Watson's Trustees v. Brown and Others [1922] ScotLR 230 (15 December 1922)

Watson's Trustees v. Brown and Others [1922] ScotLR 230 (15 December 1922)

There was an implied direction to accumulate income from the £120,000 fund and residue, so the Thellusson Act applied and prohibited further accumulation after 21 years from the testator's death. Surplus income after that period, where there was no vested beneficiary, fell into intestacy and was payable to the heirs in mobilibus, not the heir-at-law. Representatives of the heir in heritage could not share in moveable intestate estate without collating the heritage received.

Citation
[1922] ScotLR 230
Parties
First Parties (trustees): Thomas William Watson of Neilsland and others, testamentary trustees of the late Sir John Watson, first baronet of Earnock and Neilsland, Lanarkshire; Second Parties (beneficiaries): Mrs Agnes Emily Watson Williamson or Brown and others (five surviving daughters and children of two deceased daughters of Sir John Watson); Third Party (executrix and Legatee): Dame Edith Jane Nott or Watson, widow of Sir John Watson, second baronet of Earnock; Fourth Party (beneficiary, Son): Thomas William Watson; Fifth Parties (beneficiary, Heir at Law): Sir Derrick William Inglefield Watson, fourth baronet of Earnock and his curators; Sixth Parties (beneficiaries): Mrs Doreen Agnes Edith Watson or Dorman-Smith and her marriage-contract trustees
Jurisdiction
Scotland
Judgment Date
15 December 1922
Procedural Posture
Special Case (court of Session, Inner House, First Division) / Judgment on Questions of Law Regarding Testamentary Trust and Application of Thellusson Act
Outcome
Questions of law answered: Thellusson Act applies; accumulation prohibited after 21 years; surplus income falls into residue only if there is a vested beneficiary, otherwise into intestacy; income from heritage accumulated by trustees is moveable and goes to heirs in mobilibus; collation required for representatives...
Legal Topics
Accumulations, Implied Direction to Accumulate, Thellusson Act, Intestacy, Collation Inter Hæredes, Vested and Contingent Interests
Succession Trusts and Estates Accumulations Implied Direction to Accumulate Thellusson Act Intestacy Collation Inter Hæredes Vested and Contingent Interests

Case Brief

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Parties

Thomas William Watson of Neilsland and others, testamentary trustees of the late Sir John Watson, first baronet of Earnock and Neilsland, Lanarkshire

First Parties (trustees)

Mrs Agnes Emily Watson Williamson or Brown and others (five surviving daughters and children of two deceased daughters of Sir John Watson)

Second Parties (beneficiaries)

Dame Edith Jane Nott or Watson, widow of Sir John Watson, second baronet of Earnock

Third Party (executrix and Legatee)

Thomas William Watson

Fourth Party (beneficiary, Son)

Sir Derrick William Inglefield Watson, fourth baronet of Earnock and his curators

Fifth Parties (beneficiary, Heir at Law)

Mrs Doreen Agnes Edith Watson or Dorman-Smith and her marriage-contract trustees

Sixth Parties (beneficiaries)

Procedural Posture

Special Case (court of Session, Inner House, First Division) / Judgment on Questions of Law Regarding Testamentary Trust and Application of Thellusson Act

Legal Issues

  1. 1 Does the Thellusson Act prohibit accumulation of income from the £120,000 fund and residue after 21 years from testator's death?
  2. 2 Does surplus income fall into residue or intestacy?
  3. 3 Who is entitled to surplus income: heirs in mobilibus or heir-at-law?

Ratio Decidendi

There was an implied direction to accumulate income from the £120,000 fund and residue, so the Thellusson Act applied and prohibited further accumulation after 21 years from the testator's death. Surplus income after that period, where there was no vested beneficiary, fell into intestacy and was payable to the heirs in mobilibus, not the heir-at-law. Representatives of the heir in heritage could not share in moveable intestate estate without collating the heritage received.

Court Disposition

Questions of law answered: Thellusson Act applies; accumulation prohibited after 21 years; surplus income falls into residue only if there is a vested beneficiary, otherwise into intestacy; income from heritage accumulated by trustees is moveable and goes to heirs in mobilibus; collation required for representatives...

Orders

  • Trustees to distribute surplus income after 21 years from testator's death in accordance with the judgment: to heirs in mobilibus where no vested beneficiary exists; representatives of heir in heritage must collate heritage to share in moveable intestate estate.