Scottish Court of Session Decisions

Dr Hutton of Calderbank died in the year 1837, leaving a widow but no children. By his trust-disposition and settlement he directed his trustees to pay an annuity to his widow, and also an annuity to each of his two sisters Catherine and Ann Hutton. He farther directed payment of two specific legacies, after which he appointed his trustees, “ after the payment of the foresaid annuities to the said Mrs Ann Eliza Youlle or Hutton, and my sisters before named, to accumulate whatever balance or surplus may remain of the annual produce or proceeds of my estate into a capital or principal sum, to be divided with the residue of my estate, among the parties after named, after the decease of my said wife and sisters, and the survivor of them; upon the occurrence of which event, but not till then, I appoint my said trustees or trustee to collect, realise, and convert into money my whole outstanding means and estate of every description hereby conveyed or accumulated by them, my lands and others before mentioned excepted, and to distribute and divide the prices and proceeds of the same to and among the parties after named, in the following shares and proportions, viz., to each of the foresaid Major James Watkins and John Watkins, two-eighth parts or shares of the said residue and reversion of my means and estate; to each of my nieces, Mary Ann Watkins or Wilson, spouse of the foresaid James Wilson, sheriff-clerk of the county of Edinburgh, Christian Watkins, wife of William Watkins, son of Watkins of Shotton, in the county of Salop, and Jean Watkins or Howison, wife of the foresaid James Howison, residing at or near Douglas, one-eighth part or share of the residue or reversion of my said means and estate, and to my grand-niece Mary Ann Watkins, daughter of my nephew the late Hutton Watkins, sometime in the service of the Honourable the East India Company, another one-eighth part or share of the residue or reversion of my said means and estate: Declaring always, as it is hereby specially provided and declared, that in the event of any of the parties before named, who shall be entitled to a share of the residue or reversion of my estate, predeceasing the period when the same shall be made, but leaving issue of his or her body lawfully procreated, such issue shall be entitled to the portion or share which their father or mother would have been entitled to had he or she been alive; and the share accruing to such issue, in the event of there being more than one child left, shall be divisible equally among them share and share alike, it being my desire that the residue of my means and estate provided to the parties before named, or their heirs, be payable or divisible among them per stirpes and not per capita; and which said division of my means and estate I direct and appoint my said trustees or trustee to make accordingly, so soon as can be done by them conveniently after the decease of the whole of my said wife and sisters before named.”

Ann Hutton died in 1851; Catherine Hutton in 1857, and the widow, the last liferentrix, in 1864.

Christian Watkins, one of the residuary legatees, died in 1852 intestate and leaving no issue, and a question now arose as to the share of residue which was destined to her nominatim, and which formed the fund in medio in the present action.

The trustee under the mutual settlement of Catherine and Ann Hutton claimed the whole of the

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fund, in medio, on the footing that by the predecease of the legatee the share destined to her fell to be treated as intestate succession, and went to Catherine and Ann Hutton as the next of kin of the testator at the time of his death.

Mrs Howison and Mrs Wilson, grand-nieces of the testator, and two of the next of kin of Christian Watkins, did not oppose the claim of the Misses Huttons' trustee, being beneficiaries under the mutual settlement of these ladies, and taking more benefit by the trustee being successful than in any other way; but alternatively, they claimed each one-fourth, on the footing that the share vested in Christian Watkins.

Colonel Watkins and John Watkin's trustees, stated alternative claims, their principal claim being on the footing of the share having vested, as in that case they would take benefit under an agreement between them and Christian Watkins.

Mrs Kyley claimed one-tenth, on the footing that the share was intestate succession, falling to the next of kin of the testator, as at the date of the death of the last liferenter.

The Lord Ordinary (Ormidale) sustained the claim of Misses Huttons' trustee, adding this note:—The only question discussed before the Lord Ordinary was—Whether the fund in medio, being an eighth share of the residue of the estate of Mr Hutton, vested a morte testatoris or not till the period of division and distribution of that residue? In finding that the fund in medio did not vest till the latter period, the Lord Ordinary has been regulated by what he thinks must be held to have been the intention of the testator, as manifested by his deed of settlement, according to its true construction.

The last purpose of the testator's settlement is that which requires to be chiefly considered. The testator there directs his trustees, after payment of certain annuities to his wife and sisters, to accumulate the surplus, and divide it, as well as the whole residue of his estate, amongst various persons, according to certain shares; one-eighth share whereof, being the fund in medio, he destined in the first instance, to Mrs Christian Watkins. Not only does the testator direct that the whole surplus of his estate, after satisfying the annuitants, should be accumulated and converted into a capital sum, to be, along with the rest of his estate, divided ‘ after the decease of my said wife and sisters, and the survivor of them; ’ but he specially declares that, in the event of any of the parties before named, who shall be entitled to a share of the residue or reversion of my said estate predeceasing,—not the testator, but ‘ the period when the same shall be made,’ that is, according to the Lord Ordinary's reading, not his own death, but the period when the residue or reversion is made up or ascertained so as to be capable of division,—‘ leaving issue of his or her body lawfully procreated, such issue shall be entitled to the portion or share which their father or mother would have been entitled to had he or she been alive.’ There is thus a substitution or destination over, and otherwise such an indication of the testator's intention that, in accordance therewith, the Lord Ordinary thinks that he has had no alternative but to find that the share in question did not vest till the period of division and distribution. Although the terms of the settlement in the case of Young v. Robertson were somewhat different from those of the settlement in the present case, the Lord Ordinary thinks that the conclusion he has arrived at here is supported by the reasoning which appears to have influenced the Court of last resort in that case, as reported in 4 M'Queen p. 314. And he is also of opinion that the case of Laing v. Barclay, 20th July 1865, 3 M'P. 1143, which was cited to him at the debate, is a precedent to some extent in point.

“ If the Lord Ordinary is right so far, and as Mrs Christian Watkins left no issue, it follows that the eighth share of the residue in question destined for her, and which is now the fund in medio in this process, falls to be treated as a lapsed legacy, and as such devolves on the next of kin or representatives of the testator, not as at the period of division and distribution of his estate, as was contended for by some of the competing claimants, but as at the time of his death— Lord v. Colvin and Others, 15th July 1865, 3 M'P. 1883.”

Colonel Watkins and John Watkin's Trustees reclaimed.

Maclean (Clark with him) for John Watkin's Trustees.

Solicitor-General (Millar) and R. V. Campbell for Hutton's Trustee, respondent.

Spittal for Mrs Howison and Mr Wilson.

At advising—