Scottish Court of Session Decisions

James Dalrymple of Langlee, Roxburgh, died in 1877, leaving a trust-disposition and settlement dated 27th October 1875, whereby he directed that the residue and remainder of his estates, heritable and moveable, should be divided between his daughter Miss Lavinia Georgina Dalrymple, and his grandson Arthur Dalrymple Forbes Gordon, the estate of Wester Langlee being included in his daughter's share. In regard to Wester Langlee the trustees were directed to hold it for behoof of Miss Dalrymple in liferent for her liferent use allenarly and for her issue in fee. In the event of her dying without issue, the estate of Wester Langlee and any other portions of residue undivided, were to fall to the grandson, and were to be held for him by the trustees in the same way as was directed with regard to his own share, which the trustees were directed not to pay over to him until he attained the age of twenty-five.

By a codicil dated 26th January 1876 the truster declared that in the event of his daughter dying without issue, his estate held in trust for her should in the first place fall to such person or persons as she by any mortis causa deed should direct, she for that purpose having full power of disposal, to take effect after her death. Failing such deed the said estate was to be disposed of as before directed by the settlement; that is, it was to be held for the testator's grandson, and paid over to him when he attained the age of twenty-five, but, as regarded the lands falling to the truster's grandson in terms of the settlement, the codicil provided that the same should, on his attaining the age of twenty-five years, not be conveyed to him absolutely but in liferent only for his liferent use allenarly and the heirs of his body in fee whom failing to the testator's own heirs! A second codicil provided that the share of residue destined to the testator's grandson should not be paid to him when he attained twenty-five years of age, but should he held by the trustees for his liferent use,

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and for the heirs of his body in fee, whom failing for the testator's own heirs.

Miss Dalrymple died on 21st June 1888, leaving a trust-disposition and settlement, whereby she directed that Mr Forbes Gordon should have an opportunity of purchasing the estate of Wester Langlee, but failing his doing so, she directed her trustees to convey it and the whole of her other heritable estate to Mrs Durrant in liferent, and to her son, Christopher Durrant, in fee, and to hold the whole residue of the trust-estate, including the price of Wester Langlee if sold, and pay the annual income to Mrs Durrant, and after her death to realise and divide the proceeds among Mrs Durrant's children.

In May 1889 Mr Forbes Gordon raised an action of reduction against Miss Dalrymple's trustees, Mrs Durrant and others, for reduction of Miss Dalrymple's trust-disposition on the ground of facility, fraud, and undue influence. Defences were lodged and issues adjusted, and the cause was put down for jury trial. Parties, however, came to an extrajudicial arrangement embodied in a minute of agreement dated 23rd July 1890, in which it was stipulated (first) that Mrs Durrant and her family should convey to Mr Gordon all their rights under Miss Dalrymple's trust—disposition and settlement to the estate of Wester Langlee; (second) that with regard to the remainder of Miss Dalrymple's estate, the trust-disposition and settlement of Miss Dalrymple shall receive full force and effect in the same way as if it had never been challenged; and (fourth) that the action should be taken out of Court by joint—minute withdrawing all imputations against the defenders, and consenting to the reasons of reduction being repelled and the defenders assoilzied, with expenses to neither party.

On 20th July 1893 decree was pronounced, on Mr Gordon's motion, in terms of this agreement. In June 1891 Miss Dalrymple's trustees, Mrs Durrant, and her children, in terms of the 2nd article of the agreement, granted an absolute assignation and conveyance of all their rights, title, and interest, as from the date of Miss Dalrymple's death, in and to the lands of Wester Langlee, under the settlements of Mr and Miss Dalrymple, to Mr Forbes Gordon, and his heirs and assignees, and thereafter Mr Dalrymple's trustees executed a disposition of the estate in Mr Gordon's favour.

On February 14th 1895 an action was raised against Mr Forbes Gordon by the Lord Advocate on behalf of the Board of Inland Revenue, for declarator that the defender was bound to make payment to him of £750, or such other sum as might be ascertained to be the amount of the eight half—yearly instalments of succession-duty, payable “in respect of the succession of Mrs Durrant … to the liferent of the said lands and estate of Wester Langlee” on Miss Dalrymple's death, and for decree ordaining him to pay that amount with interest at the rate of four per cent. on the instalment from the dates on which they respectively became payable.

The pursuers averred—“(Cond. 2) Mrs Durrant and her son, who were respectively entitled to the liferent and fee of Wester Langlee, were strangers in blood to Miss Dalrymple, under whose trust-settlement they took their right. Through their assignation in his favour, the defender, Mr Forbes Gordon, has acquired a full right of fee. This right has come to him as their assignee, and not as Miss Dalrymple's heir-at-law. Mr Dalrymple's trustees, in granting a disposition in Mr Forbes Gordon's favour, have proceeded on the footing that Miss Dalrymple's settlement was effectual. Had her settlement been set aside, Mr Dalrymple's trust-deed would have regulated the destination of the property, and accordingly Mr Forbes Gordon would have had only a liferent after he was 25 years of age. (Cond. 12) Succession-duty is now payable at the rate of ten per cent. in respect of Mrs Durrant's succession to the liferent of Wester Langlee; and Mr Forbes Gordon, being fully vested in the property, under the disposition recorded on 24th December 1894, is in right of Mrs Durrant.”…

The pursuer pleaded—“(1) Miss Dalrymple's will not having been set aside, succession-duty is due on account of the free annual value of the liferent thereby given to Mrs Durrant. (2) The defender having acquired Mrs Durrant's liferent of the lands of Wester Langlee by the assignation in his favour, is liable for the succession-duty payable in respect of her succession thereto.”

The defender averred that he acquired his rights under the deeds before mentioned from Miss Dalrymple's trustees, and not from Mrs Durrant or her children, who never took any right in the estates of Wester Langlee under Miss Dalrymple's settlement, and that accordingly he was only liable for succession-duty at the rate of three per cent., which he had offered and was willing to pay.

On 23rd May 1895 the Lord Ordinary pronounced the following interlocutor—“Finds and declares that the defender is bound to make payment to the pursuer of succession—duty at the rate of ten per cent. in respect of the succession of Mrs Elizabeth Martin Cockburn or Durrant to the liferent of the lands and estate of Wester Langlee: Quoad ultra continues the cause,”&c.

The defender reclaimed, and argued—The action of reduction was treated as successful quoad the Langlee estate, and Mrs Durrant never had any interest in it. She would have a good defence on this ground were she sued for duty now, having had no succession to it at all for the purposes of the statute. The compromise had been made by Miss Dalrymple's trustees, and the defender had acquired his rights from them, and he was therefore only liable to pay duty at the rate of three per cent.

Argued for the pursuer—Upon Miss Dalrymple's death Mrs Durrant had become “beneficially entitled” to the liferent of Wester Langlee in the sense of section 2 of the Succession Duty Act of 1853. The right of the defender to the estate depended on

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the assignation of it to him; he thus fell precisely under section 42 of the Act as claiming in right of the successor. A stranger in blood having succeeded, duty at the rate of ten per cent. was due, and under section 42 of the Act it was exigible from the defender as the successor's assignee.

At advising—