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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Montgomerie v. Fleming's Trustees [1901] ScotLR 38_417 (28 February 1901) URL: http://www.bailii.org/scot/cases/ScotCS/1901/38SLR0417.html Cite as: [1901] SLR 38_417, [1901] ScotLR 38_417 |
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Page: 417↓
A truster directed his trustees to hold and apply the whole residue and reversion of his estate and effects, heritable and moveable, real and personal, inter alia, for behoof of his widow in liferent. Practically the whole of the estate consisted of land in or near Glasgow, on which a large number of building feus had been given out at different dates since 1830. From the lands there fell due duplications of feu-duty payable by the feuars every nineteenth year from the date of their respective entries. From these duplications the estate derived an annual revenue of varying amount. In a special case presented by the truster's widow and children, held (distinguishing Ewing v. Ewing, March 20, 1872, 10 Macph. 678) that the widow was entitled to such of these duplications as might fall due each year, as part of her liferent.
This was a special case presented by (1) Robert Jameson and others, trustees under the trust-disposition of the late James Brown Montgomerie-Fleming of Kelvin-side,
Page: 418↓
Glasgow, first parties; (2) Mrs Jane Robertson Prichard or Montgomerie-Fleming, widow of the late J. B. Montgornerie-Fleming, second party; and (3) Miss Elizabeth Tennent Montgomerie-Fleming and the other children of the said James Brown Montgomerie-Fleming, third parties. By his trust-disposition and settlement the said J. B. Montgomerie-Fleming conveyed his whole estate, heritable and moveable, to trustees for, inter alia, the following purpose:—“ In the third place, to hold and apply the whole residue, remainder, and reversion of my said estate and effects, heritable and moveable, real and personal, including therein the whole household furniture and plenishing, bed and table linen, books, pictures, gold and silver plate, cutlery, and china belonging to me at the time of my death, to and in favour and for behoof of my wife Jane Robertson Prichard or Fleming, so long as she shall remain my widow, in liferent, for her liferent alimentary use allenarly.”
Then followed provisions with regard to the fee of the estate.
In the special case the following facts were set forth:—“The chief asset of the said James Brown Montgomerie-Fleming's estate and effects was at the time of his death, and still is, the lands and estate of Kelvinside, which were valued by Messrs T. D. Smellie & Fraser, property valuators and surveyors in Glasgow, on the 16th day of February in the year 1895, at the sum of £224,459, 16s. 6d., but which were at the time of his death burdened with bonds and dispositions in security to the cumulo amount of £180,000, and are still burdened with said bonds and dispositions in security to the cumulo amount of £178,370, £1630 having since his death been paid to account of the said £180,000. The free annual income of the lands and estate of Kelvin-side, after deducting the interest on these bonds and dispositions in security, is about £1000, while the free annual income from the rest of the estate and effects left by the said James Brown Montgomerie-Fleming, and falling under the said trust-disposition and settlement, apart from Beaconsfield House and the household furniture, &c., therein, but deducting the interest on the bond and disposition in security for £4750 over that house, is about £135. From the lands and estate of Kelvinside, however, there fall due duplications of feu-duties, and it is in regard to these duplications that the question here presented for the decision of the Court arises, A statement showing what these duplications are, and also when they fall due, is printed in Appendix I., which is held as part of this case. It should here be stated that the said James Brown Montgomerie-Fleming during his life spent these duplications as they came in, just as if they were feu-duties. It should also be stated that the first parties are and will be giving off feus, with duplications of feu-duties every nineteenth year.”
Appendix 1, annexed to the special case, contained a list of the feus given off from the estate, showing in separate columns the situation of the feus, the feu-duties, the dates of entry, and the terms at which the first duplications would be payable after the death of Mr J. B. Montgomerie-Fleming. From the heading of the last-mentioned column, it appeared that the duplications were payable every nineteenth year from the date of entry. From this list it also appeared that feus had been given off more or less continuously since Whitsunday 1830, which was the earliest date of entry mentioned.
From a statement contained in Appendix 2, annexed to the special case, it appeared that the amount to be derived from the duplication of feu-duties would be as follows:—
“Year to
Whitsunday
1900
. £862
5
1
Do.
do.
1901
. 418
3
5
Do.
do.
1902
. 320
15
0
Do.
do.
1903
. 190
10
0
Do.
do.
1904
. 47
15
0
Do.
do.
1905
. 58
15
0
Do.
do.
1906
. 264
16
4
Do.
do.
1907
. 57
0
4
Do.
do.
1908
. 608
1
8
1 4 Do.
do.
1909
. 148
7
11
Do.
do.
1910
. 842
19
10
Do.
do.
1911
. 819
14
11
Do.
do.
1912
. 767
11
2
1 2 Do.
do.
1913
. 362
14
9
1 2 Do.
do.
1914
. 247
1
11
Do.
do.
1915
. 566
10
0
Do.
do.
1916
. 396
13
9
1 2 Do.
do.
1917
. 225
3
2
1 2 Do.
do.
1918
. 153
1
5”
The second party maintained that the duplications falling due, as they did, some every year, were to be reckoned as income, and therefore fell to be paid by the first parties to her as liferentrix under the bequest conveyed to her in the third place in the said trust-disposition and settlement.
The third parties maintained “that the duplications were to be considered as capital of the estate of the deceased, and did not fall to be paid to the second party as liferentrix.”
The following were the questions of law:—“(1) Do the duplications, or any of them, or any part of them, or any average of them, as well those applicable to feus given off prior to deceased's death as those applicable to feus that are being and that may be given off by his trustees, fall to be considered as income or revenue of the estate and effects of the deceased, and to be paid to the second party as liferentrix under the bequest to her made in the third place in the said trust-disposition and settlement? (2) Do the duplications, or any of them, or any part of them, fall to be considered as capital of the estate and effects of the deceased, so as not to be payable to the second party as liferentrix?”
Argued for the third parties—The duplications of feu-duties were not income but capital. Whether expressed to be so or not, they were in fact in lieu of casualties, and were called casualties in section 23 of the Conveyancing Act 1874. Casualties were capital, not income, in a question between
Page: 419↓
fiar and liferenter— Ewing v. Ewing, March 20, 1872, 10 Macph. 678; Magistrates of Dundee v. Duncan, November 20, 1883, 11 R. 145. In Lamont Campbell v. Carter Campbell, January 19, 1895, 22 R. 260, where the average annual amount of such payments was held to be included in a bond of provision in favour of his widow by an heir of entail, the question depended on ental law. That case was distinguished in Gibson v. Caddall's Trustees, July 11, 1895, 22 R. 889, where a single payment of exactly the same kind as in the present case was held to belong to the fiar. The observation of the Lord President there (p. 893) that if the trust were fortunate enough to have so large a number of superiorities that each year a duplication of £100 fell in, then they would fall to the liferenter, was not applicable here, because his Lordship was contemplating the case of a regular income from duplications. Here, as shown by the table quoted above, the income from that source varied greatly every year. Counsel for the second party were not called upon.
Mr Fleming's estate consisted of land feued off for building, yielding a clear income in feu-duties of £1000 a-year, while from other sources the annual income is about £135. From the estate there is a further return, the duplications of feu-duties payable at recurring periods from the different feus. This is quite a familiar provision in feus of building land, and the periodical payments are not generally, and they are not in this case, described as casualties. In the appendix we have a statement of the amount of these duplications of feu-duties for the years from 1900 to 1918 The amount is £862 for the year ending Whitsunday 1900, for part of which the testator lived, so that at the date of his death he was receiving nearly as much from the duplications of feu-duties as from ordinary feu-duties, and it would seem a startling proposition that the testator meant to exclude nearly half the annual income arising from his feus from the life-rent provided to his widow. One would have expected that if he meant to do this he would have directed what was to be done with the income thus excluded. The average amount of the duplications for the period of years above mentioned is £387, and it seems plain that the testator intended that this should be treated as income.
But it is argued that these payments are of such a character that they are not properly income, but are, like casualties, to be treated as capital. It is true that prior to 1874 the payment for an entry, or casualty proper, was a payment due to the fiar who could grant an entry and not to the life-renter, But such a proper casualty was not a payment recurring at regular intervals. The duplications are not described as casualties in this case, but it is contended that they are in lieu of casualties; but, taking this to be so, it does not follow that they are to be dealt with as proper casualties in a question between the parties who are respectively entitled to capital and income. If the principle contended for was sound, it must apply equally if the duplicated payment was dislributed over the whole period of 19 years so as simply to increase the annual feu-duties, and counsel for the third parties appeared to admit that in such a case it would not be possible to regard the payments as other than income.
Certain cases were referred to, among others the case of Ewing. In that case the payments were of two kinds, both periodical, the first from subjects held under contracts of ground-annual, the second from subjects under feu-contracts. In the first case the periodical payments were in name of grassum, and in the case of the feus in lieu of casualties. The decision was given in 1872, when the feudal system was in full operation, and before new relations between superior and vassal were created by the Act of 1874. By section 23 of that Act casualties, as payments for an entry depending on the occurrence of uncertain events, were abolished, while payments of additional feu-duties at fixed intervals are permitted. In view of these changes the case of Ewing is no authority against the view I have expressed.
In the case of the Magistrates of Dundee it was decided that when a feu-contract contained a provision for a duplication of feu-duties at stated intervals this was to be regarded as in lieu of casualties, even when there was no express discharge of the superior's right to casualties. That was a decision between superior and vassal as to liability for a casualty arising on the construction of a particular feu-contract, and has no bearing upon the construction of a testamentary settlement as between the person entitled to the liferent and the persons having right to the fee of a trust-estate.
I therefore think the first question should be answered in the affirmative and the second in the negative.
Page: 420↓
The case is assimilated to that of bonus dividend, but we know that according to the most recent English cases the question whether a bonus paid by a company is to be treated as paid out of income or capital is entirely a question of fact. We lately had occasion to apply that principle in a question with a liferenter. The circumstances of the present case are distinguishable from Ewing's case, because this is a case of income paid through trustees, and in my opinion such recurring payments as the present should form part of the widow's liferent.
The Court answered the first question in the affirmative, and the second in the negative.
Counsel for the Second Party— W. Campbell, K. C.— Horne. Agents— Mylne & Campbell, W.S.
Counsel for the Third Parties— Dundas, K.C.— Spens. Agents— H. B. & F. J. Dewar, W.S.
