Scottish Court of Session Decisions

Mr Alexander Kinmond died on 5th January 1872, leaving a trust-disposition and settlement dated 30th August 1867, whereby he disponed his whole estate to trustees.

The trust-disposition, after making provision for the truster's widow and appointing various special legacies, contained the following clause—“ In the fifth place, I hereby make the following legacies:—To the foresaid Thomas Kidd Kinmond, my nephew, I legate and bequeath the sum of four thousand pounds: Item—To Mrs Ann Kinmond or Cairncross, daughter of the late Andrew Kinmond, merchant in Dundee, the sum of fifteen hundred pounds; this legacy may be paid to Henry Cairncross, husband of the said Ann Kinmond, or invested for behoof of their children, and under such conditions as shall to my trustees appear most for their benefit.” Various legacies to other nephews and nieces of the truster were bequeathed under this head of the deed, and the clause proceeded as follows— “Declaring that the legacies contained in this clause shall become payable to the legatees only after my death and after the death of the said Mrs Jane Wedderburn Jolly or Kinmond as my widow; also declaring that the lawful issue of any of said legatees predeceasing the longest liver of me and my said wife shall succeed to their parents' share in equal portions; and also that the share of any of them who may predecease me and my said wife without lawful issue shall fall into the residue of my trust-estate: Declaring further that all the legacies herein conceived in favour of females shall not be subject to the jus mariti of any husband or husbands to whom they may be married, and that their own personal receipts shall be a sufficient discharge to my trustees therefor, minors always excepted.” By the sixth clause the truster provided for the event of the estate proving insufficient to meet the debts, legacies, &c., and proceeded—“And in the event of my said estate being more than sufficient for all the purposes herein specified, then and in that case the legacies to my nephews and nieces and their lawful issue shall be increased proportionally to their respective amounts so as to exhaust the estate, with power to my said trustee's

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to defer for a time the payment of such increase or surplus if they shall see cause so to do.”

The truster was survived by his widow, who died on 18th July 1895. Mrs Cairncross, the truster's niece, described in the fifth article of his disposition, survived him but predeceased his widow, having died intestate in 1892 predeceased by her husband. She left two sons, Francis and Andrew, of whom the former was of unsound mind, while the estates of the latter were sequestrated in 1889. Mrs Cairncross was herself of unsound mind at the date when Mr Kinmond's trust-disposition was executed. The trust-estate was more than sufficient to meet the legacies and provisions, and there was a surplus to be applied towards increasing proportionally the legacies to the truster's nephews and nieces.

The representatives of Francis and Andrew Cairncross having demanded payment from Mr Kinmond's trustees of the legacy to Mrs Cairncross, the trustees, by minute dated October 1896, resolved to set aside and hold and invest the funds in trust for Francis and Andrew Cairncross, and by a minute dated March 1897, “having resumed consideration of the provisions of the settlement under which the legacy to Mrs Cairncross may be ‘invested for behoof of her children and under such conditions as shall to my trustees appear most for their benefit’ declare that in their (the trustees’) opinion it is most for the benefit of both sons of Mrs Cairncross that they should be restricted to an alimentary liferent of their shares of said legacy, and that their powers of assignment and the diligence of their creditors should be excluded, leaving them always power of testamentary disposal of the fee, and they therefore resolve to retain the said respective shares of Francis and Andrew Cairncross during the lives of the said children, and to invest the same in their (the trustees’) hands, excluding the power of the said children to assign and the diligence of their creditors, and that the income and proceeds thereof shall be paid or applied half-yearly to or for behoof of the children during their respective lives as a provision purely alimentary and for their maintenance alone.”

A special case was presented by (1) Mr Kinmond's trustees, (2) Mrs Cairncross' executor ad omissa, (3) Francis Cairncross' curator bonis, and (4) the trustee on the sequestrated estate of Andrew Cairncross.

The contentions of the parties as set forth in the case were—“The first parties maintain that according to the terms of the trust-disposition and the intention of the truster, the legacy in question and proportional share of residue did not vest in Mrs Cairncross, or otherwise, even though vested, was defeasible in her person on the first parties before payment exercising the discretionary power conferred upon them, and, in any view, that the first parties in the exercise of said power are entitled to retain it and the proportionate share of residue, and invest them for behoof of the children of Mrs Cairncross under the conditions above specified, which they are of opinion are for the benefit of said children. On the other hand, the said John Mess, Mrs Cairncross' executor, the second party, contends that the legacy and proportional share of residue vested a morte testatoris in Mrs Cairncross, and on her death passed to him as her executor, and that he is entitled to payment thereof, together with the said share of residue. In the event of its being held that the legacy did not vest in Mrs Cairncross, then the said John Mess, as curator bonis to Francis Cairncross, the third party, and the said John Mess, as trustee on the sequestrated estates of Andrew Cairncross, the fourth party, maintains that the legacy and proportional share of residue vested in the children absolutely on the death of their mother, or at latest, of Mrs Kinmond, the truster's widow; and that in respect thereof he, as curator for Francis Cairncross, is entitled to payment of one-half of the legacy and of the said share of residue, and to payment of the other half as trustee on the sequestrated estates of Andrew Cairncross, on which estates the said John Mess, as curator bonis of the said Francis Cairncross, is a large creditor. Further, the said second, third, and fourth parties maintain that in any view the said share of residue is not subject to the same discretionary power as the legacy, but only to a power to postpone payment for a time.”

The questions for the judgment of the Court were—“(1) Did the legacy to Mrs Cairncross vest in her a morte testatoris, and is it now payable to the second party as her executor? (2) Are the first parties entitled to retain the said legacy and invest it for behoof of the said Francis and Andrew Cairncross equally in such manner as to exclude their creditors and secure to each of them an alimentary liferent of their respective shares and a power of testamentary disposal of the fee? or Are the third and fourth parties, as representing the said Francis and Andrew Cairncross, entitled to immediate and unconditional payment of said legacy equally between them, share and share alike? (3) Does the share of residue proportionate to the said legacy fall to be disposed of in the same manner and subject to the same conditions as the said legacy?”

The arguments of the parties sufficiently appear from their contentions as set out above.

The following cases were quoted by them in support of their arguments:— By the first party— Chambers' Trustees v. Smiths, April 5, 1878, 5 R. (H. of L.) 151; Bryce's Trustee, March 2, 1878, 5 R. 722; Lennock's Trustees, v. Lennock, October 16, 1880, 8 R. 14; Wallace's Trustees v. Wallace, June 12, 1891, 18 R. 921. By the second, third, and fourth parties— Mackinnon's Trustees v. Official Receiver in Bankruptcy in England, July 19, 1892, 19 R. 1051.

At advising—