Scottish Court of Session Decisions

On 23rd February 1909 Adam Smith, residing at 17 Dunolly Gardens, Ibrox, Glasgow, brought an action against (1) James Burns Kidston and others, the testamentary trustees of the late Dugald M'Coll, acting under his trust-disposition and settlement, dated 22nd September 1881, and registered 23rd November 1882, and (2) Mrs Jessie M'Coll or Smith for any interest she might have as one of the next-of-kin and heirs in mobilibus of the testator. In it the pursuer, in his own right and as universal

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legatee of his brothers, sought declarator that he had an indefeasible vested right in, and was entitled to payment or conveyance of, the whole residue of the testator's estate, or otherwise that he had acquired a vested right in and was entitled to immediate payment of two thirds of the said residue, and in right of a vested interest in and to the capital of the remaining third subject to defeasance in the event, but only in the event, of his having [leaving] issue; or alternatively that he had a vested right in the fee of the whole of the residue defeasible in the event of his having [leaving] issue, and in that event only (“having” was substituted for “leaving” by amendment in the Outer House). Supplementary conclusions as to divesting the trustees and payment being made to the pursuer followed, and there was also a conclusion for payment of the income to the pursuer, which, however, was not contested.

Dugald M'Coll, died on 8th November 1882. His trust-disposition and settlement, after providing for a liferent of his estate to his wife in the event of her surviving him. and making provisions for his daughter Mrs Jessie M'Coll or Smith and her children, and for his grandchild Jessie Smith, a daughter of Mrs Agnes M'Coll or Smith, directed his trustees “to hold and retain the balance of said residue and remainder for behoof of the children of the said Agnes M'Coll or Smith (other than the said Jessie Smith) and pay the annual proceeds thereof to them in equal portions, and upon the decease of the survivor of the said children (other than the said Jessie Smith) to divide the said balance among the grandchildren of the said Mrs Agnes M'Coll or Smith (not being children of the said Jessie Smith) equally and their issue per stirpes Declaring always that in the event of any of the children (other than the said Jessie Smith) of the said Agnes M'Coll or Smith dying leaving lawful issue, such issue shall prior to the time of division among them of their shares of the said balance be entitled to the shares of such annual proceeds as would have been payable to their, his or her parent if alive, and in the event of any of the children (other than the said Jessie Smith) of the said Agnes M'Coll or Smith dying without leaving lawful issue, then the shares of the said annual proceeds or of the principal sum, as the case may be, of such children shall be divided equally among the surviving children, and the lawful issue of any child or children who may have died, such issue taking their parent's share per stirpes, the said Jessie Smith and her issue being hereby expressly excluded from any share of the said balance of residue while any of the other children of the said Agnes M'Coll or Smith or their issue are in life.”

The testator further provided—“All liferent provisions under these presents or any codicil thereto shall be purely alimentary and not assignable nor arrestable nor effectable by the debts or deeds of the liferenters.”

The testator was survived by his wife, who died a few months after him, by his daughter Mrs Jessie M'Coll or Smith, who had issue, and by the children of his deceased daughter Mrs Agnes M'Coll or Smith, viz., her daughter the said Jessie Smith and three sons, David Smith, George Smith, and the pursuer Adam Smith. Jessie Smith, who was unmarried, disappeared in 1891, and had not since been heard of. Proceedings were taken before Lord Mackenzie under the Presumption of Life Limitation (Scotland) Act 1891 to have the date of her death presumed, and by decree dated 23rd October 1909 she was held to have died on 29th June 1898. George Smith died unmarried in 1905, and David Smith died, also unmarried, in 1908.

By mutual settlement dated 24th November 1894 the said David Smith, George Smith, and the pursuer assigned and disponed to and in favour of the survivors of them equally, and to the last survivor of them wholly, all the estate belonging to them respectively, or over which they, or the predeceasers of them, should have power of disposal by will or otherwise; and the survivors and last survivor of them were named to be the executors and executor and universal legatory and legatories of the predeceasors.

The pursuer pleaded, inter alia—“(1) The provisions of the said trust-disposition and settlement regarding the said residue being such as upon a sound construction thereof to confer a right of fee on the children of the said Mrs Agnes M'Coll or Smith (other than Jessie Smith) who survived the longer liver of the testator and his wife in an equal share each of said residue, and the direction to retain the capital and pay to such children the income only being a defeasible trust for administration, the pursuer as in right of all such surviving children is entitled to decree in terms of the first branch of the first declaratory and of the relative petitory conclusions. (2) The said David Smith and George Smith having, by survivance of the longer liver of the testator and his wife, acquired at least a right of fee each in one-third of the residue subject to defeasance only in the event of their leaving issue, the pursuer as their assignee became, upon their dying without issue, entitled to the fee of two-thirds of the residue, and is entitled to decree in terms of the second branch of the first declaratory and of the relative petitory conclusions. (3) Alternatively, the pursuer, as the surviving child of the said Mrs Agnes M'Coll or Smith, is, upon a sound construction of the said trust-disposition and settlement, in any case now entitled to the fee of the whole residue, subject to defeasance only in the event of his having issue, and to decree in terms of the alternative declaratory conclusion.”

The compearing defenders, the trustees, pleaded, inter alia—“(1) In so far as the pursuer seeks declarator that the fee of the whole or part of said residue has vested in him either absolutely or subject to defeasance, the action is incompetent or otherwise is premature and unnecessary. (2) In so far as the pursuer seeks declarator that he

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is entitled to the income of the said residue the action is unnecessary.”

On 24th June 1909 the Lord Ordinary ( Mackenzie) pronounced this interlocutor:—“Sustains the first and second pleas-in-law for the defenders: Dismisses the action and decerns: Finds the defenders entitled to expenses,” &c.

Opinion.—“… [ After narrating circumstances] … The pursuer presents in the conclusions of the summons three views of his rights under this residue clause—(1) that he now has an indefeasible vested right in, and is entitled to payment or conveyance to him of, the whole residue, or otherwise (2) that he has such a right to two-thirds of the residue, and is entitled to the income of the other one-third, and has a vested interest in the capital of this one-third, subject to defeasance in the event, but only in the event, of his having issue (the summons to be amended by substituting ‘having’ for ‘leaving’ issue), or otherwise (3) that he is entitled to receive the income of the whole of the residue, and that he has also a vested right in the fee of the whole of the residue defeasible only as aforesaid. There are also conclusions for payment.

“The preliminary plea having been stated—that the action is premature—the question is not at this stage whether the pursuer's view of his rights is well or ill founded on the merits. If it appears on a fair construction of the residue clause that there may be parties who are not in the process, but who, if in existence, would have prima facie an interest to dispute the pursuer's claim, then the action cannot be proceeded with.

The different branches of the residue clause are not altogether consistent with each other. The view I take, however, is that prima facie the settlement is more like that in Macgregor's Trustees, 1909, S.C. 362, than that in Greenlees' Trustees, 22 R. 136. There is not an unqualified gift followed by directions which amount merely to a scheme of administration for the benefit of one who is truly the fiar. I am unable to construe the deed as plainly containing a direct provision of a gift to the pursuer. The trustees are to hold the residue for behoof of the children of Agnes M'Coll or Smith, but the provision as to what those children are to take may be said to show that it is only the annual proceeds, and that their children are to take the fee. It is quite true that a difficulty has been created by the part of the clause which provides for the event of a child dying without leaving lawful issue. On one construction it may be said to carry not only the annual proceeds of that child's share, but the principal sum, to the surviving children. In my opinion there is good ground for arguing that this is not what was meant, and that the ambiguity has arisen from the framer of the settlement attempting to do in one clause what required two, and that he meant the annual proceeds to go to the child and the principal sum to the grandchildren. The introduction of the words “annual proceeds” at this part of the clause seems to tell strongly against the pursuer's argument.

I am of opinion that the possible issue of the pursuer would have such a beneficial interest under the deed that they would be entitled to oppose the claim he now makes to an unqualified fee. In these circumstances, on the authorities cited, of which Barron, 19 S.L.R. 275; Fleming, 6 R. 588; and Burgh Smeaton, 1907 S.C. 1009, are examples, the present proceedings, in so far as they seek to establish that there is an unqualified right of fee in the pursuer, are premature. The case of Cairns' Trustees, 1907 S.C. 117, was founded on by the pursuer, but I think it different. It was a special case, not a declarator, and three out of the four children had issue at the date of the case, so that the class was represented.

It was said that the next-of-kin (the pursuer himself and his aunt Mrs Jessie M'Coll or Smith, one of the defenders) are both in the process. They, however, are not proper contradictors. Their interest could only emerge after that of the pursuer's issue. As weighing against the pursuer's view that he has a fee, the mention of Jessie Smith and her issue is referred to as indicating that a fee by implication was intended to be given to them on the failure of other children or issue.

In the view above stated the mutual settlement by the brothers would not avail the pursuer's case.

It was contended further by the pursuer that the interests of his issue could not be affected if declarator were pronounced in terms of one or other of the conclusions relating to vesting subject to defeasance. The case of Harvey's Trustees, 22 D. 1310, founded on by the defenders, seems to me in point, and negatives the idea that the pursuer can competently ask the Court to deal with such conclusions.

I may also refer to Lord Kincairney's judgment in Millar's Trustees, 4 S.L.T. 122. The case of Cairns, founded on by the pursuer, appears to me, for the reasons already stated, not to entitle the pursuer to what he asks.

No question was raised as to income. The first and second pleas-in-law for the defenders will be sustained and the action dismissed, with expenses.”

The pursuer reclaimed, and argued—The action was not premature. So far as the pursuer sought to have an immediate conveyance of the estate, he was clearly entitled to have his right decided now. This covered both the first declarator and the declarator as to the two-thirds which passed to the pursuer as universal legatee of his two brothers. The fact, that parties might subsequently emerge who might put forward a claim to the estate, could not affect the right of the pursuer to have his present right decided now. If pursuer was entitled to an immediate judgment on this point, that judgment should be in his favour. The trust here was merely an administrative trust, and the pursuer was therefore entitled to decree of denuding— Millar's Trustees v. Millar, December 19

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1890, 18 R. 301, 28 S.L.R. 236; Greenlees Trustees v. Greenlees, December 4, 1894, 22 R. 136, 32 S.L.R. 106. The declaration as to all liferent provisions being purely alimentary applied to other provisions in the will, and not to this, and the declaration as to “shares of the principal sum” in the subsequent part of the clause showed that the testator meant those children to get the fee. The direction to “hold for behoof of” amounted to a gift of the fee, especially when, as here, there was no further disposition of the fee— Anderson's Trustees v. Anderson, December 7, 1904, 7 F. 224, 42 S.L.R. 167; Collie v. Donald and Others, July 20, 1895, 3 S.L.T. 95. On the declaratory conclusions as to vesting subject to defeasance the pursuer was also entitled to an immediate judgment. The only parties whom such a judgment could affect, and who were not represented in the present process, were the pursuer's possible issue, and the terms of the conclusion effectively safeguarded their interest. In the case of Cairns' Trustees v. Cairns, 1907 S. C. 117, 44 S.L.R. 96, the Court had held that such a question could be competently determined before the period of division. It was true that was a Special Case, but the Court had stated that the questions raised there could have been competently determined in a declarator. The cases contra founded on by the defenders were not in point, as they were not declarators of vesting subject to defeasance, and all the parties who could be interested in the fund were not represented in the process.

Argued for the defenders and respondents — The Lord Ordinary was right in holding that the action was premature. The fact that the pursuer asked immediate conveyance did not necessarily imply that he was entitled to have that question decided now, if it could be shown that there were other parties not yet in existence and not represented in the process who could state a better claim to the estate than the pursuer — Barron, November 12, 1881, 19 S.L.R. 275; Fleming, January 28, 1878, 16 S.L.R. 316, 6 R. 588; Burgh Smeaton v. Burgh Smeaton's Judicial Factor, 1907 S.C. 1009, 44 S.L.R. 718. In any event, the pursuer was wrong here. The direction in the will could not possibly be construed as an administrative trust. The initial part of the clause undoubtedly conferred a liferent, and there was an express declaration further on that all liferent provisions should be purely alimentary. This took the case out of the class of Millar's Trustees. Trustees, further, could not denude of an alimentary liferent— Hughes v. Edwardes, July 25, 1892, 19 R. (H.L.) 33, 29 S.L.R. 911, and Greenlees' Trustees, cit. sup. But further, there was not only a direction to hold but to hold and retain, and so far as pursuer knew there was no case where a direction to “hold and retain” had been construed as conferring a fee— Peden's Trustees v. Peden, June 27, 1903, 5 F. 1014, 40 S.L.R. 741. There was no repugnancy between the earlier and later parts of the clause, and “shares of the principal sum” referred to the contingency of all the liferenters being dead and the period of division arrived. The present case was more like the case of Macgregor's Trustees v. Macgregor, 1909 S.C. 362, 46 S.L.R. 296. There was further here no power to trustees to advance capital, no power of apportionment, no destination-over, and no power given to the children to dispose of shares by will. The really material question, however, was whether the declaratory conclusion of vesting subject to defeasance was premature, as there could be no doubt that on the conclusion for immediate payment the defenders on the merits were entitled to succeed. It was contrary to the policy of the Court to grant such a declarator, and in Harveys v. Harvey's Trustees, June 28, 1860, 22 D. 1310, where the declaratory conclusion asked was really a declarator of vesting subject to defeasance, though at that time the doctrine of vesting subject to defeasance had not been elaborated, the Court held that the action was premature; also Fleming v. M'Lagan, cit. supra, and Millar v. Millar's Trustees, October 29, 1896, 4 S.L.T. 122. The case of Cairns' Trustees v. Cairns, founded on by pursuer, was not in point, as it was a special case in which parties came into Court agreed to ask judgment on the merits; and further, all the parties who could have an interest in the fund were represented in the process, while here the proper contradictors, viz., possible issue of Jessie Smith and the next-of-kin, were not present.