Macgregor's Trustees v. Macgregor and Others

Factual and Procedural Background

A testator executed a trust-disposition and settlement directing his trustees to hold the residue of his estate for his children who survived him, equally "share and share alike," subject to specified conditions. In particular, the testator directed that the shares of his daughters be retained and held by the trustees for their lifetime alimentary use only, and thereafter for the issue of their bodies in fee, provided such issue attained the age of twenty-one years. The trustees were empowered to make advances to daughters from the capital of their liferented shares.

The testator died on 14th December 1904. One of his daughters, who had a one-fifth share in the residue and held it under a liferent, died unmarried and intestate on 26th November 1906 without issue. Her brother was her heir-at-law.

A dispute arose regarding the status of the one-fifth share of the residue liferented by the daughter at her death. The trustees and certain beneficiaries contended that this share accresced to the surviving children of the testator and should be administered accordingly. The executor-dative of the deceased daughter contended that the share vested in her at her death. Other parties maintained that the share did not vest in the daughter, and, not being otherwise disposed of by the settlement, fell into intestacy of the testator's estate.

The parties brought a Special Case to determine their rights in relation to the one-fifth share of the residue of the testator's estate held in liferent by the deceased daughter.

Legal Issues Presented

1. Whether the one-fifth share of residue of the testator's estate held in trust for the deceased daughter was vested in her at the date of her death.
2. If not vested, whether the said share accresced to the testator's surviving children and issue of predeceasing children per stirpes.
3. Whether, alternatively, the said share fell into intestacy of the testator's estate.

Arguments of the Parties

Executor-Dative of the Deceased Daughter's Arguments

• The deceased daughter took a fee simple in the share.
• The direction was to hold the residue for the children who survived the testator, with power to make advances, and the fee was not otherwise disposed of.
• The subsequent conditions did not negate the gift of fee in the event the beneficiary died without issue, which occurred here.
• The restriction to a liferent applied only if the daughter had issue; since she died without issue, the fee simple vested in her.
• Relied on the precedent set in Tweeddale's Trustees v. Tweeddale, December 16, 1905.

Trustees and Beneficiaries' Arguments

• No fee simple was conferred on the deceased daughter because the contingency attached to the bequest prevented vesting at her death.
• The direction was "to hold," not "to pay," distinguishing it from the Tweeddale case.
• The deceased daughter could not have demanded payment of her share during her lifetime.
• Assuming no vesting, the share must either accresce to surviving children or fall into intestacy.
• The presumption favored accretion to the surviving children.
• The phrase "share and share alike" in a gift to a family was considered surplusage, and the rule in Paxton's Trustees v. Cowie was inapplicable.
• The testator's description of daughters' shares as "original and accrescing" implied accretion rather than intestacy.

Other Parties' Positions

Counsel for the third party was not called upon to present arguments.

Table of Precedents Cited

Court's Reasoning and Analysis

The court examined the tenth provision of the testator's will, which directed the trustees to hold the residue of the estate for the children who survived the testator or their issue, with sons to receive payment as shares became available, but daughters' shares to be retained for their liferent alimentary use, and thereafter for their issue in fee.

The court noted the power granted to trustees to postpone payment and to make advances, primarily concerning the sons' shares.

The key legal question was whether the deceased daughter's share vested in her at her death, thereby passing to her heir-at-law, or whether it accresced to surviving siblings or fell into intestacy.

The court found no clear gift of fee simple to the daughter. The language "to hold" indicated a trust arrangement without immediate vesting of the fee. The court distinguished the present case from Tweeddale's Trustees v. Tweeddale, as there was no direction "to pay" the share during the daughter's lifetime.

Given the daughter died intestate and without issue, and the share was liferented to her, the court held that the share had not vested in her at death.

Consequently, the share did not accresce to the residuary legatees but fell into intestacy, as it was not otherwise disposed of by the settlement.

The court's opinion was unanimous among the presiding judges.

Holding and Implications

The court held that the one-fifth share of the residue of the testator's estate, liferented by the deceased daughter who died intestate and without issue, had not vested in her at the date of her death. Accordingly, the share did not accresce to the surviving children but fell into intestacy of the testator's estate.

The direct effect of this decision is that the disputed share must be administered as part of the intestate estate, rather than passing automatically to the residuary legatees or the daughter's heir-at-law. The opinion does not establish new precedent but clarifies the application of trust and estate principles to the specific language and circumstances of this case.