Mrs. A. Turnbull and Others, Trustees of William Turnbull, Esq., deceased v. John Cowan, Esq., Advocate, Curator Bonis of Thomas Turnbull, Esq. [1848] UKHL 6_Bell_222

UKHL

Mrs. A. Turnbull and Others, Trustees of William Turnbull, Esq., deceased v. John Cowan, Esq., Advocate, Curator Bonis of Thomas Turnbull, Esq.

[1848] UKHL 6_Bell_222

Where real and personal estate are given to Trustees, with a direction to invest the personal estate in the purchase of lands, and upon the happening of a contingency to entail both the lands given and those to be purchased, upon a specified series of heirs, without any direction as to the application of the rents of either set of lands, until the occurrence of the contingency, these rents will not fall under the direction to invest and entail; hut will go to the heir as undisposed of.

Subject_ Heir at Law. — Minor. — Lunatic. — Curator bonis. — Election. —

Whether a minor or lunatic should, before majority or convalescence, elect by his Curator between his rights at law and his interests under a will, is completely within the power of the Court, and will be exercised for him by the Court, only where it is absolutely necessary, with a view to the interests of other persons.

Subject_ Truster's debts. —

Where, between the time for investment of personalty in the purchase of land, and for entailing the land, on the occurrence of an uncertain contingency, there are rents undisposed of, these rents will not form the primary fund for payment of the Testator's debts; They will be payable out of the corpus of the personalty before investment.

Subject_ Legitim. — Intestacy. — Heir ab intestato. —

A lunatic heir entitled, on the occurrence of a contingency, to certain benefits under the will of his ancestor, is entitled in the meanwhile, to the undisposed estate of his ancestor, without prejudice to his right to elect, when the contingency should arise, between his legitim and the benefits given by the will.

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William Turnbull by trust, disposition, and settlement of the 2nd February, 1826, conveyed to trustees “All and sundry lands, teinds, fishings, superiorities, adjudications, annual rents, and other heritages whatsoever, presently belonging, or which shall happen to belong to me at my decease, with the whole writs and evidents, rights, title-deeds, and securities thereof: As also all and sundry debts and sums of money, real and personal stock in 3 per cent. Government annuities, or in any other Government security, stock in the Bank of England, or in any other bank, corporation, or company: Also all money due on bill, note, account, decreet, or any other manner of way: Also all household furniture and effects, farm-stocking and produce, utensils of every kind, lying money, arrears of rent, interest, dividends, and, in general, all personal property of every description, which shall or may belong to me at death, with the whole vouchers and instructions thereof.” (Then followed an enumeration of the particular lands.) “With full power to my said trustees, immediately after my decease, to enter to possession of the premises, to output and input tenants, and to manage the same in the like ample manner as I could have done myself, and particularly to liquidate and realise my whole personal property, and, as soon as conveniently they can thereafter, to invest the proceeds in land, as near to my other properties as can be got, and thereafter to hold and entail the same in manner underwritten: First, my said trustees are to pay all my just and lawful debts, deathbed and funeral expenses, and the expense of executing this trust: Secondly, they are to pay to my said wife, Mrs. Alison Turnbull, in the event of her surviving me, during all the days of her lifetime, and remaining my widow, a free yearly annuity of 500 l . per annum.” (Then followed gifts of certain annuities and legacies.) “And, third and lastly, I hereby direct and appoint my said trustees to apply such

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The maker of this deed died in the month of December, 1840, leaving his only son mentioned in it, surviving him. At the date of the deed, and likewise of the truster's death, this son was in an imbecile state of mind, and in March, 1842, the Respondent was appointed Curator bonis to him.

The fortune left by the truster, to be regulated by the trust disposition, consisted of lands, worth about 1500 l . a-year, and personal estate, chiefly Government stock, amounting to upwards of 80,000 l . in value.

The trustees having accepted the trust, and entered into possession of the trust estate, the Respondent, on behalf of his ward, brought an action against them and the persons in whose favour an entail was by the trust disposition directed to be made, concluding to have it found, that it was not incumbent on the

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The Lord Ordinary made avizandum to the Inner House, and directed cases for the parties to be prepared and boxed for that purpose.

Upon the 13th June, 1845, the Court pronounced the following interlocutor, which was the one appealed from:

moveable estate of the said William Turnbull by the said Defenders, his trustees between the period of his death and that of the execution of such entail, whether the same was acquired by him in his lifetime, or has been, or shall be acquired by the said trustees, under the direction of the said trust deed, after deduction of all payments which the trustees shall, in conformity with the direction and authority in the said trust deed, make out of the said income and annual produce, including such allowance as they shall make for the support and comfort of the said Thomas Turnbull, during all the days of his lifetime, or until his recovery, is undisposed of by the said deed, and now belongs, or as the same shall from time to time exist and become due, will belong, to the said Thomas Turnbull absolutely and unconditionally as his own funds; and that the pursuer as his curator bonis is entitled to demand and recover the same without prejudice to the right of the said Thomas Turnbull, or of his legal representatives afterwards to exercise his right of election, or to claim legitim as concluded for in the first declaratory conclusion of the summons; and that the same shall so belong to the said Thomas Turnbull, and form part of his funds, whether effect shall ultimately be given either to the said legal right of legitim or to the testamentary provision in his favour under his father's said deeds of settlement.”

“find, decern, and declare in terms of the first declaratory conclusion of the summons; and, further find and declare that the Defenders, the trustees of the late William Turnbull, are not directed or entitled under the terms of his trust settlement to execute an entail of the lands conveyed to them by that deed, or of the lands to be purchased by them under the directions thereof, until the period of the recovery or death of Thomas Turnbull his son; and that the free income and annual produce drawn and to be drawn from the estate heritable and

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Mr. Stuart and Mr. Anderson for the Appellant.—I. Although it be very true that the curator of a lunatic or minor cannot change the character of the estate to which his ward has succeeded, as by converting personal into real estate by lending money upon heritable bond, and, in this way, affect the succession to the ward's estate, as between his heir and personal representatives, there is nothing to prevent the curator of a ward, to whom one of two rights belongs, to elect between the two. Until the election is made the ward has not succeeded;

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II. With regard to the surplus rents between the period of the testator's death and the period for making the entail, which will remain after providing for the ward's maintenance, the gift to the trustees is of the whole estate, real as well as personal. There is no intestacy as to any part. The trust, therefore, must be commensurate with the gift; and these rents, coming within the gift, must be invested as the rest of the estate is directed to be invested. A direction to invest the corpus of an estate embraces a direction to invest the fruits of the. In Gillespie v. Marshall , Mor. No. 2, App. accessorium, &. , a gift of capital to be paid at twenty-five, without any direction as to the interest in the meanwhile, was held to carry the interest, accumulated with the principal, as an accessory to it. In Graham v. Templar , 3 Wil. Sh. 48, although there was a gift of the accruing rents, the opinion of the Judges was, that without this they would have been carried; for in the words of one of them, “when an estate is conveyed to trustees, for behoof of another, the conveyance carries the whole rents, casualties, &c., in the same manner as the estate itself.” The rents are but accessories to the estate itself, and follow it according to the maxim accessorium sequitur principale . The authorities in England are much to the same effect: in Gibson v. Montford , 1 ves. Sen . 485, Lord Hardwicke reiterated, as an acknowledged doctrine, that an executory devise of the residue of real and personal estate, took in the intermediate profits of the estate devised; and in Ackers v. Phipps , 9 Bli. N. S . 440, a case which very much resembled the present, where there was a devise of real estate, and a bequest of personal estate, to trustees, to be conveyed by them to the object of the trust, at twenty-four years of age, it was held, that the rents, accruing till the period of making over the estate, did not go to the heir-at-law of the truster as a

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In the present case the whole estate of the truster is given “for the uses, ends, and purposes after specified;” everything, therefore, which the deed passed is directed to be applied to the purposes of the trust. But the investment in land is not fixed at any time; it is to be made “as soon as conveniently may be,” whence it necessarily follows that some period, in contemplation of the truster, was to elapse between his death and the investment. If the expressions of the deed are large enough to carry the rents of the lands left by the truster, and the interest of the money to be invested as a part of a whole, this part must, as a necessary inference, be devoted to the same trusts as the land itself, and the capital of the money.

III. Assuming that the income, until the period of entail, is undisposed of, and that the Respondent is entitled to elect between legitim and the provisions of the trust, as the general intent of the truster was that the beneficiaries under the trust should enjoy the whole estate, including that part of it which would consist of the legitim , in order to give effect to this general intent, which, according to the doctrine laid down in Stair v. Stair , 2 Wil. Sh . 414, must first be given effect to; the Court would, in case the Respondent elected to take his legitim , be constrained to apply the undisposed-of income to answering the legitim , for to take it out of the capital of the estate would be to defeat, so far, the general intent of the trust.

But further, if the Respondent take the income as undisposed of, he must do so under a passive title of representation to make good the obligations of the truster, and, among the rest, to fulfil his disposition of the fund of legitim . If, therefore, the Respondent were to take the undisposed-of income the

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IV. Moreover, construing the deed, so as best to effectuate the purposes of the truster, his debts, legacies, and annuities, and the expenses of the trust, must be deducted out of the undisposed of income, which, whether it is to be invested in land or not, is, at all events, given to the trustees for the purposes of the trust.

Mr. Bethel , Mr. Wortley , and Mr. Gowan for the Respondents.

Lord Chancellor .—My Lords, In this case several questions arise, and the most important is that which relates to the income arising from the property real and personal, intermediately between the time of the testator's death and the period at which the entail, according to the directions of the instrument, was to be carried into effect.

The question depends upon what appears to be the intention of the testator. In fact, all questions upon instruments of this sort, but peculiarly questions as to what must become of the intermediate income of the property in such a case, depend upon the will of the party who is the author of the instrument. If he has directed the manner in which those intermediate rents or interest are to be applied of course that direction must prevail. If he has not so directed, and there is no disposition, then it is equally clear that with respect to that part of the property belonging to him at the time of his death of which he has so made no disposition the rule of law must prevail, which applies, in the absence of any direction by the party entitled to prescribe the mode in which it is to be taken.

The terms of the gift, so far as they are necessary for the consideration of this question, are thus expressed. He gives

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He gives therefore all the lands of which he might be possessed at the time of his death; and he gives his property as it existed at the time of his death, not as an executory gift—not a gift to take place at a future time,—but an immediate gift to trustees, who are immediately ordered upon the property so vesting in them, after the payments directed to be made, to invest it in the purchase of lands; and the lands when so purchased are to go with the lands which he had himself the possession and the disposition of at the time of his death, and those lands which so belonged to him and the other lands so to be purchased with the residue of his personalty, are to be

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Two events therefore are pointed out, upon the happening of either of which the entail is to take place; and then, and not till then, are the trustees to denude themselves of their trust and to hand over the property to those who would be entitled under the entail so directed to be made. But till one of those two events arrives the trustees have nothing to do but to hold the land according to the directions of the will. And we in vain look in any part of the will to find any direction as to what they are to do with the income arising from the land so directed to be purchased, in the interval between the death of the author of the trust and the period at which the trustees, under this direction, are to create an entail. I am speaking of course of the surplus, not of that portion which is directed to be applied either to the payment of the annuity to the wife or to the maintenance of the child. The question is only as to the surplus which remains after those particular purposes are provided for.

My Lords,

several cases have been cited, and doctrines have been referred to of unquestionable authority, and authority not only in point of principle but in point of decision, which cannot be controverted, but which appear to me to have no application whatever to the present case;—for instance, the case of Fitzgerald v. Fitzgerald , and the case of Sitwell v. Barnard . Those cases are both governed by a principle totally inapplicable to the present case. The decision in Sitwell v. Barnard , (and there are other cases which follow upon the same principle,) is simply this:—that where a testator does not leave property undisposed of, but does dispose of the intermediate rents and profits, and directs an accumulation until the money be invested in land, a year is a fit time to allow that to be done. There is

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Another class of cases is Fitzgerald v. Fitzgerald , and other cases which have followed upon the same principle. Those cases are equally inapplicable to the present; they turn entirely upon this rule of equity in this country, that where a residue is given upon a future contingency, the intermediate income goes with the principal, but. that where land is given upon a future event the intermediate rents do not go, and for this most obvious of all reasons, which seems to have been lost sight of at the bar very much: a gift of land is a gift of a specific thing, and if that is only to commence at a future period there is nothing in a gift of land the interest in which is to commence de futuro , to show an intention to give the intermediate interest, and

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Then the Court has this to consider. Here is a joint mixed gift of personalty and realty. One rule applies to personalty and another rule applies to realty. The term “residue” is used as to both. It is not, strictly speaking, applicable in the same sense to realty in which it is applied to personalty, because, although you talk of the residue of land, and a gift of land as a specific gift, still a rule having been adopted with regard to personalty, it has been considered that where the gift is mixed, that is an indication of intention that the same rule shall prevail when applied to realty. But that rule has no application to the present case, unless it can be shown that with regard to the personalty, in this case, at all events, the intermediate income fell into the corpus of the fund to be invested in land. In all those cases there is no intermediate gift at all. The gift is de futuro . Here is an immediate and direct trust to be executed by the trustees, which distinguishes it from the various other cases which have been referred to, which, to my great surprise, was used in argument as reason why the intermediate rents should pass.

Now, my Lords, if it rested entirely upon that the case of Bullock v. Stone , which was referred to in the argument, expressly takes that distinction, and decides that it makes no difference whatever generally speaking, whether there be an intermediate trust or not, except this, which Lord Hardwicke

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But it is very important in looking at the intention of the author of the trust, to see what he has directed to be done upon his own death. Now, to be sure, a gift of personalty is not materially varied in extent by the party describing it as personalty which he had upon his death; but when you are looking at the intention, and to see what it is that he meant to have done with his personalty, it is an indication of his intention as to the course to be adopted with the property upon his death. He in terms gives the personalty, and he directs the gift to be invested in land, as soon as conveniently may be, after his death. There is no doubt, therefore, that it is the duty of the trustees, after taking a reasonable time to convert the property into money, to invest the money in the purchase of land; Now, according to the rule of equity, which applies to Scotland as well as to this country, what he has directed to be done at the time of his death, must be considered as being done; and if it is postponed by any accidental circumstances, although it may make a difference to the parties, whether it is received in the shape of interest, or in the shape of rent, yet their right must be the same. It is not a postponement by the trustees of the execution of the trust, that can possibly take the property from one party entitled to it, and give it to other parties not entitled to it. We must therefore suppose that the testator supposed that what he directed to be done would be done.

Now, in this trust, therefore, if the money when realized had been invested as soon as conveniently could be after the death of the author of the trust in the purchase of land, what is to become of the rents of that land in the intermediate period between his death and the time fixed for the settlement? I

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My Lords,

having expressed the opinion which I have formed upon the principal part of the case; there are two other points which I must shortly notice. It was contended that the debts which the testator has directed to be paid, are to be paid out of the income which shall arise after his death. I in vain endeavoured to ascertain upon what principle it was that that was contended for, inasmuch as though the property is property which be had power to dispose of beyond all doubt by his will, yet not having disposed of it, it is property which descended to

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Therefore they must go still further and show, not only that property which has descended is first applicable to the payment of debts in such cases, but that the debts are to be paid, not out of the corpus of the estate, but out of the income undisposed of, or out of a portion of the estate, with respect to which no intention has been declared. There can be no authority for such a proposition. And, if there were any doubt about it, the author of the trust has here directed the payment of the debts by the trustees out of the property which he has disposed of by his will. I apprehend, therefore, there is no doubt whatever that the debts are to be paid out of the corpus of the estate. Nobody can say that the creditors are not to be paid till a sufficient sum is realised, by the accumulation of the annual income of the estate. They are to be paid out of the corpus . And the heir is not bound, out of that which has fallen to him as a future income, to provide a fund for the payment of those debts.

Then, my Lords, comes the question of election. Now all that has been done with regard to election has been to postpone the period at which the election shall take place. If I am right, and your Lordships adopt the proposition which I mean to submit to you, to affirm the decree, so far as it declares that the intermediate rents and profits are undisposed of, and therefore fall to the estate of the lunatic, your Lordships observe that there is nobody who can be interested in having the question of election decided now, because, then, the whole income arising from the estate belongs to the lunatic. Whether he takes it as the interest of his legitim , or whether he takes it as falling to him as heir, the intermediate interest is that which nobody else

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But there is another reason which makes it extremely inconvenient, and it is an inconvenience which the Court would not expose the party to, except in a case of absolute necessity, namely, that there is no means at this moment of forming an opinion about the election. There is no means of ascertaining what the interest of the lunatic would be, because it must depend entirely upon the probability of his recovery. Now if the interest of other parties was very much affected by the postponement, I will not take upon myself to say what course might be proper to be adopted for the purpose of relieving other parties from the inconvenience arising from the postponement of the election. But we know perfectly well, in this country at least, (and there is no reason to suppose that it is not the same in Scotland,) that the question of election is very much in the control of the Court, and that it either postpones it or directs the election to take place immediately, according to the circumstances of the case. It is so frequently with regard to infants. If the interests of other persons are very much affected, and require an immediate election, the Court takes upon itself to perform that duty by considering what is the most expedient course to be adopted for the interest of the infant. On the other hand, if it appears that there is no inconvenience from the delay, the Court then postpones it till the party is in a situation to choose for himself.

Now here no inconvenience can arise to anybody else from postponing the period of election, as the election will be between the legitim and the interest which the lunatic would take under the entail, and which, in the event of his not recovering, would leave nothing to choose between; because then of course the legitim would be the better interest for him, inasmuch as in that case he would take nothing under the entail. It would be putting his interest in a most inconvenient position, and assuming

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My Lords,

there was considerable confusion, as it struck me, in the argument upon this question of election. It seemed to be supposed that the interest which the party took as heir, or as next of kin, was in some way or other to be a question of election. Nothing can be more unfounded. The question of election turns upon this, —where a party gives to an individual something which is his own, and attempts to give to somebody else away from that party something which does actually belong to the person to whom the first gift is made, then the party cannot both take under the instrument and against the instrument —he cannot both claim that which is his own and take that which is intended to be given to him. But the heir-at-law is not in that position. He claims nothing against the will. He claims that which is his own by the law of descent. The legitim the party has an antecedent right to. Supposing, for instance, the personal property is given to the heir-at-law, and the real estate is attempted to be given by a will not properly executed, the heir-at-law takes the land as the heir, but he is not deprived of any benefit given under the will; unless indeed the testator has imposed the condition of election (which no doubt he may do), the question of election will not arise at all. The election therefore clearly would be ultimately between the benefit taken under the entail and the title to legitim as a claim against the gift, because the gift has professed to give all which the author of the gift had at the time of his own death.

My Lords,

I therefore see no inconvenience at all in the

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My Lords,

I think therefore, upon all these points, that the Court of Session have come to the right conclusion; and I move your Lordships to affirm their interlocutor.

Lord Campbell .—My Lords, I have very little to add to what has been addressed to your Lordships by my noble and learned friend. The first point which was discussed by the Judges below, and which has been debated at the Bar, is with respect to the election, namely, whether it was necessary for the Curator bonis , who is the Pursuer in this case, to elect between the will and the right to legitim, before making this claim. Now, my Lords, I by no means say that in no case the Curator bonis may not, under the direction of the Court, exercise the right of election. The Curator bonis appears to have considerably more authority by the law of Scotland than the committee of the estate of a lunatic has in England. He may sue in respect of the property of the person whom he represents, whether compos or non compos . And if his interest and the interest of third persons should require that an election be exercised, as at present advised, I should think that that might be done. But I see no convenience, but on the contrary, great

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Now, my Lords, the first consideration is, that the claim made in this action is not under the will at all. The claim made in this action is made on behalf of the lunatic (as I will call him, although he is not cognosced ), for something which he takes not under the will, but which is undisposed of by the will, and which he would either take as heir-at-law or next of kin, either as the real property descending, or what in Scotland is called the executry or the personal estate. Then in this case he is not approbating and reprobating. He is not setting up the will. He is saying that there is something which, as heir-at-law and next of kin, he is entitled to. And that, therefore, is not at all a case in which he is claiming something under the will, and at the same time rejecting the bequests or devises which the will may make.

Then there is certainly no inconvenience to the interests of the lunatic arising from the postponement, but quite the contrary. There is no inconvenience arising to the interests of third persons from the postponement, for no legatee and no creditor can be injured by the postponement, until either the recovery or the death of the lunatic.

Under these circumstances, it seems to me that the Court of Session were quite right in deciding that this question respecting the right to the surplus between the death of the testator and the recovery or death of the lunatic, may be determined without the election being declared upon.

Then, my Lords, with respect to the other question, I entirely concur in the view taken by my noble and learned friend who has advised your Lordships that the judgment should

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An argument was strongly urged by Mr. Stuart, who seemed to think that he had done enough by showing that what we call the legal estate in those rents and profits came to the trustees. To be sure they did, because with regard to the lands of which the testator died seised, they were devised to the trustees. With regard to the lands which were to be purchased afterwards the conveyance would be to the trustees. No doubt the trustees would receive the rents and profits, but not for their own benefit. They are purely trustees; and unless, in so far as the testator has pointed out what the trustees shall do, and what they shall receive, there is not the least vestige of any beneficial interest in the rents and profits.

Now it is quite clear to me when I look at the language of

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A strong objection was made to the form of the decree, that it would allow the representative of the son, upon his death, to claim the legitim without accounting for the benefit which he has received under the will. But, my Lords, I think it was quite unnecessary for the decree to make any express provision upon that subject. The decree is in these words, “That the pursuer as his curator bonis is entitled to demand and recover the same without prejudice to the right of the said Thomas Turnbull, or of his legal representatives afterwards, to exercise his right of election, or to claim legitim as concluded for in the first declaratory conclusion of the summons; and that the same shall so belong to the said Thomas Turnbull, and form part of his funds, whether effect shall ultimately be given either to the said legal right of legitim, or to the testamentary provision in his favour under his father's said deeds of settlement.”

Well, then, what is the point which is finally decided, and the only point which is finally decided? Why it is that the surplus of the intermediate rents and profits shall, in all events, belong to the son. Upon his death the election may then be exercised; and, if the legitim is preferred, that can only be done by giving credit or accounting accordingly.

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For these reasons I entirely agree in the motion of my noble and learned friend.

Ordered and Adjudged, That the petition and appeal be dismissed this House, and that the interlocutors complained of be affirmed. And it is further Ordered, That the Appellants do pay or cause to be paid to the Respondent the costs incurred in respect of the said appeal, the amount thereof to be certified by the Clerk Assistant, &c.

Solicitors: Spottiswoode and Robertson— Richardson, Connell, and Loch, Agents.