Scottish Court of Session Decisions

James Milne ( secundus), the testamentary trustee of his father James Milne ( primus), who resided at Broomhead, Ballater Road, Aboyne, first party; Mrs Mary Jane Walker or Milne, widow of James Milne ( primus), second party; and James Milne ( secundus) and others, the children of James Milne ( primus), third parties, brought a Special Case for the opinion and judgment of the Court as to the second party's right under the settlement to let the family dwelling-house, and her liability for the feu-duty, proprietor's rates and taxes, repairs, and insurance.

The Case set forth—“(1) James Milne, who resided at Broomwood, Ballater Road, Aboyne, in the county of Aberdeen (hereinafter referred to as ‘the testator’), died on 20th April 1919. He left a deed of settlement dated 23rd December 1918, and registered in the Books of Council and Session on 25th April 1919. … (4) In the third purpose of his said deed of settlement the testator declared—‘That my trustees shall, in the event of my said wife surviving me, allow my said wife to possess, rent free, during the whole period of her survivance of me, the heritable property known as Broomwood, Aboyne, along with the whole furniture and furnishings therein.’ The testator's said wife did survive him and is the second party. (5) By the fourth purpose of the said deed of settlement the testator provided that on the death of his said wife his trustees should dispone and convey his said heritable property known as Broomwood with the furniture therein to his son George Milne and his heirs. The said George Milne is one of the third parties. (6) After providing in the fifth purpose for delivery as soon as convenient after his death of certain small specific legacies, the testator by the sixth purpose of the said deed of settlement directed that his trustees should realise the whole of the rest and remainder of his said estates including certain heritable properties, and pay and divide the whole free proceeds thereof equally, share and share alike, to his six children, whom he appointed to be his sole residuary legatees, ‘declaring, however, that the furniture in Broomwood shall not be sold but be given to my son George Milne with the property.’ The testator was survived by his said six children. … (8) Approximately the moveable estate left by the testator amounted to £6632. His heritable estate consisted of—1. Business premises in Aboyne valued at £550; 2. Two cottages in Aboyne valued at £770; and 3. Broomwood aforesaid valued at £855. The said estate (except Broomwood aforesaid and the furniture therein) has now been almost entirely realised for division in terms of the provisions of the said deed of settlement. (9) The second party has elected to accept the said testamentary provisions in her favour in lieu of her rights at common law in the testator's estate. Since his death she has enjoyed possession of Broomwood aforesaid and the furniture therein. The assessed annual rental of Broomwood is £40, but it can be readily let furnished in summer at rents varying from £25 to £30 monthly. Aboyne, in which Broomwood is situated, has for a number of years been a favourite holiday and health resort, and there has been and still is a great demand for houses during the months from June to the end of September. Broomwood is in the most popular part of the village, and is well suited for letting to summer visitors. As

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there is a scarcity of houses in Aboyne at present, it is believed that the house could also be readily let unfurnished by the year at a good rent. The annual burdens affecting Broomwood consist of—1. Feu-duty amounting to £6, 10s.; 2. Rates and taxes, the proprietor's proportion of which amounts at present to, say, £10; 3. Cost of repairs, say, £6, 10s.; and 4. Premium of insurance, 9s.”

The questions of law were—“1. Does the right of possession of Broomwood, conferred upon the second party by the third purpose of the said deed of settlement, entitle her to let the said house ( a) furnished, or ( b) unfurnished, during her lifetime? 2. Does the right conferred as aforesaid render the second party liable for payment of the feu-duty, proprietor's rates and taxes, repairs, and insurance?”

Argued for the second party—(1) The widow was entitled to let the house. The word “possess” was used in contradistinction to the word “liferent. It implied prima facie a higher right than that of mere occupancy. It implied the right to draw the fruits of the subjects. Moreover, the words “rent free” were inappropriate to a liferent, and there was nothing to suggest a mere right of occupancy. The words “rent free” suggested a tenant sitting under a lease with the rent wiped out, and that idea fitted in with the right of the tenant to any use of the possession. Although the widow had only the right for her own life, yet there was nothing to prevent her letting the house for that or a less period. A liferent lease was not unknown to Scots law and might be assigned—Ersk. Inst. ii, 6, 32. It was sometimes granted for two lives. The right to assign included the right to sub-let— Anderson v. Alexander and Millar, F.C. 10th July 1811. The language of the bequest had never been the subject of judicial decision. The cases only decided the question of the meaning of the word “occupancy” as opposed to the word “liferent”— Johnstone v. Mackenzie's Trustees, 1912 S.C. (H.L.) 106, 49 S.L.R. 986, per Lord Shaw at 1912 S.C. (H.L.) 109, 49 S.L.R. 986; Smart's Trustees v. Smart's Trustees, 1912 S.C. 87, 49 S.L.R. 42. If the intention of the testator had been to give a right of occupancy only, there was no provision for what was to happen if the widow failed to occupy the house. In the present case there was nothing to show that the trustees must divide forthwith the whole of the residue— Smart's Trustees v. Smart's Trustees, cit., at 1912 S.C. 91, 49 S.L.R. 44. If the words used in the present case were inconsistent with the idea of a liferent, there was no rule of law which forced them to be interpreted as meaning a mere right of occupancy if it could be shown that the testator's intention was something else— Rabbeth v. Squire, 1859, 4 De G. and J. 406. (2) The widow was not liable for the proprietor's burdens on the house. It was unknown that a tenant should be liable for feu-duties and repairs, which were paid by the owner unless the obligation was expressly put upon the tenant. The testator in the present case had not referred to them, because, as he intended the property to be dealt with, it was unnecessary for him to do so.

Argued for the third parties—Both questions should be answered in the affirmative, or alternatively both questions should be answered in the negative. If the substance of the bequest was given, then it was a liferent which was given. There was no vox signata. In many cases the use of the word “liferent” had been held not to confer a liferent. In the present case the testator contemplated the disposal of his whole estate except the house, and that favoured the view that a liferent was given, because otherwise there would be no fund out of which to pay the burdens— Johnstone v. Mackenzie's Trustees, cit., per Lord Shaw at 1912 S.C. (H.L.) 110, 49 S.L.R. 987; Rodger's Trustees v. Rodger, 1875, 2 R. 294, 12 S.L.R. 204. In the present case the widow was given possession for life, which was equivalent to giving her a liferent— Montgomerie-Fleming's Trustees v. Carre, 1913 S.C. 1018, 50 S.L.R. 798, per Lord Guthrie at 1913 S.C. 1024, 50 S.L.R. 802—and therefore she was liable for the burdens— Glover's Trustees v. Glover, 1913 S.C. 115, 50 S.L.R. 71. The expression “use and enjoy” was not equivalent to a liferent— Boyer's Settled Estates, in re, [1916] 2 Ch. 404. If the testator's intention had been to relieve his widow of the burdens it was to be expected that he would have expressly said that she was to be not only free of rent but free of the burdens also. Rabbeth v. Squire ( cit.) appeared to have been a case of possession and occupancy. Anderson, in re Halligey v. Kirkley, [1920] 1 Ch. 175, was also referred to.