Scottish Court of Session Decisions

At advising on 6th December 1946,—

LORD JUSTICE-CLERK (Cooper) and LORD JAMIESON .—The questions still outstanding in this case relate to the nature of the interest taken by the second party under the holograph will of her brother. The testator's estate was wholly moveable. His will, which was evidently prepared without skilled advice, contains no appointment of an executor and no disposition to trustees. Its provisions, so far as relevant, are these:—

"I … hereby bequeath all I possess to my sister Mary Jane Slight Cochrane.

"Anything she may desire to dispose of or realise after my decease such as library and stamp collection, may be done. On her decease everything of mine to be sold and the proceeds divided …" amongst stated charities.

In a codicil the testator gave administrative instructions regarding the disposal of the library and stamp collection "for the benefit of my estate."

The rival contentions maintained before us were that the second party took either (a) a full fee, or (b) a fee restricted to the rights of sale, administration and consumption, or (c) a liferent with a power of sale and consumption, or (d) a bare liferent. These alternative submissions emerged during a discussion of the doctrine of repugnancy and of the implications to be derived from an initial gift of fee; and in the course of debate the correctness of certain decisions and dicta was challenged. It is convenient before considering the interpretation of the will to clear the ground by disposing of two overriding issues thus raised.

(1) The argument in favour of a full fee was in part supported by the dictum of Lord President Clyde in Ironside's Executor that "it is an elementary principle in the construction of wills that a right of fee once conferred upon a beneficiary is not withdrawn by a subsequent provision as to the disposal of the subject after the death of the fiar." This statement of the law was reluctantly accepted by Lord Sands after being subjected by him to severe criticism; for he understood it (as the late Professor Dykes evidently understood it—Supplement to M'Laren on Wills, p. 99)—as virtually requiring any Court of construction, upon encountering an initial gift of fee, to shut its eyes to all subsequent repugnant provisions.

We are of opinion with all respect that this formulation of the so called rule of the initial gift of fee is stated too broadly and without necessary qualifications, and that it is impossible thus to combine in a single "elementary principle" several different rules of more limited ambit. What are these rules?

The most important is derived from Miller's Trustees, the principle of which, as authoritatively declared by the majority of the Whole Court in Yuill's Trustees, is that "when a vested, unqualified and indefeasible right of fee is given to a beneficiary of full age, he is entitled to payment of the provision notwithstanding any direction to the trustees to retain the capital of the provision, and to pay over the income periodically, or to apply the capital or income in some way for his benefit." It is plain that the subsequent provision which is figured in this formulation as insufficient to affect an initial gift of a fee is a provision concerned not with modifying or abridging the gift but only with adjecting conditions to its enjoyment. Even within this limited sphere, the Court in Yuill's Trustees was at pains to stress several "necessary qualifications," (a) that the initial gift of fee should be absolute and unqualified and not burdened with annuities or other charges, (b) that the fee should have vested indefeasibly; and (c) that there must be no trust purposes to be served which could only be secured by the retention in the hands of trustees of the interest of the beneficiary.

An important corollary of Miller's Trusteesis the well recognised rule that, when an initial gift of fee is followed in the same deed by prima facie repugnant provisions, these subsequent provisions will in dubio be construed as intended only to fetter the enjoyment of the gift and not to enlarge or abridge it.

Another of these rules originated as part of the then developing doctrine of vesting subject to defeasance, and is associated with Tweeddale's Trustees. In its original form it was that, if a bequest is made to A with a further direction that trustees shall hold for A in liferent and for his issue in fee, the fee remains with A if he has no issue. This rule has recently been expanded to cover the case where the destination-over is to others than the legatee's issue—Livingston's Trustees—and it must now be stated in the language of Lord Davey in Hancock v. Watson to this effect that "if you find an absolute gift to a legatee in the first instance, and trusts are engrafted or imposed on that absolute interest which fail, either from lapse or invalidity or any other reason, then the absolute gift takes effect so far as the trusts have failed …"

The above examples are not presented as exhaustive of the type of case in which an initial gift of fee may override later repugnant (or seemingly repugnant) provisions, but they embrace the vast majority of the instances recorded in Scottish decisions. They certainly carry the rule of the initial gift of fee a long distance, but they do not carry it the whole length of Lord Clyde's formulation. The bare fact that the separate rules have been stated and re-stated with such precision and subject to so many qualifications is itself fatal to the over-simplification of the single abbreviated formula in Ironside's Executor and of the use to which that formula was sought to be put.

For these reasons, and in view of the numerous cases to which we were referred in which the Court has not hesitated to construe a will without regard to the alleged "elementary principle" of Ironside's Executor, we are unable to accept as sound the statement of the rule contained in that case.

(2) The second matter which the course of argument requires us to examine is whether it is possible to justify the introduction into our law by Denholm's Trustees, subsequently followed in Heavyside v. Smith of an anomalous species of right or interest intermediate between a liferent and a fee and described as a fee restricted to a right of sale, administration and consumption. It is worthy of note that Denholm's Trustees was a case of a pactional mutual settlement executed by husband and wife, and this factor was referred to by Lord Stormonth-Darling in delivering the judgment of the Court as confirming the view which he had formed as to the effect of the settlement. But the decision does not rest on this specialty, and it was not so understood in Heavyside v. Smith, in which Denholm's Trustees was applied to the interpretation of an ordinary will.

We are regretfully unable to appreciate the exact conception which the Court entertained of the limited fee introduced in Denholm's Trustees nor can we find in Barr's Trustees or Corrance's Trustees the support for his conclusion which Lord Stormonth-Darling claimed to discover. No other case was cited to us which affords a precedent for the innovation introduced by Denholm's Trustees and, except in Heavyside v. Smith, it does not appear to have been followed. The new chapter thus added to the history of the doctrine of repugnancy has been received with faint enthusiasm by our textbook writers—Dykes, Supplement to M'Laren on Wills, p. 98; Henderson on Vesting (2nd ed.), p. 376; Dobie on Liferent and Fee, p. 19—and with positive distaste by the Court (see, e.g.,Lord Ormidale and Lord Anderson in Heavyside v. Smith, Lord President Normand and Lord Moncrieff in Duncan v. Edinburgh Royal Infirmary ). Nor can we accept as convincing or accurate the efforts made in Ironside's Executor to explain the true ratio of Denholm's Trustees and Heavyside v. Smith . Finally, while the point may have little weight, these two decisions are in conflict with what appears to be the accepted rule of English law (Jarman (7th ed.), vol. i, p. 537, and cases there cited).

In these circumstances we are of opinion that both Denholm's Trustees and Heavyside v. Smith should now be overruled, though we recognise that it might have been possible to save Denholm's Trustees had the ratio of the decision been limited to the specialties of the pactional mutual will there in question.

We are now free to return to the construction of this will. The first of the three critical sentences, speaking as at the date of the testator's death, is unquestionably couched in terms appropriate only to the gift of an unqualified fee. The second sentence, referable to the period of the sister's survivorship of the testator, inter alia confers upon her an unqualified power of disposal inter vivos or mortis causa, at least as regards the library, the stamp collection and similar effects. If it was intended to confer a universal power of disposal of the whole estate and if a full fee had already been conferred, this power would of course be unnecessary; and there is thus some force in the contention that the power was limited to articles ejusdem generis with the library and the stamp collection, and therefore that a full fee was not intended to be conferred by clause first. It is questionable, however, whether such arguments carry much weight in the construction of a layman's will. The third sentence, referable to the period after the decease of the sister, provides that "everything of mine" shall then be sold and the proceeds divided, and it is certainly significant that the testator still envisaged the estate as being "mine."

Of the suggested alternative views of the will we have already rejected as impossible in law the "restricted fee" of Denholm's Trustees and Heavyside v. Smith . We are unable to adopt the suggestion that all that was intended to be conferred on the sister was a liferent, for any inferences arising from the power conferred in the second sentence and from the direction contained in the third are, in our view, insufficient to contradict the unambiguous terms of the opening unqualified bequest. Reading the whole provisions together, we find in them a sufficient expression of the testator's intention that the charities should take in succession to the sister whatever on her death might remain of his estate, and, by implication, that the charities should take the whole estate in the event of his sister predeceasing him. In other words our preference is for the view that the testator intended that the charities should take in succession to the sister as substitutes or quasi-substitutes, or, in the event of her predecease, as conditional institutes.

It is sufficient for the decision of this case that we should hold, as we do, that the second party takes a fee as institute. The argument touched upon certain other matters—whether the intended substitution was effective, or whether the instruction to realise before division was destructive of the intended effect, and by what methods the institute might defect the substitution, if indeed she has not already done so. The case is not framed so as to raise these issues, and, if they ever arise, that will only be after the death of the second party, and different contradictors will then be before the Court.

We are therefore for answering question 2 (b) in the affirmative, and negativing the alternative contentions.

LORD MACKAY.—Apart from one decision which perhaps created an obstacle, I form the opinion that the question is a pure question of interpretation, and of a will which directly "bequeathed," and provided no machinery to protect possible emergent interests.

In broad result my conclusions in this case are in complete correspondence with those embodied in the opinion rendered by the Lord Justice-Clerk and Lord Jamieson. It is the case that the origin of the consultation of a fuller Court was a contention that one, or perhaps two, Divisional judgments might have to be overruled.

The fact and the feature of the will and codicil set before us for interpretation which has far the largest legal significance is that the testator provided no trust to hold, and not even an executry to suffer "direction" as to executing any intended futurities. The only, but also the clear, gift is by a direct operative "I bequeath all I possess." Hence it is impossible to take refuge in the rare (and perhaps doubtful) expedient adopted in Ainslie v. Ainslie of saying that a nominate executor to whom continuing purposes are expressly consigned may be read as "trustee."

I find this combined testament quite simple. It is written (codicil and all) on continuous papers. It is the work of an unassisted layman. I find that the primary object of the benefaction is undoubtedly and solely his sister Miss Mary Cochrane. To her he "hereby bequeaths"—what? All he possesses. In my opinion, whether as a lay reader, or as a lawyer with considerable experience of wills, that is a gift in fee. I find that in a case of nearly identical terms, Lord President Clyde said this:—

"He then went on:—‘I also leave and bequeath to her the whole of my estate both heritable and moveable …’ I understand that there was no heritable estate other than the properties above mentioned. But, again, nothing could be clearer than this unqualified gift of the testator's entire heritable and moveable estate to the wife."

And Lord Blackburn:—

"I find it impossible to construe the directions in favour of the testator's widow as importing anything except an absolute gift in her favour."

—Ironside's Executor.

I find these emphatic statements chime exactly with the strong impressions of this will on my mind.

Beyond doubt the first question to decide is upon the main proposition of the parties of the third part that all the second party obtained was a liferent; and that, per consequens, the named charities (being the only persons to sustain a fee in sight) took the fee of "all he possessed," either direct or at least in vesting subject to defeasance.

In my opinion, this submission fails out of hand. All the present Court agree, I understand, in negativing liferent and my opinion is among those. So I need add nothing to reasons already rendered. To reduce an open "gift" to a mere liferent requires some words or phrases in the will of the testator not only to imply, but clearly to import, such limitation. Liferent is merely a question of fruits, it leaves the question of the tree that provides the fruit untouched.

Where words of gift are direct, and these is no trust intervening, there can only be question of a direct, full and true liferent, not of that quasi-liferight such as is given by directing trustees vested with the capital to pay income as it accrues. There is either a true liferent, or nothing of a temporary nature.

I find no statable ground for sustaining a concurrent fee, vesting amorte, in certain charities, along with, and qualified by, a liferent proper in Miss Cochrane, as being any part of the intention.

I come to the really sole alternative. That is, of (what was called) a "restricted" or a "limited" fee. Being at any rate a fee, was her right a limited or restricted fee, such that the right or interests of the other nominees became a presently exigible right and title to prevent the second party (a) treating the items of the estate as her own in full fee and dealing as a full proprietor would, during her lifetime; (b) disposing of them in any otherwise competent way, mortis causa, and so defeating any "spes" which these other persons possess?

I give my proposed answer here and now. I reject the various forms in which limited fee was propounded, and that both on construction and on authority.

Apart from the attack on the one case which above I referred to, the argument embarked on a very large review of recent and older authorities, alluding I think to over forty. I confess I found these very little either helpful, or the reverse, towards the idea of a full and unrestricted fee. Hence I may be allowed just to say that the long series of cases from Lassence v. Tierney to Livingston's Trustees, seem to depend entirely on a trust holding, and to vouch this proposition:—Where a trust has also "engrafted trusts," then and only then, upon the failure, in one way or another, of these engrafted trusts, a question of the efficiency of the original (now disburdened) gift may arise. No engrafted trust can be conjured up here. So also, the considerable other body of decisions like Miller's Trustees and Yuill's Trustees afford instances of attempts where trustees, vested with a trust to hold (away from the nominee), sought in guise of obeying "directional" instructions to withhold enjoyment of a full fee initially given through the said trustees.

Thirdly, there was mention of, and aid was begged from, the doctrine of vesting subject to defeasance. In the absence of a full trust to hold, I do not know that such a case can properly arise. At any rate, it is not shown here.

Certain few cases were referred to as supporting a sort of fee which, while enabling full proprietorial rights, yet limited them to such exercise as "consumed" the substance of the components of the estate, or some of them. What of this alternative suggestion? In the first place, it is enough, in my opinion, that I am wholly unable to find in these present direct testamentary expressions any "right" or "power" of consumption (which if it exists at all must be allowed of any item or all items composing (as events shall happen) the components of the estate at the testator's death) leaving the later expressed gift to take effect upon anything "unconsumed." On that ground (a sheer interpretation) alone I should negative the secondary claim of the third and fourth parties.

But this curious idea of a limited fee of this sort as conferred by direct gift is said to be supported by one authority. I think it is only one. And that is Heavyside v. Smith . We are convened here, in large part, to consider whether that case shall be ruled out of the books. I am clearly of opinion with the Lord Justice-Clerk that it should. Firstly, nearly all (judges and text writers) who have considered it have doubted or more than doubted it. In the second place, at least three of the four judges engaged (Lords Ormidale, Hunter and Anderson) would unhesitatingly have decided otherwise on principle, but held that they were unfortunately bound by one certain precedent. I shall shortly consider that conception. But thirdly, I am quite clearly of opinion that Lord Ormidale's judgment as expressed by him is truly a dissent: further, on a mere question of construction I agree with his view as thus expressed:

"I … protest against the view that we are here necessarily deciding any general question. We have … a fee … given to a beneficiary in terms that are not qualified in any way, no trust limitation of any kind being interposed."

After referring to the clause supposed to create the clog and saying:

"an estate of unknown and quite uncertain quantity … which at the death of that beneficiary"

(the fiar) "may be found to be non-existent" he goes on:

"I should prefer to hold that the ultimate provision … is, if not repugnant to the original provision, at any rate void of effect because of the uncertainty of its terms."

That powerful criticism gives exactly the effect which the will of William Smith and this will make on my mind: and I am prepared to cast my vote upon the view that Lord Ormidale should have dissented, and would have been right, if he had dissented. We are empowered to overrule such a decision. And I join my voice to the proposal to do so.

So far, I merely adduce three reasons which powerfully influence me to what will (one imagines) be the agreed result. Unfortunately, and with the utmost respect, there are two farther suggestions with which I am unable, after serious reconsideration, to bring my mind to concur. These concern the case of Denholm's Trustees v. Denholm's Trustees and a certain form of expression used by the late Lord President (Lord Clyde) in Ironside's Executor in 1933.

As to Denholm's Trustees it seems to be suggested that it falls with Heavyside I cannot, I fear, think so. My opinion is already stated that the facts of Heavyside were toto cœlodifferent from the complicated set of mutual and contractual (for it was so held) testaments in Denholm's Trustees;also I feel well founded in saying that the supposed compulsion (against their otherwise judgment) upon these Judges in the year 1928 did not truly exist. Further, on being invited to consider in full the view of Lord Dundas (as Lord Ordinary) and of Lord Stormonth-Darling, both when determining on relevancy (1907) and after proof (1908), one feels that upon that mutual will they are consistent with law and with good construction. Only one single word would I change, where at 1907 S. C. p. 64 Lord Stormonth-Darling says "confirmed" I should prefer to say the reading proposed is "clinched" or "completed" by the contractual element. It is so. I wish to save Denholm's Trustees in the law of Scotland. Many things may be done by express or implied consent and Denholm's Trustees was to me clearly a case of mutual wills between spouses where each contractually renounced the right of testing upon the estate derived by a set of mutual gifts from the other. I think it is hard to put any limit on the surrender of full rights which by contractual deed A may make (expressly, of course, it must be), as consideration for what B gives, derogating from the full rights of fiar; provided that there is any one present with a title and a right to enforce that surrender, it may be that a Court will listen to any artificial building-up of a group of rights, or any contractual destination of some of the rights of fiar in cases of mutual settlements, which they will at least struggle to negative as a straight exercise of the individual testing power.

I wish to add something on the supposed "right to consume." Unfortunately, as I think, it was treated as something precise and definite, and something which had crept into the books as a familiar and now established form of "limited" right. My view is strong that it is not to be so regarded. I quote a couple of sentences from Lord Stormonth-Darling:

"That leaves untouched the question, What was the meaning of the ‘full power to my said husband to consume such parts or portions of the capital during his lifetime as he may find or think necessary’ which Mrs Denholm gave him? It may be that such a power is exceptional, and, if you like, rather anomalous … But it was used by a testatrix who …"

and he brings other circumstances to bear. The debate before us showed in the clearest light the great difficulty (I think a practically insuperable difficulty) in deciding what is "consumption," and how one effects it. My view is with his Lordship's, that the conception is anomalous. I would almost add amorphous. It can only be introduced where (as in Denholm) it (the very word) was explicitly employed to express something. It should never be read into other words by mere implication.

The other qualification which is necessary to secure expression to my true view of the arguments submitted is with regard to Ironside's Executor. I cannot reconcile myself to the suggested view that the dictum (as it was called) of Lord Clyde in that report must suffer adverse comment, or revisal. It is expressly accepted by Lord Sands as the law, however characteristically he may suggest criticism of the complete logic of the law. Further it seems to me not to be obiter, as suggested, but to embody the main ground of decision of the whole First Division. Lords Blackburn and Morison both "concurred," while Lord Morison thought in addition (and correctly) that Heavyside could be distinguished. It was therefore a unanimous grond of judgement.

Nor, lastly, for I must not consume time, can I think Lord Sands and the Lord President erred. They were dealing (as they correctly pointed out) with a direct bequest, they were considering it as possibly establishing a sort of substitution in moveables. There are no doubt such cases, though they be exceptional. But I think, with a fuller reference and citation, it will be found that the true view is that expressed by Lord Fullerton, delivered on a much fuller consideration than we had, in M'Dowall v. M'Gill . The nearest other dictum to the point that I have found is that of Lord Justice-Clerk Moncreiff in Massy v. Scott's Trustees :

"Had the bequest been direct to the legatee in these terms I would have thought that the destination was not effectually protected."

With all respect then, I venture to express a different view of this so called "dictum" and of a decision which I am most unwilling to cut out of our law, as well as upon the suggestion of an expressed overruling of Denholm's Trustees.

Nevertheless, as already said, my decision both on construction and in the matter of answer to the questions is in all other respects that of the other consulted Judges. In my short opinion, on the almost too heavily documented issue, evacuation by the present Miss Cochrane as fiar (as I hold her to be) is competent to her either by any deed or gift or even by "squandering" while she lives, and equally by any testamentary writing affecting "all my movable estate." Like the Lord Justice-Clerk and Lord Jamieson, I hold that the question what will happen if she does not evacuate is not for the present case and situation. To answer it were premature.

LORD PRESIDENT (Normand).—The opinion of the majority of the consulted Judges expresses the views which I had formed on the questions with which it deals, and I agree that, though some other questions figured in the debate, they are not suitable or ripe for decision now. I have therefore little to add. But I may be allowed first to emphasise that in this case we are dealing with the construction of a will disposing of moveables, and that we have designedly not trespassed beyond the bounds of testate succession in moveables.

Counsel for the third and fourth parties argued that it was beyond doubt that the testator intended the second party, Miss Cochrane, to enjoy his estate after his death, and the third and fourth parties, the charities, to enjoy it after Miss Cochrane's death and that we should hold that he intended Miss Cochrane to have a liferent or a liferent with a power to encroach on capital, and the charities to have the fee, because that was the simplest and surest way of giving effect to this intention. But I regard this not as the construction of the will but rather as the making of a will for the testator. For not only is there no word or expression in the will of the sort which testators commonly employ when they intend to give a liferent, but the bequest to Miss Cochrane is in the plainest terms a bequest of the fee.

If then Miss Cochrane is entitled to the fee, there remains one more question which can be answered now—has she at present an unlimited fee, or a fee with limited powers? If the charities are substitutes, Miss Cochrane is at present vested in an unlimited fee, and no one disputes that. But it is said that this is not a case of substitution but a case in which there is a limited fee as in Denholm's Trustees and in Heavyside v. Smith The decision in Denholm's Trustees is not based on the contractual element in the mutual settlement of the spouses but, as is pointed out in the opinion of the majority of the consulted Judges, professes to proceed upon the authority of certain cases (Barr's Trustees, and Corrance's Trustees,) which in fact afford no support for it; in Heavyside v. Smith it was followed with extreme reluctance and even with expressions of distaste; in Ironside's Executor it was sought to justify it on grounds which had been repudiated by anticipation in the leading opinion of the Court which had decided it; it has been subjected to criticism in another and more recent case; and it has been treated as suspect in the textbooks. It is said, however, that it has stood a long time in the books and that its age should save it. If a case, even though it may be thought to have been wrongly decided, has stood long in the books and if it may be supposed to have been used as a guide by conveyancers, that may be a good reason for allowing it to remain undisturbed. But it is scarcely to be believed that any conveyancer has taken the Denholm's mutual settlement as a model style. It is a decision which runs counter to the legal conception of a fee. It is true that there have long been a few well known qualifications of a fee of moveables admitted in our law, but nothing like the kind of qualification first authorised by Denholm's Trustees was ever among them. It is therefore an intruder which has not succeeded in establishing itself. Notwithstanding the fact that so great an authority on this branch of the law as Lord Kyllachy was a party to the decision, I think that the ratio of the decision in Denholm's Trustees should now be pronounced bad in law. Heavyside v. Smith is a decision which must in consequence be treated as no longer authoritative.