Scottish Court of Session Decisions

Robert Agnew Wallace and Jane Colquhoun Bell entered into an antenuptial contract of marriage on 25th August 1859. By said deed Robert Agnew Wallace and Jane Colquhoun Bell each conveyed a sum of £5000 to Sir William Agnew Wallace of Lochryan, and others, as trustees, for the purposes therein set forth. In each case the trustees were directed to pay the liferent of the sums conveyed to the party who had conveyed them during his or her life, and after his or her death to the survivor of the spouses. With regard to the disposal of the capital of said trust funds, the trustees were directed, after the decease of the survivor of the spouses, to “pay over the said capital to or for the behoof of the surviving child or children who may be procreated of the said intended marriage, and of the issue of any child or children who may have predeceased the said intended spouses, leaving issue, in such shares or proportions, and subject to such conditions, provisions, and limitations as the said promised spouses, during their joint lives, and failing either of them, as the survivor shall appoint by any writing under their, his, or her hand, and failing such appointment, equally amongst them, share and share alike (such issue succeeding always only to the shares to which their parents would have been entitled had they been in life), and the shares of the sons to be payable upon their attaining majority, and of the daughters upon their attaining majority or being married, whichever of these events shall first happen.” With regard to both sums power was given to the trustees, on the acquisition and discharge of any tutors and curators appointed to any of the issue of the marriage, to advance the share to which any of the issue should at the time have succeeded, or part thereof, for the outfit and advancement in life of such issue. With regard to the sum of £5000 conveyed by Robert Agnew Wallace, the deed further provided that in the event of the marriage being dissolved by the death of Jane Colquhoun Bell without issue then surviving, or if there should be issue at her death, which should fail during the life of Robert Agnew Wallace, the trustees should pay said sum to Robert Agnew Wallace, his heirs and assignees. The provisions in favour of the children of the marriage were also declared to be in full satisfaction of legitim and everything else they could claim through the decease of their father. With regard to the £5000 conveyed by Jane Colquhoun Bell, it was provided that in the event of there being no issue surviving at her death, or of any issue that there might be dying before the terms of payment, the trustees should pay the same to and in favour of such persons as she might direct by any writing under her hand, and failing such writing to her executors and nearest of kin.

On 21st December 1878 Mr and Mrs Wallace executed a mutual trust-disposition and settlement. By said deed Mr Wallace disponed his whole estate to his wife in liferent for her liferent use allenarly, and Mrs Wallace in like manner disponed her whole estate to her husband in liferent. After reciting part of the marriage-contract the deed then proceeded to state that the spouses were desirous of exercising the powers conferred on them in the said contract of marriage with regard to the disposal of the fee of the sums thereby conveyed, and likewise of providing for the disposal of the fee of their whole other estate and effects, and that they therefore disponed to certain trustees their whole estate and effect of every description at present belonging to them or that should belong to them and the survivor at their respective deaths, including the whole sums conveyed by their contract of marriage in so far as any right had been reserved to them therein, inter alia, for the following purposes:—In the first place, for payment of debts, deathbed and funeral expenses, and the expenses of the trust. … Thirdly, in the event of any of their children having succeeded to the estate of Lochryan, for the purpose of paying to such child £50, as in full of all claims which he or she could make against the spouses either under the contract of marriage or in name of legitim. “Fourthly, To hold the whole residue of our estate and effects, including therein the

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several sums conveyed by the foresaid contract of marriage, and over which we have a power of appointment for behoof of the children of our marriage who may survive us, and the lawful issue of any who may predecease us, such issue taking the place of their parent, and succeeding to his or her share, but excluding always that one of our children who may have succeeded to the estate of Lochryan; and that in equal shares and proportions. … And we direct the said trustees to pay to, or apply for behoof of our said children, the whole free annual income of our several estates, and that equally amongst them, share and share alike, and on the arrival of our sons at majority respectively, to pay or assign to each of them an equal share of our several estates; and on the marriage of our daughters respectively, to settle and secure on each daughter, for her sole and exclusive use during her marriage, an equal share of our several estates, so that the same shall be held by trustees for her behoof, exclusive always of the jus mariti and right of administration, or other right whatever of her husband, with power to her to dispose of the fee of the same by any testamentary deed, and failing her disposing of the same by such deed, the same shall be paid, assigned, or conveyed to her heirs and executors. … And in regard to the disposal of the fee of the shares of any of our said daughters who may not marry, we direct the said trustees to pay, assign, or dispone the same according to the directions which each such daughter may leave by any testamentary deed; and failing the execution of such deed, to pay, assign, or convey the same to her heirs and executors: And we further direct the said trustees, on making payment of a share of our said estates to a son, or on settling a share for behoof of a daughter, to take the said son, or the trustees for behoof of such daughter, bound to repay the same, but without the addition of interest, and so that the same may form an addition to the funds available for division among our other children, in the event of such son or daughter succeeding to the said estate of Lochryan.”

Robert Agnew Wallace died on 8th June 1887, and Mrs Jane Colquhoun Bell or Wallace on 4th April 1890. They were survived by two sons and seven daughters, none of whom at the date of Mrs Wallace's death had succeeded to the estate of Lochryan. After Mrs Wallace's death questions arose with regard to the administration of the estate which had belonged to the spouses so far as the same was conveyed in their marriage-contract, and a special case was presented in order to obtain the opinion of the Court, inter alia, on the following questions:—(1) Are the first parties bound to hand over to the second parties, to be administered in terms of said trust-disposition and settlement, the sum of £5000 conveyed by Robert Agnew Wallace in the said marriage-contract, and the sum of £5000 conveyed by Mrs Jane Colquhoun Bell or Wallace in the said deed? 2) In the provision in the said trust-disposition and settlement directing the trustees on making payment of a share of the deceased's estate to a son, or settling a share for behoof of a daughter, to take the said son, or the trustees for behoof of such daughter, bound to repay the same in the event of such son or daughter succeeding to the estate of Lochryan, a condition which the spouses were entitled to adject to the appointment exercised by them under the powers reserved in the said contract of marriage, and ought it to receive effect? (3) Are the provisions in the said trust-disposition and settlement as regards the shares of the deceased's estates, destined by the said marriage-contract to the fourth parties, a valid exercise of the powers reserved to the spouses in the said contract of marriage, and ought they to receive effect?

The parties to the case were—(1) The trustees under Mr and Mrs Wallace's marriage-contract; (2) the trustees under their mutual trust-disposition and settlement; (3) the sons, and (4) the daughters of Mr and Mrs Wallace.

The first parties maintained that they were bound to retain the two sums of £5000 already mentioned, and to administer the same in accordance with the provisions of the marriage-contract, and such of the provisions of the trust-disposition and settlement, if any, as the Court might find applicable thereto. On the other hand the second parties maintained that the first parties were bound to hand over the said sums to them, to be administered by them under the trust-disposition and settlement.

The third and fourth parties further maintained that the provisions contained in the trust-disposition and settlement to the effect that, in the event of none of the third and fourth parties having succeeded to the estate of Lochryan at the time when the division of the said sums of £5000 took place, each of said parties should come under an obligation to repay his or her share of said sums on thereafter succeeding to the said estate, subject only to a right to retain a sum of £50, were inept and ineffectual. The second parties, on the other hand, maintained that the said provisions must receive effect.

The fourth parties further maintained that they were entitled to payment of their shares of said two sums of £5000 upon their attaining majority or being married, whichever of these events should first happen. The second parties on the other hand maintained that they were entitled to retain said shares and settle them on the marriage of each of the fourth parties in accordance with the provisions of the trust-disposition and settlement.

Argued for the first, third, and fourth parties — 1. On the Lochryan question.—There was no case in which a provision of this kind, directing trustees to impose an obligation on beneficiaries to repay their share of a trust-estate on the occurrence of a certain event subsequent to their succession, had received effect. 2. On the limitation of the daughters' rights.—No doubt the spouses had received a power of appointment

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and of imposing limitations and conditions, but the limitation imposed must be of the nature of the right given. In the marriage-contract the trustees were directed to “pay to or for behoof of” the children, i.e., to pay to such as were capable of giving a valid discharge, and for behoof of such as were minors and pupils. The right given in the marriage-contract was a right to a share of the fee, but in the case of the daughters this right was restricted by the trust-disposition to one of liferent with a power of testing on the fee. That was not a proper exercise of the power of appointment reserved to the spouses— Gillon's Trustees v. Gillon, &c., February 24, 1862, 24 D. 589; Moir's Trustees, June 17, 1871, 9 Macph. 848; Munro v. Munro, February 13, 1810, F.C.

Argued for the second parties—1. On the Lochryan question.—The condition imposed was within the reserved power of appointment. No condition was imposed except with regard to the trust-funds, the true construction being that the share of the truster's estate was given on the condition of the recipient not taking the estate of Lochryan— Bonhotes v. Mitchell's Trustees, May 27, 1885, 12 R. 984. 2. On the limitation of the daughters' rights.—The spouses had validly exercised the power of appointment reserved to them. The marriage-contract did not contain a gift of the fee to the children, but a direction to the trustees on the occurrence of a certain event to pay to or for behoof of the surviving children and the issue of predeceasers. The case accordingly fell within the principle of the case of Bryson's Trustees v. Clark, &c., November 26, 1880, 8 R. 142. The direction further was to pay subject to any limitations which the spouses might impose, and the use of the term limitation covered the creation of a trust— Lennock's Trustees v. Lennock, October 16, 1880, 8 R. 14; Carver v. Bowles, 1831, 2 Russell & Mylne, 201.

At advising—