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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Allan's Trustees v. Allan [1918] ScotLR 212 (11 January 1918) URL: http://www.bailii.org/scot/cases/ScotCS/1918/55SLR0212.html Cite as: [1918] SLR 212, [1918] ScotLR 212 |
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Page: 212↓
A testator directed his trustees to pay one-third of the income of his estate to his widow during her life and to pay or apply to or for behoof of his lawful children the remaining two-thirds of the income in such manner and at such time or times as they might think proper until the youngest surviving child attained the age of twenty-one years complete. He further provided—“Upon the youngest surviving child attaining twenty—one years complete my trustees shall divide the residue equally amongst my children, the lawful issue of any of them predeceasing being entitled equally among them to the share which would have fallen to their parent if alive.” The testator was survived by a widow and four children. Before the youngest child attained the age of twenty-one another daughter died without ever having married. Held that the share of the daughter had vested in her a morte testatoris, subject to defeasance in the event of her predeceasing the term of payment leaving issue, in favour of such issue.
Authorities examined.
William Smith Storie and another, the testamentary trustees of Andrew Allan, solicitor, Falkirk, first parties, Mrs Allan, his widow, second party, and Robert Andrew Craig Allan and others, his surviving children, third parties, brought a Special Case to determine questions relating to the vesting of the residue of his estate.
Andrew Allan died on 30th May 1899 leaving a trust-disposition and settlement dated 12th January 1892, which conveyed his whole means and estate to the first parties for various purposes, which included—“( Second) For payment to my sisters Barbara Gibson Allan and Jane Blair Allan of an annuity of twenty pounds sterling per annum, each, payable in equal portions half-yearly at Martinmas and Whitsunday, beginning the first payment at whichever of these terms shall first occur after my death, and that free of legacy duty; ( Third) One-third part of the free interest or income of my said means and estate remaining after providing for the foresaid annuities I direct my trustees to pay or apply to or for behoof of my wife in such manner and at such time or times as they may think proper during her lifetime; ( Fourth) The remaining two-third parts of the said interest or income of my said means and estate I direct my trustees to pay or apply to or for behoof of my lawful children in such manner and at such time or times as they may think proper until the youngest surviving child attains the age of twenty-one years complete; ( Fifthy) Upon the youngest surviving child attaining twenty-one years complete my trustees shall, after setting apart sufficient portions of my means and estate to meet the foregoing provisions in favour of my sisters and wife, divide the residue equally amongst my children, the lawful issue of any of them predeceasing being entitled equally among them to the share which would have fallen to their parent if alive; and ( Lastly) the portions of my means and estate set apart, as aforesaid, shall, as they are set free by the deaths of my said sisters and wife respectively, be divided among my said children in the same way as the rest of the capital before mentioned…. And I declare that the foregoing provisions in favour of my wife and children are and shall be accepted by them in full satisfaction of everything they could ask or claim at my death, whether in name of jus relictæ, terce,
Page: 213↓
share of moveables, legitim, or other claim competent to them or either of them against my means and estate by or through my death.” The Case set forth—“1. Andrew Allan … was survived by his two sisters Jane Blair Allan, who died on 1st April 1908, and Barbara Gibson Allan, who died on 6th February 1916. He was also survived by his widow Mrs Janet Wilson Potter or Allan, and by four children, viz., Robert Andrew Craig Allan, Mary Wordie Allan, Elizabeth Craig Allan, and Janet Evelyn Allan. The testator's widow and the said children are alive, except the said Mary Wordie Allan, who died after attaining the age of twenty-one, unmarried and intestate, on 20th May 1906. The testator's youngest child, the said Janet Evelyn Allan, attained the age of twenty-one on 6th March 1917. 2…. The estate of the testator now under the administration of his trustees amounts to £11,500 or thereby. 3. Owing to the fact that the testator's daughter, the said Mary Wordie Allan, died before the youngest of the testator's children attained the age of twenty-one, a question has arisen as to whether any share of the residue of the testator's estate was vested in her at the date of her death.”
The second party contended, inter alia—“That the said Mary Wordie Allan had at the date of her death a vested right in an equal one-fourth share of the whole residue of the trust estate (including the portions set apart to meet the provisions to the testator's sisters and the second party), and that the same falls to be distributed as intestate estate of the said Mary Wordie Allan.”
The third parties contended, inter alia—“That no right in the said residue vested in the said Mary Wordie Allan, and that the said residue, under the terms of the said trust-disposition and settlement, has vested in equal shares in the third parties as the children of the testator alive at the date when the youngest attained the age of twenty-one, or alternatively that the said residue, in so far as not required to meet the provision made to the second party in the said trust-disposition and settlement, falls to them equally, and that the remainder of the residue will vest equally in such of the third parties as survive the second party.”
The questions of law included—“1. Had the said Mary Wordie Allan at the date of her death a vested right in an equal one-fourth share of the whole residue of the trust estate (including the portions set apart to meet the provisions to the testator's sisters and the second party)”?
Argued for the third parties—The first question should be answered in the negative. The whole bequest to children was dependent on the youngest attaining the age of twenty-one. There was no gift to the children, but merely a direction to pay on the youngest attaining twenty-one, and the gift-over to issue was a true destination-over. The attainment of twenty-one was a dies incertus and consequently vesting was suspended. There was no vesting sub ject to defeasance. The following authorities were referred to:— Adams' Trustees v. Carrick, 1896, 23 R. 828, per Lord Adam at p. 831, 33 S.L.R. 620; Ballantyne's Trustees v. Kidd, 1898, 25 R. 621, per Lord Trayner at p. 632, 35 S.L.R. 488; Ross's Trustees v. Ross, 1902, 4 F. 840, 39 S.L.R. 678; Bowman v. Bowman's Trustees, 1899, 1 F. (H.L.) 69, per Lord Davey at p. 76, 36 S.L.R. 959; Muirhead v. Muirhead, 1890, 17 R. (H.L.) 45, per Lord Watson, 27 S.L.R. 917; Parlane's Trustees v. Parlane, 1902, 4 F. 805, per Lord M'Laren at p. 808, 39 S.L.R. 632; Forrest's Trustees v. Mitchell's Trustees, 1904, 6 F. 616, 41 S.L.R. 421; Alves' Trustees v. Grant, 1874, 1 R. 969, per Lord Justice-Clerk Moncreiff at p. 971, 11 S.L.R. 559; Corbet's Trustees v. Elliott's Trustees, 1906, 8 F. 610, per Lord Kyllachy at p. 612, 43 S.L.R. 379; Wylie's Trustees v. Wylie, 1906, 8 F. 617, 43 S.L.R. 383; Cairns' Trustees v. Cairns, 1907 S.C. 117, 44 S.L.R. 96; Penny's Trustees v. Adam, 1908 S.C. 662, 45 S.L.R. 481; Bannatyne's Trustees v. Watson's Trustees, 1914 S.C. 693, per Lord President Strathclyde at p. 700, 51 S.L.R. 605; Ferguson's Trustees v. Readman's Trustees, 1903, 10 S.L.T. 697; Newton v. Thomson, 1849, 11 D. 452; Fraser v. Fraser's Trustee, 1883, 11 R. 196, 21 S.L.R. 137.
Argued for the second party—The first question should be answered in the affirmative. The case was one of vesting subject to defeasance in the event of death leaving issue prior to the youngest child attaining the age of twenty-one. The gift-over to issue was not a true destination and did not affect vesting. The following additional authorities were referred to:— Coulson's Trustees v. Coulson's Trustees, 1911 S.C. 881, 48 S.L.R. 814; Wilson's Trustees v. Quick, 1878, 5 R. 697, 15 S.L.R. 395; Taylor's Trustees v. Christal, 1903, 5 F. 1010, 40 S.L.R. 738; White v. Gow, 1900, 2 F. 1170, per Lord M'Laren at p. 1173, 37 S.L.R. 895; Wilson's Trustees v. Wilson's Trustees, 1894, 22 R. 62, 32 S.L.R. 54; Naismith v. Boyes, 1899, 1 F. (H.L.) 78, 36 S.L.R. 973.
At advising—
Now if there had been no decisions in this chapter of law subsequent to the date of Young v. Robertson, 1862, 4 Macq. 314, I should have had little difficulty in holding
Page: 214↓
It would be idle, however, to deny that the doctrine of conditional vesting in cases similar to the one before us was enunciated and applied as far back as the year 1875—by Lord Shand in the case of Snell's Trustees, 1877, 4 R. 709, and again in 1902 by Lord Kyllachy in the case of Wylie's Trustees, 1906, 8 F. 617, 43 S.L.R. 383. Neither judgment was submitted to the Inner House upon a reclaiming note, but neither has ever been, so far as I am aware, questioned. And undoubtedly Lord Kyllachy had before him, when he decided Wylie's Trustees, Bowman's Trustees, Hay's Trustees, 1890, 17 R. 961, 27 S.L.R. 771, and all the prior authorities, when he came to the conclusion that in a case similar to the present the doctrine of conditional vesting applied, and said—“It has now, I think, to be taken as an established rule of construction that a contingency depending merely upon the existence or survivance of issue falls to be read as a resolutive and not as a suspensive condition. In other words, in a case like the present there is no suspension of vesting, but vesting subject to defeasance—defeasance in the event of a primary legatee leaving issue.” And the doctrine so enunciated and applied was certainly followed by the other Division of the Court in a series of cases embracing Corbet's Trustees, 1906, 8 F. 610, 43 S.L.R. 379; Cairns' Trustees, 1917 S.C. 117, 44 S.L.R. 96; Penny's Trustees, 1908 S.C. 662, 45 S.L.R. 481; and, in slightly different circumstances, Coulson's Trustees, 1911 S.C. 881, 48 S.L.R. 814. And unquestionably it was accepted in the case of Searcy's Trustees, 1907 S.C. 823, 44 S.L.R. 536, by the Judges in this Division of the Court. I very respectfully associate myself with the views expressed by Lord President Dunedin and Lord M'Laren in the case of Searcy's Trustees, and with the view expressed subsequently by Lord Kinnear in the case of Johnston's Trustees v. Dewar, 1911 S.C. 722, 48 S.L.R. 582.
In my opinion the doctrine is, in cases similar to the present, too firmly rooted in the law of Scotland for us to think of disturbing it. I think it applies to the case before us, and accordingly I am of opinion that we ought to answer the question put to us in the affirmative.
This is the whole settlement, except a clause declaring that its provisions in favour of wife and children should be accepted in full satisfaction of legal rights, which do not seem to have been excluded by marriage contract. The testator was survived by his widow and four children. One of these children, Mary Wordie Allan, died unmarried and intestate before the youngest attained majority. The widow and the rest survived, and the youngest of the children has now attained twenty-one. The contest is as to the rights of Mary Wordie Allan in the residue. The widow for her interest in her daughter's succession maintains that Mary Wordie Allan had at the date of her death a vested interest a morte in one-fourth of the residue, subject always to the life interest
Page: 215↓
We have had a lengthy and I think very academic argument on the subject of vesting subject to defeasance, which so far as I am concerned has not enlightened me. The doctrine of vesting subject to defeasance is one not to be extravagantly extended in application. It is not a panacea to be resorted to to obviate every difficulty in construing a testamentary settlement. It may very easily be abused in the application, and I am not satisfied that it has not sometimes been abused. But I think that this is a case in which the doctrine does apply, and that it is one of the simplest in that branch of succession law and did not call for an elaborate argument on the case law. I think that the result of the provisions of the settlement to which I have adverted is that the testator gave a vested interest to his children a morte (1) subject to postponement of payment so far as was necessary to provide for the annuities to his sisters and the limited liferent to his widow; (2) subject to postponement of payment so long as any of them remained in minority; and (3) subject to defeasance in the event of any of them predeceasing the date of the youngest attaining majority leaving issue, in favour of such issue.
The case to my mind partakes much more of the aspect of that of Lindsay's Trustees, 1880, 8 R. 281, 18 S.L.R. 199, than of any of the cases which were cited to us more directly bearing on the subject of vesting subject to defeasance. It has often been said that in construing a particular provision in a settlement the Court is bound to consider the settlement as a whole, and to construe the particular provision which may be in question in light of that consideration. So doing, I find no difficulty in there being here no direct gift apart from the direction to distribute. The postponement of payment is in the interest of liferenters only. What the testator contemplated was to conserve a portion of the capital of his estate to provide an income to his wife, and actuated very probably by views as to the amount of the estate which he was likely to leave; which was not large, to keep the rest together in order to afford a joint income for his children living in family until the youngest attained twenty-one. The postponement of capital distribution was a matter solely dictated by these objects, and having no relation to the ultimate interests of his children.
Further, I cannot read the directions to “divide the residue equally among my children” as implying the addition of “then surviving.”
And lastly, I think it is an element not to be neglected that the testator's provisions by his settlement were expressly made in satisfaction of legitim to a share of which Mary Wordie Allan was entitled on her father's death. This as it appears to me favours vesting a morte, though it may be subject to defeasance rather than postponement of vesting until the last of the children attained majority. This it is evident might have led to entire intestacy, even though all but the youngest who should survive of his children might have been major for some time before the youngest surviving came of age.
I do not, as I have said, think that any elaborate canvass of the authorities on the application of the doctrine of vesting subject to defeasance is needed. If any reference to case law is required it is unnecessary to go beyond the simple case of Snell's Trustees, 1877, 4 R. 709.
In the next place I think this is a typical case of vesting subject to defeasance. The true principle applicable to such a destination is to be found in the principles laid down by Lord Kyllachy and Lord Low in the cases of Corbet's Trustees, 1906, 8 F. 610, 43 S.L.R. 379, and Wylie's Trustees, 1906, 8 F. 617, 43 S.L.R. 383, and more particularly in the passage to the effect that it is an established rule of construction that a contingency depending merely upon the existence or survivance of issue falls to be read as a resolutive and not as a suspensive condition. The case of Corbet was followed by the case of Searcy's Trustees, 1907 S.C. 823, 44 S. L. R. 536. In that case Lord M'Laren refers to the doctrine of vesting subject to defeasance as an excrescence on our system, and says that “having a tolerably fair acquaintance with the older decisions as well as those of more recent date, I am satisfied that no trace of the doctrine is to be found in any of the reported cases until we come to a period about thirty years ago.” That is true if it be taken as applicable to moveable succession alone, but it must be remembered that the same eminent Judge said in the case of Gardner v. Hamblin, 1900, 2 F. 679, 37 S.L.R. 486—“It has been decided in cases which go back at least a hundred years that a destination of heritage subject to devolution in the event of the birth of a nearer heir is effectual, and heirs of entail in possession have been dispossessed by the Court on the birth of nearer heirs.” The principle in both cases is just the same—it is vesting subject to divestiture. In the case of Snell's Trustees, 1877, 4 R. 709, decided in 1875, which was an Outer House case, all that was done was to apply to moveable succession a principlefirmly establishedlong before in the law of Scotland with regard to heritage.
Page: 216↓
The history of the matter is that the principle of Snell's Trustees was applied in Taylor v. Gilbert, 1878, 5 R. (H.L.) 217, 15 S.L.R. 776, the classical passage being Lord Blackburn's opinion at p. 221. Snell's Trustees does not appear to have been cited in the discussion. The principle underlying the decision in Snell's Trustees was very clearly stated in the case of Steel's Trustees, 1888, 16 R. 204, 26 S.L.R. 146, by Lord President Inglis—more clearly than it had been in the intervening time since the case of Taylor v. Gilbert, and certainly in the discussion in Steel's Trustees the decision in Snell's Trustees bulked very largely. The same principle was recognised in the case of Cairns, 1907 S.C. 117, 44 S.L.R. 96, and there Lord Low deals with the decision in Bowman, 1899, 1 F. (H.L.) 69, 36 S.L.R. 959, and I agree with the view taken that there is nothing that was said in Bowman that can affect the application of the doctrine of vesting subject to defeasance in such a destination as we have here.
Mr Candlish Henderson pressed upon us the decision in the case of Adams, 1896, 23 R. 828, 33 S.L.R. 620, as being quite inconsistent with the judgment we now propose to pronounce, and it was said that that decision was to the same effect as the decision in Parlane's Trustees, 1902, 4 F. 805, 39 S.L.R. 632, and Forrest's Trustees, 1904, 6 F. 616, 41 S.L.R. 421. It was said that there was a difference of opinion between the First Division and the Second. It is impossible to suggest that, after the decision in Searcy, because in Searcy's Trustees the cases of Forrest, Corbet's Trustees, Wylie's Trustees, and Cairns were cited. The simple answer to the point made on the case of Adams ( cit.) is this, that there was presented to the Courtonly two alternatives—either absolute vesting or suspended vesting. The Court did not have the opportunity in Adams' case of considering whether the principle which had been enunciated by Lord Shand in Snell's Trustees, applied by the House of Lords in Taylor v. Gilbert, and laid down by Lord President Inglis in Steel's Trustees, bore upon the case in hand. Accordingly, as the point was not argued, it cannot possibly be said that the judgment is a decision binding in any way upon us in a case in which vesting subject to defeasance was argued.
I am of opinion that there is no conflict between the views of the First and Second Divisions, and that the case of Searcy is a conclusive answer to any such suggestion. The doctrine of vesting subject to defeasance being established, and being in my opinion a useful working principle, should be applied here.
As is usual in similar cases we had a long discussion as to what had been done by other testators in other wills, but we heard comparatively little about what had been directed to be done by this particular testator. Two reasons were urged in favour of the view that there could be no vesting until the date of distribution. It was said that the gift was subject to a condition in respect that it was to take effect upon an event which might never happen, and dies incertus pro conditione habetur. If one adheres strictly and literally to the language of the bequest there is no answer to that argument, because none of the testator's children might have attained majority. But the bequest must be construed reasonably, and this is obviously one of the cases where by sticking to the letter one fails to get at the true meaning of the testator. His meaning becomes quite plain when one refers back to the 4th purpose, which deals with the distribution of the income. So long as any child was alive and in minority the income was to be divided among the children, but when the income ceased to be so required (an event which must happen) the capital would fall to be divided as directed in the 5th purpose.
The second argument against immediate vesting was based upon the fact that after directing the residue to be equally divided amongst his children the testator added, “the lawful issue of any of them predeceasing being entitled equally among them to the share which would have fallen to their parent if alive.” In other words, the gift in favour of each child was to be subject to a contingency which would operate in favour of the issue (if any) of that particular child, so that such issue should take preferably to the creditors or assignees of their parent. It is, I think, somewhat difficult to understand why it should ever have been supposed that a contingency of this very limited character ought to be construed as making the gift to each child conditional on his being alive at the date of distribution, or, in other words, as operating in favour of the brothers and sisters of the primary legatee.
Various cases were cited in favour of the view that in a destination such as we have here vesting was suspended until the date
Page: 217↓
For these reasons I agree with your Lordships.
The Court answered the first question in the affirmative.
Counsel for the First and Third Parties— R. C. Henderson. Agents— R. D. Ker & Ker, W.S.
Counsel for the Second Party— W. J. Robertson, Agent— A. E. S. Thomson. Solicitor.
