Scottish Court of Session Decisions

The Reverend Dr Andrew Sym, minister of the parish of Easter or New Kilpatrick, died on 22nd July 1870, leaving a trust-disposition and settlement dated 20th December 1850, and two relative codicils dated respectively 26th December 1859 and 11th July 1870, whereby he disponed his whole estate, heritable and moveable, to the trustees therein named, for the trust purposes therein specified. The fourth purpose of the trust-disposition and settlement was as follows:— “ Quarto, I instruct my trustees to set aside or invest, in such a way and on such security as to them may seem most advantageous, the principal sum of £2000 sterling, and to pay the interest or annual produce thereof, at the terms at which the same may be received by themselves, to or for behoof of my niece Lewis Sym, daughter of my deceased brother Dr James Sym, physician in Ayr, for her liferent use and enjoyment thereof during all the days and years of her life after my death, and the principal sum itself shall be held by my said trustees, subject to my said niece's liferent, for behoof of the child or children to be procreated of her body, equally among them, if more than one, payable only on such child or children attaining majority, but with power to my trustees, after the lapse of my said niece's liferent, to apply the whole or such parts of the interest or annual produce of said principal sum, as to them may seem proper, towards the maintenance, education, and upbringing of her said child or children during their minority, and in the event of there not being a child or children procreated of the body of my said niece, or failing such by death before attaining majority, then the said principal sum, and such part of the interest thereof as may not have been expended by my trustees as aforesaid, shall be accounted for or paid to my said sister Sarah Sym, or her heirs, or assignees whomsoever, and I legate and bequeath accordingly.” The trust — disposition and settlement declared that the trustees shall have full power to sell, dispose of, and convert into money the testator's means and estate, so far as necessary or appeared proper, and to invest the trust-funds so far as requisite in securities, heritable or moveable, or in the purchase of property or stocks. Dr Sym's residuary legatee was his only sister Miss Sarah Sym. Dr Sym was survived by his sister Miss Sarah Sym, and his niece Miss Lewis Sym.

Miss Sarah Sym died on 14th September 1876, leaving a trust-disposition and settlement dated 27th January 1874, and relative codicil dated 15th January 1875, in which she disponed her whole estate to the trustees therein mentioned, for the trust purposes therein specified. By this trust—disposition and settlement and codicil, after directing her testamentary trustees to pay two legacies, she gave the following direction to her trustees:—“And fourthly, my said trustees and their foresaids shall hold, apply, pay, convey, and make over the whole rest, residue, and remainder of my means and estate, and the interest and other annual produce thereof, to and for behoof of my niece the said Lewis Sym, whom I hereby nominate and appoint as my residuary legatee, including in said residue my whole right, title, and interest

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in and to, or to dispose of, test upon, or convey, the fee or capital of the sum of £2000 liferented by my said niece under the trust-disposition and deed of settlement of my deceased brother Dr Andrew Sym.”

At the time of Dr Andrew Sym's death a considerable part of his estate consisted of ground-annuals, which were well secured, and his trustees, instead of setting apart any particular ground-annuals, or selling these and re-investing a sum of £2000 out of the proceeds to meet the provision for Miss Lewis Sym made in the fourth purpose of his trust-disposition and settlement (quoted above), retained the whole ground annuals, and paid to her, out of the annual proceeds received from them, interest at the rate of 4 1 2 per cent. on a capital sum of £2000 in satisfaction of the liferent thereof. This arrangement continued, with the knowledge and implied consent of the said Miss Sarah Sym and the said Miss Lewis Sym, until the death of Miss Sarah Sym in September 1876, and was thereafter continued, with the consent of Miss Lewis Sym, till March 1881.

Miss Lewis Sym, as residuary legatee of her aunt Miss Sarah Sym, became entitled at the death of the latter to the residue of the estate of the deceased Dr Sym. Accordingly, in March 1881 Dr Sym's trustees resolved to make over said residue to Miss Lewis Sym, under deduction of sufficient estate to satisfy the life—rent to which Miss Lewis Sym was entitled under the fourth purpose of Dr Sym's settlement. To meet this liferent the trustees resolved to retain the following two ground —annuals, viz. — (1) Ground—annual of £46, 15s., payable by John M'Ilroy's representatives, from property, Rutland Orescent, Glasgow; and (2) Ground—annual of £65, payable by James Shaw, from subjects Sauchiehall Street, Glasgow. These ground-annuals, capitalised at 22 1 2\years, the then current selling value of such securities, would have given a capital sum of £2514, 17s. 6d., which was somewhat in excess of the amount of the legacy, hut Miss Lewis Sym consented and approved of this, the surplus of their value beyond the legacy being declared, by minute of Dr Sym's trustees, to be at her own disposal.

On 14th June 1888 Miss Lewis Sym granted a discharge in favour of Dr Andrew Sym's trustees, whereby, on the narrative that under the testamentary writings of Dr Andrew Sym and Miss Sarah Sym she was entitled to the fee of the whole residue of the said trust-estates and effects, except, the discharge proceeded, “a sum of two thousand pounds left to me in liferent, and as to which there is some doubt regarding my present right of fee;” and on the further narrative that certain sums had been paid to her by the trustees of Dr Sym, she discharged them of the whole provisions in her favour except the two ground annuals as above set forth, “reserving always all questions regarding the said legacy of two thousand pounds.”

Miss Lewis Sym died unmarried on 9th July 1896, leaving a trust-disposition and settlement, dated 16th June 1887, and relative codicil, dated 15th April 1893, by which she conveyed her whole estate, heritable and moveable, to the trustees therein mentioned, for the trust purposes therein set forth. By the fifth purpose of her trust—disposition and settlement she provided as follows “With respect to the disposal of £2000 in which I am liferented under the will of my late uncle the Reverend Andrew Sym, Doctor of Divinity, and of which I consider I am entitled to dispose, I direct that the said sum, or so much thereof as may remain at my death, shall be divided equally among” certain persons named.

The trust-disposition also provided as follows:—“( Lastly) I direct my trustees, as soon after my death as they may deem expedient, to realise the whole residue and remainder of my said means and estate, and to pay over the same to the Directors of Ayr Hospital for behoof thereof.”

The two ground-annuals for £46, 14s. 10d., and £65 respectively, retained by the first parties to satisfy the fourth purpose of the trust-disposition and settlement of Dr Sym in terms of the arrangement above set forth, were sold by them on 18th November 1896, and realised the sum of £3547, 5s.

In these circumstances, a question having been raised as to the right of the legatees under the fifth purpose of Miss Lewis Sym's trust-disposition and settlement in the proceeds realised from the sale of the ground—annuals above mentioned, a Special Case was presented for the opinion and judgment of the Court in which the facts above narrated were set forth.

The parties to the case were (1) Dr Andrew Sym's trustees, (2) Miss Lewis Sym's trustees, (3) the legatees under the fifth purpose of Miss Lewis Sym's trust-disposition and settlement, (4) the Directors of Ayr Hospital.

The third parties maintained that they were entitled to the whole of the proceeds of the ground-annuals less the expenses connected with the sale of them, or at least to the whole of the proceeds less £726, 3s. 9d., i.e., £514, 17s. 6d. (the value above £2000 of the ground-annuals in 1881) and the proportion of the increase applicable thereto, and the expenses aforesaid.

The fourth parties, on the other hand, maintained that the third parties were only entitled to £2000, with interest thereon from the date of the death of Miss Lewis Sym till payment.

The questions of law for the opinion and judgment of the Court were as follows;— “(1) Whether the third parties are entitled, under deduction of the expense of realisation, to the whole proceeds derived from the sale of two ground-annuals, or whether they are only entitled to said proceeds under deduction of said sum of £726, 3s. 9d.? or (2) Whether the third parties are entitled to receive the capital sum of £2000 with the interest accrued thereon?”

Argued for the third parties—The second branch of the first question should be answered in the affirmative. It was necessary to look at Dr Sym's settlement and the course of events between his death

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and the death of Miss Lewis Sym to see what she supposed herself to be dealing with when she made the legacy in question, although no doubt her intention must be determined by her own settlement only. Looking to the circumstances of this case, the expression “or so much thereof as may remain at my death” showed that she intended to give an investment and not a sum of money. The words “£2000” were designative not taxative. What the testatrix meant to bequeath to the third parties was her interest in the fee of what ultimately came to her from the legacy contained in the fourth purpose of Dr Sym's settlement. No doubt originally that was a sum of £2000, but it was a sum which was to be set aside and invested, and once set aside and invested, as at latest happened in 1881, it ceased to be a sum of money and became a fund or estate, to which the fiar under the legacy became entitled, with the advantage of any increase and the disadvantage of any decrease in its value.— Robinson v. Fraser's Trustee, August 3, 1881, 8 R. (H.L.) 127. What Miss Lewis Sym therefore meant to give under the fifth purpose of her settlement was not a sum of £2000 only but the value realised by a certain investment which in 1881 was valued at £2000. There could be little doubt that if the value of the ground—annuals had fallen below £2000 there would have been no recourse against the residuary estate after 1881, and those who would have had to bear the loss were entitled to benefit by the gain. It had been held that bonus additions were carried by a legacy of a certain sum insured on the testator's life.— Roberts v. Edwards (1863), 33 L.J., Ch., 369; and arrears of interest by a legacy of a specific sum in a loan— Cunninghame v. Vassall, November 3, 1871, 10 Macph. 49. These cases were analogous to the present. If it appeared that what the testatrix meant to bequeath was not merely a certain sum of money but the proceeds of a certain piece of property in which that sum had been invested, as the third parties submitted was the case here, that intention would not be defeated, because in the words of gift a specific sum was mentioned, that being merely a falsa demonstratio. See Bruce's Trustees v. Bruce, June 7, 1875, 2 R. 775; and Forbes' Trustees v. Forbes, January 13, 1893, 20 R. 248. When the testatrix referred to “£2000 in which I am liferented under the will of my late uncle,” that was merely a falsa demonstratio, for in truth she was liferented in an investment valued at £2000 in 1881, and as this was evidently what she referred to, the third parties were entitled to the increased amount which that investment realised when sold, and not to the sum of £2000 only.

Argued for the fourth parties—The meaning of this bequest must be determined by a consideration of Miss Lewis Sym's settlement, not of the settlement of anyone else. What she gave was a sum of £2000 and nothing more. The expression “or as much thereof as may remain at my death” was inserted so as to make sure that these legatees should have no claim upon the residue of her estate if the sum held by Dr Sym's trustees turned out to be insufficient to pay their legacy in full. But even if Dr Sym's settlement was taken into consideration the fourth parties were entitled to prevail. What he gave was a principal sum, not an investment. The investment contemplated was merely to secure a principal sum of £2000 which was the true subject of the gift. Throughout his trustees had distinguished between the principal sum of £2000 and the investment on which it stood. The liferentrix did not receive the interest or produce of any investment, but 44 per cent. on the sum of £2000. Under the arrangement of 1881, to which Miss Lewis Sym was a party, and which was embodied in the minute, a distinction was drawn between the sum of £2000, which was the subject of the legacy, and the investment. The state of matters which Miss Lewis Sym had in contemplation when she made the provision in question was that Dr Sym's trustees held a sum of £2000 in terms of the fourth purpose of his settlement, and a certain balance over and above that sum, which was hers absolutely, and that these sums were invested in two ground-annuals, the difference between the value of which and £2000 was at her own disposal. She was aware what the investment was, which had been retained to meet the sum of which she enjoyed the liferent, and if she had intended to give the third parties the proceeds of that investment, or that part of the proceeds which represented £2000 in 1881, she would have said so, and would not have used the words £2000 as was the case here. The second question should be answered in the affirmative.