Scottish Court of Session Decisions

Alexander Brown, merchant, residing at 8 Pitt Street, Edinburgh, died on 5th April 1900, leaving a trust-disposition and settlement dated 11th January 1865 and various codicils thereto. In the settlement the testator directed his trustees as follows:—“And I direct them to pay out of my said estate all such legacies gifts or provisions and implement all such instructions as shall be contained in any codicil or any memorandum or writing by me clearly expressive of my will, though not formally executed, declaring that the same, whether formal or informal, shall be held and taken to be part and parcel of these presents.”

Among the legacies, gifts, &c., contained in the testator's settlement was a legacy of £200, “free from legacy-duty.”

The trustees were directed to pay the residue of the testator's estate to and among certain nephews and nieces nominatim.

In 1894 the testator executed a codicil whereby he left to each of his trustees a sum of £100 free of legacy-duty,” and made certain other bequests.

In 1897 the testator executed a second codicil making certain further bequests, and containing the following provision, viz.:—“I provide and declare that the foregoing bequests, and also those contained in the foregoing trust-disposition and settlement and codicil, are to be satisfied and paid free of all Government duty.” Thereafter, in 1898, the testator executed a third and a fourth codicil, in each of which he made certain further bequests of heritage and moveables, without any direction as to freedom from Government duties.

In these circumstances this special case was presented for the opinion and judgment of the Court.

The parties to the special case were (1) the testator's trustees, and (2) the beneficiaries under the testator's third and fourth codicils.

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The first parties maintained—that the clause as to freedom from all Government duty contained in the second codicil did not apply to the bequests contained in the said third and fourth codicils, and that in a question between the parties both the estate-duty, so far as applicable to heritage, and the succession and legacy duties should be borne by the second parties, so far as said bequests were concerned.

The second parties maintained—that on a just construction of the said testamentary writings, they were not liable ultimately for the estate-duty and the succession and legacy duties payable in respect of the bequests to them respectively, and that, in any event, they were only liable for succession and legacy duties. They contended that the clause of exemption in the second codicil was applicable to all the bequests made by the truster.

The following was the question of law:—“On a sound construction of the trustdisposition and settlement and codicils of the said deceased Alexander Brown, are the bequests in favour of the second parties free in a question with the first parties (a) of both estate-duty, so far as applicable to heritage, and succession and legacyduties; or ( b) of any of these duties?”

Argued for the first parties—The provision in the second codicil as to freedom from Government duty was to be strictly interpreted, and it applied only to foregoing legacies. Bequests could not be freed from the burden of paying Government duties except by distinct provision— Urquhart's Trustees v. Gordon, December 7, 1900, 3 F. 242, 38 S.L.R. 148.

Argued for the second parties—All the codicils were to be taken as part and parcel of the settlement, and the provision as to freedom from Government duty in the second codicil referred to all the bequests contained in the settlement. The third and fourth codicils being part and parcel of the settlement, the bequests which they contained were declared by the testator to be free from Government duty, the burden of paying which was thrown on residue. A clause of relief from Government duties had been held to apply to subsequent codicils— M'Alpine, &c., March 20, 1883, 10 R. 837. Lord President, p. 846, 20 S.L.R. 551; Williams v. Hughes (1857), 24 Beavan, 474; Byne v. Currey (1834), 2 Crompton & Meeson 603; Tomkins v. Tucker (1901), 85 L.T.R. 451. The case of Urquhart's Trustees v. Gordon, cit. sup. was special and did not affect the question. With regard to the bequests of heritage it could not be intended that the Government duty was to be a burden on the heritable subjects.