Scottish Court of Session Decisions

A Special Case was presented for the opinion and judgment of the Court by the Rev. Æneas Geddes and others, the trustees under the trust-disposition and settlement of the late John Cameron, at one time sheep farmer in Patagonia, and afterwards of Lakeview, Errogie, Inverness-shire, first parties, the truster's widow, second party, the truster's daughters, third parties, and two other legatees, fourth parties, to decide whether the widow, who had claimed her jus relictæ, was entitled in forma specifica to a third of certain shares held by the truster.

The truster died domiciled in Scotland on 1st June 1911, survived by his wife and three children of his marriage. His trust-disposition and settlement, dated 30th May 1911, conveyed his whole estate to trustees. The purposes of the trust were, inter alia, (first) payment of debts; (second) conveyance to his widow of certain heritage in Inverness (valued at £800), delivery to her of such portion (not exceeding one-half) of his household furniture as she might select, and payment to her of £1250 and of the rent of his property at Errogie for a certain period; (third) transfer to his three daughters of his shares in the Sociedad Explotadora de Tierra del Fuego in equal parts; (fourth) certain pecuniary legacies; (fifth) and (sixth) specific bequests to granddaughters; and (lastly) division of the residue equally among his daughters.

The settlement contained, inter alia, the following declarations:—“Declaring that the provisions hereby made in favour of my wife and children shall be accepted by them as in lieu and in full satisfaction of their whole legal rights of every description to which they would be entitled, or could claim or demand by or through my death; and in the event of them or any of them claiming her legal rights, she shall forfeit all right and interest and benefit under these presents: And I further declare that the whole legacies and other bequests herein made shall be paid free of all legacy, succession, or other government death duties.”

After payment of debts the truster's moveable estate amounted to £15,053, 0s. 11d. His heritage was valued at £1400. The truster's widow declined her testamentary provisions and elected to claim her rights at common law. Owing to her election the estate was insufficient to satisfy the pecuniary legacies, if ranked equally, and government duties. At the date of the truster's death the share capital of the Sociedad Explotadora de Tierra del Fuego (a Chilian company) amounted to £1,500,000 shares of £1 each, or the Chilian equivalent. After the truster's widow had intimated her election, but before satisfaction of her claims had been made by the executors, the Sociedad increased its capital by 300,000 bonus shares paid for out of its real estate fund—a reserve fund of accumulated profits. These shares were allotted pro rata among the shareholders. The truster had held 3900 shares, valued at his death at £7800, and the allotment of bonus shares made the holding 4680 shares.

The second party contended that her jus relictæ was a right to a share in forma specifiea of the moveable estate belonging to her husband at his death, and that one-third of the said shares, with the proportion of dividends accrued including the bonus shares, fell to her either under her

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jus relictæ or as accrescing or effeiring thereto.

For the third parties the following contentions were stated—“That the bequest in their favour of the testator's shares in the Sociedad Explotadora de Tierra del Fuego is a special legacy in their favour which vested in them free of legacy duty at his death, and that the other moveable estate of the testator, and any estate, whether heritable or moveable, forfeited by the second party in respect of her having claimed her legal rights, must be exhausted in providing for debts, expenses of administration, jus relictæ, and other preferable claims before any diminution of the bequest is made. They further claim, without diminution in like manner, the 780 shares allotted to the trustees subsequent to the testator's death, and all dividends on these and the shares originally bequeathed which have been paid since the testator's death. They further contend that none of the said allotted shares or of the said dividends fall under the second party's jus relictæ or accresce or effeir thereto.”

The fourth parties maintained “that (1) in the event of the second party being entitled to claim in forma specifica a third of the shares belonging to the deceased or allotted to the first parties in the Sociedad Explotadora de Tierra del Fuego the bequest of said shares to the third parties must abate primo loco; (2) that in the event of the second party not being so entitled the legacy to the third parties under the third purpose must suffer diminution pari passu with the “other pecuniary legacies” in so far as the trust estate is insufficient to pay all the legacies in full.”

On the point now under report the question of law was—“2. Is the second party entitled ( a) to a transfer of one-third of the deceased's shares in the Sociedad Explotadora de Tierra del Fuego in pro tanto satisfaction of her jus relictæ, or ( b) to have only the value of said shares as at the date of the testator's death brought into computation in ascertaining the amount of her jus relictæ?”

Argued for the second party—Although legitim was payable out of realised estate, jus relictæ was a claim to moveables in forma specifica. Jus relictæ originated in Teutonic law and differed in its characteristics from legitim, which was of Roman origin, and from jus relictæ which was the creature of statute. For convenience in division the pecuniary value might be taken, but that could not alter the nature of the right which vested in the widow at her husband's death and entitled her to a share of each asset of the moveable estate—Stair, iii, 4, 24; iii, 8, 43; Ersk. iii, 9, 20; Fraser, Husband and Wife, 648–50; Fisher v. Dixon, 1840, 2 D. 1121, per Lord Fullerton at p. 1142; Ross v. Masson, 1843, 5 D. 483, per Lord Moncreiff; M'Intyre v. M'Intyre's Trustees, 1865, 3 Macph. 1074; Muirhead v. Muirhead's Factor, 1867, 6 Macph. 95, 5 S.L.R. 88; Pringle's Trustees v. Hamilton, 1872, 10 Macph. 621, 9 S.L.R. 377; Naismith v. Boyes, 1899, 1 F. (H.L.) 79, 36 S.L.R. 973, per Lord Watson; Stewart v. James Keiller & Sons, Ltd., 1902, 4 F. 657, 39 S.L.R. 353.

Argued for the third and fourth parties—The specific legacy of shares ranked preferably as regards liability to abatement—M'Laren, Wills and Succession, 3rd edn., pp. 577 and 588; Millar v. Millar's Trustees (O.H.) 1914, 1 S.L.T. 414; Balmerino, 1746, M. 8074; Gordon v. Campbell, 1729, M. 14,384. The legacy would be defeated were the second party's claim upheld. Her argument so far as based on origin of her right and of legitim was unsound. Jus relictæ was not a jus in re; it was a claim of debt, and nothing more than that was meant when the claim was described as a right of property—Ersk. iii, 9, 19; Fisher v. Dixon) ( cit.); Inglis v. Inglis, 1869, 7 Macph. 435, 6 S.L.R. 271; Tait's Trustees v. Lees, 1886, 13 R. 1104, 23 S.L.R. 782; Gilchrist v. Gilchrist's Trustees, 1889, 16 R. 1118, at 1122, 26 S.L.R. 639; Stewart v. James Keiller & Sons, Ltd., cit.