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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Miller Richard's Trustees v. Miller Richard [1903] ScotLR 40_663 (09 June 1903) URL: http://www.bailii.org/scot/cases/ScotCS/1903/40SLR0663.html Cite as: [1903] SLR 40_663, [1903] ScotLR 40_663 |
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Page: 663↓
By his trust-disposition and settlement a testator “left” the whole residue of his estate to and among his children equally, share and share alike, and declared that the shares should be payable as soon as conveniently might be after his death.
In a codicil the testator, considering that he had been forced to the conclusion that H, one of his sons, was unable to control his capital expenditure, directed his trustees on making the division of the residue provided for in the trust-disposition and settlement, not to pay over to H the share of the estate apportioned to him, but to pay him a specified sum, and hold and invest the remainder and pay him the income for his liferent alimentary use. The testator further declared that this provision was to be strictly alimentary, and not assignable by his son or attachable by his creditors, providing always that his son should have power to dispose by will or by deed of provision of the capital sum so retained on his death. It was further declared that these provisions were in full of legitim.
Held that, assuming the settlement to have conferred a fee on H, the right of fee, although not expressly revoked, had been taken away by the codicil, and that H was only entitled to an alimentary liferent, with a right of disposal of the fee by testamentary deed.
Walter Miller Richard died on 13th August 1902, leaving a trust-disposition and settlement dated 9th January 1900, and two codicils dated respectively 1st November 1901 and 13th July 1902, whereby he conveyed his whole estate to trustees for the purposes therein set forth. The testator was survived by his widow and six children.
By the third purpose of his trust-disposition and settlement the testator made certain provisions for his widow, and by
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the fourth purpose he provided—“I leave the whole rest, residue, and remainder of my means and estate to and among my children, Herbert Miller Richard, Walter Cecil Richard, Charles Richard, Leslie Fitzroy Richard, Ernie Noel Richard, and William Raymond Richard, and any other children who may be hereafter born to me, equally share and share alike, the share of any dying before or after me without leaving lawful issue to accresce to the survivors, and the issue of any predeceasing the term of payment leaving lawful issue surviving being entitled to the shares original and accruing to which their parent would have been entitled had he or she survived, and that equally among them… . And I declare that the shares of residue falling to the beneficiaries before indicated shall be payable to them, so far as not retained by my trustees to provide the annuities or advances before mentioned, as soon as conveniently may be after my death.” By the codicil dated 13th July 1902 the testator provided as follows—“Considering that my son Herbert Miller Richard has from time to time incurred debts to a large amount, which I have paid for him or assisted him in securing, and that I am forced to the conclusion that he is unable to control his capital expenditure: Therefore I direct my trustees, on making the division of residue provided for in the fourth purpose of my said trust-disposition and settlement, not to pay over to my said son Herbert Miller Richard the share of my estate apportioned to him, but my trustees shall pay over out of his said share a sum of £2000, which will be sufficient for repayment of the debt secured on his expectancy from my estate, which, so far as known to me, is £500, and which will leave him a sum in hand which I trust he may make good use of. And I direct my trustees to hold the remainder of the share so apportioned to my said son, and invest the same in suitable investments, paying him for his liferent alimentary use the income thereof at such intervals as they may find convenient and expedient. And I declare that this provision is and shall be strictly alimentary, and shall not be assignable by my said son nor attachable by diligence of his creditors, providing always that my said son shall have power to dispose by will or deed of provision of the capital sum so retained on his death. And I declare that the foregoing provisions in favour of my said son are in full of all legitim, bairns' part of gear, or legal share of heritage or moveables which it is competent to my said son to demand at my death. And in the event of the said provisions not being so accepted by my said son as in full of all claim competent to him, I direct my trustees to pay him his legitim only, deducting therefrom the amount of the advances made by me during my lifetime to him or on his account, and sums for which my estate may be liable to third parties on his account.”
By the codicil dated 1st November 1901 the testator provided that a sum of £400, which he had advanced to his son Herbert Miller Richard, should form a deduction from the provision falling to him under the settlement.
After the testator's death the trustees, in terms of said codicil of 13th July 1902, made payment to Herbert Miller Richard of the sum of £2000 therein directed to be paid to him, and set aside for his behoof the balance of the one-sixth of the residue of the estate so far as the same had come into their hands and was available for division. The remainder of the residue was subject to (1) a liferent of a portion thereof in favour of Mrs Richard senior, and (2) certain liferent annuities in favour of Mrs Kate Lindsay or Richard, widow of the testator.
A question arose between the trustees and Herbert Miller Richard as to whether he was entitled to payment, for his own absolute use, of the sum so set aside for his behoof by the trustees, and consequently of his share of the remainder of the residue of the trust estate when the same should be available for division. The trustees maintained that in terms of said codicil dated 13th July 1902 they were bound to retain the balance of the share of residue falling to Herbert Miller Richard and invest the same for his behoof, paying him only the annual income thereof as an alimentary provision, and that he was entitled only to dispose thereof by testamentary deed. Herbert Miller Richard maintained that he was vested with the fee of said share of residue, and that he was entitled to immediate payment thereof so far as the residue was now available for division, and to the balance as the said liferent and annuities respectively expired.
For the settlement of these points a special case was presented for the opinion and judgment of the Court by the trustees as first parties and Herbert Miller Richard as second party.
The questions of law were as follows “(1) Is the second party vested in the fee of one-sixth of said residue, under deduction of the said sum of £400? (2) In the event of the first question being answered in the affirmative, is the second party entitled to immediate payment of the said one-sixth share of residue, so far as the same is now available for division, and to the balance as the said liferent and annuities respectively expire?”
Argued for the first parties—(1) The second party was not vested in the fee of one-sixth of the residue. His right was of a more limited character, viz., that of a liferent coupled with a power to dispose by will. No right to the fee was conferred on him by the trust-deed, as according to its terms vesting was postponed till the date of payment. Even if the will was held to give a right of fee, the codicil came in its place and destroyed that right— Alves v. Alves, March 8, 1861, 23 D. 712: Douglas's Trustees v. Cochrane, November 6, 1902, 5 F. 69, 40 S.L.R. 103. 2. Even if there was a fee vested in the son, he was not entitled to immediate payment. The right of fee was qualified by the terms of the codicil. In the present case there was a specific trustpurpose
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that could only be fulfilled by keeping up the trust. That purpose was to make the provision in favour of the second party alimentary. The case fell under the rule laid down in Russell v. Bell's Trustees, March 5, 1897, 24 R. 666, 34 S.L.R. 497, and the opinions of the Judges in Chambers' Trustees v. Smith, April 15, 1878, 5 R. (H.L.) 151, 15 S.L.R. 541. The present case was in a more favourable position for the trustees than Russell's Trustees, supra, because in the present case the trustees had no power to hand over to the second party any part of the capital. The present case could be distinguished from Miller's Trustees, infra, because in Miller's case the full enjoyment of the fee was in the beneficiary, while in the present his right was definitely limited to an alimentary provision. Argued for the second party—There was only one debateable question in the present case—Was or was not the fee of one-sixth of the residue in the second party? After the decision in Miller's Trustees v. Miller, December 19, 1890, 18 R. 301, 28 S.L.R. 236, followed by such cases as Wilkie's Trustees v. Wight's Trustees, November 30, 1893, 21 R. 199, 31 S.L.R. 135; Hargrave's Trustees v. Schofield, October 25, 1900, 3 F. 14, 38 S.L.R. 9; and Yuill's Trustees v. Thomson, May 29, 1902, 4 F. 815, 39 S.L.R. 668, the law was clear that no one can be vested with a fee unburdened with the liferent of a third party without having the right to demand immediate payment from the trustees. A testator could not limit the enjoyment of a right of fee by a beneficiary of sound mind and of full age by means of restrictions. The only exception to the rule was where there was a contingent right in favour of other beneficiaries— Graham's Trustees v. Graham, November 30, 1899, 2 F. 232, 37 S.L.R. 163. In the present case the fee had vested in the second party, as the codicil did not recal the gift of fee conferred in the will, but only imposed restrictions with regard to payment. Chambers' Trustees and Russell's Trustees were quite distinct from the present case. In both of these cases there was held to be no fee in the beneficiary, but only a vested interest which the trustees could take away.
At advising—
I am therefore of opinion that the first question should be answered in the negative, and if it be so answered the second question does not require to be answered.
The second party claims immediate payment of the capital of the balance of his share remaining after deduction of the £2000 paid to him as directed by the truster. The codicil says expressly that he is to be given only an alimentary liferent of it coupled with a limited power or faculty of disposing of it by will or provision.
In the cases of Miller's Trustees and Yuill's Trustees it was conceded that notwithstanding a gift in fee, the trustees would be entitled to withhold payment if retention of the capital were required for the fulfilment of other trust purposes. Unfortunately there is no precise definition of “trust purposes” which will warrant such retention. But I am disposed to think, on a consideration of the opinions of the majority in the two cases, that we must now hold that in order to warrant retention where a fee is given the trust purposes must be connected with other objects and persons than the beneficiary whose share
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I asked the second party's counsel whether he maintained that the codicil taken by itself gives the second party a right of fee; he replied that on full consideration he could not maintain that. That view, which is probably sound, seems to me to solve the question put to us, because if the codicil taken by itself does not confer a fee upon the second party its effect is to reduce the second party's interest to something less than a right of fee. If effect is to be given to the codicil the second party can never himself receive any part of the capital of the balance, and that distinguishes this from cases in which, although payment is postponed, the capital must ultimately be paid to the beneficiary or his asignee.
The only question that remains is whether there was anything to prevent the testator from effectually altering his original will in that way. I agree that the safer course would have been for him to have formally and absolutely revoked the original provision in favour of the second party and then to have proceeded to substitute for it the provisions which we find in the codicil; but the codicil, in my opinion, amounts to a clear revocation of the original bequest. No proper question of repugnancy arises, as might perhaps have occurred if these limitations had been inserted in the original will. A condition or modification inserted in a codicil executed after a lapse of time is not quite in pari casu with a condition superadded in the same deed to an apparently absolute gift of fee; it records a deliberate change of testamentary intention. And, in my opinion, such a change of mind, that is, the substitution of a liferent for a fee, has here been competently and sufficiently expressed to receive effect.
The Court answered the first question of law in the negative, and found it unnecessary to answer the other question of law therein stated.
Counsel for the First Party— Jameson, K.C.— Hunter. Agents— Fyfe, Ireland, & Dangerfìeld, W.S.
Counsel for the Second Party— Graham Stewart. Agent— Edward I. Findlay, Solicitor.
