Scottish Court of Session Decisions

By antenuptial contract of marriage entered into between the deceased William Neish and Miss Margaret Ann Watson, afterwards his wife, dated 12th and 14th September 1848, Mr Neish assigned, transferred, conveyed, and made over to the trustees thereby appointed a sum of £8000 out of the first and readiest of his means and estate, and directed it to be paid at the first term of Whitsunday or Martinmas which should happen six months after his decease; and for the further security and more sure payment pro tanto to the trustees, he assigned to them two policies of assurance on his life as therein specified. The trustees were directed by the contract of marriage to hold the said sum of £8000, and to pay the annual income thereof to Mrs Neish in the event of her surviving her husband, and after her death, or in the event of him surviving her, at the first term of Whitsunday or Martinmas which should happen six months after his death, to pay “the said principal sum of £8000 to the child or children of the marriage, and the heirs of their bodies, secundum stirpes equally or in such proportions, if more than one child, and with and under such conditions and restrictions as the father should have directed by any writing under his hand, and failing which, as the mother might direct in the event of her surviving him.” On the other part, by the said contract of marriage Miss Watson, afterwards Mrs Neish, assigned to the trustees thereby appointed certain interests she had in the trust-estate of her deceased father. By her father's trust-disposition and deed of settlement it was provided that the shares of the residue of his estate falling to his daughters should, on their respectively attaining the age of twenty-one years or being married, under deduction of £1000 sterling, which should be paid to them respectively on either of the said events happening, be lent out on heritable security, or upon the Parliamentary funds of Great Britain; that the interest arising therefrom should be paid to his daughters in liferent for their liferent use only, and that after their deaths the principal should be divided among their children in such proportion as his said daughters might appoint, and failing such appointment, to their children equally on their respectively attaining twenty-one years. Miss Watson attained the age of twenty-one years on 15th January 1840. Her father's trustees, on 1st August 1840, set apart for her credit in account with them, a sum of £3000 as an interim payment to account of her share of the residue of his estate, whereof she was entitled to £1000 for her own absolute use and disposal, and said sum amounted to £3975 at 1st August 1848. By the marriage-contract Miss Watson, with consent of her intended husband, and also of her father's then trustees, assigned, transferred, disponed, conveyed, and made over to and in favour of the trustees named in the contract of marriage, and to those they might assume, the sum of £3000, part of the said sum of £3975, with the interest thereof from 1st August then last; as also her, the said Margaret Ann Watson's remaining right and interest in the estate of her said father when realised, but always in trust for these purposes—That the trustees in whose favour the assignation was granted should, in terms of her father's

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deed of settlement, lend out on heritable security, or upon the Parliamentary funds of Great Britain, the said sum of £3000, as well as the principal of the said remainder or balance of the said Margaret Ann Watson's share of the residue of her said father's estate, and should pay the income thereof to the said Margaret Ann Watson during all the days of her life in liferent for her liferent use only, and after her death should “pay the principal to her children in such proportions as she might appoint by any writing under her hand, and failing such appointment to her children equally on their respectively attaining twenty-one years of age.”

There were six sons of the marriage of Mr and Mrs Neish, and two daughters, all of whom were still alive. One of the daughters was still unmarried. The other was married, and had two children still in pupilarity.

Mrs Neish predeceased her husband. She died intestate, and left no writing or appointment with reference to her share of the, in the marriage-contract trust or falling to her under her father's settlement. Mr Neish died on 16th March 1886, leaving a will dated 19th July 1883, with two codicils thereto dated respectively 20th October 1884 and 12th March 1886. By his will, after directing various legacies to be paid, he devised, bequeathed, and disponed, to the trustees therein named, “all the real and personal estate not hereinbefore disposed of to which at my death I shall be beneficially entitled, or of which I shall have power to dispose beneficially by will for any purpose I may think proper.”

The trustees under the will were directed to hold the trust-estate for the testator's children in equal shares, but so far as the shares of the testator's two daughters were concerned, they were directed to pay the income only to each daughter during her life, and after her death to hold the capital and income in trust for her issue, whether children or remoter descendants, payable at such age or time, in such manner, and if more than one, “in such shares as each such daughter shall appoint,” or failing any such appointment, for such daughters' children equally; and in the event of any daughter dying without leaving issue, then the capital of such daughter's share was appointed to accrue to the testator's other children, sons and daughters, but so that the further share accruing to each such daughter should be retained and held by the trustees, subject to the like trusts and powers as were thereinbefore declared concerning the original share of that daughter.

During his life Mr Neish did not do anything beyond granting the assignation contained in his marriage-contract towards paying or securing the provision of £8000 appointed to be paid at the first term of Whitsunday or Martinmas which should happen six months after his decease. On his death the amounts due under the life policies assigned were paid to his executors.

In the year 1854 Mr Neish borrowed from the trustees under the contract of marriage, from funds which had come into their hands in virtue of the assignation by Mrs Neish and her father's trustees in their favour contained in the contract of marriage, the sum of £8000, for which sum he granted a bond and disposition in security in their favour over his estate of Clepington. That bond, which was recorded in the General Register of Sasines 24th May 1854, was undischarged at the date of Mr Neish's death.

By a discharge dated 29th September and 3rd and 10th October 1886, executed by all the children of the late Mr Neish, including his two daughters, the married daughter acting with the special advice and consent of her husband, and her husband also granting the discharge for his own interest and as taking burden on himself for his wife, certain provisions were made regarding the marriage-contract trust-estate. It proceeded on the narrative of the marriage-contract, and on the further narrative that neither Mr Neish nor his spouse left any writing under their bands relative to the disposal or division of the funds embraced in or falling under said marriage-contract trust; that the funds of the marriage trust consisted of (1) the sum of £8660 contained in the before-mentioned bond and disposition in security granted by Mr Neish in favour of his marriage-contract trustees; and (2) the provision of £8000 which under said marriage-contract Mr Neish bound himself to provide for his wife and children; that the trustees acting under said contract of marriage would, in the due execution of the trust created by said contract, now fall to obtain payment from the testamentary trustees and executors of Mr Neish of the sum due under the foresaid bond and disposition in security, as well as of the foresaid provision of £8000, and to pay over the same to them, the children of Mr Neish, they having all attained majority, and there being no children who had died leaving issue, in terms of the directions contained in said marriage-contract; that they, the granters thereof, in place of requiring fulfilment of the provisions in their favour contained in the said contract of marriage, had agreed and resolved to request and authorise the trustees acting under said contract not to require repayment of the sum due under said bond and disposition in security or payment of said provision, and had further agreed and resolved to renounce and discharge their whole claim, rights, and interests under said marriage-contract to the effect that the funds falling under the same might be retained and administered by the testamentary trustees of the late Mr Neish as part of his testamentary trust-estate. After this narrative the discharge proceeded:—“Therefore we, the whole granters hereof, do hereby ( first) request, authorize, and desire the foresaid trustees acting under said contract of marriage to discharge the foresaid bond and disposition in security and the foresaid provision of £8000, made and undertaken by the said William Neish under said contract of marriage; ( second) discharge and renounce the whole provisions in favour of

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us, or any of us, contained in or falling to us in virtue of said contract of marriage in any way, as well as the said contract of marriage itself, whole tenor, contents, and clauses thereof.”

In connection with the discharge and partly as authorised by the provisions thereof, an additional discharge was executed by the only surviving original trustee acting under the contract of marriage, with the consent and concurrence of the assumed trustees, viz., the six sons of the late Mr Neish, and by the assumed trustees for themselves and their own right and interest, and at the special desire and request of, and as authorised by, the whole sons and daughters of Mr Neish as the beneficiaries under the contract of marriage, dated the said additional discharge the 29th September and 3rd and 5th October 1886, and recorded in the division of the General Register of Sasines 20th April 1892, by which deed, and, inter alia, upon the narrative that no consideration had been paid to them, the said trustees, for executing the same, the said granters thereof discharged ( first) the said bond and disposition in security for £8000 and all interest due thereon, and they declared to be redeemed and disburdened thereof, and of the infeftment following thereon, all and whole the lands and others thereby conveyed in security; and (second) all and whole the provision of £8000, which under said contract of marriage Mr Neish had bound himself to provide, from payment of which provision it was by said additional discharge declared the testamentary trustees and executors of Mr Neish should be for ever freed and discharged.

The object of the discharges was to release the then trustees of the contract of marriage, because at that time there was no cash fund available for payment of these two sums of £8000 each, and it was thought expedient to obviate the necessity of a forced sale of part of the testator's estate. The discharges were duly delivered to the trustees of the will, and in consequence of their provisions no payment was made from Mr Neish's trust-estate to the marriage-contract trustees.

At a subsequent period funds amply sufficient to satisfy the daughters' shares having come into the hands of the testamentary trustees, questions were raised on behalf of Mr Neish's two daughters, as to whether, in view of the provisions of the marriage-contract, and notwithstanding the terms of the will and of the discharges referred to, they were entitled to obtain payment of their shares of the marriage-contract funds, and the present special case was presented for the opinion of the Court.

The parties to the case were (1) the marriage-contract trustees; (2) the executors and trustees, original and assumed, of Mr Neish's will (being four of his sons), the six sons of Mr Neish as individuals, and the two pupil children of his married daughter; (3) Mr Neish's unmarried daughter, his married daughter with the consent of her husband, and her husband for his own interest.

The opinion and judgment of the Court was desired upon the following questions of law:—“(2) Was the sum of £8000 derived from the trust-estate of Mr Watson, the father of Mrs Neish, effectually assigned and conveyed by the contract of marriage to the trustees acting under the same? or Did it fall to be administered by the trustees under Mr Watson's deed of settlement, as if no assignation thereof had been contained in the marriage-contract? (3) Did the said deeds of discharge apply to the said last-mentioned sum of £8000, and effect a transfer thereof to the administration of the trustees under the will of Mr Neish as if it formed a part of his testamentary estate? (4) Assuming that, by virtue of the said discharges, the said two sums of £8000 each were transferred to the trustees acting under the will of Mr Neish, and to be administered as if they formed portions of his testamentary estate, is this transfer, so far as effected by the third parties, revocable by them.”

Argued for the first and second parties—(1) The fee of the sum of £8000 which came from the maternal grandfather's estate was validly conveyed to the marriage-contract trustees, and therefore fell under the discharges granted by the children. (2) The discharges effected a valid and effectual renunciation by the daughters of their rights under the marriage-contract. The result of the transaction was that the sum due by the testamentary trustees to the marriage-contract trustees ceased to be due to them, and became part of the testamentary trust-estate. It was impossible now to make the provisions of the marriage-contract binding in the disposal, not of the marriage-contract estate, but of the testamentary estate. The funds in question were just part of the testamentary estate, and as such must be dealt with in terms of the will. (3) The daughters were not now entitled to revoke the discharges to any effect. No trust was created by them, but even if it were held otherwise, the discharges were still not revocable, for upon delivery, rights were conferred upon third persons which constituted a jus quæsitum in them sufficient to bar revocation. (4) The father had a power of appointment under the marriage-contract, and it had been validly exercised by him in his will to the effect of restricting the daughters to a liferent— Lennock's Trustees v. Lennock, October 16, 1880, 8 R. 14; Wallace's Trustees v. Wallace, June 12, 1891, 18 R. 921.

Argued for the third parties—(1) The sum of £8000 which came from the maternal grandfather's estate did not as regards the fee, come under the marriage-contract, but remained part of the maternal grandfather's estate, and subject to the provisions of his will. Consequently the fee of that sum was not effectually dealt with by the discharges, and under the grandfather's will, which alone governed the disposal of it, the daughters were entitled to the fee of £1000 each. (2) At the time when the discharge was granted, the daughters were entitled to a fee of £20(10 each. It was so stated in the

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narrative of the first discharge, and the first and second parties were not now entitled to contradict that narrative. Apart from that, it was clear that the marriage-contract funds were not effectually dealt with by the father's will. This was not a case in which a power could be held to have been exercised without reference. (3) The third parties did not desire to revoke the discharges quoad the trustees. What they claimed right to revoke was only that portion of the discharge by which a trust was created, and by which their rights were restricted from a fee to a liferent. There was no consideration given for the restriction; there was no contract. It was perfectly gratuitous on the part of the daughters. Third parties were not entitled to enforce such a gratuitous benefit so conferred upon them as a jus quæsitum. The case was just the same as if the daughters had got payment of their shares, and had gone to the trustees and asked them to take charge of them. They would have been entitled to revoke any deed by which they had effected such a purpose— Mackenzie v. Mackenzie's Trustees, July 10, 1878, 5 R. 1027; Wight-man v. Costine, March 20, 1879, 6 R., H. L., 13. This was especially so in the case of the unmarried daughter, for no rights were conferred upon existing children in her case. In the case of both daughters, the provisions in favour of children and brothers and sisters were, though not in form, yet in substance and effect, practically testamentary— Byre's Trustees v. Gemmell, December 20, 1895, 23 R. 332. The discharge was therefore revocable, except in so far as it freed the marriage-contract trustees from demanding payment from the testamentary trustees. The effect of the transaction was, that a certain sum which the testamentary trustees would have had to pay, remained in their hands subject to certain directions given by the persons to whom that sum would otherwise have had to be ultimately paid, and these persons were entitled to revoke and alter these directions.