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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Smith and Others (Dawson's Trustees) v. Dawson [1896] ScotLR 33_749 (9 July 1896)
URL: http://www.bailii.org/scot/cases/ScotCS/1896/33SLR0749.html
Cite as: [1896] SLR 33_749, [1896] ScotLR 33_749
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SCOTTISH_SLR_Court_of_Session
Page: 749↓
Court of Session Inner House First Division.
v.
Facts:
A deed of acknowledgment of a loan was in the following terms:—“Received from” D “the sum of five thousand pounds sterling (£5000) as a deposit for mission purposes, to bear interest at the rate of 4 per cent. per annum, payable half-yearly at Whitsunday and Martinmas, and to be repaid on three months' notice.”
Held (1) that the sum of £5000 contained in the above acknowledgment was heritable as regards the widow's jus relictæ, but moveable, in virtue of the Act 1661, c. 32, as regards legitim; and (2) that in fixing legitim the said sum fell to be divided into two equal parts.
Observations (by Lord Kinnear) as to the circumstances in which a widow who has made an election between her legal and testamentary provisions is entitled to rescind that election.
Mr Michael Dawson, 12 Millar Street, Glasgow, died on 20th February 1895, and was survived by his widow Mrs Cannon or Dawson, and two daughters Mrs Wallace and Miss Catherine Dawson. He left a trust-disposition and settlement by which he directed his trustees to pay an alimentary annuity to his wife and to his eldest daughter, the said Mrs Wallace, and to hold the residue of the estate in liferent for his younger daughter the said Miss Catherine Dawson, and in fee to her children, whom failing to the Archbishop and Chapter of the Roman Catholic Diocese of the Western District of Scotland. The net value of Mr Dawson's estate was £5990, and £5000 of it was deposited with the Roman Catholic Archdiocese of Glasgow upon the terms contained in the following deed of acknowledgment:—“ Archdiocese of Glasgow— Glasgow, 23 rd February 1892.—Received from Mr Michael Dawson of 47 King Street, Glasgow, the sum of Five thousand pounds sterling (£5000) as a deposit for mission purposes, to bear interest at the rate of 4 per cent. per annum, payable half-yearly at Whitsunday and Martinmas, and to be repaid on three months' notice.” The document was subscribed across a penny stamp by the Archbishop and the Diocesan Treasurer, and was indorsed as follows:—“The sum acknowledged on the other side has been allocated as follows to the undernoted missions on loan, but Mr Dawson is to receive his interest half-yearly direct
Page: 750↓
from the Diocesan Treasurer, who is also to repay him the capital when required on three months' notice. John A. Maguire,
Diocesan Treasurer.
St Alphonsus, Glasgow
£1000
Shieldmuir
1000
Uddingston
1500
Whifflet
1000
Longriggend
500
£5000”
After the death of the testator the agents for the trustees, who were appointed by the trust-disposition, sent a copy of the above deed to the agents for Mrs Dawson and Mrs Wallace, who wrote repudiating the provisions under the settlement, and claimed their legal rights in the testator's estate. The agents for the said trustees in acknowledging this intimation pointed out that in their opinion the said £5000 was such an investment as fell under the provisions of the Act 1661, c. 32, and that therefore the widow had no legal rights in it. The agents for Mrs Dawson and Mrs Wallace thereupon withdrew their said intimation until the point had been considered, and the trustees in the circumstances consented to this being done. The agents for Mrs Dawson and Mrs Wallace took the opinion of counsel in the matter, and after consideration they on 5th August 1895 intimated that Mrs Wallace claimed her legal rights in her father's estate, and on 4th September 1895 they wrote in regard to the widow's claim a letter in the following terms:—“We have yours of yesterday, and we beg to intimate that Mrs Dawson will accept the provisions in her husband's settlement.” She, in accordance with this intimation, accepted payment of her provisions under said settlement so far as due.
A special case was presented for the decision of the Court by (first) the trustees, (second), Mrs Dawson, (third) Mrs Wallace, and (fourth) Miss Dawson.
The second party contended that she was entitled to recal her election and claim her legal rights in the event of the Court holding that the said sum of £5000 was moveable quoad succession.
The first and fourth parties maintained that the second party was bound by her election, and must now accept the provisions of her husband's settlement.
The questions for the consideration of the Court were—“(1) Whether the second party is entitled, on repaying to the First party the amounts received by her from them, with interest at 5 per cent. per annum from the respective dates of payment, to claim her legal rights, or whether she is barred from claiming said rights. (2) Whether the said sum of £5000 is moveable as regards succession in a question between the first and second parties, and whether the second party is entitled to claim one-third thereof as jus relictæ. (3) Whether in fixing the legitim fund the division of said sum of £5000 is bipartite or tripartite?”
Argued for fourth parties—(1) There was no ground for allowing the widow to go back on her election, She had been put upon her guard by the agents of the trustees, and had advisedly made her choice. There had been no misrepresentation inducing error on her part, and there was no suggestion of fraud. Her exercise of the power was a sort of quasi-contract from which she could not now resile— Inglis' Trustees v. Inglis, May 31st 1887, 14 R. 740. In the case of Macfadyen ( infra) there had never really been election, and so it was not in point. (2) This was clearly a contract for a sum of money containing a liability to pay interest, and accordingly even without the endorsation it fell under the Act—Stair, iii. 4, 24.
Argued for third party—The £5000 fell to be divided on the basis that the widow had no legal rights in it. The case of Downie v. Christie, July 14, 1886, 4 Macph. 1067, raised exactly the present point, and showed that the criterion was whether the document bore a clause of interest.
Argued for second party—(1) She had done nothing to bar her from recalling her choice. Nobody had been prejudiced, nor would be if she were allowed to reconsider it. That was the criterion by which the Court decided questions such as these— Macfadyen v. Macfadyen's Trustees, Dec 2, 1882, 10 R. 285. There was no authority for the proposition that election was to be treated as a contract, and the trustees were not entitled to hurry the widow into making her election, but must make themselves acquainted with her legal rights and duly put them before her— Ross v. Masson, Feb. 3, 1843, 5 D. 483, at 488. (2) This document did not fall under the 1661 Act. Prior to that Act the sum in it would not have been treated as heritable, and that Act was not intended to make anything heritable which was not so before. The document was substantially the same as a deposit-receipt, the only difference being that the interest on the latter fluctuated according to the bank rate, Nor were there any of the formalities as to repayment to be found in the documents affected by the statute. In the case of Downie the obligation was in the form of a mortgage, and there was no question that the document was a bond.
At advising—
Page: 751↓
The second question is whether the sum of £5000 is moveable as regards succession in a question between the first and second parties—that is, between the testamentary trustees and the widow—and whether the second party, the widow, is entitled to claim one-third thereof as jus relictæ. That depends upon whether the fund in question is heritable or moveable, according to the law as it stood before the passing of the rescinded Act of 1641. At that date personal bonds with a clause of interest were supposed to constitute feuda pecuniæ and were heritable quoad succession. The law was changed, first by the rescinded Act, and afterwards by the Act of 1661, cap. 32, which is now in force, and by which contracts and obligations for sums of money with clauses of interest are made moveable as to ordinary succession, but under this declaration, that “all such bonds, quoad fiscum, shall remain in the same condition as they were before the 16th of November 1641, nor shall any part thereof pertain to the relict jure relictæ nor to the husband jure mariti.” The question, therefore, is whether the document set forth in the 8th article of the case is a contract or obligation for money which before 1641 must have been held as heritable. Now, it acknowledges receipt of a sum of £5000, to bear interest at the rate of 4 per cent., and to be repaid on three months' notice. It has been determined by many decisions, and it is laid down as settled law by the institutional writers, that it is the payment of interest which fixes the heritable character of a personal bond. The case of Downie v. Christie is directly in point except in this one respect, that in that case the loan was for a period of time and to bear interest periodically before the arrival of a fixed term of payment, whereas in the present case there is no fixed term of repayment, but the money is repayable on three months' notice. But that distinction makes no difference, because the old law was that where the term of payment of a bond was at a distant or uncertain date the bond was accounted heritable after the first term for payment of the interest, because the distance or the uncertainty of the term for payment of the principal afforded evidence that the creditor intended from the beginning to employ his money for a term of years together at interest. Whatever may be thought of the reason of this rule according to the now established principles of law, the rule itself was fixed. These, like other personal bonds, are now moveable by statute; but the rights of the fisk and of widows are excluded from the operation of the Act. It follows that the second party has no more right to participate in the sum of £5000 in question than if it were still heritable to all intents and purposes; and that she was rightly advised if she made her election upon that assumption.
In these circumstances I presume that she has no interest to claim jus relictæ in place of the testamentary provisions in her favour. But I know of no authority for holding that any express election which has been partly carried into effect can be recalled at pleasure if it has not been made in ignorance or error, but in full knowledge of the existence and value of the abandoned right in comparison with that which has been accepted. Therefore if we were to answer the first question I am unable to find in the statement of the case any state of facts which would enable us to decide it in the affirmative. In the view I take, however, of the question raised by the second query it would appear to me that the parties have no interest in the decision of the first, and therefore it is unnecessary to answer it,
The third question is whether, in fixing the legitim fund, “the division of the said sum of £5000 is bipartite or tripartite.” As to that I entertain no doubt. The money is moveable as regards succession for all purposes except the fisk and the jus relictæ.
It follows that the executor and the children claiming legitim are entitled to share, and as no one else has a right to participate, the division must be an equal division between those two parties. The law is clearly stated by Mr Erskine—“Personal bonds due to the husband, because by the Act 1661 they are moveable in respect of succession and heritable as to the widow, must therefore increase the legitim and the dead's part but not the jus relictæ.” I am not aware that the law so laid down has ever been called in question, and I am therefore of opinion that we should answer the third question, that the division must be into two and not into three parts.
Page: 752↓
I agree that the questions should be answered in the way that has been suggested by Lord Kinnear.
The Lord President concurred.
The Court found it unnecessary to answer the first question, answered the second question in the negative, and affirmed the first alternative of the third question.
Counsel for the First and Fourth Parties— Dickson— Deas. Agents— Morton, Smart, & Macdonald, W.S.
Counsel for the Second Party— Shaw— Lyon Mackenzie. Agent— Andrew Urquhart, S.S.C.
Counsel for the Third Party— Abel. Agent— J. A. Cairns, S.S.C.