Scottish Court of Session Decisions

The parties to this Special Case were (1) David Curror, Solicitor Supreme Courts, judicial factor on the trust-estate of the deceased John Henderson, builder, No. 2 Stafford Street, Edinburgh; (2) Mrs Margaret Henderson or Brown, relict of Robert Brown, architect, Edinburgh; Mrs Catherine Henderson or Nisbet, wife of George Nisbet, farmer, Tranent; and the said George Nisbet, for his own rights and interests; and Mrs Caroline Graham or Henderson, relict of John Henderson, architect, Edinburgh, son of the said deceased John Henderson; (3) Miss Margaret Wilhelmina Nisbet, and Miss Agnes Nisbet, daughters of the said George Nisbet, and grandchildren of the said deceased John Henderson; and (4) Mrs Margaret Brown or Thomas, Mrs Helenore Brown or Macgregor, Miss Louisa Brown, and Miss Mary Catherine Brown, daughters of the said Mrs Margaret Henderson or Brown; and John Henderson and Walter Henderson, sons of the said Mrs Caroline Graham or Henderson, all grandchildren of the said deceased John Henderson.

The said John Henderson died on 11th March 1860, leaving a trust-disposition and settlement, dated 28th May 1857, whereby, after appointing trustees, and directing payment of his debts, and sick-bed and funeral charges, he provided as follows:—“ Second, I direct my said trustees to hold and retain the residue of my whole heritable and moveable, real and personal estate, for the period of ten years from and after my decease, and during that time annually to divide the free income or proceeds arising therefrom into three equal shares, and to pay one of these shares to each of my daughters, Margaret Henderson or Brown, wife of Robert Brown, architect in Edinburgh, and Catherine Henderson or Nisbet, wife of George Nisbet, farmer, Tranent, half-yearly at two terms of the

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year—Martinmas and Whitsunday—in equal portions, commencing at the first term of Whitsunday or Martinmas immediately after my death: and with regard to the remaining third share of said free annual income or proceeds, I direct my said trustees to pay therefrom to Caroline Graham or Henderson, relict of my eldest son John Henderson, architect in Edinburgh, now deceased, a free annuity of £10 sterling, payable half-yearly at two terms of the year—Whitsunday and Martinmas— in equal portions, commencing at the first term of Whitsunday or Martinmas that shall happen immediately after my decease, but so long only as she remains unmarried, declaring that if the said Caroline Graham or Henderson shall enter into a second marriage, said annuity shall cease and determine. And I further direct my said trustees, out of said third share of income, to pay to John Henderson, eldest son of the said Caroline Graham or Henderson, an annuity of £15 sterling, until he attains twenty-one years of age, and to pay to Walter Henderson, younger son of the said Caroline Graham or Henderson, an annuity of £20 sterling until he attains twenty-one years of age; said annuities to my said two grandsons John and Walter Henderson being paid to them half-yearly at the terms of Martinmas and Whitsunday, in equal portions, commencing at the first term of Martinmas or Whitsunday that shall happen immediately after my decease, or, in the option of my said trustees, said annuities to be expended for behoof of the said John and Walter Henderson in such manner as to my said trustees shall seem beneficial and expedient, of which they shall be sole judges; and with regard to the balance or surplus of the said third share of income after satisfying the said annuities to the said Caroline Graham or Henderson and her two children before named, I direct my said trustees to accumulate and invest the same for behoof of the parties who shall at the period of division hereinafter specified become entitled to the fee of the residue of my said estate in virtue of these presents, and if either of my said daughters shall die before the expiry of the said ten years, leaving lawful issue of her body, I direct my said trustees to hold and accumulate the third share of the income of my estates effeiring to such deceased daughter for behoof of her said issue until the said ten years expire, with power to my said trustees to apply the whole or any part of such third share of said income for the maintenance and education of the lawful issue of such of my said daughters as shall decease, in a suitable manner, if my said trustees shall consider it expedient, of which they are to be the sole judges. Third, Upon the expiry of said ten years after my decease, if both or either of my said daughters are then in life, I direct my said trustees to set apart and invest as much of the capital of my said estate as will yield a free annuity of £75 sterling to each of my said daughters during all the days of their lives, payable half-yearly at Martinmas and Whitsunday in equal portions, and as will further yield the foresaid annuity of £10 sterling herein provided to the said Caroline Graham or Henderson during all the days of her lifetime, so long as she remains unmarried: And I appoint the residue of my said estate to be divided amongst the said John and Walter Henderson, being the only children of my said deceased son John Henderson; Robert, Margaret, Christina, Helenore, Louisa, John Henderson, and Mary Catherine Brown, being the seven children presently in life of my said daughter Margaret Henderson or Brown, and Margaret Wilhelmina Nisbet, child of my said daughter Catherine Henderson or Nisbet, and amongst any other children who may hereafter, before the expiry of the said period of ten years after my decease, be procreated of the bodies of my said two daughters Margaret Henderson or Brown and Catherine Henderson or Nisbet, or either of them, or amongst such of my whole grandchildren herein before specially named, or to be procreated as aforesaid, as shall be in life at the expiry of the said period of ten years after my death, and that equally share and share alike, said shares to be immediately paid over to such of my said grandchildren as shall then have attained twenty-one years complete; and the shares of such of them as shall be in minority to be consigned in bank or invested for their behoof until they attain majority; but in the meantime my said trustees may pay to them, or expend for their behoof, the income of the shares of such of said grandchildren until they severally attain twenty-one years: Declaring that in all cases the children or issue of any of my grandchildren deceasing shall take equally share and share alike the portion of said residue of my means and estate which their parent would have taken if in life. Fourth, In the event of my said daughters, or either of them, being in life at the expiry of the said period of ten years after my death, in which case a portion of my said estate is to be set apart and invested in order to yield to each of them the foresaid annuities of £75 sterling as before provided, I hereby direct that upon the death of the survivor of my said daughters, the fee or capital sums set apart for said annuities shall be divided equally amongst my whole grandchildren before specified—that is, the children of my son, the said deceased John Henderson, and of my daughters, the said Margaret Henderson or Brown and Catherine Henderson or Nisbet, who may be then in life, share and share alike, and paid over to such of my said grandchildren as shall have attained majority, and in the event of any of them being then in minority, I appoint their shares to be invested or consigned in bank, until they so arrive at twenty-one years of age, in the same manner as above provided, with reference to the division herein appointed to be made of my said funds and estate upon the expiry of ten years immediately after my death: Declaring that in the event of both of my said daughters being in life at the expiry of the said period of ten years, the sums set apart and invested to meet the annuity of £75 to her who shall thereafter first decease, shall not be divided until her surviving sister also die as above specified, but shall be held, and the interest thereon accumulated, by my said trustees from the date of the death of my said first deceasing daughter, aye and until the said period of division hereby appointed to take place at the death of my surviving daughter: And further, declaring that no right shall be held to have vested in any of my said grandchildren until they are respectively entitled to demand payment of their shares of my means and estate above provided to them.

Thereafter, on 16th February 1869 he executed a codicil, whereby, after making certain alterations in the names of his trustees, he provided as follows:—“In the second place, I hereby provide and declare that when the period of division of my trust-estate specified under the fourth purpose of said trust-deed and settlement shall arrive, my said trustees shall pay over to the child or children

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then in life procreated of the body of my daughter Catherine Henderson or Nisbet, one equal share of the residue of my means and estate, whatever that share may amount to, and that over and above the equal share provided to each of my other grandchildren who may then be in life, all in manner set forth in the said trust-deed and settlement, that is to say, the child or children of the said Catherine Henderson or Nisbet shall respectively receive double the sum as their share and interest in my succession which will be exigible by any individual child procreated of the bodies of my deceased son John Henderson, or of my other daughter Margaret Henderson or Brown: Declaring hereby, that the whole other provisions in my said trust-disposition and settlement, in so far as not inconsistent with this codicil, are hereby confirmed in all respects; and, quoad ultra, I ratify and approve of the said trust-disposition and settlement.”

On 4th May 1860 the said David Curror was appointed judicial factor on the said trust-estate, in consequence of the trustees nominated in the said trust-disposition and codicil declining to act, and he has since proceeded with the discharge of the duties of his office. In terms of the first purpose of the trust he paid the truster's debts, &c., and in terms of the second purpose, he, during the period of ten years from and after the testator's decease, annually dealt with the free income or proceeds of the residue of the trust-estate in manner provided by the second purpose. The said period of ten years having expired on 11th March 1870, it now became the duty of the judicial factor to apportion the said estate in the manner directed by the truster.

The second and fourth parties to this Special Case are the sole surviving grandchildren of the truster. The parties of the fourth part —being the grandchildren other than the two children of Mrs Nisbet —maintained that after sufficient capital had been set aside to pay the annuities provided in the second purpose of the trust, the residue of the trust-estate should be divided into eight equal shares, and paid over as directed in the third purpose thereof.

Mrs Nisbet's two children —the truster's remaining grandchildren —the parties of the third part —contended that the said residue fell to be divided into ten equal shares, and that each of them was entitled to payment of two of said one-tenth shares, and that, as regarded the other grandchildren of the truster, each was entitled to no more than one of the said one-tenth shares; at least, that each of the daughters of the said Mrs Nisbet was entitled to immediate payment of one of said one-tenth shares, and to have another of said one-tenth shares set apart, to the effect that the same might be paid to her at the time fixed by the fourth purpose of the trust for the division of the fee or capital sums therein specified.

The questions for the opinion and judgment of the Court were: —

“(1) Whether, after setting apart and investing as much of the capital of the foresaid trust-estate as is required to be set apart and invested in terms of the third purpose of the foresaid trust, the said judicial factor is, in regard to the remainder of the said trust-estate, bound forthwith to divide the said remainder into eight equal shares, and to make immediate payment of one of said one-eighth shares to each of such of the testator's eight surviving grandchildren foresaid as have attained majority, and to consign in bank or invest for behoof of each grandchild now in minority one of said one-eighth shares until she shall attain majority? or,

(2) Whether the said judicial factor is bound forthwith to divide the said remainder into ten equal shares, and—subject to consignation or investment as aforesaid, in the case of grandchildren still in minority—(1) to make immediate payment of two of said one-tenth shares to each of the said Margaret Wilhelmina Nisbet and Agnes Nisbet, and one of said one-tenth shares to each of the remaining six surviving grandchildren of the said testator; or (2) to make immediate payment of one of said one-tenth shares to each of the eight surviving grandchildren of the testator, and to set apart one of said one-tenth shares for behoof of each of said Margaret Wilhelmina Nisbet and Agnes Nisbet, to the effect that the same may, with the interest which shall have accrued thereon, be paid to her at the period fixed in the fourth purpose of the said trust for the division of ‘the fee or capital sums ’ therein specified?

(3) Whether the amount of capital to be set apart and invested in terms of the third purpose of the trust-deed to yield the free annuities therein specified, is such a sum as, if invested in the purchase of government stocks, public funds, or securities of the United Kingdom, would yield the said free annuities, and the necessary expenses of management? or,

(4) Whether it is such a sum as, if invested on good heritable security, would yield said annuities and expenses on the footing of the average rate of interest being 3 1 2 per cent?“

In the absence of any dispute among the parties, and on the ground that this was a subject for the judicial factor's discretion, the Court refused to entertain any consideration of the third and fourth questions. The argument was therefore confined to the first two.

Black for the judicial factor.

Macdonald, for the parties of the second and fourth parts, contended that the provision in the codicil was not intended to affect the third purpose of the trust-deed, but only to come into operation when the remainder of the estate fell to be divided under the fourth purpose.

Marshall, for the parties of the third part, maintained that the codicil was meant to affect the whole share or interest which any grandchild could take in the succession, and that accordingly the children of Mrs Nisbet were entitled to a preference over the other grandchildren of the truster.

At advising—