Scottish Court of Session Decisions

In July 1898 the trustees of James Browne, who died on 9th February 1845, raised an action of multiplepoinding for the purpose of determining who were entitled to the fee of the portion of his estate which had been liferented by his daughter Isabella under his trust-disposition and settlement dated 25th January 1842, and which had been set free by the death of Isabella unmarried on 8th December 1897.

The facts of the case and the claims of the various parties are fully set forth in the opinion of the Lord Ordinary ( Pearson).

On 28th December 1899 the Lord Ordinary pronounced the following interlocutor:— “Finds that the fund in medio vested to

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the extent of four-fifths thereof in Robert Bennet Browne as the sole surviving child of the testator, and to the extent of the remaining fifth thereof in Mary Jane Ewing Smith, as legatee of the deceased Isabella Jane Browne, and appoints the cause to be enrolled for further procedure, reserving all questions of expenses, and grants leave to reclaim.”

Note.—“This question arises in the succession of James Browne, insurance broker in Glasgow, who died in 1845, leaving a trust-disposition and settlement, the trustees under which are the pursuers and real raisers. Mr Browne was survived by one son and four daughters. His son Robert Browne is still alive and his interest is represented by the claimant Mr M'Clelland, the trustee in his sequestration, and Mr Anderson, his assignee. I was informed that these two claimants had agreed to reserve meanwhile all questions arising inter se.

The four daughters are all now dead. Mary died in 1850, predeceased by her only child Alexander (born September 1848, died October 1849), who died in infancy, and survived by her husband Colin Brown, who has since died, and is represented by his trustees. Jane (Mrs Smith) died in 1856, leaving four children, who are also claimants. Janet (Mrs Duncan Brown) died in 1890, leaving an only child, the claimant Mrs Morgan. Isabella died unmarried in 1897; and it is upon her death that this action is now raised for distribution of the remaining part of the estate.

By the residuary clause of the testator's will he directed his trustees to hold the residue for behoof of his children, and to divide the same into as many shares as he might have children at the period of his death, the issue of a predeceasing child being entitled to the share their parent would have taken if he or she had survived the testator. The shares of sons were to be payable on their respectively attaining the age of twenty-one. As to the daughters’ shares, he directed his trustees, upon a daughter attaining majority or being married, ‘to invest the shares falling to such daughters either in the purchase of heritable property or upon heritable security, taking the rights thereto in favour of such daughters in liferent for their liferent use allenarly, exclusive of the jus mariti or right of administration of any husband and to their lawful issue, respectively, and failing such issue, then to the survivors of my said children, equally among them share and share alike in fee.’ Then followed a declaration as to the shares of deceasing children, the effect of which I shall consider presently.

From the truster's death in 1845 until the death of Mary (Mrs Colin Brown) in 1850, the income was divided and paid to the five children in five equal shares. From April 1850 until December 1858 the income was divided and paid equally among the remaining four children, including the issue of Jane (Mrs Smith) after her death in 1856. It was assumed by all concerned that Mary's infant son Alexander, who predeceased his mother, took no share of the residue, and therefore transmitted nothing to his representative, namely, his father Colin Browne.

In December 1858 the trustees made up a scheme of division of the residue proceeding on the same assumption. They divided it into four equal shares of about £8500 each. One of these shares they paid to Robert Browne, another they paid to the family of Mrs Smith, and the other two shares they retained for Janet (Mrs Duncan Brown) and Isabella as liferenters. On Janet's death in December 1890 her share was paid to her daughter Mrs Morgan and her marriage trustees. There remained in the hands of the testamentary trustees the one-fourth liferented by Isabella, which was set free for division on her death in December 1897. It consisted (1) of her original fifth of the residue, and (2) of one-fourth of Mary's fifth, and is now the fund in medio.

The main question is raised by the claim of Colin Brown's trustees. Their contention is that the fee of the fifth share liferented by Mary (Mrs Colin Brown) vested in her infant son Alexander notwithstanding his predecease of his mother, and was transmitted through him to his father Colin Brown. They contend (1) that one-fourth of that fifth was wrongly paid away by the trustees to each of Robert Brown, the Smith family, and Mrs Morgan, and that the remaining fourth of it is included in Isabella's share now in medio, and (2) that the fund in medio is liable to make good these overpayments, either generally as being the balance of the estate still undivided, or at all events to the extent to which any claimant now to be ranked on the fund has benefited by the overpayments. The other claimants meet these demands with pleas of mora and prescription, as well as with the plea that the fund in medio, being only Isabella's liferented share, the accounts cannot be opened up generally and re-stated in this action. But the first question is, whether Colin Brown's trustees are right in the view which they submit on the construction of the residuary clause, namely, that Alexander Brown took a vested fee in the fifth share liferented by his mother, and transmitted it to his representatives. In my opinion this contention is not well founded.

It is to be observed, in the first place, that the daughter's shares were directed to be invested by the trustees in the purchase of heritable property or upon heritable security, the rights thereto being in favour of the daughters in liferent for their liferent use allenarly, exclusive of the rights of husbands, ‘and to their lawful issue respectively, and failing such issue, then to the survivors of my said children equally among them, share and share alike, in fee.’ This direction was not observed by the trustees, who in fact made no such investments, but I apprehend that according to a well-settled rule of trust law this omission can make no difference in the beneficial rights, which must be ascertained as if the trustees had done that which they were directed to do. Now, if they had purchased heritage with Mary's share, and

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taken the title thereto in the terms I have quoted, I do not think it could have been contended that the words ‘failing such issue, then to the survivors,’ imported merely a conditional institution. They are, according to ordinary acceptation, words of substitution, and are apt to carry the fee to the survivors of the class referred to upon the failure of the institute without defeating the destination. In my opinion, upon Mary's death predeceased by her issue, the fee was carried to the surviving children of the testator, or as certain of the claimants contend, to such survivors along with the surviving issue of predeceasers. In either view the claim of Colin Brown's trustees is excluded.

In support of their claim they relied mainly on the case of Cunningham (1889), 17 R. 218. In that case trustees were directed to lend out the daughters' shares on real security, and to take the bonds so that the interest should be paid to them during their life, and the principal sum after their death ‘to be paid or divided equally among the deceaser's lawful issue, and failing issue equally among my own children surviving at the time.’ It is to be observed, however, that in the case of Cunningham the present question did not and could not arise for decision, being excluded by the facts. In that case issue did not fail in any view, for the liferentrix was survived by five children, and the question was whether the representatives of her other children, who had predeceased her, were entitled to participate in the fee of the share. They were held entitled to do so. But there was no question raised in that case with surviving uncles and aunts, children of the testator.

The next question is as to the meaning of the expression ‘survivors of my said children’ in the destination of the fee of the daughters' shares. It is contended by the surviving children of those daughters of the testator who predeceased Isabella that the word ‘survivors’ is open to construction, and must here be read as including the issue of predeceasers, and that either on this ground or by the operation of the conditio si sine liberis, they are entitled to share per stirpes in the fund in medio. It appears to me that the conditio is implied and excluded by the terms of the will, the contingency of issue having been distinctly in the contemplation of the testator in the adjoining clauses. As to the other ground, it rests mainly on the declaration which immediately follows the direction to invest, and I am of opinion that it is founded on a misconception of the purpose and import of the declaration. This appears to me to relate back, not to the immediately foregoing destination, but to the earlier clause as to the division of the residuary estate. It is conditioned upon one of three events, none of which happened in the case of Isabella, namely, the death of a child of the testator—(1) before the testator himself, or (2) before receiving payment, or (3) before the investment of her share (that is, as I read it, before the share was or ought to have been invested). I take it that this declaration was intended to apply to deaths occurring in the earlier and intermediate period which might elapse before the trustees were in a position to pay to sons or invest for daughters, and not to qualify or interpret the destination to be inserted in the investments. It provides that on the occurrence of such deaths the issue of predeceasers was to come in along with survivors, and the prominence which is given to this idea in the declaration rather emphasises its omission from the destination of the fee.

The fund in medio, being the share liferented by Isabella, includes (as I have said) one-fourth of Mary's share; and a question is raised whether this, which must be regarded as an accruing share, was subject to the restriction to a liferent or was at Isabella's disposal. It seems clear on the authorities, and was not disputed by those claiming in Robert Browne's interest, that the latter is the sound view. This being so, this part share (which amounts to a fifth of the fund in medio) passes under Isabella's will to the claimant Mary Jane Ewing Smith.

“The result is that I hold the fund in medio to have vested in Robert Browne as to four-fifths, and in Mary Smith as to one-fifth. And as the parties concurred in desiring this question of vesting to be decided before the rest of the case is disposed of, I have granted leave to reclaim.”

The claimants Colin Brown's trustees reclaimed, and argued— “Failing issue” meant “failing having issue,” not “failing leaving issue.” It was a case of conditional institution, and whenever Mary Brown's child Alexander was born the conditions were satisfied, and the fee of her share vested in him. It now belonged to the claimants as representing his heir. The case was ruled by Carleton v. Thomson, July 30, 1867, 5 Macph. (H.L.) 151, and Cunningham's Trustees v. Cunningham, November 30, 1889, 17 R. 218. The latter case was especially in point. In it as in the present there was a direction to the trustees to invest in real security. The judgment of the Lord Ordinary reversed these authoritative decisions, and was therefore unsound.

Argued for the other claimants—What had to be kept in view was that the present case dealt with heritage. The testator directed that the shares falling to daughters should be invested in heritable property or heritable securities. The rules with regard to heritage therefore applied. It was not a conditional institution but a substitution. “Failing issue” did not mean “failing issue coming into existence,” but “failing issue taking up and evacuating the destination” after coming into existence. Mary Brown's child Alexander died without evacuating the destination, and the property therefore descended to the claimants as substitutes in the deed—Bell's Principles (10th edition) sec. 1693; Henderson v. Dougal, February 12, 1841, 3 D. 548; Watson v. Giffen, January 23, 1884, 11 R. 444; opinion of L.P. Inglis, 451. The intention of the testator, as shown in the deed, was that there should be substitution. He

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desired to exclude all chance of his sons-in-law succeeding to his estate. The case of Carleton, supra, dealt with moveable estate, and had therefore no application in present circumstances. In Cunningham, supra, the testator had directed that the principal sum was to be “paid,” which necessitated a money division. And in that case some of the issue were in existence, so no question arose with the substituted heirs. The case of Cunningham therefore did not rule the present.

At advising—