Kearon v Thomson's Trustees
| Jurisdiction | Scotland |
| Judgment Date | 02 March 1949 |
| Date | 02 March 1949 |
| Docket Number | No. 34. |
| Court | Court of Session (Inner House - First Division) |
1ST DIVISION.
Lord Sorn.
Interest—Rate of interest—Executry and trust funds—Bequest of legitim—Succession.
A testator directed his executors and trustees to pay to his daughter her legal right of legitim. Owing to unavoidable difficulties in realising the estate, two payments to account were made and the final instalment was not tendered until thirteen months after the testator's death. The daughter brought an action against the executors and trustees in which she concluded for interest at the rate of 5 per cent or, alternatively, at the rate of 3 per cent. It was admitted that interest was due from the date of death of the testator but there was a dispute as to the rate of interest exigible, the executors contending that they were liable only for such interest as the estate had in fact earned. The Lord Ordinary having awarded 5 per cent,—
Held (rev. judgment of Lord Sorn) that interest was due at the rate of 3 per cent.
Observations on the term "legal interest."
(Sequel to Thomson's Trustees v. DavidsonSC,1947 S. C. 654.)
Dr Margaret (otherwise Meta) Helen Thomson or Edmond or Kearon brought an action against Donald John Morrison and Hugh M'Millan Arnott, the executors and trustees acting under the trust-disposition and settlement of her father Ernest Thomson dated 26th January 1947 and registered in the Books of Council and Session on 25th March 1947, in which she concluded for payment of the unpaid balance of her legal right of legitim which the testator had directed his executors and trustees to make over to her and for payment of other two sums alternatively. These sums represented respectively interest at 5 per cent and interest at 3 per cent from the testator's death until payment on the amount of her legitim.
The testator died on 20th March 1947. Owing to unavoidable difficulties in realising the estate, payments to account were made in September and December 1947 and the final computation was not presented until April 1948. The sum representing the legal right of legitim was £15,640. It was admitted that there had been no fault on the part of the executors and trustees causing delay in the realisation of the estate, and it was also admitted that interest on the capital sum was due from the date of the death of the testator. The only question in dispute related to the rate of interest due, which, the executors contended, was only such rate as the estate had in fact earned. In the present case this was considerably less than 3 per cent.
On 17th December 1948, after a Procedure Roll discussion, the Lord Ordinary (Sorn) granted decree for payment of the unpaid balance of legitim and also for interest at the rate of 5 per cent from the date of death of the testator.
LORD PRESIDENT (Cooper)—This is the opinion of the Court.
The testator, who died on 20th March 1947, directed his executors and trustees to pay to his daughter her legal right of legitim. Owing to unavoidable difficulties in realising the estate, partial payments to account were made in September and December 1947, and the final
computation was presented only in April 1948. The total sum due is £15,640. It is admitted that there was no mora or "wrongful withholding" of money on the part of the executors and trustees. It is admitted that the daughter as legitim creditor is entitled to interest as from the date of death. The sole question is whether the rate of interest should be 5 per cent. The Lord Ordinary, though with evident hesitation, has held that the rate should be 5 per cent, substantially on the ground that this is "the ordinary rule."An examination of the earlier authorities which were reviewed in the admirable debate to which we listened inspires the reflection voiced by Lord Craighill in 1884 that "nothing can be conceived less amenable to a settled general principle than our law upon a creditor's right to interest"—Blair's Trustees v. PayneUNKSC.1 It is unfortunately only too plain that much confusion was introduced by the use of the ambiguous term "legal interest"—originally applicable to the maximum rate of 5 per cent fixed by a statute of 12 Anne (long since repealed)—and that several of the earlier decisions or dicta were treated as authority for propositions which they did not decide. But I do not propose to conduct a historical investigation into the older law, for it is more than fifty years since the attitude of the Courts was transformed. The turn of the tide is first seen in Inglis' Trustees v. BreenUNKSC2 (a case dealing with the closely related question of the rate of...
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Magistrates of Leven v Assessor of Public Undertakings
...was indistinguishable in principle from interest receivable from investments, and (5) that, distinguishingKearon v. Thomson's Trustees, 1949 S. C. 287, he was right in allowing interest on tenants' capital at the rate which over a long period had been accepted as proper. The Provost, Magist......
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Farstad Supply As V. Enviroco Limited
...1) 1987 SLT 575. If the court were to alter the normal rate, that ought to be a decision of the Inner House: Kearon v Thomson's Trustees 1949 SC 287, Lord Sorn at p.288. In Boots The Chemist Ltd the Lord Ordinary's decision to adopt the normal practice of applying the judicial rate in the f......
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Bryan Jackson Official Liquidator Of Weir Construction (contracts) Limited
...there was no statutory rate of legal interest and that five per cent had been only a maximum rate. Finally, in Kearon v Thomson's Trustees 1949 SC 287, which again was a case concerning interest on legitim, the Lord President (Lord Cooper) exposed the hollowness of the concept of "legal int......
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Alexander Douglas Miller Against William George Pollock
...However it was accepted that the pursuer was entitled to interest on his legal rights claim from the date of death (Kearon v Thomson’s Trs 1949 SC 287). The question of interest remained a discretionary one (Waddell’s Trs v Crawford 1926 654 at 664). The pursuer claims interest at 8% which ......