Scottish Court of Session Decisions

On 15th August 1907 a special case was presented which dealt with a provision, contained in a codicil to the trust-disposition and settlement of the deceased Robert Napier, engineer and shipbuilder in Glasgow.

Robert Napier died on the 23rd June 1876, leaving a trust-disposition and settlement, dated 14th April 1871, whereby he conveyed his whole estate to trustees, with five codicils or additions thereto, of which that of 18th January 1876 alone had any bearing on the questions now raised. The fifth purpose of the trust directed the trustees to divide the residue and remainder of his means and estate into ten equal shares; to hold one tenth share for each of his three daughters, and her children; to hold three tenth shares for behoof of his son “James Robert Napier and his wife and children, and those substituted to them as hereinafter mentioned”; and to pay or convey over three tenth parts or shares to his son “John Napier and his heirs.” The deed then proceeded as follows—“And as regards the remaining one tenth part or share, I direct my trustees to apply the same in the first instance in satisfying and paying the several legacies and bequests which I have left or may leave or bequeath by any separate writing or codicil though not formally executed, and in paying the Government duty on such legacies and bequests; and I direct that after satisfying these legacies or bequests and the duty thereon the surplus or remainder of the said last-mentioned share shall be paid or made over also to my said son John Napier and his heirs; and I would explain that my reason for making all the provisions of the said John Napier payable to himself instead of destining the same or a portion thereof for the benefit of his wife and family (as I should have wished to have done) is that he may have the command and control of all available capital in carrying on the business of Robert Napier & Sons, as after mentioned.”

On 18th January 1876 the testator addressed a letter to the trustees,—“Dear Sirs—With reference to the directions contained in the fifth purpose of my trust-disposition and settlement regarding

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the disposal of the one-tenth part or share of the residue of my estate, the remainder of which tenth part, after payment of legacies, I have thereby devised to my son John, my partner in the business of R. Napier & Sons, I now direct and provide that five-tenths of this said tenth share shall be set aside and held by my trustees in trust for behoof of my son John, his wife and family, for alimentary use, not alienable or assignable or attachable for his or their debts (and afterwards to their issue in fee), and the annual proceeds arising therefrom to be paid quarterly to those entitled to receive the same.…” The letter then directed that two-tenths of this tenth share should be paid or conveyed to a daughter of the truster, and the remaining three-tenths of the said tenth share be applied in aid of certain charities.

The five-tenths of one-tenth share of residue was the subject of this special case. It amounted to about £17,000.

The testator was survived by his son John, by the wife of his son John, and by their only children, Robert Assheton Napier and Elizabeth Malcolm Napier, both born before the date of the deed. During the lifetime of Mr John Napier, who died on the 28th December 1899, the trustees paid to him the whole income of the fund. He was survived by his wife and by his daughter Elizabeth, but was predeceased by his son Robert Assheton Napier, who died on 23rd October 1894, survived by a family of sons and daughters. On the death of John Napier the question of the rights of parties in the fund was raised, but by arrangement, to which, without prejudice to their respective rights and interests, the widow, the daughters, and all the members of the family of the son were parties, one-half of the annual income was paid to Mrs John Napier, the widow, and the other half to her daughter. The widow having died on 23rd January 1907 this arrangement came to an end. The income of the whole fund was thereupon claimed on behalf of Miss Elizabeth Malcolm Napier, but in this claim the children of the late Robert Assheton Napier were not prepared to acquiesce.

The parties to the case were—(1) Lawrence Twentyman Napier and others, the trustees of the testator, first parties; (2) Miss Elizabeth Malcolm Napier, second party; and (3) the children of Robert Assheton Napier and their assignees, third parties.

The first parties contended that the fee of the one half of the fund of £17,000, which half was admitted to be liferented by the second party, was in them in trust for her issue, whom failing, for the persons conditionally instituted to them in the settlement; or otherwise that the fee of the whole fund was in them, and that the question to whom the fee ultimately goes could not be decided until the death of the second party. The second party contended that she had a right to the liferent of the whole fund, and in any event to a liferent of one-half thereof. The third parties contended that they had right to the fee of the whole fund subject to a liferent of one-half of the fund in favour of the second party, and defeasance quoad one-half of the fund in the event of her marrying and having children.

The questions of law—it being admitted that the second party was entitled to the liferent of one-half of the fund—for the opinion and judgment of the Court were as follows—“(1) Is the party of the second part entitled to the liferent of the whole fund? or (2) Is the party of the second part entitled to the liferent of only one-half of the fund? (3) Are the parties of the third part entitled to the fee of one-half of the fund absolutely? (4) Are the parties of the third part entitled to the fee of the whole fund, subject to the liferent of one-half thereof in favour of the party of the second part, and also subject to defeasance quoad one-half if the party of the second part marries and has children?”

Argued for the second parties—Though a gift to A and B equally excluded accretion— Paxton's Trustees v. Cowie and Others, July 16, 1886, 13 R. 1191, 23 S.L.R. 830—yet a bequest to a class implied accretion. There were no words here implying a several bequest. The gift was concurrent to John, wife, and family, with accretion (Robert's share accrescing to Elizabeth on his death), there being in cases of liferent a presumption in favour of accretion— Johnston, March 8, 1899, 1 F. 720, Lord Moncreiff at p. 722, 36 S.L.R. 529—or else, alternatively, it was successive to John, wife and family. In either case the second party was now entitled to a liferent of the whole fund.

Argued for the third parties—The parenthetical clause “afterwards to their issue in fee” meant that the issue of each child of John ( i.e. the issue of Robert and Elizabeth) took a fee as soon as their parents' share of liferent was set free by the death of that parent. Robert's liferent did not accresce to Elizabeth. A distributive construction and not accretion was in such cases most in accordance with the presumed intention of the testator— Tristram. v. M'Haffies, December 4, 1894, 22 R. 121, Lord M'Laren at 126, 32 S.L.R. 114; Allen v. Flint, June 15, 1886, 13 R. 975, Lord M'Laren at 977, 23 S.L.R. 703. The argument of the first parties entailed supplying a destination-over to John Napiers' heirs from the 5th purpose of the trust-disposition, but that dealt with a whole tenth, and the provisions as to that tenth were superseded by the codicil, the fund in question here being only the half. Accordingly there was no destination-over to suspend vesting. The whole fund had vested in the third parties as a class subject to defeasance quoad one-half if Elizabeth had issue— Hickling's Trustees v. Garland's Trustees, August 1, 1898, 1 F. (H.L.) 7, 35 S.L.R. 975; Douglas v. Douglas, March 31, 1864, 2 Macph. 1008; Carleton v. Thomson, July 30, 1867, 5 Macph. (H.L.) 151, 4 S.L.R. 226.

Argued for the first parties—The trustees were bound to hold the fund till the termination of the liferent, because there was

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a conditional institution of, or destination over to, John's heirs. This was suspensive of vesting till the death of the liferenter, and not till then could the class entitled to take be ascertained— Turner v. Gaw, February 20, 1894, 21 R. 563, 31 S.L.R. 447; Thompson's Trustees v. Jamieson, January 26, 1900, 2 F. 470, 37 S.L.R. 346.

At advising—