Scottish Court of Session Decisions

Ashmore Kyle Paterson Wingate, Castle Douglas, pursuer, brought an action against Wilson Rowan Meikle and others, the trustees acting under the trust-disposion and settlement of the deceased Mrs Margaret Ashmore Kyle or Wingate, his mother, in which he concluded, inter alia, for declarator “that the whole revenue accumulated and to be derived from the capital estate of the said deceased Mrs Margaret Ashmore Kyle or Wingate so far as remaining in the hands of the defenders as trustees foresaid, after providing for repayment out of the said revenue to the capital funds of the said estate in the hands of the defenders as trustees foresaid, of the amount paid to the pursuer in name of legitim and interest, is payable to the pursuer immediately so far as accumulated, and so far as to be derived hereafter, from time to time as it accrues, during the lifetime of the pursuer.” Conclusions for accounting followed.

Mrs Wingate died on 30th November 1912 leaving the said trust-disposition and settlement and several codicils thereto. By the second purpose of the settlement she directed her trustees to convey to the pursuer a sum equal to five-sevenths of his beneficial interest in his grand father's estate which he had assigned to her during her lifetime. This direction, however, was revoked by a codicil dated 17th December 1910 and the following provisions were substituted therefor—“I hereby cancel and revoke the second purpose of the said trust-disposition and settlement, and in place thereof I direct my trustees to retain and invest in their names a sum out of my estate equal in amount to the net capital sum paid or to be payable to me or my trustees in virtue of assignation by my son Ashmore Kyle Paterson Wingate in my favour, dated sixth June Nineteen hundred and nine, whereby I acquired five-sevenths of his beneficial interest (both capital and income) in the estate of his grandfather the late Thomas Wingate, sometime engineer and shipbuilder at Whiteinch, near Glasgow, and who thereafter resided at Broom-hall, Partick, in virtue of his trust-disposition and settlement dated seventeenth April Eighteen hundred and sixty-seven, and relative codicils: And I direct my trustees to pay and apply the whole free income arising therefrom to and for behoof of my son the said Ashmore Kyle Paterson Wingate during his lifetime, and that at such term or terms, in such proportions, and in such way and manner as my trustees shall in their sole discretion think proper; which liferent interest shall be purely alimentary and shall not in any way be affectable by the debts or deeds of my said son or attachable by the diligence of his creditors: And in the event of my said son predeceasing me, or on my son's death should he survive me, I direct my trustees to hold and apply said net capital sum to and for behoof of and to divide and pay the same equally among and to his children, if any, on their respectively attaining the age of twenty-five years jointly, per stirpes, with the issue of any of said children who shall have predeceased leaving issue (such issue being entitled equally among them to the share which their parent or parents respectively would have taken on survivance) … And failing issue of my said son to take in terms of the foregoing destination, I direct my trustees to pay and deliver said net capital sum in the following proportions, namely [in one-third shares to certain beneficiaries named] … And except in so far as hereby

Page: 605↓

altered I confirm the foregoing trust-disposition and settlement and relative codicils.”

The fifth and subsequent purposes of Mrs Wingate's settlement were as follows—“( Fifth) Subject to the foregoing provisions I direct my trustees to convey to my son Ashmore Kyle Paterson Wingate as his own property absolutely the whole household furniture and plenishing which shall belong to me at the time of my death, including therein bed and table linen, silver plate, books, and pictures: ( Sixth) Subject to the whole provisions hereinbefore contained I direct my trustees to pay to my said son, or to apply or expend for his behoof during his lifetime, the whole free annual income which shall arise from the residue of my estate, and that in such sum or sums and at such term or terms in each year all as my trustees may in their own discretion consider proper: ( Seventh) Subject to the provisions hereinbefore contained, I direct my trustees, in the event of my son leaving issue surviving him, to hold and apply the whole residue of my means and estate to and for behoof of, and after the death of my said son, should he survive me, to divide and pay the same equally among and to the children of my said son on their respectively attaining the age of twenty-one years jointly, per stirpes, with the issue of any of said children who shall have predeceased leaving issue (such issue being entitled equally among them to the share which their parent or parents respectively would have taken on survivance) … ( Eighth) On the death of my said son should he survive me and leave no issue, or on my own death should he predecease me without leaving issue, I direct my trustees to divide the free residue of my means and estate into three equal parts, and to pay one of such parts to [each of certain named charities and religious institutions] … And I declare that the foregoing provision in favour of my said son shall be accepted and held by him as in full satisfaction of his claim of legitim.”

The parties averred, inter alia—“(Cond. 5) After his mother's death the pursuer claimed legitim out of her estate. Disputes arose as to the amount payable to him in name of legitim, and an action was ultimately raised against him by his mother's trustees for the purpose of fixing the amount of his legitim. In that action it was determined by decree dated 5th June 1917 that the amount of legitim payable to the pursuer was £1448, 7s. 9d., and that he was entitled to interest thereon from the date of his mother's death. The trustees duly made payment to him of the said sum of £1448, 7s. 9d. together with the sum of £246, 7s. 10d. in name of interest. ( Ans. 5) Admitted. (Cond. 6) The defenders and their predecessors in office as trustees of Mrs Wingate have accumulated the whole free revenue of the residue of her estate since her death. The accumulated revenue now exceeds the sum paid to the pursuer in name of legitim. The only directions contained in the testamentary writings as to the revenue of the residue of the estate (including the estate assigned by the pursuer to his mother) are the directions above quoted in terms of which the whole revenue falls to be paid to the pursuer during his lifetime. The ultimate beneficiaries of the fee of the said residue are ascertainable only on the death of the pursuer, so that the said fee is retainable in the hands of the defenders during the pursuer's lifetime. The revenue accumulated and to be derived during the lifetime of the pursuer (after making up the amount paid to him as legitim) is either payable to the pursuer by virtue of the said testamentary writings or else forms intestate estate of the testatrix, and is payable to the pursuer as her sole heir-at-law and heir in mobilibus. The statements in answer in so far as not coinciding herewith are denied. ( Ans. 6) Admitted that defenders as trustees of Mrs Wingate have accumulated the whole free revenue of her estate since her death, and that the accumulated revenue now exceeds the sum paid to the pursuer in name of legitim. The directions contained in the testamentary writings as to the revenue of the residue of the estate (including the estate assigned by the pursuer to his mother) are referred to for their terms. Admitted further that the ultimate beneficiaries of the fee of said residue are ascertainable only on the death of the pursuer, so that said fee is retainable in the hands of the defenders during the pursuer's lifetime. Quoad ultra denied. The pursuer by electing to claim and by having received payment of his legal rights has completely and finally lost all beneficial right and interest in the conventional provisions conceived in his favour by said testamentary writings. Further, the defenders as trustees foresaid maintain that subject to the provisions of the Thellusson Act (39 and 40 Geo. III, cap. 98), said revenue falls into and forms part of the residue of said estate and the pursuer is not entitled thereto. In any event the defenders as trustees foresaid are only bound to pay said revenue to such persons as may be found entitled thereto by judicial determination.”

The pursuer pleaded, inter alia—“l. In respect that the revenue accumulated and to be derived during the lifetime of the pursuer from the capital estate in the hands of the defenders as trustees foresaid after providing for repayment to the capital funds of the estate of the amount paid to the pursuer in name of legitim, is payable to the pursuer either ( a) in terms of-the testamentary writings of the deceased, or ( b) as intestate estate of the deceased, decree of declarator should be granted as concluded for.”

The defenders pleaded, inter alia—“1. The pursuer having elected to claim legitim and having received payment thereof is barred from claiming any beneficial right or interest under the conventional provisions of the said testamentary writings, and the defenders as trustees foresaid should be assoilzied from the declaratory conclusions of the summons. 2. In respect that the surplus revenue of the estate of the deceased, set free by pursuer's election to claim legitim, and by payment of legitim to him falls into

Page: 606↓

and forms part of the residue of the estate of the deceased, subject always to the provisions of the Thellusson Act, the defenders as trustees foresaid should be assoilzied from the declaratory conclusions of the summons.”

On 20th November 1920 the Lord Ordinary ( Blackburn) repelled the pleas-in-law for the pursuer, sustained the second plea-in-law for the defenders, and dismissed the action.

Opinion.—“Mrs Wingate, the mother of the pursuer in this action, died in 1912 leaving a trust-disposition and settlement dated 9th July 1909, and among other codicils one dated 17th December 1910. By the second purpose of the former deed she directed her trustees to convey to her son a sum equal in amount to five-sevenths of his beneficial interest in his grandfather's estate, which he had assigned to her during her lifetime. By the fifth purpose she directed them to convey to him her whole household furniture, and by the sixth purpose to pay him during his lifetime the whole free annual income of the residue of her estate. By the seventh purpose the trustees were directed, on the death of the pursuer leaving issue surviving him, to divide and pay the residue of the estate among his children and the issue of predeceasers, while in the event of his leaving no issue they were directed by the eighth purpose to divide the residue among certain named charities. Immediately after the eighth purpose there follows a declaration as to the vesting of the shares of succession and a clause giving the trustees discretionary powers as to the dates of payment, and then comes the following declaration, viz.—‘And I declare that the foregoing provision in favour of my said son shall be accepted and held by him as in full satisfaction of his claim of legitim.’

By the codicil of 17th December 1910 the testatrix revoked the second purpose of her trust-disposition and settlement by which she bequeathed a capital sum to her son, and in place thereof she directed her trustees to invest and hold the said capital sum for payment of the free income thereof to her son during his lifetime and after his death for payment of the fee to his issue, whom failing to certain of her other relatives. The codicil contains the following provision, viz.—‘Except in so far as hereby altered, I confirm the foregoing trust-disposition and settlement and relative codicils.’

On Mrs Wingate's death the pursuer claimed legitim, and thereafter the income of the estate provided to him was applied to restore to the capital of the residue a sum equivalent to that withdrawn to meet the legitim claimed. This has now been done, and the question arises as to how the income set free by the pursuer's claim of legitim is to be disposed of in the future.

The pursuer claims it ( a) in terms of the testamentary writings of the deceased, or ( b) as falling into intestacy; while the defenders, who are Mrs Wingate's trustees, maintain that it forms part of the residue of the estate, and that subject to the provisions of the Thellusson Act it must continue to be accumulated for the benefit of the residuary legatees.

With regard to the pursuer's first claim, it was not contended that he was entitled in terms of his mother's testamentary writings to the whole of the income set free. It was admitted that the declaration in the trust-disposition and settlement that the provision in his favour was ‘in full satisfaction’ of legitim, and the recent decision in Rose's Trustees ( 1910 S.C. 827) provided a complete answer to any such claim.

But it was argued that he was entitled to that part of the income set free which consists of the interest of the capital sum originally bequeathed to him. This argument depends, in the first place, on the construction to be put upon the words ‘the foregoing provision,’ which in terms of the trust-disposition and settlement is declared to be in full satisfaction of legitim. The pursuer maintains that the word ‘provision’ being in the singular the clause only applies to the provision of the income of the residue contained in the sixth purpose of the settlement, and was not intended to refer to the gift of capital in the second purpose or of the furniture in the fifth. I do not think there is any substance in this suggested construction, which obtains no support from the position of the satisfaction clause in the settlement, and which, further, in my opinion violates a very ordinary meaning of the word ‘provision’ as including all that has been provided. Nor do I think there was any more substance in the argument submitted in the second place to the effect that the declaration does not apply to the codicil. The settlement and the codicil must be construed together, and the effect is merely to read into the original settlement a bequest of liferent instead of one of fee. I have no difficulty in bolding that the declaration applies to this liferent, and I think that by confirming the trust-disposition and settlement in the codicil the testatrix clearly shows that she intended it should do so.

This disposes of the first alternative branch of the pursuer's first plea-in-law. The question in the second branch is a sharp one, namely, Does the income set free continue to fall into residue, or is it now intestate succession? So far as I am aware this question has never been the subject of express decision in any case analogous to the present, although it was considered in the well-known case of Macfarlane's Trustees v. Oliver, 9 R. 1138. In that case the testator left the residue of his estate in two equal share to his son and daughter in liferent and to their issue respectively in fee. There was no clause in the will declaring that these provisions were in full satisfaction of legitim. The daughter claimed her legitim, and after all the interests thereby affected had been compensated the question arose as to what was to become of the surplus income. The majority of the whole Court held that there being no satisfaction clause in the will it was not contrary to the testator's expressed intention that the daughter should revert to her provision, and accordingly that she was entitled to do so. The minority were of opinion that a satisfaction clause must

Page: 607↓

be implied in every will purporting to be a universal disposition of the testator's estate, and that the effect of such an implied clause required the complete surrender by the daughter of the provision in her favour. While this was the only question decided by the Court it was necessary for the consulted Judges to consider what was to become of the surplus income in the event of the views of the minority prevailing. Their opinions therefore cannot be regarded as mere obiter dicta. Four of the consulted Judges—Lords Rutherfurd Clark, M'Laren, Adam, and Kinnear—who were all of the majority above referred to, gave it as their opinion that unless the daughter was found entitled to the surplus income it must fall into intestacy. I do not well see how they could have reached any other conclusion, having already committed themselves to the opinion that it was not inconsistent with the testator's expressed intention that the surplus income should be applied for behoof of the daughter alone to the exclusion of all the other beneficiaries entitled under the will. How completely this view of the testator's expressed intentions entered into their opinions as to the ultimate disposal of the surplus income in the event of the testator's intention not being given effect to is clear from paragraph 5 of the joint opinion of Lord M'Laren and Lord Rutherfurd Clark (p. 1160), and the last paragraph of the joint opinion of Lord Kinnear and Lord Adam (p. 1162). I do not think that the opinions of any of these learned Judges have any bearing on a case where the testament under construction contains a clause declaring the provision to be in full satisfaction of legitim, except in so far as they indicate that the governing consideration in disposing of the surplus income must always be the testator's intention. The opinions of the consulted Judges in the minority deal, however, with a state of matters which are similar to those in the present case, except that the condition which they read into the will they were construing is expressed in that now under consideration. Of these judges Lord Justice-Clerk Moncreiff, Lord Craighill, and Lord Lee were of opinion that under such circumstances it was to be assumed that the testator intended the surplus income to fall into residue and not into intestacy. Lord Fraser, however, who was also one of the consulted Judges in the minority, took a different view, and was of opinion that the surplus income fell into intestacy. He reached this conclusion on two grounds which are apparently quite distinct. In one part of his opinion he says that to hold otherwise would be ‘inconsistent with the principle on which a court of equity has acted in establishing the doctrine of compensation,’ and in another that ‘the surplus was undisposed of,’ and that ‘the testator did not anticipate the event which happened.’ It would, I think, be difficult to support the second of these reasons had the condition that the provision was to be taken in full satisfaction of legitim been express instead of implied, and I am accordingly left in doubt as to what conclusion Lord Fraser would have reached in a case like the present, but there is no doubt that like all the Judges in the case he attached chief importance to the intentions of the testator as indicated by his testamentary writings.

When the case came to be advised Lord President Inglis, Lord Mure, and Lord Shand agreed with the majority of the consulted Judges that the construction which they proposed should be put upon the settlement would most effectually carry out the intentions of the testator. This being the judgment of the Court it was unnecessary for them to consider how the surplus income should have been disposed of on the hypothesis that the intentions of the testator were not to be given effect to. The Lord President at the end of his opinion refers to the matter as follows:—‘I observe that some of the consulted Judges in the majority express an opinion on the question. … I am unable to give any opinion on that question as a question on the construction of the testator's settlement, because I cannot say which alternative is most inconsistent with the intention of the testator. They appear to me to be equally so.’ This I take to mean that the guiding factor as to how the surplus income is to be disposed of must always be the testator's intention, and that it was idle to consider how it should be disposed of on the assumption that what was held to be the testator's intention was not to be given effect to. Lord Mure and Lord Shand, however, indicate that had the question arisen they would have concurred in the opinion of the consulted Judges in the majority. But the question did not arise, and I think it is clear from the opinion of Lord Mure as expressed in the subsequent case of Russell's Trustees ( 13 R. at p. 995) that he did not regard his concurrence as indicating that the proper alternative to the judgment pronounced was to hold that the surplus income fell into intestacy. Referring to Macfarlane's Trustees he says—‘The real controversy there was whether the parties who had brought about the defeat of the settlement could claim anything under it after full compensation had been made for the loss thereby occasioned, or whether the fund then remaining fell into residue.’ I think this shows that in Lord Mure's mind the true alternative to the conclusion he arrived at in Macfarlane's Trustees was that reached by the Judges in the minority, and that had he shared their opinion as to the testator's intention he would have held that the surplus income fell into residue. This supports the conclusion I have arrived at that none of the opinions in Macfarlane's Trustees which point to intestacy as the ultimate destination of the surplus income have any bearing on a case like that now under consideration where the settlement contains an express clause of satisfaction.

The only assistance in this case that I think can be derived from Macfarlane's Trustees is that the testator's intention must provide the guide as to how the surplus income is to be disposed of, and that three learned Judges in the minority were of opinion that the effect of a satisfaction

Page: 608↓

clause in the settlement indicates an intention on the part of the testator that the surplus income should fall into residue. In my judgment this conclusion as to the construction to be placed on such a clause is sound, and in the present case is the only way in which effect could be properly given to the intentions of the testatrix. It cannot be said that she has overlooked the right of her son to claim legitim in view of the declaration that the provision for him is to be accepted ‘in full satisfaction’ of his legitim. She gives him an option of taking the provision on condition that he allows the legitim fund to fall into the residue. It seems to me to be an inevitable inference that if he did not take the provision and deprived the residue of the legitim fund she intended the provision to enure to the residue fund. In the view I take of this case there is no interference with the principles of equitable compensation such as are suggested in the opinion of Lord Fraser in Macfarlane's Trustees. I do not think this is a case to which equitable compensation has any application as there are no interests affected which call for its interference. The testatrix has in my opinion sufficiently clearly indicated her intention that in the event of the son claiming legitim the income set free should go to residue, and to residue it has gone, and I think should continue to go till at all events twenty-one years from the death of the testatrix. The result is that the residue fund when it comes to be distributed will be larger than it would have been had the son accepted his provision. But the moment he elected to claim legitim the value of the residue was affected, and inevitably its ultimate value became dependent on the duration of his life. I do not think it can be assumed that the testatrix overlooked or ignored this possibility, or that it is unlikely that she should have intended her residuary legatees to take any benefit as well as to bear any loss which might result from so uncertain a contingency.

Accordingly in my opinion the second branch of the pursuer's first plea-in-law cannot be sustained. As the conclusions of the summons draw no distinction between the income accruing before and after the period when the Thellusson Act comes into operation, I think the proper way to dispose of the action is to repel all the pursuer's pleas-in-law, sustain the second plea for the defenders, and dismiss the action.”

The pursuer reclaimed, and argued—The declaration in the settlement that “the foregoing provision” in favour of the pursuer was “in full satisfaction of his claim of legitim” did not apply to the bequest made to him in the codicil of 17th December 1910. This codicil dealt with the estate that had been assigned to the testatrix during her lifetime by the pursuer, and was thus of the nature of a repayment. The use of the word “provision in the singular number was significant, and showed that the clause only applied to the income of the residue dealt with in the sixth purpose of the settlement, and did not refer to the gift of capital in the second purpose. The above circumstances distinguished this case from that of Rose's Trustees v. Rose, 1916 S.C. 827, 53 S.L.R. 630. The pursuer therefore was entitled to the income of this portion of the estate after compensation had been made for the payment of his Legitim. Alternatively he was entitled to the income of the residue of the estate as heir in mobilibus of his mother, for the income fell not into residue but into intestacy— Macfarlane's Trustees v. Oliver, 9 R. 1138, 19 S.L.R. 850, per Lords Mure, Shand, M'Laren, and Kinnear. The case of Innes' Trustees v. Bowen, 1920 S.C. 133, was also referred to.

Argued for the defenders—The pursuer's claim in so far as based on the terms of the will was excluded by the decision in Rose's Trustees. The principal deed and the codicil must be read together. The word “provision” (although in the singular number) included all that had been provided. As regards branch ( b) of the pursuer's first plea-in-law, the presumption in law was against intestacy, and the present deed was quite susceptible of a construction whereby intestacy might be avoided. The bequest of the liferent to the pursuer was conditional on his surrender of legitim. It was merely a charge on the residue which would fly off on lapse or surrender. Moreover, it was evident that the testatrix actually contemplated the contingency that the pursuer might repudiate the testamentary provisions and claim his legal rights, for she had provided against it. What was forfeited was not residue but the income of the residue, and that fell on being discharged not into intestacy but into residue. The surplus income therefore, both accrued and prospective, fell to be added to residue. The following cases were referred to: Pursell v. Elder, 1865, 3 Macph. (H.L.) 59; Sturgis v. Meiklam's Trustees, 3 Macph. (H.L.) 70; Storie's Trustees v. Gray, 1 R. 953, 11 S.L.R. 552; Russell's Trustees v. Gardiners, 13 R. 989, 23 S.L.R. 719.

At advising—