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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Neville and Others v. Shepherd and Others [1895] ScotLR 33_248 (21 December 1895)
URL: http://www.bailii.org/scot/cases/ScotCS/1895/33SLR0248.html
Cite as: [1895] ScotLR 33_248, [1895] SLR 33_248
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SCOTTISH_SLR_Court_of_Session
Page: 248↓
Court of Session Inner House First Division.
v.
Facts:
By trust-disposition and settlement a testator conveyed his whole property to trustees, and directed them, inter alia, at the first term of Whitsunday or Martinmas after the termination of a certain liferent, to divide, pay, and make over the whole residue of his estate equally among the whole children born or to be born of his daughter's marriage, and to the survivors or last survivor of said children. The deed proceeded:—“Further, in the event of its happening that all of my said grandchildren predeceased the terms of payment of their respective provisions without leaving lawful issue, and all of which provisions it is hereby declared shall vest at the said terms of payment so fixed by me, then, and in that case, but in that case only,” he directed his trustees to make over the
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residue equally to his nephews and nieces, declaring that the issue of predeceasing nephews and nieces should take the share which would have fallen to their parents. The testator died leaving an only child, who by her marriage had seven children, of whom one predeceased the truster. Of the remainder, two only, Mrs N. and Miss S., survived the termination of the liferent. Mrs N., however, predeceased the first term of Whitsunday after that date, leaving four children.
In a question between the children of Mrs N. and Miss S. as to the shares of residue to which they were entitled, held (1) that Mrs N. not having survived the term of vesting, which was the term of payment, had no vested interest in the residue, but (2) that the children of Mrs N. were entitled, in virtue of the conditional institution implied in the terms of the destination-over to nephews and nieces, to the accresced as well as the original share of residue which their parent would have taken had she survived the period of vesting.
Observations per Lord M'Laren on the conditio si sine liberis.
By trust-disposition and settlement the late Dr James Gloag conveyed his whole estate to trustees for certain purposes.
By the seventh purpose thereof he directed his trustees, on the death of the survivor of himself and his wife, to hold the residue of the estate, and apply the interest thereof for the liferent use of his daughter Mrs Shepherd, and in the event of her death to pay the said liferent to her husband John Shepherd.
By the eighth purpose the trustees were directed, on the termination of the liferent by the death of the longest liver of Mr and Mrs Shepherd, or by Mr Shepherd's second marriage, “then at the first term of Whitsunday or Martinmas which shall happen after that event, to divide, pay, and make over the whole residue and remainder of my said whole estates above disponed and conveyed, or the proceeds thereof, including any income accruing thereon between the expiry of the liferent thereof hereinbefore settled on my said daughter and her husband, and the said term of payment, equally, share and share alike, among the whole children already horn or to be born of the marriage between the said John Shepherd and Mrs Janet Black Gloag or Shepherd, and to the survivors or last survivor of said children (under the declaration after mentioned.)” That declaration was to the effect that payment of their respective shares was to be superseded till the first term of Whitsunday or Martinmas after they attained majority in the case of grandsons, after they attained majority or were married in the case of granddaughters.
The trust-disposition proceeded,—“And further, in the event of any of my said grandchildren predeceasing me leaving a lawful child or lawful children, I hereby appoint and declare that such child or children shall succeed equally to the share of my said estates which would have fallen to his or her deceased parent under these presents if he or she had been alive.” Power was then given to the trustees to advance in whole or in part to the grandchildren the provisions “which such grandchildren or any of them may be entitled to,” and to postpone payment of their provisions to any or all of the grandchildren till they attained the age of twenty-five. The trust-disposition continued,—“Further, in the event of its happening that all of my said grandchildren predeceased the terms of payment of their respective provisions without leaving lawful issue, and all of which provisions it is hereby declared shall vest at the said terms of payment so fixed by me, then, and in that case, but in that case only, I direct my trustees (after expiry always of the liferents hereinbefore provided) to divide, pay, and make over my estate hereinbefore settled on my said grandchildren” among his nephews and nieces; “declaring that in the event of any of my said nephews and nieces predeceasing the period at which they would have become entitled to participate in my said estate (and which shall not become a vested interest till the period of payment arrives), leaving a lawful child or lawful children, then, and in that case, such child or children shall be entitled, equally among them, per stirpes, to the share which would have fallen to their deceasing parent or parents.”
Dr Gloag died on 23rd January 1870, predeceased by his wife, and survived by his only child Mrs Shepherd, who enjoyed the liferent of the residue of Dr Gloag's estate till her death in 1873. Thereafter her husband received the liferent of the estate till his death on 21st March 1895.
Mr and Mrs Shepherd had seven children, of whom one predeceased the truster, while two daughters only survived their father,—Mrs Elizabeth Muir Shepherd or Neville, and Miss Jessie Shepherd.
Mrs Neville died on 17th April 1895, prior to the first term of Whitsunday after her father's death. She was survived by her husband and four pupil children.
The residue of Dr Gloag's estate amounted to £3800.
This special case was brought by Mrs Neville's children (first parties) and Miss Jessie Shepherd (second party) to determine certain questions with regard to the division of the residue of Dr Gloag's estate. Dr Gloag's trustees appeared as third parties.
The first parties maintained that Mrs Neville having survived her father, acquired a vested interest in one-half of the residue, the other half being payable to Miss Shepherd. Alternatively they maintained that they were entitled to one-half of the residue, in virtue either of an implied substitution to their mother or of the conditio si sine liberis.
The second party maintained that Mrs Neville, having predeceased the term of payment, did not acquire a vested interest in the residue of her father's estate, and that the first parties could only succeed in
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virtue of the conditio si sine liberis to her original share, viz., one-sixth of the residue, the second party being entitled by sur-vivance to the remainder of the residue. The questions of law upon which the opinion of the Court was asked were these :—“(1) Did Mrs Elizabeth Muir Shepherd or Neville acquire a vested right to one-half of the residue of the estate of the said Dr James Gloag? (2) In the event of the preceding question question being answered in the negative, are the parties hereto of the first part, the children of the said Mrs Elizabeth Muir Shepherd or Neville, entitled to one-half share of the said residue? or (3) are they only entitled to one-sixth thereof?”
Argued for the first parties—(1) Mrs Neville had a vested interest, for the period of vesting was either the termination of the liferent or the death of the testator, as was indicated by his providing for the event of any of his grandchildren predeceasing him. (2) No doubt there was an artificial rule of construction by which the application of the conditio si sine liberis, or the express substitution of children to a parent's share, was limited to the parent's original share exclusive of anything that would have accresced to the parent— Young v. Robertson, February 14, 1862, 4 Macq. 337; Aitken's Trustees v. Wright, December 22, 1871, 10 Macph. 275; M'Nish v. Donald's Trustees, October 25, 1879, 7 R. 96; and Henderson v. Hendersons, January 9, 1890, 17 R. 293. But the present case was distinguishable from M'Nish, in respect that here there was a bequest to a class and not to grandchildren nominatim—an important point ( Aitken's Trustees, ut supra, per Lord Kinloch, p. 280); there was no direct institution of issue, and the contingent accretion had occurred before Mrs Shepherd's death, while in M'Nish there was an intermediate failure between the death of the parent and the period of payment. Even the technical rule of construction laid down in Young v. Robertson and followed in M'Nish had been questioned by Lord M'Laren in M'Culloch's Trustees, May 14, 1892, 19 R. 777, at p. 779. But at all events here in the deed itself there was a clear indication of the testator's intention that issue should take everything that a predeceasing parent would have taken had he survived. There was the clause dealing with grandchildren “predeceasing me”; there was the clause substituting the children of nephews and nieces to their parents failing grandchildren and their issue; above all, there was the clause providing for the event of all the grandchildren predeceasing the term of payment “without leaving lawful issue.” It was only in that event that the nephews and nieces were to take. Therefore the sentence must be completed by adding, “If any grandchildren do leave lawful issue, they shall take.”
Argued for the second party—(1) There was no vesting in Mrs Neville. The testator intended that there should be no division until a certain period, that period being the Whitsunday or Martinmas after the termination of the liferent. There could therefore only be vesting at the date of the first division or of payment. But there was a positive declaration of the testator as to when he intended vesting to take place, viz., the date of payment, and Mrs Neville had not survived that date. The only difficulty arose from the clause dealing with the event of any grandchildren “predeceasing me.” But that single expression could not overcome his expressly declared intention. (2) The rule of construction illustrated in Young v. Robertson and M'Nish applied here. It had been given effect to not only in the cases distinguished by the first parties, but also in The Earl of Lauderdale, &c., May 19, 1838, 8 S. 771; Clelland v. Gray, June 20, 1839, 1 D, 1031; and Thornhill v. Macpherson, January 20, 1841, 3 D.394, per Lord Medwyn, 407, per Lord Moncreiff, 410. In M'Culloch the terms of the deed spoke of shares original and accresced. If there had been no survivorship clause here, there would have been intestacy as regards the shares of predeceasing grandchildren, for there was no conditional institution to anything except the original share of parents. The logical result of the argument of the first parties with regard to M'Nish was that there must be different results according to the order of the predecease. No warrant for any such proposition could be found in the cases.
At advising—
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Then comes the second question—Are the children of Mrs Neville entitled to one-half or to one-sixth share of the residue? That depends upon the construction of the same clause, and perhaps is not so clear. As I have pointed out, the truster directed his trustees to divide, pay, and make over the residue or the proceeds thereof among the whole children already born or to be born and to the survivor. There is certainly no substitution of the issue of these children, but there are other clauses dealing with the issue of the grandchildren of the truster, and the first of these is this—And further, in the event of any of my said grandchildren predeceasing me leaving a lawful child or lawful children, I hereby appoint and declare that such child or children shall succeed equally to the share of my said estates which would have fallen to his or her deceased parent under these presents if he or she had been alive.” Now, I do not think there is any ambiguity about this clause requiring construction. It provides for the case only of the grandchildren predeceasing the truster himself. But it is to be observed that it contains no provision for the case of grandchildren who survived the truster but predeceased the term of vesting. They are not provided for in this clause. We may conjecture that perhaps the words “predeceasing me are a slip or mistake for the words “predeceasing the term of payment,” but I think the words are clear. Therefore if it depended upon this clause only, it would be difficult to see that there was any substitution of the issue of grandchildren generally to their parents. But before leaving that clause I may say that I think the clause itself would be sufficient to exclude the presumption that children are substituted to their parents by the application of the doctrine of si sine liberis, for Dr Gloag is here dealing with the issue of grandchildren, and dealing with those in a particular position, because he was applying his mind to the very parties to whom the conditio would otherwise apply. But there is a general clause which deals with the whole matter, that, namely, which I have already referred to, “Further, in the event,” &c. Now, it appears to me to be quite clear that if any issue of any of the grandchildren were alive at the date of vesting, that destination-over to the truster's nephews and nieces could not take effect, because it was only upon the failure of issue of grandchildren that the destination was to take effect. And for what reason? Simply, because if there were any issue of grandchildren surviving the term of vesting, they were to come in place of their parents. Therefore it appears to me that we have an implied substitution or rather conditional institution of the issue of grandchildren predeceasing, and predeceasing the term of payment. Now, if that be so, we have a clearly implied substitution of the issue of grandchildren to their parents in the event of their parents dying. I think that clause is sufficient for the determination of this case, and therefore I think we should answer the second question in the affirmative, to the effect that the children of Mrs Neville are entitled to take one-half of the estate.
The second question as originally put invited us to answer what share might be taken by a child or issue claiming under the conditio si sine liberis, and if the question had remained unaltered I think that only one answer could be given, because it is settled as matter of legal implication, as distinguished from construction, that a child under the conditio never takes more than what is described as the parents' original share, that is, the share which the parent would take supposing everyone in the destination to survive the period of payment. But that principle or implication does not go very far to solve a case like the present. The reason is this, that the right of children under the conditio is an equitable extension of the will, and cannot reasonably be extended beyond this, that what the truster thought a reasonable provision for one to whom he was in loco parentis shall pass to that person's children. The extent of what is considered a reasonable provision is fixed by the provision which the parent has actually made on the assumption that all his children survived.
When, on the contrary, the substitution is contained in a will or deed, the language used in the deed determines the extent of the right of the substituted legatee. In
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Now, if we are to consider what words are to be inserted in this deed by implication, it seems to me that we ought to give the issue of this family of grandchildren the right which we may assume to have been in the testator's mind. In the passage relating to the event of the death of all the members of this family without leaving issue and bringing in the destination-over to collaterals, the testator plainly contemplates that if any members of the family die before the distribution of the residue, their issue are to come in their place, and I agree that the true implication is that issue are to succeed to whatever the parent would have taken had he survived. That construction receives support from the passage in which the testator ineffectually attempted to provide for the event of children dying without issue. That clause is not strictly applicable to the event which has happened. Nevertheless we get some insight as to what the intention was when we find the testator saying that “such child or children shall succeed equally to the share of my said estates which would have fallen to his or her deceased parent if he or she had been alive.” It appears to me that we cannot be wrong in holding that the testator meant to give the same right in the event for which he only provides by implication, as he has expressly given in the event of any of his grandchildren predeceasing himself.
The Lord President concurred.
The Court answered the first question in the negative, and the second question in the affirmative, finding Mrs Neville's children entitled to one-half of the residue of Dr Gloag's estate.
Counsel for First and Third Parties— Balfour, Q.C.— Cook. Agents— Morton, Smart, & Macdonald, W.S.
Counsel for Second Party— H. Johnston— Wilton. Agent— Arthur S. Muir, S.S.C.