Scottish Court of Session Decisions

The late James Farquhar White of Balruddery died on 5th September 1884 predeceased by his wife, but survived by two sons and six daughters. He left a trust-disposition and settlement dated 14th February 1868 with eight codicils thereto, by which he conveyed to the trustees therein named, and for the purposes therein mentioned, the whole estate, heritable and moveable, real and personal, which should belong to him at the time of his death. By the fifth purpose of the trust-disposition and settlement the truster appointed his trustees “to divide the residue of my estate, heritable and moveable, real and personal, after answering the foregoing purposes and all accumulations thereof, amongst the whole lawful children or remoter issue procreated or to be procreated of my body, in such shares that James Martin White, my son, or his lawful issue, shall receive three shares, each of my other sons or their lawful issue two shares, and each of my daughters or their lawful issue one share; and that after my death, and in the case of sons, upon their respectively attaining majority, and in the case of daughters upon their respectively attaining majority or being married, whichever of these events shall first happen;” and he provided that in case any of his sons should predecease him or die in minority, the share of such deceasers should fall and belong to his lawful issue, whom failing to the testator's other children or their issue. The sixth purpose of said trust-disposition and settlement was as follows:—“With respect to the shares of the residue, original or accresced, falling to my sons, I declare that the capital of the one-half thereof, whether original or accresced, shall not be payable to them respectively before they shall respectively have attained the age of twenty-five years complete, but they shall receive the interest thereof from the time of their respectively attaining majority: Declaring nevertheless that my said trustees shall have power to pay to any of my sons the capital of the said half, in whole or in part, as soon after he shall have attained majority as they shall deem advisable; and that, on the other hand, my said trustees, if they shall consider it for the interest of any of my sons, shall have power to withhold payment of the capital of such half, in whole or in part, even after he shall have attained the age of twenty-five years complete, and that either during the remainder of his life, or for such shorter period or periods, as my said trustees shall from time to time determine; and the interest on the capital so retained shall be paid to such son yearly or half-yearly as it falls due for his aliment, and such interest shall not be assignable by him, nor subject to his debts or deeds or the diligence of his creditors: Declaring also, that in case any of my sons shall die after me, and after attaining majority, but without having received payment of the whole of the capital of the above-mentioned half

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of his shares, original or accresced, of the residue, the capital of such half, or so much thereof as shall remain in the hands of the trustees, shall be paid to the lawful issue of the body of such son, whom failing to such person or persons as he shall have appointed by a revocable writing under his hand, and failing such appointment, to my other children or their respective issue, in the same proportions and subject to the same provisions as their original shares.

At the truster's death his younger son Alexander Sidney White was in minority. He attained majority on 29th March 1888. No allocation of the truster's estate was made until May 1890.

It was admitted that the minutes of meetings of the trust were correct, and accurately set forth the actings of the trustees. From the minute of meeting held on 8th July 1889 it appeared that on that date the trustees resolved that valuations of the trust-estate, with the exception of certain heritable properties, as at 30th June 1889, should be obtained and a scheme of division made up. From the minutes it further appeared that on 6th November, the valuations having been obtained and a scheme of division made up, the agents were instructed to prepare a discharge and ratification for the signatures of the beneficiaries.

The discharge referred to, which was dated 2nd May 1890 and subsequent dates, proceeded on a narrative of the truster's settlement and codicils, and of the various steps taken by the trustees towards realising the estate, and on the further narrative that, with a view to an interim division, a state and scheme of division showing the estate of the trust, and of the portion thereof of which an interim division was then to be made, had been made up, that the securities set forth in that state had been valued, and that the trustees, in place of realising same, were to make them over to beneficiaries. It contained the following clause “And now seeing … that the said trustees have allocated to me, the said Alexander Sidney White, the securities and cash of the value of £80,957, 11s. 6d. conform to column ‘B’ in the said scheme of division, and have made payment or accounted for to me for the sum of £48,000 thereof, and in virtue of the power conferred upon them by the said trust-disposition and settlement and codicil thereto, the said trustees have retained and hold for my behoof the balance of £32,957, 11s. 6d; … we, the said James Martin White and Alexander Sidney White, hereby severally and respectively exoner, acquit, and simpliciter discharge the said trustees, and their respective heirs, executors, and successors, and also the agents of the trustees, and all other persons whomsoever, of and from the foresaid several and respective sums of money and securities paid and allocated to us respectively: … Reserving always to us, the said James Martin White and Alexander Sidney White, and to us [ then follow the names of the daughters], “and our … children or remoter issue, or the persons entitled to claim through us … the respective shares falling to us … of the residue of the means and estate of the said deceased James Farquhar White in so far as the same is not included in the said scheme of division.”

On 8th July 1889, the trustees, having in view that Mr J. Martin White, the elder son of the truster, had attained the age of twenty-five, and also the discretionary powers conferred upon them by the fifth and sixth heads of the truster's settlement, resolved by minute to pay the said Mr J. Martin White his share of the residue, “under deduction of … a sum of £15,000 withheld by them in virtue of the powers reserved to them under the sixth head of the settlement.” Alexander Sidney White, the younger son of the truster, only attained twenty-five years of age on 29th March 1892. The trustees had not by any minute resolved whether payment of the balance of his share of his father's estate or any part of it, should be withheld by them in exercise of their discretionary power.

Alexander Sidney White died on 4th November 1894, survived by a widow, Mrs Amy Constance Andrew or White, and by two children, Alison Marjorie White and Ian Sidney White, who were both in pupillarity. He left a trust-disposition and settlement, dated 26th July 1894, with relative codicil, by which he conveyed to the trustees therein named, for the purposes therein set forth, his whole means and estate, heritable and moveable, real and personal; and further, without prejudice to said general conveyance, ‘the share of the residue, original and accrescing, falling to me under the trust-disposition and settlement and codicils thereto of my father, the deceased James Farquhar White, Esquire of Balruddery. At the date of Mr Alexander Sidney White's death, his father's trustees held the foresaid balance, amounting, according to the 1889 valuation, to £32,957, 11s. 6d. of the share of the residue of his father's estate which had been specially allocated to him in the first division before his death, and the income from which had during his lifetime been regularly paid to him. Since Mr Sidney White's death the trustees had made a final valuation and division, allocating to his share an additional sum of £5180, which they retained and held along with the said £32,957, 11s. 6d. previously allocated, making together a balance of £38,137, 11s. 6d. in their hands. Mr Alexander Sidney White's settlement contained no appointment of tutors or guardians to his children.

In these circumstances, questions having arisen as to the meaning of the clauses above quoted in the late James Farquhar White's trust-disposition and settlement, the present case was presented for the decision of the Court.

The parties to the case were—(1) The trustees of the late James Farquhar White; (2) The trustees under the trust-disposition and settlement of Alexander Sidney White, and (3) Alexander Sidney White's children and their mother as their guardian in virtue

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of the Guardianship of Infants Act 1886.

The contentions of the parties appear from the arguments of counsel, infra.

The questions of law for the opinion and judgment of the Court were as follows:—“(1) Are the second parties, in virtue of the disposition in their favour contained in Mr A. Sidney White's trust-disposition and settlement, entitled to demand and receive from the first parties the portion of Mr A. Sidney White's share of his father's estate allocated to him in terms of the discharge quoted, but still in the hands of his father's trustees? (2) Are the second parties entitled to demand and receive from the first parties the share of the portion of Mr J. F. White's trust-estate unallocated at the date of Mr A. Sidney White's death? (3) If the first or second question be answered in the negative, is Mrs Sidney White, as guardian of her pupil children, entitled to receive the portion of Mr A. Sidney White's share of his father's estate referred to in the first question, and the share of the unallocated estate referred to in the second question, or either of them? (4) Are the first parties entitled and bound to retain said shares, or either of them, until the attainment of majority in the case of Ian Sidney White, or until that event or marriage in the case of Alison Marjorie White

Mr James Pitman, advocate, was appointed curator ad litem, to the children of the late Alexander Sidney White, but after considering the case he adopted the argument of the third parties.

Argued for the second party—(1) Alexander Sidney White had at his death a vested right of fee in the whole of his share, which was consequently carried by his settlement. The fifth purpose expressly conferred such a fee upon him, and there was nothing in any other part of the deed which was sufficient to derogate from the right so conferred— Stewart's Trustees v. Stewart, January 22, 1896, 23 R. 416, and cases there followed—see also Miller's Trustees v. Miller, December 19, 1890, 18 R. 301. The power to postpone payment could not postpone vesting— M'Elmail v. Lundie's Trustees, October 31, 1888, 16 R. 47; Jamieson v. Allardice, May 30, 1872, 10 Macph. 755. Still less a mere failure to pay over at the date appointed— Chalmers Trustees, March 16, 1882, 9 R. 743. The clauses of a will must all be read together, and the meaning most consistent with the intention of the testator as gathered from the whole deed should be preferred to the apparent literal meaning of a particular clause. The rule followed by the House of Lords in Lady Constance Mackenzie v. Duke of Sutherland's Trustees, May 15, 1896, 33 S.L.R. 628, applied only to the case of voces signatæ. The maxim Posteriora derogant prioribus did not apply to wills (see Trayner's Latin Maxims, 465), and therefore the fact that the last clause of the sixth purpose was subsequent to the fifth purpose was not of importance. It was quite a natural construction of the clause to take it as referring only to the case of a son dying between 21 and 25, and this construction was to be preferred as most consistent with the absolute gift in the fifth purpose—see also Chalmers' Trustees, cit. Indeed, any other construction could only lead to the clause being held void for repugnancy— Duthie's Trustees v. For long, July 17, 1889, 16 R. 1002. (2) The power to withhold payment had never been exercised by the trustees. It had never been held that a discretionary power of this kind had been validly exercised by merely neglecting to pay over. In all the cases the trustees had formally intimated that they had availed themselves of the power conferred upon them. See Chambers' Trustees v. Smith, November 9. 1877, 5 R. 97, and April 15, 1878, 5 R. (H. of L.) 151; Weller v. Ker, March 2, 1866, 4 Macph. (H. of L.) 8; Mackinnon's Trustees v. Official Receiver of Bankruptcy in England, July 19, 1892, 19 R. 1051. It could not even be inferred here that such was the trustees' intention, because in the case of the other son there was a formal minute withholding payment of part of his share, and it was to be presumed that if they had intended to withhold part of A. S. White's share, they would have recorded a minute to that effect. The trustees could not be said to have determined to withhold payment unless they had minuted their intention to do so. The onus of showing such determination was upon the third parties, and the absence of an admission in the case that the trustees had so determined was fatal to their view. The third parties were not entitled to take advantage from the trustees having failed to pay over, as they were bound to do if they had not determined to withhold payment. In such a case the maxim quod fieri debet infectum valet applied, and the event contemplated by the last clause of the sixth purpose, even on the supposition that that clause referred to the case of a son dying after 25, had never arisen. (3) The discharge was favourable to the view maintained by these parties. The allocation there spoken of was equivalent to payment. The trustees' actings were only consistent with the view that they regarded A. S. White as a fiar. Such allocation was incompatible with the exercise of the power of withholding payment.

Argued for the third parties—The contention of the third parties gave effect to the plain meaning of the last clause of the sixth purpose, and was entitled to prevail. (1) This was not a case of an absolute fee vesting a morte testatoris, for there was a destination-over, and there could be no vesting at least till majority. But even if A. S. White had a vested right after he attained majority, the exact nature of that right could not be determined until his death, or until payment by the trustees—See per Lord President Inglis in Lindsay's Trustees v. Lindsay, December 14, 1880, 8 R. 281, at p. 285. In the case of Chalmers' Trustees, cit., there was no power to the trustees to withhold payment. (2) The mere fact that the trustees had not paid over was sufficient to show that they had exercised the power to postpone payment—See per Lord Young (Lord Ordinary) and Lord Shand in Chalmers' Trustees v. Smiths, cit. at pp. 99 and 121 respectively.

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There has been no direction as to any particular way in which the power was to be exercised. In Wilier v. Ker, cit., the truster directed that the trustees' disapprobation must be minuted if it were to have effect in restricting the beneficiary to a liferent. It must be presumed, apart from admission to the contrary, that the trustees had acted lawfully, and they could only withhold payment lawfully in exercise of their power to do so. But from the minute of 8th July 1889 it appeared that the trustees had applied their minds to the question of withholding payment, and had determined to do so. (3) The allocation referred to in the discharge was not equivalent to payment. Generally, this case most nearly resembled Chalmers' Trustees, cit., and Howat's Trustees v. Howat, December 17, 1869, 8 Macph. 337, and following the analogy of these cases the third parties' views were entitled to receive effect. As to the contention of the first parties, if the third parties prevailed it must be under the final clause of the sixth purpose, and that clause negatived any idea of the trustees holding the fund for behoof of grandchildren till their majority or marriage.

Argued for the first parties—In the event of the third parties being held entitled to the fund, the trustees submitted that they were bound to hold their shares until respectively A. S. White's son attained majority, and his daughter attained majority or was married. The words sons and daughters, in the clause of the fifth purpose appointing the date of vesting, was meant to include grandchildren, as elsewhere in the deed, when referring to his own children, the testator always used the words “my sons” and “my daughters.”

At advising—