Scottish Court of Session Decisions

William James White Nicol and another, the trustees acting under the trust-disposition and settlement of the deceased John White of Drummelzier and Netherurd in the county of Peebles, and relative deeds of assumption, first parties, William James White Nicol, as an individual, second party, and William G. D. H. Nicol, son, and Miss Jane B. E. Nicol, and Miss Margaret C. M. Nicol, sisters of William James White Nicol, third parties, presented a Special Case for the opinion and judgment of the Court.

The Case stated, inter alia—“2. In his trust-disposition and settlement the testator, after conferring wide powers upon his trustees, to whom he conveyed his whole means and estate, including his lands and estates of Drummelzier and Netherurd, gave certain general directions as to the payment of his debts and of various legacies and provisions. He further provided that his daughter Mrs Jane Aitken White should be paid for her liferent use the annual income and proceeds of the free residue and remainder of his trust estate. The sixth purpose of the said trust-disposition and settlement is in the following terms:—‘( Sixth) After the death of the longest liver of me and my said daughter, my said trustees shall hold my said landed estates, and accumulate the rents thereof until they shall have paid off and discharged all debts and obligations incurred or to be incurred by me or them and the legacies hereinbefore bequeathed (but not including the said annuity of twenty pounds), or until the heir called under the order of succession after written shall have attained the age of twenty-one years complete, if he or she shall not then have attained that age, whichever of these events shall last happen (marriage being hereby declared equivalent to majority in the case of a female heir), but they shall allow such heir in existence for the time from and after the death of the longest liver of me and my daughter to have and enjoy the personal use and occupation free of rent of my mansion-house, garden, policy, and shootings of Netherurd, and the shootings of my estate of Drummelzier, and shall also pay to said heir an annuity of Two hundred pounds sterling per annum out of the rents of my said landed estates, payable half-yearly in advance; and in the event of my said daughter Mrs Jane Aitken White predeceasing me, I direct and appoint the household furniture, books, plate, articles of virtu, linen, wines, Pictures, horses, carriages, and other house old plenishing which may belong to me at the time of my death to be handed over to said heir in existence for the time at that date, for such heir's own absolute use and behoof; but declaring always that if my said daughter shall predecease me and leave no heir of her body, and my nephew William Nicol, Esquire, merchant in Bombay, shall survive me, he shall not be entitled absolutely to the furniture and other articles last above mentioned, but shall only be entitled to the use thereof during his lifetime, his liferent right thereto being strictly alimentary and not capable of beingassigned by him onerously or gratuitously, or liable for his debts or deeds, or subject to the diligence of his creditors; and upon his death the said furniture and other articles shall be delivered to the heir of entail who shall succeed to my lands as after mentioned, after the death of the said William Nicol for such heir's own absolute use and behoof; and also declaring that if my said daughter shall leave no heir of her body, or if no such heir shall survive until the deed of entail first after mentioned is executed and perfected, and if the said William Nicol then survives and becomes entitled, as he will in these events be entitled, to the personal use and occupation, free of rent, of my mansion-house, garden, policy, and shootings of Netherurd, and the shootings of my estate of Drummelzier, and to payment of the said annuity of Two hundred pounds, all as before mentioned, these rights are hereby declared to be strictly alimentary provision for him, and not capable of being anticipated or assigned by him onerously or gratuitously, or liable for his debts or deeds, or subject to the diligence of his creditors; and as soon as my said trustees shall have paid off and discharged all debts and obligations incurred or to be incurred by me or them, and the legacies hereinbefore bequeathed (but not including the said annuity of twenty pounds), or upon the heir called under the order of succession after written attaining the age of twenty-one years complete, whichever of these events shall last happen (marriage being hereby declared equivalent to majority in the case of a female heir), but only if my said daughter shall leave an heir of her body, who shall survive both of the said events, my said trustees shall execute a deed of strict entail in terms of the law of Scotland, and shall perfect the said deed by recording the same in the Register of Tailzies, and also in the Register of Sasines both for publication and preservation, of the whole residue and remainder of my landed estates and heritages above conveyed, including my said estates of Drummelzier and Netherurd, and shall convey and dispone the same under the fetters of said entail and under burden of the said annuity of twenty pounds if then payable or subsisting to and in favour of the heirs-male of the body of my said daughter Jane Aitken White, whom failing the heirs whatsoever of her body, the eldest heir-female succeeding always without division, and excluding heirs-portioners throughout the whole order of succession prescribed by these presents, and failing heirs of the body of my said daughter, then to and in favour of my nephew the said William Nicol and the heirs-male of his body, whom failing the heirs whatsoever of his body, whom failing my niece the said Mrs Jane Stevenson or Maclaren, and the heirs-male of her body, whom failing the heirs whatsoever of her body, whom all failing to my own nearest heirs and assignees whomsoever; and my said trustees shall at the same time Page: 544↓ as they shall execute and deliver said deed of entail pay over to the heir then entitled to succeed to my said landed estates for his or her absolute use and behoof any balance that may be in their hands arising from the accumulation of the rents thereof. …’ 3. The seventh purpose of the said trust-disposition and settlement is in the following terms:—‘( Seventh) If my said daughter shall not leave an heir of her body who shall survive until the said deed of entail is executed and perfected as aforesaid, and if the said William Nicol shall be then in life, my said trustees shall delay the execution of the said deed of entail until his death, and from and after the date when all the said debts and obligations incurred by me and them, and the said legacies (excepting the said annuity of twenty pounds) shall have been paid and discharged, they shall hold the residue of my estates for behoof of the said William Nicol in liferent for his liferent use allenarly, and shall pay to him during his lifetime thereafter the free income of the said residue, and which liferent shall be a purely alimentary provision for him and his family, not capable of being anticipated or assigned by him onerously or gratuitously, or liable for his debts or deeds, or subject to the diligence of his creditors; but declaring always that notwithstanding the said William Nicol is restricted to a liferent in the events last mentioned, yet he shall be entitled after the said liferent opens to him to make provisions for his widow and children and their issue other than the heir who shall succeed to my landed estates as after mentioned out of my landed estates to the same extent and effect and in the same manner as if my said landed estates were strictly entailed and he had succeeded thereto as heir of entail; and after the death of the said William Nicol my said trustees shall execute the deed of entail before mentioned in favour of the heirs called after him, and otherwise fully carry out the sixth purpose hereof, any balance of funds in their hands being paid to the heir of entail who shall first succeed to the entailed estate after the death of the said William Nicol for his or her absolute use and behoof upon a discharge being granted by him or her in their favour, all as mentioned in the said sixth purpose.’ 4. The said Mrs Jane Aitken White died upon 27th April 1923 without leaving issue. She was predeceased by the said William Nicol. William James White Nicol, who is as an individual the second party to the present case, is the heir-male of the body of the said William Nicol, and is entitled, subject to the hereinbefore recited provisions as to payment of debts and legacies, to have a deed of entail executed in his favour by the first parties in accordance with the directions of the testator. The third parties are the three next heirs at present entitled in their order to succeed the said William James White Nicol as heirs of entail, and are of full age and are not subject to any legal incapacity. 5. At the present date the lands and estates of Drummelzier and Netherurd, over which the said deed of entail falls to be executed, are burdened with heritable debt to the extent of	£10,000
The first parties are also indebted to the executors of the said Mrs Jane Aitken White for sums advanced to them from time to time by her amounting approximately to	1,300
The first parties are also indebted to the trustees of the late Miss Mary Christina White, another daughter of the testator who predeceased her father, for the amount of the said Mary Christina White's interest under her parents' marriage contract. The amount so due is	21,000
	£32,300

The sole income available to the first parties for discharging these burdens, as well as for the upkeep and repair of the heritable estates, is the rental from the lands of Drummelzier and Netherurd, the gross amount of which at the present date does not exceed £2000. The second party, who is the residuary legatee of the said Mary Christina White and of the said Mrs Jane Aitken White, has, however, offered and is willing to place in the hands of the first parties such sum as may be required to enable them to pay the said debts and legacies on condition of their applying such sum in payment of the same and thereupon executing a deed of entail in his favour in the terms directed by the testator's trust-disposition and settlement. The first parties are willing to accept the said offer if it is competent for them to fulfil the conditions subject to which it is made. 6. Questions have arisen as to whether the first parties are bound to pay the said debts and legacies entirely out of accumulations of the rents of the said heritable estates before executing a deed of entail in favour of the second party or whether they are entitled to accept the offer of the second party and to pay the said debts and legacies in the manner proposed by him and thereafter to execute a deed of entail in his favour.”

The question of law was—“( a) Are the first parties entitled to accept the offer of the second party subject to its conditions and to make immediate payment of the said debts and legacies out of sums contributed by him and thereupon to execute the said deed of entail in favour of him as institute and the substitute heirs specified in the testator's trust-disposition and settlement? or ( b) Are they bound to delay executing a deed of entail until they are able to make payment of the debts and legacies out of the funds forming the testator's trust estate and the accumulated rents of the heritage comprised therein or until further accumulation becomes illegal?”

Argued for the second party—The present case was ruled by the case of Home's Trustees v. Fergusson's Executrix, 1921 S.C. 474, 58 S.L.R. 367. In that case there was a direction to pay the debts out of the accumulated rents, and it was then held that the trustees were bound to accept a similar offer and that there was nothing to restrict them to the accumulated rents as a means of paying off the debts. The present case

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was really a fortiori of that. Scarlett v. Lord Abinger's Trustees, 1907 S.C. 811, 44 S.L.R. 525, was the exact opposite of Home's Trustees, and of this case, because there was a direction there that the debts were to be paid out of the rents and in no other way. Further, the circumstances of that case made a continuing trust necessary. In any event accumulations for the payment of debts could only be made for a period of twenty-one years—Entail (Scotland) Act 1914 (4 and 5 Geo. V, cap. 43), sec. 9.

Argued for the third parties—Though not expressly directed, it was clearly implied that the trustees were to accumulate the rents and to pay the debts out of them— Scarlett v. Lord Abinger's Trustees, 1907 S.C. 811, 44 S.L.R. 525. While it was competent to anticipate the period of payment, it was not competent to accelerate the period of vesting— Muirhead v. Muirhead, 17 R. (H.L.) 45, per Lord Watson at p. 48, 27 S.L.R. 917. Even in Home's Trustees v. Fergusson's Executrix, cit. sup., the Court said that if the testator had provided a method for payment the Court could not accelerate— per Lord President Clyde at p. 480. The provisions of the present deed clearly contemplated a continuing trust.