participate in the said share fell to be ascertained as at that date, and that only those of Mrs Hosack's brothers and sisters who personally survived her, and the issue of any who predeceased, were entitled to participate in the said share.

The third parties maintained that the fee of the shares of residue liferented by the daughters of the testator vested a morte testatoris in the remaining children of the testator who survived him, subject to defeasance in whole or in part in the event of the daughters or either of them leaving issue. They maintained therefore that each of the sons of the testator acquired a vested interest at their father's death in the fee of the share of residue liferented by Mrs Hosack.

The questions in the case were as follows:—(1) Was vesting of the fee of the share of residue liferented by Mrs Hosack suspended until her death, and does said share (subject to the liferent of her husband of one-third thereof) fall to be divided in the proportions of one-fourth part thereof to the said Edward Sambourne M'Dongal, one-fourth part thereof to the said two children of Thomas M'Dougal, one-fourth part thereof to the said children of Mrs Williams, and one-fourth part to be added to the share of residue liferented by the said Dinah M'Dougal? or (2) ( a) Did the fee of the said share of residue vest at the testator's death in his remaining children who survived him and the issue of his daughter Mrs Williams, who predeceased him, subject to defeasance in whole or in part in the event of Mrs Hosack leaving issue who attained majority? and ( b) Does said share (subject to the liferent of Major Hosack of one-third thereof) fall to be divided in the proportions of one-fifth part to the said Edward Sambourne M'Dougal, one-fifth part to the testamentary trustees of the deceased Thomas M'Dougal, one-fifth part to the testamentary trustees of the said James Brown M'Dougal, one-fifth part to the said children of Mrs Williams, and one-fifth part to be added to the share of residue liferented by the said Dinah M'Dougal?

Argued for the second parties—The share in question was the share liferented by the deceased Mrs Hosack, a daughter of the testator. The destination of the share in question was to a daughter in liferent, and if she should leave issue who should attain majority, to such issue in fee. Failing such issue the share so liferented was to go to “my surviving children” and the children of any who might have died leaving children. This was an ordinary clause of survivorship, and on the well-recognised principle of interpretation applicable to such clauses the words were to be taken as referring to the period of distribution, viz., the death of the liferentrix— Young v. Robertson, February 14, 1862, 4 Macq. 314.

Argued for the third parties—The direction to the trustees was to “hold” for behoof of daughters and their issue, it being specially provided that the fee was not to vest in the issue before majority. The children entitled to the fee were the children remaining at the date of the testator's death, that date being declared to be the period of vesting—under deduction of the shares of Mrs Flora Williams and of any others who might predecease the testator— Carleton v. Thomson, July 30, 1867, 5 Macph. (H.L.) 151, per Lord Colonsay, at p. 154; 4 S.L.R. 226. The codicil of 1870 was designed to meet a new set of contingencies, viz., others of the testator's children predeceasing him. The death of Flora was the occasion of the codicil, and the codicil must be read as having been made to provide for the predecease of others of the testator's children. It was accordingly provided that if a daughter should die leaving no issue, then the “remaining” children and issue of predeceasers (the latter being here mentioned for the first time) were instituted. If daughters should die leaving issue who should die in minority, “other” children and issue of predeceasers were instituted. “Remaining” and “other” meant the same thing, i.e., those remaining after the death of children predeceasing the testator. That being so, the will and codicil read together supported the view that vesting was intended to take place as to the whole provisions at the testator's death. There was also the special clause in the codicil declaring the death of the testator to be the date of vesting. Only where the words of the deed were inconsistent with vesting a morte testatoris would a later period be taken, and the opposite was the case here— Taylor v. Gilbert's Trustees, July 12, 1878, 5 R. (H.L.) 217, per Lord Blackburn, at p. 221, 15 S.L.R. 776; Thompson's Trustees v. Jamieson, January 26, 1900, 2 F. 470, 37 S.L.R. 346.