Scottish Court of Session Decisions

Mr John Denniston died on 27th April 1833 leaving a trust-disposition and settlement dated 9th March 1829. By this settlement he conveyed his whole estate, heritable and moveable, to trustees for these among other purposes—First, for payment of debts, sickbed and funeral expenses, and the expenses of the trust; second, for conveyance of a certain landed estate to his eldest son, in consideration of which £700 was to be deducted from his share of the residue of the testator's estate. In the third place, he directed that his trustees should,“as soon as practicable, make a division of my whole remaining means and estate, heritable and moveable, equally, and share and share alike, among the said John Denniston, my eldest son (deducting always, however, from his share the said sum of £700 sterling), James Denniston, Hugh Denniston, Archibald Denniston, and Thomas Denniston, my other sons; Janet Denniston, Elizabeth Denniston, and Jean Denniston, my daughters, but in the event of the death of any of my said children without leaving lawful issue, it is hereby provided and declared that the deceaser's share of my said means and estate shall be equally divided among my surviving children, and applied and secured as immediately to be provided for: And it is hereby further provided and declared that the share coming to either of my said sons shall not be paid to them until it appears to a majority of my said trustees to be prudent

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and advisable to pay the same to enable them to enter into business, or until they arrive at majority, and until either of these occur, the share coming to each son shall be laid out in undoubted personal or real security, and the interest or annual rent arising therefrom applied to their maintenance, education, and clothing: And it is also hereby expressly provided and declared, and I direct and appoint my said trustees to lend out on unquestionable real security the share coming to each of my said daughters, and to take the bonds or securities to be granted therefor in such a way as that the interest or annual rent of such share shall be paid to them during all the days of their lifetime, and the principal sum or share itself after their death to be paid or divided equally, and share alike, among the deceaser's lawful issue, and failing issue equally among my own children surviving at the time; and I expressly appoint and direct that the security shall be taken in terms so as to exclude the jus mariti and right of administration of any husband or husbands they may marry, and that the liferent of my said daughters shall not be affectable by their debts or deeds, nor the same liable to any claim of their husbands, and that the receipts and discharges granted by my daughters alone shall be perfectly sufficient to the receivers: And I hereby further direct that if any of my children express a willingness or desire to have part of my heritage (saving always the lands of Killochries, which are to be conveyed as before provided for), my said trustees shall cause the same to be valued by two competent judges, one to be appointed by themselves, and one appointed on the other side, and the value thereof shall form a charge against the share of such child, and be deducted therefrom, and if the value exceeds the said share it shall be paid so soon as it is ascertained, and the conveyance to such heritage, if to any of my daughters, shall be taken in liferent and fee, and exclusive of the husband's jus mariti, as before specially appointed and directed.”

One of the testator's daughters, Janet, married the Rev. Dr Cunningham in 1834. The contract of marriage entered into between them contained a declaration that if there were more than one child of the marriage it should be in Dr Cunningham's power, and failing him in the power of his widow, to apportion among the children the provisions in their favour therein contained.

Under a deed of trust dated 3rd, 5th, and 6th January 1859, a sum of £6500 was placed in the hands of certain trustees for behoof of Dr and Mrs Cunningham in liferent, and their children in fee, “in such shares and under such conditions and interests as shall be appointed by the said William Cunningham in any writings under his hand, and failing such appointment, for the said children in equal shares.”

Dr Cunningham died on 14th December 1861 leaving a trust disposition and settlement dated 13th December 1861, by which he disponed to certain trustees his whole means and estate. The trust purposes were “First, For payment of debts; second, for payment of the whole annual proceeds of the estate to Mrs Janet Denniston or Cunningham, his widow, now deceased. The third purpose of the trust is as follows—‘Third, After the death of the said Janet Denniston or Cunningham, in case she shall survive me, or after my death in case I shall survive her, and in exercise of the powers and faculties given to me, and contained in contract of marriage betwixt the said Janet Denniston or Cunningham and me, dated the 14th day of July 1834, and in deed of trust by the said Thomas Guthrie and others in favour of the said Thomas Guthrie and others, for behoof of me and my wife and children, dated the 3rd, 5th, and 6th days of January 1859, and of all rights competent to me in any other way, I hereby direct and appoint my said trustees, and the trustees in whom the charge of any other estate or estates to which my children may have right, to co-operate with my said trustees, and to give effect to the apportionment or division of my said estate, and such other estate, in manner hereinafter expressed, videlicet—In the first place, for payment of the sum of £1000 at the first term of Whitsunday or Martinmas after the death of the survivor of us to each of my said children who shall then be married, with the interest thereof from the date of the death of the said survivor, and thereafter at the term of Whitsunday and Martinmas, payable half-yearly, during non-payment: In the second place, for setting apart at the said term, with the like interest, a like sum of £1000 sterling for each of my other children then surviving; and in the third place, for setting apart and paying the annual proceeds of the residue or residues for the liferent use of my unmarried daughters or daughter; and in the event of all my surviving daughters being married, the whole residue or residues shall be divisible betwixt my surviving children: Declaring that the issue of any of my children who shall have married shall have the same right therein, or in any provisions herein contained which may lapse, as his or her parent would have had if he or she had survived; and it is hereby expressly provided and declared that the portion or portions to which my children or any of them may have right of the estate of their grandfather the deceased John Denniston, merchant, Greenock, shall be imputed and reckoned throughout the whole of the foresaid divisions or apportionments, so that no one shall be preferred before another, except as before provided. Providing also that no principal sum payable or divisible in virtue hereof shall vest or be payable in virtue hereof to any of my sons until he arrive at the age of twenty-five years complete, or if a daughter, unless she has arrived at that age, or been married, whichever of these events shall first happen.’”

Mrs Cunningham died on 2nd March 1888. Dr and Mrs Cunningham had eleven children, viz. (1) Janet, born on the 6th June 1835, married on 11th June 1856 George Carphin, banker, Dunkeld, who predeceased

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her. (2) Helen, born on 14th April 1837, married on 14th October 1862 Robert Mackenzie, merchant, Dundee, was predeceased by her husband, and died on 15th November 1865 leaving two children. (3) William, born 15th September 1839, died 16th October 1843. (4) Jane Fairrie, born 4th May 1841. (5) John Denniston, born 11th December 1842, died unmarried and intestate on 20th August 1871. (6) Charles Gordon, born 9th July 1845. (7) Andrew Blackadder, born 1st August 1846, died 14th September 1852. (8) William Robertson, born 9th September 1848, died 18th June 1849. (9) Archibald, born 26th December 1849. (10) Elizabeth, born 3rd April 1851, died 6th September 1852. (11) And Mary Anne, born 7th January 1853.

Certain questions having arisen among the beneficiaries under the deeds above mentioned, this case was presented for the purpose of obtaining the opinion of the Court, inter alia, upon the following questions—“Did right to a share of the fee of their grandfather the said John Denniston's estate vest in the children of Mrs Cunningham, who predeceased her; and if so, did the same pass to their heirs in heritage or in moveables? If not, is the seventh party entitled to £1000 under it, in addition to the amount payable to him out of his grandfather the said John Denniston's estate?”

The net amounts of the various funds to which the case had reference were admitted approximately to be—“1. Marriage-contract fund, £1560; 2. deed of trust fund, £6500; 3. Dr Cunningham's own estate, £500; 4. the Denniston fund, £3150.”

The following were the parties to the case—1. The testamentary trustees of Dr Cunningham; 2. the testamentary trustees of Mr Denniston; 3. the marriage-contract trustees of Dr and Mrs Cunningham; 4. the trustees under the deed of trust; 5. (a) Mrs Janet Cunningham or Carphin, ( b) the children of the deceased Mrs Helen Cunningham or Mackenzie, (c) the marriage-contract trustees of Mr and Mrs Mackenzie; 6. Jane Fairrie Cunningham and Mary Anne Cunningham; 7. Charles Gordon Cunningham; 8. Archibald Cunningham; 9. the executors of Mrs Janet Denniston or Cunningham.

In regard to the first of these questions, the fifth parties maintained that Mrs Cunningham had only a liferent in the capital sum which John Denniston's trustees were directed to invest for her and her issue; that each of her children acquired a vested right at birth to a share of said capital sum, and that the shares of children who died before Mrs Cunningham intestate and without issue fell to be equally divided among their next-of-kin, viz., the brothers and sisters who were in existence at their deaths, the issue of Mrs Mackenzie coming in right of her for her share. The sixth parties maintained that the share of Mr Denniston's estate liferented by his daughter Mrs Cunningham did not vest until her death, and that no share of the said estate vestep in the predeceasing children of Mrs Cunningham. They admitted that the issue of Mrs Mackenzie took their mother's share in their own right under the conditio si sine liberis. On the other hand, the seventh party maintained that a share of the said estate vested in Mrs Cunningham's deceased children, and that the same being heritable quoad succession, the result was that the seventh party was entitled to three-elevenths of the share of the Denniston estate which was liferented by Mrs Cunningham. The ninth parties also maintained that if a share of the said estate vested in John Denniston Cunningham, then by virtue of the Move-able Succession Act 1855 one-third thereof passed to his mother, the said Mrs Cunningham, and was now payable to them as her executors.

In regard to the third question, the seventh party also maintained that he was entitled to his share of his grandfather's estate, and in addition thereto, to the sum of £1000 bequeathed to him under the second purpose of his father's trust-disposition and settlement. He further maintained that, in any event, the clause of his father's settlement quoted in this article did not apply to the snares of the Denniston estate to which he was entitled as heir of deceased children. On the other hand, the fifth and sixth parties maintained that the seventh party's right under his father's settlement was restricted to payment of such a sum out of his father's estate, and the estates over which he had a power of apportionment, as might be necessary, along with the share of his grandfather's estate to which he was entitled, to secure him in payment of a sum of £1000, under deduction of the advances he had already received, and the fifth parties maintained that a share of Dr Cunningham's estate equal to what the seventh party was entitled to fell to each of (1) Mrs Carphin, (2) the other parties of the fifth part, and in any event, that the said clause above quoted in this article applied only to the Portion or portions to which Mrs Cunningham's children might have right directly and immediately under John Denniston's settlement, and not to what they might succeed to as next-of-kin of children dying intestate and without issue.

Argued for the sixth, eighth, and ninth parties—1. On question of vesting—There was no vesting of the fee of the share destined by Mr Denniston to Mrs Cunningham in liferent and her children in fee till the death of the liferentrix. That was the period of distribution, and the intention of the deed was to postpone vesting till then. Prior to that event there was a fiduciary fee in Mrs Cunningham or the trustees— Young v. Robertson, February 14, 1862, 4 Macq. 314; Marshall v. King, October 30, 1888, 16 R. 40. “Failing issue” meant “failing there being issue,” and the failure was referred to the date of the death of the liferentrix. With one exception—the case of Carleton v. Thomson—the cases in which such words had been under the consideration of the Court had been cases of marriage-contracts, such as Byers v. The construction to be put on such words in mariage-contracts was different fromr that to be put upon them in testaments. In Carleton v. Thomson the words of the

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destination differed from those used in the present case. 2. On the question of heritable and moveable—Assuming that there was vesting a morte, the shares were moveable estate, and passed to the heirs in moveables of the children of Mrs Cunningham who had predeceased her and died intestate. There was certainly no doubt that this was the case with regard to John Denniston, who died in 1871, under section 117 of the Lands Clauses Consolidation (Scotland) Act 1868 (31 and 32 Vict. cap. 101). With regard to the shares of children who had died before that Act came into operation, the direction to invest in real security did not operate conversion of moveable into heritable estate, as the direction was given merely for the purposes of trust administration. The words “pay over” were clearly applicable to moveable estate only, and the direction to divide equally among the issue could only be carried out if the shares were moveable estate. In the view of the testator these shares were to be moveable estate— Nairn's Trustees v. Melville, November 10, 1877, 5 R. 128; Duncan's Trustees v. Munro, March 18, 1882, 9 R. 731; Aitken, &c. v. Munro, &c., July 6, 1883, 10 R. 1097; Sheppard's Trustee v. Sheppard, July 2, 1885, 12 R. 1193; M'Laren on Wills, i. 215. 3. On the question of election — Dr Cunningham clearly intended that, taking the shares of Mr Denniston's estate and his own together, his children's shares should be equal. If they elected to take under his will they were bound to submit to the condition imposed. The doctrine of approbate and reprobate distinctly applied— Bonholes v. Mitchell's Trustees, May 27, 1885, 12 R. 984; Ker v. Wauchope, 1819, 1 Bligh, 1, opinion per Lord Chancellor, pp. 21–23.

Argued for the fifth parties—1. There was vesting in Mr Denniston's grandchildren as they came into existence. “Failing issue” was equivalent to “failing there having been issue,” just as “without issue” had been held to be “without having had issue” — Carleton v. Thomson, February 11, 1865, 3 Macph. 514, and July 30, 1867, 5 Macph. (H. of L.) 151; Byers, 10 R. 1034. There was here an absolute conveyance at the outset to the children, and the fact that there was no clause of survivorship distinguished the case from Young v. Robertson, and Marshall v. King. 2. On the question of heritable and moveable—These parties adopted the argument submitted for the sixth, eighth, and ninth parties.

Argued for the seventh party—1. On the question of vesting—This party adopted the argument submitted for the fifth party. 2. The shares destined by Mr Denniston were rendered heritable by the distinct direction of the testator to lend them out on real security. It was intended by the testator that the securities should be taken in names of his daughters and their children—Bell's Prin. 1492; Dick v. Gillies, July 4, 1828, 6 S. 1065; Romanes v. Riddell, January 13, 1805, 3 Macph. 348. The words “pay over” were merely equivalent to “transfer.”

At advising—