Scottish Court of Session Decisions

Colonel Frederick John Colin Halkett and his wife Mrs Helen Margaret Fisher or Halkett were married in 1857. By antenuptial marriage-contract dated 26th January 1857, Mrs Halkett conveyed to trustees the whole estate then belonging to her, or which she might acquire during the subsistence of the marriage. The second purpose of the trust was thus expressed—“for payment of the free annual interest or produce of the trust-funds and estate to the said Helen Margaret Fisher during the subsistence of the marriage, such payment being exclusive of the jus mariti and right of administration of the said Frederick John Colin Halkett, and her own receipt being a sufficient discharge to the said trustees.”

In October 1889 Colonel Halkett borrowed from the Reliance Mutual Life Assurance Society the sum of £1500, and he and his wife granted therefor a bond and assignation in security dated 1st October, in which he bound himself, his heirs and executors, and representatives whomsoever, to repay the said sum with interest at five per cent. until repayment.

In security of her personal obligation, Mrs Halkett, with the special advice and consent of her husband, assigned to the pursuers her whole right and interest, present and future, in, under, and in virtue of the marriage-contract, and in particular, and without prejudice to the said generality, in and to the whole sums of money, as well capital as income, which were or might become payable to her under the contract.

On 3rd October 1889 this bond and assignation was duly intimated to Joseph Campbell Penney, the judicial factor who was then acting on the estate which had fallen under the marriage-contract. In December 1889 Colonel Halkett was adjudicated a bankrupt in England.

In January 1891 John Thomas Abdy and Thomas Eykin, the trustees for the Reliance Mutual Life Assurance Society, raised the present action of declarator against Francis Adam Bringloe, the judicial factor on the said marriage-contract trust — estate of Colonel and Mrs Halkett, and concluding (1) for declarator that they had acquired right as and from the 3rd October 1889 to the capital and income payable to the spouses or either of them under the contract of marriage; (2) for an account by Bringloe showing the balance due by the estate to the pursuers as in right of the defenders under the bond; (3) for payment of £600 as such balance; (4) for an annual payment of the free interest of the estate.

The defender Mrs Halkett averred that on 17th September 1889 she was induced by her husband gratuitously and without consideration to sign the said bond and assignation in security, and she further alleged that no right to the free annual proceeds of the trust funds was ever transferred to or vested in the pursuers.

She also averred that the pursuers accepted the security in full knowledge of the terms of the marriage-contract, and that she in signing the bond did so under her husband's influence.

The pursuers pleaded, inter alia—“(1) The interests of the defenders Frederick John Colin Halkett and Mrs Helen Margaret Fisher or Halkett under the marriage-contract having been validly transferred to and vested in the pursuers, decree should be granted as craved.”

The defenders pleaded, inter alia—“(2) The estate of the defender Mrs Halkett having been conveyed to trustees for her protection, in terms of the antenuptial marriage-contract referred to, she could not validly and effectually convey away the same stante matrimonio to her own prejudice; and separatim, she could not do so in security of her husband's debts. (3) The defender F. A. Bringloe, as representing the trustees under said marriage-contract, is not entitled to act upon said bond and assignation in security and intimation thereof.”

On 5th February 1891 the Lord Ordinary ( Low) sustained the second and third pleas-in-law for the defenders, assoilzied the defender Bringloe from the petitory conclusions, and dismissed the action.

“ Opinion.—[ After narrating the facts]—It was explained that the question which the pursuers wished to have determined in the present action is their right, as Mrs Halkett's assignees, to the income of the trust-estate during the subsistence of the marriage. This was the only question argued before me.

It was contended for the defenders that the provision in the second purpose of the trust, that the income of the trust-estate should be paid to Mrs Halkett during the subsistence of the marriage, was a proper contract provision which she had no power either to renounce or abandon or assign while the marriage subsisted.

The pursuers, on the other hand, contended that the income of the trust funds constitutes separate estate of the wife, with which she can deal in any way she chooses.

There are three classes of cases in which the rights of a wife under an antenuptial marriage-contract have been defined by the Court.

(1) If the wife's provision is not secured by a trust, she can deal with it as she pleases. For example, if she is infeft in a liferent of her husband's heritage, she can renounce or assign the liferent— Standard Property Investment Company v. Cowe, 4 R. 695. It is clear that the present case does not fall under this category.

(2) The mere fact of a wife having conveyed her portion to trustees under an antenuptial contract of marriage does not divest her of her rights as proprietor unless the trustees are directed to hold and apply it for proper matrimonial purposes— Ramsay, 10 Macph. 120; Laidlaw, 11 R. 481.

(3) If, however, the wife's estate is conveyed to trustees for the purpose of settling

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and securing marriage-contract provisions, then the wife cannot abandon or renounce or assign the rights intended to be secured to her during the subsistence of the marriage. The trust is, in such a case, regarded as a means (indeed the only means) of protecting the wife's marriage-contract provisions not only against her husband and his creditors, but against herself and her own acts— Torry Anderson, 15 S. 1073; Menzies, 2 R. 507.

The question is, whether the present case falls to be determined upon the principles to which effect was given in the second class of cases above referred to, or upon those which were held to govern in the third class. In other words, the question which I have to decide is, whether Mrs Halkett's right to the income of the trust-estate is an absolute unrestricted right, which she can deal with as she likes, the trust being merely the machinery by which the income is conveyed to her, or whether it is not a proper matrimonial provision which is protected by the trust even against her own acts.

My opinion is in favour of the latter of these views. To pay the income to Mrs Halkett, and to her alone, is one of the purposes for which the conveyance to the trustees is made. It is true that the provision is not declared to be alimentary only. I do not think, however, that this alters the essential character of the provision. Looking to the general scheme of the contract, I am of opinion that the second purpose was intended to secure a separate income to the wife during the subsistence of the marriage, protected by the trust not only against the husband and his creditors, but against the wife herself, and particularly against the risk of her being induced, through love or fear of her husband, to anticipate her right to this income for his benefit, but to her own prejudice.

The circumstances under which the assignation sued on was granted form a typical example of the kind of case against which the contract was intended to protect the wife. Colonel Halkett, apparently upon the eve of bankruptcy, wished to borrow £1500. He could only do so with his wife's assistance, and she has been induced to assign to the lender the very income which by the marriage-contract was intended to be secured to her. I think that the principles upon which the case of Menzies v. Murray, and previous cases of that class were decided, are applicable here, and I am therefore of opinion that the pursuers cannot, as Mrs Halkett's assignees, demand that the judicial factor shall account for and pay to them the income of the trust-estate during the subsistence of the marriage.

The conclusion at which I have arrived is, I think, confirmed by the judgment which was pronounced by the Court last year in regard to the rights of the spouses under this marriage-contract— Halketts v. Halkett's Factor, 17 R. 719. In that case Mrs Halkett and her husband, with consent of three of their children who had attained majority, asked for declarator that the judicial factor was bound to convey to Mrs Halkett the whole of the trust funds over and above the sum of £5000 secured to the children by the eighth purpose. The Court held that Mrs Halkett was not entitled to make the demand during the subsistence of the marriage.

The Lord Ordinary in that case—Lord Trayner—referring to the second purpose of the marriage-contract, says—‘I regard that clause as not merely a direction for trust management, but a proper contract provision, whereby there was secured to Mrs Halkett, so long as the marriage subsisted, payment of the free proceeds of her estate—a provision intended to protect her against her own acts as well as the acts of others, and one which she cannot now revoke or renounce. The grounds upon which the learned Judges in the decision of the case of Menzies v. Murray appear to me to have at least equal force and applicability in the present case.’

The Lord Justice-Clerk concurred with the Lord Ordinary, and although Lord Rutherfurd Clark and Lord Lee doubted the direct applicability of the case of Menzies v. Murray, it must be remembered that the question before the Court was in regard to Mrs Halkett's right to the capital of the trust funds, and not in regard to her right to assign the income in security and for payment of her husband's debts.

As I have already said, the only question argued before me was as to the right of the pursuers to demand payment of the income from the judicial factor during the subsistence of the marriage, and therefore it is unnecessary to consider what the position of the parties will be in the event of the marriage being dissolved.”

The pursuers reclaimed, and argued—The terms of the marriage-contract vested in Mrs Halkett an indefeasible title to the income of the trust-estate, and by the clause in the bond and assignation she interposed her personal credit as in right of the income of the estate to relieve her husband. She effectually assigned to the Insurance Company the annually accruing interest of her own estate, which she was entitled to do. There was nothing in this case of the nature of a proper matrimonial provision which the trust could protect against her own acts.

Argued for the respondents—Under the terms of the marriage-contract Mrs Halkett was not entitled to alienate the income of the trust-estate. The contract provided for the funds being held, and the trust was the machinery by which this was to be done. So long as Mrs Halkett lived the trust purposes remained unfulfilled. The whole'object of this marriage-contract was to protect Mrs Halkett from her husband and his creditors. This bond was a cautionary obligation by Mrs Halkett for behoof of her husband, and was bad at common law— Biggart v. City of Glasgow Bank, January 15, 1879, 6 R. 470; Menzies v. Murray March 5, 1875, 2 R. 507.

At advising—