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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Chivas' Trustees v. Chivas' Trustees [1906] ScotLR 44_15 (27 October 1906)
URL: http://www.bailii.org/scot/cases/ScotCS/1906/44SLR0015.html
Cite as: [1906] ScotLR 44_15, [1906] SLR 44_15
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SCOTTISH_SLR_Court_of_Session
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Court of Session Inner House Second Division.
v.
Facts:
A testator directed his trustees to pay to his widow an annuity of £500 (to be in part derived from a certain heritable property), and gave her power to bequeath “the amount of said annuity” (except in so far as derived from the heritable property, which was otherwise disposed of) to any one or more of their children. The heritable estate provided an income of about £45 annually, and to meet the balance the trustees set aside a sum of £20,000, the result being that there was annually a surplus income of between £100 and £150.
The widow died, having exercised her power of bequest. In a special case it was maintained that her power of bequest was limited to such a sum as would have been reasonably sufficient for the purposes of the annuity.
Held that it extended to the whole sum of £20,000, the trustees having acted in good faith, and the amount set aside not being so extravagant as to suggest that they had failed to exercise a reasonable discretion.
Mr James Chivas died on 8th July 1886 leaving a settlement and codicils by which he conveyed his whole estates, heritable and moveable, to trustees for various purposes. The third purpose of his settlement was in the following terms:—“In the third place, I appoint my said trustees to pay to my said spouse, free of all deductions, an annuity of £500 sterling, payable half-yearly in equal portions at the terms of Whitsunday and Martinmas, commencing the first half-yearly payment thereof at the first term of Whitsunday or Martinmas which shall happen after my decease; and also to pay to her the sum of £200 sterling in full of mournings and interim aliment, with power to my said spouse to bequeath the amount of said annuity to any one or more of our children as she may think fit.” By a codicil he provided as follows—“ First, that the free rental of Thornhill lands form part of the annuity bequeathed to my wife during her life.” There followed special provisions dealing with the fee.
In a special case presented to the Court in 1893 ( reported October 17, 1893, 21 R. 1, 31 S.L.R. 1) it was decided that the rents of Thornhill were not bequeathed in addition to the annuity of £500, but formed part of it. The free rental of Thornhill taken over an average of years amounted to a sum of about £45 per annum.
The trustees accordingly set aside a sum of £20,000 to provide for the balance of the annuity, with the result that there was
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annually a surplus of income of between £120 and £150. The testator's widow died in 1904, leaving a holograph will in which she expressly disposed of the sum of £20,000 invested by the trustees to provide her annuity.
A special case was after her death presented to the Court containing, inter alia, the following question:—“Did the power of bequest conferred by the testator on Mrs Chivas extend to the whole sum of £20,000 set aside by the first parties (the testator's trustees) to meet her annuity?”
The second parties to the case contended that Mrs Chivas' power of bequest did not apply to the whole sum which the trustees might in their discretion and for their own protection set aside to meet the annuity, but only to such sum as was sufficient to provide such part of the annuity as was not provided by the rents of Thornhill. They maintained that while the trustees might be entitled to set aside such a sum as would insure that there should not in any contingency be a deficiency, the sum so set aside by the trustees was not the measure of the widow's right of bequest.
The third parties contended that the power of bequest conferred by the testator on Mrs Chivas extended to the whole amount set apart by the first parties out of the residue of the testator's estate to meet her annuity.
The following cases were referred to— Forsyth v. Kilgour, December 15, 1854, 17 D. 207; Munro's Trustees v. Munro, June 21, 1899, 1 F. 980, 36 S.L.R. 761; Hicks v. Ross, [1891] 3 Ch 499.
The judgment of the Court was delivered by
The third question relates to the sum (£20,000) retained by the trustees to secure Mrs Chivas' annuity. The second parties contend that that sum was excessive seeing that a considerable part of the annuity was met by the rents of Thornhill, and that accordingly Mrs Chivas' right to bequeath the sum retained to secure the annuity should be held to be limited to such an amount as would have been reasonably sufficient for that purpose after taking into account the average free rents of Thornhill. Now, I think that the sum retained by the trustees was very full, but it is not suggested that they acted otherwise than in good faith, and I am not prepared to say that the amount was so extravagant that they cannot be regarded as having exercised their discretion reasonably. I am therefore of opinion that the third question falls to be answered in the affirmative….
The Court answered the question in the affirmative.
Counsel for the Second Parties— Wilson, K.C.— D. Anderson. Agents— Davidson & Macnaughton, S.S.C.
Counsel for the Third Parties— Cullen, K.C.— Blackburn, K.C.— Chree. Agent— F. J. Martin, W.S.