Scottish Court of Session Decisions

A Special Case for the opinion and judgment of the Court was presented by (1) David Martin Currie and others, as executors under will in English form and two relative codicils of the late Sir Donald Currie, first parties, and (2) the said David Martin Currie and others, as trustees under a certain trust-disposition by the said Sir Donald Currie, second parties, dealing with a fund received by the second parties on the completion of a purchase of fishings and the sale of certain farms forming part of the trust estate administered by them.

The following narrative of the facts is taken from the opinion of Lord Dundas — “Sir Donald Currie died on 13th April 1909 possessed of large estate, both heritable and moveable. He was survived by his widow and by three daughters, one of whom is Mrs Wisely. His testamentary writings consisted of (1) a will in English form, dated 1st June 1908, and two codicils, of which only the later, dated 2nd April 1909, is material to the case; and (2) four mortis causa dispositions of separate heritable estates, which were expressly confirmed by his will, only one of which, dated 24th August 1904, need here be considered. It conveyed to trustees (who are the second parties—the first parties being Sir Donald's executors under the will and codicils) the truster's estate of Chesthill in Perthshire, and directed them to pay the free annual rents and income thereof to his widow during her lifetime for her liferent alimentary use allenarly, and on her death to Mrs Wisely during her lifetime; and on the death of the longest liver of these ladies, and on the only son of Mrs Wisely attaining twenty-one, to convey the estate to him and the heirs of his body, whom failing as therein set forth. Sir Donald acquired the estate of Chesthill in 1903 from its then proprietor, Mr Stewart Menzies, and he afterwards re-sold to Mr Menzies the mansionhouse and certain ground in its immediate vicinity, subject to a right of pre-emption in favour of himself and his heirs in the estate of Chesthill, if Mr Menzies should come to offer these subjects for sale. Reference is made to Chesthill in two clauses of the codicil of 2nd April 1909, which may here be mentioned. Clause 6 narrates the said option to re-purchase, and directs the trustees under the will, in the event of such opportunity arising, to raise and pay the price of the subjects to be repurchased out of the trust funds in their hands forming part of the residuary estate, on the footing that the subjects should be conveyed to and vested in the trustees acting under the disposition of the Chesthill estate. The seventh clause (to be more particularly afterwards referred to) is as follows—‘7. I direct and empower my executors to pay for the fishing rights which I have agreed to purchase from Mr Ian Bullough of Meggernie; and I authorise them to receive for my estate the amount arranged to be paid by Mr Ian Bullough for the farms of Cashlie and Dalchoirlich.’ These two farms were part of Chesthill. It seems, therefore, that in one contingency Sir Donald intended (by the sixth clause) an enlargement of the Chesthill estate at the cost of

Page: 855↓

his general residue; and in another (by clause 7) a diminution of that estate—as the facts to be narrated will show—with corresponding benefit to the said residue.

“The facts out of which this case arises are as follows—The salmon fishings in the river Lyon, so far as it passes through or bounds the estate of Chesthill, belonged in 1903 to Mr Ian Bullough of Meggernie, while Chesthill included two outlying and detached farms, Cashlie and Dalchoirlich (some eight miles distant from the main part of it), which completely intersected the estate of Meggernie. The case states (Art. 5) that “in view of the fact that the acquisition of these salmon fishings would greatly increase the amenity and value of the Chesthill estate, Sir Donald Currie had for some time before his death been in communication with Mr Bullough with the view of completing an arrangement under which, inter alia, Sir Donald Currie should sell to him the said two outlying farms at the price of £12,000, and acquire from him the said salmon fishings at the price of £2000. A minute of agreement had practically been adjusted, and Sir Donald Currie was, before 2nd April 1909, and until the date of his death, under the impression that a binding agreement had been entered into to that effect. The parties hereto are, however, advised, and for the purposes of this case are agreed, that no agreement was in fact completed which was in law binding on either Sir Donald Currie or Mr Bullough.’

The contentions in the case relate to the sum of £10,000, being the balance between the said price of the Chesthill farms (£12,000) and that of the Meggernie salmon fishings (£2000). The first parties (Sir Donald's executors) maintain that the seventh clause of the codicil, above quoted, effectually directed payment of the disputed sum to be made to them on the completion of the combined sale and excambion — at all events as in a question between them and the second parties (the Chesthill trustees), and that as the transaction has now been actually carried through, in the manner to be immediately explained, they are now entitled to such payment. The Chesthill trustees, on the other hand, contend that the directions in the codicil having been made by Sir Donald under misapprehension of fact, are of no force or effect, at all events so far as they are concerned, and that the disputed sum should be treated as a surrogatum pro tanto for the farms, and held by them as such in trust accordingly.

The question (which I have found a difficult one) depends primarily on Sir Donald Currie's intention as it may be gathered from his testamentary writings, and is very little affected by what has actually occurred in the matter since his death. As already stated, parties are at one that no agreement was in fact completed in Sir Donald's life which was in law binding either on him or on Mr Bullough. It is clear, therefore, that if Mr Bullough had chosen to repudiate the arrangement he could have done so and the matter would have been at an end. But it appears that Mr Bullough maintained the legal validity of the arrangement, and he was all along willing and anxious that it should be carried out in the exact terms which Sir Donald believed to have been binding upon the parties. No practical difficulty therefore arose in carrying out the bargain from the attitude assumed by Mr Bullough, but, on the other hand, the mere fact of his willingness could not, I apprehend, be of itself conclusive of the legal position as between the executors and the Chesthill trustees, and it is there that the difficulty of the case emerges.

“As matter of fact, the Chesthill trustees went to the Court after Sir Donald's death with two petitions. The first was for authority to sell the two farms to Mr Bullough for £12,000 on condition that he should sell the salmon fishings to the petitioners for £2000. To this petition the executors lodged answers, stating that while they did not dispute the propriety of the proposed transaction, they claimed that the balance of the price of the farms, after deducting that of the fishings, viz., £10,000, ought to be paid over to them by the petitioners, and submitting that the prayer of the petition should only be granted on condition of such payment being made. After sundry procedure the Lord Ordinary granted the prayer, but expressly reserved for future determination the questions raised by the answers. By the second petition the Chesthill trustees sought, and in due course obtained, power to buy the salmon fishings. The trustees have carried out the double transaction with Mr Bullough, and the disputed balance of £10,000, less expenses, &c., is now in their hands; but parties are agreed that this fact is in no way to prejudice their legal rights to it hinc inde. I do not, however, think that all this procedure has much bearing upon the question now to be decided, which indeed was expressly reserved by the Lord Ordinary, except of course that if the transaction had in fact come to nothing there would be no room for the first parties' argument.”

The contentions of the parties were—“12. The parties are agreed, that in the event of its being held that the said balance falls to be paid over to the first parties, the whole expenses of and incidental to the sale of the said farms and the acquisition of the salmon fishings, including the expenses of the petitions referred to, ought to be paid by the first parties out of the said balance. But a question has arisen as to whether, in the event of its being held that the said balance ought to be retained by the second parties, the said expenses fall to be paid out of the said balance or form a charge against the general estate of Sir Donald Currie. 13. The first parties contend that by the codicil of 2nd April 1909 Sir Donald Currie validly provided that on the sale of the farms of Cashlie and Dalchoirlich to Mr Bullough being completed, in pursuance of the contemplated agreement with him, the price should be paid to his executors for behoof of his general estate,

Page: 856↓

they on the other hand paying out of his general estate the price of the salmon fishings to be acquired from Mr Bullough; that said provision is binding on the second parties; and that the first parties are accordingly entitled to receive from the second parties the excess of the price received for the farms over the price paid for the salmon fishings. Alternatively they contend that in the event of the second parties being found entitled to retain said excess of price, the expense of carrying through the purchase and sale must be paid out of said excess, and does not form a proper charge against the general estate. 14. The second parties contend that the directions in the seventh article of the said codicil, having been executed by Sir Donald Currie in consequence of a misapprehension of fact, have no force or effect, at all events so far as they are concerned, and that the balance of the said price falls to be treated as a surrogatum pro tanto for the said farms of Cashlie and Dalchoirlich, and to be held by them for the purposes set forth in the trust-disposition. Further, they contend that the said expenses of carrying through the purchase and sales, having been incurred in consequence of the actings of Sir Donald Currie, form a proper charge against his general estate.”

The questions of law for the opinion of the Court were—“(1) Does the said balance of the price fall to be paid over to the first parties? or (2) Are the second parties ( a) bound or ( b) entitled to hold the same for the purposes set forth in the said trust-disposition? (3) In the event of the first question being answered in the negative, ( a) do the said expenses fall to be paid by the second parties, or ( b) do they form a good charge against Sir Donald Currie's general estate?”

Argued for the first parties—If such a question as this arose in connection with an intestate succession, the sole consideration, of course, would be whether a binding agreement to sell had been concluded. If so, then the heir would receive the estate, but would have to transfer it in implement of the agreement, and the executors would receive the price— Chiesley, 1704, M. 5531. Conversely, if a bargain to buy had been concluded, the heir would be entitled to delivery and the executors bound to pay the price. Again, in testate succession, if a binding agreement to sell had been concluded, the heir would be entitled to receive the property under burden of transferring it in implement, and would be entitled to the price— Pollock's Trustees v. Anderson, January 22, 1902, 4 F. 455, 39 S.L.R. 324; M'Arthur's Executors v. Guild, 1908 S.C. 743, 45 S.L.R. 551. In such cases the question was one of ademption, while here there was no question of ademption, and the intention of the testator could alone be looked to. There could be no doubt here as to the intention of the testator to benefit his general estate at the expense of Chesthill, and the agreement which the testator thought binding having now been implemented there was no difficulty in giving effect to the testator's intention. The Court would be the more ready to give effect to the testator's intention in a question between beneficiaries— per Lord Kinnear (Ordinary) in Bell's Trustees v. Bell, &c., November 8, 1884, 12 R. 84, 22 S.L.R. 59, at p. 90, p. 63. Further, the natural corollary of granting authority to the transaction was to find that the first parties were entitled to the balance in dispute.

Argued for the second parties — The seventh clause in the codicil proceeded on an erroneous impression as to fact, and could not be founded on to the effect contended for by the first parties without reading into it something that was not there, namely, an obligation on the second parties to hand over to the first parties the price of subjects which the second parties alone could sell and had sold. Though the efficacy of a testamentary direction might depend on the testator's knowledge of a fact—M'Laren, Wills and Succession (3rd ed.), i, p. 390—it was well settled that a legacy or revocation of a legacy, if clearly expressed, would not be held invalid because it proceeded on the narrative of a false cause— Spiers v. Graham, December 18, 1829, 8 S. 268; Grant v. Grant, July 9, 1846, 8 D. 1077; Barclay v. Maskelyne, 1858, 1 John. 124; Armit v. Hipkins, 1873, 28 L.T., N.S. 222—and the Court would not allow conjecture as to what the testator might have done had he known the facts to render a valid direction invalid. Similarly the Court would not be influenced by conjecture to amend and so render effectual an ineffectual direction proceeding on an erroneous impression on the part of a testator. The subsequent sale by the trustees could not affect the question— Macfarlane v. Greig, February 26, 1895, 22 R. 405, 32 S.L.R. 299 ( per Lord M'Laren, at p. 409, p. 382) — nor the fact that the Court had sanctioned the transaction which Sir Donald thought had been agreed on, for that sanction was based, not on the intention of the testator, but on the advantage to the estate.

At advising—