Bannerman's Trustees v Bannerman
| Jurisdiction | Scotland |
| Judgment Date | 28 January 1915 |
| Docket Number | No. 51. |
| Date | 28 January 1915 |
| Court | Court of Session |
Ld. Ormidale, Lord President, Lord Johnston, Lord Skerrington.
Succession—Faculties and Powers—Validity—Liferent with alternative powers of disposal—Power to dispose to charities or to ‘any person’—Fiduciary and proprietary powers.
Charitable Bequests and Trusts—Uncertainty—‘Religious or charitable Institutions conducted according to Protestant principles.’
A father bequeathed to the survivor of his children a share of the residue of his estate in liferent, with full power by mortis causa deed ‘to dispose of the same and direct the succession thereto in favour either of religious or charitable Institutions one or more conducted according to Protestant principles or of any person or persons whom such survivor may appoint or partly in favour of such Institution or Institutions and partly in favour of such persons or person all in such terms and subject to such conditions as such survivor may think proper.’ The survivor exercised this power by a deed of directions in which he bequeathed this share of residue absolutely to his wife.
Held that the power was valid and had been validly exercised;—per the Lord President on the ground that it gave a liferent with power of disposal mortis causa in favour of objects which were sufficiently defined;—per Lord Skerrington, on the ground that the life-renter was given two different and distinct powers, one a fiduciary power to select religious or charitable institutions, the other a proprietary power to dispose of the fund in favour of individuals; and that he had validly exercised the latter power.
Diss. Lord Johnston, who was of opinion that the power was fiduciary in both its alternatives, and was void from uncertainty in respect that in the alternative in favour of individuals it did not sufficiently define the class to be benefited.
Opinions that the power of disposal in favour of ‘religious or charitable Institutions conducted according to Protestant principles’ was not void from uncertainty.
Observations (per Lord Skerrington) on the nature of proprietary and of fiduciary powers respectively.
Expenses—Trust—Unsuccessful action of multiplepoinding challenging trust administration—Personal liability of unsuccessful claimants—Action not timeously brought.
Eleven years after a trust had come into operation an action of multiplepoinding was brought by one of the trustees, who was also a beneficiary under the trust, as real raiser, in which he and certain other claimants unsuccessfully challenged the validity of certain provisions in the trust-deed and in a relative deed of directions, in accordance with which provisions the trust had hitherto been administered.
Circumstances in which held that the expenses of the successful claimants should be borne by the unsuccessful claimants and not by the trust.
On 14th February 1913 an action of multiplepoinding was brought for the determination of conflicting claims upon the trust-estate of the late Walter Bannerman primus(hereinafter called ‘the testator’), in which the trustees were the pursuers and nominal raisers, but the real raiser was Robert Bannerman junior, one of the testator's grandchildren, who was also one of the trustees.
The testator died on 7th August 1879, leaving a trust-disposition and settlement, dated 4th May 1877, in terms of which the free annual produce of his trust-estate fell to be divided among his three children in the proportion of three-eighths to each of his sons and two-eighths to his daughter, and the capital of the shares so liferented fell to be divided among the issue of the liferenters respectively. In the event of one child dying without leaving issue to take the share liferented by their parent the share fell to be divided into two equal parts—the income of one of such parts to be paid to each of the other two children, and the fee thereof to his or her issue. In the event of two children dying before or after the testator without leaving issue the whole residue was to be paid to the survivor in liferent and to his or her issue in fee. The Twelfth purpose of the settlement was in these terms:—‘Twelve, Should the survivor of my children die without leaving issue who survive the term of payment of their shares (but survived by issue of my other children or one of them) my Trustees shall pay and convey one half of the fee of the portion of my Estate liferented by such survivor to and among the issue of my other child or children in such way and manner and in such proportions and subject to such conditions as such survivor may have directed by any Deed or Writing under his or her hand; and failing such writing then equally between the families of my other children the share of each family in such case being divided equally among the members thereof, or if one only shall leave issue, then to such issue equally among them; And with regard to the other half of the fee liferented by the survivor I hereby declare that he or she shall have full power by any mortis causa Deed or Writing by him or her to dispose of the same and direct the succession thereto in favour either of religious or charitable Institutions one or more conducted according to Protestant principles or of any person or persons whom such survivor may appoint or partly in favour of such Institution or Institutions and partly in favour of such persons or person all in such terms and subject to such conditions and directions as such survivor may think proper; but should the survivor not exercise the foregoing power of disposal then the said one half of the fee or any portion thereof not disposed of in virtue of the foregoing power shall be divided equally among the issue of my other children by families.’*
The testator was survived by three children, viz:—(1) Jessie, who died unmarried in 1896, (2) Robert senior, who died in 1902 leaving issue, and (3) Walter secundus, who died without issue in 1903, survived by his widow, Mrs Mary Ramsay or Bannerman. On the death of Walter Bannerman secundus, the survivor of the testator's children, without issue, the event occurred which was provided for in the twelfth purpose of the settlement.
On 26th November 1894 Walter Bannerman secundus had executed a Deed of Direction, which proceeded on a narrative of the twelfth purpose of his father's settlement, and contained the following direction:—‘And whereas I have resolved that should I be the survivor of my father's children and the events contemplated in the twelfth purpose of. the said trust-disposition and settlement should occur, to exercise the power thereby conferred upon me in manner and to the effect under written, therefore I hereby direct the trustees acting for the time under the said trust-disposition and settlement in the events mentioned in said purpose (first) to allocate
and pay the one-half of the fee of my said father's means and estate liferented by me to my niece Jessie Bannerman, daughter of my brother Robert Bannerman, and (second) to pay to my wife Mrs Mary Ramsay or Bannerman absolutely in the event of her surviving me the other half of the fee of my said father's means and estate liferented by me.’
The fund in medio in the multiplepoinding was the one-half of the residue of the testator's estate liferented by Walter Bannerman secundus, so far as it remained in the hands of the pursuers and nominal raisers. The residue of the whole estate, as realised after the death of the testator, amounted to about £80,000.
Claims were lodged for the following parties:—
(1) The pursuers and nominal raisers (the testamentary trustees), and also Mrs Jessie Bannerman or Brodie, daughter of Robert Bannerman senior, the Jessie Bannerman mentioned in the Deed of Direction. The trustees claimed to be ranked to the whole of the fund in medio in order that they might administer it in terms of the testator's settlement and of the Deed of Direction of Walter Bannerman secundus; and Mrs Brodie claimed to be ranked to the share of the estate destined to her in the Deed of Direction. They averred, inter alia, that the real raiser was one of the trustees, that he was conversant with the management of the trust, and that he had received a payment from the trust, and on receipt thereof had granted a full discharge to the trustees of all his interest in the trust.
(2) Mrs Mary Ramsay or Bannerman, the widow of Walter Bannerman secundus, who claimed to be ranked and preferred to the fee of one-half of the share of the testator's estate liferented by her late husband, to which she pleaded that she was entitled in terms of the Deed of Direction.
(3) Robert Bannerman junior, the real raiser, a son of Robert Bannerman senior, who disputed the validity of the Deed of Direction on various grounds, and also maintained that the power of disposal in the testator's settlement as regarded the share of the estate liferented by the last survivor of his children was void from uncertainty. He accordingly claimed a share of the fund in medio as undisposed of by the Deed of Direction. Similar claims—claims (4) and (5)—were lodged for another son of Robert Bannerman senior and for the executrix of a deceased son.
On 29th January 1914 the Lord Ordinary (Ormidale) pronounced an interlocutor, in which he ranked and preferred (1) the nominal raisers, (2) Mrs Jessie Bannerman or Brodie, and (3) Mrs Mary Ramsay or Bannerman, in terms of their respective claims, and repelled the claims of the real raiser and the other two claimants. He also found the unsuccessful claimants jointly and severally liable in the expenses of the competition to the successful claimants.*
The real raiser reclaimed, and the case was heard before the First Division (without Lord Mackenzie) on 17th December 1914, and 5th January 1915.
Argued for the reclaimer;—(1) The power given in the twelfth purpose of the settlement was of the nature of a trust,1 it did not confer on the liferenter a beneficial interest in the half...
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