( Ante, vol. xxviii. p. 244, and 18 R. 319.)
Subject_Succession — Vesting — Marriage-Contract — Clause — Construction — Conditio si sine liberis.
In an antenuptial marriage-contract the wife conveyed a sum of £4000 to trustees. The deed provided that in the event of the marriage being dissolved by the predecease of the wife leaving children, the husband should have an alimentary liferent of this fund, that after his death the capital should be paid over to the children of the marriage on their attaining majority, and that if there were no children alive at the dissolution of the marriage, or should they all die before the terms of payment of their provisions as aforesaid, the husband should continue to have the liferent of the fund during his life, but that the whole capital should be subject to the wife's disposal by will. In the parallel clause which dealt with the event of the husband predeceasing the wife, it was provided that the wife should have an alimentary liferent of the fund; that after her death the interest was to be applied for behoof of the children during their minority, and that on their attaining majority the capital was to be paid to them, but subject to the declaration that if “such children should all die before their mother, or … should they all die before attaining majority, and without leaving issue of their own bodies,” the fund should continue to be held for the alimentary liferent of the widow; and it was further declared that in the event of the wife surviving her husband, and of the failure of issue of the marriage, she should have the right to test on the capital. It was expressly provided that the provisions to children should not be payable, or become vested interests, or be transmissible by them until after the death of the longest liver of the spouses, and until the children attained majority.
The marriage was dissolved by the predecease of the wife, who was survived by one son, and left a will in
which she made over all she possessed to her husband.
In an action by the husband and son for payment upon their joint discharge of the £4000, held ( rev. judgment of the First Division) that the trustees were bound to maintain the trust, not only for the protection of the husband's alimentary liferent, but also for the possible issue of the son.
This case is reported ante, vol. xxviii. p. 244, and 18 R. 319.
Hughes and Another (Edwardes' Trustees) appealed.
The respondents did not appear.
At delivering judgment—
I have had an opportunity of reading the judgment prepared by my noble and learned friend Lord Watson. I entirely concur in that judgment, and I do not think it necessary to state anything further.
Under the provisions of the marriage-contract the sole duty of the trustees during the lifetime of both spouses was to pay the income of the fund to Mrs Edwardes for her personal and alimentary use, exclusive of the jus mariti and right of administration of her husband. Separate directions are given with respect to the disposal of the income and corpus of the fund applicable to the alternative events of the wife or husband predeceasing. In the event of the wife's predecease leaving a child or children, the trustees are directed to pay the income to the husband during his life for his alimentary use, his right to assign and the diligence of his creditors being excluded On his death the capital is made payable to “the said child or children,” after their attaining majority in the case of sons, and in the case of daughters, after their attaining majority or being married. Should there be no child or children alive at the wife's decease, or should they die before the terms at which their provisions become payable, the trustees are directed to make over the capital at her husband's death to any person whom she may appoint by will or other writing, whom failing to her nearest heirs and executors.
Mrs Edwardes on the 17th April 1860 made a will in favour of her husband the terms of which are sufficient to carry the capital of the trust-fund to him upon the occurrence of the events in which the testatrix had power to dispose of it. Although these events have not occurred, the pursuers maintained, in both Courts below, that they were entitled to present payment upon their joint demand, because the fund, which has not yet vested in either of them, must inevitably belong to one or other of them—to the son in the event of his surviving his father, and to the father in the event of his son's predecease. If that were an accurate statement of the beneficial interests in the fee of the trust-fund which can emerge in any possible event, and there were no obstacle interposed by the terms of the trust, I should be prepared to hold, as I indicated in Muirhead v. Muirhead and Crellin, 15 App. Cas. 300, that they were entitled to immediate payment of the fund. But in my opinion their right to immediate payment cannot be affirmed if, notwithstanding their ultimate interest, the terms of the trust require that it shall be kept up, or if their right is liable to defeasance by the possible existence of other beneficiaries.
The appellants argued that there are three reasons, each of them in itself sufficient to justify their refusal to pay over the capital of the trust-fund to the pursuers. First, that in present circumstances they are bound to retain it for the protection and continuance of the husband's alimentary liferent; secondly, that in the possible event of the son's death leaving issue before his interest becomes vested, such issue will be entitled to take if they survive their grandfather; and thirdly, that the will of Mrs Edwardes in her husband's favour was revoked by the subsequent birth of her son.
Only the first and second of these reasons were pleaded by the appellants in the Court of Session. The Lord Ordinary and Lord Adam, who held that the appellants were under no obligation to denude, rested their judgment upon an affirmance of the second, and expressed no opinion upon the first. The late Lord President (Inglis), who with Lords M'Laren and Kinnear constituted the majority of the First Division, necessarily dealt with and rejected both these reasons in arriving at the judgment appealed from. The third reason was not submitted by the appellants either to the Lord Ordinary or to the Inner House, and in my opinion it ought not to be considered by your Lordships. According to the law of Scotland, the question whether the testament of a parent is
The learned Judges of the Inner House who decided in favour of the pursuers, do not suggest that a trust duly constituted for payment of an alimentary annuity can be brought to an end by the joint action of the annuitant and the parties having beneficial right to the fee. A rule to the contrary has long been settled, and was recently enforced in Whyte's Trustees v. Whyte, 4 Sess. Cas. (4th series) 786, and Duthie's Trustees v. Kinloch, 5 Sess. Cas. (4th series) 858. In both instances the parties entitled to the fee had a vested interest, which is not the case here; and in Duthie's Trustees v. Duthie, the alimentary liferenter and the beneficial fiar were one and the same person. Yet it was held that the combined action of all parties interested could not defeat the settlor's intention to make the annuitants' right alimentary, a result which could not be attained except by continuing the trust. None of their Lordships disputed the existence or force of the rule, but they were of opinion that its application was in this case excluded by the terms of a clause in the marriage settlement which provides that the trustees shall have power to pay over the capital of the fund “at any time after the death of the predeceasing wife, and the failure of issue on obtaining the consent and discharge of the surviving husband, the liferenter, and the beneficiaries under the wife's will, or settlement, or of her heirs and executors, failing her executing a will or settlement.” The view which they took was thus explained by the Lord President, 18 Sess. Cas, (4th series), p. 327—“The only obstacle to the application of this clause is the existence of the other pursuer Henry Frederick (that is, of the son). But the clause just quoted shows that there was no intention to maintain the trust in all events merely for security of the alimentary liferent, and if all parties interested, the surviving husband and the only child, are desirous to put an end to the trust and obtain a conveyance of the fee, it appears to me that the principle, if not the letter, of the clause is clearly applicable.” I find it is impossible to concur in that interpretation, which in my opinion is as much at variance with the spirit as with the letter of the clause. The clause contains an exception which appears to me to accentuate the expression of the settlor's intention that the trust shall continue for the purpose of making the husband's liferent alimentary, in every event save the one specified, namely, the failure of issue of the marriage, and the consequent devolution of the fee to the wife's heirs, legal or testamentary. It was the obvious purpose of the settlor to provide that the surviving husband should remain in the enjoyment of a strictly alimentary allowance so long as there existed children or issue of the marriage whom he was under an obligation to support, and that the trust was not to be terminated until the fee devolved upon persons to whom he owed no such obligation.
The Lord Ordinary held that by virtue of the implied condition si sine liberis decesserit, issue of children are conditionally instituted, and that a child of the younger pursuer would take the fee in the event of his father predeceasing the liferenter. When the case went to the First Division, the majority were of opinion that the deed contained expressions sufficient to oust the condition, if otherwise applicable; whilst Lord Adam thought that irrespective of the condition, its terms were sufficient to give to issue of children, on the failure of their parent before the term of payment, the share of fee which he would have taken on survivance. But all the learned Judges of the Division, Lord Adam included, treated it as an open and doubtful question whether the conditio si sine liberis decesserit applies to a provision in a marriage contract. No reason was assigned by any of their Lord-ships for the doubt which they thus cast upon a principle which I have been accustomed to regard as settled, and I have not been able to discover any foundation for it.
In Wood v. Aitchison, Mor. Dict. 13,043, John Aitchison became bound, in the marriage articles of his son Thomas, to invest £400 in land, or on security, and to take the right in favour of the spouses and the longest liver of them in liferent, “and to the child or children to be procreated betwixt them, whom failing, to the said John Aitchison his heirs and assignees whatsoever in fee.” The wife predeceased her husband, at whose death there were alive one son of the marriage, and the daughter of a predeceasing child. The surviving son claimed the whole provision, but the Court held that the daughter, by virtue of the implied condition, was entitled to take her parent's share. Their Lordships were unanimously of opinion, “that in all provisions of this sort, the issue of children predeceasing the term of payment were entitled to that share which their parent could have claimed.” It would be no light matter to disturb a decision of the Court of Session upon such a point in the year 1789—a decision which must not only have been relied upon in practice, but so far as I am aware, during the century which has since elapsed, the authority of which has never been questioned. It was followed in Robertson v. Houston, 20 Sess. Cas. (2nd series, 989), and so late as the year 1870 the First Division, in Arthur and Seymour v. Lamb, 8 Sess. Cas. (3rd series) 928, upon a case remitted for their opinion, advised the Court of Chancery that a provision by a father in a Scotch contract of marriage, “in favour of himself
I cannot therefore doubt that according to the law of Scotland the condition must be read into the provision with which we are dealing, unless its application is expressly or impliedly excluded by the context. The expressions upon which the majority relied as ousting the condition, occur in the directions for the disposal of the fee in the event of the husband's predecease. In that case the wife took an alimentary liferent, the fee being payable on her decease to the “child or children” of the marriage. Then follow declarations to the effect that “if such child or children should all die before their mother, or although they should survive her, should they all die without leaving iSsue of their bodies,” their mother's alimentary annuity was to continue, but that in the event of “failure of issue” she was to have the power of disposing of the capital by will or other writing, to take effect at her decease. Upon these conditions the Lord President observed—“The contrast between this and the clause applicable to the predecease of the wife is very remarkable. In the latter the only parties entitled to the fee as institutes are ‘children.’ In the former the grandchildren are conditionally instituted to their parents, and the widow's right to test is made dependent not on the failure of children but on the failure of the issue of the marriage, a term of more elastic signification than ‘children,’ and including descendants of any generation if the natural meaning is not controlled by the context.” His Lordship accordingly came to the conclusion that the settlor having used different words of gift in the two events contemplated, and having expressly instituted issue of children in the one case and omitted them in the other, must be held to have done so intentionally. The same reasoning was adopted by Lords M'Laren and Kinnear.
I do not think that there exists any such contrast between the two clauses as their Lordships have suggested. In both clauses the words of gift are precisely the same, being to “the child or children of the marriage.” The expressions “should they all die before attaining majority, and without leaving issue of their own bodies,” are only introduced for the purpose of limiting the wife's power of disposal by will in the event of her surviving her husband. In the event of her predeceasing him her powers appear to me to be subject to the same limitation, because in that event it is provided that the trustees may pay to the liferenter, and to her heirs-at-law, or by will, “at any time after the death of the predeceasing wife and the failure of issue,” or, in other words, after the failure of children and their descendants. What might have been the effect of an express gift to children in the one event, and to children and their issue in the other, it is unnecessary for the purposes of this case to determine. In my opinion these incidental expressions occurring in each clause point in the same direction. They equally indicate the understanding of the settlor that his gift to “a child or children” would bear the meaning which the law ascribes to the words in a marriage-contract provision, and would therefore include the issue of such child or children. I am confirmed in that impression by the fact that the two clauses already referred to are followed by provisions applicable to both, in which the beneficiaries are described as “children of the marriage.” I can hardly conceive that the settlor meant these words to signify children only in the one clause, and children whom failing their issue in the other.
For these reasons I have come to the conclusion that the interlocutor of the Inner House, in so far as appealed from, must be reversed, and the interlocutor of the Lord Ordinary restored. Your Lord-ships are not required to deal with the question of expenses in the Courts below, seeing that there is no appeal from that part of the interlocutor of the First Division which disposes of them. I think the appellants ought to have their costs of this appeal as between agent and client out of the trust fund in question.
The authorities cited by the learned counsel for the appellants have satisfied me that the trustees were bound to uphold the trust for the purpose of protecting the surviving husband's alimentary liferent. If I understand aright the opinion of the late Lord President, he would have come to the same conclusion but for a special clause in the settlement which gives the trustee power to pay over the capital of the trust estate after the wife's death in the event of failure of issue of the marriage. Whether, even in that case, the trustees would have been bound to denude against their own judgment is perhaps doubtful. I can understand that the lady's stepfather or his advisers may have thought that if it should happen that there was no issue of the marriage to be cared for, there would be less reason for securing an alimentary provision for the husband, and that the matter might well be left to the discretion of the trustees. But however that may be, I am unable to assent to the view that because the trustees are authorised or even required to part with the trust funds in one particular case which has not happened, it follows that in another and a different case the Court is at liberty to set aside restrictions which the law allows and the settlement has in terms imposed.
On the second point also I venture to differ from the opinion of the majority of the First Division of the Court of Session. The settlement is not well drawn, but if it is read fairly, it is I think impossible not to see that it was the intention of the parties to make provision for the issue of children dying in the lifetime of their parents. I doubt whether the word “children” in this settlement of itself and by its own force comprehends “grandchildren.” I rather think that the word “children” is used in its proper sense; and so I think is the word “issue.” But it seems to me that the settlement is framed upon the view that in calling children the settlors were at the same time calling the issue of children. The settlement itself speaks of its provisions as being provisions “for the issue of the marriage.” Each purpose of the trust that deals with the interest of children contains somewhere a reference to issue, and the reference I think is not the less significant because it is brought in (so to speak) rather casually. In fact the condition si sine liberis seems to run through the whole settlement, and to have been in the contemplation of the parties throughout. In the result I think that the interest of possible grandchildren cannot be disregarded.
On both grounds, therefore, I am of opinion that the appeal must be allowed.
Interlocutor appealed from reversed with costs.
Counsel for the Appellants— Rigby, Q.C.— Asher, Q.C.— Dick Peddie. Agent— Andrew Beveridge, for Macandrew, Wright, & Murray, W.S.