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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Darling's Trustees v. Johnston and Others [1909] ScotLR 394 (30 January 1909)
URL: http://www.bailii.org/scot/cases/ScotCS/1909/46SLR0394.html
Cite as: [1909] ScotLR 394, [1909] SLR 394
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SCOTTISH_SLR_Court_of_Session
Page: 394↓
Court of Session Inner House First Division.
v.
Succession — Liferent and Fee — Bona fide perceptio et consumptio.
Facts:
A testator gave a liferent of £2000 to his daughter, and directed that after her decease it should be paid to anyone or more of his other descendants in such
shares as she might appoint, and failing such appointment to his descendants equally among them per stirpes. The daughter appointed a liferent to a niece, a granddaughter of the testator, and directed that on the capital being set free on her death it should be divided in certain proportions amongst certain persons (all of whom were amongst the descendants of her father), whom failing to their respective heirs in mobilibus.
Held (1) that the appointment was bad, because ( a) the appointees might prove to be outwith the power, i.e. not descendants of the granter, and ( b) the appointment postponed the period of division; and (2) that the £2000 fell to be divided per stirpes among the testator's descendants at the time of the death of the appointing liferentrix.
Opinions reserved as to whether where there was a power of appointment of a certain sum it was a good exercise of the power to appoint a mere liferent.
Held that the doctrine of fruges bona fide perceptce et consumptœ did not apply to a liferent paid in error to the wrong person.
Hunter's Trustees v. Hunter, July 6, 1894, 21 R. 949, 31 S.L.R. 837, so far as laying down any rule to the contrary, disapproved.
William Darling, farmer, residing at Abbey Bank, Kelso, died on 26th July 1867, leaving a trust-disposition and settlement dated 17th February 1863, and registered in the Sheriff Court, Books of Roxburghshire 12th August 1867. By it he conveyed his whole estate, heritable and moveable, to trustees for the purposes therein mentioned.
The third purpose of the said trust-disposition and settlement provided—“That my trustees shall at the first term of Whitsunday or Martinmas after my death lay out and invest in such manner as they may deem advisable two sums of two thousand pounds sterling for the respective behoof of my two daughters, the said Margaretta Elizabeth Darling and Jane Darling, and annually pay the interest or annual produce arising from the said respective sums of two thousand pounds to each of them respectively during all the days of their respective lives: Declaring that the said interest or annual produce is purely alimentary and not assignable by them, nor shall it be subject to the jus mariti or right of administration of any husband either of them may marry respectively, nor affectable by his debts or deeds, nor liable to the diligence of his creditors, but shall be paid to each of my said daughters on their own respective receipts allenarly, and declaring further, that after the decease of my said two daughters respectively the said sum of two thousand pounds so provided for behoof of each of them shall be paid by my said trustees to the child or children and descendants of each of my said daughters
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respectively so deceasing in such shares or proportions as she may direct or appoint by any writing under her hand, and failing such direction or appointment, to her said children and their descendants share and share alike per stirpes—that is to say, the descendants of such of the children of my said daughters respectively as may have predeceased their respective parents shall be entitled to, and draw among them equally, the share or shares of the said sum of Two thousand pounds to which their respective ancestors would be entitled to if in life, and in the event of both or either of my said daughters Margaretta Elizabeth and Jane dying unmarried or without issue, then and in that case the principal sum of Two thousand pounds to be liferented by each of them respectively shall be paid to any one or more of my other descendants in such shares or proportions as my daughter so deceasing may direct and appoint in manner foresaid, and failing such direction or appointment to my descendants equally among them share and share alike per stirpes as aforesaid, and in case I shall have no descendants alive at the time of their respective deaths, they shall have power to leave and bequeath the said sums to such other person as they shall respectively think fit: But declaring that in the event of both or either of my said daughters being married, the husband of such daughters or daughter shall after the decease of his wife be entitled to draw the annual produce of the foresaid sum of two thousand pounds provided to each of them.” Margaretta Elizabeth Darling died on 27th November 1904, and Jane Darling upon 22nd September 1907, both unmarried, and each leaving a trust-disposition and settlement dated 30th September 1899, and couched in exactly similar terms, excepting in so far as each sister's will was conceived in the other sister's favour.
By their said settlements each of the said sisters Margaretta and Jane Darling, after providing for the payment of her debts and the disposal of her furniture, directed her said trustees—To hold the whole residue of her estate in trust, and to pay the income thereof to her other sister, during her life, and, on the death of the latter if she should survive the testatrix, or at the death of the testatrix if her other sister predeceased her, the said trustees were directed to hold the said residue for behoof of her niece Mary Jane Roberton, and to pay the income thereof to her during her life. Each of these liferent provisions was in both settlements declared to include the interest on the sum of £2000 liferented by the testatrix under the said trust-disposition of her father the said William Darling. The trustees were then directed to pay and apply the capital of the said residue, on its being set free by the deaths of the said liferentrices—or by the death of the testatrix, if the said liferentrices both predeceased her—in the following manner, viz.—one half thereof to be paid to William Rutherford Darling, son of the testatrix' brother the said George Rutherford Darling, whom failing to the heirs in mobilibus of the said William Rutherford Darling, and the other half thereof to the four children of the late Locke Rutherford Darling, also a son of the said George Rutherford Darling, equally among them, and to their respective heirs in mobilibus. It was further declared that the capital of the said residue should not vest until the deaths of the liferentrices, and finally there occurred in each settlement the following clause, viz.—“And considering that by the said trust-disposition and settlement executed by my said father I am entitled to the liferent of the sum of two thousand pounds, and that I have power to bequeath the said sum to such of his descendants as I may think fit, therefore I hereby leave and bequeath the said sum of two thousand pounds to the same persons who shall be entitled to the said residue of my means and estate as before provided, whether liferent or fee, in the same manner in every respect as is hereinbefore specified in regard thereto.”
On the decease of Margaretta, and in accordance with the terms of her said settlement, the trustees acting under her father's settlement paid over the income of the £2000 liferented by her under the said settlement to her sister Jane in addition to the income of the £2000 liferented by the latter, and that up to her death on 22nd September 1907.
William Darling was survived by four children, viz.:—Mrs Mary Ann Darling or Roberton, wife of James Roberton, farmer, Ladyrig; the said George Rutherford Darling; the said Margaretta Elizabeth Darling; and the said Jane Darling. His descendants at the time of the said Jane Darling's death were (1) the said Miss Mary Jane Roberton; (2) Mrs Jane Pringle
Roberton or Rutherford; (3) Mrs Ellen Margaretta Roberton or Harvey; (4) Mrs Agnes Christian Roberton or Henderson (all children of the said late Mrs Mary Ann Darling or Roberton); (5) the said William Rutherford Darling, a son of the said late George Rutherford Darling; and (6) the four children (all of whom were in minority) of the late Locke Rutherford Darling, another son of the said deceased George Rutherford Darling. The said descendants, along with Jane Darling, were also the whole descendants of William Darling at the date of death of Margaretta Elizabeth Darling on 7th November 1904. Mrs Rutherford, Mrs Harvey, and Mrs Henderson conveyed by their respective marriage-contracts all their right, title, and interest in the £4000 in question to trustees for the purposes of said contracts.
Questions having arisen as to the exercise of the powers of appointment conferred on Margaretta and Jane Darling by the third purpose of William Darling's trust-disposition and settlement, a Special Case was presented.
The parties to the case were (1) John Somerville Johnstone and Another, the trustees acting under the trust-disposition and settlement of William Darling, first parties. (2) The trustees acting under the
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trust-disposition and settlement of Margaretta Elizabeth Darling, second parties. (3) The trustees acting under the trust-disposition and settlement of Jane Darling, third parties. (4) Mary Jane Roberton, fourth party. (5) The various trustees acting under the ante-nuptial contracts of marriage between ( a) Mrs Rutherford and her husband, ( b) Mrs Harvey and her husband, ( c) Mrs Henderson and her husband; William Rutherford Darling, and the four minor children of Locke Rutherford Darling, fifth parties. The fourth party contended (1) that the power of appointment over the said two sums of £2000 conferred on Margaretta Elizabeth Darling and Jane Darling respectively was validly exercised by each of them; (2) that Jane fell to be included, if necessary, in the class of descendants of William Darling to whom in the events specified in his trust-disposition and settlement the fee of the sum of £2000 liferented by Margaretta was destined; and (3) that in any event the estate of Jane was not liable to repay to the estate of the said William Darling any sums paid to her in respect of the sum of £2000 liferented by Margaretta. The second and third parties maintained the validity of the trust purposes set forth in the settlements of Margaretta and Jane, and to that extent accordingly they concurred in the contentions of the fourth party. The fifth parties maintained (1) that the aforesaid power of appointment conferred on Margaretta and Jane respectively had not been validly exercised by either of them, either in whole or in part; (2) that the two said sums of £2000 fell to be divided among the class of descendants of William Darling, to whom in the events specified in his trust-disposition and settlement the fee of the said two sums was destined; (3) that Jane did not, upon a sound construction of the said late William Darling's trust-disposition and settlement, fall to be included in the class of descendants called to the fee of the said sum of £2000, liferented by Margaretta, by the truster in the event of Margaretta dying unmarried or without issue, and without having validly exercised her power of appointment. They further maintained that in the event of its being held that Margaretta did not validly exercise the power of appointment conferred upon her, the estate of Jane Darling was liable to repay to the estate of William Darling any sums paid to her in respect of the sum of £2000 liferented by Margaretta. The first parties, being merely desirous of administering the estate of the said William Darling as the Court might direct, had no contentions to state.
The questions of law for the opinion and judgment of the Court were—“(1) Has the power of appointment over the sum of £2000 liferented by the said Margaretta Elizabeth Darling been validly exercised by her in her trust-disposition and settlement, and if so, to what extent? or (2) Did the said sum of £2000 on her death fall to be divided per stirpes among the descendants of the said William Darling then alive? and if so (3) Was the said Jane Darling entitled to a one-third share of the capital of the said sum of £2000? (4) Has the power of appointment over the sum of £2000 liferented by the said Jane Darling been validly exercised by her in her trust-disposition and settlement, and if so, to what extent? or (5) Does the said sum of £2000 fall to be divided per stirpes among the descendants of the said William Darling alive at the date of her death? (6) In the event of it being held that the bequest to the said Jane Darling of a liferent of the sum of £2000 liferented by the said Margaretta Elizabeth Darling was invalid, are the third parties bound to repay to the first parties the sums representing the income of the said sum of £2000 received by her from and after the death of the said Margaretta Elizabeth Darling, and if so, are they liable in interest and at what rate?”
Argued for the fifth parties—The power of appointment given to her had not been validly exercised either by Margaretta or by Jane. As to the attempted appointments of liferents, a new appointment of a liferent was not good. To give a liferent was to burden the capital sum, not to appoint it. Moreover, the effect here would be to postpone the period of division. As to the attempted appointments of the capital sums, those also were bad, because those ultimately called, namely, heirs in mobilibus of certain of the testator's descendants, were not necessarily his descendants, and hence not objects of the power. Reference was made to the following authorities— Matthews Duncan's Trustees v. Matthews Duncan, February 20, 1901, 3 F. 533, 38 S.L.R. 401; Neill's Trustees v. Neill, March 7, 1902, 4 F. 636, Lord M'Laren at 640, 39 S.L.R. 426; Lennock's Trustees v. Lennock, October 16, 1880, 8 R. 14, 18 S.L.R. 36; Warrand's Trustees v. Warrand, January 22, 1901, 3 F. 369, 38 S.L.R. 273; Mackenzie's Trustees v. Kilmarnock's Trustees, December 4,1908, 46 S.L.R. 217.
Argued for the second, third, and fourth parties—The appointments were good. An appointment to a mere liferent was a good exercise of a power of appointment— Dalziel v. Dalziel's Trustees, March 9, 1905, 7 F. 545, Lord President at 553, 42 S.L.R. 404; Neill's Trustees v. Neill ( cit. sup.), M'Laren on Wills, sections 2044–5. If the ultimate destination to heirs in mobilibus was ultra vires, then these words should be held pro non scripto. In support of the third contention of the fourth parties— Hunter's Trustees v. Hunter, July 6, 1894, 21 R. 949, 31 S.L.R. 837, was cited.
At advising—
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Now both Margaretta and Jane left trust-dispositions and settlements written in identical terms; and their trust-dispositions and settlements dealt with their own fortunes, and, so far as the residue was concerned, directed that the residue should be held for the liferent use of the surviving sister. That is to say, Margaretta provided for the liferent of her fortune being given to Jane, and Jane did the same for Margaretta. The trust-dispositions then went on to provide that when the said residue and remainder should be set free by the death of Margaretta—or Jane, as the case might be—there was to be a liferent in favour of a certain niece, Mary Jane Roberton; and at the end of her liferent the capital was to be divided—one-half to a nephew by name of William Rutherford Darling, whom failing to his heirs in mobilibus, and the other half to the children of another nephew, Locke Rutherford Darling, and their heirs in mobilibus, with the declaration that the capital should not vest in these persons until the deaths of both liferentrices; and then the dispositions continued—“Considering that by the said trust-disposition and settlement executed by my said father I am entitled to the liferent of the sum of two thousand pounds, and that I have power to bequeath the said sum to such of his descendants as I may think fit, therefore I hereby leave and bequeath the said sum of two thousand pounds to the same persons who shall be entitled to the said residue of my means and estate as before provided, whether liferent or fee, in the same manner in every respect as is hereinbefore specified in regard thereto.” Accordingly that last sentence is really just repeating in shorthand, with regard to the £2000, what had before been said in detail as regards the general residue. Margaretta, as I have already mentioned, died in 1904, and following out the provisions of her trust-disposition and settlement the interest of the £2000, which had formerly been paid to her, was after her death paid to Jane, but only for three years, because Jane died in 1907.
Now Jane having died, the question has arisen as to what is to happen to these two sums of £2000. The whole point, of course, is—has there been or has there not been a good appointment of these two sums? If there has been a good appointment, then there is no question as to what happens at present, because Mary Jane Roberton must take a liferent of the interest of these two sums of £2000, and if Mary Jane Roberton takes the liferent, although we have been asked certain questions, it is quite clear that your Lordships would never determine ab ante who would take the fee, because that would occur at a period which may be long distant, and it would be quite impossible now to be perfectly certain that the persons who had the interest in the appointments were really before us. Therefore your Lordships would certainly not answer any such questions, but, of course, your Lordships will answer the question as to whether Mary Jane Roberton is entitled to the present liferent. If she is not, then, as everyone is before us who can immediately claim, your Lordships can answer that matter also.
The question has been often approached and mooted, but never decided, as to whether, where there is a power of appointment of a sum among a certain class or among certain people, it is a good exercise of the appointment to appoint a liferent. I do not think that that general question arises in this case or need be decided, and therefore I propose to reserve my opinion upon that until it does arise. But the general considerations that affect the exercise of a power of appointment are perfectly well settled. I had occasion to say something about them in the recent case of Dalziel ( 7 F. 545), and I do not propose to repeat what I then said. But it is quite clear that the appointment, to be good, must be to persons within the power. Now, here I do not think that there has been any appointment, that can be sustained, to persons within the power. There is no appointment to Mary Jane Roberton of the capital sum of £2000. She is only given the liferent, and when you come to the fee of the sum, it is given to a set of persons who are to be determined at an entirely future date, and among them are included persons who are certainly not necessarily objects of the appointment, because they are described as heirs in mobilibus. If you waited and found out, of course the heirs in mobilibus might prove to be persons who fell within the description in the power, because they might be descendants of Mr William Darling, but, on the other hand, they might not be, and I think therefore that the exercise of the power is bad for that reason.
But I think it is bad for another reason also. The cases vary in this way. A may give a power to B to exercise, and the power will be well exercised or not as it is exercised in favour of the objects of the power or not. A may say nothing more
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Now the moment you put the question in that form it decides itself, because it cannot be a good exercise of that power to put off the true exercise of the power for many years. I think this becomes exceedingly clear by an illustration. Supposing A, who died in, let us say, 1900, left a sum which he subjected to a power to divide among the issue or descending issue of somebody alive or the descendants of somebody dead, could anyone suppose that it would be a good exercise of that power for the person given the appointment of the power to say—“I direct that the persons to participate shall be the persons who shall have that character in the year 2000?” That of course would defeat itself; and in the same way here, though the time of course is not so ridiculous, yet the whole matter is proposed to be put off by introducing a young liferentrix, and it may be many years before Mary Jane Roberton dies.
Accordingly I think that there is no question here that the exercise of the power is bad. It cannot be brought into the category of cases where, there being a proper exercise of the power in favour of a certain person, the person exercising the power seeks in some way to clog the interest so given, in which case, as has been decided, the Court may hold that the power has been well exercised, the clogs that are merely hampering the direction flying off. It cannot be brought into that category, because here there is nothing to be given Mary Jane Roberton except a liferent.
That being so, what is the result? The result, I think, is quite plain, that it is to fall “to my descendants equally among them, share and share alike, per stirpes”—that is, at the moment of the liferent ending. It follows from what I have said, therefore, that I think it was wrong to pay Jane the interest of the £2000 which was set free by the death of Margaretta; but that can, however, now be put right. Therefore the distribution of each £2000 must be taken as at the time it was set free by the death of each liferentrix. Taking Margaretta first, there was a division per stirpes among the descendants at her death; taking Jane second, then again there was a division per stirpes among the descendants at her death.
When we come to the particular shares that the persons take, all I need say is that as regards Mary Jane Roberton, who comes in I think as a representative of these ladies, she in taking her share of what Jane got must necessarily, in re stating the accounts, allow for what was improperly given to Jane of Margaretta's £2000. An attempt was made to argue that she should not be made to pay rebate upon the doctrine of bona fide percepta et consumpta, and a certain case was quoted to us— Hunter's Trustees v. Hunter, 21 R. 949. That case was decided upon its own terms and conditions. I most respectfully say I am not to be held to agree with what it is said was there laid down as a general principle. I thought it was long ago settled, and indeed is clear law, that the doctrine of bona fide percepta et consumpta is a doctrine which deals with fruits. It deals only with the case where the subject is given to a wrong person in bona fides, which subject can be restored as a whole, and then the doctrine deals with the fruits while they were in the wrong hands, and by that doctrine such fruits are not bound to be repaid. It has no application whatsoever to wrong payments, not of fruits but of the subject itself. The liferent here paid was not a fruit—it was the thing itself. And accordingly I cannot imagine that this doctrine has any application whatsoever to a case of this class. Nor indeed here is there any equitable basis for it, for of course she will take more under her share of the capital than she would have taken under the liferent, and there is no reason she should have both.
Accordingly the questions categorically will be answered as follows—The first in the negative, the second in the affirmative, the third in the affirmative, the fourth in the negative, the fifth in the affirmative, and the sixth in the affirmative.
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The Court answered the first question in the negative, the second in the affirmative, the third in the affirmative, the fourth in the negative, the fifth in the affirmative, and the sixth in the affirmative.
Counsel for the First and Fifth Parties— W. J. Robertson. Agents— Ronald & Ritchie, S.S.C.
Counsel for the Second, Third, and Fourth Parties— Carnegie. Agents— Lindsay, Howe, & Co., W.S.