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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Macdonald's Trustees v. Corporation of Aberdeen [1902] ScotLR 39_745 (03 July 1902) URL: http://www.bailii.org/scot/cases/ScotCS/1902/39SLR0745.html Cite as: [1902] SLR 39_745, [1902] ScotLR 39_745 |
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Page: 745↓
A testator, inter alia, directed his trustees to “make offer to the Town Council of Aberdeen, on behalf of the community of that city, free of legacy duty, of my collection of oil paintings, … together with one-third of the residue of my estate for the purpose after mentioned.” … Held that the words “free of legacy duty” applied to the bequest of paintings only.
Observations on the competency of a bequest of residue free of legacy duty.
By his trust-disposition and settlement, dated 11th December 1882, the late Alexander Macdonald of Kepplestone directed, inter alia, as follows:—“( Fifth) On the death of my said wife my said trustees shall make offer to the Town Council of Aberdeen, on behalf of the community of
Page: 746↓
that city, free of legacy duty, of my collection of oil paintings, pen and ink drawings, and etchings, together with one-third of the residue of my estate for the purpose after mentioned, but only on the conditions following, viz.” … The residue of the estate amounted to about £54,000, exclusive of payment of residue duty.
A question having arisen between the other residuary legatees and the Town Council of Aberdeen as to the extent to which the provisions in favour of the latter were to be free of legacy duty, a special case was presented for the opinion of the Court.
The parties to the case were (1) Mr Macdonald's trustees; (2) the Lord Provost, Magistrates, and Town Council of Aberdeen; (3) all the other beneficiaries who were entitled to a share of the residue under the settlement except two; and (4) the remaining two beneficiaries entitled to a share of the residue, who, at the request of the other parties interested, had become parties to the case, but did not desire to offer any argument.
The second parties maintained that, in terms of the fifth clause of said trust-disposition and settlement, they were entitled to receive from the first parties, not only the specific legacies, but also one-third of the residue of said estate free of legacy duty, payment of said duty falling to be made out of the remaining two-thirds of residue.
The third parties maintained that the fair reading of the terms of the bequest was that only the collection of paintings and others was to be offered free of legacy duty. They contended that it would require stronger evidence of intention than the terms of the bequest conveyed to throw upon the two-thirds of the residue destined to the truster's relatives the burden of legacy duty due upon the one-third destined to strangers; and further, that residue could not be bequeathed free of duty.
The question of law was as follows:—“Are the second parties entitled to payment from the first parties of one-third of the residue of the trust-estate of the said deceased Alexander Macdonald, free of any deduction in respect of legacy duty?”
Argued for the second parties—The words “free of legacy duty” applied both to the bequest of paintings and to the bequest of a third of the residue. The intention of the testator was that the legacy duty was to be borne by the rest of the estate. The bequest was a gift of a unum quid, and was meant to be free of duty— Warbrick v. Varley, 1861, 30 Beavan 241; Hanson on Death Duties, p. 466.
Counsel for the third parties were not called upon.
It is perfectly intelligible and natural that a bequest of paintings should be made free of legacy duty, but then the clause goes on “together with one-third of the residue of my estate.”
Now, I think on a sound construction of this clause that that means that the bequest of residue is given on the footing that the legatee pays legacy duty.
If a share of residue is to be given free from legacy duty, that must be expressed in clear terms, as it is a thing which it is plainly difficult to do, because if you give a person one-third of the residue free from legacy duty it is not a true third, as the other residuary legatees would have to bear his share of the duty.
That such a bequest can be made effectual I have no doubt, as in the case of Warbrick v. Varley, 30 Beavan, 241, quoted to us, but I think the safer ground to go upon here is that it is not plain that the testator intended any such thing, but meant to give the collection of paintings only free from legacy duty.
I therefore think with your Lordship that the share of residue in question is not bequeathed free of legacy duty.
No doubt a part of residue may be effectually bequeathed free of duty by imposing the burden on the remainder of the residue. But I am disposed to read the clause in question as a bequest of two separate and distinct subjects—one of paintings and the other of one-third of the residue.
Looking at the position of the words “free of legacy duty” I am of opinion that the proper construction of the clause is, that these words are applicable only to the bequest of paintings.
Page: 747↓
The Court answered the question stated in the negative.
Counsel for the First and Fourth Parties— Dove Wilson. Agents— Alex. Morison & Co., W.S.
Counsel for the Second Parties— Dundas, K.C.— Hunter. Agents— Gordon, Falconer, & Fairweather, W.S.
Counsel for the Third Parties— Lorimer— A. S. D. Thomson. Agent— Andrew Newlands, S.S.C.