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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Nixon's Trustees v. Kane [1915] ScotLR 375 (20 February 1915) URL: http://www.bailii.org/scot/cases/ScotCS/1915/52SLR0375.html Cite as: [1915] ScotLR 375, [1915] SLR 375 |
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Page: 375↓
A testatrix provided by her will that a provision to her daughters should be in full of all claims competent to them against her as executrix of their late father, or against his estate, or under his settlement. The daughters having claimed the amount due to them by their mother under their father's will, as well as their legal rights in their mother's estate, held that they had not forfeited their testamentary provisions absolutely, but only so far as necessary to make equitable compensation to the other beneficiaries under the will.
Christopher Johnston Bisset and others, the testamentary trustees of the deceased Mrs Hannah Smith or Kane or Nixon, who resided at Newport, Fife, first parties, and Miss Catherine Maria Kane, Mrs Paulina Kane or Burns, Mrs Adriana Kane or Henderson, and Mrs Esther Kane or Berman, four daughters of the testatrix, with the consent and concurrence of their respective husbands as their curators and administrators-in-law, second parties, presented a Special Case for the opinion and judgment of the Court as to whether the second parties having claimed their legal rights were entitled after equitable compensation had been made to participate as beneficiaries under the deceased's will.
By her trust-disposition and settlement the testatrix, who died on 4th April 1896, directed her trustees, thirdly, to apply the free annual proceeds and income of her means and estate or the residue thereof towards the education and maintenance of the second parties, and the survivors or survivor of them. The proceeds and income so provided were declared to be strictly alimentary and not assignable, and she provided further—“Which provision shall be accepted by my said daughters in full of all claim they can have against me as executrix of their father the late Paul Kane, or against his estate or under his settlement.” She further provided that on the death of the survivor the trustees should divide the capital of her estate or the residue thereof among the children of the second parties, the division being per stirpes and the issue of those predeceasing taking their parent's share, and failing issue she directed that it should belong to the heirs and assignees of the last survivor.
The Case stated, inter alia—“5.… Each of the four daughters named in the third purpose of the said trust-disposition and settlement above referred to, shortly after they attained majority on or about 8th January 1897, 24th May 1900, 24th April 1902, and 23rd June 1903 respectively, and having been independently advised, elected to claim and receive their legal rights, and accepted payment thereof, amounting to the sum of £51, 16s. 8d. each. Each of said four daughters after said advice also elected to claim and received payment from the trustees of a sum of £200 which was due to them by the truster as executrix of the will of her first husband the said Paul Kane, he having left a legacy of that amount to each of said daughters by his will, and appointed the truster as executrix of his will. The said Paul Kane died on 24th May 1889, and the truster, as his executrix appointed by his will, took and retained possession of his whole estates, and immixed them with her own. The discharges granted by said four daughters for legitim narrate that the
Page: 376↓
daughters ‘resolve and elect not to accept the provisions of the said trust-disposition and settlement’ by Mrs Nixon, and refer to their granting of even date a discharge of the legacy of £200. 6. The election of the said four daughters, who were the liferent beneficiaries under the said trust-disposition and settlement of the said deceased Mrs Hannah Nixon, to take their legal rights and payment of the sums due to them by the truster as executrix foresaid, resulted in the withdrawal from the trust estate of a total sum of £1007, 6s. 8d. The youngest daughter of the truster, being the said Esther Kane, granted discharges of her legitim and of said legacy of £200 on 12th September 1903. Since that date the whole income of the trust funds has been accumulated, and the accumulations have now reached the above sum of £1007, 6s. 8d.
7. In the foregoing circumstances the question has arisen whether the second parties by claiming and accepting payment of legitim from the truster's estate, and of the said sums due to them by the truster as executrix of their deceased father, have forfeited all interest as beneficiaries under the said trust-disposition and settlement; or whether the trust estate having been compensated for the said sums withdrawn therefrom by the second parties, the first parties are now bound to resume payment to the second parties of the income of the trust estate.”
The questions of law were—“1. Are the second parties now entitled to payment of the income of the trust estate, the sums paid to them having been made good to the trust estate? Or 2. Have the second parties by claiming and receiving payment of said sums forfeited all interest under the said trust-disposition and settlement?”
Argued for the first parties—By taking rights, legally competent to them, but involving repudiation of the terms of the will, the second parties had forfeited all right to benefit under the will— Bonhotes v. Mitchell's Trustees, May 27, 1885, 12 R. 984, 22 S.L.R. 648. Where beneficiaries repudiated a will in part they could not claim under it— Douglas-Menzies v. Umphelby, [1908] A.C.224. The testatrix was entitled to put the daughters to their election of their father's legacy even though it did not belong to her— Crum-Ewing's Trustees v. Bayly's Trustees, 1911 S.C. (H.L.) 18, [1911] AC 217, 48 S.L.R. 401. An express forfeiture clause was not necessary to bring about this result. The case of Gray's Trustees v. Gray, 1907 S.C. 54, 44 S.L.R. 39, might be against this contention, but Jacks' Trustees v. Jacks, 1913 S.C. 815, 50 S.L.R. 536, which was later in date, was in its favour.
Argued for the second parties—The second parties were entitled to succeed, because where a will was upset by a beneficiary under it claiming his legal rights, then, notwithstanding a clause providing that the testamentary provision should be in full of legal rights, the person so claiming would be entitled to a beneficial interest under the will as soon as the disturbance caused by his election had been made good— Gray's Trustees v. Gray, cit. sup. The case of Jacks' Trustees v. Jacks, cit. sup., founded on by the first parties, was not in point except as to a doubt expressed by Lord Johnston, which was not concurred in by Lord Kinnear. In any event, in the present case the second parties' election could not produce forfeiture, because the option put to them was not between their legal and testamentary rights but between their testamentary rights and a debt due to them by their mother. Such a condition would not be recognised— Moon v. Moon's Trustees, 1909 S.C. 185, 46 S.L.R. 165.
At advising—
But the question remains whether the case is not one to which the doctrine of equitable compensation is applicable. I am of opinion that it is. While in law the consequence of the second parties' election would have been that the bequests, which they had elected not to take, would have fallen into residue or intestacy, the consequence in equity was merely that compensation fell to be made out of the conditional bequest to those who suffered, and to the extent to which they suffered, by the second parties' non-compliance with the condition, which was express, as to the legacies under
Page: 377↓
So far as the second parties claimed their legal rights, contrary to the exclusion implied by the generality of the settlement, and contrary to the provision to them of a liferent of the whole residue, the case seems to me indistinguishable from Macfarlane's Trustees, 9 R. 1138, 19 S.L.R. 850. And so far as the second parties claimed the legaciesdue to them under their father's will, contrary to the express provision of their mothers settlement, the case seems to be ruled by Gray's Trustees, 1907 S.C. 54. It is true that the question of equitable compensation has ordinarily arisen in the cases of widow or children, when the choice has been between conventional provisions and legal rights. But I see no sufficient reason why the doctrine should not apply in the absence of relationship between the testator and the beneficiary, and in the case where the exclusion applies to estate of the beneficiary, which it is not in the power of the truster directly to affect. The doctrine is stated quite generally in the series of cases beginning with the case of Kers v. Wauchope, 1 Bligh 1, the first Scotch case in which the doctrine of equitable compensation seems to have been mooted. In that case Lord Eldon said—“In our Courts we have engrafted upon this primary doctrine of election the equity, as it may be termed, of compensation. Suppose a testator gives his estate to A, and directs that the estate of A, or any part of it, should be given to B. If the devisee will not comply with the provisions of the will the Courts of equity hold that another condition is to be implied as arising out of the will and the conduct of the devisee; that inasmuch as the testator meant that his heir-at-law should not take his estate which he gives A, in consideration of his giving his estate to B; if A refuses to comply with the will, B shall be compensated by taking the property, or the value of the property, which the testator meant for him out of the estate devised, though he cannot have it out of the estate intended for him.”
It was argued for the second parties that the case of Gray's Trustees was wrongly decided, and reliance was placed on certain obiter dicta in the subsequent case of Jacks' Trustees, 1913 S.C. 815, in which it was suggested that such words as those in Mrs Nixon's settlement, by which the second parties are put expressly to their election (which are substantially identical with those in Gray's Trustees), ought to be held equivalent to a clause of forfeiture, with the result that the conventional provisions became finally and to all effects a lapsed interest. But, without indicating any doubts as to the soundness of the judgment in Gray's Trustees, it is enough to say that until that case is disapproved by a full bench or by the House of Lords it is binding on this Court.
I am therefore of opinion that the first question should be answered in the affirmative, and the second question in the negative.
Page: 378↓
The Court answered the first question in the negative and the second in the affirmative.
Counsel for the First Parties— Sandeman, K.C.— Garson. Agents— Alexander Morison & Company, W.S.
Counsel for the Second Parties— Anderson, K.C.— W. T. Watson. Agents— Macpherson & Mackay, S.S.C.
