Scottish Court of Session Decisions

Page: 98↓

Mr Alexander Stuart, builder, Peterhead, died in August 1887 leaving a trust-disposition and settlement, in which he directed his trustees to pay the income of his whole estate to his wife. By the fourth purpose he provided—“Fourthly, on the death of my said wife, and on the expiry of her said liferent, I hereby direct and appoint my trustees to hold and apply my said whole means and estates, heritable and moveable, and the prices and produce thereof, as follows, viz., In the first place, I direct and appoint my trustees to hold and apply the following bequests and legacies to and for behoof of the persons after named or referred to, being relations of my said wife … (Third) To each of the lawful children of my said wife's brother, the late David Ewan, as follows … (8) Mrs Isabella Christian Ewan or Rothwell, Three hundred and fifty pounds sterling.” There was a provision to the effect of postponing the vesting of these legacies in the beneficiaries till the period of payment, and it was further provided that “the foregoing provisions in favour of my own and also of my said wife's nephews and nieces, and their descendants, are hereby declared strictly alimentary, and not assignable by them, or by any of them, nor arrestable nor attachable by the diligence of creditors; and further, with regard to such of the foregoing provisions, or of any provisions to be made by me in any codicil hereto, as are in favour of or may descend to females, I hereby declare that the same are and shall be exclusive always of the jus mariti and right of administration of their respective husbands, and not affectable by the debts or deeds of such husbands, or by any action, diligence, or execution competent to follow thereupon.” The truster's widow survived him and died on 31st August 1890, and in accordance with the terms of the trust-disposition the legacy to Mrs Rothwell vested and became payable at that date.

At the date of the truster's death Mrs Rothwell's husband was due to him a sum of £80, and had granted a promissory-note in his favour which fell due on 12th September 1887. On 21st September Mrs Rothwell wrote to the agents who were acting for Mr Stuart's trustees in the following terms:—“Gentlemen,—With respect to my husband's acceptance to a bill of £80 now due to my uncle, the late Mr A. Stuart, builder, Peterhead, and made payable within the North of Scotland Bank, Limited, Crieff, I write to say that I consent to the suggestion of the bank agent, authorising you to pay the bill now out of the legacy left me by my uncle, or when the same is payable.—I am, yours respectfully,

“ Isabella C. Rothwell ( Late Ewan).” Her husband by a letter of the same date expressed the wish that her application should be favourably entertained by the trustees. The trustees accordingly on 1st December paid the promissory-note.

On the the death of the liferenter, when the legacy of £350 became payable to Mrs Rothwell, the trustees in sending the discharge of the legacy for her signature intimated that the amount paid by them in respect of the promissory-note would be deducted, and they received from her a receipt on the Inland Revenue schedule in the following terms:—

“ Receipt on Duplicate of Foregoing Account.

Received, the 11th day of November 1896, the sum of Three hundred and sixteen pounds, 17/3, being the legacy above-mentioned, having first allowed or paid Thirty-five pounds, 4/1 for the duty thereon.

Isabella Christina Rothwell.” [Stamped 1d.)

The trustees thereupon sent to Mrs Rothwell a cheque for £235, intimating that they had deducted the £80 in question, and that if she accepted the cheque it was in full payment of all claims. On 30th November she wrote to the effect that she accepted the cheque; “it would be folly to refuse it; I don't blame you for the loss of the £81.” Mrs Rothwell thereafter raised an action against the trustees in the Sheriff Court craving the Court to ordain them to pay over the sum of £118 under deduction of legacy-duty, being the balance not paid to her out of the legacy of £350.

The pursuer made certain general averments to the effect (1) that she was under undue influence of her husband and ignorant of her rights, or otherwise under essential error, force, or fear when she granted this letter, and that the letter was fraudulently devised by defenders, or others on their behalf, acting without their authority, in the interest solely of the residuary legatees; and (2) with reference to the period when the receipt was granted, that defenders' agents still kept her in the dark as to the true nature of her legal rights, and assured her that she had no alternative but to allow the deduction to be made from her legacy of the amount of the promissory-note. Further, that the pursuer was acting under the direction of defenders' agent as agent in the trust, and had no independent adviser, and was ignorant of the true nature of her rights under testator's settlement when she signed the Government schedule for the amount of the legacy, and that when she accepted the cheque she did so under essential error, and in the fear that if there was delay her husband might, if he heard of the matter, deprive her of her legacy.

She pleaded—“(3) The letter of 21st September 1887 founded on by defenders, having ( a) been impetrated from pursuer, a married woman, fraudulently or by undue influence, force, or fear; or ( b) the same having been granted under essential error as to pursuer's rights, and contrary to the express terms of the testamentary bequest in her favour, the same, and all that has followed thereon, is void or reducible, and objection can be pleaded thereagainst exceptione. (4) Any alleged discharge of the sum sued for ( a) having been obtained under essential error and sine causa; and ( b) the same having also been induced fraudulently and contrary to the testamentary rights of pursuer and powers of defenders, such alleged discharge is liable to reduction, and objections thereto may be pleaded in the present proceedings exceptione.”

The defenders pleaded that having paid

Page: 99↓

the promissory-note in accordance with the pursuer's letter, they were entitled to retain the amount from the legacy, and that in respect of the discharge granted by her they should be assoilzied; and (4) the pursuer's averments are irrelevant and insufficient to support the conclusions of the action.”

The Sheriff-Substitute ( Duncan Robertson), on 14th July 1897, found that the pursuer had failed to state a relevant case, and accordingly sustained the defenders' fourth plea and dismissed the action.

[ His Lordship, after stating the facts of the case, and the nature of the pursuer's averments as quoted above, proceeded]—“Before considering these averments and how far they are relevant, it is, I think, necessary to consider what in point of fact were pursuer's rights under the settlement of which she is alleged to have been ignorant. As to this there was no controversy; it was not disputed that as soon as the money came into pursuer's hands she could do what she liked with it, and it was in no way protected against her creditors. Even before it came into her hand it was quite open to her to assign her prospective interest for what it was worth, and such an assignation would have been quite good. The money could not be kept intact as an alimentary fund without the intervention of a trust. That being so, it is, I confess, somewhat difficult to see what rights or supposed rights of pursuer were concealed from her. The money was hers and she could do with it as she liked; if she chose to assist her husband by paying off his debt to prevent him being discussed, it was quite within her power to do so, and I cannot see that it required special intimation to her to inform her that she might give or withhold. She does not say that she was led to believe by defenders or her husband that she had no other course open to her, or that her husband could touch the money. It is merely stated that pursuer was under essential error and in ignorance of her rights when she wrote the letter of authority, but it is not said what the essential error was about, nor is it said what the rights were which she was ignorant of, and I imagine that no right could be stated except that she was entitled to refuse if she liked, and that her husband could not touch the money. In my opinion these averments are not relevant averments of essential error. It is further, however, said that the letter was granted under the undue influence of her husband, but it is merely said it was so granted—there is no detail or specification given. It is not said how the influence was exerted, or why pursuer should have been more amenable to it than any other wife. It may quite well be that the husband exercised his influence to induce the pursuer to send the letter, but unless he did more than this, I am not prepared to say the letter can be gone back upon, and a mere use of the word ‘undue’ does not, in my view, materially alter the matter. It is quite easy to use such words, but the mere use of them has never been held to make relevant a case otherwise irrelevant. The same applies to the use of the word ‘fraud.’ It is here alleged that the said letter was ‘fraudulently devised by the defenders, or by others on their behalf acting without their authority, in the interests solely of residuary legatees. It is all very well to say that, but there are absolutely no facts averred which can support such an allegation. I confess I have some difficulty in apprehending what the averment exactly means. It says that the letter was ‘fraudulently devised,’ but there is no question that pursuer wrote and signed it, and what ‘fraudulently devised’ means I hardly see. If it means it was suggested by defenders or these others to the bank agent that he should suggest to pursuer that she might write the letter, which is the only solution I can think of, I cannot see that this, even assuming that it were true, in any way savours of fraud. The defenders would be naturally anxious to recover the money as a debt due to the estate; it was their duty to do so, if they made this suggestion, and the pursuer chose to agree to it to save her husband, I cannot at all see how that could be called fraud on their part. If it was said that defenders and pursuer's husband were acting in concert, the matter might be different, but there is no such allegation. These observations, I think, cover all pursuer's averments above referred toon the first head, and my opinion therefore is that these averments do not constitute a relevant case; but the case against pursuer is stronger when we come to consider what happened when her legacy was paid to her after the liferentrix's death. Her husband then was not living with her, and she could not be under his influence, and we may take it from the letter produced that she signed the Government receipt produced, and accepted the cheque afterwards sent, in the full knowledge at least that this amount was being deducted, and after consideration on her part. That there was consideration is certain from the terms of the letter. Of course, it is again said that she did all this without independent advice, and in ignorance of her rights under the testator's settlement, but again the answers seem to me clear that there were no rights which at this time could affect her legal position. She could have done no more than she has done now, namely, attempt to go back upon her former authority—that is, fight the matter in Court; and further, so far as appears, there was no reason whatever why she should not have taken independent advice before signing the receipt. No doubt she further alleges that the agent assured her then that she had no alternative but allow the deduction, and no doubt this was the view of the agents, but even assuming it proved, it could not help pursuer with reference to the granting of the letter of authority itself; if it is good, and she is bound by it, then pursuer had no course open to her but to allow the deduction, and holding, as I do, that no relevant case has been stated for going back upon the letter, it is plain that to allow proof of this would be useless. The same observation applies to the other allegation already referred to as to her reason for accepting the cheque; if the

Page: 100↓

letter of authority was binding, she could get no more than the amount in the cheque; further, on this point, pursuer had only to ask to ascertain that her husband had no claim. She does not aver that she asked and was misled; if she had this mistaken idea, as we must assume, it could not be imputed to defenders. No doubt one has considerable sympathy with a woman in the position of pursuer. She has done what she now realises was a foolish thing, which she did not require to do, but while that is so, it is, in my opinion, very necessary to be certain before incurring serious expenses that now she is trying to go back upon her former action she avers facts and circumstances which, if true, will justify the Court in allowing her to do so. In my opinion she has not made such averments here, and I am therefore to dismiss the case as irrelevant. That being my view as to pursuer's case, it is, of course, not necessary for me to say anything as to the relevancy of the defence.”

The pursuer appealed to the Court of Session, and argued It was admitted that at the date she wrote the letter authorising payment the pursuer had no vested interest in the legacy, but in addition to that it was declared to be strictly alimentary and not assignable. It was not incompetent to put a legatee under the disability to assign a legacy before it was actually paid to her, and this was what the trust-deed effectually did. Accordingly, this was not an assignation which could be made at all. But even assuming that it could be made effectually if the question were one with a third party, the trustees were not entitled to found upon it in accounting with the beneficiaries. It was the plain duty of the trustees to hand over the legacy intact to the pursuer as soon as it became payable. Their fiduciary relation to the beneficiaries and the truster as well rendered this imperative on them. Moreover, this letter was of the nature of an obligation by her, which was not binding upon her as a married woman. Burnet v. British Linen Company Bank, February 9. 1888, 25 S.L.R. 356; Jackson v. MacDiarmid, March 1, 1892, 19 R. 528; M'Lean v. Angus Brothers, February 2, 1887, 14 R. 448.

Argued for respondents—There could be no doubt that in spite of the provisions to the effect that the legacy was alimentary it became the pursuer's absolute property as soon as it vested, for in the case of a gift of absolute fee such words of restriction flew off. She was perfectly entitled to assign her contingent rights to a third party, though of course the value of such an assignation depended upon her surviving to have a vested interest. Accordingly the trustees were not bound when the date of payment arrived to tender the legacy intact to her personally, but to herself or her assignees as the case might be. The case fell under the rule of such cases as Millers Trustees v. Miller, December 19, 1890, 18 R. 301; Wilkie's Trustees v. Wilkie, November 30. 1893, 21 R. 99; Simeon's Trustees v. Brown, March 11, 1890, 17 R. 581; Murray v. Macfarlane's Trustees, July 17. 1895, 22 R. 927. The letter authorising the trustees to pay amounted to an assignation to them of the legacy to that extent, and there could be no reason why they should not repay themselves just like a third party who might be an assignee.

At advising—