Scottish Court of Session Decisions

The late Rev. William Barr died on 7th June 1883, survived by a widow, but by no issue, and leaving a trust-disposition and settlement, to which his wife was a consenting party, dated 10th February 1881. By this settlement he directed the trustees named therein (1) to pay his debts, (2) to convey his household effects to his wife for her liferent use allenarly; and “in the third place, at the first term of Whitsunday or Martinmas that shall first arrive after my death, to pay and make over to the said Mrs Barbara Riddell or Barr the sum of two thousand one hundred pounds, with power to her, by herself alone, to dispose of the same during her life, or in such way and manner as she shall think fit; in the fourth place, to pay to her at the said first term of Whitsunday or Martinmas that shall first arrive after my death the additional sum of two thousand pounds, to be held by her during her lifetime, and the uncontrolled possession and profit of which she shall enjoy as long as she lives; which sum, however, should nothing occur to render it necessary for her to touch upon, or induce her to dispose of it otherwise, which she shall have power to do, the same or balance thereof shall at her death return and form part of my trust-estate;” and lastly, to pay the residue in the manner pointed out by any writings under his hand, and in default thereof to his nearest personal representatives.

In a holograph supplementary settlement dated 26th January 1882 he recited the third head of his trust-disposition as follows—“In that will … My debts thus paid, I instruct my said executors next not only to hand over to my wife for her liferent use all my household furniture, &c., as specified in my previous will, but also to pay to her these two sums on the conditions stated—1st, the sum of two thousand and one hund.

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pounds sterling (£2100) in fee, to be alike in use and destination at her sole and absolute disposal; and 2nd, the sum also of two thousand pounds (£2000), the free and unfettered use of which she shall enjoy so long as she lives, with power even to trench upon the principal should she ever under any emergency require to do so; declaring, however, that the said £2000 so far as not required for my wife's personal use shall at her death return, and, if thought necessary, be ordered by her then to return to my estate and be disposed of as I shall appoint.” He then made certain provisions to relatives named, and directed his executors to divide equally among his nieces and nephews the residue of his estate, which he thus calculated—“1. What may possibly remain in the hands of my executors after meeting the specified provisions of both my wills, say £2000. 2. What is likely to return to my estate after the death of my wife £2000. And 3. What returns to my estate at the death of our servant Janet, £350, in all £4350.”

After Mr Barr's death his executors entered upon the administration of his estate, and in the course of administration in May 1884 they paid to the widow the sums of £2100 and £2000 directed to be paid to her under the third and fourth purposes of the trust-settlement respectively. The sum of £2000 was separately invested by Mrs Barr, she never entrenched or used any part of the capital of it, and it remained a separate part of the estate down to her death.

Mrs Barr died on 24th October 1889, leaving a trust-disposition and settlement dated 5th January 1889, whereby she conveyed to trustees named therein “the whole means and estate, heritable and moveable, real and personal, owing and belonging to me, or which shall be owing and belonging to me, or over which I may have the power of disposal at my death; declaring that the above clause is intended to include and shall include a sum of £2000 left to me by my said husband under his trust disposition and settlement, and which sum my said husband intended I should dispose of as I thought right and proper.”

The present action was raised by the executors under Mr Barr's trust-disposition and settlement against the trustees under Mrs Barr's trust-disposition and settlement for payment of the said sum of £2000.

The pursuers pleaded—“(1) The said Mrs Barr not having trenched upon or disposed of said sum of £2000, the same falls to be repaid to the estate of the said Rev. William Barr, as provided by his settlement, and decree should accordingly be pronounced as concluded for. (2) The settlement of the said Mrs Barr not being a valid exercise by her of the power of trenching upon or disposing of said £2000, the pursuers are entitled to decree.”

The defenders pleaded—“(1) On a sound construction of the Rev. William Barr's settlement, Mrs Barr, on his death, took an absolute right to the £2000 in question; or otherwise had a testamentary power of disposal thereof.”

Upon 3rd December 1890 the Lord Ordinary ( Kyllachy) decerned against the defenders in terms of the conclusions of the summons.

“ Opinion.—In this case I have come to the conclusion that the pursuers, the Rev. William Barr's trustees, are entitled to decree in terms of their summons.

The first question is as to the true construction of Mr Barr's settlement with respect to the bequest of £2000, which is the subject of the action. In my opinion that settlement must be held to include both the original trust-disposition and settlement and the holograph supplementary settlement; and reading these documents together, I am unable to come to any other conclusion than that maintained by the pursuers, viz., that Mrs Barr's right was in effect a liferent, with a limited power of disposal during her life. I do not doubt that she might have spent the money, and it may be that she might have disposed of it gratuitously inter vivos. But I do not think it possible to hold that she had the power to test upon it, and therefore assuming—as I do assume—that she was entitled to have the money paid over to her, and to use it, or any part of it, for any purpose she pleased during her life, I consider that she was under an obligation to repay at her death to her husband's estate so much of it as she did not so use… .

“The following authorities were referred to—For pursuers— Sprott, 17 D. 840; Lawson, 3 D. 1001; Smith, 10 R. 1144; Tronson, 12 R. 155. For defenders— Buchanan, 6 Macph. 536; Ersk. iii. 8, 45; Mackay, 13 S. 246; Dwyer, 1 R. 943.”

The defenders reclaimed, and argued—The two deeds must be read together, and the statements in them showed that Mr Barr had left this sum of £2000 to his wife for her own use. It was true that he qualified that by saying that it was for her enjoyment during life, and was to return to his estate, so far as not trenched upon, after her death; but she was also given power “to dispose of it otherwise.” That power she had used in her settlement, and it ought to receive effect— Reddie's Trustees v. Lindsay, March 7, 1890, 17 R. 558.

Counsel for respondents were not called on.

At advising—