Scottish Court of Session Decisions

Mrs Mary Bannochie or Coats, wife of Thomas Archibald Coats, brought an action against George Mitchell and others, the trustees of her father James Bannochie, to have it found and declared that as one of his children she was entitled to legitim out of his estate, for payment of the amount thereof, and for reduction of a holograph writing granted by her to her father.

The defenders averred—“(Stat. 1) On 10th June 1902 the pursuer executed and delivered to the truster a holograph writing in the following terms:—‘I, Mary Bannochie or Coats, wife of and residing with Thomas Archibald Coats, S.S.C., Aberdeen, do hereby undertake and agree that in the event of my said husband being indebted to you, James Bannochie above designed, to any extent at the time of your death, whether by way of obligation to any bank or bill or otherwise on any document held by you, the amount of said indebtedness shall, unless and until liquidated by the said Thomas Archibald Coats, form a debt due by me, and a deduction from my share of your means and estate.

‘Adopted as holograph.

‘Mary Coats.’

Said writing was executed by the pursuer with the consent of her husband, who appended thereto the following docquet:—‘I approve and confirm the above.

‘Thomas A. Coats.’

(Stat. 2) At the date of the truster's death the said Thomas Archibald Coats was due the truster, inter alia, the sum of £1194, 18s. 5d., conform to IOU dated 17th May 1904 herewith produced, together with £253, 16s. 6d. of interest thereon conform to statement also herewith produced. Said sum has not been paid by the said Thomas Archibald Coats, who became bankrupt on or about 16th December 1907, and is irrecoverable out of his estate. In terms

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of said writing of 10th June 1902 said sums are deductible from the pursuer's share of the truster's estate. They greatly exceed her share of legitim.”

In answer thereto the pursuer averred—(Ans. 1) Admitted that the said writing was executed by the pursuer and the said docquet by her husband. They are referred to for their terms, beyond which no admission is made. Explained and averred that at the time of signing said writing the pursuer was a married woman, and was accordingly incapable of granting such an obligation as the said writing purports to grant; that she was in ignorance of her legal rights in her father's estate; that she had no independent legal advice, and that she received no consideration in exchange for signing said document. Further, the pursuer understood from her father that her share of his means and estate would be largely in excess of all sums advanced by him to her husband.”

The pursuer pleaded—“(2) The pursuer having been a married woman at the time she executed the said pretended undertaking or agreement, she is not bound thereby, and the same should be set aside as null and void and of no force or effect as excluding the pursuer's claim to legitim. (3) The said pretended undertaking or agreement having been granted by the pursuer in ignorance of her legal rights in her father's estate is not binding on her, and ought to be set aside. (4) The said pretended undertaking or agreement having been granted without any consideration therefor, and for an indefinite amount, is null and void, and ought to be set aside.”

The defenders pleaded—“(2) The defenders being entitled to set off against the pursuer's legitim the debts due by her husband to the truster at his death, and said debts being in excess of the pursuer's share of legitim, the defenders are entitled to absolvitor.” (3) The pursuer's averments in support of the reductive conclusion of the summons are irrelevant.”

On 25th February the Lord Ordinary ( Ormidale) repelled the second plea-inlaw for the pursuer.

Opinion.—“Mr James Bannochie died on 29th June 1909. This is an action at the instance of one of his children—Mrs Coats—against his trustees and executors for payment of legitim.

“The defenders plead that they are entitled to set off against the pursuer's legitim the debts due by her husband to her father at the time of his death, and that as these debts are in excess of the pursuer's share of legitim they are entitled to absolvitor.

The right to set off these debts depends on the nature and effect of a holograph writing, admittedly executed by the pursuer, dated 10th June 1902.

It is quoted in the defenders' statement 1.

The pursuer maintains that it is a cautionary obligation and nothing else. It is not disputed that if this is so it is not binding on the pursuer, she being a married woman.

In my judgment the writing is not a cautionary obligation, except perhaps in the sense that the bond and assignation in security by Mrs Halkett was a cautionary obligation in the case of the Reliance Mutual Life Assurance Society v. Halkett's Factor, 1891, 18 R. 615, for I think that here, as there, the wife did agree to interpose her personal credit for the purpose of assisting her husband. But she did not do so by becoming cautioner for him. The writing, if not strictly speaking an assignation, is of the nature of an assignation. No doubt the right to claim legitim did not vest in the pursuer until her survivance of her father, and so regarded is a mere spes successionis. But it seems to me to be none the less susceptible of being dealt with prior to the parent's death. It may certainly be satisfied, in whole or in part, by advances made to a child by a parent during his lifetime, and as certainly it cannot be gratuitously defeated by the parent. In any view of the right, the pursuer's legitim was at her own absolute disposal. It was her separate estate, and she was, it seems to me, entitled to deal with it in any way the pleased— Biggart v. City of Glasgow Bank, 1879, 6 R. 470; Burnet v. British Linen Bank, 1888, 25 S.L.R. 356.

What she did do here, if not to assign it in security, was to give her father a mandate to treat it as a fund of credit for her husband, and to authorise him to debit it with the amount of any advances made by him to her husband. The essence of a cautionary obligation is that the cautioner becomes personally bound along with the principal debtor. Here it may be noted that at the date of the holograph writing there was no principal debtor, for there was no principal debt. The wife's transaction with her father constituted an independent and substantive agreement. Moreover, she came under no personal obligation at all—none at anyrate which the defenders are under any necessity by action or diligence of enforcing against her.

If the writing had concluded with the words ‘shall form a debt due by me,’ there might have been room for the plea that there was a personal obligation of a cautionary nature. But I read these words as entirely separable from, or at most as merely introductory, to what follows. They are not the words on which the defenders found. They ignore them, as I think they are entitled to do, and rest their claim on the words ‘shall form a deduction from my means and estate.’

What the wife did, therefore, was to bind, not herself, but her estate, and that has always been regarded as a vital distinction— Watson v. Henderson, July 9, 1802, Hume, 208; Harvey & Fawell v. Chessels, February 21, 1791, Bell's Oct. Cas. 255. This appropriation of her future estate might have been unavailing if there had been anyone in the person of a creditor to challenge it or to interfere with its operation— Bedwells & Yates v. Tod, December 2, 1819, F.C.;

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Graham & Company v. Raeburn & Verel, 1895, 23 R. 84. But there is no one claiming such a right.

I shall therefore repel the second plea-in-law for the pursuer.”

On 9th March 1911 the Lord Ordinary pronounced this further interlocutor—“The Lord Ordinary repels the third and fourth pleas-in-law for the pursuer, and in respect it is admitted at the Bar that at the date of the death of the truster the debts due by the pursuer's husband to the truster were in excess of the sum of £700 sued for, assoilzies the defenders from the conclusions of the summons, and decerns.”

The pursuer reclaimed, and argued—The writing of 10th June 1902 constituted a cautionary obligation—Bell's Prin. 245. Such an obligation could not be effectually granted by a married woman— Biggart v. City of Glasgow Bank, January 15, 1879, 6 R. 470 (Lord President at 481). She could convey her separate estate, and undertake personal obligations with regard thereto. Quoad ultra her personal obligation was null. That was the general rule and it had been applied in several cases— Jackson v. Macdiarmid, March 1, 1892, 19 R. 528, 29 S.L.R. 438; Laing v. Provincial Homes Investment Company, Limited, 1909 S. C. 812, 46 S.L.R. 616; M'Lean v. Angus Brothers, February 2, 1887, 14 R. 448, 24 S.L.R. 317. The Married Women's Property (Scotland) Act 1881 (40 and 41 Vict. cap. 29) did not alter the rule of the common law. The pursuer had plainly undertaken a personal obligation, and in security thereof had assigned her spes successionis in her father's estate. The words “shall form a debt due by me and a deduction from my share,” &c., were ancillary to the personal obligation. By those words she had designated the fund out of which she would make payment to satisfy her obligation. (2) Even if the writing could be read as constituting an assignation, it was neither in form nor substance an assignation of anything belonging to her. She had nothing to Convey. All she had was a mere expectancy, for a spes successionis was not property or estate— Reid v. Morrison, March 10, 1893, 20 R. 510 (Lord Rutherfurd Clark at 514), 30 S.L.R. 477. An assignation of a spes successionis was just a personal obligation by the granter thereof that if and when property vested in him it should be handed over to the assignee. Such an obligation a married woman could not grant. (3) In any event the pursuer was entitled to a proof of her averments as to error and want of consideration.

Argued for defenders—(1) The writing in question was not merely a personal obligation by the pursuer, but also an assignation by her of her share of her father's estate. No express words were necessary to constitute an assignation if the intention to assign was clear— Carter v. M'Intosh, &c., March 20, 1862, 24 D. 925. It was well established that a married woman could grant security affecting her estate—Ersk. i, 6, 27; Ellis v. Keith, 1665, M. 5987; Marshall v. Ferguson, 1665, M. 5990; Somervell v. Paton, 1665, M. 5990; Clerk v. Sharp, 1717, M. 5996; Reliance Mutual Life Assurance Society v. Halkett's Factor, March 4, 1891, 18 R. 615, 28 S.L.R. 589. (2) It was immaterial that the subject assigned was a spes successionis. A spes successionis could be assigned— Trappes v. Meredith, November 3, 1871, 10 Macph. 38. It was quite common in postnuptial marriage contracts to have assignations of expectancies. If a married woman could assign her property in security of her husband's debts, it was absurd to suggest that she could not so assign a spes successionis. The defenders had not to do anything to perfect their right. The funds were in their hands, and their right became effectual when the property vested in the pursuer— Reid v. Morrison ( sup. cit.), 20 R. 514. (3) The pursuer had set forth no grounds for inquiry. There were no relevant averments of ignorance nor error induced by misrepresentation. It was immaterial that she received no consideration— Clerk v. Sharp ( cit. sup.); Reliance Mutual Life Assurance Society v. Halkett's Factor ( cit. sup.).

At advising—