Scottish Court of Session Decisions

This was an action of declarator at the instance of John Fleming and James Brown Fleming, writers in Glasgow, William Malcolm's assignees, and William Quilter, the trustee upon the estates for liquidation by arrangement of Malcolms & Company, &c., and on the separate estates of William Malcolm and Samuel Smythe Malcolm, against William Thomas Fraser, late of Skipness, in the county of Argyle, Miss Eliza Fraser, Mrs Mary Fraser or Nichol, and James Thomas Nichol, as also against Peter M'Lagan of Pumpherston, M.P., and others, trustees under a deed of arrangement and settlement, dated 3d January 1842, between the deceased William Fraser the younger, of Liverpool, the said Miss Eliza Fraser, the said Mary Fraser (afterwards Nichol), William Fraser of Hillside, in the shire of Fife, of the first, second, third, and fourth parts, and William Fraser of Hillside and others of the fifth part.

By his last will and testament, dated September 1, 1834, Thomas Fraser, therein designed of the county of Inverness, but late of Demerara, and then of Lodge Lane, England, who died on 4th August 1835, bequeathed to his four natural children William, Thomas, Eliza (a defender), and Mary, now Mrs Nichol (a defender), £100 a-year each, and he declared that in case of the death of any one of them the £100 should be annually paid to his or her lawful child or children until the youngest child should attain the age of twenty-one years, when the capital sum of £3000 should be paid to such a child or children, excluding any further claim whatever on his estate; but that such of them as might die without legitimate issue such share of £100 was to revert to the survivors of his children, and to be equally divided among them in addition to the above legacies; and the will finally contained the following provision:—“After all my just debts are paid, I give and bequeath all the rest of my property, and everything I am possessed of whatever, to my brother William Fraser of Plantation Helena, Demerara.”

Thomas, the second of the testator's children, died intestate and unmarried on 11th June 1839. On 3d January 1842 a deed of arrangement and settlement was entered into between the three surviving children of the testator, of the first, second, and third parts; William Fraser of Hillside, Fife, of the fourth part; and William Fraser of Hillside, and others, of the fifth part. It proceeded on the narrative that Thomas Fraser by his last will and testament had made the already-mentioned bequest in favour of his four children; that Thomas Fraser (the younger) had died on 11th June 1839, intestate and without ever having been married; and that William Fraser the younger, Eliza Fraser, and Mary Fraser had then respectively attained the age of twenty-one years, and that William Fraser the younger was then living unmarried and in a state of unsound mind; and that doubts had arisen as to the construction of the above-recited bequests, and otherwise in reference to the same will and to the claims of William Fraser the younger, Eliza Fraser, and Mary Fraser, and their issue respectively, upon the estate of the testator; and that in order to avoid litigation and expense it was agreed by and between the various parties already named that William Fraser of Hillside should appropriate the bequests of the will, and for that purpose should invest £12,000 in the names of himself and of Richard Mackenzie and others, the trustees of the deed of arrangement, on Government or real securities, to be holden by the trustees for the trust purposes, and subject to the provisions concerning the same in and by the deed of arrangement; and that £12,000 had accordingly been charged by William Fraser on his estate of Hillside, by way of mortgage, to the trustees already named, at 4 per cent. per annum, until Whitsunday 1855, when by the terms of the mortgage the £12,000 would become payable to the trustees; the three surviving children drawing in the meantime the additional income thus created above the £400 specified in the will, but with and under the declarations and conditions specified therein; and that it had been determined that the trusts of the £12,000 should be declared in manner and to the effect thereinafter appearing, and that it had been agreed that William Fraser the younger should be named a party to the deed in order to the execution thereof by him if he should become competent in that behalf, and that the same should be absolutely binding on the several other persons, parties thereto, and their respective heirs, executors, administrators, and assigns, notwithstanding William Fraser the younger might never execute the same. The deed of arrangement (although the subscribing parties to it were resident in Scotland, and although tested according to the law of Scotland), was in the English form. The trust purposes were that the trustees should pay and divide the whole yearly income of the trust money equally among William Fraser the younger, Eliza Fraser, and Mary Fraser, during their respective natural lives, and after their deaths, for such trust and purposes as according to the true construction, intent, and meaning of the will would then satisfy the bequests of the £100 and £3000 respectively therein contained, and so that until the time of the decease of the survivor of the three children the whole yearly income arising from the £12,000, notwithstanding it might exceed £400, should be applicable in equal fourth parts in the same manner in which the several annual sums of £100 each would have been applicable.

Subsequently certain new trustees were by various deeds of assumption and assignation assumed, including Mr M'Lagan, M.P., and others.

By testamentary settlement, dated May 7, 1849, William Fraser of Hillside, then of Skipness, gave, bequeathed, disponed, and assigned to his eldest son, the defender William Thomas Fraser, and the heirs whomsoever of his body, his whole heritable and moveable property, subject to certain bequests and legacies therein mentioned, and appointed William Thomas Fraser his sole executor.

William Thomas Fraser's estates were subsequently sequestrated, and the pursuers of this action brought it upon the footing that they were vested in his rights by a series of assignations and transmissions which it is unnecessary to specify.

William Fraser the younger died insane and

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unmarried in 1877. Eliza Fraser and Mary Fraser or Nichol were born in 1813 and 1815 respectively. The former never married; the latter had an only child James Thomas Nichol, who was at the date of the summons in his twenty-sixth year.

The summons concluded for declarator “that the sole right and title to and beneficial interest in the fee of three sums of £3000 each, amounting together to the sum of £9000, being portions of the sum of £12,000 held by the defenders as trustees aforesaid, invested under the said deed of arrangement and settlement to meet annuities of £100 sterling to each of the now deceased William Fraser, the now deceased Thomas Fraser, and the said Eliza Fraser, bequeathed to them by the last will and testament of the late Thomas Fraser, their father, on or about the 1st day of September 1834, have vested in the defender William Thomas Fraser; or otherwise that as regards the £3000 applicable to the annuity of the defender Eliza Fraser, that she has never been married, and is now past the years of childbearing, and that the fee of the said sum of £3000 has vested in the defender the said William Thomas Fraser, or at least that upon decree to the above effect being obtained, the fee of the last-mentioned sum of £3000 shall vest in him; and further that Mrs Mary Fraser or Nichol is now past the age of child-bearing, and that in the event of the defender James Thomas Nichol predeceasing the defender Mrs Mary Fraser or Nichol his mother, William Thomas Fraser will become entitled to and have vested in him the sole right to and beneficial interest in the fee of a farther sum of £3000, being the remainder of the sum of £12,000, and further that the pursuers, as assignees and in right of William Thomas Fraser, have now right to the extent of an equal half each to all the right, title, and interest which William Thomas Fraser had, has, or may have in the fee of the four sums of £3000 each; and further, and in any view that the pursuers have full right to sell and dispose of, assign, and convey all William Thomas Fraser's reversionary right and interest in the fee of the four sums of £3000 each; but under reservation always to the defender William Thomas Fraser of all right competent to him in the balance, if any, of the price or prices that may be obtained therefor after deducting the sum of £2400 with interest thereon at the rate of 10 per centum per annum from 14th February 1877.” &c. It was averred by the pursuers that William Thomas Fraser, as his father's universal legatee, became absolutely entitled to his residuary property, including his right and interest in the £12,000.

The pursuers' averments as to the vesting of the fund were as follows:—The fee of one of the sums of £3000 vested in the late William Fraser of Hillside upon the death of Thomas Fraser the younger in 1839. Further, upon the death in 1877 of William Fraser the younger, the fee of another £3000 vested in William Quilter as trustee, and is now vested in the pursuers. Further, as Eliza Fraser has never been married, and is now past the years of child-bearing, the fee of another £3000 has vested in the pursuers, or at least they are entitled to have it found and declared that she has never been married and is now past the years of child-bearing, and that upon their obtaining decree to that effect the fee of the last-mentioned sum of £3000 shall vest in them. Further, they are entitled to obtain decree finding and declaring that in the event of James Thomas Nichol predeceasing his mother without leaving lawful issue, Mrs Nichol being now past the years of child-bearing, the fee of the fourth and last £3000 will, on the death of the longest liver of the sisters, vest in the pursuers; and further, in the event of James Thomas Nichol predeceasing his mother and leaving lawful issue, the fee of the £3000 will, notwithstanding, vest in the pursuers.

No defences were lodged for Miss Fraser or for Mrs Nichol or her son. The trustees alone appeared to defend.

They averred that no such declarator as was asked could be obtained during the lives of the annuitants, and that even if the Court were disposed to entertain the action for this purpose, the right of the pursuers was by no means clear, and that the defenders would not be in safety to recognise the pursuers' claim unless it were established in an action to which all parties having adverse interests were called. They further averred that the next-of-kin of the testator should have been cited, as they under one interpretation of the will must be held to have a reversionary interest in the estate.

It appeared that in a multiplepoinding raised in 1871 by Mr Dalgety, the trustee upon William Thomas Fraser's sequestrated estate, against the creditors of William Thomas Fraser, an interlocutor was pronounced by Lord Rutherfurd Clark, Ordinary, on 29th January 1878, ordaining the sale of the reversionary interests of Mr Fraser in this £12,000, pursuant to an order, dated 13th July 1877, pronounced by the Master of the Rolls giving authority for such sale.

The pursuers pleaded—“(1) Upon a sound construction of the last will and settlement of the testator Thomas Fraser, of the deed of arrangement and settlement of 1842, and of the testamentary settlement of the late William Fraser libelled, the right to the fee of two of the sums of £3000 in question has become vested in the pursuers. (2) In respect that the defender Eliza Fraser has never been married, and is past the years of child-bearing, the fee of another of the said sums of £3000 has vested in the pursuers, or at least will so vest upon their obtaining decree declaring that she has never been married and has passed the said age. (3) The pursuers are entitled to have it found and declared that upon a sound construction of the said last will and settlement they will be entitled to the fee of the fourth and last sum of £3000 in the event of the defender James Thomas Nichol predeceasing his mother, and that whether he shall leave issue or not.”

The defenders pleaded—“(1) The action should be sisted until all necessary parties have been called. (2) In respect there is at present no distributable fund, and that the foresaid capital sum will not vest in any one until the death of the survivor of Thomas Fraser's children, the pursuers are not entitled to decree of declarator as craved. (3) Assuming that the action is competently brought while the two annuitants are in life, then, on a sound construction of Thomas Fraser's will, Mr William Fraser was only constituted general legatee of the testator's estate other than the said fund of £11,951, 3s. 10d. (4) On a sound construction of the said settlement, the gift there made to the children in liferent

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and to their respective issue in fee imported a fee in the liferenters. (5) Mr William Fraser having died before the capital sum can in any view be held to have vested, his right lapsed, and he had not the capacity to transmit any right to the fund in question to his son as testamentary representative. (6) In respect that the interest of Mr William T. Fraser, as well as his father's interest, is contingent, it did not vest in him, and did not pass to his trustee in bankruptcy, and the pursuers have therefore no title or interest in the fund in dispute.”

The Lord Ordinary ( Rutherfurd Clark) pronounced the following interlocutor:—

“ Edinburgh, 31 st October 1878.—The Lord Ordinary … repels the first six pleas-in-law for the defenders Peter M'Lagan and others, the trustees under the deed of arrangement and settlement dated 3d January 1842: Finds and declares (1) that the sole right and title to and beneficial interest in the fee or reversion of two sums of £3000 or thereby, each being portions of the sum of £12,000 or thereby held by the defenders the said Peter M'Lagan and others, as trustees foresaid, to meet the annuities of £100 sterling bequeathed to each of the now deceased William Fraser and Thomas Fraser by the last will and testament of the late Thomas Fraser their father, formerly of the county of Inverness, afterwards of Demerara, and thereafter of Lodge Lane, England, dated on or about the 1st of September 1834, has vested in the defender William Thomas Fraser; (2) Finds and declares that the fee or reversion of the £3000 or thereby held by the said trustees to meet the annuity of the defender Eliza Fraser will, in the event of her decease without leaving a lawful child or children or the lawful issue of such surviving her at the date of her death, belong to the defender William Thomas Fraser; and (3) on the motion of the pursuers, continues the cause as regards the sum of £3000 held by the said trustees to meet the annuity bequeathed by the said Thomas Fraser to Mrs Mary Fraser or Nichol; (4) Finds and declares that the pursuers James Brown Fleming and John Fleming, on behalf of Montgomerie and Fleming as assignees and executors, creditors of the late William Malcolm and William Quilter as trustee, as mentioned in the summons, are at liberty and have full right and title to sell and dispose of, assign, and convey all and whole the said William Thomas Fraser's reversionary right and interest in the fee of the said first-mentioned three sums of £3000 each or thereby as assignees, and in right of the said William Thomas Fraser, and have, subject to the reservation after mentioned, now right to the extent of an equal half each to all the right, title, and interest which the said William Thomas Fraser had, has, or may have in the fee of the said three sums of £3000 each or thereby, but under reservation always to the defender the said William Thomas Fraser, or others in his right, of all right competent to them or any of them in and to the balance, if any, of the price or prices that may be obtained therefor after deducting the sum of £2400, with interest thereon at the rate of 10 per centum per annum from 14th February 1877, and the said William Quilter's foresaid costs of his relative application to the Master of the Rolls to be taxed by the Taxing Master of the Court of Chancery in London, as between solicitor and client, and the expenses of process to follow hereon, and of and incident to the sale of the said reversionary interests, but under the declaration that the purchaser or purchasers from them of the said reversionary interests shall have no concern with the application of the said price or prices thereof, but shall be fully exonered and discharged of the same by the simple receipt thereof by the pursuers, and decerns: Finds the defenders entitled to expenses hitherto incurred by them out of the trust funds as the same shall be taxed by the Auditor.

“ Note.—The pursuers have been found by decree of the Court of Chancery to be in right of the estate of William Thomas Fraser, and have brought this action in order to clear their title to certain immediate or reversionary interests which he is said to possess under the will of his uncle Thomas Fraser, dated 1st September 1834.

By that will Thomas Fraser bequeathed an annuity of £100 to each of his four illegitimate children, William, Thomas, Eliza, and Mary Fraser, and £3000 to the children or issue of each of them. The annuity of any deceaser passes to the survivors; but there is no similar provision as regards the capital.

The residue of the estate was bequeathed to the testator's brother William Fraser, and his interests were transmitted to his son William Thomas Fraser.

In 1842 an agreement was entered into by which four sums of £3000 each were settled in trust to secure the interests conferred by Thomas Fraser on his children and their issue. The trustees acting under this trust are the only parties who have made appearance.

The first question which was raised by the defenders was that all parties interested had not been called, and they specified first the next-of-kin of Thomas Fraser, the testator; and second, Mr A. J. Russell, W. S., in whom they say that the reversionary interest of William Thomas Fraser is vested. With respect to the latter point, it seems sufficient to say that the Court of Chancery has already held that the pursuers are in right of that interest.

As regards the first point, the Lord Ordinary is of opinion that it is not necessary to call the next-of-kin of the testator. He bequeathed his residue to his brother, and any lapsed legacy would of necessity fall into residue.

By the death of William and Thomas Fraser, the sons of the testator, without issue, two legacies of £3000 have lapsed and have fallen into residue. It follows that if Eliza Fraser shall die without issue, the legacy of £3000 bequeathed to her children will share the same fate.

It was argued by the defenders that the children of Thomas Fraser took a, right of fee in the sum of £3000 each. In the opinion of the Lord Ordinary there is nothing to support that view.

They further maintained that the action was premature, inasmuch as there was no fund available for immediate distribution. But the pursuers are entitled, and indeed bound, to realise the estate of William Thomas Fraser, and it appears to the Lord Ordinary that they are entitled to ascertain their interest in the two sums of £3000 each bequeathed to the children of William and Thomas Fraser, which are only subject to the annuities granted to their surviving sisters. He also thinks

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that he may in the circumstances give a conditional decree applicable to the £3000 bequeathed to the children of Eliza Fraser. But he is not disposed to deal with the remaining £3000. For not only is Mary Fraser (now Mrs Nicol) alive, but she has a son. The pursuer did not press the point.”

The defenders, the trustees, reclaimed.

At advising—