BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £1, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!
 |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | |
Scottish Court of Session Decisions |
||
|
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Wilson's Trustees v. Wilson and Others [1917] ScotLR 468 (02 June 1917) URL: http://www.bailii.org/scot/cases/ScotCS/1917/54SLR0468.html Cite as: [1917] SLR 468, [1917] ScotLR 468 |
||
[New search] [Printable PDF version] [Help]
Page: 468↓
A testator directed his trustees—“(Lastly) And with regard to the residue of my means and estate I direct my said trustees should my said wife survive me to hold and retain the same and all accumulations thereof until her death, and on her death, or at my own death should she predecease me, my said trustees shall pay over the whole of said residue and all accumulations thereon to the trustees and managers of the Royal Infirmary of Glasgow to be used and applied by them for the purposes of the said infirmary.” The testator's widow having survived him for more than twenty-one years, when further accumulation became under the Thellusson Act illegal, held in a special case that the surplus income after the lapse of twenty-one years from the testator's death fell to the testator's heirs ab intestato and that the testator's widow was not entitled to jus relictce therefrom.
Logan's Trustees v. Logan, 1896, 23 R. 848, 33 S.L.R. 638, and Campbell's Trustees v. Campbell, 1891, 18 R. 992, 28 S.L.R. 771 in so far as they applied the law of resulting intestacy, doubted per Lord Skerrington.
The Thellusson Act (39 and 40 Geo. Ill, cap. 98), sec. 1, enacts—“That no person or Eersons shall after the passing of this Act, by any deed or deeds, surrender or surrenders, will, codicil, or otherwise howsoever, settle or dispose of any real or personal property so and in such manner that the rents, issues, profits, or produce thereof shall be wholly or partially accumulated for any longer term than the life or lives of any such grantor or grantors, settler or settlers, or the term of twenty-one years from the death of any such grantor, settler, devisor, or testator, or during the minority or respective minorities of any person or persons who shall be living or in ventre sa mere at the time of the death of such grantor, devisor, or testator, or during the minority or respective minorities only of any person or persons who under the uses or trusts of the deed, surrender, will, or other assurances directing; such accumulations would for the time being, if of full age, be entitled unto the rents, issues, and profits, or the interest, dividend, or annual produce so directed to be accumulated; and in every case where any accumulations shall be directed otherwise than as aforesaid, such direction shall be null and void, and the rents, issues, profits, and produce of such property so directed to be accumulated shall, so long as the same shall be directed to be accumulated contrary to the provisions of this Act, go to and be received by such person or persons as would have been entitled thereto if such accumulation had not been directed.”
William Nicol and others, testamentary trustees of the deceased Lyon Wilson junior, first parties, Miss Jane Wilson and others, the heirs both in heritage and moveables of the said Lyon Wilson junior, second parties, the Glasgow Royal Infirmary, third party, and Mrs Elizabeth Anderson or Wilson, widow of the said Lyon Wilson junior, fourth party, brought a Special Case for the opinion and judgment
Page: 469↓
of the Court upon questions relating to the disposal of the income of the said Lyon Wilson junior's estate when under the Thellusson Act (39 and 40 Geo. Ill, cap. 98) accumulation of the said income as directed by his settlement ceased to be legal. Lyon Wilson junior died on 30th December 1893 without issue and survived by the fourth party. He left a trust-disposition and settlement and three codicils, which conveyed “all and sundry the whole means and estate, heritable and moveable, real and personal, of every kind and description, and wheresoever situated, that shall belong to me at the time of my death, including therein the whole means and estate belonging to me under and in virtue of the trust-disposition and settlement of my father, the late Lyon Wilson, builder, Glasgow, dated fifteenth March Eighteen hundred and eighty, and codicil theretodated seventh November Eighteen hundred and eighty—seven, and both recorded in the Books of Council and Session twenty-eighth July Eighteen hundred and eighty-eight, and also the fee of the estate stated to be life-rented by me therein and which belongs to me in fee inasmuch as the fee is not specially disposed of, and same falls to me as heir-at-law of my father, or otherwise in respect that the conveyance in my favour therein contained by the terms thereof implies a fee in my favour.” The trust purposes included the payment of various legacies and an annuity to the fourth party of £100, increased by a codicil to £150. The residue clause is quoted supra in rubric.
The Special Case set forth—“4. The testator left no estate except his interest as the only son and heir-in-law of his late father Lyon Wilson senior, builder, Glasgow, in (1) a portion of his father's residuary estate which had fallen into intestacy, and (2) the accumulated annual income thereof since that intestacy emerged. 5. The testator's father, who died in 1888, left a trust-disposition and settlement under which the residue was held for behoof of his whole children equally in liferent for their liferent use allenarly and for behoof of their respective issue in fee. 6. On the testator's death in 1893 a question arose as to who was entitled to the fee of the share of his father's estate liferented by the testator, and on a Special Case presented to the Court in 1894 it was decided that the said share on the death of the life-renter without issue fell into intestacy and belonged to the heirs ab intestato of Lyon Wilson senior as at the date of the latter's death— Wilson's Trustees, 1894, 22 R. 62, 32 S.L.R. 54. Miss Margaret Craig Wilson, a sister of the testator, subsequently died without issue on 27th March 1911, and the share of Lyon Wilson senior's estate liferented by her also fell into intestacy, and belongs to the heirs ab intestato of Lyon Wilson senior as at the date of his death. 7. The widow of the testator elected on his death to take the annuity provided by the settlement in lieu of her legal rights, and she has accordingly received payment of thesameregularly from the income of the estate. 8. The estate left by Lyon Wilson senior consisted of a large amount of heritage, viz., tenements of different values situated in Glasgow, and a house at Mambeg, Gareloch, with a relatively small amount of moveable estate. After payment of his widow's jus relictce the moveable estate held by the trustees for the deceased Lyon Wilson senior's children in terms of his settlement amounted to £1341, 5s. 11d. On the respective deaths of Lyon Wilson junior and Margaret Craig Wilson the shares of the moveable estate liferented by them were, in terms of the judgment in the Special Case, transferred to the heirs in mobilibus of Lyon Wilson senior. The shares of heritage liferented by the testator and Margaret Craig Wilson are still in the hands of the trustees of Lyon Wilson senior, in whose name the titles to the properties stand, and these trustees have, since the respective deaths of Lyon Wilson junior and Margaret Craig Wilson, paid the revenue thereof to the first parties. The income from these shares of heritage amounts to about £400 per annum. The trustees of said Lyon Wilson senior have power to sell. 9. The said income has been all along more than sufficient to pay the annuity to the testator's widow, and the balance after providing for said annuity has been accumulating in the hands of the first parties. The testator's estate now consists as aforesaid of his interest in his father's estate and cash amounting to about £2750 invested in Glasgow Corporation mortgages, said sum of £2750 being the said accumulated balances. 10. The testator was the only son of the said Lyon Wilson senior, who also left four daughters, viz., Miss Jane Wilson and Mrs Christina Mackie Wilson or M'Andrew (two of the second parties), the said Miss Margaret Craig Wilson, who survived the testator but is now deceased, and Mrs Mary Barclay Wilson or Neill, who died on 12th December 1893 (thus predeceasing the testator), leaving an only child Mrs Margaret Craig Wilson Neill or Hunter, the third of the second parties. The second parties, the said Miss Jane Wilson, Mrs Christina Mackie Wilson or M'Andrew, and Mrs Margaret Craig Wilson Neill or Hunter, are thus the heirs ab intestato of the testator, both in heritage and moveables.”
The second parties claimed (1) the whole of the said surplus income; alternatively (2) the whole surplus income from year to year from the rents of the heritable properties and one-half of the income of the Corporation bonds. They contended that the whole of the said surplus income fell to them as intestate heritable estate of the testator, being undisposed of in his said trust-disposition and settlement, and that the claim of the third parties did not emerge until the death of the annuitant. Further, that the character of said estate was determined as at the date of the testator's death, and that the accumulations now invested in moveables being the proceeds of heritable estate were heritable as regards succession, and that the future income of the same fell to them along with the surplus income from the heritable properties to the exclusion of the claim of the fourth party. Alternatively that should the fourth party's claim in connection
Page: 470↓
with same be declared to be legal they were entitled to have their alternative claim upheld. The third parties claimed that the whole of said surplus income should be paid to them on the ground that they had a vested right to the residue a morte testatoris, which was equivalent to a present gift of the whole residue to them, and also in respect that there was in the trust-disposition and settlement a specific bequest of accumulations to them.
The fourth party, as widow of the deceased, contended that she was entitled as jus relictæ to one-half of the gross income of the personal estate; that the said surplus income was moveable estate and that its character was to be determined, not as at the testator's death, but as at the expiry of the twenty-one years thereafter, and so far as invested in moveable estate was moveable property.
The questions of law were—“(1) Are the third parties entitled to payment of the whole of the surplus income? (2) In the event of the foregoing question being answered in the negative, are the second parties as the heirs of the deceased both in heritage and moveables entitled to ( a) the whole of the surplus income both from the heritable properties and from the Corporation bonds; or ( b) the whole surplus income from the heritable properties and one-half of the income from the Corporation bonds? Or (3) Is the fourth party entitled to payment as jus relictæ of one half of the surplus income during the remainder of her life of the whole estate as at the close of the lawful period of accumulation, or alternatively is she entitled to payment during the remainder of her life of one-half of the free income of the personal estate without deduction of said annuity as at said period?”
Argued for the second parties—A lapsed residuary bequest usually fell into intestacy—Lewin, Trusts, 12th ed., p. 99. When there was a present gift of residue that rule suffered an exception, but here there was no present gift of the residue, and consequently Smith v. Glasgow Royal Infirmary, 1909 S.C. 1231, per Lord Dunedin, at p. 1236, 46 S.L.R. 860, applied. Indeed the present case was stronger, for the testator himself had differentiated between residue and accumulations. Weatherall v. Thornburgh, 1878, 8 ChD 261, was in point. That case was not overruled by Wharton v. Masterman, [1895] AC 186, as was shown by Frost v. Greatorex, [1900] 2 Ch 541. Wharton's case ( cit.) was distinguished, for there the ratio of the decision was that the legatee could put an end to accumulations which were for his own benefit. Here the accumulations were to secure benefits for others than the residuary legatee. The bequest of accumulations only applied to such accumulations as the law allowed; when the accumulations ceased to be lawful the settlement fell to be read as if there had never been any direction to accumulate, and there was no room for an argument as to implied intention. Maxwell's Trustees v. Maxwell, 1877, 5 R. 248, 15 S.L.R. 155, was an illustration of the contrary case. Further, the rents of the heritage went to the heir— Campbell's Trustees v. Campbell, 1891, 18 R. 992, 28 S.L.R. 771; Logan's Trustees v. Logan, 1896, 23 R. 848, 33 S.L.R. 638. And in the present case it did not matter whether they went to the heir as at the testator's death or at some other time. Consequently the fourth party's claim could not be sustained; having abandoned her claim to the capital she could not claim the fruits thereof, and she had no claim to jus relietæ, for the estate in question was not moveable as at the date of the testator's death.
Argued for the third parties—“Residue” here meant everything not otherwise disposed of. There was a present gift to a third party with postponed enjoyment; it was not the case of a gift of a fund to be ascertained at a later date which was not a present gift. A present gift meant that there was an existing object of gift— Weatherall's case ( cit.); Wharton's case ( cit.). Smith's case ( cit.) was distinguished, for in that case the testator directed his trustees to realise his estate after the death of all the annuitants, and then only was the residue ascertained; here the residue was “struck” as at the testator's death.
Argued for the fourth party—The fourth party adopted the argument for the second parties on the first point, and cited in addition Green v. Gascoyne, 1865, 34 L.J., Ch. 268. The fourth party was entitled as jus relictæ to one-half the gross income of the personal estate— Lord v. Colvin, 1860, 23 D. 111, 1865, 3 Macph. 1083; Campbell'n Trustees v. Campbell ( cit.); Logan's Trustees v. Logan ( cit.); Moon's Trustees v. Moon, 1899, 2 F. 201, 37 S.L.R. 140; Mackay's Trustees v. Mackay, 1909 S.C. 139, 46 S.L.R. 147.
The question we have to decide is, To whom is that surplus income now payable? I answer, in the terms of the Act, to “such person or persons as would have been entitled thereto if such accumulation had not been directed.” On a consideration of the terms of this will I have come to the conclusion that the second parties, who are the heirs in heritage and moveables of the deceased, are entitled to have that surplus income. The will in this case offers us no guidance. As Lord Rutherfurd Clark, in the case of Campbell's Trustees, 18 R. 992, at p. 1007, says—“I do not think that the
Page: 471↓
In the clause which I have just read there are three points to be noted—( first) there is no present gift of the residue—the bequest takes effect on the death of the widow, who still survives; (second) there is no disposal of the surplus income payable between the 30th December 1914—the expiry of the twenty-one years—and the death of the widow; ( third) the accumulations bequeathed are accumulations under the will and not accumulations after the will has ceased to operate. To use the words of Lord Kinnear in the case of Smith v. Glasgow Royal Infirmary, 1909 S.C. 1231, at p. 1237—“There is no gift of the income to any person whatever except” the widow “and no gift of the residue to anybody until the death of” the widow. “The right of the Infirmary to take the residue remaining in the hands of the trustees at the death of the widow is not accelerated according to the rule settled by the decisions by the operation of the Thellusson Act; it remains exactly what it was before. And that being so, as I can find no gift of the income arising between the date when the twenty-one years came to an end and the death of the widow, that income being undisposed of falls into intestacy.” These words seem to me to be directly applicable to the present case. In short, so far as regards the bequest of residue I am of opinion that the case is covered by Smith v. Glasgow Royal Infirmary.
With regard to the accumulations of income, it appears to me that the words of Lord Trayner in Moon's Trustees, 2 F. 201, are in terms applicable to the present case, for here, as there, the testator disposed of that part of his estate which consisted of accumulations lawfully made, but he has not disposed of that part of it which arises from accumulations of income prohibited by law.
Accordingly I am of opinion that the second parties are entitled to have the surplus income here. The claim for the widow was not very seriously pressed. In my opinion it is not tenable.
I therefore propose to your Lordships that we should answer the first question put to us in the negative, the second question, branch ( a), in the affirmative, and the third question in the negative.
As regards the claim of the widow, a claim of jus relictce must be on estate which is in existence at the date of the death of the testator, and therefore the claim made by her in this case seems to me untenable.
It has been said that the question whether income set free by the operation of the Thellusson Act belongs to the legatee of the corpus which produces the income or falls into intestacy depends upon whether such legatee has or has not an absolute vested right to his legacy. That, however, is an incomplete statement of the law. Absolute vesting is indeed a condition of success on the part of the legatee, but something more is required. A legatee, whether special or general or residuary, whose legacy falls to be paid or delivered at a postponed date is not necessarily and in all circumstances entitled to receive the intermediate income even although his right to the corpus is absolutely vested in him. It is always a question of intention depending upon the express or implied directions of the testator whether such a legatee is entitled to claim the fruits accruing prior to the date fixed for payment or delivery of the legacy. It follows that where a direction to accumulate income has become null and void by the operation of the Thellusson Act, the legatee of the corpus cannot successfully claim the income set free by the statute unless he can show that he has a gift of that income which remains valid notwithstanding that the direction to accumulate has become void and ineffectual. In some cases a residuary legatee may have no difficulty in demonstrating that the mere bequest of the “residue” vests him not merely in the corpus but also in the whole free income therefrom accruing prior to the date fixed by the testator for the distribution of the residue. In other cases, of which the present seems to me to be a typical example, the gift of the intermediate income and the direction to accumulate are inseparable from each other. In the last purpose of his will the testator distinguished between the “residue” of his-estate on the one hand and all accumulations thereof until her” (his widow's) “death” on the other hand. By “residue” he clearly meant the corpus of the residue as at his death, and excluding the free income subsequently accruing therefrom. It follows that the direction to his trustees to pay over to the residuary legatee on the death of the widow “the whole of said residue and all accumulations thereon” included merely the “residue” in the narrow sense which I have explained plus the free income therefrom so far as the trustees might lawfully accumulate it, but necessarily excluding free income which the trustees could not lawfully retain in their hands but were bound to distribute as it accrued.
I am accordingly of opinion that the surplus income does not belong to the residuary legatee but that it falls into intestacy. Further, assuming it to be the law, as was decided in the case of Logan's Trustees v. Logan, 23 R. 848, that surplus income arising from rents lawfully accumulated by and in the hands of trustees is moveable estate and falls to the heir in mobilibus as at the testator's death, it does not in the
Page: 472↓
The Court answered the first question in the negative, the first branch of the second question in the affirmative, and the third question in the negative.
Counsel for the First Parties— Maclaren. Agents— J. Douglas Gardiner & Mill, S.S.C.
Counsel for the Second Parties— Blackburn, K.C.— A. M. Mackay. Agents— Simpson & Marwick, W.S.
Counsel for the Third Parties— Moncrieff, K.C.— R. C. Henderson. Agents— Webster, Will, & Co., W.S.
Counsel for the Fourth Party— Wilson, K.C.— Lippe. Agents— Maxwell, Gill, & Pringle, W.S.
