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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Macpherson's Trustees v. Macpherson [1907] ScotLR 781 (21 June 1907) URL: http://www.bailii.org/scot/cases/ScotCS/1907/44SLR0781.html Cite as: [1907] SLR 781, [1907] ScotLR 781 |
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Page: 781↓
A testator, who died on 9th July, as to certain shares in a company the accounts of which were made up on 30th April, the dividend being declared in the October following, directed his trustees to pay the dividends accruing thereon “as received” to his wife during her life. Held that the widow was entitled, without any apportionment, to the whole of the dividends declared subsequent to the testator's death, irrespective of the period during which they had been earned.
The Apportionment Act 1870, sec. 7, enacts — “The provisions of this Act shall not extend to any case in which it is or shall be expressly stipulated that no apportionment shall take place.”
William Macpherson, managing director of the Globe Express, Limited, died on 7th July 1905, leaving a trust-disposition and settlement whereby he assigned and disponed to his widow Mrs Annie Mitchell or Macpherson and others as trustees his whole estate. At the time of his death the testator held 197 shares of £100 each (fully paid) in his company.
By the sixth purpose of his trust-disposition and settlement he directed his trustees to make over upon his death a number of shares, 50 as it turned out, in his company to certain legatees, “each share carrying with it the current year's dividend corresponding thereto.” The seventh purpose was—“The remainder of my shares in the company shall be retained by my trustees during the survivance of my wife, and the dividends accruing from said shares shall, as received, be paid over to her.…
The Globe Express, Limited, in accordance with its articles of association, made up its accounts to 30th April of each year, and, while there was no provision as to the date of the annual meeting when the dividend should be declared, by invariable custom such meeting had been held in the October following. On 10th October 1905 the annual meeting was held, and a dividend for the year ending 30th April preceding was declared at the rate of 7 per cent. The testator's trustees were subsequently paid £1379, being the dividend on the testator's 197 shares.
A question having arisen as to Mrs Macpherson's right to the dividends declared after her husband's death, a special case was presented for ( first) the trustees, and ( second) Mrs Macpherson.
The case stated—“The second party now maintains that the whole of the said dividend on the remaining 147 shares, amounting to the sum of £1029, should, in terms of the 7th purpose and other provisions of the said trust-disposition and settlement, have been paid to her by the first parties when received by them, or at all events that she is entitled to the whole of the dividend which may be paid by the company for the year ending 30th April 1906, when received by the first parties. The first parties, on the other hand, maintain that the dividends payable in respect of the year ending 30th April 1905, and for the period from 30th April to 7th July 1905, form part of the capital of the trust estate and that the second party is only entitled, in terms of the eighth purpose of the said trust-disposition and settlement, and in accordance with the Apportionment Act 1870, to the free liferent of the sums representing the said dividend for the year ending 30th April 1905, and the portion of any dividend which may be declared for the succeeding year applicable to the period from 1st May 1905 to 7th July 1905, the date of the truster's death.”
The questions of law were—“1. Does the whole of the dividend for the year ending 30th April 1905 on the said 147 shares of the Globe Express, Limited, held by the first parties, fall to be paid to the second party under the provisions of the said trust-disposition and settlement? 2. In the event of the first question being answered
Page: 782↓
in the negative, does the portion of the dividend for the year ending 30th April 1906, for the period from 1st May 1905 to 7th July 1905, fall to be paid to the second party under the provisions of the said trust-disposition and settlement?” Argued for the first parties—The question was one of intention. The provision in the sixth purpose that the shares therein bequeathed “should carry the current year's dividend corresponding thereto” clearly excluded apportionment, and the absence of any such words in the seventh purpose showed that apportionment was intended there. Moreover, the word used was “accruing,” not “accrued,” and that meant dividends actually accruing during her survivance. The words “as received,” founded on by the second party, meant that the widow's share of the dividends were to be paid when they fell due and not when the liferent of the general estate (also bequeathed to her) was payable, and without being debited with any charges affecting the liferent of the general estate. Apart from intention, the Apportionment Act read into every settlement the provision that periodical payments should accrue from day to day, and be apportionable accordingly—Apportionment Act 1870 (33 and 34 Vict. c. 35), secs. 2 and 5; Tyrrel v. Clark (1854), 2 Drewry's Rep. 86; Pollock v. Pollock (1874), L.R. 18 Eq. 329; Oppenheimer v. Boatman, [1907] 1 Ch 399.
Argued for the second party—The words “as received” showed clearly that the dividends in question were to be paid over without any apportionment — Apportionment Act ( cit. sup.), sec. 7; Lysaght v. Lysaght, [1898] 1 Ch 115.
Now, in this case we have to consider a will dealing with a substantial amount of personal property, and dealing with it in reasonably clear terms. Among other things Mr Macpherson, after disposing of 70 shares in the Globe Express, Limited, valued at £7000, directs, with respect to the remainder of his shares in that company, that they “shall be retained by my trustees during the survivance of my wife, and the dividends accruing from said shares shall, as received, be paid over to her.” Now there is here a trust to hold for the benefit of Mrs Macpherson, the testator's widow. He then goes on to say what is to be done with the capital, but that does not enter into the present question, and therefore I do not pursue the subject further. The shares are to be held by the trustees during Mrs Macpherson's life, and the trustees are charged with the duty of paying over to her the annual produce or income of these shares. If the direction had been given in these general terms, that the lady was to receive payment of the income of the shares, I do not doubt that the Apportionment Act would have taken effect upon the provision and would have made it necessary to apportion the termly payment accruing in the year of the testator's death, because in the case supposed there would have been an omission on the testator's part to provide how that particular year's income should be dealt with. But, then, I do not think there has been any omission in this case, because the direction is given that the dividends accruing from the shares shall, “as received,” be paid over to his wife. I think that under that provision the first of the dividends received after the testator's death falls to be dealt with exactly as all the others accruing in the course of her life would be treated. If the trustees, following out the directions literally, had, in the month of October, when a dividend was declared, paid it over to Mrs Macpherson, and if the next-of-kin or anyone having an adverse interest were to challenge the payment, I have difficulty in seeing on what argument such a challenge could be rested. I think the answer would be that the trustees had followed the truster's direction by paying the dividend as it accrued, and that the lady, in accordance with that direction, was entitled to apply the income, “as received,” for her own benefit.
This seems to me to be the preferable view, because in the absence of any direction as to apportioning the year's income, I think it may be inferred that the testator did not contemplate any apportionment, and did not think it necessary to give any direction on the subject. I think that his meaning was that the income should be treated as accruing to his wife as and when it was received by the trustees, and that it should be without delay paid over to her for her own benefit. I am therefore of opinion that the first question should be answered in favour of the second party.
Page: 783↓
I entirely agree, however, with the observation which fell from your Lordship in the chair that although we think the direction clear enough it was nevertheless perfectly natural and proper on the part of the trustees to bring this question before the Court in order that they might have judicial authority for the course they might agree to follow.
The
The Court answered the first question in the affirmative, found it unnecessary to answer the second question, and decerned.
Counsel for First Parties— D. P. Fleming. Agents— Webster, Will, & Company, S.S.C.
Counsel for Second Parties— R. S. Horne. Agents— P. Gardiner Gillespie & Gillespie, S.S.C.
