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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Anderson's Trustees v. Anderson [1904] ScotLR 42_167 (07 December 1904)
URL: http://www.bailii.org/scot/cases/ScotCS/1904/42SLR0167.html
Cite as: [1904] ScotLR 42_167, [1904] SLR 42_167
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SCOTTISH_SLR_Court_of_Session
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Court of Session Inner House First Division.
v.
Facts:
A testator in his settlement directed his trustees to divide the residue of his estate into four equal shares, to be held or paid by his trustees in accordance with his directions. With respect to one share he directed his trustees to “hold” it “for behoof of” a son, to invest it in their own names for his behoof, and to pay the income to him during his survivance, with power to them (in the event of the son's marriage, or if for any other reason they thought it expedient) to advance to him from the capital of the share a sum not exceeding £2000, and with power to the son to provide, with consent of the trustees, an annuity for his widow out of the income of the share, and to apportion by deed inter vivos or by testament the share among his children, to take effect upon his decease. It was further provided that, in the event of the son dying unmarried, the share should be divided equally among his surviving nearest of kin per stirpes. The son survived the testator and married.
Held (1) that the fee of the share was not given to the son, and (2) that the trustees were bound to hold during the lifetime of the son the share of the estate held by them for his behoof.
William Anderson of Hallyards, in the county of Peebles, died on 3rd March 1879, leaving a trust-disposition and settlement dated 19th January 1877, which was recorded 14th March 1879. By it he conveyed his whole estate, heritable and moveable, to Sir Charles Bowman Logan and others as trustees for, inter alia, the following purposes—“( Third) I direct that the whole free residue and remainder of my said estate, heritable and moveable, real and personal, above conveyed, or the realised value thereof … shall, as soon as conveniently may be after my death, be divided by my said trustees into four just and equal shares, corresponding to the number of my present surviving children, which several shares shall continue to be held by my said trustees, or paid, applied, or disposed of by them in manner hereinafter directed. ( Fourth) I direct my said trustees as soon as conveniently may be after the foresaid division, to pay, assign, or dispone one of said just and equal fourth shares to my elder son.… ( Fifth) I direct my said trustees to hold another of said just and equal fourth shares of said residue for behoof of my younger son David Brown Anderson, Writer to the Signet, and they shall cause the amount thereof to be transferred to and invested in their own names for his
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behoof, and they shall pay over to him during his survivance the free interest, dividends, or annual profits thence arising, and his receipt therefor shall be a valid and effectual discharge to my said trustees for the payment of said interest, dividends, or profits; but with power to said trustees (in the event of the marriage of my said son to the satisfaction of my said trustees, or if for any other reason they may judge it expedient and prudent to make such advances) to advance to him from the capital of said share held by them for his behoof a sum or sums not exceeding in whole the sum of £2000 sterling, to meet expenses needful and proper to be incurred upon his marriage or for the other purposes above referred to; with power also to my said son to make, with consent of the said trustees, provision for a suitable annuity or jointure for his widow out of the income of said share, and also, in the event of there being children procreated of his said marriage, to convey, assign, or bequeath by deed inter vivos, or by testament, to take effect upon his decease, said share of my said means and estate in such proportions amongst said children as he may judge proper, and in the event of the said David Brown Anderson dying unmarried the said fourth share held for his behoof as aforesaid, or the proceeds thereof, shall, in so far as the same may not have been advanced to him as aforesaid, be divided equally among his surviving nearest of kin per stirpes. ( Sixth) I direct my said trustees to hold another of said just and equal four shares of said residue for my eldest daughter … in liferent, for her liferent use allenarly and the children of her late and any future marriage in fee; and I direct my said trustees to cause the amount of said one-fourth share to be transferred to and invested in their own names for behoof of my said daughter and her children as aforesaid, and my said trustees shall draw the interest, profits, or dividends accruing upon said investments as the same may respectively become due, and make payment thereof to my said daughter during her survivance.,.” Ry the seventh purpose he directed the remaining share to be set apart for his younger daughter, for her liferent use allenarly and her children in fee in terms similar to the terms of the sixth purpose ( supra). The residue of the testator's estate amounted to £90,000.
In 1900 David Brown Anderson married, and with the consent of the trustees he provided by postnuptial contract for a jointure to his wife out of the income of the trust estate. The trustees also, in virtue of the power conferred upon them, advanced to him a sum of £2000. At the date of this case he had no children and his wife still survived.
Questions having arisen with regard to the rights conferred by the third and fifth purposes of the said trust-disposition and settlement this special case was presented to the Court. The parties to the case were (1) the trustees acting under the trust-disposition and settlement, (2) the two daughters of the testator and the widow and children of the deceased son of the testator, and (3) the said David Brown Anderson, the testator's younger son. The second and third parties were the whole heirs in mobilibus of the testator.
The first parties maintained that they were bound to hold the third party's share of residue during his survivance, in terms of the trust-disposition and settlement. In the event of this contention heing upheld they had further contentions as to the disposal of this share of residue in certain contingencies, but the Court declined to consider these.
The second parties were interested in the further contentions of the first parties which were not considered.
The third party maintained that the share of residue held by the first parties for his behoof vested in him a morte testatoris, subject to defeasance in the event of his dying unmarried, which was the only case in which an ulterior right was conferred on his next-of-kin, and that, as that event could not occur now, the said share had vested in him absolutely, and he was entitled to payment.
The following question of law was, inter alia, submitted to the Court—“(1) Are the first parties bound to hold during the lifetime of the third party the share of the testator's estate at present held by them for his behoof, or is he entitled to receive payment of the same now?”
Argued for the first parties—The question in the case was whether the testator had conferred a fee or not. If he had it was admitted that he could not restrict the enjoyment of a fully vested fee—Miller's Trustees v. Miller, December 19, 1890, 18 R. 301, 28 S.L.R. 236. There might, however, be words of original gift, with an effectual direction to hold in trust added— Dalglish's Trustees v. Bannerman's Executors, March 6, 1889, 16 R. 559, 26 S.L.R. 424; Lindsay's Trustees v. Lindsay, December 14, 1880, 8 R. 281, 18 S.L.R. 199. Here the testator had not conferred a fee. This was shown in the provision itself, for the trustees were to hold and to invest in their own names; there was nothing about paying to the third party the capital; it was only the income which was to be paid; there was power to make advances from capital, but that only to a limited extent, and there was a destination-over to an arbitrarily selected class of heirs in the event of the third party dying unmarried. If the whole deed were looked to, this became even clearer, for the testator had given a fee to his eldest son and a liferent to his daughters, and the bequest to the third party in no way resembled the former and closely resembled the latter. The case really was similar in principle to Douglas's Trustees, November 6, 1902, 5 F. 69, 40 S.L.R. 103; Peden's Trusteee v. Peden, June 27, 1903, 5 F. 1014, 40 S.L.R. 741; Reid v. Reid's Trustees, June 21, 1889, 1 F. 969, 36 S.L.R. 722; Muir's Trustees v. Muir's Trustees, March 19, 1895, 22 R. 553, 32 S.L.R. 370. In both
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Ballantyne's Trustees and Greenlees' Trustees, cit. inf., there was a clear gift of a fee, and Ballantyne's Trustees was a doubtful authority since the dicta in Bowman v. Bowman, July 25, 1899, 1 F. (H.L.) 69, 36 S.L.R. 959. Argued for the third party—The third party was entitled to have his share of residue now paid over to him. The bequest came between that to the elder son, where an undoubted fee was given, and that to the daughter, where undoubtedly only a liferent was conferred. It could not have been intended to give a liferent only, for where that was intended the testator used clear language. Probably therefore a fee in some way fettered had been intended, and this was consistent with the language used. To “hold for behoof of” was equivalent to an out-and-out gift— Ballantyne's Trustees v. Kidd, Feb. 18, 1898, 25 R. 621, 35 S.L.R. 488; Greenlees' Trustees v. Greenlees, Dec. 4, 1894, 22 R. 136, 32 S.L.R. 106. No restriction on the gift was imposed by the power to the trustees to advance or the power given the beneficiary to convey to his children. There might be some doubt as to what the qualifications were intended to amount to, but that doubt could not affect the fee which had been given. The testator could not tie up a fee so as to deprive the beneficiary of the enjoyment of it— Miller's Trustees, cit. sup.; M'Culloch's Trustees, November 24, 1903, 41 S.L.R. 88, L.R. [1904], App. Cas. 55; Yuill's Trustees v. Thomson, May 29, 1902, 4 F. 815, 39 S.L.R. 668. The only thing which could entitle the trustees to withhold payment would have been the provision for the contingency of the beneficiary dying unmarried, but the possibility of that contingency was gone. Dying unmarried meant dying without ever being married. Compare the construction of a provision as to dying without issue— Steel's Trustees v. Steedman, December 13, 1902, 5 F. 239, 40 S.L.R. 202. In interpreting a statute it had been held that a widower was a married man, i.e., a man who had been married— Kennedy's Trustees v. Sharpe, November 21, 1895, 23 R. 146, 33 S.L.R. 89. The English cases supported this construction—Jarman on Wills (5th ed.), vol. i, p. 487; Dalrymple v. Hall, L.R. (1881), 16 Ch D 715; in re Sergeant, L.R. (1884), 26 Ch. D. 575; Blundell v. De Falbe, 1888, 57 L. J., Ch. D. 576.
The question arises out of the clause by which the testator directs the disposal of the residue of his estate, and that question is whether Mr David Brown Anderson, the party of the third part, has on the proper construction of the settlement, and more especially of the fifth clause of the settlement, an absolute right to the fee of the share bequeathed to him, and if he has such a right of fee, whether or not he has right to immediate payment. The first parties, the trustees, say that that is not the nature of the right given to Mr David Brown Anderson, but that what is given to him is only a life-rent and certain other advantages or powers which it is in the option of the trustees to confer upon him.
Now, in the clause dealing with residue the testator directs that the whole of the residue and remainder of his estate “shall, as soon as conveniently may be after my death, be divided by my said trustees into four just and equal shares, corresponding to the number of my present surviving children, which several shares shall continue to be held by my said trustees, or paid, applied, or disposed of by them in manner hereinafter directed.” That is the ruling clause as to the residue. It is to be divided by the trustees into four shares, and these shares are to be held or paid according to the manner he directs—that is to say, some are to be paid, some are to be held; and accordingly in the next clause, which deals with the share given to his eldest son, there is a direction—“As soon as conveniently may be after the foresaid division, to pay, assign, or dispone one of said just and equal four shares to “his elder son William Anderson. Now, there is no question that that clause confers a fee upon William Anderson. But then we come to the fifth clause, which is the one we have materially to do with, and by it he directs his trustees “to hold another of said just and equal fourth shares of said residue for behoof of my younger son David Brown Anderson, Writer to the Signet.” The direction there is not to pay, but to “hold for behoof of.” It was said by the Solicitor-General—and I do not dispute the observation—that a direction simply to hold for behoof of a particular person, with no further direction or with no further limitations or qualifications, and no further disposition of the fee, would and may in certain cases amount to a gift, though it is only said to be “for behoof of.” I do not dispute that at all, but I dispute altogether the mode of construction of this clause which the learned Solicitor-General submitted, namely, that having got the leading words “to hold one-fourth of the residue for behoof of my younger son David Brown Anderson,” we have to stop there and say—without looking at the qualifications and limitations contained in the clause—that that means an, absolute gift in this case, and that, being an absolute gift, all the qualifications and conditions annexed to it are to be considered as mere qualifications and conditions of an absolute gift already given. I do not think that is a proper mode of construing a will. I think you must take the whole clause from first to last, and having considered the whole clause with all its conditions and qualifications, then say whether, when the testator used the words that the trustees were to hold a one-fourth share for behoof of David Brown Anderson, he thereby meant to hold it for his behoof in fee, or to hold it for his behoof as subsequently directed and pointed
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The testator further goes on to direct that the trustees are to take and invest his share in their names for his behoof, and then this is what they are to do—“They shall pay over to him during his survivance the free interest, dividends, or annual profits thence arising, and his receipt therefor shall be a valid and effectual discharge to my said trustees in payments of said interest, dividends or profits.” That is nothing but a direction to pay the interest or income of the estate. It was said, too, that that is inconsistent with a direct right of fee being given to Mr Anderson because, if so, he had a right to demand the whole capital and the direction to pay the interest would be quite superfluous.
But then there is another power to the trustees. In the event of the marriage of the son to their satisfaction, “or if for any other reason they may judge it expedient and prudent to make such advances” they have power to advance to him from the capital of the share held by them for his behoof, a sum not exceeding £2000 sterling to meet expenses needful and proper to be incurred upon his marriage. Now, that again is entirely inconsistent with his having a right to the whole capital. It is provided that his share is to be held for his behoof in the sense expressed here—that the trustees if they think proper may advance £2000.
Then there is a power given to the son to provide with the consent of the trustees for his widow in the event of his marriage. The same observation applies to this provision. That is not an absolute power of disposal of the estate, and is inconsistent with the fee being intended to be given. Then there is the power of apportioning his share among his own children; but that is a very different power from a power of absolute disposal to anybody he wished. It is a limited power, and again is inconsistent with the right in fee being given to him.
And then we have another clause, which is that, in the event of Mr David Brown Anderson dying unmarried, the one-fourth share held for his behoof, or the proceeds thereof, shall be divided “equally among his surviving nearest of kin per stirpes Now, it is impossible to deny that on the construction of that clause in certain events there was an equal division of the fee to be given to selected beneficiaries, namely, not the heirs in mobilibus, which the law would settle, but his nearest of kin per stirpes which is a selected class.
As to the true meaning of the word “unmarried,” whether it means if he should die unmarried, or whether it means if he should never have been married, on the construction of this deed I do not think it is at all material what meaning we give the word, because we are trying to find the intention of the testator, and it appears to me quite obvious that in certain events contemplated by the testator the fee of this estate was not given to his son but was given to his next-of-kin per stirpes That is a clear destination-over, and is quite inconsistent with David Brown Anderson having a right of fee a morte testatoris.
Accordingly, on the construction of this deed I think it is evident that the intention of the testator was not to give the fee to David Brown Anderson but to give the trustees the duty to hold and to administer the estate in terms of the third and fifth clauses. I am therefore of opinion that we should answer in the affirmative the first alternative of the first question, to the effect that the first parties are bound to hold during the lifetime of the third party the share of the testator's estate at present held by them for his behoof.
Now, with the aid of the prefatory statement in the third purpose, I think no one who goes on to read the fifth purpose, in which the trustees are directed to hold a certain “share for behoof of” the testator's younger son David Brown Anderson, could fall into the error of supposing these words stated completely the purpose of the testator in regard to his son, but would consider that these words are merely an announcement of the subject which he was going to dispose of, and would look for the precise destination of that share to the directions which are given to the trustees in regard to this share which they are to set apart for behoof of David Brown Anderson. It was contended by the third parties that these words “for behoof of my younger son” are sufficient to vest him in the capital of his share in the events which have happened; but there are at least two perfectly legitimate modes of interpreting these general words. The one would be that the son would get just the particular interest thereafter provided for him, and no more; and
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What is to happen in case Mr Anderson should have no issue, or should die without leaving any children surviving him, is a question which I think we can hardly usefully consider at the present time. It may be that if in that case he disposed of the estate to third parties it might be held that under the general words at the commencement of the fifth purpose he would have an interest in the fee sufficient to enable him to dispose of it. That has been held in other cases—chiefly cases of provision in favour of ladies with a power to settle; but this is a question which we are unable to determine in the absence of those who may have an adverse interest.
I am clearly of opinion with your Lord-ship that the testamentary directions must be carried out according to the plain meaning of the language used, and that this is not a case where any artificial or arbitrary rule of construction ought to interfere with the testator's intention, and that the question must be answered in favour of the first parties.
The
The first alternative of the first question was accordingly answered in the affirmative.
Counsel for the First and Second Parties— Campbell, K.C.—Munro. Agents— Mackenzie, Innes, & Logan, W.S.
Counsel for the Third Party—The Solicitor-General ( Dundas, K.C.)— Blackburn. Agents— Dundas & Wilson, C.S.