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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> The Duke of Sutherland's Trustees v. Countess of Cromartie and Others [1895] ScotLR 32_641 (2 July 1895)
URL: http://www.bailii.org/scot/cases/ScotCS/1895/32SLR0641.html
Cite as: [1895] SLR 32_641, [1895] ScotLR 32_641
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SCOTTISH_SLR_Court_of_Session
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Court of Session Inner House Second Division.
v.
Facts:
A granted a trust-disposition, whereby, “in order to make and secure additional provision” for his second son and “the other heirs of entail succeeding to him in the lands and estate of Cromartie, to enable them to support the dignity and title of Earl of Cromartie,” he conveyed a number of securities to trustees, and directed them, after his death, to pay the free annual proceeds of the funds conveyed to his second son and the heirs-male of his body, whom
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failing to certain substitutes, whom failing “to the heirs-female” of his body. The truster's second son was survived by two daughters, and upon his death the succession under the trust-disposition opened to the heirs—female of his body. The elder of the daughters succeeded to the dignity and estates of the earldom of Cromartie. Held that the intention of the truster was that the income of the trust fund should be applied in upholding the dignity and honour of the earldom of Cromartie, and that accordingly it must be paid to the daughter who had succeeded thereto.
In 1784 the Cromartie estates were restored to the son of George Earl of Cromartie, who had been attainted of high treason in 1746. He entailed the estates on himself and the heirs-male of his body, whom failing the heirs-female of his body and other substitutes, with the declaration “the eldest heir-female and the descendants of her body always excluding heirs-portioners and succeeding without division through the whole course of heirs whatsoever, as well as heirs of provision, so often as the same shall descend to females.”
By Royal Letters —Patent dated 21st October 1861 Anne Hay Mackenzie (then Duchess of Sutherland), who was then heir of entail in possession of the Cromartie estates, was restored to the family honours forfeited by the attainder, being created Countess of Cromartie, Viscountess of Tarbat, Baroness Castlehaven of Castlehaven, and Baroness Macleod of Castle Leod, with remainder to Francis Sutherland Leveson-Gower, the second surviving son of the Duchess, and the heirs-male of his body, and in default of such issue to the other younger sons of the said Duchess in their order, and the heirs—male of their bodies, and in default of such issue to the said Lord Francis Sutherland Leveson-Gower and the heirs of his body. In connection with and as a condition of this restitution of the said honours, provision had to be made for the due and proper endowment and maintenance of the earldom of Cromartie. By a private Act of Parliament the Duchess of Sutherland was authorised, with consent of her husband, to disentail the Cromartie estates (of which she was heir of entail in possession), and to entail them upon herself and her second son Lord Francis Sutherland Leveson-Gower and the heirs-male of his body; whom failing any son or sons of the Duchess of Sutherland to be thereafter born, in the order of seniority, and the heirs-male of his or their bodies, whom failing the heirs-female of Lord Francis Sutherland Leveson-Gower.
A disposition and deed of entail was afterwards executed in terms of the said Act.
In 1873 the Cromartie estates were again disentailed under the authority of the Court, and by a disposition and deed of entail bearing to be granted for the preservation and honour of the earldom of Cromartie, the Duchess of Sutherland, Countess of Cromartie, entailed the estates upon herself, whom failing Lord Francis Sutherland Leveson-Gower, designed Francis Viscount Tarbat, her second surviving son, whom failing certain other heirs of entail, with the provision “the eldest heir-female and the descendants of her body always excluding heirs-portioners and succeeding without division throughout the whole course of succession of heirs whatsoever as well as heirs of provision.” It was further declared that, in the event of any of the said heirs of entail succeeding to the earldom and estate of Sutherland, the succession to the Cromartie estates should devolve upon the heir next entitled to succeed thereto under the destination before specified.
Upon 23rd July 1862 the Duke of Sutherland granted a trust-deed, whereby “in order to make and secure additional provision for his second son Lord Francis Leveson-Gower, known as Lord Tarbat, and the other heirs of entail succeeding to him in the lands and estate of Cromartie … to enable them to support the dignity and title of the Earl of Oromartie,” he conveyed to trustees a number of bonds, policies of insurance, and other securities under, inter alia, the conditions and provisions after written:—“ Third, That my said trustees shall, during my lifetime pay the free annual proceeds of the said trust-funds to me: Fourth, That my said trustees shall, on my death, if the said Francis Sutherland Leveson-Gower, commonly called Lord Macleod, be then in minority, out of the free proceeds of the trust-funds, apply such amount as shall be requisite for his maintenance and education, and thereafter accumulate any balance which may remain, and invest the same in the purchase of Government Stock, or on any of the securities above mentioned, and upon the said Francis Sutherland Leveson-Gower, commonly called Lord Macleod, attaining the age of twenty-one years complete, my said trustees shall then pay the free proceeds of the said trust—funds, including the accumulated sum as aforesaid, to him, and the heirs-male of his body, whom failing to any son or sons to be hereafter born of my present marriage, in the order of seniority, and the heirs-male of his or their bodies, whom failing to the heirs-female of the body of the said Francis Sutherland Leveson-Gower, commonly called Lord Macleod, whom failing to certain other substitutes.”
By antenuptial contract of marriage dated August 1, 1876, between Lord Francis Leveson-Gower and the Honourable Lilian Macdonald of the Isles, he, as heir-apparent of the Cromartie estates, with consent of his mother the Countess of Cromartie, and by virtue of the Act of Parliament 5 Geo. IV., cap. 87, and 31 and 32 Vict., cap. 84, bound and obliged himself and the heirs of entail succeeding to him to make payment out of the rents to the children of his intended marriage who should not succeed to the entailed estates, of the provisions specified therein, viz., to one such child
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the sum of £7000, if two such children the sum of £14,000, and if three or more such children the sum of £21,000. By an assignation in trust and bond and disposition in security, Lord Francis Leveson-Gower, in implement of his obligation in the marriage contract, assigned certain insurance policies to the amount of £21,000 to the trustees who were appointed, or who should be afterwards appointed, to that office under the Duke of Sutherland's trust-deed executed in 1862, but with a declaration that these policies were assigned for the following purposes, viz., that the trustees should, on his decease, out of the proceeds of the policies, relieve the entailed estate of Cromartie of the obligations undertaken by him in his marriage-contract in favour of his younger children; and as regarded the surplus of the sums contained in the policies, that they should invest the same in their own names as trustees, and apply the same and the annual income thereof for the purposes (other than the third purpose), and in the manner provided by the Duke of Sutherland with regard to the securities placed by him under the charge of the said trustees, all as if the said sums had been assigned by the said trust-deed by the said Duke of Sutherland, and as if at the death of the granter the said Duke were naturally dead.
The Countess of Cromartie and Duchess of Sutherland died on 25th November 1888, and was succeeded in the title and estates of Cromartie by her second son, Francis, Viscount Tarbat. The Duke of Sutherland died upon 22nd September 1892, and the income of the trust-funds provided under the trust-deed of 1862 was then paid to the Earl of Cromartie.
The Earl died upon 24th November 1893 survived by two daughters only. Upon his death the Cromartie estates passed to the eldest, Lady Sibell Lilian Mackenzie, who by Royal Letters-Patent dated 25th February 1895 was declared to be Countess of Cromartie, and to hold the earldom in as full and ample a manner as her father had done.
After deduction of the amount of the provision due to the younger daughter under her father's marriage-contract, there remained in the hands of the trustees under the assignation in trust above mentioned the sum of £19,392.
Questions having arisen as to the administration of the income of this fund and of the trust funds held by the trustees under the deed of trust granted by the Duke of Sutherland, a special case was presented by (1) the trustees acting under the Duke of Sutherland's trust-deed of 1862; (2) the Countess of Cromartie; (3) the Right Honourable Lady Constance Mackenzie, younger daughter of the late Earl.
The questions of law were—"1. Is the whole free income—(1) of the trust funds referred to in article 7 (i.e., the funds held under the deed of trust granted by the Duke of Sutherland); and (2) of the trust funds referred to in article 9 (i.e., the funds held under the assignation in trust granted by Viscount Tarbat), payable to Sibell Lilian, Countess of Cromartie. 2. Are (1) the whole free income of the trust funds referred to in article 9, and (2) the one-half of the free income of the trust funds referred to in article 7, payable to Sibell Lilian, Countess of Cromartie, and (3) the other one-half of the free income of the trust funds referred to in article 7 payable to her sister, the Lady Constance Mackenzie. Or 3, Is the whole free income (1) of the trust funds referred to in article 7, and (2) of the trust funds referred to in article 9, payable, in equal shares, to Sibell Lilian, Countess of Cromartie, and her sister, the Lady Constance Mackenzie.”
Cases cited — Farquhar v. Farquhar, November 28, 1838, 1 D. 121; Chancellor v. Mossman & Company, July 19, 1872, 10 Macph. 995; Inglis v. Gillanders, January 19, 1895, 22 R. 266.
At advising—
Lord Justice-Clerk—On the restoration of the Cromartie estates in 1784 to the son of George Earl of Cromartie, who had been attainted of high treason, he entailed the estates on himself and the heirs-male of his body, whom failing the heirs-female of his body and a number of substitutes, with the declaration “the eldest heir-female and the decendants of her body always excluding heirs-portioners, and succeeding without division through the whole course of heirs whatsoever, as well as heirs of provision, so oft as the same shall descend to females.”
The late Duchess of Sutherland, who was a descendant of the entailer, succeeded to the estates under the entail, and was by Royal Letters-Patent restored in 1864 to the honours which had been taken away by the attainder, being constituted Countess of Cromartie with numerous other titles attached. As a condition of the restitution, certain provisions had to be made for the endowment and maintenance of the restored earldom, and accordingly by private statute the Duke and Duchess of Sutherland in 1861 obtained authority to disentail the Cromartie estate and re-entail them upon herself or her second son, Francis, to whom the title was to go on the Duchess's death by the Letters-Patent. The estates were in 1873 disentailed under authority of the Court, and a new entail made in 1878, bearing to be granted, as was the previous entail, for the preservation of the dignity and honour of the earldom, by which they were again entailed on the Duchess, whom failing on Francis, her second son, whom failing certain other heirs of entail, with the provision “the eldest heir-female and the descendants of her body always excluding heirs-portioners, and succeeding without division throughout the whole course of succession of heirs whatsoever, as well as heirs of provision.”
At the time when the first entail was created, the Duke of Sutherland, by trust-deed, granted on the narrative that it was to enable his son Francis and those succeeding him to support the dynasty and title of Earl of Cromartie, assigned certain bonds, policies, and other securities, to
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Francis, on his marriage in 1876, then heir-apparent of the Cromartie estates, with consent of the Duchess, then the institute in possession, bound himself by antenuptial contracts to pay to his children not succeeding to the estate, if one, £7000, if two, £14,000, and if three or more, £21,000. He also insured his life for £21,000, to free the estate of the burden of these younger children's provisions, the £21,000 to vest in the trustees appointed under the trust-deed of 1862, they to hold the funds “for the behoof and support of the said earldom,” the trustees being directed to free the estates of the younger children's provisions and to invest any surplus remaining in terms of their power under the trust-deed, and apply the income thereof in terms of the purposes contained in that deed.
Francis succeeded to the earldom in 1888, and died in 1893, having survived his father for about a year, and enjoyed the income of the trust funds. He left only female issue, of whom the eldest, Lady Sibell, succeeded to the entailed estate, and was by Royal Letters-Patent declared Countess of Cromartie.
The present question has arisen between her and her younger sister, and relates to two subjects—first, the income of the trust fund created by the late Duke of Sutherland; and second, the income of the surplus of the £21,000 after meeting the marriage-contract provision of £7000. Both of these funds form part of the trust-funds in the hands of the trustees under the trust of 1862, and as regards both of them the question is—Does the sole right to them rest in the present Countess of Cromartie as the heir-female succeeding to the entire entailed estate, or is the expression “heirs—female” in the trust —deed to be read according to ordinary construction, so as to include both daughters of the late Earl? It was practically conceded at the debate that both funds—the fund coming from the Duke, and the fund provided by the late Earl, stand on the same footing, and therefore the question is simplified down to this —Are the trustees bound to pay over the whole income of the trust funds to the Countess, or is her sister entitled to one-half of them?
It appears to me that what was aimed at in all the deeds was to make a provision for the upholding of the dignity and title of the Cromartie earldom. And it is not to be merely traced as a motive, but is, I think, very clearly expressed in the different deeds, which all bear relation to the heir in possession, for the time being, of the estates of Cromartie. The trust-deed expressly bears that its purpose is to “secure additional provision for Francis and the other heirs of entail succeeding to him in the lands and estate of Cromartie,” which, as heirs-portioner are excluded, and therefore the estates must be held by one individual, could not be carried out according to the plain intention, if one-half were to be given to one who is not an heir, who has succeeded to the estates. It was suggested in the debate that there was ambiguity in expression, and where that was so, the natural meaning of the words were to be taken, viz., that they applied to a class. But there does not appear to me to be any difficulty in so construing the trust-deed as to dispose of any ambiguity which the generality of the words used may create. The trust-deed was drawn up in direct relation to the entail then subsisting, which was made under authority of an Act of Parliament, and is in this particular in entire accord with the later entail which under the authority of the Court was substituted for it. It seems to me to be not at all a strained construction to read the destination as if the words “in succession” had been expressed, which reading brings the trust-deed into conformity with the entail, to which it relates, and makes it effectual for the practical aid of the heir of that entail. If effect were to be given to the contention of Lady Constance, the younger sister, we should in my opinion be in measure defeating the plain purpose for which the funds were placed under trust both by the late Duke, and his son the late Earl of Cromartie. The money must be applied for the aid of the holder of the estates in upholding the dignity and title in terms of the trust-deed. I would propose that the first question should be answered in the affirmative, and that would make it unnecessary to answer the second and third questions.
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Now, under the deed of entail, when the succession descends to heirs-female, it is the eldest heir-female who is called to succeed without division and to the exclusion of heirs-portioners. Accordingly, the second party has succeeded as heir of entail to the lands and estate of Cromartie, and she bears the title of Countess of Cromartie. It is she who has to “support the dignity and title” of the earldom. It was to enable the holder of the title and possessor of the estate to support that dignity and title that the trust funds in question were provided. If therefore we read the words “heirs-female” as meaning heirs-female in succession, that is, heirs—female entitled to succeed under the entail, the first party would be entitled to the trust funds. I think such a reading is consistent not merely with the general tenor of the trust deed, but also one which enables the purpose of the truster to be given effect to. To divide the trust funds between the second and third parties would not fulfil the purpose of the truster as it would be conferring funds intended for the support of the dignity and title of the earldom of Cromartie on one who had no such title or dignity to support. It might indeed frustrate the plain intention of the truster. I accordingly adopt the reading of the deed which I have indicated, and am of opinion that the first question put to us should be answered in the affirmative.
The
Lord Justice-Clerk intimated that
The Court answered the first question in the affirmative, and found it unnecessary to answer the other questions.
Counsel for the First Parties— Blackburn.
Counsel for the Second Parties— Asher, Q.C.— Macphail. Agents for the First and Second Parties— Mackenzie & Black, W.S.
Counsel for the Third Party— Dundas— Craigie. Agent— J. C. Couper, W.S.