Scottish Court of Session Decisions

By trust-disposition and settlement, dated 2Gth December 1851, Peter Denny, merchant, Dumbarton, disponed his whole estate, heritable and moveable, to trustees for certain purposes. The purposes of the trust were, inter alia, as follows—“Second, I direct my said trustees to hold the free residue of my said means and estate in trust for and on behalf of the said Elizabeth Denny and James Denny, both lawful children of my brother David Denny, now deceased, in equal proportions, in liferent for their liferent alimentary use allenarly, and for their respective lawful issue, equally among them, share and share alike, in fee & declaring that in the event of either of the said Elizabeth Denny or James Denny deceasing without leaving lawful issue, the survivor of them shall be entitled to his or her liferent alimentary use for liferent allenarly of the whole of said residue: Third, At the first of said terms that shall occur after the death of the said Elizabeth Denny and James Denny respectively, said trustees or trustee shall pay and divide the fee of the portion of the residue that may have been so liferented, to and among the lawful issue, if any, of the deceaser, equally among them, share and share alike; whom failing, the same shall be paid (but subject always to the liferent foresaid) to the lawful children, equally among them, of the survivor; whom failing, to and among my own lawful heirs whomsoever.”

Peter Denny, the truster, died on 19th February 1856, leaving both heritable and moveable property of considerable value, and was survived by James Denny and Elizabeth Denny, the two liferenters under the settlement. After the trustees death the free income of the whole estate was paid to the two liferenters during their joint lives, and after James Denny's death, in 1858, to Elizabeth Denny, till her death on 4th January 1872.

In October 1872 Peter Denny's trustees raised a process of multiplepoinding and exoneration for the distribution of his estate, and called as defenders his heir-at-law and next-of-kin and their whole representatives, who were the truster's lawful heirs in mobilibus. By an interlocutor, dated 18th July 1874, the Lord Ordinary ( Young) found the parties therein named entitled to participate in it in the proportions therein mentioned. One finding was—“Finds that, according to said destination, the truster's moveable estate pertains to the representatives of Elizabeth Denny and James Denny, his niece and nephew, the life-renters under said settlement, the said Elizabeth Denny and James Denny having been the truster's next-of-kin, and the lawful heirs in mobilibus at the date of his death.” A reclaiming note, which was presented by one of the parties, was of consent refused by the Second Division of the Court, and the Lord Ordinary thereafter approved of a scheme of division of the moveable estate among the parties preferred by his first interlocutor, and granted warrant for payment in their favour.

This was an action of reduction of these interlocutors, at the instance of Mrs Isabella Boyd, the cousin and sole residuary legatee of Elizabeth Denny under her trust-disposition and settlement, dated 16th June 1864, against Peter Denny's trustees and the parties found entitled to participate in his estate as above narrated. Neither she nor the trustee and executor of Elizabeth Denny had been called as defenders in the multiplepoinding, and no intimation was made to her. She stated that she did not know of the existence of the action until some time after the decrees were pronounced, and that she believed the Court was not made aware that Elizabeth Denny had left a settlement.

She further averred—“The said estate of the said deceased Peter Denny vested, under the said settlement of the said Peter Denny, in the lawful heirs of the testator ab intestato as at the date of his death. At that date the said James Denny was his heir in heritage, and the said Miss Elizabeth Denny his heir in moveables. The said James Denny died unmarried and intestate,

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* Decided January 19, 1877

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as above set forth, and the said Elizabeth Denny was his nearest of kin. The whole moveable estate of the said Peter Denny fell and belonged to the said Elizabeth Denny at the date of her death, and was carried by her said settlement.

It was pleaded inter alia for the pursuer—“(2) The interlocutors sought to be reduced having been pronounced in the absence of the pursuer, and in a process to which she was not called as party, she is entitled to decree of reduction of the same in so far as they are prejudicial to her interests. (3) The whole moveable estate left by Mr Peter Denny having, according to the true construction of his settlement, vested at his death in his niece Miss Elizabeth Denny, and having belonged to her at the time of her death, was carried by her trust-settlement, and the pursuer has now right thereto as residuary legatee under that settlement. (4) Assuming that the whole of the said moveable estate did not vest in Elizabeth Denny alone at the testator's death, it vested equally in her and her brother James Denny, and upon the death of the said James Denny his share vested in the said Elizabeth Denny as his sole next-of-kin, and the whole was carried by her said trust-disposition and settlement.”

The question raised in the case, and the argument of the parties, appear fully from the opinions delivered by the Lord Ordinary in the case. The first of these was dated 19th January 1876.

“ Note.—The case is so novel and important that I venture to request the assistance of further argument before coming to any decision upon it. For this purpose, I shall state the questions which the case seems to me to present, and the prima facie impressions and difficulties which I at present entertain regarding them.

The estate, heritable and moveable, of Peter Denny, who died in 1856, was distributed by this Court among the parties found to have right thereto under his trust settlement, as construed by the Court in the process of multiplepoinding instituted by his trustees, and referred to in the present record. The purpose of this action is to reduce the interlocutors by which that distribution was effected; to declare that the pursuer is entitled to the whole moveable estate of the truster; and to ordain the trustees to account and pay to her accordingly.

The pursuer was not called, and did not appear, in the multiplepoinding; and if she shall instruct that she was excusably ignorant of it and of her alleged right, I assume that, in some form of action or proceeding (and it is undesireable to raise any question of mere form), she is entitled to an opportunity of trying her right, and, if she shall establish it, to such remedy as may be practicable with reference to what may have already been duly, orderly, and in good faith done in the multiplepoinding in pursuance of the interlocutors pronounced therein, and taking care that others are not unduly prejudiced by the tardiness of her appearance, even though that may not be imputable to any blame on her part.

The truster's directions to his trustees were to hold the estate for his nephew and niece (James and Elizabeth Denny), and the survivor in life-rent, and their issue in fee. They both survived the truster, and thereafter died without issue, James in 1858 and Elizabeth in 1872. The direction of the settlement applicable to that event is, to pay and divide the estate ‘to and among my own lawful heirs whomsoever.’

At the truster's death, James and Elizabeth (the liferenters) were his next-of-kin. At the death of Elizabeth (the survivor of the two) in 1872, the defenders were (it may be assumed provisionally) the truster's next-of-kin, and, as such, the persons who then answered the description of his heirs whomsoever, the competition being limited to the personal estate. The pursuer (it may be assumed also provisionally) is Elizabeth Denny's residuary legatee, and as such in right of any personal estate or right which was vested in her at the time of her death and passed by her will.

The competition is thus between the defenders as Peter Denny's heirs whomsoever in mobilibus in 1872, when Elizabeth died, and when the event occurred in which he directed his estate to be paid to his ‘own lawful heirs whomsoever, ’ and the pursuer as Elizabeth Denny's residuary legatee, and as such entitled to whatever had vested in her in her lifetime as the heir ab intestato of her uncle or brother, or in any other manner. On this record she claims, not on the footing that the uncle died intestate-though that may be hereafter open to her-but that the effect of his settlement was to vest his personal estate in Elizabeth, through whom she claims, or one moiety in her and the other in James, to whom she succeeded ab intestato on his death in 1858. The defenders, on the other band, maintain that there was no intestacy on the part of Peter Denny, and that the property must pass according to the direction of the settlement, which, being contingent, conferred no vested right transmissible by will or ab intestato till the contingency happened on Elizabeth's death in 1872.

The first question to be settled is-Did Peter Denny, with reference to the event that happened, viz., the death of both liferenters without issue, die testate or intestate with respect to his move-able property?

The objection to intestacy of course is, that the settlement contains an express direction with reference to that event. Is this well answered by observing that the direction being to pay to his lawful heirs, imports no more than the law would have implied without it, and so leaves the case as one of virtual intestacy? If the term ‘lawful heirs, ’ as used in the direction, imports lawful heirs ab intestato and none others, the answer is probably good; otherwise I should think it is bad.

The following points appear to be settled by authority-1st, That a will whereby intestacy will be prevented and the heirs ab intestato disappointed in a specified event of uncertain occurrence, does not suspend vesting in the heirs ab intestato Lord v. Colvin, December 7, 1860, 23 D. 111, and July 15, 1865, 3 Macph. 1083. Aright by intestacy is thus pointedly distinguished from a right by bequest, or provisione hominis, and on grounds which are quite intelligible. Under a contingent bequest no right vests whilet he contingency is uncertain, but a similar uncertainty regarding intestacy, on which the right of the heir ab intestato necessarily depends, for its worth at least, does not suspend the vesting of the right or hinder its transmission to his representative, legal or voluntary, subject to the risk of the right proving worthless in the result. 2d, It appears to be settled by the cases of Maxwell v. Wyllie, May 25, 1837,

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15 S. 1005, and Balderston v. Fulton, Jan. 23, 1857, 19 D. 293, that a bequest or direction in favour of the testator's own heirs, provided there is no contingency, is to be construed in favour of his heirs ab intestato, and vests a morte testatoris, notwithstanding that the term appointed for payment is the death of some or all of such heirs. By heirs ab intestato, I mean, of course, the heirs as ascertained by law at the party's death, that being the only period to which the law of intestate succession looks. It would, however, be an error to suppose that a man has no other lawful heirs. However long a person may be dead, so long as there are kindred of his on the earth, he is represented in right of blood by those who are esteemed his heirs, and who, should occasion arise, may take benefit as such accordingly—not by intestate succession to him, but as answering the description occurring in a destination or bequest. In such cases-and they are familiar in practice-those who answer the description at the time the succession opens or the benefit vests are preferred, and are not excluded by the deeds or wills of those who would have answered it at a former period, and through whom they derive the blood in right of which alone they take.

The proposition on which Lord Neaves founds his judgment in the case of Balderston v. Fulton ( 19 D. 295, Lord Ordinary's note) is therefore generally true, although the Court held that it did not affect the decision in that case, where the party who successfully claimed the fee undoubtedly answered the description at the time of vesting, and was not, as the Court held, excluded by implied intention. But between that case and the present there is this distinction, that there the direction of the will, although originally contingent, had become absolute by the occurrence of the contingency in the lifetime of the heir who was preferred, whereas here the contingency remained in suspense while the pursuer's author lived. The distinction is material to the question when the succession opened or vested, which may be found the most important question in the case. A fee given by will or other settlement in immediate sequence to a liferent vests a morte testatoris, while it is otherwise if given on condition that the liferenter shall die without issue, for although the death of the liferenter is a certainty, his death without issue is a contingency. It had been settled long before the cases of Maxwell v. Wyllie and Balderston v. Fulton that the gift of a fee vests a morte testatoris notwithstanding the existence of an antecedent life-rent, which must determine before the gift can be satisfied, and these cases only applied the established rule notwithstanding the circumstance that the liferenter was one of the class to whom the fee was given, which the Court held did not imply an intention to exclude him from the benefit of the gift to which, but for that circumstance, he was clearly entitled.

But the rule itself is different in the case of a contingent gift. For, as I have observed, a fee given contingently in case the liferenter shall die without issue does not vest a morte testatoris if the liferenter survive, or so long as he survives; and, on the assumption of testacy, the question here seems to be, how this rule, and not the other, operates in the circumstances? If it shall be held that the succession did not open, in the sense of the gift vesting, till the death of the liferenter, it would seem to follow that they shall take who then answer the description by which the objects of it are specified or designed. It would be already so, in principle, and according to the authorities, in the case of such a contingent gift by a stranger to the heirs of another. If the case of a contingent gift by a man to his own heirs is to be differently dealt with, it must be on some principle which has not yet been argued or stated to me, or on some authority which has not yet been cited. The two cases chiefly relied on by the pursuer (viz., Maxwell v. Wyllie and Balderston v. Fulton), if I rightly apprehend them, give no direct countenance to such a distinction. These must, I think, have been decided as they were, and on the same grounds, although the testators in both had been strangers to the objects of their bounty. The question in both was whether the liferenter was by implied will excluded from participating in the gift of the fee? and this question, which the Court decided in the negative, would, so far as I can see, have been the same, had the testator been a stranger. Negativing this question, the Court simply applied the rule of vesting, established as applicable to every case of a fee given absolutely and unconditionally, to take effect on the termination of a liferent or on the purification of a contingency.

If the direction immediately in question be construed as contingent, to the effect of operating in favour of those who should answer the description of the giver's heirs when the contingency happened, there is of course no room for the argument of virtual intestacy.

It is impossible to overlook the circumstance that the language of the interlocutor of 18th July 1874 is favourable to the pursuer's argument, and at variance with that now maintained by the defenders, for the parties thereby preferred are so as the representatives of Elizabeth and James Denny, who were ‘the truster's next-of-kin and the lawful heirs in mobilibus at the date of his death.’ If this be the true ground of preference, the argument seems irresistible, that it must have been allowed, in ignorance of the fact that Elizabeth Denny, who survived James for fourteen years, and as his representative took whatever was capable of transmission on intestacy from him, left a will which excluded her legal representatives in favour of the pursuer.

But if the pursuer is to take no prejudice from that interlocutor, neither, on the other hand, can she take any benefit, and it will only be common justice to the defenders to allow them to revise and remodel their pleadings in the competition with reference to the case which she now presents. A reduction of the interlocutor in the multiplepoinding would necessarily have the effect of completely reviving it as a process of distribution and exoneration. Upon what terms it may be revised, and the pleadings in the competition remodelled, is for consideration, and I must invite the attention of the parties to the matter as practically important. For my own part, I have to say that my judgment, which I delivered with the grounds of it fully stated, was only intended to decide that for the purposes of the question of conversion the case was virtually undistinguishable from intestacy. As to the propinquity and ranking of the several claimants, the parties were agreed, except only as regards the relationship of a Mrs Croall, which was argued after I

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had delivered judgment on the question of conversion. The circumstances of that dispute have escaped my memory. But I need not further dwell on the terms of the interlocutor of 18th July, from which the pursuer can clearly take no benefit.”