Scottish Court of Session Decisions

Lord Murray'sOPINION:—[After a narrative of the facts]—In the present action the pursuer calls upon her mother to hold count and reckoning for the stock and crop and the profits thereon over the whole period, some twenty-seven years, which has elapsed since the defender became tenant in 1899. No satisfactory reasons for this delay are put forward on record, and it may well be, as stated for the defender, that it is quite impossible now to render any proper accounts of intromissions, if the pursuer be entitled to demand such. A number of points are taken in defence on the merits, as also a plea of bar based on mora and acquiescence, but it appeared to be agreed that inquiry before further answer would be necessary as to all these, and that the only question which could be determined in the Procedure Roll was one which turns simply on the construction and effect of the minute of agreement above referred to.

The defender takes two points—(1 that, on a sound construction of the agreement, the defender became the absolute proprietor of the stock by way of gift from the father, under burden, it may be, of maintaining and educating the children; that she is in no way, either as regards the stock or the profits, trustee for or accountable to the pursuer; and 2 that, in any event, if any trust there be, the action is premature during the defender's survivance.

I had some difficulty in formulating the proposition tabled for the pursuer. The pursuer apparently concedes that she cannot maintain any claim to an accounting for the income or profits of the capital stock until at least the children were educated and able to fend for themselves. The year 1917 was taken as a fair limit; but she maintains her right to a present accounting and to payment of her share of the value of the stock, plus profits thereon, arising since 1917. This, upon the footing that the children (and the children only) were throughout the beneficiaries in the trust for maintenance, and, that trust having come to an end on the forisfamiliation of the youngest child, say in 1917, the capital stock then became divisible. Apparently the pursuer was prepared to concede that the widow on a division would be entitled to a share of the capital stock, though excluded from any beneficial right in the revenue or profits.

I reject this argument. If it had been necessary, I should have been prepared to sustain the defender's argument that the widow was the true proprietor of the stock, subject only to the burden, or trust if you like, of maintaining and educating the children. That burden or trust, it is not disputed, she has discharged or fulfilled. But, even assuming that a trust did attach to the capital stock, the widow was clearly as much a beneficiary in regard to her maintenance as any of the children, and the action is, in any event, ill-conceived and premature. That is sufficient to dispose of the present action. I shall accordingly sustain the defender's first plea in law, and dismiss the action with expenses to the defender.

The pursuer reclaimed; but, on 3rd November 1926 before the reclaiming note was heard, a minute of agreement was entered into between the defender of the first part, and Murdo Leitch of the second part, to the following effect:—“Whereas by a Minute of Agreement dated twenty-fifth January Nineteen hundred Donald Leitch, Farmer, sometime of Bulliemore and afterwards residing in Shore Street, Thurso, who was joint tenant with Sinclair Leitch, the First Party's husband, after the death of the said Sinclair Leitch conveyed to the said First Party the whole stock and plenishing on the farm of Achingills aforesaid, and Whereas the First Party thereafter made the stock over to the Second Party: Now this Agreement witnesseth (First) that the First Party agrees to accept from the Second Party and the Second Party agrees to pay to the First Party the sum of One thousand pounds Sterling to be accepted by the First Party in full settlement of her claims in respect of the said transference by her to the Second Party of the stock in question, and of her interest since the date of transference in the farm of Achingills in respect of her work there and otherwise: … (Third) the Second Party agrees that the First Party may reside in the farm house at Achingills as long as she desires, having the same privileges in connexion with the house as heretofore, the said farm house remaining the family home for behoof of the First Party as well as of the Second Party:(Fourth) In respect of this Agreement the First Party discharges all her claims against the Second Party in respect of the original stock on the said farm of Achingills transferred by her to the Second Party and her claims in respect of remuneration or profits from the farm and all other claims in connexion with the said farm.” This agreement was lodged in process.

The case was heard before the First Division(without the Lord President)on 26th May and 16th June 1927. At the hearing the pursuer limited her demand for an accounting to an accounting of how the £1000 contained in the agreement of 1926 was invested and was being dealt with by the defender.

Argued for the reclaimer;—The agreement of 1900 created an inter vivos trust. This was contained in the words “for behoof of herself and her family.” The beneficiaries under the trust were the defender and her whole family, and the effect was to give to all the beneficiaries an equal right in the trust assets. The condition upon which the trust was to continue without a division of the assets was that the defender was to continue in her tenancy of the farm and her ownership of the stock and effects upon it. When this condition came to an end in 1920 on the purchase of the farm by Murdo Leitch, there was then no further guidance from the minute of agreement as to what was to happen. In these circumstances, the rule was that, once a beneficiary was of age, he had the right to an equal share of the assets. The pursuer's first plea in law should therefore be sustained; and, further, decree for payment should be pronounced. In any event, however, the pursuer was entitled to an accounting in order to have the position defined, even if she was not entitled to payment until her mother's death. The cases of Lambe v. Eames and In re Hill, relied on by the respondents, were not authoritative in Scotland, and English and Scottish law had not developed on the same lines in this matter.

The case of Urquhart's Executors v. Abbott showed how far the Scottish Courts had gone, in contrast with the English Courts, in finding a trust. The Lord Ordinary's interlocutor should therefore be recalled.

Argued for the respondent;—The attitude of the pursuer throughout the case was not consistent. Assuming for the purposes of argument that there was a trust in this case, its purposes were not yet exhausted. Its object was to keep the family fortune together as a fund for such members of the family as might be in need. As long as the defender lived she might need help from the fund, and indeed the older she grew the greater would be her need. The trust purposes accordingly still continued. But there was in fact no such trust. The terms of the agreement of 1900 did not spell a trust. The words “for behoof of herself and her family” were ambiguous, and the use of the expression “sole and exclusive property” in the second article, and the imposition of personal liability for the rent upon the defender, did not point to a trust. The case was thus distinguishable from the cases of Macpherson and Michie founded upon by the pursuer, and was ruled by the cases of Lambe v. Eames and In re Hill. On this matter there was no distinction between the law of England and the law of Scotland. The case of Urguhart was distinguishable from the present, as the specialties noted by the Judges in that case were not present here. Apart, however, from authorities, the agreement was one which should be construed in the light of the surrounding circumstances. When this was done the weight of the various considerations was against a trust having been set up. But, if the Court took the opposite view and held that there was a trust, the time for division had not yet arrived. The Lord Ordinary's interlocutor should therefore be affirmed.

At advising on 2nd July 1927,—

Lord Sands.—This is an action of accounting brought by a daughter against her mother. It appears that, under a contract entered into in 1900 between the defender and her father-in-law, he made over the whole stock, &c., on a small farm to the defender as her sole and exclusive property for behoof of herself and her family. The pursuer, as one of the family, claims an accounting against the defender for her intromissions with this estate. As originally conceived, the action contemplated what would have been an intricate accounting over a number of years, but the pursuer now limits her claim to an accounting as regards £1000, which has been accepted by the defender from her son Murdo Leitch in satisfaction of her claims—the stock, &c., having been made over to him a number of years ago.

As regards the interpretation of a gift or conveyance for behoof of relatives, four cases were cited to us, two of them Scottish and two English, all more or less in point. In the case of Macpherson v. Maepherson's Curator Bonis a legacy to a lady for the benefit of herself and B, an imbecile sister, was construed as a several gift of a moiety to each sister. Again, in the case of Michie's Executors v. Michie it was held that a bequest to a brother “for behoof of his family” meant a bequest of an equal share to be taken immediately by each of the brother's children. I confess I have doubt as to whether, in either of these two cases, the result was in accordance with the intention of the testator. I lean rather to the view that the direction was merely indicative of the purpose of the bequest, that in both cases the testator had complete confidence in the disponee using the money in the best interest of the object indicated, and did not mean to limit or fetter his or her discretion in any way. These cases are, however, authoritative as to the prima facie meaning to be attached to such an expression as “for behoof of” in the case of a bequest to a sister or a parent. I say “prima facie,” because interpretation may yield to the special circumstances and surroundings of the particular case in hand. In the case of Lambe v. Eames a bequest to a widow was “to be at her disposal in any way she may think best, for the benefit of herself and her family.” It was held that this left to the widow discretion as the head of the family, and did not import an obligation to divide among her children, if any part of the fund could, in her opinion, be advantageously employed otherwise for the benefit of any member of her family. There the disposition challenged was a provision for an illegitimate child of one of her sons. In the case of In re Hill the bequest was to five named brothers and sisters “for the benefit of themselves and their respective families.” It was held that this was a bequest to the legatees absolutely, and not as trustees for their children. In that case Eve, J., said (at p. 263): “The words on which reliance is placed must be read as expressing the motive and purpose of the gifts and not as cutting down the extent of the interest of the legatee.” That case resembles the present very closely, in so far as it seems to be the case of a bequest to a parent, not for behoof of (or for the benefit of) his family, but for behoof of himself and his family. On the other hand, the circumstances and surroundings were different from those of the present case.

In the circumstances of the present case I think it extremely improbable that, when the agreement was entered into, there was any thought in anybody's mind of division among the children in equal shares, or anything of that kind. The defender was left with a large young family to struggle through with, and the proceeds of the holding were the only possible means of subsistence. She was to do her best to struggle along and rear the family. The idea that it was contemplated that she should keep trust accounts appears to me to be fantastic. On the other hand, I am not prepared to go so far as to hold that there was an absolute gift to the defender unfettered by any fiduciary obligation to the children. I do not think that, if she had married again, for example, she would have been entitled to make over the estate to her second husband, or, if she had died, to will it away from the family. In my view, so long as any of the beneficiaries stood in need and the supply of their need might be defeated by a division, there was no obligation to divide or to aim at equal apportionment. The pursuer, so far, concedes this, for she now admits that there is no obligation to account during the period of minority of any of the children. But the rights and interests of the defender herself were at least on a par with those of her children. The estate was to be held and administered, not “for behoof of her family,” but “for behoof of herself and her family.” The defender is now an elderly woman, presumably past earning a livelihood, and it is not said that she has independent estate. If, as I interpret it, the fund is an alimentary one for behoof of “the defender and her family” as a necessitous unit, there can be no claim to division during her survivance in a state of dependence upon the fund.

I am accordingly of opinion that the action, as one calling for production of an account of intromissions from the date of the agreement, and for decree for a present payment, is, as the Lord Ordinary put it, “illconceived.” I am of opinion that we should adhere to his interlocutor.

Lord Blackburn.—The defender in this case was left a widow in February 1899 with nine children, the youngest of whom had been born in 1897. Her husband, Sinclair Leitch, had been joint tenant along with his father, Donald Leitch, of a small arable farm in Caithness, the rent of which is now said to be £105 per annum. The stock, &c., on the farm belonged to the father, but, on the death of his son, he made over his whole interest in the farm stock, &c., as from the term of Whitsunday 1899, to the defender “for behoof of herself and her family by the said Sinclair Leitch,” reserving to himself during the currency of the lease the sole and exclusive management of the farm, which was to be properly carried on under his directions by the defender. This provision by Donald Leitch was embodied in a minute of agreement between him and the defender, which provided, on the one hand, that she should pay the rent of the farm and all debts due in connexion therewith; and, on the other, that “the whole farm stock, crops, implements of husbandry, household furniture, and whole other effects on or connected with said farm shall from said term be the sole and exclusive property of” the defender “for behoof foresaid.” Donald Leitch died in February 1902, and the lease assigned to the defender expired a few years later. The tenancy of the farm was continued down to 1921, when the farm was purchased by the defender's second son, Murdo Leitch. The defender still, however, resides there, and gives some assistance in the dairy work of the farm. For the first year after the death of Donald Leitch she had the help of her two eldest sons in managing the farm, but the eldest son, aged twenty-three, then emigrated, and from 1902 down to 1921 the defender and Murdo Leitch were together responsible for the whole management of the farm, and were entered in the Valuation-roll as joint tenants. The seven younger children were maintained and brought up at the farm. Two of them died, a daughter in 1912 and a son in 1915, and the others have gone out into the world, with the exception of the youngest daughter, who still resides at the farm. It must have been a hard struggle for the defender to rear so large a family and to make ends meet. In 1910 Murdo Leitch became tenant of an adjacent small sheep farm at a rent of £25, which he worked in his own interests, but along with the other farm.

It is in these circumstances that the pursuer, an unmarried daughter who resides in Thurso, has raised an action in which she calls the whole members of the family as defenders, and demands an accounting of her mother's whole intromissions with the stock, crops, &c., of the farm, and with the profits thereon from Whitsunday 1899 down to January 1926, which failing, for payment of £1000. The action was dismissed by the Lord Ordinary as irrelevant, for reasons with which I entirely agree; and the reclaiming note was lodged on 26th August 1926. Thereafter the defender entered into an agreement, dated 3rd November 1926, with her son Murdo, by which—in respect of his undertaking to pay her a sum of £1000 and agreeing that she should be entitled to reside at the farm as long as she desired, and that she should have the same privileges in connexion with the house as heretofore, the same remaining the family home for her behoof—she discharged all claims against him in respect of the original stock on the farm and all her own claims for remuneration or profits in connexion therewith. This agreement was lodged in process, and at the hearing of the reclaiming note the pursuer's demand for an accounting was restricted to an accounting of how this sum of £1000 had been invested and was being dealt with by the defender. But it was further claimed for the pursuer that the sale of the stock by the defender had brought the trust to an end, and required a division of the whole sum received by her into ten equal shares, immediately payable among her and the nine children who survived their grandfather, or the representatives of those who have since died.

It was argued that the agreement between the defender and Donald Leitch constituted a trust under which the whole subjects conveyed, and all profits derived therefrom, immediately vested in equal shares in the defender and her children, payment being postponed until the youngest of the family should have attained the age of sixteen, an event which occurred in the year 1913. I am unable to hold that the agreement between Donald Leitch and the defender confers any right upon the pursuer to demand an accounting for the sum of £1000, or for immediate payment of any part thereof. I assent to the argument that the agreement in question did create what is technically a trust in the person of the defender, and that the pursuer had some beneficial interest under the trust. No endeavour was made to define specifically what that beneficial interest originally was, although the pursuer says that she is now entitled to an equal share of the £1000. The £1000 includes, not only the value of the stock, which constituted the only capital of the trust, but also the defender's claims for her own labour and services, and as all the children who helped on the farm were paid wages at the ordinary rates, the defender's claim for remuneration for her services appears reasonable, and may be substantial. The question really is: What was the beneficial interest which it was intended should be conferred upon the children? I think it is perfectly certain that Donald Leitch, in entering into the agreement, had no intention of creating a formal trust, or of giving any of the individual children any right to payment of the capital of the trust, so long, at all events, as the defender did not marry again, and continued to reside at the farm and to maintain a home there for the family. By the second article of the agreement he provided that everything should be “the sole and exclusive property of the” defender “for behoof of herself and her family.” What beneficial interest was intended to be conferred upon the pursuer by the words “for behoof of”? In some cases these words have been construed to confer a right of property—e.g., Macpherson, 21 R. 386, and Michie's Executors, 7 F. 509—but their meaning must in every case depend upon the construction of the deed in which they appear. On a construction of the present deed, I think they import no more than that, so long as their mother lived, the children should be provided with a means of living until they reached the time of life when they could earn a living for themselves, and with a home to which they could always return. Donald Leitch must have been well aware that this result could not definitely be secured by his making over the farm and stock to the defender. It depended upon the success which might attend the management of the farm by the defender, with the assistance of such of the elder children as might be willing to help her. The eldest son preferred to seek his living elsewhere, but the second son has devoted the best years of his life to assisting his mother to keep the farm going. It must be largely due to his skill and industry that the beneficial interest which I think Donald Leitch intended that the younger children should enjoy was secured. No attempt is made in the minute of agreement to define how the defender should manage the farm after Donald Leitch's death. This was left entirely to her discretion; as was the question whether she should continue the tenancy after the expiry of his lease or not, and the manner in which she should provide for the upbringing of the family. But the farm was kept on by her till long after all the children had reached an age at which they could earn their own living. It is still being carried on by one of her sons, which is probably just what Donald Leitch would have desired, and under agreement with the son the farm is still available for her use as a family home. So long as she remains in residence at the farm, her family can stay with her there.

In these circumstances I do not think the pursuer has any such beneficial interest as entitles her to demand an accounting or an immediate payment of a share of the £1000. In my opinion the Lord Ordinary was right in dismissing the action as irrelevant, and his interlocutor should be affirmed. I may add that I entirely agree that it is most regrettable that this litigation should ever have been raised at all, and that, having been raised, it should have been brought in the Court of Session.

Lord Ashmore.—The Lord Ordinary held the pursuer's averments irrelevant, and in my opinion his Lordship's judgment is well founded. The argument submitted for the reclaimer involved the affirmation of the proposition that, under the minute of agreement entered into in 1900 between Donald Leitch and Mrs Leitch, the widow of Donald's son Sinclair, the pursuer is now entitled to call on the widow to account to the pursuer and to make payment to her at this stage of any share to which she may be entitled. The argument so submitted would result in depriving the widow in her old age of the benefits which the agreement of 1900 conferred upon her. That is a consequence which seems to me to be directly inconsistent with the provisions of the agreement. I am accordingly of opinion that the action as laid is irrelevant.—[His Lordship then dealt with a matter with which this report is not concerned.]

I am in favour of adhering to the interlocutor of the Lord Ordinary.