Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> M'Murdo's Trustees v. M'Murdo [1897] ScotLR 34_339 (28 January 1897)
URL: http://www.bailii.org/scot/cases/ScotCS/1897/34SLR0339.html
Cite as: [1897] ScotLR 34_339, [1897] SLR 34_339
[New search] [Printable PDF version] [Help]
SCOTTISH_SLR_Court_of_Session
Page: 339↓
Court of Session Inner House Second Division.
v.
Facts:
By antenuptial contract of marriage it was provided that on the death of the wife the marriage-contract trustees should pay the free interest or income of the residue of her estates to her husband “during all the days of his life, for his own use, and for the maintenance and education of the issue, if such there be, of the said intended marriage,” and should hold the fee and capital of such estate for behoof of “the whole children” of the marriage, in such proportions as the spouses or the survivor of them should appoint, and failing such appointment “for behoof of her whole lawful children” and the survivors, share and share alike, “the issue of any of them predeceasing her succeeding to their parent's share.”
The wife died in 1869 without having executed the power of appointment, and survived by her husband and four children. In 1883 the husband executed a deed of appointment whereby he directed the trust-estate to be divided equally among the children. In 1896 the husband and the four children—all of whom were of full age, and three of whom were married and had issue—became desirous of winding-up the trust. The husband having agreed to renounce his liferent, they called on the trustees to divide the estate among the children according to the deed of appointment. The trustees refused to do so without judicial authority, as they had doubts whether the grandchildren
Page: 340↓
of the marriage had not an interest in the estate, and whether the husband's liferent was not alimentary. Held (1) that the term “issue of the marriage” in the clause of the marriage-contract, meant immediate issue of the marriage, that is, children, and that no right was conferred on grandchildren; and (2) that the trustees on receiving a renunciation of his liferent from the husband, and a discharge from the children of the marriage, were bound to divide the funds among the children, according to the deed of appointment.
By antenuptial contract of marriage, dated 30th September and 1st October 1861, between Lieutenant Charles Edward M'Murdo and Miss Madeline Susan Baxter, the latter conveyed to trustees the whole estate, moveable and heritable, then belonging to her, or which should belong to or become vested in her during the subsistence of the marriage. The fifth purpose of the said antenuptial contract of marriage is in the following terms:—“In the event of her predeceasing her said intended husband, they shall pay to him the free interest or income for the time being of the residue of her estates foresaid during all the days of his life, for his own use and for the maintenance and education of the issue (if such there be) of the said intended marriage; and the said trustees shall hold and apply the fee or capital of the residue of the said estates and income arising therefrom after his death, for behoof of the whole children of the said intended marriage, in such proportions and under such conditions as the said Madeline Susan Baxter and Charles Edward M'Murdo may appoint in any writing to be executed by them during their joint lives, or if no such writing be executed by them jointly, then by any writing to be executed by the survivor of them; and failing such writings, for behoof of her whole lawful children and the survivors and survivor of them, share and share alike, the issue of any of them predeceasing her succeeding to their parent's share in equal proportions.”
On 6th April 1869 Miss Madeline Susan Baxter or M'Murdo died leaving estate under the charge of the marriage-contract trustees worth £10,827, 8s. 1d. She was survived by her husband Captain M'Murdo and four children.
Mrs M'Murdo and her husband did not exercise the power of appointment reserved to them by the marriage-contract during the life of the former. On 19th March 1883 Captain M'Murdo executed a deed of appointment, whereby he directed the trust-estate to be divided equally among his said children, the share of any child dying without issue before division to be divided equally among the survivors.
In 1896 Captain M'Murdo and the children of the marriage, who had all attained majority, became desirous to have the trust wound up, and the trust-funds divided among the children in the proportions directed by the deed of appointment, and they accordingly called upon the trustees to do so. Captain M'Murdo agreed to renounce his liferent, and to join in the discharge to be granted to the trustees.
Three of the children of the marriage were married, each of whom had issue. The grandchildren were all in pupilarity.
The trustees although desirous of meeting the wishes of Captain M'Murdo and his children, were of opinion that they were not entitled to divide the trust-estate until the death of Captain M'Murdo.
For the settlement of the point a special case was presented to the Court by (1) the marriage-contract trustees; (2) Captain M'Murdo; (3) the children of the marriage; and (4) the issue of the children of the marriage.
The question of law was—“Whether the first parties are bound, on receiving a renunciation from the second party of his liferent and a discharge by the third parties, to wind-up the trust-estate under their charge, and divide the funds in their hands among the said third parties in the proportions specified in the said deed of appointment?”
Argued for the first and fourth parties—(1) In terms of the marriage-contract the income was to be used, inter alia, for the maintenance and education of the “issue” of the marriage. “Issue” had been held to include grandchildren— Macdonald v. Hall, July 24, 1893, 20 R. (H.L.) 88. Besides, the word “issue” occurred twice in the clause. On the second occasion it referred to the grandchildren of the marriage, and it could not be held to have a restricted meaning on the first occasion. The fourth parties had thus a right which could not be defeated by any agreement between the second and third parties. (2) The income was for the use of the second party “during all the days of his life,” and was therefore of the nature of an alimentary provision. The trustees must therefore retain the trust-estate till the death of Captain M'Murdo— Muirhead v. Muirhead, May 12, 1890, 17 R. (H.L.) 45.
Argued for the second and third parties—(1) If the clause of the marriage-contract was read as a whole, it was plain that the first word “issue” meant the children of the marriage, and that there was conditional institution of grandchildren only in the case of children predeceasing the mother and leaving issue. (3) The liferent to the second party was not alimentary, and the second party was entitled to renounce it if he chose. He having done so, and the children of the marriage being of full age, they were entitled to unite in demanding the estate from the trustees, and to give them a valid discharge— Pretty v. Newbigging, March 2, 1854, 16 D. 667; Lord Watson in Muirhead, supra, 17 R. (H.L.) 48.
At advising—
Lord Justice-Clerk—The late Miss M'Murdo by antenuptial contract disponed her estate, present and prospective, to trustees, and appointed that in the event of her predeceasing her husband they were to pay
Page: 341↓
Mrs M'Murdo is now dead, being survived by her husband and all her children, and her husband has executed a deed of appointment by which the estate is to be divided equally among the children, the share of any child dying without issue before division to be divided equally among the survivors.
The question now before the Court is, whether the trustees may now divide the fund among the children of the marriage. All the children are major, and desire that this should be done, and the father, who is also desirous to the same effect, has agreed to renounce all rights he may have to the liferent or income settled upon him.
When the purposes of the trust are looked at, it is seen that there is here provision for the support of the other spouse and the upbringing of the family. There is no express declaration of an alimentary character attaching to the provision, and there is nothing from which such an intention is to be implied. The purpose is stated as one “for his own use and for the maintenance and education of the issue.” This latter part of the purpose has been fulfilled so far as upbringing and education are concerned, as the family are all grown up. There therefore remains only as regards the purposes that which applied to the payment of interest to the survivor of the spouses. There is really no question as regards issue of children, for there is in the deed no destination-over. It is only the issue of any child “predeceasing her” that is to take the parent's share, and she was survived by all her children.
In this case the children of the marriage have a right of fee, and it is only the father's right to a liferent interest which stands in the way of their shares being made over to them. I think that he can discharge his claim, and that if he does so the trustees are entitled to wind up the trust and to hand over their shares to the beneficiaries.
I think it proper to add that in my opinion the raising of questions as to whether a liferent or annuity is alimentary or not ought to be avoided, as they easily might, by conveyancers bringing the matter under the notice of the granter of such deeds and seeing that the words of the deed clearly express the granter's intention.
Mrs M'Murdo having died, the only persons interested in the estate in question are Mr M'Murdo, who has right to the liferent, and the children of the marriage, who take the fee subject to their father's right of appointment. The children are all of full age and their rights are vested. In these circumstances Mr M'Murdo offers to renounce and discharge his liferent in order that his children may at once receive their shares of the estate as he has apportioned them; but the question has been raised whether Mr M'Murdo can validly discharge his liferent. I am of opinion that he can, and the case of Pretty v. Newbigging, 16 D. 667, seems a direct authority in favour of that view. I may also refer to the opinion of Lord Watson in the case of Muirhead, 17 R. (H.L.) 48, as applicable to the present case, where the constitution and continuance of the trust have apparently no other purpose or object (and none other was suggested at the bar) than the protection and security of the liferent right which Mr M'Murdo is ready to discharge.
I think, therefore, that the question put to us should be answered in the affirmative.
The Court answered the question in the affirmative.
Page: 342↓
Counsel for the First and Fourth Parties— Burnet. Counsel for the Second and Third Parties— Guthrie. Agents— Murray, Beith, & Murray, W.S.