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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Strachey's Trustees v. Johnstone's Trustees [1895] ScotLR 32_305 (22 February 1895)
URL: http://www.bailii.org/scot/cases/ScotCS/1895/32SLR0305.html
Cite as: [1895] ScotLR 32_305, [1895] SLR 32_305
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SCOTTISH_SLR_Court_of_Session
Page: 305↓
Court of Session Outer House Second Division.
Lord Kyllachy, Ordinary.
v.
Facts:
A testator by his trust-disposition and settlement directed his trustees to pay to Mrs S, to whom he stood in loco parentis, out of funds invested in his business, a legacy of £4000, with interest at the rate of 5 per cent. if she allowed the money to remain in the business.
In An Indenture of Settlement Made Three Years Previously In Contemplation
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of the marriage of Mrs S, the testator had bound his executors, within six months after his death, to pay to the trustees named in the indenture a sum of £4000, with interest at the rate of 4 per cent. from the date of his death, in trust for behoof of Mrs S, and her husband if he survived her, in liferent, and the children of the marriage in fee. Failing children the sum was to revert to the granter's estate. The deed further declared that, if Mrs S should during the marriage become entitled to any property of the value of £200, such property should be conveyed to the trustees under the indenture for purposes therein set forth. Held that the legacy was not given by the testator in satisfaction of the provision which he had made in the indenture of settlement, but that the trustees under that deed were entitled to payment of both the provision and the legacy.
By indenture of settlement dated January 20, 1874, made in contemplation of the marriage (shortly after solemnised) between John Wombwell Strachey and Jane Ellen Cooper, John Johnstone of Halleaths covenanted with the trustees named in the settlement that his executors should within six months after his death, pay to the said trustees the sum of £4000, with interest at the rate of 4 per cent. per annum from his death, to be held by them upon the trusts declared in the deed, these being that the trustees should pay the income of the said sum to Mrs Strachey during her life for her sole and separate use, and, in the event of Mr Strachey surviving her, to him during his life, and after the death of the survivor should hold the said sum in trust for the children of the marriage, who being sons should attain the age of twenty-one years, or being daughters should attain that age or marry. In the event of there being no child of the marriage, who being a son should attain twenty-one years, or being a daughter attain that age or be married, the said sum was to revert to the estate of Mr Johnstone. It was further declared that, if Mrs Strachey should become entitled during the coverture to any property of the value of £200, then such property should be conveyed to the trustees to be held by them in trust for behoof of Mrs Strachey and her husband, if he survived her, in liferent, and the children of the marriage in fee, who being sons should attain majority, or being daughters should attain that age or marry; and that in default of children the trustees should stand possessed of such property in trust as Mrs Strachey should appoint, and in default of such appointment upon the trust following, viz., if Mrs Strachey should survive her husband, in trust for her, but if Mr Strachey should survive his wife, then in trust for such persons as under the statutes for the distribution of the estates of intestates would have become entitled to such property at the death of Mrs Strachey, if she had died possessed thereof intestate and without having been married.
Upon February 27, 1877, Mr Johnstone of Halleaths executed a trust-disposition and settlement whereby he assigned his whole heritable and moveable estate to trustees for, inter alia, the following purposes:— First, payment of debts, expenses, and legacies; Third, the trustees were directed to convey the testator's whole heritable estate in Scotland to his eldest son Andrew and a certain succession of heirs, “but subject always and under burden of the debts secured thereon and of such parts of the legacies of £500 and £4000 and annuities of £400 and £300 mentioned in the fifth purpose hereof as my shares in the East India indigo concern or my personal estate may not be sufficient to meet;” Fifth, the testator directed that his shares and interest in the East India indigo concern carried on under the name of Robert Watson & Co. should stand in the name of his son Andrew, for the purpose of paying one fourth to his son Charles, and another fourth to be divided equally among his three daughters. The remaining two-fourths were to be sold, and the proceeds applied in paying the following legacies, viz., “£500 to my said wife at the time of my death; an annuity of £400 to her during her life; an annuity of £300 to Mrs Louisa Popham, residing in London—said annuities to be paid half-yearly at Whitsunday and Martinmas, and to commence at the first of these terms after my death for the half-year following, and a legacy of £4000 to Jane Helen Strachey, residing at Bognor, who shall be allowed interest at 5 per cent. on that sum so long as she shall prefer to allow it to remain as part of the share in the indigo concern;” lastly, the trustees were directed to pay the residue of the estate to the testator's son, Andrew, and his heirs. Mr Johnstone of Halleaths died on 20th December 1884.
Upon 20th June 1885 the trustees under his trust-disposition and settlement paid the sum of £4000, with interest at the rate of 4 per cent. from the date of his death, to the trustees under Mrs Strachey's marriage-settlement. Mrs Strachey died on 28th December 1889.
Upon May 3rd 1894 the trustees under Mrs Strachey's marriage-settlement raised an action against the trustees under Mr Johnstone's trust - disposition and settlement for payment of £4000, as the amount of the legacy bequeathed by Mr Johnstone to Mrs Strachey in his trust - disposition and settlement, with interest at 5 per cent. from the date of his death.
The defenders averred—“Mrs Strachey had come from India at the age of three, and Mr Johnstone took upon himself her entire maintenance and education, and provided her with a home until her marriage.”
They pleaded—“(3) The presumption of law being that the legacy of £4000 was intended by the testator to be in satisfaction of the obligation in Mrs Strachey's marriage - contract, and there being no circumstances sufficient to rebut this presumption, the defenders are entitled to be assoilzied. (4) The intention of the testator being that the legacy of £4000
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should be in satisfaction of the obligation in the marriage-contract, the defenders are entitled te be assoilzied.” Upon December 22nd 1894 the Lord Ordinary ( Kyllachy) sustained the defences and assoilzied the defenders from the conclusions of the action.
“ Opinion.—In this case of Mr and Mrs Strachey's marriage trustees against Mr Johnstone's trustees I have come to the conclusion that the bequest of Mr Johnstone of £4000 to Mrs Strachey must be held as in satisfaction of the obligation which he (Mr Johnstone) undertook in Mrs Strachey's marriage —contract. I think that the two provisions are substantially identical — they are identical in amount, they are identical as regards the term of payment, viz., Mr Johnstone's death. And although the bequest is in favour of Mrs Strachey, while the obligation was in favour of her marriage-contract trustees, I think it is quite apparent, on the examination of the deeds, that the bequest operated as a bequest to the trustees, and placed the fund in the trustees' hands for the purposes of the trust quite as effectually as if the bequest had been to the trustees direct.
“I am therefore of opinion that the trustees are entitled to my judgment, and I presume the judgment should take the form of absolvitor from the conclusions of the summons. I should perhaps add that I have not thought it necessary to inquire into the matter of Mr Johnstone's relationship to Mrs Strachey. It is stated, and it is not denied, that she had been brought up as a member of his family, and, supposing the fact to be essential, it, I think, sufficiently appears that he had assumed the responsibilities of a parent, and became a party to the marriage-contract as one who stood to the lady in loco parentis.”
The pursuers reclaimed, and argued — This was a question of the intention of the testator, and viewed as such it was plain from the terms of the two deeds in question that he intended Mrs Strachey to have not only the provision in the marriage-contract, but also the legacy given by his settlement. It must be held that what was given by a father to his daughter by marriage-contract provision was a debt due by him and to be paid as such, and what he gave afterwards was from his good will— Grant v. Anderson, November 19, 1840, 3 D. 89. Although the truster here was not Mrs Strachey's father, he stood to her in loco parentis, and the same rule applied. It was true that in that case the maxim debitor non prcesumitur donare was held to apply, but that maxim was easily overcome in the case of a mortis causa settlement, unless it were shown that either expressly or by necessary implication the granter intended the one sum to be in satisfaction of the other. In this case the destination of the two funds was quite distinct. In the case of the marriage-contract provision, if there were no children of the marriage, the money was to revert to Mr Johnstone's estate on the death of the liferenter, while in the settlement the legacy was given to Mrs Strachey personally. It is true that it went to her marriage-contract trustees under the clause in the contract, but that did not prevent it being a gift to her, because the trustees were different from those under the settlement, and the destination was different. In the case of the legacy also, the interest allowed was 5 per cent. while the sum given remained in the East India Indigo concern, but in the marriage-contract provision the interest allowed was only 4 per cent— Keith Johnstone's Trustees v. Johnstone and Others, November 3, 1894, 32 S.L.R. 24; Kippen's Trustees v. Kippen, July 3, 1856, 18 D. 1137, affirmed Kippen v. Darly, May 21, 1858, 3 Macq. 203; Elliot v. Bowhill, June 21, 1873, 11 Macph. 735.
Argued for the defenders — It was admitted that this was a question of the truster's intention. Although it was admitted that there was no presumption against double provision in Scotland generally, still the case of Kippen (cited supra) was an authority that, where a father made a prior provision for his child by a bond, a subsequent provision would be deemed a satisfaction of the debt— Smith v. Common Agent, &c., June 29, 1841, 3 D. 1109. It was to be noted that the marriage-contract was an English deed, and the trust-disposition and settlement a Scottish deed, and it might be presumed that in giving directions for the latter Mr Johnstone had not fully in his mind all the trusts expressed in the former deed. It was true that there were variations in the destinations and the amount of interest allowed upon the two sums, but it would require much greater variations before a Court could judicially come to the conclusion that the latter sum was not meant to be given in satisfaction of the former— Chichester v. Coventry, May 14, 1867, L.R. (H. of L.) 71; M'Laren on Wills, &c. 746.
At advising—
Now, this is so or not, that is, the legacy has been paid or satisfied or not, according to the view we take of whether or not the legacy is in fact only a direction by the truster to the trustees under his will to pay certain provisions under Mrs Strachey's marriage-contract, under which marriage-contract the pursuers are the trustees, or is a sum given to Mrs Strachey over and above the provision in the marriage-contract.
By that marriage-contract Mr Johnstone
Page: 308↓
Now, looking at the provisions of the marriage-contract, it appears that the trustees were to hold this sum of £4000 for behoof of the husband and wife and the survivor in liferent, and the children in fee. The language of the deed is rather involved, but that is the effect of the provisions, but there is also a provision that if children of the marriage failed, then the trustees were to hold it for behoof of John Johnstone himself, i.e., it was to revert to his estate.
There is no such provision attached to the legacy to Mrs Strachey; it was not to revert to John Johnstone's estate. But it is said with reference to the marriage-contract that Mrs Strachey was bound, with respect to any property to which she might acquire right above the value of £200 during the subsistence of the marriage, to make a conveyance of such property to the marriage-contract trustees, to be held, as provided in reference to the sum of £4000, for the survivor of the spouses in life—rent and for the children in fee. Now, it is said that the right to this legacy was conveyed to the trustees under the marriage-contract; it was not so in fact; but there is no doubt about Mrs Strachey's obligation to pay any sum received during her marriage to her marriage-contract trustees, and no doubt about their right to recover any such sum, and we must deal with the case on the footing that this legacy of £4000 had been properly assigned to them and that they are now suing for it to be held by them for the purposes stated in the trust-deeds applicable thereto.
I need not point out that this is a different trust from that constituted by the marriage-contract provision, and it would seem to follow that a payment in satisfaction of the one trust purpose is not necessarily in satisfaction of the other. The one payment has been made in satisfaction of the marriage-contract provision, but this action is brought by the trustees to recover the legacy, as trustees no doubt, but under a different trust. I therefore cannot concur in the view of the Lord Ordinary that this legacy is in sense and substance indistinguishable from the marriage-contract provision, and that payment in satisfaction of the one is satisfaction of the other.
My view therefore is that the testator's trustees paid the marriage-contract provision as a debt due by the testator which they were bound to pay, and that the legacy is a distinct and separate provision. I think, therefore, we must recal the Lord Ordinary's interlocutor and give decree in favour of the pursuers.
The Court recalled the Lord Ordinary's interlocutor, and gave decree for the sum claimed, with interest at the rate of 4 per cent. per annum from 20th December 1884.
Counsel for the Pursuers— Guthrie— Sym — Chree. Agents— J. & J. Ross, W.8.
Counsel for the Defenders— H. Johnston — C. K. Mackenzie. Agents— J. C. & A. Stewart, W.S.