Scottish Court of Session Decisions

In the year 1834 Mr George Scott, merchant in Prince of Wales Island, East Indies, married Miss Lucy Grace Brown, daughter of the then deceased David Brown, merchant in Penang, at Trinity Lodge, Dunse, Berwickshire. An ante-nuptial-contract was executed by Mr George Scott on the one part, and by Miss Brown, with consent of Major Brown, sole acting trustee of her father, on the other. By this contract Mr George Scott bound and obliged himself to make payment to the child or children of the marriage, on his, her, or their attaining the age of twenty-one years, or if daughters at marriage, of a sum of £4000, in such proportions as might be appointed by the spouses by a joint-deed, or, as the survivor might appoint, by a writing under his or her hand; while Miss Brown conveyed to the marriage-contract trustees her whole means and estate, amounting to £2250, for payment (first) of the expenses of the trust; (second) that the trustees should hold, pay, and apply the interest thereof to such person or persons, and such uses and purposes, as she should alone and without her husband's consent direct by a writing under her hand, declaring that it should not be lawful for her to deprive herself of the benefit thereof by anticipation; or otherwise, that they should hold and apply the interest thereof for the separate use of herself and the children of the marriage, excluding the jus mariti of her husband; declaring that in the event of his surviving her he should be entitled to the interest during his life. The marriage-contract then provided—“(Third) That the said trustees shall, after the decease of the longest liver of the said George Scott and Lucy Grace Brown, pay over the principal sum or stock to the child or children of this intended marriage in terms of a joint deed to be executed by the said George Scott and Lucy Grace Brown at any time: Declaring that in the event of the death of either of them without making such division, the survivor shall have the same power; and in case no division shall be made in manner before mentioned, then the said stock or principal sum shall belong to and be divided among the children, share and share alike; and in case there shall be no children of the said marriage, or if there shall be children, in case the whole of the said children shall die before the term of payment of their shares of the trust moneys, then, and in either of these events, it shall be competent to and in the power of the said Lucy Grace Brown, by any deed or last will, to assign or bequeath all or any part of the said principal stock or sum to such person or persons as she shall think fit. And (lastly) in the event before specified of there being no children of the said intended marriage, or in case the said children shall die before their shares become due and payable without having lawful issue of their bodies, then the said principal sum or stock shall go and be payable to the heirs whatsoever of the said Lucy Grace Brown.” In consideration of the obligations undertaken by the husband as above narrated, the deed proceeded to discharge the legal rights of the wife in the event of her survivance, and also to discharge the legal rights of the children, if any.

The marriage was dissolved in 1844 by the death of Mrs George Scott, to whom until her death the trustees had paid the interest of the trust funds. She and her husband had executed no joint deed of apportionment among the children of the marriage, of whom there were five—Margaret Brown Scott, George Smyth Scott, Hugh Robert Scott, Alexander Brown Scott, and David Scott. The two last-named died in minority and unmarried. Hugh Robert Scott reached majority, but died unmarried in 1872. George Smyth Scott died in 1877, leaving one daughter, Amy Hindmarsh Scott. Margaret Brown Scott alone of the children survived the father, who died in 1880. She was married in 1855 to Mr Walter Scott. Previously to their marriage

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a deed of indenture in English form was executed, to which deed Mr George Scott was a party, and whereby on the narrative of his own marriage-contract, and that no joint deed of apportionment had been made by himself and his wife, he covenanted and agreed that he would prior to the solemnisation of the marriage make a deed appointing one-third of the £4000 provided by himself in his marriage-contract, and one-third of the £2250 provided by his wife to the trustees of the marriage, or otherwise that he would by a subsequent deed of appointment or by his last will make such an appointment. Such a deed of appointment he accordingly executed in 1875, appointing one-third of these two sums from and after his decease to Mrs Walter Scott's marriage-contract trustees, and that his son George Smyth Scott “shall from the date of these presents stand possessed of the remaining two-thirds of the said sum of £4000 sterling, and shall from and after the decease of the said George Scott stand possessed of the remaining two-thirds of the said sum of £2250 sterling, subject to the trust of the said firstly hereinbefore recited indenture of settlement” (Mr and Mrs George Scott's marriage-settlement), “in trust for himself the said George Smyth Scott, his executors, administrators, and assigns.” This deed of appointment was delivered to George Smyth Scott, who died two years later—1877—as already stated. Previously to his death in 1877 Mr George Smyth Scott, by indenture in English form, borrowed at Penang from Brown & Co., merchants there, $1770.69, and Brown & Co. undertook to remit monthly to Mrs G. Scott, his wife, $100 till the remittances should amount to $600. In security of this loan he assigned to the individual partners of Brown & Co. the two-thirds of the £2250 appointed to him by the deed of appointment.

On the death of Mr George Scott in 1880, as to this sum of two-thirds of £2250 which had been assigned to Brown & Co., Miss Amy Hindmarsh Scott, George Smyth Scott's daughter, maintained that the assignation by her father to Brown & Co. was inept, in respect that the right of the children of the marriage between Mr and Mrs George Scott to any part of the £2250 provided by Mrs George Scott did not vest till the death of the survivor of the spouses, and that the right to the two-thirds of £2250 had therefore not vested in the lifetime of her father, who predeceased his father Mr George Scott. Brown & Co., on the other hand, maintained that the two-thirds of £2250 had vested in George Smyth Scott during his life, and was therefore carried by the assignation. This Special Case was then presented to the Court. The first parties were the marriage-contract trustees of Mr and Mrs George Scott, Miss Amy Hindmarsh Scott was the second party, and Brown & Co. were the third parties.

The question of law was—“Is the second party entitled to the two-thirds of the said sum of £2250 appointed to her father by the said deed of appointment, or were the said two-thirds carried by the assignation in favour of the third parties granted by the said George Smyth Scott?”

Argued for the second party—The exercise of the power of appointment in 1875 could not affect vesting. It only fixed the shares when vesting took place. There could be no vesting till the death of the longest liver of Mr and Mrs George Scott. The wife had a power of testing, not only if there were no children of the marriage, but also if there were children, and they all died before the term of payment. That was inconsistent with vesting in the children themselves, and so also was the provision that if there were no children, or if there were children who all died before their shares became due and payable without leaving lawful issue of their bodies, the fund was to return to the heirs whatsoever of Mrs George Scott— Lockhart v. Scott, February 25, 1858, 20 D. 690.

Argued for third parties—The presumption was in favour of vesting at the dissolution of the marriage at latest. There was no destination-over, only a power to the mother to test in a certain event— Romanes v. Riddell, January 13, 1865, 3 Macph. 348.