Scottish Court of Session Decisions

The Mercantile Law Amendment (Scotland) Act 1856 provides—Section 1. “From and after the passing of this Act, where goods have been sold, but the same have not been delivered to the purchaser, and have been allowed to remain in the custody of the seller, it shall not be competent for any creditor of such seller after the date of such sale to attach such goods as belonging to the seller by any diligence in process of law, including sequestration, to the effect of preventing the purchaser, or others in his right, from enforcing delivery of the same.

” The Married Women's Property (Scotland) Act provides—Section 1 (4). “Any money or other estate of the wife lent or entrusted to the husband or immixed with his funds, shall be treated as assets of the husband's estate in bankruptcy, under reservation of the wife's claim to a dividend as a creditor for the value of such money or other estate after, but not before the claims of the other creditors of the husband for valuable consideration in money or money's worth have been satisfied.”

This was a petition in the Sheriff Court at Wick by Mrs Mary Benvie or Anderson, wife of the Reverend William Harley Anderson, M. A., minister of Pulteneytown, residing at Rosemount, with his consent and concurrence, against Robert Leith, solicitor, Wick, trustee on Mr Anderson's sequestrated estate. The object of the petition was to interdict the defender from carrying away certain furniture, the alleged property of the pursuer in the house at Rosemount, which he had seized and intended to sell for the benefit of the creditors.

Mr Anderson's estate was sequestrated upon 4th September 1891, and the defender was unanimously appointed trustee on 16th September, and his election was thereafter duly declared and confirmed.

The pursuer alleged that upon 9th December 1890 Mr Anderson sold her all the furniture, originally his own property, in terms of the following sale-note—“I, William Harley Anderson, M.A., minister of Pulteneytown, residing at Rosemount, Wick, hereby acknowledge that I have received from Mrs Mary Benvie or Anderson, my wife, out of her separate estate the sum of Two hundred and twenty-five pounds sterling (£225), which has been paid to her at various times since the death of her father, the late Wm. Benvie, Esq.,

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merchant, Dundee, by the agents for his trustees, appointed by his settlement of his affairs, said agents being Messrs Reid, Johnstone, Scrimgeour, & Co., solicitors; in consideration of which sum of (£225) Two hundred and twenty-five pounds paid by her to me, I have sold to her all my moveable goods and effects, consisting of the furniture and plenishing of this my house situated at Rosemount, Wick, a particular statement of which follows.” Then followed a detailed inventory of the furniture, valued at £225.

The pursuer averred—“They (the articles of furniture) are the absolute property of the pursuer, being purchased and paid for by her out of the sums received from her father's trustees. The said sum of £225 paid by the pursuer to the said William Harley Anderson for said furniture and other effects was a full and just price, and truly paid by the pursuer to the said William Harley Anderson, and retained by him as the value thereof.”

The defender pleaded—“(6) The household furniture and effects referred to not having been delivered, but allowed to remain in the bankrupt's possession and use, the alleged sale is invalid. (7) Reputed ownership in the person of the bankrupt.”

The Sheriff-Substitute ( D. J. Mackenzie) allowed a proof.

Mr Anderson deponed—“I know that my wife has separate means and estate derived from her deceased father's estate exclusive of the jus mariti and right of administration of her husband. (Shown No. 4 of process)—That is a copy of the trust-disposition and settlement by William Benvie, the pursuer's late father. (Shown No. 5 of process)—That is the disposition or sale-note. I prepared that deed. It is a receipt for £225 received by me from my wife, in return for which I sold all the effects in the house. The effects here mentioned were all the effects in the house… . Mrs Anderson was giving me her money for my purposes, and the condition upon which she gave me the money (which was hers) was that the furniture should be hers when the money she gave amounted to the value of the furniture. The year of Mr Benvie's trust ends in June, and Mrs Anderson gets her annuity as soon after the 4th of June as the accounts can be made up, but she receives an interim payment in December of £25. (Shown No. 22 of process)—That is my pass-book with the North of Scotland Bank, Limited, which I have now produced. The first payment that I received from her, Mrs Anderson, was £25, which appears in the bankbook as a payment under date 4th January 1886. It was paid by bank-draft of date about the end of December 1885. [The witness traced other and similar entries in his pass-book.] … These payments that I received from Mrs Anderson amounted to over £240. I never repaid that back to her, and I then delivered the furniture over to her by sale-note in terms of the verbal arrangement. The verbal arrangement was made at the time I received the first payment, and the money was to go in payment of my debts. Cross-examination. (Shown No. 5 of process)—That document was written of the date it bears. The various sums I have spoken to went into my ordinary bank account, and were applied by me for household and other purposes in the same way as my ordinary income, and during all that time Mrs Anderson lived in family with me, and she was supported by me from these funds. (Q) Was it at the time of the first payment, 4th January 1886, that the tacit understanding was come to between you and Mrs Anderson?—(A) That being the first payment she had got out of her separate estate. When she paid it over to me she did so upon the understanding that she was to get the furniture. Subsequent to that tacit understanding we have spoken about the matter, but that was the understanding all through. Mrs Anderson would not have given me the money unless I would agree to that. (Q) Did you form any opinion why she would not give you the money except on that understanding?—(A) I did not form any opinion. (Q) Did it occur to you that it was in consequence of the condition of your affairs pecuniarily?—(A) No. I am satisfied that had nothing to do with it, but I cannot form any opinion as to what was her reason.”

The pursuer deponed—“In the end of 1885 or the beginning of 1886 I came to an arrangement with my husband about my furniture. I arranged that he would get my money if I got value for it, as otherwise it being my own I could have laid it out in shares or otherwise. I accordingly paid him the money I received, and I was to get the household furniture and all other effects inside the house. I was to get the effects when the sum was paid up. The last instalment was paid in December 1890. (Shown cheques Nos. 23 to 28 of process)—These cheques are all payable to me, and are endorsed by me. I handed them to my husband. Cross-examination.—(Q) Is it correct to say that you had made up your mind to refuse to give your income to Mr Anderson unless he gave you the furniture?—(A) I cannot say if the word ‘refuse’ suits, but I said to him that I had a right to invest my money in outside property, and he was to let me have for it the furniture if I gave it to him. It is correct to say that I did not refuse to give him my money. Since 1885 I have been residing in family with Mr Anderson and managed the household affairs.”

Upon 18th February 1892 the Sheriff-Substitute pronounced this interlocutor:—“[ After stating the facts]—Finds in law that a contract of sale was entered into between the pursuer and her husband, which is set forth in the document No. 5 of process: Finds that no delivery of the furniture followed upon said contract: Finds that the said furniture has been ‘lent or entrusted’ by the pursuer to her said husband and ‘immixed with his funds’ in the sense of sec. 1, sub-sec. (4) of the Married Women's Property (Scotland) Act 1881 (44 and 45 Vict. cap. 21): Finds therefore that under sec. 2, sub-sec.

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(2), of the said Act the only claim which the pursuer can have, if she any have, to the said furniture, is a claim in terms of the sub-section of the Act first above mentioned: Finds it is inexpedient to decide in this process the validity or value of such claim, as it is in any view insufficient to entitle the pursuer to interdict as concluded for: Finds that the pursuer is not entitled to interdict in terms of the prayer of the petition, &c.

“ Note.— … Such being my view of the main facts of the case, it does not appear that the sale of the furniture was gratuitous or reducible in view of his bankruptcy, as the defender contends, but the effects of that sale have further to be considered in the light of the circumstances which follow. The furniture apparently remained in the joint use and enjoyment of the spouses. If the transaction had been one between independent persons, I think it would probably have been ruled by the principles laid down in Sim v. Grant, June 3, 1862, Scot. Jur. 517; see also M'Bain v. Wallace, 1881, 8 R. 106—and the first section of the Mercantile Law Amendment Act would have been held not to apply. Here there is no subordinate title such as loan or lease which would exclude the operation of the doctrine of reputed ownership, and modify the question of the application of the Mercantile Law Amendment Act. See Lord Young's remarks in the case of Scott and Others v. Horsburgh, February 20, 1889, 26 S.L.R. 362, on the question of the effects of a sale of a person's furniture in his own house, he retaining possession. In the present case the transaction is one between husband and wife, and the somewhat difficult problems which would arise in other circumstances are to my mind set aside to a large extent by the provisions of the Married Women's Property Act (44 and 45 Vict. cap. 21). That Act applies to this transaction, as the property (if it were acquired by the wife) has been so acquired since 1881, and any rights she has in this furniture are regulated by it. Now, it is not, I think, denied that this furniture has been used in common by the spouses, and therefore even if the wife had acquired the full property in it, it has been subsequently so immixed with the property of the husband as to give her no more than a claim after the other creditors—See Goudy on Bankruptcy, pp. 291, 293. This ground is sufficient for the decision of the question raised by the present action, which is one for interdict against the trustee, and as the validity or extent of the wife's claim in the sequestration is a separate and distinct question, it does not appear to me to be desirable to decide it here.”

The pursuer appealed.

Cases cited— Brown v. Brown's Trustee, December 19, 1850, 13 D. 373; Scott v. Scott's Trustee, February 20, 1889, 16 R. 504.

At advising—