Scottish Court of Session Decisions

William Chalmers, residing in Aberdeen, and Jane Cruickshanks or Chalmers, his wife, executed a mutual last will and settlement on August 16, 1872. Mrs Chalmers survived her husband, who died on October 27, 1872, and in virtue of a power conferred on the survivor under the said mutual deed executed a codicil dated 11th June 1874. Part of the estate conveyed under the said mutual deed and codicil consisted of two policies of insurance, each for £300, which were effected by the said William Chalmers “for his own behoof and for behoof of Mrs Jane Cruickshanks or Chalmers, his spouse,” on the life of their son William Leslie Chalmers, one of the second parties. These policies were payable to the trusters or to the survivor of them, their, his, or her executors or assignees. Mrs Chalmers after her husband's death regularly paid the premiums. She died on 4th August 1879, and after her death the premiums were paid by the trustees out of the trust-funds.

William Leslie Chalmers, one of the sons of the trusters, repudiated the provisions in his favour under the mutual deed and codicil, and claimed legitim, which was duly paid to him, he, under certain reservations, granting in return a formal discharge of all claims competent to him against the estates of the trusters or under the mutual deed and codicil. He specially reserved any claim which was competent to him to a share of the value of the said policies as forming part of the legitim fund, maintaining that the actuarial value of these policies as at the date of his father's death formed part of the free moveable estate of his father the said William Chalmers, and became subject to the claim of legitim.

By the said mutual settlement the estate of the spouses had been divided into twelve shares, which were allocated among the children and

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grandchildren of the trusters. The seventh purpose provided one of these shares “to and for the use of the said William Chalmers Best, our grandson, payable on his attaining the age of twenty-one years, the annual proceeds of said share being till that period applied for his education and maintenance: And we declare and direct that in case any of our children before named, or the said William Chalmers Best, should die previous to payment of the foresaid provisions in their favour without leaving lawful issue, then subject to the liferents before expressed, the share of such deceasing legatee shall be divided among and paid to our other children and the said William Chalmers Best, or their lawful issue per stirpes, share and share alike.” William Chalmers Best attained the age of twenty-one years, but died on August 22, 1879, eighteen days after his grandmother, the survivor of the two spouses by whom the mutual disposition was granted, leaving a will in favour of a brother and sister. No apportionment, payment, or transfer of any part of the estate was made to him.

The following questions were submitted for the judgment of the Court:—“1. Did the actuarial value of the said policies of insurance as at the death of the said William Chalmers form part of the free moveable estate left by him, and become subject to the claim of legitim? …. 5. Did the share of the trust-estate bequeathed to the deceased William Chalmers Best vest in him prior to his death?”

The parties submitting these questions were—First, The trustees appointed by the spouses; second, William Leslie Chalmers and his children; third and fifth, other children of the spouses, or representatives of children; and fourth, the brother and sister of the deceased William Best, who took under his will.

Argued for the first and fourth parties—These policies were in favour of William Chalmers and Mrs Chalmers, and were payable to the spouses or the survivor, their executors or assignees. They were a gift to or provision for Mrs Chalmers; she was vested in them, and their actuarial value was never in bonis of Mr Chalmers, and should not form any part of this fund. The time of payment was the falling-in of the policies; that time has not yet arrived, and the money is not at present available; therefore there can be no vesting until the arrival of the period of payment and the emergencies of the claim. The testator fixed no time for the vesting of the universitas of his estate. William Chalmers Best's share is to be payable on his attaining twenty-one years and his surviving the testators. In Ferrier's case, as here, there is a direction given as to when a special provision is to vest, quite apart from the rest of the estate. Executors being allowed a certain time in which to pay does not prevent vesting; there may be vesting though the money is not paid. The words “previous to payment” in the seventh purpose of the trust-deed must be read as equivalent to previous to the time of payment arising—this alone prevents hostility between the clauses— Pringle's Trustees, March 15, 1872, 10 Macph. 621; Muirhead v. Muirhead's Factor, December 6, 1867, 6 Macph. 95; Smith v. Kerr, June 5, 1869, 7 Macph. 863; Wight v. Brown, January 27, 1849, 11 D. 459; Sloane v. Finlayson, May 20, 1876, 3 R. 678.

Argued for the second, third, and fifth parties—Question 1 is ruled by the case of Pringle's Trs. At the death of William Chalmers the survivor had virtually a gift of the whole estate. These policies of insurance, therefore, were in no different position from the rest of the moveable estate of the predeceasing truster. Under question 5 no vesting took place, because no payment had been made. The sum could not be demanded until the debts and other prior claims had been paid. The test of vesting here was, Could William Chalmers Best have demanded payment before his death? It was maintained he could not— Howat's Trustees v. Howat, Dec. 17, 1869, 8 Macph. 337; Thorburn v. Thorburn, Feb. 16, 1836, 14 S. 485; Ferrier v. Ferriers, May 18, 1872, 10 Macph. 711.