Scottish Court of Session Decisions

Lord Trayner—I do not regard this case as attended with any difficulty. The contention of the second parties is that the trustees were directed “to hold” certain portions of the truster's residue for their behoof; that a direction to hold is equivalent to words of direct gift; that such a gift vests a morte, and that any directions inconsistent with the full and immediate enjoyment of the gift must be disregarded. The case of Miller's Trustees was of course referred to. But in that case there was no doubt about the vesting, whereas here the first question is, was there a vesting of the fee of the residue. Now, I agree in the view that in some cases a direction to trustees “to hold” for behoof of a beneficiary is equivalent to a direct gift. But in determining whether such a direction is equivalent to a gift the direction must be read in connection with its context, and doing so here I am of opinion that the direction referred to was not equivalent to or intended to express an absolute gift. The purpose for which the trustees are directed to hold is plainly stated. It is “to pay the income of the estate so held to the second parties. That no gift of fee was intended is also plain, for the truster states that the second parties “shall have no power to obtain payment” of the fee which the trustees are directed to hold. There is no doubt a power conferred on the second parties enabling them to test upon the shares of residue held on their behoof. But a liferent with a power to test is not a fee. In dealing with the construction of the settlement before us (as in all cases of the construction to be put upon testamentary writings) the first thing to be considered is, what was the intention of the truster. That intention is here very clear. The second parties were to have the income of a part of the residue, and might test upon it, but they were to have no power to obtain payment. To give effect to their contention would be in direct opposition to the expressed direction of the truster, for we would be in effect ordering the trustees to pay to the second parties what the truster said was not to be paid to them. I am therefore for answering the question put to us in the negative.

Lord Moncreiff—I am of the same opinion. The distinction between cases in which the present question arises is often very narrow. In this case there are some indications which point to an intention to confer a right of fee and not only a liferent. In particular, there is no disposal of the fee except in the case of a daughter leaving a will or appointing the fee among her children. That at first sight points to this being a right of fee that is conferred upon the daughter of the testatrix. But taking the clause in question as a whole, I think it is plain that the testatrix intended to restrict her daughters' right to something less than a fee. All that is given to them is the income of their portions, and there is an express direction that they “shall have no power to obtain payment of the share” to be held for their behoof. Further, the only power of disposal that is conferred upon the daughters is a power to do so by will or deed of appointment. Therefore we have not here the absolute power of disposal which has been in some cases held to confer a fee.

In the last case referred to by Mr Craigie, the case of Rattray, the Court construed the power to assign as a general power of disposal. I do not think we can so regard what we have here. On the whole matter I agree with Lord Trayner that the question should be answered as he proposes.

The Lord Justice-Clerk concurred.

Lord Young was absent.