Scottish Court of Session Decisions

Lord Dundas— [After a narrative of the facts of the case]—The first question put to us in the case is—“Did the fee of the share of residue which effeired to the late Peter Cowan ( a) vest in him, or ( b) fall into residue, or ( c) form intestate estate of the testator?” No argument was submitted to us in favour of the second of these contentions. As between the first and third of them I am of opinion that the first must prevail. I think the case falls within the principle of a well-known series of cases—I shall allude to some of them presently—of which the earliest important example is Lindsay's Trustees ( 1880, 8 R. 281), and one of the latest is Tweeddale's Trustees ( 1905, 8 F. 264). I use the word “principle” in the sense in which Lord President Dunedin (in Tweeddale's Trustees) considered it “convenient, if not strictly accurate, to speak of the principle of so-and-so as laid down in a case or a series of cases.” In the same case Lord Low said—“The principle recognised in all these cases seems to me to be, that where there is a direct bequest, or a direction to trustees to pay or convey to a daughter, in terms which, according to the natural meaning of the language used, import a gift, that gift will not be recalled by a subsequent direction to the trustees to hold the fund for or settle it upon the daughter in liferent for her liferent use allenarly. and her children in fee, except in so far as may be requisite to give effect to these purposes, and, accordingly, if there are no children, the fee will vest absolutely in the daughter and be in bonis of her at her death.” It may be worth while to note that the provision there in question was declared to be purely alimentary. I think the principle thus stated applies, mutatis mutandis, to the present case. I cannot accept the argument that there are here no sufficient words of original gift to Peter Cowan of his share of residue to bring the case within the doctrine expressed by Lord Low. I consider that the direction to the trustees to “divide” the residue “equally among” the beneficiaries imports, according to the natural meaning of the language used, a gift to each of his share; and one may note, for what it is worth, the use of the word “belong,” which is used disjunctively along with “effeir” in regard to Peter's share. It seems to me that “divide among” is as good a phrase of gift as the words occurring in some at least of the series of cases to which I have alluded. In Lindsay's Trustees (supra) the residue was directed to be “divided equally among” the truster's whole children, the shares to vest at his death. In Dalglish's Trustees ( 1889, 16 R. 559) the direction was to divide into equal shares to be paid to the beneficiaries. In Logan's Trustees ( 1890, 17 R. 425) the residue was to “belong to and be divided among” the children in equal proportions. In Stewart's Trustees ( 1896, 23 R. 416) the direction was to convey equally among them, share and share alike, In Mackay's Trustees ( 1897, 24 R. 904), the direction was to “divide or convey or pay and make over” to and among the children equally. In Dunlop's Trustees ( 1899, 1 F. 722) the trustees were directed to hold and set apart the principal sum of £10,000 which the truster left and bequeathed to the children of his deceased sister. In Tweeddale's Trustees ( sup. cit.) the direction was to “make payment.” By way of contrast it may be worth while to refer to Muir's Trustees ( 1895, 22 R. 553), where the trustees were directed to retain the whole residue for behoof of the truster's children, and to divide the same amongst them in certain proportions, the shares of sons and daughters respectively being to be set aside and held and invested and otherwise dealt with as after mentioned, and as regards the shares falling to sons the trustees were directed to hold and invest the same in their own names as trustees for behoof of the sons respectively in liferent, for their alimentary liferent uses allenarly, and for behoof of their respective issue in fee, but with power notwithstanding to make advances in their discretion to the sons out of the capital of their respective shares. The Court held that the trust deed did not import an absolute gift of the capital of their shares of residue to the sons. But Lord M'Laren, who gave the opinion of the Court, stated the general rule as follows—“if a testator begins by making an unqualified division of his estate or residue amongst children, and then by a subsequent clause empowers his trustees to retain the shares of one or more of them, and to pay the income to the child or children for life, and the fee or capital to their issue, it may very well be that the power is only given to the trustees for the protection of the immediate beneficiaries. Accordingly if one of these should die without issue, and leaving a will, it may be held that the original gift was not displaced but its effect only suspended during the lifetime of the beneficiary, and for his or her protection.… It is, however, essential to the proper application of this principle of construction that there should be an independent unqualified gift to the immediate beneficiary, capable of taking effect when the special trust fails oris exhausted.” Again, in the recent case of MacGregor's Trustees ( 1909 S.C. 362), where the residue was directed to be held “in trust for behoof of such of my children as shall survive me,.… equally, share and share alike, subject to the conditions following viz. … in the case of my daughters I direct my trustees to retain and hold their shares, original and accrescing, for their liferent alimentary use allenarly,.… and for the issue of their bodies equally among such issue in fee,” the Court held that the share of a daughter who survived the truster but died unmarried had not vested in her, because, as the Lord President put it, “you must first find words which purport to bestow a certain gift or interest. Now here there is no direct provision of a gift or interest at all.” It seems to me, therefore, that as matter of construction of the settlement before us, and in the light of the authorities, we must hold (adapting Lord Low's criterion to the present circumstances) that the testator's settlement imported a gift to Peter Cowan of his share of residue which was not recalled by the subsequent direction to hold and invest it for his liferent alimentary use and for that of his widow, if he had left one, and for his children in fee, except in so far as it might be requisite to give effect to these purposes, and accordingly, that as Peter Cowan was never married, the fee vested absolutely in Peter, and was in bonis of him at his death.

[His Lordship then dealt with another question, with which this report is not concerned.]

The Lord Justice-Clerk, Lord Salvesen, and Lord Guthrie concurred.