Scottish Court of Session Decisions

After a review of the evidence of Ferguson's solvency or insolvency at the date of the purchase, his Lordship's note proceeds—

“2d, Holding the defender therefore to have been solvent in August 1869, the Lord Ordinary—having regard to the sums which were held to be reasonable provisions in the cases of Craig and Galloway, 17th July 1861, 4 Macph. p. 267, and of Rust, 14th Jan. 1865—has come to the conclusion that £250, or one-half the value of the legacy, was not an unreasonable sum to set apart as a provision for the other defender. Had this money not belonged originally to Mrs Ferguson, the Lord Ordinary would have been disposed to hold that about a third of the amount would, in the circumstances, have been a proper sum to apply by way of a provision. But as the money came through the wife, her provision may, it is thought, be fairly fixed at a larger sum; and he has taken it at the one-half, being the amount which, with the apparent approbation of the Court, was fixed in the case of Small, 24th February 1870, as a reasonable provision for a wife, in dealing with a question of this description under the 16th section of the Conjugal Rights Act, 24 and 25 Vict. cap. 86.

3d, Upon this assumption, the Lord Ordinary has found that the application of the legacy, to the extent of £250, in the purchase of the property in question, is not challengeable as a donation, and was not revoked by the defender's sequestration, but that the conveyance is revocable, and may be cut down as regards the excess, which seems to have been recognised as a competent course in disposing of the case of Craig and Galloway in the House of Lords, and to be sanctioned by the principle of the decisions in the case of Kemp and Napier, 1 Feb. 1842; and of Dunlop Trs., 24 March 1865, both in this Court and in the House of Lords.

It was contended, on the part of the pursuer, that the effect of the declaration in the feu-charter, empowering the defender Mrs Ferguson to dispose of the subjects during her life, might have enabled her to deprive her husband of his liferent, and may prevent the creditors from now taking any benefit from the bankrupt's liferent interest in the property. The Lord Ordinary is disposed to doubt, as at present advised, whether the declaration would necessarily have that effect, inasmuch as the right of fee appears to be expressly burdened with the liferent interest of the bankrupt. But assuming that this would have been its effect, and that the husband, by consenting to its insertion, had thereby put it in his wife's power to defeat his liferent, and to dispose of the property for her own benefit during her husband's life, this was, it is thought, challengable by the husband as a donation; and the Lord Ordinary has therefore found it to be revoked by the sequestration. The effect of this will be to make the liferent interest of the bankrupt available for the creditors, after payment of the interest due upon the bond.”

The pursuer now put in a minute, proposing to secure a provision to Mrs Ferguson of £250, payable to her in the event of her surviving her husband, and upon his death; to be effected by a policy of insurance with the North British and Mercantile Insurance Company; and moved the Lord Ordinary to approve of the proposal, and in respect thereof decern in terms of the conclusions of the summons, superseding extract till the policy has been effected.

The Lord Ordinary, on 16th June 1871, approved of the proposal contained in the minute, and found, that upon the policy being effected, the pursuer would be entitled to decree in terms of the reductive conclusions; found no expenses due to either party.

The defender reclaimed.

Campbell Smith, and Mackintosh, for them, argued—(1) That if the Conjugal Rights Act applied, Mrs Ferguson was entitled to a present provision out of the money to which she had succeeded; that in any view the contingent reversion of £250, the provision made by the Lord Ordinary, was much too small; Somner, March 2, 1871, 9 Macph. 594; Taylor, October 28, 1871, 9 Scot. Law Rep. 22; (2) That at common law, the provision being reasonable, and the husband solvent at the date, the deed should stand, and the defender be assoilzied.

( Millar,) Q.C., and ( Mair), for the pursuer.

During the debate the Court asked the counsel for the defenders whether they argued on the footing that the liferent given to the husband was defeasible by the wife or not.

( Mackintosh)—We ask for absolvitor in either view.

The Court—Unless we have some argument, from either party, for holding it defeasible, we shall hold it to be indefeasible.

At advising—

( Lord President)—The object of the present action is to claim for the trustee and creditors the whole property embraced in the feu-charter. The defence stated for the wife is that it makes no more than a reasonable provision for her, as the wife of the bankrupt. That I am prepared to sustain. The case comes within the operation of section 16 of the Conjugal Rights Act. Mrs Ferguson succeeded to money, and that money was not reduced into the possession of the husband, and so the proviso at the end of the section does not apply. The effect of the deed taken by the husband and wife from the superior is to make this arrangement. The money succeeded to by Mrs Ferguson, to the extent of £405, was paid pro tanto as the price of the subjects. The remainder of the price was advanced by the Standard Investment Company. The deed settles the fee on the wife. There is a destination over in favour of the child; but as far as the fee is concerned, she has an absolute power of disposal, notwithstanding the destination over. The husband gets a liferent. The only question before us is, whether that provision of the fee of £405 to the wife exceeds a reasonable provision?—not whether it comes up to a reasonable provision. I am of opinion that it does not exceed a

Page: 41↓