Scottish Court of Session Decisions

Sir Henry John Lowndes Graham, K.C.B., barrister-at-law, Clerk of the Parliaments, House of Lords, London, and others, trustees under the trust-disposition and settlement of the deceased William Graham jun., merchant, Glasgow, the testator, dated 27th February 1851, and relative codicils, first parties; William Graham Lang, residing at Broad meadows, in the county of Selkirk, and others, trustees under the trust-disposition and settlement of the deceased Mrs Margaret Graham or Lang of Broadmeadows aforesaid, dated 28th August 1900, and sundry relative codicils, second parties; ( a) the said William Graham Lang and another, the trustees acting under the antenuptial contract of marriage between Rear-Admiral Spencer Yorke de Horsey, R.N., and Mrs Cicely Jane Lang or de Horsey, his wife; ( b) the said William Graham Lang, the sole surviving trustee acting under the antenuptial contract of marriage between Thomas George Taylor, lieutenant in the Gordon Highlanders, and Mrs Josephine Margaret Lang or Taylor, his wife; and ( c) Hugh Cyril Lang of Broadmeadows aforesaid, the said Mrs de Horsey, Mrs Taylor, and Hugh Cyril Lang being the children of Robert James Lang, a son of Mrs Margaret Graham or Lang who predeceased her, third parties; and the said William Graham Lang and others, being the six surviving sons and

Page: 586↓

daughters (with their husbands) of the said Mrs Margaret Graham or Lang, fourth parties—brought a Special Case dealing with the disposal of a one-seventh of the share of the residue of the testator's estate which had been liferented by the said Mrs Graham or Lang.

The testator's trust-disposition and settlement provided, inter alia—“In the third place, I appoint my said trustees and theirs aforesaid to divide the whole residue and remainder of my said means and estate into as many shares as I shall have children surviving at the period of my decease, whether of my former or present marriage, and to make over or hold the said shares for behoof of my several children in manner and subject to the conditions after mentioned; declaring that if any of my children shall predecease me leaving lawful issue, such issue shall receive (if more than one equally among them) the share which would have fallen to the deceased parent had he or she survived; and declaring that, in case any of my children shall die in minority unmarried, or in case any of my sons whose share shall be retained as after mentioned shall die unmarried before attaining the age of twenty-five years, the share of such deceaser or deceasers shall be divided equally among my whole surviving children of both marriages, share and share alike (the lawful issue of any of my children who may have previously died leaving such issue receiving the share their parents would have received had he or she survived, if more than one, equally among them), and all sums so falling to any of my children shall be held and disposed of by my said trustees in all respects in the same way and subject to the same regulations as the original provisions in favour of such children respectively. … In the fifth place, in regard to the shares of my daughters, I appoint my said trustees and theirs aforesaid to hold the shares of my means and estate falling to such of my daughters as may at their majority be unmarried, and so long as they continue unmarried, in their own names as trustees aforesaid, and to pay over to them the whole interest or annual profits of their respective shares, and that at Whitsunday and Martinmas yearly by equal portions, which share shall not be liable to the debts or deeds of my said unmarried daughters, who shall only have an alimentary liferent thereof, not assignable by my said daughters nor liable for their debts or deeds, but the shares of my said unmarried daughters shall be at their own disposal by deeds to take effect at their death, but by such deeds alone, and failing such deeds shall fall to my other children of whatever marriage equally among them (the lawful issue of such of my children as may have died receiving their parents' share as aforesaid), and in the event of the marriage of any of my daughters, whether in minority or after majority, I direct and appoint my said trustees to retain the whole of the shares of such daughters, such retention to continue during all the days and years of the lives of such daughters, and I hereby direct my said trustees and theirs aforesaid to pay to my said married daughters the interest or annual proceeds of the money so retained in trust during their respective lives, and when they shall respectively die to pay the money so retained or convey the property in which such money shall be invested to the lawful issue of such daughters in such proportions as such daughters may have appointed by writings under their hands, and failing such writings equally among such issue, share and share alike, my said daughters being entitled, even although they shall leave lawful issue by deed to take effect at their death, to grant the liferent of one-half of the sums so held in trust to their respective husbands but to no greater extent, and that only as an alimentary liferent to such husbands, not assignable by them nor attachable by their creditors, and in case such daughters or any of them shall die without leaving lawful issue, then my said trustees shall pay the sums held in trust for their behoof or convey the property in which such sums may be invested to such other person or persons as such daughters may respectively appoint by deeds to take effect at their death, and failing such deeds to my other children of whichever marriage equally among them, the lawful issue of such of my children as may have died receiving their parents' share as aforesaid; and it is hereby expressly provided and declared that the jus mariti and right of administration of the husbands of my daughters shall be, and the same are hereby, expressly excluded in so far as regards the sums retained by my said trustees and interest and annual profits thereof: And declaring that the sums so retained, as well as the interest or annual profits thereof, shall not be affected by the debts or deeds of the husbands of my said daughters, nor attachable by the diligence of their own or of their husbands' creditors of any kind or nature, the liferent interest of my said daughters therein being purely alimentary and not assignable, for which liferent the receipts of my said daughters alone, without consent of their husbands, shall be sufficient exoneration to my said trustees and theirs aforesaid: And I appoint my said trustees and theirs aforesaid, previous to the majority or marriage of my said daughters, to expend such portion of the income of their respective shares as my said trustees may think proper and necessary in each case.”

By codicil dated June 24, 1851, the testator, inter alia, provided—“And seeing that I have resolved to alter the before—recited directions in regard to the shares of my daughters in so far as they confer on them the power of disposing of the same by mortis causa deed in the event of their dying unmarried or without leaving issue: Therefore I do hereby revoke and recall so much of the said fifth purpose of the said trust as directs and appoints that the shares of my unmarried daughters shall be at their own disposal by deeds to take effect at their death, and appoints my trustees, in case my married daughters or any of them should die without leaving lawful issue, to pay the sums held in trust for their behoof, or convey

Page: 587↓

the property in which such sums may be invested to such person or persons as such daughters may respectively appoint by deeds to take effect at their death: And in place thereof I direct and appoint my trustees, in the event of my daughters or any of them dying without leaving issue, to divide and pay, convey, or make over the shares or provisions of such daughters (subject to the liferents of their husbands, if any such there be) equally to and amongst my surviving children of whichever marriage, and the issue of such of them as may have predeceased, leaving issue, such issue, if more than one child, taking their parent's shares equally amongst them, share and share alike; but I direct that all sums of money or subjects to which my sons and daughters, or any of them, may succeed by the decease of any of their brothers or sisters without issue under the above directions, or those contained in the beforewritten trust-disposition and settlement, shall be held and retained or paid by my trustees in terms of the directions, and subject to the limitations, powers, conditions, and destinations contained in the said trust-disposition and settlement in the same manner as if the said sums of money or subjects had formed part of the original shares or provisions provided to my sons and daughters: And notwithstanding of the directions herein, and in the trust-disposition and settlement contained, I authorise and empower my trustees, out of the shares or provisions of my daughters, to pay to them on their marriage a sum not exceeding Five hundred pounds sterling to each for their outfit, these sums to be deducted from the shares of capital provided to them in liferent.”

The Case stated—“The testator was survived by his wife [ and several children, one of them being] Mrs Margaret Graham or Lang. … The testator's daughter, the said Mrs Margaret Graham or Lang, died on 18th August 1914, predeceased by her husband Hugh Morris Lang of Broadmeadows in the county of Selkirk. Mrs Lang left a trust-disposition and settlement, dated 28th August 1900, and sundry relative codicils, whereby she disponed and assigned her whole estate to the trustees therein nominated in trust for the purposes therein set forth; but she did not exercise the power of apportionment among her issue conferred on her by the fifth purpose of the testator's trust-disposition and settlement. Mrs Lang was survived by six children. … Another child, Robert James Lang, predeceased Mrs Lang on 3rd July 1914, leaving three children, who all survive. … Prior to his death the said Robert James Lang, by assignation dated 19th October, and duly intimated to the testator's trustees on 6th and 8th November 1900, in consideration of the sum of £1500 paid to him by his mother the said Mrs Lang, assigned and disponed to her, her heirs, executors, and assignees whomsoever absolutely, immediately, and irredeemably his whole right, title, and interest of whatever kind, whether present, contingent, reversionary, or future, or vested or to become vested in and to the residue of the testator's estate. In these circumstances a question has arisen whether a one-seventh part of the share of the residue of the testator's estate liferented by the said Mrs Margaret Graham or Lang vested in her son the said Robert James Lang and was carried to her by his said assignation, or whether the said one-seventh part falls to be paid to the said Robert James Lang's three children or those representing them in equal shares. …”

The contentions of the parties as set forth in the case were as follows:—“The second parties maintain (first) that a one-seventh share of the portion of the residue of the testator's estate liferented by the said Mrs Margaret Graham or Lang had vested in the said Robert James Lang at his death, defeasance not having taken place in respect that all his mother's issue did not predecease her, and that there has been no exclusion of the said Robert James Lang by an exercise by his mother of the power of appointment conferred on her. Said one-seventh share was accordingly carried by the said assignation by the said Robert James Lang. …

The third parties maintain (first) that at the date of his death the said Robert James Lang had not acquired a vested interest in the one-seventh share of the portion of the residue of the testator's estate which was liferented by his mother the said Mrs Margaret Graham or Lang, that the assignation executed by the said Robert James Lang of date 19th October 1900 carried to the assignees therein no right or interest in the said one-seventh share, that on the death of the said Mrs Margaret Graham or Lang the children of the said Robert James Lang as coming in his place acquired a vested interest in the said one-seventh share, which is accordingly now divisible among the third parties in three equal shares. …

The following question of law was, inter alia, stated—“1. Was a one-seventh share of the portion of the residue of the testator's estate liferented by the said Mrs Margaret Graham or Lang vested in the said Robert James Lang so as to be carried by his said assignation dated 19th October 1900?”

Argued for the second parties—There was vesting a morte testatoris in the children of the liferentrix. The only contingency resolutive of their right was if the liferentrix died without leaving issue. The right of the liferentrix to appoint the settled estate was not in reality a contingency. The existence of a power of appointment did not suspend vesting, but only rendered such defeasible if and in so far as the power was exercised— Chambers' Trustees v. Smith, 1878, 5 R. (H.L.) 151, per Lord Blackburn at p. 161, 15 S.L.R. 541; Watson v. Marjori-banks, 1837, 15 S. 586 This was a class gift, and as such there was vesting a morte testatoris— Corbet's Trustees v. Elliot's Trustees, 1906, 8 F. 610, per Lord Kyllachy at p. 612, 43 S.L.R. 379. There was no essential distinction between this case and Hickling's Trustees v. Garland's Trustees, 1898, 1 F. (H.L.) 7, 35 S.L.R. 975. In Hickling's Trustees ( cit.) there was a residue clause, which took the place of a true destination-over (see

Page: 588↓

Lord Watson, ibid., at 1 F. (H.L.) p. 10). The liferentrix had not exercised the power of appointment in favour of the other members of the class. Robert James Lang must therefore be held entitled to a right, vested a morte testatoris in one-seventh of the liferent fund. The fact that he predeceased his mother did not affect his right, because defeasance took place only if Mrs Lang was survived by none of her children— M'Lachlan v. Taitt, 1860, 2 De G. F. & J. 449; Boulton v. Beard, 1853, 3 De G. M. & G. 608; Bromhead v. Hunt, 1821, 2 J. & W. 459. Hickling's Trustees decided that contingent gifts to a class vested de presenti. The principle of that decision existed in Carleton v. Thomson, 1867, 5 Macph. (H.L.) 151, 4 S.L.R. 226; Chambers' Trustees v. Smith ( cit.); Cunningham v. Cunningham, 1889, 17 R. 218, 27 S.L.R. 106. Binnie's Trustees v. Prendergast, 1910 S.C. 735, 47 S.L.R. 271, was at variance with the cases cited.

Argued for the third parties—It was only on the death of the testator's daughters that the issue took. Further, there was a second contingency, in respect that the testator's daughters might exercise the power of appointment and carry the fee away from any of the children. There was thus a double contingency in the present case, which clearly distinguished it from the case of Hickling's Trustees ( cit.). The doctrine of vesting subject to defeasance was not applicable to a case of double contingency— Johnston's Trustees v. Dewar, 1911 S.C. 722, per Lord Kinnear at p. 729, 48 S.L.R. 382. The doctrine could be applied when there was an alternative contingency— Coulson's Trustees v. Coulson's Trustees, 1911 S.C. 881, 48 S.L.R. 814; Bannatyne's Trustees v. Watson's Trustees, 1914 S.C. 693, per Lord Mackenzie at p. 702, 51 S.L.R. 605. It was always a question on the language of the particular settlement whether the inference should be drawn that the testator meant that there should be vesting. Such an inference could not be drawn here, as the terms of the deed contemplated that the persons in whom the fund should vest were those alive at the date of payment. The gift to Mrs Lang's issue was contingent upon each child's survivance, and her power to defeat his claim by appointment, and here the conditions were personal to each member of the class claiming under the deed. The case was ruled by Binnie's Trustees v. Prendergast ( cit.), where, as here, there was a proper destination-over—Theobald on Wills (593) and cases ( cit.). These specialties did not occur in the deed under consideration in Hickling's Trustees ( cit.). That case had recognised vesting in a class, and the principle there applied should not be extended. Robert James Lang had accordingly acquired no vested interest in the fund liferented by his mother, and no part thereof had been carried by his assignation.

The fourth parties adopted the argument of the third parties on the question whether Robert James Lang had acquired any vested interest.

At advising—