Scottish Court of Session Decisions

This was an action of multiplepoinding at the instance of Robert Alison, David Renton, and George Murray, trustees under the trust-disposition and settlement of Mrs Margaret Alison or Renton of Oakmount, Lasswade, dated 9th December 1868, against themselves and William Alison and Mary Catherine Alison, in the following circumstances:—

Mr and Mrs Renton were married in 1830, and Miss Alison, a sister of Mrs Renton, lived with them. Mrs Renton and Miss Alison had each about £7000. Mr Renton got possession of the whole of his wife's money and borrowed £5000 from Miss Alison. Thereafter his affairs became embarrassed and he executed a trust deed for

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behoof of creditors in favour of the said George Murray, under which all the creditors except Mrs Renton and Miss Alison were settled with. There remained a balance of £5061, of which Mrs Renton, under an arrangement between her and Miss Alison, received £2074, and Miss Alison £2987. At this date Miss Alison was further possessed of funds to the amount of £1675. Mr Renton died on 18th March 1857, and on 19th May of that year Mrs Renton and Miss Alison executed a mutual disposition and settlement, in which they disponed each to the other their whole estate in liferent, and to certain beneficiaries in fee, and each nominated the other sole executor. At Whitsunday 1860 two railway debentures for £1500 fell to be paid up. Both these debentures stood in Miss Alison's name—one belonging entirely to her and the other partly to her and partly to Mr Renton. This £3000 was reinvested in a debenture of the Dundee, Perth, and Aberdeen Railway Junction Company, of which the said Mr Robert Alison was at that time secretary. The investment was taken in the names of the ladies jointly and the survivor. Thereafter the whole funds which the ladies held invested in various stock were transferred from their respective names into their joint names and the survivor, with the exception of £1770, which was invested in the villa of Oakmount, the disposition of which was also taken to the two ladies and the survivor. Miss Alison died on 24th May 1862. Mrs Renton died on 2d September 1874, leaving the said trust-disposition and settlement by which she conveyed her whole means and estate, heritable and moveable, to the said Mr Robert Alison, James Renton, and George Murray, as trustees for purposes different from and inconsistent with the terms of the joint will.

The said Robert Alison and George Renton were the principal beneficiaries under the joint will, and the said William Alison and Mary Catherine Alison under Mrs Renton's trust-disposition and settlement.

William Alison and Mary Catherine Alison maintained that in the terms of the joint investment the whole funds of the two ladies became the absolute property of the survivor, and were carried by Mrs Renton's deed.

Robert Alison and George Murray maintained that Mrs Renton's settlement only carried her own estate, the joint will being still a valid and subsisting deed in regard to the succession of Miss Alison. They averred that Mrs Renton and Miss Alison had entrusted the entire management of their affairs to them, and that they had of their own motive, without any instructions from the ladies, and indeed without giving them any information on the subject, invested their funds in their joint names and the survivor, as being in their opinion in conformity with the terms of the joint will.

The Lord Ordinary pronounced the following interlocutor:—

“ Edinburgh, 10 th July 1875.—The Lord Ordinary having heard counsel for the parties, and considered the record and process: Finds that the fund in medio was the sole and absolute property of the late Mrs Renton at the time of her death, and that the succession thereto was to be regulated and dealt with in terms of the trust-disposition and settlement and relative codicil, No. 11 of process: Therefore ranks and prefers,” &c.

His Lordship pronounced the following opinion:—

“The leading question in this case regards the operation and effect of the mutual settlement at the death of Miss Alison, the predeceaser of the two testators, on 24th May 1862. It was contended that the terms of the subsequent investments of her money, and of the title taken to the villa of Oakmount implied a revocation by her which she had undoubted power to make. I think this an erroneous contention; for the settlement, being testamentary, must be regarded as her last will, and as speaking in the last moments of her existence. What property she left for her will to carry, or whether she left any, is another question, which the terms of the investments and the title to Oakmount may materially affect; but there is, I think, no question of revocation.

“It is alleged, and I assume truly, that the fortunes of the two sisters were unequal, and that Miss Alison was the richer of the two. I also assume that at the date of the will their fortunes, which consisted of money, were separately invested, and therefore then distinguishable. But having only £5365 between them, and resolving to live together, it is not surprising that they should have made a common purse of it, as they did, and out of it paid for the villa which they bought to live in, and the cost of their establishment. The common purse was made by investing the money which they were respectively able to contribute upon securities, taken in their joint names, with destination to the survivor. The title to the villa was taken to them in conjunct fee and liferent, and to the heirs and assignees of the longest liver. They lived together in this villa on the produce of the joint purse till Miss Alison died, in May 1862. This was quite consistent with the mutual will, as it would have been had they spent all they had, which they were at perfect liberty to do.

With respect to the price paid for the villa, I think it clear that it was so much money spent by the testators in the lifetime of both, and that the villa itself, in the purchase of which the money was spent, was not at Miss Alison's death subject to her disposition or will, as expressed in the mutual settlement, but passed in absolute property to Mrs Renton, according to the destination of the title. It is, I think, plain that Miss Alison could not, by a settlement subsequent to the title, have disposed of the villa in whole or in part to her sister's prejudice, for her sister's right was absolute and irrevocable by the terms of the title if she survived, and, as I have already observed, the mutual settlement being testamentary, speaks for each testator as at the time of her death without reference to its date. I am, therefore, of opinion that the villa does not to any extent pass under the mutual settlement, but is wholly carried by that of Mrs Renton, whose exclusive property it became by her survivance, as completely as if the disposition had been to herself alone.

With respect to the money of which the sisters made common purse by the terms of the investments, and the manner in which they used it for five years, it is clear that on Miss Alison's

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death it belonged prima facie to Mrs Renton, who survived. But it is proposed to subject part of it to the operation of Miss Alison's disposition by the mutual will, by making a separation according to the proportions in which the sisters contributed to its formation, and regarding the larger part as the estate of Miss Alison, who contributed the larger share. In aid of this view, it is alleged, and offered to be proved, that Miss Alison had £4165, and Mrs Renton only £1200, and, farther, that the investments were taken in their joint names, with right of survivorship, by the claimants Alison and Murray, ‘as being in conformity with the terms of the said mutual disposition and settlement of which they had been made aware,’ but without specially consulting the ladies.

It would obviously be a difficult and uncertain process to effect a separation of money which had been so amalgamated and used by two sisters as a common fund for five years. I must assume that the sisters knew that the money had been amalgamated, and that all their joint expenditure was met out of it. There is nothing to show that they intended an ultimate separation, and no accounts to enable the Court to make a separation. It does not appear whether their house and personal expenses were wholly paid out of income, or trenched to any extent on capital. The price of the villa must have been paid out of capital. How is this to be apportioned? To hold either that the sisters contributed equally, or in proportion to the original fortune of each, or that either of them paid the whole of it, would be mere assumption without evidence. But a division of the remainder could not be effected without determining this question, which the sisters have left no means of determining. I assume that the fortunes of the sisters were originally unequal, to the extent stated, because though this is not admitted, the fact is alleged to be so, and proof of it offered. But, as five years before the death of the predeceaser they joined them together on securitities ex facie of which they were their joint property, in equal shares, with benefit of survivorship, and allowed matters to stand so during the remainder of their joint lives, I think this must be taken to be according to their intention, and that the operation and effect of the mutual will must be judged of accordingly. The will did not restrain them from dealing with their money as they pleased while they both lived, and with regard to all or any of it which they so dealt with as to become their joint property while they both lived—and on the death of either the exclusive property of the survivor—I think it clear that the will of the predeceaser, as expressed in the settlement, has no operation. It is not a question of revocation, for the will at Miss Alison's death stood with respect to any money or property subject to its operation—that is, with respect to all money and property of hers which, had she died intestate, would have passed to her legal heirs. It is clear that had Miss Alison died intestate the whole invested money, as well as the villa of Oakmount, would have passed, not to her legal heirs, but to her surviving sister, and this as the necessary, and I must assume intended, consequence of her own acts. The result is that there is nothing left for her will to take effect upon; but this is an accident, for she might have left other property. It is to be observed that the settlement is not only testamentary but quite general, so that there is here no such question as might arise with respect to a particular estate or property standing on a prior special destination.

I am therefore of opinion that on the death of Miss Alison Mrs Renton became proprietor of the money as well as the villa, with absolute power to dispose of both; and I arrive at this conclusion with the more satisfaction, because I think it is not only the legal result of what was done, but is in accordance with what was intended. Mrs Renton's subsequent will was her own affair, and her sister probably could not, or did not, anticipate what she might do, but I think it was intended that she might do as she pleased.

The result is, that the whole fund in medio being, in my opinion, the property of Mrs Renton at the time of her death, is carried by her settlement, for there is no question of her power to revoke and alter the prior mutual settlement with respect to her own property.”

Robert Alison and George Murray reclaimed.

They intimated that they did not press their claim in regard to the villa of Oakmount.

Argued for them—The mere terms of an investment could not revoke a probative deed, and to say that the money was put beyond the operation of the deed was practically the same thing as to say that the deed was revoked. Even if the terms of an investment, if made deliberately by the testator, could defeat the prior settlement, the investments, in this case being made without the testator's authority or knowledge, were in a totally different position. The reclaimers should be allowed proof of their averments.

William and Catherine Alison argued—The investments having been made by the mandatories of the ladies, were in the same position as if they had been made by them, and the terms of the investment were sufficient to carry the fee of the money invested to the survivor. This was not a revocation of the joint will, but had the effect of putting the funds in this position—that upon the death of one sister they passed by accretion into the estate of the survivor.

Authorities—M'Laren (Wills and Succession) vol. i. p. 262; Dingwall v. Askew, Feb. 5, 1788, 1 Cox (Chan. Cases) 427; Taylor v. Taylor, 10 Hare 475; North British Railway Company v. Tunnock, Nov. 1, 1864, 3 Macph. 1; Cuthill v. Burns, March 28, 1862, 24 D. 849; Keddie v. Christie. 11 D. 145.

The Court allowed a proof, and the reclaimers adduced the said Mr Robert Alison and Mr George Murray as witnesses. Robert Alison deponed inter alia—“I am half-brother of the late Mrs Renton and Miss Alison. Mr Renton died in March 1857. After his death Mr George Murray, C.A., and I, managed the affairs of Mrs Renton and Miss Alison. Mr Murray paid and received the income and kept the accounts, and I advised in regard to the investments. About ten days or a fortnight after it was made I was informed by these ladies that they had made a mutual settlement. They shewed me the deed. … At Whitsunday 1860 two North British Railway debentures for £1500 each fell to be paid up. These debentures, I believe, both stood

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in Miss Alison's name. One of them belonged to herself entirely, and the other, which came from Miss Renton of Eyemouth, belonged partly to herself and partly to Mrs Renton. Mr Murray consulted me in regard to the reinvestment of that £3000. I said I could procure a Dundee, Perth, and Aberdeen Railway debenture at 4 1 2per cent. Mr Murray approved of that and sent me the money. I wrote out the debenture, and signed it as secretary, along with three of the directors of the company, and sent it to Mr Murray. The interest warrants were made payable to him. I took that debenture, as I had seen the will, in the joint names of Mrs Renton and Miss Alison and the survivor, believing that I did so in terms of the joint will. I mentioned that to Mr Murray. I never consulted Mrs Renton or Miss Alison in reference to the terms of this investment. I said nothing to them about the way in which I was going to invest the money, and they knew nothing about it. I have no doubt that the discharge for the two £1500 debentures, from which the £3000 came, must have been signed by the ladies in whose names they stood, but I had nothing to do with that. The £3000 investment was the first investment I had to do with. Mr Murray made up annual states of the accounts of the ladies' affairs. These accounts were all sent to me, and I was in the habit of giving them to the ladies. They never looked at them, and they said they would not look at them. I therefore gave up taking the states of accounts to them for several years.”

George Murray deponed—“I managed to a great extent the money matters of Mrs Renton and Miss Alison. I kept the accounts and also the documents connected with the funds. I received and paid over to them the income as it arose. I did not take charge of the investing of the funds. Mr Alison, who was secretary of the Dundee. Perth, and Aberdeen Junction Railway, and had better means than I had of knowing about investments, did so. I received the dividend warrants and drew the dividends. In uplifting the income of these ladies I did so entirely upon my own signature. I never consulted them on the subject. They never had in their possession the vouchers and writings instructing their means and investments. These were transmitted to me by Mr Alison after he made the investments, and remained with me. I never had in my possession any interest warrants signed by the ladies, they were all blank. I was informed by Mr Alison that Mrs Renton and Miss Alison had made a settlement. I had no communication with the ladies themselves about it previous to the death of Miss Alison. I merely knew that it was a joint will, and the parties who were the beneficiaries under it according to Mr Alison's information. I recollect £3000 being invested by Mr Alison in a Dundee and Perth Railway debenture. I remitted to him the money with which to purchase it. The dividend warrants or coupons in respect of the £3000 debenture were blank, and I endorsed them when I went to the bank. I never shewed that debenture bond to either of the ladies, or communicated its terms to them. It remained in my possession after I received it till the death of Miss Alison. It had not been converted at her death. I never had any communication with the ladies about that investment. I sent my accounts annually to Mr Alison, who I understand would shew them to the ladies. I did not deal with them personally upon that matter. I occasionally paid their income to Mrs Renton personally. Latterly I made payments to a bank account which she opened in Lasswade. I did so just as she required money to meet her general expenses—there was no regular payment. I have no recollection what Mr Alison communicated to me about the will they made, except that he told me it was a joint will, and I understood from him that they were to liferent each other's estate. After 1860 some stocks which were standing in their separate names were transferred into their joint names. I think that was done on the suggestion of Mr Alison, but I got the thing arranged after communication with him. I am not sure' if I had any communication with the ladies on the subject of these transfers. I may have got them to sign, but I do not recollect. I gave no suggestion or advice personally in the matter; it was all arranged independently of me.”

At advising—