Scottish Court of Session Decisions

The question in this case was whether a power of appointment was validly exercised by a general settlement.

Mrs Mary Stewart or Tarratt was married to David Fox Tarratt on 1st May 1865. By indenture of settlement of that date, made between the spouses, and Joseph Tarratt and John Lorne Stewart, fathers of the spouses, and the trustees under the settlement, John Lorne Stewart bound himself to pay to the trustees £1000, and after his decease £5000 more. These sums were to be held in trust for the child or children of the marriage, the income being paid to Mrs Tarratt and to her husband if he survived her. A power of appointment was reserved to Mrs Tarratt.

Daniel Fox Tarratt died intestate in 1888, survived by his wife and two children, Joseph Fox Tarratt and Mary Caroline Campbell Tarratt, who subsequently married the Hon. Osmond Hastings. He left, exclusive of funds settled by his marriage contract, a considerable amount of heritable estate, and moveable estate amounting to about £6000, of which his son succeeded to the heritage and his daughter to two-thirds of the moveables. The son and daughter also succeeded to a large amount of estate as residuary legatees of their grandmother, Joseph Fox Tarratt's share of the net residue amounting to about £100,000 and his sister's share to about £50,000. Joseph Fox Tarratt died on 31st October 1898, at the age of twenty-nine, survived by two infant sons, and leaving a will.

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Mrs Tarratt died on 14th January 1904, leaving a holograph will in the following terms:—

“Lochead, Ardrishaig, N.B.

I leave all I possess to my daughter Mary Caroline Hastings or Tarratt, after the following bequests are paid:—

£50 to Nurse Woodend,

£20 to Barbara M'Arthur,

£10 to Margaret MacLachlan,

£10 to Alex. Mackay; and

I appoint my brother, John Lorne Stewart, of Coll, my executor.

Mary Tarratt.

Lochead, May 19th, 1903.”

The question having arisen whether this will comprehended the subjects of the power of appointment contained in the marriage settlement, a special case was presented for the opinion and judgment of the Court.

The parties to the special case were—(1) The trustees under Mr and Mrs Tarratt's marriage settlement; (2) the trustees under Joseph Fox Tarratt's will; (3) Mrs Mary Caroline Tarratt or Hastings, residuary legatee; and (4) the executor under Mrs Tarratt's will.

The contentions of the parties as stated in the case were:—“The second parties contended that Mrs Tarratt failed to exercise the power of appointment conferred upon her, and that one-half of the sums contributed by John Lorne Stewart fell to be paid to them.

The third and fourth parties contended that the testatrix did exercise the power in favour of her daughter, and that the whole sums fell to be paid to Mrs Hastings.”

The question in the case was as follows:—“Does Mrs Tarratt's holograph will or settlement carry the trust fund over which she had a power of appointment to her only surviving child—the third party?”

Argued for the first and second parties—A general disposition of his whole property by one having estate besides the subject of a power of appointment, did not necessarily operate as an exercise of the power. At the most there was only a presumption that it did so operate, and there were circumstances in this case to rebut the presumption. Mrs Tarratt's daughter had already received a share of her father's and grandmother's estates— Smith v. Milne, June 6, 1826, 4 S. 679; Dalgleish's Trustees v. Young, June 29, 1893, 20 R. 904, 30 S.L.R. 802; Hyslop v. Maxwell's Trustees, February 11, 1834, 12 S. 413; Mackenzie v. Gillanders, June 19, 1874, 1 R. 1050, 11 S.L.R. 612.

Argued for the third and fourth parties—There was nothing in the case to prevent the application of the general rule that a general settlement was a valid exercise of a power of appointment— Mactavish's Trustees v. Ogston's Executors, March 10, 1903, 5 F. 641, 40 S.L.R. 458; Clark's Trustees v. Clark's Executors, February 16, 1894, 21 R. 546, 31 S.L.R. 430: Cameron v. Mackie, August 29, 1833, 7 W. & S. 106, per Lord Brougham at p. 141.