Scottish Court of Session Decisions

James Anderson, died upon 27th August 1884, survived by his widow, three sons, and two daughters. All his children were in majority at the time of his death. He left a trust-disposition and settlement dated 12th March 1860, by which he conveyed his whole moveable and heritable estate to trustees, for, inter alia, the following purposes—(1) Payment of debts, (2) Payment

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to his widow of a third of his personal estate within three months of his death and a third of the rents of his heritable estate daring her lifetime. Lastly the truster directed his trustees to “hold the residue and remainder of my said estates, heritable and moveable, real and personal, above conveyed, for behoof of the said James, John, and William Anderson, my sons, and of Mary and Helen Anderson, my daughters, and of any other lawful child or children that may be born to me, equally share and share alike, and pay the same to my said children as they severally attain the age of majority, or if daughters, when married, whichever of these events shall first happen, under the burden of the foresaid provisions to their said mother: But declaring that the interest or annual produce of said shares shall be applied in the maintenance, upbringing, and education of such of my children as shall be in pupillarity or minority at the time of my death, declaring that the shares destined to my daughters shall not be subject and liable to the debts and deeds of any husbands they or either of them marry, nor to the diligence of their husband's creditors, nor be assignable by such husbands, the jus mariti of such husbands being hereby expressly excluded, and in the event of any of my said sons or daughters dying without lawful issue of his, her, or their bodies, before said shares become payable as aforesaid, then and in that case the share or shares of such of them so deceasing shall appertain and accresce to the survivors or survivor of my said children equally as aforesaid, providing and declaring that in case one or more of my said children shall die as aforesaid leaving lawful issue of his, her, or their bodies, then and in that case such issue shall be entitled to the share of my estates which their deceased parent or parents would have been entitled to if alive, equally share and share alike, and the interest of such share or shares shall in such event be applied by my trustees towards the maintenance and education of such issue, and the share itself shall be divisible in equal portions amongst such issue on their respectively attaining the years of majority or marriage, if females, whichever shall first happen.”

There was no direction to sell but the truster granted his trustees “powers of sale for the disposal of my said estates, heritable and moveable, by public roup or private bargain, and of compromise and submission, and in general to do or cause to be done everything necessary for the execution of the trust hereby created.”

At the date of the truster's death his estate consisted of heritage to the value of £6000, and moveables to the value of £228, 12s. 5d.

The truster's widow died on 11th January 1889. One of his children, William Anderson, died intestate at Paisley on 25th April 1891, survived by his widow and a pupil son, his only child and heir, and the issue of a former marriage. With the consent and at the desire of the beneficiaries the trustees had continued to hold the heritable estate and divide the rents and income among them until shortly prior to the raising of this action, when a part of the property was sold.

In August 1894 Mrs Abigail Bell or Anderson, widow and executrix-dative of the deceased William Anderson, brought an action against the surviving trustees under James Anderson's trust-disposition and settlement to have it declared “that the share in the estate of the said deceased James Anderson to which the said deceased William Anderson succeeded in virtue of the said trust-disposition and settlement was moveable quoad his succession, and now belongs to his heirs in mobilibus,” and for payment of the amount of that share which she alleged to be about £1500.

The pursuer pleaded—“((1) The realisation of said heritable estate being indispensable to the execution of the trust created under the terms of the settlement libelled, and the share of each of the beneficiaries therefore being moveable quoad succession, the pursuer is entitled to decree in terms of the declaratory conclusions of the summons. (2) The defenders are bound to hold just and reckoning with the pursuer as the executrix-dative of her late husband William Anderson in respect of the share in his father's estate which vested in him in terms of the said trust-disposition and settlement. (3) In virtue of her right of jus relictœ, the pursuer is entitled to one-third of said estate which vested in her said husband, and is thus in her own right entitled to decree of count, reckoning, and payment as concluded for.”

The defender pleaded—“(1) No title to sue. (3) On a sound construction of the trust-deed libelled the share of the late William Anderson in his father's trust-estate is heritable, and the defenders should accordingly be assoilzied from the declaratory conclusion of the summons. (4) The defenders, the trustees of the late James Anderson, not being bound to account to the pursuer, the defenders are entitled to decree of absolvitor, with expenses.”

Upon 22nd December 1894 the Lord Ordinary ( Kyllachy) sustained the first, third, and fourth pleas-in-law for the defenders, and assoilzied them from the conclusions of the action.

“ Opinion.—In this case I may perhaps communicate to the parties the grounds of my judgment at greater length, but in the meantime I do not go into detail.

My view is that there was here no conversion. There was no direction to sell. There was merely a power of sale, and I am unable to hold that a sale of the heritage was indispensable to the execution of the trust. It might have been indispensable if the truster had died, and the trust had come into operation while his children were under age, and when, therefore, there might have been various periods of payment as in the recent case of Playfair's Trustees. But in the events which here happened, the whole children were of age when the truster died. There was, therefore, only one period of division, and that being so, it is not suggested that there was

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any difficulty in making the division in forma specifica. I therefore accept Mr Constable's argument, distinguishing this case from the case of Playfair's Trustees; and that I apprehend involves that I assoilzie the defenders from the conclusions of the summons.”

The pursuer reclaimed, and argued—In all cases such as this it was necessary to take the intention of the testator as expressed in his deed as to whether there was to be conversion of the moveable estate or not. In this case the truster had expressed his intention by giving the directions to his trustees to pay the residue of his estate to his children, share and share alike, and by giving them power to sell the heritage. To operate conversion it was not necessary that there should be an express direction to sell the heritable estate— Advocate-General v. Blackburn's Trustees, November 27, 1847, 10 D. 166. The heritable property held by the trustees consisted of urban tenements, and it was therefore practically necessary for the execution of the directions given them to sell the heritage— Fotheringham's Trustees, &c., July 2, 1873, 11 Macph. 848; Baird, &c. v. Watson, December 8, 1880, 8 R. 233. If the principle of Buchanan v. Angus, May 15, 1862, 4 Macph. 374, were to be followed, the estate would have to be divided, not according to the intention of the truster, but according to circumstances supervening after his death. The fact that the trustees had held the heritable property for some time after the period of possible payment had arrived did not change the character of the estate when the division was actually made— Broivn's Trustees v. Brown, December 4, 1890, 18 R. 185. The case of Sheppard's Trustees v. Sheppard, July 2, 1885, 12 R. 1193, did not alter the practice of the Court if conversion could be implied from the terms of the deed. The cases of Playfair's Trustees v. Playfair, June 1, 1894, 21 R. 836; Seton's Trustees v. Seton, July 2, 1886, 13 R. 1047, were very special in their terms, and the directions to the trustees were not the same as in this case.

The respondents argued—It was admitted that up to the death of the pursuer's husband there was no change in the quality of the estate, and all the beneficiaries were willing that the estate should remain heritable, and that was an important fact, because even if it could be held that the testator had intended conversion, the actings of the beneficiaries had operated reconversion— Hogg v. Hamilton, June 7, 1877, 4 R. 845. The word “pay” upon which the pursuer had founded as showing that the truster intended conversion of his heritable estate into money did not convey that meaning as interpreted by the decisions— Hogg v. Hamilton, supra, per Lord President, 4 R. 848. The intention of the testator as to conversion was to be judged, not at the date of his signing the settlement, but at the date when it came into operation. In the case of Playfair's Trustees, supra, there was a necessity to convert the heritage into money, because there were varying periods of payment, but in this case all the beneficiaries were in majority, and capable of receiving their share of the heritage when it came to be divided, so that no conversion could be implied from the difficulty of managing the estate, as it could have been conveyed to the beneficaries pro indiviso— Duncan's Trustees v. Thomas, March 16, 1882, 9 R. 731; Stuart v. Jackson, November 15, 1889, 17 R. 85. It appeared therefore that conversion was not necessary for the execution of the trust, and in the circumstances it was plain that the rule of the case of Sheppard's Trustees v. Sheppard, cited supra, was applicable, and that conversion had not taken place— cp. also Auld v. Anderson, December 8, 1876, 4 R, 211; Aitken v. Munro, July 5, 1883, 10 R. 1097. The case of Brown's Trustees was a very special one.

At advising—

Lord Justice-Clerk—The testator by his trust-disposition and settlement left his whole property to trustees, and gave directions that the widow was to receive one-third of his moveable estate, and that the trustees were to hold the residue of the estate for behoof of his children, share and share alike, and to pay each child's share to him when he attained the age of twenty-one, or in the case of a daughter, when she should be married. In the deed a power of sale was given to the trustees, but that power was limited to the case of it being found necessary for the execution of the trust. The circumstances here are that the testator was survived by all his children, five in number, and that they were all major at his death. The question is, one of the childen having died before any division of the property was made, whether his share of the succession, as regards the heritage left by the testator, is to be held as being heritable or moveable in its nature. It was conceded that there were certain provisions in this deed which from their very nature were inoperative at the testator's death, and must be excluded from our consideration.

I think it has been conclusively decided by the case of Sheppard's Trustee v. Sheppard that in such circumstances as we have here the estate must be held to be heritable. The only result of the decision is that the estate will not be paid in money, but will be conveyed to the beneficiaries pro indiviso, and I see nothing unreasonable in that result. Indeed the estate has remained unsold for many years with the concurrence of the beneficiaries, thus indicating that such was the best form in which it could be held in their interests. I am of opinion that the Lord Ordinary was right in the result he arrived at, and that his interlocutor should be affirmed.