Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Corbet and Others (Elliott's Trustees) v. Waddell (Elliott's Trustee) and Elliott and Spouse [1879] ScotLR 17_106 (14 November 1879)
URL: http://www.bailii.org/scot/cases/ScotCS/1879/17SLR0106.html
Cite as: [1879] ScotLR 17_106, [1879] SLR 17_106
[New search] [Printable PDF version] [Help]
SCOTTISH_SLR_Court_of_Session
Page: 106↓
Court of Session Inner House First Division.
v.
Provisions to Husbands and Wives
Bankruptcy — Trustee in a Liquidation — Title to Sue — Act 32 and 33 Vict. cap. 71 (English Bankrupt Act), sec. 125, sub-sec. 5.
Facts:
A marriage-contract was executed at Aberdeen according to both the Scotch and the English form, but its entire phraseology and purposes were otherwise according to Scotch law and practice, and the trustees under it were Scotchmen resident in Scotland. The husband was and continued to be a domiciled Englishman; the wife was at the date of the marriage a domiciled Scotchwoman. Held that in accordance with the implied intention of parties the marriage-contract was to be construed according to the law of Scotland.
In the construction of the terms of a marriage-contract, held (1) that it was competent to have recourse to extrinsic evidence in order to determine from what source certain funds conveyed therein had been derived, whether from the husband himself or from others; and (2) that as it appeared that they had come not from the husband but from a third party, under directions, which had been properly carried out, that they were to be alimentary, a claim to them made by the trustee upon the husband's bankrupt estate fell to be rejected.
Section 125, subsec. 5, of the above Act provides that “all such property of the debtor as would, if he were made bankrupt, be divisible among his creditors, shall, from and after the date of the appointment of a trustee, vest in such trustee under a liquidation by arrangement, and be divisible among his creditors.” Held, on the principle laid down in Mann (Aikenhead's Trustee) v. Sinclair, supra, vol. 16, p. 430, 6 R. 1078, that the trustee in a liquidation had no title to sue for the alimentary creditors of the debtor.
An antenuptial contract of marriage entered into between John Bardoe Bowes Elliott and Miss Mary Christian Corbet, dated 22d May and registered 2d July 1858, contained, inter alia, the following provisions:—“In contemplation of which marriage the said John Bardoe Bowes Elliott hereby assigns, dispones, conveys, and makes over to and in favour of the said James Corbet, Major William Gibb, late of the Honourable the East India Company's Service, residing in Aberdeen, and Lauchlan M'Kinnon junior, advocate in Aberdeen, and to the accepting survivors or survivor of them …. the sum of ten thousand pounds sterling, being part of the sum of twelve thousand pounds sterling lately remitted for his behoof from India by his father John Bardoe Elliott, Esquire, late of the Honourable the East India Company's Bengal Civil Service, and which sum of twelve thousand pounds is at present lodged in the hands of Messieurs Coutts & Company, bankers in London, and will be payable to the said John Bardoe Bowes Elliot in the month of July next, on the joint order and receipt of himself, the said John Bardoe Bowes Elliott, and of the said James Corbet; and the said John Bardoe Bowes Elliott and James Corbet bind and oblige themselves to grant, execute, and deliver to the said trustees herein, and their foresaids, all writs and deeds necessary for the more readily putting the said trustees herein and their foresaids in possession of the said sum of ten thousand pounds sterling, declaring that the said trustees and their foresaids shall hold the said sum of ten thousand pounds sterling in trust always for the uses, ends, and purposes following, videlicet—They shall hold or lend out the said sum of ten thousand pounds sterling in their own names as trustees foresaid on Government securities, railway debenture bonds, or such other good and undoubted security, personal or heritable, as they may select, and the interests or proceeds thereof shall be annually paid by them to the said John Bardoe Bowes Elliott during his lifetime, and
Page: 107↓
after his death to the said Mary Christian Corbet during her lifetime, declaring that the said interest or proceeds shall be alimentary, and shall not be subject to the debts or deeds of the said John Bardoe Bowes Elliott or Mary Christian Corbet, nor to be liable to be affected in any way by the diligence of their creditors.” It was then provided that on the death of the longest liver of the spouses the capital of the sum of £10,000 should be paid to the children of the marriage on their attaining majority, or in the case of daughters at marriage, equally or according to the appointment of the spouses. Powers were given to the trustees at their discretion to expend before the period of payment arrived, either in whole or in part, for behoof of the children of the marriage, the principal sums to which they might be entitled out of the capital of £10,000. Failing children being alive at the death of the predeceaser of the spouses, the £10,000 was to go to the survivor. The deed then proceeded—“And the said John Bardoe Bowes Elliott binds and obliges himself, his heirs and executors, to aliment, entertain, and educate his said children suitably to their station until the term of their said provisions, or until they shall be otherwise provided for …. For which causes, and on the other part, the said Mary Christian Corbet, in contemplation of said marriage, hereby assigns, dispones, conveys, and makes over to and in favour of the said trustees herein and their foresaids the whole heritable and moveable property of every kind and description at present belonging to her, or which she shall acquire or become entitled to, or which shall vest in her during the subsistence of the marriage between her and the said John Bardoe Bowes Elliott, but in trust always for the uses, ends, and purposes following, namely—the whole sums above conveyed by the said Mary Christian Corbet shall be held or lent out by the said trustees herein and their foresaids in their own names on Government securities, railway debenture bonds, or such other good and undoubted security, personal or heritable, as they may select, and the interest or the produce thereof shall be annually paid by them to the said Mary Christian Corbet during her lifetime, exclusive of her husband's jus mariti and power of administration, and after her death to the said John Bardoe Bowes Elliott during his lifetime, declaring that the said interest or proceeds shall be alimentary, and shall not be subject to the debts or deeds of the said Mary Christian Corbet or John Bardoe Bowes Elliott….. And it is hereby declared that the provisions hereby conceived in favour of the said Mary Christian Corbet, and of the children of the said intended marriage, are and shall be in full satisfaction to her of all terce of heritage, half or third of moveables, or other claims whatsoever competent to her by and through the decease of the said John Bardoe Bowes Elliott, in case she shall survive him, his goodwill only excepted, or that her executors or nearest of kin could make by and through her decease in case she shall predecease the said John Bardoe Bowes Elliott, and also in full satisfaction to the said children of all claims for legitim or executry, and of every other claim competent to them by and through the decease of their said father and mother: Farther, it is hereby provided and declared, that although the said intended marriage should happen to be dissolved within year and day of the same, and without a living child procreated thereof, yet the whole provisions hereby conceived in favour of either party shall subsist and take effect, any law or practice to the contrary notwithstanding.… And lastly, the said parties consent to the registration hereof in the Books of Council and Session, or others competent, therein to remain for preservation; and that letters of horning on six days' charge, and all other execution needful, may pass and be direct hereon in form as effeirs, and thereto they constitute George Monro and John Dick, Esquires, advocates, their procurators,” &c. The testing clause then followed in the Scotch form, bearing that the deed was signed and attested in accordance with the practice both of Scotch and English law. The following documents also related to the point in dispute:—
Letter, John Bardoe Elliott, Esq., to Messrs Coutts & Co., bankers, dated 2d March 1858.
“By the present mail Messrs Colvin, Cowie, & Co., of Calcutta, will transmit to you No. 1 of a set of bills on England for twelve thousand pounds (£12,000) at three months' sight, which I request you will oblige me by crediting on realisation to the joint names of my son John Bardoe Bowes Elliott, at present a captain in the 43d Regt. Light Infantry, and James Corbet, Esq., of Aberdeen, late of the Bengal Medical Service—£10,000 of this sum being intended as a marriage settlement by my son on his wife at his marriage with Miss Mary C. Corbet, daughter of the said James Corbet, Esq.
I have to request that you will pay the said sum of £10,000 to the said Captain J. B. B. Elliott and James Corbet, Esq., on their joint receipt. The remaining two thousand pounds (£2000) to be paid to my son Captain Elliott on his marriage with Miss Corbet, and for which his receipt to you will be sufficient.—I am, &c.,
J. B. Elliott.”
Letter, J. Corbet, Esq., and Captain Elliott, to Messrs Coutts & Co., dated 16th July 1858.
“With reference to your letter of the 10th inst. to Mr Corbet's address, we have now the pleasure to enclose our joint receipt for ten thousand pounds, and to request that you will be good enough to pay over the amount to the Union Bank of London, to be placed to the credit of the North of Scotland Banking Company in Aberdeen on account of James Corbet, Esq.
A favourable investment on the security of landed property at present presents itself in Aberdeen, otherwise we should have been very glad to have availed ourselves of your offer to invest the money.—We are, &c.,
J. Corbet.
J. B. B. Elliott, Captn.”
Receipt by Mr J. Corbet and Captain J. B. B. Elliott, to Messrs Coutts & Co., dated 16th July 1858.
“Received from Messrs Coutts & Co., bankers, the sum of ten thousand pounds sterling (£10,000) remitted from India by John Bardoe Elliott, Esq. of Patna.
J. Cobbet.
Bengal Medical Service Retired List.
J. B. B. Elliott, Captn., 43d Lt. Infantry.
16th July 1858.”
Page: 108↓
Receipt by Captain J. B. B. Elliott to Messrs Coutts & Co., dated 17th July 1858.
“ Chatham, July 17 th 1858.
Received from Messrs Coutts & Co., Strand, London, the sum of £1997, 15s., being a portion of the sum of £12,000 sent from India by J. B. Elliott, Esq., of Patna, Bengal.
J. B. B. Elliott, Captn., 43d Lt. Infantry.”
The trustees invested the above sum of £10,000 in the following manner, viz.—(1) In a mortgage for £1000 by the Great North of Scotland Railway, (2) one for £4000 by the Caledonian Railway, and (3) a bond and disposition in security for £5000 over certain lands in Aberdeenshire.
On 26th June 1878 Mr J. B. B. Elliott filed a petition in the Court of Bankruptcy in London for the liquidation of his affairs by arrangement; and subsequently at a meeting of his creditors it was resolved that his affairs should be liquidated by arrangement. On the 26th July following Mr James Waddell was appointed the trustee under the liquidation.
This was a multiplepoinding brought by the marriage-contract trustees in consequence of a demand upon them by Mr Waddell to be paid all interest of the £10,000, present and future. The object was to have the rights of parties determined, and the defenders were in the first place Mr Waddell, and secondly Mr and Mrs Elliott.
Mr and Mrs Elliott claimed “to be ranked and preferred to the whole fund in medio, the interest and proceeds of which the said fund consists to be annually paid by the said trustees to the claimant the said John Bardoe Bowes Elliott during his lifetime, and after his death to the claimant the said Mrs Mary Christian Corbet or Elliott, declaring that the said interest and proceeds are alimentary, and not subject to the debts or deeds of them or either of them, nor liable to be affected in any way by the diligence of their creditors. In any case, the claimant the said Mrs Mary Christian Corbet or Elliott claims the said interest and proceeds during her lifetime after the death of the said John Bardoe Bowes Elliott, declaring that the said interest and proceeds are alimentary, and not subject to her debts or deeds, nor liable to be affected in any way by the diligence of her creditors.”
Mr Waddell claimed “to be ranked and preferred, as trustee foresaid, preferably and primo loco to the whole of the interest or proceeds which have accrued, and are now in the hands of the pursuers, and also to the interest or proceeds which shall hereafter accrue or become due during the lifetime of the said John Bardoe Bowes Elliott on the said sum of £10,000 sterling, and further to the contingent interest of the said John Bardoe Bowes Elliott in the said capital sum itself, as the same may be estimated and valued under the statutes.”
Mr and Mrs Elliot pleaded, inter alia—“(2) The said sum of £10,000 never having been the property or in the possession of the said John Bardoe Bowes Elliot, the claim of the claimant James Waddell is excluded by the declaration contained in the said antenuptial contract of marriage, that the interest or proceeds which form the present fund in medio should be alimentary, and not subject to the debts or deeds of the present claimants, nor liable to be affected in any way by the diligence of their creditors. (3) The claimants are entitled to be ranked and preferred in terms of their claim in respect of the instructions of the donor of the said sum of £10,000, and of the above-mentioned declaration in conformity therewith. (4) Separatim, the claimants are entitled to be ranked and preferred in terms of their claim in respect that the said interest and proceeds are necessary for the aliment of themselves and their family.”
The pleas for Mr Waddell were—“(1) The law to be applied to the facts is the law of England; and as according to that law, the fund in medio would be carried to the trustee in the liquidation, his claim ought to be sustained. (2) Assuming that the law to be applied is the law of Scotland, the trustee's claim ought to be sustained, because it is incompetent for the owner of property to withdraw it from creditors as a means for payment of their debts, by declaring it in his marriage-contract to be alimentary, and not affectable by creditors. (3) The whole property and estate of the said John Bardoe Bowes Elliott having passed to and become vested in the claimant, as trustee foresaid, the claimant is entitled to decree in terms of his claim. (4) In any view, the whole interest not being required for alimentary purposes, the trustee ought to be found entitled to a proportion thereof.”
The Lord Ordinary (Rutherfurd Clark) ranked and preferred the claimants Mr and Mrs Elliott in terms of the first branch of their claim. He added this note to his interlocutor:—
“ Note.—By marriage-contract dated 22d May 1858 between John Bardoe Bowes Elliott and Mary Christian Corbet, the former assigned to the trustees thereby appointed the sum of £10,000. This sum is described ‘as part of a sum of £12,000 lately remitted for his behoof from India by his father John Bardoe Elliott, and which sum of £12,000 is at present lodged in the hands of Messieurs Coutts & Co., bankers in London, and will be payable to the said John Bardoe Bowes Elliott on the joint order of himself and of the said James Corbet.’ Mr Corbet was the father of Mrs Elliott.
The purposes of the trust are—(1) to pay the interest to Mr Elliott during his lifetime; (2) to pay the interest to Mrs Elliott during her lifetime if she should survive her husband; (3) to hold the capital for behoof of the children of the marriage; and (4) if there are no children or issue of children alive at the dissolution of the marriage, it is declared that the capital shall belong to the survivor of the spouses, ‘or to his or her heirs or assignees.’ It is provided that the interest which is payable to Mr Elliott, and after his death to Mrs Elliott, ‘shall be alimentary, and shall not be subject to the debts or deeds of the said John Bardoe Bowes Elliott or Mary Christian Elliott, nor be liable to be affected in any way by the diligence of their creditors.’
Mr and Mrs Elliott are both alive, and there are children of the marriage. Mr Elliott is bankrupt. His affairs have been put in liquidation under certain proceedings. The claimant Waddell is trustee in the liquidation.
The fund in medio is the interest which is in the hands of the marriage-contract trustees, and which may hereafter accrue during the subsistence of the marriage. It is claimed by Mr Waddell as part of the estate of Mr Elliott which
Page: 109↓
falls within the liquidation, and it is claimed by Mr and Mrs Elliott as an alimentary fund which belongs to them, or at least to Mr Elliott. It is conceded on both sides that if the £10,000 is to be considered as belonging to Mr Elliott and settled by him, the interest of it cannot be withdrawn from his creditors by the declaration that it was to be paid to him as an alimentary fund. But it is contended by Mr and Mrs Elliott that the money belonged to Mr Elliott the elder, that it was settled in conformity with his instructions, and that Mr Elliott the younger never had any right to it beyond what is given to him by the marriage-contract. This is the question to be solved.
The claimant Mr Waddell contends that it must be determined by reference to the marriage-contract only. The Lord Ordinary cannot adopt that view. The contract identifies the fund, and it is, it is thought, legitimate to ascertain by extraneous evidence to whom the fund belonged and by whom it is truly settled.
£12,000 was remitted from India by the father of Mr Elliott, and placed in the hands of Coutts & Co. in the joint names of Mr Elliott and Mr Corbet. The letter of instructions by Mr Elliott the elder is produced. He directs Messrs Coutts & Co. to credit £12,000 to the joint names of John Bardoe Bowes Elliott and James Corbet, ‘£10,000 of this sum being intended as a marriage settlement by my son on his wife,’ and he requests them to pay ‘the said sum of £10,000 to Mr Elliott and Mr Corbet’ on their joint receipt, and ‘the remainder to be paid to my son Captain Elliott on his marriage with Miss Corbet.’ The marriage-contract before mentioned was entered into and the marriage was solemnised.
In the opinion of the Lord Ordinary the £10,000 cannot be regarded as part of the estate of Mr Elliott. He had no absolute gift of it, and if the marriage had not taken place it would, it is thought, have remained the property of his father. He thinks that the true view of the case is that the money was remitted in order to be settled under a marriage-contract in such terms as might be thought best for the spouses, and except through the marriage-contract Mr Elliott had no right to it. It is true that the only instruction given with respect to the £10,000 is that it is intended as a marriage settlement by my son on his wife,’ and it has been suggested that except in so far as the wife took a direct interest in it, the money was to be regarded as coming from the husband, and as his property. But she was interested in seeing that due provision was made for the maintenance of the family during the subsistence of the marriage as well as for herself after its dissolution. The marriage, it is to be presumed, would not have taken place unless the money had been settled as it now is.
It was urged that the fund was more than sufficient for an alimentary fund. The Lord Ordinary is not able to adopt that view.”
Waddell reclaimed, and amended his condescendence by making, inter alia, the following averment in regard to a contention that the marriage-contract fell to be construed according to English law, by which a provision such as that in question would be void against creditors—“The said John Bardoe Bowes Elliott is a domiciled Englishman. Before and since his marriage he has been uninterruptedly domiciled in England, and at the date of the marriage it was the intention of the spouses to reside and be domiciled in England—an intention which they have carried into effect. His father, the said John Bardoe Elliott, was domiciled in Bengal, and died there. The sum of £10,000 mentioned in the summons was conveyed to the said John Bardoe Bowes Elliott by his father for his behoof in order that the son might make a settlement upon his marriage, and it became the son's property upon its being remitted to London, or at all events before the conveyance in the marriage-contract was executed and took effect.”
It was admitted that Mr Elliott was at the date of his marriage, and continued to be, a domiciled Englishman.
Waddell argued on his first plea-in-law, to which the Court desired the argument to be confined in the first instance—The law of England ought to be applied. The domicile of the spouses was, and was intended to be, in England. The law of that country admittedly must regulate the position of the spouses stante matrimonio and their succession after its dissolution as to all matters not within the contract. Did the contract alter that rule in the present case? It was no doubt within the power of the parties to contract themselves into the law of another country. But they had not done so here and consequently the contract must be construed as an English contract.
Authorities— Watson v. Renton, Jan. 21, 1792, M. 4582; Royal Bank v. Scott Smith, Stein, & Co., Jan. 20, 1813, F.C.; Stair v. Head, Feb. 29, 1844, 6 D. 904; Valery v. Scott, July 4, 1876, 3 R. 965; Toubert v. Turot, Dec. 11, 1703, 1 Br. Parl. Cases, 129; Anstruther v. Adair, June 10, 1834, 2 Mylne and Keene, 513; Este v. Smith, June 13, 1854, 23 L.J., Ch. 705, and 18 Beav. 112; Duncan v. Cannon, June 20, 1854, 23 L.J., Ch. 265, and 18 Beav. 128; Byam v. Byam, Dec. 4, 1854, 19 Beav. 58; Watts v. Shrimpton, Aug. 6, 1855, 21 Beav. 97; Dicey's Law of Domicile (1879), 273, 275; Westlake's Intern. Law, sec. 371; Philimore's Intern. Law, vol. iv., sec. 466; Wharlin's Intern. Law, secs. 190,200, 201; Bishop on Mar. and Div. sec. 404; Savigny's Intern. Law (Guthrie) 178, 180; Story's Confl. of Laws, secs. 184, 199.
Argued for the respondents—The law to be applied was the law of Scotland. The contract was Sootch in form and in place of execution, the trustees were Scotch, and the investments were Scotch. There could be no doubt that the parties meant the law of Scotland to regulate the contract although they had not said so expressly. The marriage had taken place on the faith of the contract being carried out as the parties intended.
Authorities— Ramsay v. Cowan, July 11, 1833, 11 S. 967; Thomson's Trustees v. Alexander, Dec. 18, 1851, 14 D. 217; Treceylan v. Treveylan, March 11, 1873, 11 Macph. 516; Mitchell & Baxter v. Dawson, Dec. 3, 1875, 3 R. 208.
At advising—
Page: 110↓
The marriage was celebrated in Aberdeen, the lady and her father being resident in that town, and the contract of marriage created a trust which according to my view must be administered in Scotland, and could not competently be administered anywhere else, nor be subject to any other jurisdiction than that of this Court. The husband dispones, conveys, and makes over to certain gentlemen resident in Aberdeen, and to the accepting survivor or survivors of them, and to the heirs of such survivor, a sum of £10,000, being part of the sum of £12,000 lately remitted for his behoof from India by his father, to be payable on the joint order and receipt of himself and Mr James Corbet. Then Mr Elliot and Mr Corbet, in whose names the money had been lodged, “bind and oblige themselves,” &c.—[ His Lordship here read the clause of the antenuptial contract as quoted supra]—and then on the death of the longest liver the money is to become payable in certain proportions to the children of the marriage. On the other hand, Miss Corbet makes over her whole estate, and that in like manner is to be lent out—[ His Lordship here read the clause quoted above]—and the destination is again in favour of the children of the marriage. The trustees have power to vary the securities for the investment of the trust funds from time to time; and they have also power to assume other trustees. Miss Corbet in consideration of the provisions made in her favour renounces her right to terce and jus relictæ, and further the provisions are declared to be in full satisfaction of all claims to legitim. Both parties consent to the registration of the deed, not only for preservation, but also that letters of horning on a six days' charge and all other needful execution may pass on it. And accordingly the deed is registered in the Books of Council and Session in terms of that clause.
Now, it appears to me that the administration of this trust under such a deed is essentially Scotch, and that if any question arose as to the nature of the securities in which the trustees should invest the funds, it would fall to be determined by the law of Scotland, because the words used are peculiar to Scotch Conveyancing, and the trustees are directed to have regard to their powers as expressed in that language. And if other questions arose as to the time of making payments, and above all as to the time and manner of making payment of the interest to one or other of the spouses, it appears to me that these too must be settled by reference to that law. In short, I cannot imagine that the trustees are expected to have regard to any other system of jurisprudence than that under which they live. They are Scotchmen, the deed is Scotch, and they are not bound to know the law of any other country.
It appears that the only estate coming under the trust is this £10,000, for Miss Corbet neither acquired nor succeeded to anything of her own. Now, that has been invested in the mortgages of Scotch railways and in heritable bonds over lands in Aberdeenshire, so that the investments are quite in harmony with the other characteristics of the trust. I cannot come to any other conclusion than that the deed is to be construed according to the law of Scotland. Therefore whatever may become of the interest after it is paid over, the trustees can only pay it in terms of the trust-deed. In this multiplepoinding they are asked to pay it in some other way; but that they have no power to do.
And let me add that the estate might come into the administration of this Court. Suppose that the trust were to lapse. A judicial factor would have to be appointed, and we would have no difficulty in sustaining our jurisdiction for that purpose. The Court would then be administering this estate through its officer. That seems to me a very conclusive test of the question. I have no hesitation in repelling the plea that the law of England ought to be applied.
The question is, whether, although the spouses have not said so, the deed may be read as implying an intention of that sort? I cannot doubt that that is its meaning. Its whole phraseology is easily intelligible according to the law of Scotland, but it is unintelligible according to any other law. It was agreed that it should be registered in Scotland, not for security merely, but for execution, and a decree of registration is just a decree of a Scotch Court. Then all the trustees are Scotchmen—resident in Scotland—and plainly it was understood and intended that they should be resident in Scotland, and that the contract should be carried out there. Further, all the acts of administration have taken place in Scotland, and I think must continue to take place there. If the trustees were to resign, it would fall to this Court to appoint new trustees. The wife by the contract conveys her whole means and estate which she may acquire or succeed to during the marriage. That is the consideration on her part; and I have no doubt how the provision is to be construed according to the law of Scotland; but how it would be according to English law we cannot
Page: 111↓
Your Lordships have so fully discussed the provisions of the deed that it would be mere repetition on my part to go over them again; but I may be permitted to add that I think the argument on the merits goes a long way to settle what was the intention of the parties. For it is maintained by the appellant that it is incompetent by the law of England to settle property or the income of property in such a way as to defeat the rights of the husband's creditors. Now, on turning to the deed I find it plain that the parties intended this fund to be alimentary, so that if they intended the deed to be construed according to the law of England that clause would be of no effect. But I cannot assume that the parties intended to be subject to a law which would nullify one of the provisions of the deed.
Parties were thereafter heard on the other pleas for the reclaimer.
Argued for him—(1) The money was the husband's, or, what came to the same thing, the father gave it to his son absolutely; at least the contrary did not appear from the marriage-contract, and beyond its terms the respondents were not entitled to go. If, then, the money was the husband's, the marriage-contract would not stand against his creditors— Kemp v. Napier, Feb. 1, 1842, 4 D. 558; Johnstone v. Dunlop, Mar. 24, 1865, 3 Macph. 758; Kerr v. Justice, Nov. 7, 1866, 5 Macph. 4; Miller v. Learmonth, Nov. 21, 1871, 10 Macph. 107, and May 3, 1875, 2 R. (H.L.) 62. At all events ( 2) the trustee represented alimentary creditors, and could insist in his claim on their behalf. [The Lord President referred to Mann (Aikenhead's Trustee) v. Sinclair, June 20, 1879, 16 Scot. Law Rep. 630, 6 R. 1078.]
Argued for the respondents—The money was not the husband's, as it was not given by the father to his son alone, but in conjunction with the lady's father, to be invested as they should think fit for the purposes of the marriage. [The Court did not desire argument upon the question of the trustee's title to sue for alimentary creditors.]
At advising—
There is no doubt that if the money belonged to Mr Elliott himself it was impossible for him by any deed or any contract to settle it so as to put it beyond the reach of his creditors. That is an elementary principle in the law of bankruptcy which no one ever dreamt of disputing. The question is, whether this £10,000 was the property of Mr Elliott?
It is said that we cannot go beyond the terms of the marriage-contract itself. I cannot assent to that proposition. I do not say what would have been the case if there had been an express declaration in the deed that this £10,000 had been paid out of the husband's own funds. But so far from that being so it is quite plain from the marriage-contract that this money stands in a peculiar position. For it appears that it was placed under the joint control of Mr Elliott and his father-in-law. Therefore it seems to me that when the question turns upon a matter of fact—whose was this money?—we may have recourse to extrinsic evidence to settle the matter of fact. This evidence does not enter into the construction of the marriage-contract in the slightest, but it has an important bearing on the rights of the parties, for if it turns out that the money was the husband's, one result will follow; if it turns out that it was not his, then the result may be the opposite.
The money, as we see from the correspondence, belonged to Mr Elliott's father. It was sent home from India in the form of a draft on Mr Elliott senior's bankers—Messrs Coutts & Co.—who were directed to pay over to Captain Elliott the sum of £2000 as soon as his marriage with Miss Corbet should take place. Now this £2000
Page: 112↓
But there is another question which was not, I think, argued before the Lord Ordinary, and it is, whether this trustee in bankruptcy is entitled to claim this fund for certain of Mr Elliott's alimentary creditors whom he says he represents? That looks very like the question we decided in the case of Aikenhead's Trustee last session ( 6 R. 1078). The trustee has vested in him the whole estate of the bankrupt. But the estate which is vested, as appears clearly from the English Bankrupt Act (31 and 32 Vict. c. 71), sec. 125, subsec. 5, is “all such property of the debtor as would if he were made bankrupt be divisible among his creditors.” That can be read only as meaning divisible among his whole creditors. That is not the position of the fund here. I think therefore that the trustee, as representing the whole body and not a particular class who may come forward and claim in their own name, has no title to claim this fund. On the whole matter I am for adhering.
On the other question I entirely concur. I think the liquidator represents the whole body of creditors, and that consequently he has no title to appear for the alimentary creditors of the husband.
I think it right to add, however, that even had the money come from the husband, or from a stranger without any condition, I am not prepared to say that the condition in the marriage-contract declaring the fund to be alimentary would have been ineffectual. The money was internal for the aliment and maintenance of the children of the marriage, and was the only fund for that purpose. In Kerr v. Justice, 5 Macph. 4, on the other hand, the wife had a large separate estate, and that might make a difference in my view.
As to the claim of the trustee to appear for alimentary creditors, I concur with your Lordships. These creditors are entitled to appear for themselves, and must do so if they desire to insist in their claim.
The Court adhered.
Counsel for the Trustee (Reclaimer)—The Dean of Faculty ( Fraser)— Taylor Innes. Agents— Boyd, Macdonald, & Co., S.S.C.
Counsel for J. B. B. Elliott and Spouse (Respondents)— Kinnear— Begg. Agents— Morton, Neilson, & Smart. W.S.