M'Arthur's Executors v Guild
| Jurisdiction | Scotland |
| Judgment Date | 11 March 1908 |
| Docket Number | No. 106. |
| Date | 11 March 1908 |
| Court | Court of Session |
Lord President, Lord Justice-Clerk, Lord M'Laren, Lord Kinnear, Lord Stormonth-Darling, Lord Ardwall, Lord Guthrie.
SuccessionSpecial LegacySpecific Bequest of HeritageSale of Subject Suspensive ConditionAdemption.
A testator by his will bequeathed to his daughter, as a special legacy, a hotel of which he was the proprietor. Shortly before his death the testator sold the hotel to William Steven, and signed a minute of sale which bore that it shall be a condition of this agreement being binding on both parties that Mr Steven applies for and obtains a transfer of the licence certificate of the said hotel. The transfer was not obtained until after the death of the testator, and thereafter a formal conveyance was executed in favour of the purchaser, and the price paid.
In a special case the question was put whether the bequest of the hotel had been adeemed. Held (by the First Division with three consulted Judges) that the contract of sale being subject to a suspensive conditionnamely, the transfer of the licencethe hotel remained part of the testator's estate at his death, and accordingly that the legacy had not been adeemed, and that the price of the hotel belonged to the daughter.
Opinions that even if there had been no suspensive condition there had been no ademption, the hotel, or the right to its price, remaining part of the testator's estate.
Heron v. EspieUNK, June 3, 1856, 18 D. 917, and Pollok's Trustees v. AndersonSC, Jan. 22, 1902, 4 F. 455, commented on and explained.
Peter M'Arthur, Perth, died on 16th April 1906, leaving a will with executed in 1905. By his will, two of the testator's sons were appointed his executors, and after various special bequests the testator conveyed to them the whole residue of his means and estate, heritable and moveable, with power to realise and divide the same among the residuary legatees named therein.
The third head of the will was as follows:(Thirdly) I dispone, assign, and bequeath to my daughter, Mrs Margaret Anderson M'Arthur or Guild, residing in Strathmiglo, Fifeshire, wife of James Guild, hotelkeeper there, whom failing, to her child or children in equal right (first) the property in Strathmiglo, consisting of the Royal Hotel and premises therewith connected, with the pertinents and the writs and title-deeds thereof; (second) (certain other properties).
By minute of sale, dated 5th March 1906, the testator sold the Royal Hotel, Strathmiglo, to William Steven, Kinross, at the price of 1400 sterling, with entry at Whitsunday (15th May) 1906, at which date the price was declared to be payable. The minute, which was signed by the testator and by Mr Steven, stated:(7) It shall be a condition of this agreement being binding on both parties that Mr Steven applies for and obtains a transfer of the licence certificate for the said Royal Hotel, Strathmiglo. It was also provided that William Steven, the purchaser, should, within seven days from the date of the minute of sale, consign 400 in the Bank of Scotland in Perth on deposit-receipt in the joint names of the testator and himself, in part payment of the purchase price. The said sum of 400 was consigned in said bank upon 12th March 1906, to await the settlement of the price of the Royal Hotel, Strathmiglo, repayable on the joint indorsement of the said William Steven, Esq., and Peter M'Arthur, Esq., residing at 61 George Street, Perth. A transfer of the licence certificate in favour of Mr Steven was obtained at the Licensing Court held on 17th April 1906, the day after the death of the testator, and a formal conveyance of the property was thereafter executed in his favour, and the balance of the price paid.
Questions having arisen as to the rights of parties in consequence of the sale of the hotel, a special case was presented, which stated the facts above narrated.
The parties to the case were:(1) The executors under the will, (2) and (4) the residuary legatees, and (3) Mrs Guild, to whom the hotel had been bequeathed.
The first, second, and fourth parties maintained that the bequest of the said Royal Hotel to the third party was adeemed by the sale thereof concluded between the testator and the purchaser thereof, under and by virtue of the said minute of sale and consignation of part of the price, and that the said 400 consigned in bank as aforesaid, together with the balance of the said price of 1400, formed part of the residue of the estate of the testator. The third party contended that the said bequest was not adeemed, in respect that the testator had executed no conveyance thereof prior to his death in favour of the purchaser, and was then still feudally vest therein as proprietor thereof.
The question of law was:Was the bequest by the testator to the third party of the said heritable property known as the Royal Hotel, Strathmiglo, adeemed?
The case was argued before the First Division, with three consulted Judges, on 4th and 5th February 1908.
Argued for the first, second, and fourth parties;When heritage was sold voluntarily, the price was moveable from the moment the sale was completed.1 In the present case the sale was completed at the moment when the minute of sale was signed, it being immaterial that no conveyance had been executed,2 and the condition as to the acquisition of the licence being merely resolutive and not suspensive. Accordingly, at the date of the testator's death the subject of this special bequest had been converted from heritage into moveable estate, and thus had ceased to exist in the form in which it was bequeathed. The subject of the bequest having ceased to exist, it followed that the legacy had been adeemed.3 The case of Pollok's Trustees v. AndersonSC,4 relied on by the third party, was wrongly decided, and should be overruled, in so far as it decided that where the subject of a special legacy had been sold before the death of the testator the special legatee had a claim on the price. There was no authority for this proposition, and it was contrary to the decision of the whole Court in the case of Heron v. EspieUNK.5
Argued for the third party;The sole test in a question of ademption was whether or not the title to the property in question was in the testator at the time of his death.6 So long as the testator remained proprietor of the subject, it was irrelevant to consider any obligations into which he had entered with regard to it, or his intentions as evidenced by such obligations. In this respect ademption was distinguished from conversion, where intention was a relevant consideration.7 Applying this test to the present case, it was clear that at the date of his deathwhich was the date at which the will must be
held to speak1the testator was still feudally vested in the hotel, and the proprietor of it. The English cases were of no value in this connection, as by English law a contract of sale passed the property.2Pollok's Trustees v. AndersonSC3 was directly in point, and, indeed, the present case was a fortiori, for in PollokSC3 the sale was unconditional, whereas here it was dependent on a suspensive condition which was not purified until after the death of the testator. Heron v. EspieUNK4 did not conflict with PollokSC,3 and, indeed, had no bearing at all on the...
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