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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Knox's Trustees v. Knox and Others [1869] ScotLR 6_557 (6 June 1869)
URL: http://www.bailii.org/scot/cases/ScotCS/1869/06SLR0557.html
Cite as: [1869] ScotLR 6_557, [1869] SLR 6_557
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SCOTTISH_SLR_Court_of_Session
Page: 557↓
Court of Session Inner House First Division.
v.
Facts:
In a
Page: 558↓
marriage-contract £4000 was provided to the children of the marriage, the husband reserving a power of apportionment. In a subsequent testamentary deed, the husband apportioned that sum, giving a certain share to one of his children. This share he afterwards, on the death of the child, revoked by a codicil, in which he gave a certain annuity to his granddaughter until she attained twenty-one years of age, when his trustees were to pay her one-half of the residue of his estate, and to hold the other half for her in liferent and her children in fee. He provided other annuities. After his death, held (1) that the granddaughter, now the only party in right of the £4000 in the marriage-contract, was entitled to that sum and also to the annuity; and (2) that payment of the annuities must be made out of the capital of the trust-estate, in so far as the annual income was insufficient to pay them.
By antenuptial contract of marriage, dated January 1831, Bobert Knox, inter alia, bound and obliged himself and his heirs, executors, and successors, to pay to the child or children of his then intended marriage the sum of £4000 sterling, payable at the first term of Whitsunday or Martinmas after his death. The contract of marriage declared that it should be in the power of Knox to divide and apportion, as he should think proper, among the children of the marriage the provisions in their favour therein contained, and, failing such division, that the said provisions should belong to and be divided among the said children equally, share and share alike. The contract also declared that the provisions in the said contract of marriage, conceived in favour of the child or children of the said intended marriage, should be in full satisfaction to them of all bairns' part of gear, legitim, portion-natural, executry, and everything else that they could ask or claim by and through the decease of Knox excepting what he might think fit to bestow of his own good will only. The marriage in reference to which the said contract was entered into took place shortly thereafter, and was dissolved by the death of Mrs Knox in 1846. The following children were born of the marriage, viz., (1st) Bruce Ellis Knox, afterwards married to John Gilmer, now residing in London; (2d) Robert Knox junior; (3d) James Dunlop Knox. The said Bruce Ellis Knox, then Mrs Gilmer, died in Mauritius, intestate, in the year 1858; the said James Dunlop Knox died intestate in the month of April 1864, and the said Robert Knox junior, died on the 16th day of March 1865. All of them predeceased the said Robert Knox, and none of them left issue except the said James Dunlop Knox, whose widow gave birth, on 29th November 1864, to a posthumous child, Miss Elizabeth Bruce Gordon Knox.
Robert Knox died on 18th December 1865, leaving a trust-disposition and settlement dated the 27 th day of June 1864, and two codicils, both dated 1st May 1865. By the trust-disposition and settlement Knox directed his trustees, inter alia, to pay to the present claimant, Masterton Ure Knox, brother of the truster and Miss Christian Knox, his sister, a certain annuity, commencing the first half-yearly payment thereof at the first term of Whitsunday or Martinmas that should occur after his death for the half-year preceding, and so on thereafter while the same was payable. The annuity was increased by a subsequent codicil. He further directed his trustees to pay to Mrs Victoria Knox, widow of his son, the said James Dunlop Knox, such a sum as, along with interest at the rate of five per centum per annum on such sum as she might have right to under the contract of marriage of herself and her husband, or any will made by him, or as his widow, and any annuity she might be entitled to under these deeds, as should make up an amount of £150 per annum. The trust-disposition and settlement proceeds to narrate the terms of the said contract of marriage between the truster and his wife, and of a contract of marriage between the said John Gilmer and Bruce Ellis Knox, and an obligation thereby incurred by him in favour of Bruce Ellis Knox, and further mentions that the truster had made advances to Mrs Gilmer during her life, and also to the said James Dunlop Knox for his commission in the army, and thereafter, greatly exceeding their proportions of the sum of £4000 provided to the truster's children by his said marriage-contract, had it been equally divided among his whole children. The deed then continues: “Therefore, and in virtue of the powers contained in my said contract of marriage, I do hereby divide and apportion the foresaid sum of £4000 as follow's, viz.:—£5 thereof to the heirs and representatives of the said Bruce Ellis Knox or Gilmer, as coming in her place; the like sum of £5 to any child or children that may be born to the said James Dunlop Knox as coming in his place, whom failing to his heirs and representatives, and the balance of the said sum of £4000 to the said Robert Knox junior, his heirs and representatives; and lastly, and with regard to the residue and remainder of any estates generally above disponed, I direct my said trustees to pay, assign, or dispone the same, or the price and produce thereof, to and in favour of my said son, Robert Knox junior, and his heirs and assignees whomsoever, which provisions in favour of my said children or their issue, or heirs and representatives, shall be and are hereby declared to be in full of all claims for legitim, share of executry, or otherwise, by and through the death of their late mother, or my death, or under the trust-disposition and settlement of their late grandfather James Dunlop, or the contract of marriage between me and their late mother.” The first of the foresaid codicils contains the following bequest in favour of the claimant, Masterton Ure Knox and his sister the said Christian Knox;—“I, Robert Knox, within named and designed, hereby instruct my trustees, in place of the annuity provided to them, to pay to Christian Knox and Masterton Ure Knox, my brother and sister, and the survivor of them, an annuity of £200 sterling per annum; and that during the whole term of their natural lives, with corresponding interest and penalty thereto.” By the second codicil Robert Knox revoked and recalled the whole provisions in favour of the said Robert Knox junior, and his heirs, contained in the trust-deed, Robert Knox junior being then dead. Further, he directed his trustees to pay to the said Elizabeth Bruce Gordon Knox an annuity of £200 until she should attain the age of twenty-one years or be married; and, on her attaining the said age, he directed his trustees to pay and dispone to her one-half of the free residue and remainder of his means and estate; and, as regards the other half thereof, he directed his trustees to hold the same in trust for behoof of the said Miss Elizabeth Bruce Gordon Knox in liferent and her children in fee, the fee to be paid, assigned, or disponed at her death to her children in such proportions as she might appoint by any writing under her hand,
Page: 559↓
which failing, equally share and share alike. The trustees of Robert Knox, pursuers of the present process, stated that in the event of the sum of £4000 provided in the marriage-contract of the said Robert Knox, being held to be claimable out of the trust-estate, the estate left in their hands would be insufficient to pay out of the revenue derivable therefrom the annuities provided by the truster, including the annuity of £200 provided to the said Miss Elizabeth Bruce Gordon Knox. In this action Miss E. B. G. Knox claimed the sum of £4000 under the marriage-contract of 1831, and also the annuity of £200 under the trust-disposition and relative codicil; or otherwise, and in the event of the free revenue of the estate being insufficient to pay in full the annuities thereby bequeathed, she claimed that the free revenue be divided between herself and the other annuitants in shares proportional to the amount of the annuities under the conditions and provisions set forth in the trust-disposition. On the other hand, it was pleaded by the claimants that Miss E. B. G. Knox was not entitled to the £4000 and also to the testamentary provision, and that payment of the annuities must be made out of the capital of the trust-estate in so far as the annual proceeds were insufficient to pay them.
The Lord Ordinary ( Jerviswoode), on 3d March 1869, sustained the claim of Miss E. B. G. Knox to the £4000, and also to the annuity of £200, and on 25th March sustained that claimant's objection to payment of the annuities out of capital.
A reclaiming note was presented.
Clark and Gloag for Masterton Ure Knox.
Gordon and Marshall for Elizabeth B. G. Knox.
Shand for Knox's Trustees.
At advising—
Knox did propose in his testamentary deed to exercise this power of apportionment vested in him by the marriage contract; and, in the first place, it must be observed that in the first purpose of his trust-deed he provides for the payment of all his debts, and of course, among others, he directs his trustees to pay this £4000; and the exercise of this power of apportionment is only a direction to these trustees to pay that debt in certain proportions. What he says is this:—“Therefore, and in virtue of the powers contained in my said contract of marriage, I do hereby divide and apportion the foresaid sum of £4000 as follows, viz.;—£5 thereof to the heirs and representatives of the said Bruce Ellis Knox or Gilmer, as coming in her place; the like sum of £5 to any child or children that may be born to the said James Dunlop Knox, as coming in his place, whom failing to his heirs and representatives; and the balance of the said sum of £4000 to the said Robert Knox junior, his heirs and representatives.” Whether this was a good exercise of the power may admit of doubt. We don't know what his intention was in giving any part to the heirs of Mrs Gilmer, being her children or descendants, and whether that made the apportionment bad, or whether it was illusory altogether; but it is not necessary to consider that, for the codicil, revoking the settlement in part, put an end to this exercise of the power of apportionment. It removed that exercise of the power out of the deed altogether, and left the provision of £4000 to stand in the marriage contract as formerly. Then, on his death, Miss Elizabeth Knox being the only one in a position to claim this debt, was entitled to the whole sum. It is said that the provisions made in the codicil for Miss Elizabeth Knox are such that she cannot at once claim the provision in the marriage contract and also the provision in the codicil; that she is barred from claiming the £4000, because that is inconsistent with the settlement. The principle of that argument is no doubt well established and just, but it does not apply. In the first place, there is no sufficient evidence that the testator intended to deprive Elizabeth Knox of her legal rights as a creditor under the marriage contract as a condition of her taking the provision under the codicil. If Mr Knox had any such intention he might very easily have expressed it; for, while recalling the provision to Robert Knox, if he did not mean the necessary legal effect to follow he might have said so, but all he said was this:—“I recall the whole provisions in favour of him and his heirs contained in the foregoing settlement; Farther, I do hereby direct my trustees to pay to my granddaughter, Elizabeth Bruce Knox, an annuity of £200 until she attains the age of twenty-one years or is married; and, on her attaining the said age, I direct my trustees to pay, assign, and dispone to her one-half of the free residue and remainder of my means and estate; and, as regards the other half thereof, my said trustees shall hold the same in trust for behoof of my said granddaughter in liferent and her children in fee.” I can see nothing in that inconsistent with her taking, in the first place, that provision to which she was entitled as a creditor under the marriage contract— i.e., to the £4000. If mere conjecture were admissible, Knox may be supposed to have thought himself entitled not to consider the marriage contract at all, but we cannot give effect to such conjectures of probable intention, and must take the settlement as we find it. I have therefore no doubt that Elizabeth Knox is entitled to the £4000 without prejudice to her right to the provision secured to her by the codicil.
Then as to the question of the annuities, dealt with by the interlocutor of 25th March, I think the Lord Ordinary is clearly wrong. The proposition which was pressed upon us was, that the annuities are payable out of income, and if there be not income sufficient to pay them in full, they must suffer abatement. The general rule, I think, as between annuitants and the residuary legatee, is just the reverse; an annuitant is a special legatee, and not the less so because the legacy is payable annually, instead of all at once. The rule is that special legacies do not suffer abatement as
Page: 560↓
The other Judges concurred.
Agents for Pursuer— Hill, Reid, & Drummond, W.S.
Agents for M. U. Knox— Tods, Murray, & Jameson, W.S.
Agent for E. B. G. Knox— Lockhart Thomson, S.S.C.