Fogo's Judicial Factor v Fogo's Trustees
| Jurisdiction | Scotland |
| Judgment Date | 22 February 1929 |
| Docket Number | No. 65. |
| Date | 22 February 1929 |
| Court | Court of Session |
Lord Ormidale, Lord Anderson, Lord Justice-Clerk (Alness).
Fee and LiferentPowers of liferenterLiferent by conveyance to liferenterBequest of liferent of estate with power to enter into possession and generally to do everything in the premises in the same manner and as fully and freely as I could have done myselfRetention of non-trustee investmentsPurchase of non-trustee investments.
A testator by his settlement appointed his wife to be his sole executrix, and directed her to pay his debts and a legacy of 300. He then disponed his whole means and estate to her in liferent for her liferent use only, with power to enter into possession of my said whole estate and effects, draw the rents, interest, dividends, and annual produce thereof and generally to do everything in the premises in the same manner and as fully and freely as I could have done myself. The settlement further contained a disposition of the estate, on the termination of the liferent, to trustees, with directions to them to realise it, and, after paying various legacies, to pay the residue to certain beneficiaries.
The widow entered into possession of the estate, part of which was invested in non-trustee securities. Certain of these were realised by her and the proceeds were re-invested in non-trustee securities, which had at her death depreciated in value. Of the non-trustee securities which the widow retained some had appreciated in value at her death and others had depreciated. The cumulo value of the estate had increased considerably.
Held (1) that the widow's duties as executrix ceased when she had paid the debts and the legacy of 300; (2) that thereafter she was in possession of the estate qua liferentrix; (3) that her appointment as liferentrix did not constitute her a trustee; and (4) that, as life rentrix, she was entitled, under the powers in the clause above quoted, to retain the non-trustee securities and to re-invest the proceeds of sales in non-trustee securities.
Opinion, per Lord Ormidale, that, apart from the special clause, the widow, qua liferentrix, was entitled, if not bound, to retain the original investments.
Opinion, per Lord Anderson, that, if the widow had been in the position of a trustee, her representatives would have had a good claim for relief under sec. 32 of the Trusts (Scotland) Act, 1921, in view of the increase of the cumulo value of the estate under her management.
James Fogo, I Glenorchy Terrace, Edinburgh, died on 31st July 1898, leaving a widow, but no surviving children, By his trust-disposition and settlement he appointed his wife, Mrs Annie Scott or Fogo, my sole and only executrix, with all the powers competent to that office. The settlement continued:I hereby direct my said wife in the first place to pay all my just and lawful debts deathbed and funeral expenses In the second place I direct my said wife to retain out of the first of my monies coming into her hands a legacy of Three hundred pounds to be at her absolute disposal And I do hereby give grant assign and dispone to the said Mrs Annie Scott or Fogo in liferent for her liferent use only in the event of her surviving me and on her death in the event of her surviving me or on my own death in the event of my surviving her to her mother Mrs Mary Cuthbertson or Scott of Ryehill also in liferent for her liferent use only All and Sundry lands and heritages goods gear debts and sums of money and whole means estate and effects heritable and moveable real and personal of every description or wherever situated at present belonging or which shall belong to me at the time of my decease with the whole writs titles vouchers and instructions thereof with power to the said Mrs Annie Scott or Fogo in the event of her surviving me and on her death or on my own death in the event of my surviving her the said Mrs Mary Cuthbertson or Scott to enter into possession of my said whole estate and effects draw the rents interest dividends and annual produce thereof during their respective liferents as aforesaid and generally to do everything in the premises in the same manner and as fully and freely as I could have done myself and on the extinction of said liferents in the event of my said wife or her mother surviving me or on my own death in the event of my surviving them I do hereby give grant assign and dispone my said estate and effects heritable and moveable real and personal with the whole writs vouchers and instructions thereof to and in favour of such person or persons as may be appointed by me by any codicil hereto or separate writing whether formally or informally executed or by my said wife at any time during her lifetime in the event of her surviving mebut in trust always for the ends uses and purposes following videlicet In the first place in the event of my surviving said liferentrices for payment of all my just and lawful debts deathbed and funeral expenses and the expenses of executing this Trust In the second place In the event of my wife and her mother surviving on the death of the longest liver of them for payment of the expense of executing this Trust In the third place on the death of my said wife in the event of her surviving me or on my own death in the event of my surviving her Then followed directions to hand over specific articles to certain beneficiaries, to realise the whole estate and effects before conveyed, to make payment of certain legacies, and lastly to pay whatever residue there might be in equal shares among the testator's first cousins. The testator granted power to his trustees to appoint any one of their number factor and law agent and to pay him the usual professional remuneration, and declared that they should have all the powers, privileges, and immunities of gratuitous trustees.
The testator appointed no trustees. Mrs Fogo, who died on 26th January 1925, predeceased by Mrs Scott, left a settlement, in which she appointed trustees on her own estate, and a deed of appointment, in which she appointed the same persons also to be trustees under her husband's settlement. This latter appointment they refused to accept in view of a possible conflict of interest between the twoestates, and a judicial factor was appointed on Mr Fogo's estate.
After the testator's death Mrs Fogo was confirmed as executrix. She also entered into possession and enjoyment of the estate bequeathed to her as liferentrix, and as such applied the income for her own behoof.
After Mrs Fogo's death questions arose as to her liability for loss and depreciation of investments forming part of the testator's estate, and a special case was presented for the opinion and judgment of the Court of Session. The judicial factor on Mr Fogo's estate was the first party to the case; Mrs Fogo's trustees were the second parties.
The case set forth that the gross amount of the estate left by Mr Fogo was 5398, 1s. 7d. of moveable estate, and a property at Norman Street, Glasgow.
The case further set forth: A large part of the testator's estate was invested at his death in non-trustee investments. Mrs Fogo retained most of these investments. Of the investments so retained she realised a certain number at various dates during her lifetime, and the remainder she still held at the time of her death. The investments so realised were of a cumulo value, according to the values contained in the inventory given up at the testator's death, of 1525, Is. As at the respective dates of realisation certain of these investments showed a cumulo appreciation of 269, 11s. 5d., and certain others of the investments showed a cumulo depreciation of 39, 5s., the total sum realised being 1755, 7s. 5d. The non-trustee investments retained by Mrs Fogo and still held at her death were valued in the inventory of the testator's estate at a total sum of 3684, 15s. 9d. At Mrs Fogo's death these investments were valued at 4711, 6s. 5d., the increase in value being represented by a cumulo appreciation on certain of the investments of 1886, 9s. 11d. and a cumulo depreciation on other of the investments of 799, 19s. 3d. Of the investments of the testator realised by Mrs Fogo during her lifetime part of the proceeds of realisation was re-invested by her in non-trustee securities. At her death these re-investments all showed a depreciation in value below cost, the said depreciation amounting in cumulo176, 4a. 1d. (10) The parties are agreed that, if it was not incumbent on Mrs Fogo to realise the estate liferented by her so far as standing invested at the date of her husband's death in non trustees investments and to re-invest it in trustee investments, no question arises as to the propriety of the investments retained by her, and that if she was entitled to re-invest in non-trustee investments no question arises as to the propriety of the investments in which she re-invested the portions of the estate realised.
The first party maintained that Mrs Fogo was in the position of a trustee on the testator's estate, and that her trustees were bound to make good out of her estate the loss arising from her retention of non-trustee investments and from her purchase of non-trustee investments.
The second parties maintained that Mrs Fogo was liferentrix of her husband's estate, and that, as such, she was entitled to use and enjoy his estate as left by him salva rerum substantia, that she was in no sense a trustee on the estate except in so far as there might be any duty on her to maintain it as far as possible in its original form, and that she was under no duty to realise the estate and reinvest the proceeds in trust investments. They accordingly maintained that they were not liable to the first party for depreciation in the non-trustee investments.
The questions of law with which this report is concerned were:(1) Are the second parties liable to the first party for loss arising from the depreciation shown by the non-trustee investments of the...
To continue reading
Request your trial
-
Pet: For Recall Of Sequestration Agnes Watt Dickie Or Ritchie V. Charles Dickie
...20, the Stair Memorial Encyclopaedia, Fulton v Fulton (1864) 2 M. 893 per Lord Cowan at p.900, Fogo's Judicial Factor v Fogo's Trustees 1929 S.C. 546 per Lord Anderson at pps.553-554 and Inglis v Inglis 1983 S.C. 8, that an executor has fiduciary duties and may be held personally liable for......
-
RUSSELL'S EXECUTOR v Commissioners of Inland Revenue
...with the estate for the purposes of management and he cannot give over the estate to others." In Fogo's Judicial Factor v. Fogo's Trs. 1929 S.C. 546 at p. 551, Lord Ormidale said that if there is no provision in the will involving a continuing duty on the part of the executor and the retent......
-
Guild v Commissioners of Inland Revenue
...following cases were referred to in the opinions: Davidson's Trustees v Arnott SC1951 SC 42 Fogo's Judicial Factor v Fogo's Trustees ENR1929 SC 546 Fulton v Fulton & Ors (1864) 2M 893 Gibson's Trustees, Petitioners SC1933 SC 190 IR Commrs v Baddeley ELR[1955] AC 572 IR Commrs v Glasgow Poli......
-
Hutcheson & Company 's Administrator v Taylor's Executrix
...v. Evans, (1871) 9 Macph. 810; Beith v. Mackenzie, (1875) 3 R. 185, Lord Gifford at p. 186. 4 Fogo's Judicial Factor v. Fogo's Trustees, 1929 S. C. 546, Lord Ormidale at p. 551. 5 Ersk. Inst. III. ix. 36; Bell's Com., (M'Laren's ed.) vol. ii., pp. 79, 80, 81; M'Laren on Wills and Succession......