Scottish Court of Session Decisions

William Searcy, Ella Ville, Ardnadam, died on 1st December 1882, leaving a trust-disposition and settlement, dated 16th December 1880 and registered 20th December 1882. On 6th December 1904, difficulties having arisen in the administration of the trust, John Watt, banker, Glasgow, and others, the trustees acting thereunder, brought an action of multiplepoinding and exoneration, the fund in medio being the residue of the trust estate, amounting to £16,400.

The clauses of the trust-disposition giving rise to the difficulties were:—“( Fifthly) After the whole of the foregoing provisions have been paid and satisfied, I direct my said trustees to hold the residue of my whole means and estate in trust for behoof of my daughter Mary Ann Ella Searcy or Murray, wife of the said William Murray, in liferent, for her liferent use only, and to her whole children equally between and among them in fee, the issue of any of deceasing children taking per stirpes their parent's share, and to pay the free annual revenue of the same to her in equal proportions at the said two terms of Whitsunday and Martinmas in each year; and further, I direct my said trustees to dispone and make over to my said daughter absolutely, All and Whole the dwelling-house occupied by me, and known as Ella Ville, Ardnadam, together with the whole household and other furniture, goods and effects, and all others therein or in connection therewith, or with the grounds attached thereto, at the time of my death; and ( Sixthly) In the event of my said daughter predeceasing or dying without leaving lawful issue, I hereby authorise and direct my said trustees to realise the whole residue of my said means and estate in any manner of way as to them shall seem fit, and to divide the same in equal proportions amongst the families of the said John Searcy and the said William Brown, in equal proportions, share and share alike…

The questions which had arisen were—(1) Did the residue vest a morte subject to defeasance, or only on the death of the liferentrix; (2) was the division per capita amongst the whole members of the families, or per stirpes between the two families; and, in one event, (3) did the word “family” let in grandchildren.

The testator had been twice married. His first wife, by whom he had no children, was a relation, a Miss Searcy, and the John Searcy of the trust-disposition was her brother. His second wife, by whom he had a daughter, the Mary Searcy or Murray of the trust-disposition, was a Miss Brown, and the William Brown of the trust-disposition was her brother.

The testator was survived by his only child Mrs Murray. She died on 7th May 1904, a widow, without issue, but leaving a trust-disposition and settlement.

John Searcy died on 12th June 1898, survived by the following children—(1) Arthur John Searcy, (2) Mrs Maud Ann Searcy or Physick, (3) Mrs Edith Rebecca Searcy or Dickson, who all survived Mrs Murray the liferentrix, and also (4) Frederick William Searcy, who, dying on 10th February 1901, predeceased Mrs Murray the liferentrix, but was survived by one child, John William Searcy, who was alive at the time of the action. Frederick William Searcy had left a trust-disposition and settlement whereby he conveyed his whole estate to trustees.

William Brown died on 5th September 1888, survived by his only child Amelia Brown. She died unmarried and intestate on 18th October 1893, thus predeceasing the liferentrix.

The following claims were made:—1. Arthur John Searcy, Mrs Physick, and Mrs Dickson claimed the whole fund in medio on the footing that vesting was postponed till the death of the liferentrix and that they were then the only members of the favoured families; alternatively and on the footing that vesting took place a morte, subject to defeasance in the event of the liferentrix leaving issue, and that the division among the members of the two families was to be per capita, they claimed three-fifths of the fund; alternatively and on the footing that vesting took place a morte and that the division was to be per stirpes, they claimed three-fourths of half the fund.

2. The trustees of the late Frederick William Searcy claimed one-fifth of the fund on the footing that vesting took place a morte and that the division was per capita among the members of both families; alternatively, on the footing that the division was to be per stirpes, they claimed one-eighth.

3. John William Searcy and his guardian claimed one-fourth on the footing that yesting was postponed till the death of the liferentrix, that “family” included grandchildren, and that the division among the two families was per capita; alternatively they claimed one-eighth in the event of the division being per stirpes.

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4. Albert John Allbuary, as executor of his mother Mrs Elizabeth Carpenter or Allbuary, who was a sister of Amelia Brown's mother, and Amelia Brown's sole next-of-kin at her death, claimed one-half of the fund on the footing that vesting took place a morte subject to defeasance, and that the division was per stirpes; alternatively, and in the event of the division being per capita he claimed one-fifth.

5. The trustees of Mrs Mary A. E. Searcy or Murray, the liferentrix, maintained that they were entitled to one-half of the fund on the ground that vesting was postponed till her death, and that the division was per stirpes, on which construction the share destined to the Brown family had fallen into intestacy and vested in Mrs Murray as heir ab intestato of the testator; alternatively, and on the footing that vesting took place a morte subject to defeasance, they advanced claims based on Mrs Murray having been Amelia Brown's heir-at-law.

On 9th March 1906 the Lord Ordinary ( Johnston) pronounced the following interlocutor:—“Finds, on a sound construction of the trust-disposition of the late John Searcy, and in particular of the fifth and sixth purposes thereof—( First) That vesting of the fee of the residue was postponed till the death of the liferentrix the late Mrs Mary Ann Ella Searcy or Murray; ( Second) that the said residue fell to be divided per stirpes between the families of John Searcy and William Brown, and that the share of each family fell to be divided per capita among the members of such family: Further, finds that the one-half share of residue destined per stirpes to the family of William Brown lapsed into intestacy owing to Amelia Brown, the sole representative of that family, predeceasing the liferentrix, and falls accordingly to the claimants the trustees of the said Mrs Mary Ann Ella Searcy or Murray, the testator's sole next-of-kin at the date of his death: Further, finds with reference to the division of the one-half share of residue falling to be divided per capita among the family of the late John Searcy, that the term family, on a proper construction, is confined to the immediate issue of the said late John Searcy, and that the said share falls to be divided per capita among his three children who survived the liferentrix. …”

Opinion.—… [ After narrating facts and fifth and sixth purposes of the trust disposition] …—“A difficult question arises in the circumstances as to the meaning of the destination-over to the families of the said John Searcy and William Brown. But before that question can be reached the question of vesting has to be determined. As the truster's daughter Mrs Murray died without issue, the fifth purpose of the settlement is exhausted without any fee being taken thereunder. The fee is therefore disposed of by the sixth purposes, unless in whole or in part it lapses into intestacy. There are a number of claimants, and amongst others Arthur John Searcy and his surviving sisters, children of the above-mentioned John Searcy, maintain that there was vesting subject to defeasance in the families of John Searcy and William Brown a morte testatoris, which vesting became absolute on the death of Mrs Murray, the liferentrix, without issue. On the other hand, the trustees of the late Mrs Murray contend that vesting was postponed until Mrs Murray's death, when, owing to the failure of the family of the above-mentioned William Brown, one-half of the residue fell back into intestacy, and was transmitted to them as the representatives of Mrs Murray herself, as she was the truster's sole next-of-kin. These two claims present the question at issue, and it is unnecessary to examine at this stage any of the other claims.

Vesting subject to defeasance is now well recognised and accepted in the law of Scotland. But the principle is more easy to enunciate than to apply. Perhaps there could not be a better example of the difficulty of its application, and of the difference of opinion which may be entertained on the subject, than Nisbet of Mersington's case—a decision of the whole Court by a narrow majority, reported 2 Fr. 470. I have examined it carefully, and had I been called upon to decide it I am afraid I should have been found in the ranks of the minority. But I think that parties are sometimes too anxious to plead in a doctrinaire way this principle of vesting subject to defeasance, and that there are circumstances in which to apply it would defeat the intention of the testator, so far as that can be gathered from the terms of his settlement. I think that this case is one of them. It may be said that in the result the directions of the fifth and sixth purposes of the testator's settlement are just a destination to the truster's daughter in liferent allenarly and her issue in fee, and failing issue, then over to a class capable of ascertainment at the truster's death, and therefore the very case for which the doctrine of vesting subject to defeasance was invented. But I cannot ignore the method by which the testator reached this assumed result. The destinaton-over is no mere destination-over bound up with the principal destination, forming part of one consecutive idea and embraced in one and the same clause. On the contrary, the destination-over is an entirely new departure, not merely grammatically separate, but contained in a separate and different clause of the settlement. The fifth clause directs the trustees to hold the residue for the daughter in liferent and her issue in fee, and says nothing about holding for the destinees-over. There is thus no gift or bequest to them as from the testator's death. For what they take they must look entirely to the sixth clause, which takes effect only in the event of the daughter's death without issue, and gives or bequeaths nothing except on that event, and therefore at the daughter's death. If the testator's intention is to be deduced from the terms he has used I cannot think that he intended his destinees-over to take at his death, when he expressly gave them nothing

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except on an event occurring which happened twenty-two years after his death. What he really meant, if indeed he really knew what he meant, I cannot of course tell. I can only deduce what he must be assumed to have meant from what he has said, and I think that to apply the doctrine of vesting subject to defeasance to the destination which he has left would be a blind and indiscriminate application of that principle which would defeat testamentary intention. I hold, therefore, that vesting was postponed until the death of the liferentrix, and I find no difficulty in the postponement, for the trustees were holding the fee during the life of the liferentrix for whom it might ultimately concern. The only hesitation I have on the point arises from the fact that the same element which to my mind distinguishes the present case from others where the vesting has been held to be subject to defeasance, was present, though in very different form and degree, in the recent case of Corbett's Trustees, decided by the Second Division on 11th February last. But I cannot apply the reasoning of Lord Low, who deals with the point, to the circumstances of the present case.

“Having determined that vesting took place only at the death of the liferentrix, it remains to apply to the circumstances the direction to divide among the families of John Searcy and William Brown. These circumstances are, that at the death of the liferentrix there were living three children of John Searcy and a grandchild, the son of a deceased son, who had long survived the truster but predeceased the liferentrix. William Brown, on the other hand, had only one child, a daughter, Amelia Brown, who survived the truster, but died in 1893, during the lifetime of the liferentrix.

The clause of division among these families is of doubtful meaning, for it directs division in equal proportions twice over — in equal proportions among the families, in equal proportions share and share alike. The only intelligible meaning that I can give to this is to assume that the truster meant to divide the residue equally between the two families per stirpes, and at the same time to divide the share of each family intra familiam equally per capita. If that be so, then one-half of the residue vested at the death of the liferentrix in the family of John Searcy. But in respect of the predecease of Amelia Brown, the half destined to the family of William Brown lapsed and fell back into intestacy, and therefore falls to the representatives of Mrs Murray, the testator's sole next-of-kin.

There remains, however, still another question, viz., who compose the family of the late John Searcy? Is that term, in the circumstances, confined to his three children who survived the liferentrix, or does it include the grandson, the sole issue of a son who predeceased that date? I think this is perhaps the most difficult of the questions raised. It is not a case in which any assistance can be got from the doctrine of si sine liberis. I have come, however, to the conclusion that there is nothing to lead me to depart from the ordinary construction of the word ‘family,’ which is confined to the immediate children of the person named. Grandchildren are members of the family of another than he. They cannot be the members both of the family of their grandfather and of the family of their father.

I shall pronounce findings accordingly, and continue the case so that the relative decree of ranking and preference may be prepared and the case exhausted. As agreed at the bar, the expenses of all concerned will be paid out of the fund in medio.”

On 17th March 1906 his Lordship, in terms of the foregoing findings, pronounced the following interlocutor—“Ranks and prefers the claimants the trustees of the late Mrs Mary Ann Ella Searcy or Murray to one-half of the residue of the estate of the late William Searcy, and ranks and prefers each of the claimants the said Arthur John Searcy, Maude Ann Searcy or Physick, and Edith Rebecca Searcy or Dickson, to one-third of one-half of the said residue. …”

Albert John Allbuary reclaimed, and argued—(1) The Lord Ordinary was wrong in holding that vesting was postponed. Survivance of the term of payment was not made an express condition of vesting; moreover, there was a direction to pay at a dies certus. There was here vesting a morte subject to defeasance. In the absence of vesting subject to defeasance there must either be absolute vesting or postponed vesting, and both these views might prejudice the issue of the testator's daughter, whom he would naturally wish to benefit. Vesting subject to defeasance reconciled all the conflicting interests, as the right of the secondary legatees would be at once defeated by the birth of issue to the liferentrix. Amelia Brown therefore took a vested interest, and it was not disputed that the reclaimer was in right of that interest. On the question of vesting reference was made to Taylor v. Gilbert's Trustees, July 12, 1878, 5 R. (H.L.) 217, 15 S.L.R. 776; Corbet's Trustees v. Elliott's Trustees, February 10, 1906, 8 F. 610, 43 S.L.R. 379; Wylie's Trustees v. Wylie, December 10, 1902, 8 F. 617, 43 S.L.R. 383; Hay's Trustees v. Hay. June 19, 1890, 17 R. 961, 27 S.L.R. 771: Cairns' Trustees v. Cairns and Others, 1907 S.C. 117, 44 S.L.R. 96. As to the date of distribution where the gift was to a class, reference was made to the opinions of Lords Kyllachy and Low in Corbet's Trustees ( cit. supra). The fifth and sixth purposes of the settlement were to be read together—the fact that they were in separate clauses was immaterial. (2) The Lord Ordinary was right in holding that the division between the families was per stirpes— Low's Trustees v. Whitworth, February 4, 1892, 19 R. 431, 29 S.L.R. 389. The word used was “families,” and that did not mean individuals but groups of individuals.

Argued for the claimants Frederick William Searcy's Trustees—The claimants adopted the foregoing argument on the

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question of vesting. In addition, they argued (1) Survivance of the liferentrix was not an essential condition. The fact that Frederick William Searcy predeceased her did not prevent vesting taking place in him a morte subject to defeasance— Taylor v. Gilbert's Trustees ( cit. supra); Steel's Trustees v. Steel, December 12, 1888, 16 R. 204, 26 S.L.R. 146; Thompson's Trustees v. Jamieson, January 26, 1900, 2 F. 470, 37 S.L.R. 346. The narrow majority in Thompson was not on the question of vesting but as to whether there was or was not a proper conditional institution. (2) The Lord Ordinary was wrong in holding that the division was per stirpes—it was per capita. The word used was “amongst”—not “between” — that implied division per capita— Bogie's Trustees v. Christie, January 26, 1882, 9 R. 453, 19 S.L.R. 363; Abrey v. Newman (1852), 16 Beav. 431; Barnes v. Patch, (1903) 8 Vesey's Ch. Rep. 603.

Argued for the claimants A. J. Searcy, Mrs M. A. Searcy or Physick, and Mrs E. R. Searcy or Dickson — (1) The Lord Ordinary was right in holding that vesting was postponed. The sixth purpose was independent altogether of the fifth, and did not come into operation until both conditions had been purified— Forrest's Trustees v. Mitchell's Trustees, March 17, 1904, 6 F. 616, 41 S.L.R. 421. The fifth and sixth purposes were mutually exclusive, for if there were issue their existence evacuated the destination in the sixth clause. The case fell within the rule of Bryson's Trustees v. Clark, November 26, 1880, 8 R. 142, 18 S.L.R. 103. In Cairns' Trustees ( cit. supra) the case of Bowman v. Bowman (July 25, 1899, 1 F. (H.L.) 69, 36 S.L.R. 959) was appealed to by Lord Kyllachy as an authority for the proposition that the period of vesting was in general concurrent with that of division. An intention to suspend vesting might be inferred from the deed as a whole — Per Lord Colonsay in Carleton v. Thomson, July 30, 1867, 5 Macph. (H.L.) 151, at p. 154, 4 S.L.R. 226, at p. 228. See also same case in Court of Session, February 11, 1865, 3 Macph. 514. (2) The division ought to be per capita. On this point the claimants adopted the argument for F. W. Searcy's trustees. (3) Family did not include grandchildren. There was nothing in the will to give it a more extended meaning. The conditio si sine which was invoked in Irvine v. Irvine, July 9, 1873, 11 Macph. 892, 10 S.L.R. 625, did not apply here. Reference was also made to Low's Trustees ( cit. supra) and to Cattanach's Trustees v. Cattanach, November 28, 1901, 4 F. 205, 39 S.L.R. 154.

Argued for Mrs Mary A. E. Searcy or Murray's trustees — (1) Vesting was postponed (the claimant adopted the argument for the preceding claimants on this point). The cases of Taylor v. Gilbert's Trustees and Thompson's Trustees v. Jamieson ( cit supra) did not apply, for the destination-over was not a separate and substantive provision as here, but an integral part of one and the same destination. The testator could not have intended vesting a morte, as in that event the representatives of the Brown family, now extinct, would cast out the representatives of his own daughter. There was here a suspensive condition, not a proper conditional institution as in Corbet's Trustees ( cit. supra). There being none of the Brown family alive, and there being no gift to the heirs of that family, there was intestacy quoad the share destined to them. The gift to the Brown family was contingent on their survivance — Hickling's Trustees v. Garland's Trustees, Aug. 1, 1898, 1 F. (H.L.) 7; 35 S.L.R. 975. Assuming A. M. Brown's share fell into intestacy the present claimants were in right of it as representing the heir ab intestato of the testator. (2) On the question of division the claimants adopted the argument for A. J. Allbuary. The division was per stirpes. The words “in equal proportions” were used twice in the same clause; that could only mean a division of the whole in equal “portions” between the two families, and a subsequent division of each half in equal “portions” amongst the members of each family. Otherwise the clause would be unintelligible. Reference was made to Home's Trustees v. Ramsays, Dec. 11, 1884, 12 R. 314; 22 S.L.R. 221; and to Inglis v. M'Neils, June 23, 1892, 19 R. 924; 29 S.L.R. 795.

Argued for J. W. Searcy and his guardian—In the event of vesting being held postponed the claimants contended that “family” included grandchildren. They referred to Irvine ( cit. supra); Low's Trustees ( cit. supra); Macdonald's Trustees v. Macdonald, Oct. 26, 1900, 8 S.L.T. 226; Pigg v. Clarke (1876), L.R. 3 Ch. Div. 672; Williams v. Williams (1851), 1 Simon N.S. Ch. 358.

At advising—