Scottish Court of Session Decisions

By his trust-disposition and settlement the late John Baillie, wholesale provision merchant, Edinburgh, who died on 4th February 1888, conveyed his whole estate to trustees, who were directed to pay the income of the estate to his widow Mrs Agnes Ainslie Tillie or Baillie, subject to the burden of the maintenance and upbringing of the children of the marriage. By the fifth and sixth purposes the trustees were directed as follows:—“( Fifth) At and immediately after the decease or second marriage of the said Agnes Ainslie Tillie or Baillie, or after my own death, in the event of her having predeceased me, my trustees shall pay, assign, and dispone the residue of my estate to and in favour of my children equally among them, share and share alike, on their respectively attaining majority, if sons, or attaining majority or being married, whichever of these events shall first happen, if daughters, and in the event of the death of any of my children occurring before the period hereby fixed for payment of his or her share, then the share of residue which would otherwise have fallen to such predeceasing child shall accrue to his or her child or children or issue equally among them per stirpes, and failing child, children, or issue, then to such of his or her surviving brothers and sisters, and the child, children, or issue of deceased brothers and sisters as may themselves take a share of my estate, and that equally among them per stirpes; and ( Sixth) in the event of all my children predeceasing the period of division among them hereinbefore without leaving issue, then my trustees shall realise and divide the residue of my whole heritable and moveable means and estate above conveyed, or proceeds thereof, and pay, assign, and dispone the same as follows, viz., one-third thereof to the said Agnes Ainslie Tillie or Baillie, in the event of her being alive when my children and issue of them fail, and, in the event of her being then dead, to her heirs and assignees whomsoever,

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and the remaining two-thirds thereof to such of my brothers and sisters as may be alive when my children and issue of them fail and their respective heirs and assignees whom-soever, and it is hereby specially provided and declared that the provisions hereinafter conceived in favour of the said Agnes Ainslie Tillie or Baillie and my children shall be accepted by them, and the same are hereby declared to be in full of all their legal claims of terce, jus relictæ, legitim, portion natural, bairns' part of gear, executry, and every other right or claim which they or any of them or their heirs, executors, or representatives could ask or claim by or through my decease.”

John Baillie was survived by his wife and six children. Mrs Baillie did not accept the provisions in her favour, but claimed her legal rights, which were satisfied. By this the trust-estate was reduced to a sum of £270, 19s. 3d.

The children being all in pupillarity or minority, and the income from the estate being trifling, Mrs Baillie applied to the trustees for advances out of the capital sum to enable her to maintain and educate the family. The present petition was accordingly presented by the trustees and by Mrs Baillie as an individual, praying for authority to the trustees to pay to Mrs Baillie the sum of £145, 19s. 3d., to wipe off debts incurred by her in meeting the family expenditure, and a further annual sum of £30, out of the trust-funds of the estate.

On 18th March 1896 the following interlocutor was pronounced:—“The Lords having considered the petition, to which no answers have been lodged, and heard counsel, remit to Mr James Bannerman, W.S., to consider and report upon the regularity of the procedure and upon the authority desired to make advances out of the capital of the trust-funds and trustestate: Further, remit to the Lord Ordinary on the Bills to proceed further as may be necessary.”

Mr Bannerman presented a report, which, after stating the facts of the case, proceeded as follows “I would respectfully submit that there is no vested interest in any individual child or in the children as a class till the period of division—the death or second marriage of Mrs Baillie. The direction in the children's favour is only to take effect at that period, and only surviving children or the issue of predeceasing children will then have a vested interest. In the event of all the children dying without issue before the period of division, there is a destination-over to Mrs Baillie and her heirs and assignees whomsoever, and to the truster's brothers and sisters. The provisions not having yet vested in the children, and there being a destinationover, it humbly appears to me, that following the case of Mundell and Others, 24th January 1862, 24 D. 327, the petition is incompetent. But there are circumstances to which I would respectfully direct the attention of the Court. The primary purpose of the trust-disposition and settlement, after providing a liferent to Mrs Baillie, is the maintenance and education of the children, and she having claimed her legal rights, the estate is now held solely for the benefit of the children. Aliment of the children is a claim against the representatives of the father, and the children are creditors on his estate. The petitioners’ agent has represented to me that it is competent for the Court to authorise the trustees to make advances to pay this claim of aliment. I have grave doubts as to the competency of trustees coming to the Court for authority to pay a debt which, I would respectfully submit, they, in their capacity of tutors and curators to the children, are bound to take the responsibility of paying after fixing the amount with due care. I would respectfully refer to the case of Woodrow, 8 S. 604, 26th February 1830. The 7th section of the Trust (Scotland) Act 1867 enacts that the Court may ‘authorise trustees to advance any part of the capital of a fund destined either absolutely or contingently to minor descendants of the truster, being beneficiaries having a vested interest in such fund, if it shall appear that the income of the fund is insufficient.… and that such advance is necessary for the maintenance or education of such beneficiaries or any of them, and that it is not expressly prohibited by the trust deed, and that the rights of parties other than the heirs or. representatives of such minor beneficiaries shall not be thereby prejudiced.” I would submit that the trusters’ children have a ‘vested interest’ or ‘primary interest’ in the estate within the meaning of the Act as interpreted by the Court in the case of Pattison and Others, 19th Feb. 1870, 8 Macph. 575, and that the petition might be granted were it not for the words of the 7th section’ that the rights of parties other than the heirs or representatives of such minor beneficiaries shall not be prejudiced.’ As in my opinion there is no vesting in the children until the time of division, and in the event of all the truster's children predeceasing that term without issue the fund is directed to be divided in certain proportions between Mrs Baillie and her heirs and assignees whomsoever, and the truster's brothers and sisters, I would respectfully submit that the granting of the petition would prejudice the rights of the truster's brothers and sisters who are parties ‘other than the heirs or representatives of such minor beneficiaries,’ and therefore that the petition cannot be granted in virtue of the Act.”