Scottish Court of Session Decisions

By antenuptial contract of marriage dated 12th November 1868, entered into between John Maxwell Heron (therein named John Heron Maxwell), of the first part, and Margaret Stancomb, second daughter of William Stancomb of Fairleigh Castle, near Bath, in the county of Somerset, of the second part, the said John Maxwell Heron, as heir-apparent of the entailed estate of Heron, and Michael Maxwell Heron, as heir of entail in possession of said entailed estates, for their respective interests, in contemplation of the said John Maxwell Heron's marriage to the said Margaret Stancomb, and of certain provisions by a deed in English form referred to in the said antenuptial contract of marriage, and in exercise of the powers in regard to provisions to children contained in the deed of entail of the said estates, as well as those granted by the Entail Amendment Act 1868 (31 and 32 Vict. cap. 84), bound and obliged themselves, and the whole heirs of entail succeeding to them in the said entailed estate, “to make payment of the provisions following to the child or children to be procreated of the said marriage who shall be alive at the death of the said John Heron Maxwell and shall not succeed to the said entailed estate; and to the representatives of those children who shall predecease the said John Heron Maxwell, claiming right in virtue of special settlement by marriage-contract the following provisions, bearing interest in terms of the statute, and payable one year after the death of the said John Heron Maxwell, videlicet, if one such child, the sum of £4000, if two such children, the sum of £5000, and if three or more such children, the sum of £6000, or such other sum less as shall not exceed three years' free rents of the said entailed estate of Heron at the time of the death of the said John Heron Maxwell, after deducting all public burdens, interest of debts, and the yearly amount of other burdens of what nature soever affecting or burdening the said lands and estate, or the yearly rents or proceeds thereof, and diminishing the clear yearly rent or yearly value thereof to the heir of entail in possession.”

Three children were procreated of the marriage, viz., Violet Bridget Maxwell Heron, born 15th May 1870; Guy Maxwell Heron, born 8th June 1871, who was the heir entitled to succeed to the entailed estate of Heron after his father; and Basil Montague Maxwell Heron, born 18th June 1878.

Michael Maxwell Heron died on or about 4th April 1877, and was succeeded in the estates by John Maxwell Heron, who on 6th March 1883 presented a petition to the Court of Session for their disentail. In the course of the procedure therein a curator was appointed to Violet Bridget Maxwell Heron and Basil Montague Maxwell Heron, and a bond and disposition in security, dated 30th October 1883 and recorded 14th April 1884, was granted by John Maxwell Heron in favour of Frederick William Burgoyne Heron Maxwell, James Howden, and Thomas Roworth Parr, being the parties at whose instance it was provided by the said contract of marriage that execution should pass for implement of the provisions therein conceived in favour of the issue of the marriage. By the said

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bond and disposition in security, which proceeds on the narrative of the said contract of marriage, of the disentail proceedings, and that it was right and proper that he, John Maxwell Heron, should grant the same in order to secure the provisions to the said younger children contained in the said contract of marriage, John Maxwell Heron bound and obliged himself, and his heirs, executors, and representatives, to make payment to the said parties as trustees, at the first term of Whitsunday or Martinmas which should happen twelve months after his death, of the sum of £6000, with interest thereon at the rate of 5 per cent. from the date of his death to the term of payment, and half-yearly, termly, and proportionally thereafter during the not-payment; but it was declared that notwithstanding the obligation therein contained that if at the date of his death there should be only two children surviving of the said marriage who would not have succeeded to the said estates, or the lawful issue of two such children, or the representatives of two such children, claiming right in virtue of special settlement by marriage-contract, the obligation therein contained should be and the same was thereby restricted to the sum of £5000; if there should be only one such child or issue or representative as before mentioned, the obligation should be and the same was thereby restricted to the sum of £4000; and if he should not be survived by any child or issue or representative as before mentioned, the provision should lapse. By the bond and disposition in security it was further declared that the same was granted to the trustees, and should be accepted by them “in trust for payment to the children of the said marriage surviving me” (John Maxwell Heron) “who would not have succeeded under said … deed of entail to the said entailed lands and estate, or in the case of such of them as shall predecease me, their lawful issue or representatives claiming right in virtue of special settlement by marriage-contract of the sums to be received by them in such proportions if more than one as I shall appoint by any writing under my hand at any time of my life, and failing such appointment the same shall be divided amongst them equally.”

The estates of John Maxwell Heron were sequestrated on 11th July 1887, and the estates over which the bond and disposition in security extended—then held in fee-simple—were sold by the trustee in the sequestration. At that time the rights of Violet Bridget Maxwell Heron and Basil Montague Heron under the bond were valued by the trustee in the sequestration, in terms of the Bankruptcy Acts, at £2510, 11s., after taking into account all the contingencies mentioned in the marriage-contract. This valuation was concurred in by the trustees under the bond and disposition in security, and in the ranking and division of the claims of the heritable estates, the trustees, for behoof of the said two younger children, were ranked and preferred by the Court for the above sum, and the same was paid over to and was at this date held by the trustees for them.

Questions having arisen as to whether the children were entitled to payment of the sum with interest thereon now, or whether the trustees were bound to retain said principal sum until the first term of Whitsunday or Martinmas which should happen one year after John Maxwell Heron's death, and meanwhile either to accumulate the interest thereon or to pay or apply the same to or for behoof of said younger children, the present case was submitted for the opinion and judgment of the Court. When the case was presented John Maxwell Heron was 55 years of age.

The first parties to the case were the trustees under the bond and disposition in security. The second parties were Violet Bridget Maxwell Heron and Basil Montague Maxwell Heron, and John Maxwell Heron as curator-at-law to the latter, who was still in minority. The third parties were Guy Maxwell Heron and George Dunlop, his curator bonis.

The first parties maintained that the sum in question was the value, ascertained at the time of ranking, of a sum which was not due to the second parties until one year after the death of the said John Maxwell Heron, and that it should remain in their hands as trustees with accumulation of interest until that date.

The second parties, on the other hand, contended that the said sum being the present value of a contingent claim ascertained in terms of the Bankruptcy Statutes, was now payable to them, and required that the sum should now be paid to them. In any case, they contended that the interest on the principal sum should be at present paid over to them.

The third parties concurred with the first parties in maintaining that the sum in question was not due to the second parties until one year after the death of the said John Maxwell Heron, and that it should therefore remain in the hands of the first parties as trustees foresaid with accumulation of interest until that date.

The questions at law were—“(1) Are the second parties now entitled to payment, and are the first parties bound on demand to pay said sum of £2510, 11s., with the interest accrued? or (2) Are the first parties bound to retain the said principal sum until the first term of Whitsunday or Martinmas which shall happen one year after the said John Maxwell Heron's death? and (3) In the event of question 2 being answered in the affirmative, are the first parties bound to accumulate the interest of the principal sum with principal; or are they entitled meanwhile to pay or apply said interest to or for behoof of the second parties?”

Argued for first and third parties—The trustees were bound to retain the sum till after John Maxwell Heron's death, or at least until his son Basil attained majority. The bankruptcy of John Maxwell Heron, although it had reduced the amount of the provision, had no effect on the date at which it was to be paid.

Argued for the second parties—The bond

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and disposition in security only created a simple trust; on payment being made to the trustees at the father's death they were immediately to pay it over to the children who survived the father, and no provision was made for the trustees retaining the money in their own hands. The bankruptcy of the father brought about the same result as if he had died. The Bankruptcy Act 1856 (19 and 20 Vict. c. 79), sec. 53, contemplates the valuation and out-and-out payment of a contingent claim. The payment had been made here for a contingent claim, and the second parties were entitled to have the money handed over to them immediately.

At advising—