Scottish Court of Session Decisions

The Married Women's Property (Scotland) Act 1881 (44 and 45 Vict. cap. 21), sec. 1, provides:—“(3) Except as hereinafter provided, the wife's moveable estate shall not be subject to arrestment or other diligence of the law for the husband's debts, provided that the said estate (except corporeal moveables as are usually possessed without a written or documentary title) is invested, placed, or secured in the name of the wife herself, or in such terms as shall clearly distinguish the same from the estate of the husband. (4) Any money or other estate of the wife lent or entrusted to the husband or inmixed 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 claim of the other creditors of the husband for valuable consideration in money or money's worth have been satisfied.”

Mrs Betsy Laurie or Cowan was married to John Cowan, sometime cashier and bookkeeper, Calder Iron Works, Coatbridge, on 1st August 1887. At the date of her marriage she had £70 invested in a deposit-receipt in her own name in the National Bank of Scotland in their branch at Fauldhouse, where it so remained until February 20, 1888. It was then drawn and re-lodged by Mrs Cowan in the Coatbridge branch of the bank in the joint names of herself and her husband. This sum was several times drawn and re-deposited during the marriage along with other moneys given to Mrs Cowan by her husband, until on 25th October 1891 the amount was £450, 10s. in two deposit-receipts of £305, 10s. and £145 respectively, in these terms—“Received from John and Betsy Cowan, Calder, Coatbridge, payable to either or survivor,” &c.

On 25th November 1891 William Dixon, Limited, iron and coal masters, Glasgow, raised an action in the Sheriff Court at Airdrie against John Cowan for payment of £1000, and arrested in the hands of the bank all sums of money belonging to Cowan.

Cowan's estates were sequestrated on 11th October 1892, and David W. Kidston, C.A., Glasgow, was appointed trustee. Mrs Cowan and Mr Kidston both claimed payment of the amount in the deposit-receipts, and the bank raised a multiple-poinding calling all parties.

The trustee claimed that the whole amount was part of the sequestrated estate of Cowan.

Mrs Cowan admitted that the sums given to her by the husband and lodged on deposit-receipts passed to the trustee in the sequestration, but that the £70 deposited by her before marriage should be repaid with interest.

She averred—“Said deposit-receipts were taken in her husband's name as well as her own, animo donandi. If the terms of the said receipts import a gift of the said sum of £70 to her said husband, the claimant was entitled to recall, and accordingly had recalled, the same as a donation inter virum et uxorem. In any event, said sum of £70 being part of the claimant's separate estate, and not having been inmixed with her husband's estate, has not been attached by said arrestments or sequestration.”

And pleaded—“(1) The said sum of £70 being part of the claimant's separate estate, she ought to be found entitled to payment thereof, and to be ranked and preferred in terms of her claim. (2) Esto that the terms of the said receipts import a gift of the said sum of £70 to the said John Cowan, the said gift having been recalled, the said sum is not affected by the arrestment used by William Dixon, Limited, or by her husband's sequestration.”

Upon 31st May 1893 the Lord Ordinary sustained the claim for the trustee in the sequestration.

Mr and Mrs Cowan reclaimed, and argued—They only desired a proof that the £70 still belonged to Mrs Cowan, and could be traced through the deposit-receipts. She admitted that any sums given her by her husband must fall under the sequestration. This sum of £70 was in fact a donation by her to her husband, and as the sequestration operated as a revocation of all donations by her husband to her it also recalled her donation to him— Lord Advocate v. Galloway, February 8, 1884, 11 R. 541; Gibson v. Hutchison, July 5, 1872, 10 Macph. 923. It was true that the £70 was put into deposit-receipts along with the husband's money, but the receipts remained in the hands of the wife and under her control; that was all that was necessary— Clark v. Clark, May 25, 1881, 8 R. 723.

The respondent argued—This sum of £70 had been invested along with the husband's money in the name of the spouses or of the survivor; on his bankruptcy the whole was therefore the property of the husband, and passed to the trustee in bankruptcy. The sum could not be divided up, but must be taken as a whole. Even the averment of donation to the husband, afterwards recalled, would not entitle her to a proof, because the only way in which a wife could prevent her private estate falling under her husband's bankruptcy was by keeping it quite separate. The wife had not done that in this case, and therefore she could not claim any exemption of the ordinary law or of the statute— Anderson v. Anderson's Trustee, March 18, 1892, 19 R. 684.

At advising—