Scottish Court of Session Decisions

James Whitelaw Mackenzie died on 10th September 1900, leaving a trust-disposition and settlement whereby he conveyed his whole property, heritable and moveable, to his wife, the pursuer in this action, and to his brothers Robert Mackenzie and Walter Mackenzie, in trust for, inter alia, the following purposes—“(First) For payment of all my just and lawful debts, deathbed and funeral expenses, and the expenses of executing this trust; (Second) That my trustees shall give to my said wife in the event of her surviving me, during all the days of her life, the liferent use and enjoyment of my dwelling-house, number nine Glencairn Crescent, Edinburgh, or of such other house as shall at the time of my death be my residence in Edinburgh, and belong to me, together with the whole household furniture and plenishing therein at the time of my death, including books, pictures, linen, china, plate, plated articles and others, without however any obligation upon her to replace articles broken or perishing with the using; and in the event of the said dwelling-house and the whole or any part of said household furniture and plenishing being sold by my trustees, as they are hereby with consent of my said wife empowered to do, they shall pay to her the annual income of the price or prices obtained therefor during all the days of her life; Declaring that the said liferent provisions shall be for the alimentary use of my said wife, and shall not be assignable by her, or affectable by the diligence of her creditors; (Third) That my trustees shall pay to my said wife, in the event of her surviving me, an annuity after the rate of Five hundred pounds per annum, payable in advance, and that half-yearly, commencing at the first term of Whitsunday or Martinmas which shall occur after my death, declaring that the said annuity is granted to my said wife in name of aliment allenarly, and for her own personal support and subsistence only, and it shall not be in the power of my said wife

Page: 257↓

to anticipate or assign the said alimentary provision, nor shall the same be arrestable or atfectable for her debts or deeds of any description whatsoever; (Fourth) That my trustees shall pay to my said brother Walter Mackenzie the sum of One thousand pounds sterling, and to my said brother Robert Mackenzie the sum of Five hundred pounds sterling; (Fifth) That my trustees shall, in the event of my said wife surviving me, after setting aside the sum of Twenty thousand pounds to provide for the foresaid annuity, pay and convey to her one-half of the whole residue and remainder of my means and estate, and shall pay and convey the remaining one-half to my said brother Walter Mackenzie to the extent of two-thirds thereof, and to my said brother Robert Mackenzie to the extent of one-third thereof; and shall, on the death of my said wife pay and convey to them in the same proportions the said dwelling-house and household furniture and plenishing, or, if the same shall have been sold, the prices thereof, and the sum set aside to provide the said annuity, and any surplus revenue accrued thereon.”

The trust-disposition and settlement also contained a declaration that the foresaid provisions in favour of the pursuer should be in full of all her legal rights. On the death of the testator the pursuer was separately advised by Messrs Davidson & Syme, W.S., regarding her legal rights and her rights under the will, and to enable her to make her election between the legal and conventional provisions the trustees submitted to her and her agents a statement showing the respective values of the said rights. This statement, under the head of provisions conceived in favour of the pursuer under the will, contained the following item—“1. Liferent of dwelling-house No. 9 Glencairn Crescent, Edinburgh—annual value of house after deducting feu-duty, landlord's taxes, repairs, &c., say, £100 — capital value of liferent, £1896, 2s. 6d.” Thereafter the pursuer intimated to the trustees her intention to abide by the settlement. The trustees made up title to the dwelling-house in their names as trustees, and allowed the pursuer to obtain possession of the house and furniture therein. They invested £20,000 to provide for the annuity, and paid the legacies, and thereafter divided the whole residue of the estate. A formal discharge was thereupon granted, inter alios, by the pursuer in favour of the trustees, exonering and discharging them of their whole actings and intromissions with the trust estate up to 10th November 1902, including the distribution of the residue. The pursuer married again. From the testator's death until and including the term of Martinmas 1908 the pursuer paid the feu-duty, proprietor's taxes, and landlord's repairs applicable to the said dwelling-house without demur. Before the following term, however, she intimated to the trustees that she would no longer make these payments, and demanded from them reimbursement of the payments she had already made. The trustees refused to admit liability, and at the term of Whitsunday 1909 deducted the amount of the feu-duty from the alimentary annuity due to her at that term. The pursuer thereupon raised the present action, which concluded for (1) declarator that she was entitled to occupy the said dwelling-house free of all liability for feu-duties, proprietor's taxes, and landlord's repairs, and that the trustees were bound to pay same, and (2) payment to her by the trustees of £441, 9s. 4d., being the amount of the feu-duties, proprietor's taxes, and landlord's repairs disbursed by her since the date of the testator's death, together with the interest thereon.

The pursuer pleaded—“(1) The pursuer being entitled on a sound construction of the trust-disposition and settlement of the late James Whitelaw Mackenzie to occupy the testator's dwelling-house free of all liability for the burdens referred to on record, decree of declarator should be pronounced in terms of one or other of the alternatives of the first conclusion of the summons. (2) The pursuer having disbursed sums in connection with the said house which were properly payable by the defenders as trustees, is entitled to decree in terms of the second conclusion.”

The defenders pleaded—“(4) Upon a sound construction of the trust-disposition and settlement of the deceased James White-law Mackenzie, the pursuer is liable for the several burdens sued for, and decree of absolvitor should be pronounced. (5) In any event, in the circumstances stated, the pursuer is barred personali exceptione from insisting in her present claim, and the defenders should be assoilzied.”

On 9th February 1910 the Lord Ordinary ( Guthrie) assoilzied the defenders.

Opinion. — “.… The case cannot be decided by attention only to the opening words of the clause quoted, namely, ‘that my trustees shall give to my said wife, in the event of her surviving me, during all the days of her life, the liferent use and enjoyment of my dwelling-house.’ This appears from a statement of the corresponding clauses in the cases quoted tome. I refer to—

1. Clark, 1871. 9 M. 435, in which the clause to be construed ran as follows:—	also to give her (his wife) the use of my house No. 36 Drummond Place, with the whole furniture and effects contained therein so long as she remained his widow.
2. Rodger, 1875, 2 R. 294, in which the testator bequeathed	to his wife the liferent use and enjoyment of the house in which I reside at the time of my death, free of all feu-duty, ground-annual, taxes, and all other deductions.
3. Bayne, 1894, 22 R. 26. In this case the testator ordered his trustees	‘to make over to Miss D the house at present occupied by me at C together with the whole furniture, & c., therein, and that during all the days of her natural life, and so long as she shall not enter into any marriage after my death.’
4. Cathcart, 1899, 2 F. 326. The testator bequeathed	to his wife ‘the liferent use of any one house he may die possessed of.’

Page: 258↓

In Cathcart and Rodger the right was held one of occupancy notwithstanding the use of the word ‘liferent.’ The same result followed in the case of Bayne, although the house was to be ‘made over,’ and also in the case of Clark; but in both these cases the benefit of the bequest was to terminate on marriage.

I hold that the pursuer must be dealt with as a liferenter, liable to meet the feu-duty, proprietor's taxes, and landlord's repairs, as well as the occupant's rates and tenant's repairs. In the four cases above cited there was residue not directed to be divided during the lifetime of the beneficiary, and not specially destined at her death, which was available for payment by the trustees of the burdens in question. These cases are, in that particular, in contrast with the present case. On the testator's death, after paying two legacies of £1000 and £500 to Mr Mackenzie's brothers, setting aside £20,000 for the pursuer's annuity of £500, and retaining the furniture for the pursuer's liferent use and enjoyment, the residue was immediately divisible—half to the pursuer and the other half in unequal proportions to the testator's brothers. Except it may be by necessary inference in so far as necessary for the expenses of executing the trust, there is no direction to set aside and retain during the pursuer's lifetime any sum to meet debts. The burdens in question would require a sum not less than £2000, which would at the pursuer's death be intestate succession of the deceased, the only provisions in favour of the testator's brothers being a right to the dwelling-house and furniture in fee, and the sum set apart for the pursuer's annuity with accumulations. The opening words of the clause in question being capable of being read either in the sense of liferent or of occupancy, I think the testator's intention not to free the pursuer from the burdens which she seeks to throw on the trustees may be fairly inferred from his failure to provide the trustees with any fund out of which the burdens can be met, and from the unlikelihood, if he had meant such a fund to be retained without any special direction, of his not providing for its distribution after the pursuer's death.

Another point confirms me in the view above expressed. The testator provides that the pursuer shall not be under any obligation ‘to replace articles broken or perishing with the using.’ If the pursuer is a liferenter such a provision is necessary, but if she is an occupant the provision, so far as referring to articles broken, is useless, for a mere occupant would not be liable for articles broken.

If the view above expressed be sound it is unnecessary to consider the case of personal bar presented by the defenders.”

The pursuer reclaimed, and argued—(1) Although not so in form, this was truly an action of relief by the trustees, who had put the pursuer in petitorio by deducting the feu-duty from her alimentary liferent. The dwelling-house being feudally vested in them they were prima facie liable for feu-duty, proprietor's taxes, and landlord's repairs, and it would require a very special indication of intention by the testator to put such expenses on the beneficiary. The terms of the will would never have entitled the pursuer to demand from the trustees a conveyance of the dwelling-house in liferent, and the right given was quite different from that conferred when there was a direct conveyance of heritage in liferent — M'Laren's Wills and Succession, vol. i, p. 614, et seq. Where there was a direct conveyance the beneficiary was put in the position of a registered owner with a limited title, whose name would appear in the valuation roll, and who would be liable for such charges as were here in dispute. The trustees in the present case occupied that position, and the so-called liferenter was merely an occupier. The case of Campbell v. Wardlaw, March 15, 1882, 9 R. 725, 19 S.L.R. 498, July 6, 1883, 10 R. (H.L.) 65, 20 S.L.R. 748, was in quite a different category. The present case could not be distinguished from Clark and Others, January 19, 1871, 9 Macph. 435, 8 S.L.R. 314; Rodger's Trustees v. Rodger, January 9, 1875, 2 R. 294, 12 S.L.R. 204; Bayne's Trustees v. Bayne, November 3, 1894, 22 R. 26, 32 S.L.R. 31; and Cathcart's Trustees v. Allardice, December 21, 1899, 2 F. 326, 37 S.L.R. 252, which must be taken as deciding that phraseology such as the testator here used did not confer a proper liferent. The circumstance that the will contained no express provision for the payment of these particular burdens and no indication of a source out of which they should be paid did not show the testator's intention that they should be borne by the pursuer. Such provisions would be quite contrary to practice. The direction to the trustees to pay the expenses of administration was sufficient, and that direction fell to be executed before any of the other provisions of the will. In any event the £20,000 would obviously yield much more than was necessary to pay the widow's annuity, and the testator, who would be alive to this, must have intended the surplus revenue of this fund to be devoted to purposes other than the payment of the annuity. Moreover it was unlikely that the testator should intend these expenses to be paid out of a provision which he had made alimentary. The power to sell the house given to the trustees, subject no doubt to the pursuer's consent, supported the view that this was a mere right of occupancy. The pursuer also referred to Kinloch's Trustees v. Kinloch, February 24, 1880, 7 R. 596, 17 S.L.R. 444, and the Heritable Securities Investment Association, Limited v. Miller's Trustees, December 17, 1892, 20 R. 675, 30 S.L.R. 354. (2) The pursuer was not barred from insisting in her claim by having elected to abide by the settlement without objecting to the accuracy of the statement submitted to her by the trustees. Because the trustees chose to put a value upon her rights under the will she was not therefore bound by that value, and in any event the statement expressly provided that the valuations contained in it should not be binding on either party. Neither was she barred by

Page: 259↓

the discharge granted to the trustees, which merely exonerated them so far as the estate had been paid away, but did not discharge them from carrying out their duties as trustees so far as the trust was still subsisting. Nor was it material that before the pursuer made her claim the whole of the residue had been divided without objection on her part. If there were no trust funds available and it was sought to make the trustees personally liable the position might be different, but the defenders were only sued qua trustees, and there were ample trust funds available to meet these charges.

Argued for the respondents—(1) In none of the oases cited by the pursuer was any particular significance given to the words used in making the bequest. The question was treated as one of intention to be gathered from the settlement as a whole. If the scheme of settlement in the present case was so considered it became clear that the testator intended these burdens to be borne by the pursuer. Expenses of administration were a proper charge on residue, but here, distinguishing this case from all the authorities relied upon by the pursuer, the settlement provided for an immediate distribution of residue. Further, there was specific appropriation of the dwelling-house and of the £20,000 and the surplus revenue thereon, which constituted the whole trust funds after the division of the residue. In these circumstances omission to provide for payment of the said burdens was significant as indicating the testator's intention that they should be borne by the pursuer. It would be a breach of trust for the trustees to use any part of the revenue from the £20,000 for payment of any administration expenses except those incurred in connection with the administration of this fund. The testator had directed the trustees in the event of the house being sold to pay to the pursuer the annual income of the price realised. If the pursuer's contention were sound this surrogatum would be of less value, to the extent of the income on the amount of the burdens capitalised, than the right she at present enjoyed, but it must be presumed that the testator regarded the two rights as of approximately equal value. It was not material that the dwelling-house was vested in the trustees without any direction to convey it to the beneficiary in liferent. There might be a proper liferent although there was a trust and no title in the liferenter— Campbell v. Wardlaw, cit. sup. The words “liferent use and enjoyment” had a well-recognised meaning in law— Morris, &c. v. Anderson, &c., June 16, 1882, 9 R. 952, 19 S.L.R. 716; Mackenzie's Trustees v. Kilmarnock's Trustees, 1909 S.C. 472, 46 S.L.R. 217. This case was distinguishable from the authorities relied on by the pursuer, in all of which the house formed part of the residue, and there was residue available for payment of the burdens. Moreover, in Clark and Others, cit. sup., the mere use of the house was given till the second marriage or death of the beneficiary. In Bayne's Trustees v. Bagne, cit. sup., also the right was terminable on marriage, while in Cathcart's Trustees v. Allardice, cit. sup., the right was conferred by an onerous obligation contained in an antenuptial marriage contract. In none of these cases was the liferentrix interested in the residue at all, whereas here she took the largest share of it. The defender also referred to Brand v. Scott's Trustees, May 13, 1892, 19 R. 768, 29 S.L.R. 641. 2. In any event the pursuer was personally barred from insisting in her claim. She was herself a trustee and residuary legatee. Having all along paid the burdens in question, having elected to abide by the settlement without disputing the accuracy of the statement showing the value of her conventional provisions submitted to her by the trustees, and having granted to the trustees a discharge, which ratified and approved their whole actings, after they had without objection on her part divided the residue, she could not call upon them to pay these charges now, when they had no funds that could be used for that purpose without a breach of trust, or in any event without putting the whole burden on other beneficiaries to the complete relief of the pursuer, who would have had to bear one half of it had her claim been made when it could have been met out of residue.