Scottish Court of Session Decisions

At advising—

Lord President—In regard to a marriage where there has been a marriage-contract the first consideration is how the spouses are to live. If they have no property, then, ‘of course they must live by their industry alone, but if they have any property, either in possession or in expectancy, they surely look to that as a source from which they are to derive income and enable them to sustain the burdens of married life, pro tanto at least. It would be a very strange marriage-contract that settled the property belonging to the one spouse or the other in fee only upon the children without making any provision of the income for the spouses. Yet that is really the principle upon which it is proposed that we should construe this deed. I think that so unnatural an idea as that would require very strong language to make it effectual.

Now, I do not see any difficulty about this deed except that it is very ill expressed and very badly drawn. As to the intention of the deed I have no doubt, and the expression “intention” I do not use in the same sense I would in construing a will, but as I would use it in construing any onerous contract.

The husband here had no fortune, and the settlement he makes is by way of personal obligation, and the only security is a policy of insurance, which was effected in contemplation of the marriage. The lady had expectations, and therefore she conveys to the trustees all that she may acquire during the subsistence of the marriage. But a conveyance of that kind did not divest the lady at all of estate to which she might succeed or was then in possession unless the money or the property so conveyed was directed to be applied to marriage-contract purposes. She was divested only so far, and so far as there are no such directions she remained the absolute owner, and the marriage-contract trust was a mere burden. That principle was clearly given effect to in the cases of Ramsay's Trustees and Newlands. There are three branches of Newlands’ case—the two branches to which I refer are those contained in 9 R. 1104 [July 14, 1882], and 11 R. 481, February 1, 1884.

Therefore in regard to this conveyance, as in regard to every other, we have to inquire to what extent the property has been settled on the objects of the marriage-contract—in other words, to what extent the property is directed to be applied to such purposes. The words used in the deed are that the trustees are to hold the property for the ends, uses, and purposes following, viz.—“For behoof of the said Charles Titus Higginbotham, in the event of his surviving her, in liferent for his liferent alimentary use allenarly, and not affectable by his debts or deeds or the diligence of his creditors, but to the extent of one-half only of her said means and estate, and for behoof of the child or children of the said intended marriage, in such proportions as she may appoint, or if no appointment be made by her, equally in fee, and failing a surviving child of said marriage for behoof of her own nearest heirs or assignees.” Now, the children of the marriage—leaving out of view in the meantime the partial liferent given to the husband—are the only parties for whose benefit the money was settled. They are nascituri, and may never come into existence; the marriage may endure for a long time without there being any children, and may be dissolved without there being any children. But in all these contingencies, according to the contention of the first and third parties, no part of the money was to be used or enjoyed by the spouses during the subsistence of the marriage. So far from being supported by the words of the clause, I think the words of the clause are repugnant to such an idea. The estate is dealt with as the estate of Mrs Higginbotham, for the power of appointment is in her alone, and in the event of there being no children it is settled on her heirs. The contingent right of the children of the marriage is the sole burden on Mrs Higginbotham's estate; that is the plain meaning of the deed.

Now, what is that contingent right? It is declared to be a right of fee as distinguished from a right of liferent. That the liferent right was in contemplation of the person who framed the deed is plain from the fact that the husband gets a partial liferent in the event of his survivance. The deed is no doubt foolishly and ignorantly drawn, but that the income is to be enjoyed by the spouses stante matrimonio appears from every line. I think that the income accruing during the subsistence of the marriage has not been disposed of in such a way as that the trustees are entitled to withhold it from the granter of the deed. I think the right to the income remained in Mrs Higginbotham as much after she had executed the deed as before. The result of holding aught else appears to me most startling, for then under no conceivable circumstances would any succession coming to Mrs Higginbotham be enjoyed by the spouses. They might be in poverty, and Mrs Higginbotham might succeed to a large sum of money, but the spouses could not benefit to the extent of one penny. They would be kept in poverty in order that there might be an accumulation for children who might never come into existence.

I think we should answer the questions in conformity with these views, by affirming the first and negativing the second.

Lord Mure—I am of the same opinion.

The clause which we have to construe is this conveyance to trustees, and we can only gather from the purposes expressed what the trustees are entitled to do with the money. Now, while there is a conveyance to the trustees of all the wife's property, there is no direction what to do with the income of the property so conveyed. There is evidently an omission, and we are asked what is to be done with this undisposed of income.

I agree with your Lordship that the radical right being in this lady, all that she did not expressly convey away remains in her. I think that is the sound principle as it was laid down in the cases of Ramsay and Newlands. The trustees have no power to accumulate the income, for they are not told to do so. I think it was the intention of the parties that the income should be available for the wife and her husband, and that after her death the direction to the trustees should come into operation.

Lord Shand—I quite agree with the argument that was submitted for the first and third parties, that in construing this deed one must look only to the terms of the deed. Taking that view, I think that according to the sound construction of the deed this lady has not settled her property so as to deprive her of the income during the subsistence of the marriage. It is true that for certain purposes she has conveyed away her property, and that from the date of the conveyance the title is in the trustees. But on the question for what purpose she has so conveyed it, it appears to me that the only purposes are that if the husband survives he is to have the liferent of one-half, and that if there are children they are to get the fee. There is so strong a presumption against the notion that one or both of the spouses are to be taken, by mere conveyance, to have divested themselves of the right to the income of their estate that I think nothing short of an express clause would be sufficient. In cases where a testator leaves his estate to trustees with a direction to convey the fee to beneficiaries, but postpones the period of payment until the beneficiaries reach the age of twenty-one or twenty-five, it has been held that the income is thereby disposed of. But the important element here is wanting in those cases, for of course the granter of a trust-disposition and settlement divests himself not only of all title to his property, but also of all interest. He could retain no right, for his life ceases before the deed comes into operation. When, however, as in this case, there is no direction as to the disposal of the income by the trustees, the granter from whom the right of property comes has the right to the income, and accordingly I think this lady is entitled to the income of the property so far as it came from her.

Lord Adam was absent.

The Court answered the first question in the affirmative, and the second in the negative.