Scottish Court of Session Decisions

This action was raised by Mary M'Elmail against Robert Stark Lundie and others, the surviving and acting trustees under the trust-disposition and settlement of John Lundie senior, pawnbroker in Glasgow, and against John Lundie junior. The pursuer sought to have it found and declared that by dissolution of the marriage between her and the defender John Lundie junior by decree of divorce in respect of his adultery she became entitled to her legal provisions of terce and jus relictæ out of the estate then belonging to him, and that his estate included his share in the trust-estate of his father John Lundie senior.

The pursuer was married to the defender John Lundie junior on 10th February 1870, and on 22d February 1887 she obtained decree of divorce against him on account of his adultery.

John Lundie senior died in July 1869. By his trust-disposition and settlement, dated 23d and recorded 30th July 1869, he conveyed his whole means and estate to Robert Stark Lundie, his son, and certain other trustees, chiefly for the following purposes—(1) Payment to his widow of an annuity of £60, to meet which a capital sum was to be set apart. Upon her death this sum was to be “divided into six equal shares or portions, and my said trustees shall pay over one share thereof to my son the said Robert Stark Lundie, and one share thereof to my son James Buchanan Lundie; and my said trustees shall hold one share thereof in trust for the use and behoof of my son John Lundie junior, and shall retain the same, or such part thereof as they may think proper, in their own hands, for such period after the death of my said spouse as they may deem expedient, and they shall pay the said share to him by such instalments, or in such portions, and at such times, as they may think fit; but so long as the said share, or any part thereof, shall not be paid over to my said son, my trustees shall pay to him the interest or annual produce of such share, or part thereof, so remaining unpaid up, and that half-yearly by equal portions, at the terms of Martinmas and Whitsunday in each year, aye and until the said share be wholly paid over to him and discharged.” The other three shares the trustees were directed to hold in trust for the testator's three daughters in liferent, and their children in fee, and upon the death of each of his daughters who should leave lawful issue, they were directed “to pay over to such issue equally amongst them, if more than one, share and share alike, the fee and capital of the said share liferented by their parent.” (2) He directed his trustees to apportion and divide the whole residue of his estate, after payment of expenses, into six equal shares, and to deal with them in the same manner as he had directed with respect to the payment of the capital sum payable upon the death of the widow. It was further provided—“Declaring that the foresaid provisions to my said three sons, and to the issue of my said three

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daughters, shall not become vested interests in them until the respective terms of payment thereof, and accordingly upon the death of any of my said sons or daughters without leaving lawful issue the said provisions of such of them so dying without leaving lawful issue shall accresce and be paid to and divided equally amongst my surviving sons in fee, and my surviving daughters in liferent, aad their issue respectively in fee.”

On the death of the testator his widow claimed her legal rights out of his estate, and the claim was admitted and settled by the trustees, and one of the daughters claimed her legal right of legitim, and was also settled with. In these circumstances John Lundie junior became entitled to compensation out of the funds thereby set free, and the whole interest of his father's estate, as at the date of the testator's death, amounted to upwards of £6000. The trustees paid over to John Lundie junior the income of his share, and also paid to him in instalments about £2000 of the capital sum, but still retained in their hands at the time of the decree of divorce about £4700.

The trustees declared themselves willing to pay over the half of the income of this sum to the pursuer, but refused to let her participate in the capital.

The defender John Lundie junior averred his willingness to pay to her year by year one-half of his income, “not being able to obtain funds from the said trustees to settle with the pursuer.”

The pursuer pleaded, inter alia—“(1) The pursuer having become entitled, on the dissolution of her marriage with the defender John Lundie in respect of the latter's adultery, to terce and jus relictæ out of his estate, including his interest in his said father's estate, is entitled to declarator as craved. (2) The share or shares of the defender John Lundie in the trust-estate held by the other defenders under the provisions of the trust-deed, and also in respect of the funds set free by legal claims as aforesaid, being vested in him at the date of dissolution of his said marriage, are subject to the legal rights of the pursuer as if the said marriage had been then dissolved by his death.

The defenders the late John Lundie's trustees pleaded—“(3) The share of the defender John Lundie in the trust-estate administered by the present defenders not having vested, they are entitled to absolvitor. (4) The pursuer having no higher right than the defender John Lundie in the trust-estate administered by the present defenders, they ought to be assoilzied. (5) The present defenders being bound to exercise the discretion conferred on them by the settlement, and having resolved to retain the balance of capital of the other defender's share, are entitled to absolvitor from the conclusions for count, reckoning, and payment.” The defender John Lundie pleaded—“(2) The defender not having been able to obtain money from his father's trustees to settle with the pursuer, but having offered to account to her for one-half of his income, and one-half of the value of said furniture, and to allow her to retain the said sum of £500, should be assoilzied, with expenses, from the conclusions of the summons, in so far as directed against him.”

The Lord Ordinary ( Kinnear) pronounced the following interlocutor:—“Finds and declares in terms of the declaratory conclusions of the summons, and appoints the defenders, Lundie's trustees, to lodge an account showing the amount in their hands of the defender John Lundie's share of the trust-estate of the deceased John Lundie, and that quam primum, &c.

Opinion.—I do not understand it to be disputed that on the divorce of a husband for adultery the wife has right to her legal or conventional provisions in the same manner as if the husband had died. It follows that the pursuer is entitled to claim her share of the defender's moveable estate in name of jus relictæ. The only question is, whether the defender John Lundie's share of his father's estate, in the hands of the other defenders, his father's trustees, is vested in him so as to form part of his moveable estate.

It is maintained that nothing vests in him under his father's will except such portions of his share as the trustees may from time to time think fit to pay to him in the exercise of their discretion.

I do not think this a sound construction. The trustees are directed to divide the estate on the death of the widow, and to hold one share ‘for the use and behoof’ of John Lundie from the period of division. They are to retain John Lundie's share for such time as they may deem expedient, and to pay it by such instalments as they may think fit. But the interest of the portion retained by the trustees is to be paid to him ‘until the said share shall be wholly paid over to him and discharged.’ Sooner or later, therefore, the whole is to be paid to him and to him alone. There is no destination-over with regard to any part, and in the event of his death before the whole had been paid, the unpaid portion must go to his representatives. No one could take it except through him. It is true that it is declared that the provisions to the testator's sons and daughters shall not become vested interests in them until the respective terms of payment. But that must in my opinion be referred to the term of payment fixed by the testator himself. The trustees are empowered to pay to John Lundie at the same time as to the other sons. They are also authorised for his benefit to retain his share, or a part of it, and pay it by instalments. But that cannot be construed into a power to withhold it absolutely from him and his representatives. It is unnecessary to consider whether the discretion of the trustees could be effectually exercised against creditors during the lifetime of the beneficiary. It is certain that if the right has vested it can be of no effect against his representatives after his death, and the pursuer is placed by the divorce in precisely the same position as if she were a widow claiming jus relictæ on the death of her husband. The principle laid down in Beattie v. Johnston, 5 Macph. 340, and in the later case of Harvie, appears to me to be directly applicable.”

The defenders, the trustees, reclaimed, and argued—The pursuer could not claim as jus relictæ any part of the share held for John Lundie under the terms of his father's settlement. By the terms of the deed vesting was postponed till “the respective terms of payment.” These were in the discretion of the trustees as regarded John Lundie, and thus the share held for him only vested by instalments as paid. The trustees were directed to “hold” the share, and

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therefore there was no force in an argument based on the appropriation of the shares. By an exercise of their discretion they could make him a liferenter. The widow was in no better position than a creditor who had attached a share. Yet the latter as an assignee of John Lundie could no more than John Lundie himself enforce payment against the trustees. Even if there had been vesting it was of such a qualified type, that no payment could follow upon it. Smith v. Chambers was a fortiori of the present, because there a power to retain was superinduced upon a general vesting; here the power to retain came first— Smith v. Chambers' Trustees, November 9, 1877, 5 R. 98, H. of L. April 15, 1878, 5 R. 151; Smith's Trustees v. Smith July 11, 1883, 10 R. 1144.

The pursuer argued—But for the clause postponing vesting till the respective terms of payment, there could have been no question that John Lundie's share had vested. That direction was satisfied without referring it to the payment of the instalments of John Lundie's share. The different terms of payment in the deed were—(1) the death of the widow; (2) the realising of the estate (3) the respective dates of the daughters' deaths. There was no distinction between the share of John Lundie and his brothers, save the discretion in the trustees to hold for his behoof. The very fact that it was set apart to be held for him implied vesting. The direction to pay was as strong as to hold, and the trustees might have paid at once. Their power to hold threw no doubt on the amount of the share. It was not a familiar idea that a share should vest by instalments. The Court also had always been anxious to avoid leaving to trustees a discretion as to the term of payment. Smith v. Chambers differed toto cælo from the present case, in respect that the deed there empowered the trustees to cut down the fee. Any discretion to withhold was personal to John Lundie, and as he was now to be looked upon as dead so far as the pursuer was concerned, it must have ceased— Leighton v. Leighton, March 8, 1867, 5 Macph 561; Hunter's Trustees v Hunter, February 9, 1888, 15 R. 399; Ferrier v. Ferriers, May 18, 1872, 10 Macph. 711.; Sutherland's Trustees v. Clarkson, October 29, 1874, 2 R. 46; Scott, &c. v. Scott's Executrix, January 27, 1877, 4 R. 384.

At advising—