Scottish Court of Session Decisions

Lewis Carmichael Urquhart died on 20th January 1889 leaving a holograph last will and testament dated 31st July 1878, with relative codicils dated respectively 29th January 1881, 14th August 1884, and 1st May 1888.

By his will he bequeathed his whole estate, real and personal, to trustees for the purposes therein mentioned, and, inter alia, directed his trustees, out of the rents of his heritable property, to pay “annuities of £50 sterling in half-yearly instalments, each free of legacy-duty, to my dear brother Alexander Urquhart, of Agnes Villa, Elgin, and to my dear sisters Helen Urquhart, spinster in Elgin, and Isabella Urquhart or Stewart, widow of the late Captain James Stewart, sometime adjutant of the Highland Rifle Militia, Dingwall, now residing at 15 Academy Street, Elgin; and also to pay therefrom in a similar manner annuities of £10 sterling, each free of legacy-duty, to my cousins Margaret Cormie, spinster in Elgin, Helen Cormie or Archibald, widow of the late William Archibald, sometime forrester at Scroggiemill, Elgin, Alexander Mackintosh, labourer in Elgin, and Penuel Anderson or Falconer, widow of the late Alexander Falconer, sometime draper in Elgin, whom failing to her daughter Penuel Falconer, spinster, Edinburgh, now both residing at 8 Cumin Place, in the Newington district of that city, and also to pay therefrom in a similar manner, … and free of legacy-duty, an annuity of £20 sterling to Ann Reid, spinster in Elgin, presently in service with me at my residence of West Villa, Elgin.”

By the codicil of 14th August 1884 the testator directed as follows:—“The annuity of £10 sterling, lapsed by the death of Helen Cormie or Archibald, I give, devise, and bequeath to the afore mentioned Ann Reid, my housekeeper, in addition to the annuity of £20 sterling previously settled on her, and all free of legacy-duty.”

By the codicil of 1st May 1888 the testator, fearing that there might be a deficiency in his estate, recalled a bequest of the proceeds of certain heritable subjects which he had made in his will to his nephew Frank Urquhart and his nieces Agnes Urquhart and Elspeth Jane Urquhart, and provided as follows:—“And I hereby constitute and appoint them and their brother Dr Alexander Reid Urquhart, physician to Murray's Hospital, Perth, heirs to the £50 annuities of their uncle Alexander Urquhart of Agnes Villa, and their aunts Miss Helen Urquhart and Mrs Captain Stewart of 15 Academy Street, Elgin, … each annuity as it may become vacant by the death of the annuitant being divided equally amongst the said four children or the survivors of them during their lifetime.… With regard to the annuities of Miss Penuel Falconer, Margaret Cormie, and Alexander Mackintosh, as they become vacant by death, I constitute and appoint Miss Ann Reid, my housekeeper, heir to each of them in addition to that settled upon herself.” …

Mrs Penuel Anderson or Falconer predeceased the testator. The testator was survived by Alexander Urquhart, Helen Urquhart, and Isabella Urquhart or Stewart, Margaret Cormie, and Alexander Mackintosh, who had all since died. Miss Penuel Falconer and all the substituted annuitants survived the testator and were still alive.

A question arose as to whether on the death of the original annuitants the annuitants substituted to them in the codicil of 1st May 1888 were entitled to receive the annuities free of legacy-duty, and for the decision of this question, inter alia, the present special case was presented for the opinion and judgment of the Court. The parties to the special case were (1) the testator's trustees; (2) the trustees and managers of Dr Gray's Hospital, Elgin, and (3) the trustees of the Northern Infirmary, Inverness, to whom the testator had left special legacies; (4) Alexander Reid Urquhart, Frank Urquhart, and Mrs Agnes Urquhart or Tamson, and Mrs Elspeth Jane Urquhart or Hobart, and their respective husbands, and Miss Penuel Falconer, (5) Miss Ann Reid, and (6) the Baptist Union of Scotland, to whom the testator had left the residue of his personal estate.

The questions of law were, inter alia, as follows:—“(3) Do the succession duties upon the annuities of £50 bequeathed by the testator to his brother Alexander Urquhart and his sisters Helen and Isabella respectively, which became payable upon the succession thereto of the said Alexander Reid Urquhart, Frank Urquhart, Agnes Urquhart or Tamson, and Elspeth Jane Urquhart or Hobart, and which will hereafter become payable upon the succession of the survivors and survivor of them, and also upon the annuity of £10 bequeathed by the testator to Penuel Falconer, which may become payable upon the succession thereto of the said Ann Reid, fall to be paid by the first parties? or (4) Are these duties payable by the parties respectively succeeding to said annuities?”

Argued for the first, second, third, and sixth parties—In the absence of express directions

Page: 149↓

by the testator to a contrary effect, the succession duties which had become and which would become due upon the opening of the succession to the substituted annuitants fell to be settled by the parties succeeding thereto and not by the first parties. This was not the case of one gift being substituted for another, or of one legatee being put in the place of another, and consequently M'Alpine v. Steuart, March 20, 1883, 10 R. 837, did not apply. The terms of the bequest to Ann Reid in the codicil of 14th August 1884 showed that where the testator intended that a substituted annuitant should not pay legacy-duty, he expressly said so.

Argued for the fourth and fifth parties—The succession duties falling due on their succession to the annuitants fell to be settled by the testator's trustees. The testator contemplated that the substituted annuitants should be put in the same position as the original annuitants. They were constituted heirs to the annuities. The terms of the gift to Ann Reid in the codicil of 14th August 1884 did not affect the question, because in that codicil she was not constituted an “heir” to a former annuity, but was bequeathed an annuity which had lapsed.

At advising—