Scottish Court of Session Decisions

James Christal Ferguson, shipmaster, Kirkcudbright, was married to Elizabeth Jane Brown Christal on 10th April 1860.

By antenuptial marriage-contract dated 7th April 1860, “the spouses assigned and disponed to and in favour of themselves, and the survivor of them, one-half of the whole estate, heritable and moveable, that might belong to them, or either of them, at the dissolution of their marriage, and to and in favour of the survivor of them, for the survivor's liferent use only, and the children of the said marriage, whom failing, the next-of-kin of the spouses, in fee, the other half of the estate—it being declared that, in the event of the failure of issue, one-half of the said liferented portion of the estate should fall to the next-of-kin of the said James Christal Ferguson, and the other half to the next-of-kin of the said Elizabeth Jane Brown Christal or Ferguson. It was further declared that if the surviving spouse should marry again, he or she should forfeit his or her right to the liferent, and the children of the marriage, whom failing, the next-of-kin of the predeceasing spouse, should have a claim against the survivor so remarrying for repetition of the value of the half of the whole estate provided to the survivor as aforesaid. The contract further provided that it should not be lawful to, nor in the power of, the spouses, or either of them during the subsistence of the marriage, to discharge, renounce, or restrict the said provisions therein contained in their favour or in favour of either of them, or any part thereof, or to convey or assign the same onerously or gratuitously, in whole or in part, without the express consent of Robert Christal, the father of the said Mrs Elizabeth Jane Brown Christal or Ferguson; and it was declared that any discharge or renunciation, conveyance, or deed of restriction, or any other deed whatever in relation to the said provisions granted by the spouses or either of them, without the consent of the said Robert Christal, should be null and void. The clergyman for the Established Church of Scotland for the parish of Kirkcudbright, and his successors in office, were appointed trustees in succession to see the purposes of the contract carried out, and the spouses also nominated the said clergyman, whom failing his successors, to be their executor. The said Mrs Elizabeth Jane Brown Christal or Ferguson accepted the foresaid provisions in her favour as in full of all terce, legal share of moveables, and everything she, jure relictce or otherwise, could claim, or that her nearest of kin could claim, from the said James Christal Ferguson, or his heirs, executors, or representatives; and the provisions in favour of the children of the marriage were also declared to be in full of their legal rights.”

On 17th January 1878 the spouses executed a deed of revocation and mutual settlement, which proceeded on the narrative “that shortly before their marriage they were induced by the said Robert Christal to sign a deed which they understood and believed to be a contract of marriage, containing the usual provisions in similar cases, which deed had been prepared by the law-agent of the said Robert Christal, had not been revised by anyone on behalf of the said James Christal Ferguson, and was subscribed by the parties thereto without being explained to or understood by them; that on reading over a copy of said antenuptial contract of marriage they became satisfied that the provisions and clauses contained therein were unusual and improper, and that the same, being contrary to their belief and intention, the deed had been signed by them under essential error, and that, without prejudice to any remedies competent to them, or either of them, to challenge and reduce the said deed, they had resolved and agreed to revoke and alter the same in manner and to the extent and effect thereinafter written.” By this deed “they revoked and recalled (first) all provisions in favour of, and rights and powers conferred on the next-of-kin of them, or either of them, by the foresaid contract of marriage, in the event of the predecease of either of them, and they declared that in

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the event of either of them dying without leaving a child or children procreated of their said marriage, the whole estate and effects, real and personal, of the party deceasing should descend and belong to the survivor of them, and his or her heirs, and that whether such survivor should enter into a second marriage or not; and (second) they recalled and revoked the nomination of trustees and executors contained in the said contract of marriage, and nominated the survivor of them to be sole trustee and executor to the predeceaser. Mr Robert Christal was asked to give his consent to this deed, but he refused to do so.”

On 14th June 1890 James Christal Ferguson, while on board his ship on a voyage to Australia, executed a holograph codicil to the foresaid mutual deed, which, after providing for certain pecuniary legacies to the amount of about £1000, proceeded thus—“‘I wish my estate to be managed by the same trustees as my brother John Christal Ferguson, dead or alive, including to my wife Mrs Elizabeth J. B. Ferguson, who is to owen all in life rent, except legacys mentioned, and at her decease to be divided as my brother, John Christal Ferguson's estate.’ The testator then provided for the protection of his wife and her property should she become incapable of managing her affairs, and left annuities to his sister-in-law, and his sister, and legacies to his trustees.”

James Christal Ferguson died at sea on 21st June 1890, survived by his wife. No children were born of the marriage. His brother John Christal Ferguson died on 11th May 1890, leaving a settlement wherein he appointed trustees for the administration of his estate.

At the date of the marriage James Christal Ferguson was mate in a merchant vessel, and had saved about £300; it was disputed whether his wife had any means. At the date of the mutual deed the value of his estate was about £10,000, while Mrs Ferguson was averred to possess estates to the value of £800, and to have certain expectations from her father. At the date of his death Mr Ferguson's estate amounted to about £30,000.

Mrs Ferguson became insane soon after the execution of the mutual deed, and was at different periods confined in an asylum. In 1891 James Martin, chartered accountant, Edinburgh, was appointed curator bonis to her.

The question having been raised whether James Christal Ferguson had power to alter the provisions contained in the mutual settlement by the codicil which he had executed without his wife's consent, Martin raised an action against the trustees of John Christal Ferguson, who were also Captain Ferguson's trustees, under the terms of the codicil, in which he concluded (1) for reduction of the said codicil, and (2) for declarator “that the said Mrs Elizabeth Jane Brown Christal or Ferguson is entitled in fee, for her own absolute use and behoof, and free from all burdens and deductions whatsoever, except the payment of the said James Christal Ferguson's debts, to the whole means, estate, debts, and effects, real and personal, which belonged to the said James Christal Ferguson at the time of his death, conform to and in virtue of the provisions to that effect in her favour, contained in the said deed of revocation and mutual settlement.”

The pursuer pleaded—“(1) The deed of revocation and mutual settlement was an onerous deed, competently made by the spouses, and irrevocable and unalterable, except by their joint act. (2) It being incompetent for the said James Christal Ferguson to execute the said pretended codicil, it is inept, and should be reduced in terms of the reductive conclusions of the summons. (3) The said deed of revocation and mutual settlement never having been validly revoked or altered, the pursuer is entitled to decree in terms of the declaratory conclusions of the summons.”

The defenders pleaded, inter alia—“(1) The action is irrelevant. (2) Separatim, in any view the reductive conclusions of the summons are irrelevant and unnecessary. (3) The said deed of revocation and mutual settlement was revocable at the instance of Mr James Christal Ferguson in respect (1) it was gratuitous; (2) it was testamentary.”

On 28th October 1892 the Lord Ordinary ( Low) found that Mrs Ferguson “was not entitled in fee to the whole means and estate of her deceased husband … in virtue of the deed of revocation and mutual settlement mentioned in the summons: Therefore repelled the pursuer's pleas-in-law, assoilzied the compearing defenders from the reductive conclusions of the summons; and quoad ultra dismissed the action.

“ Opinion.—[ After summarising the deeds]—Mr Ferguson was in the merchant service. He had latterly command of a ship, but at the date of his marriage he was in the position of a mate. He was then possessed of some £300. The pursuer avers that Mrs Ferguson had an equal amount, but I do not think that that is a matter of importance, as whatever she had passed to her husband jure mariti. Apparently, chiefly by successful trading at the ports to which he sailed, Mr Ferguson rapidly increased his fortune, which at the date of the mutual deed in 1878 amounted to £10,000, and at the date of his death to £30,000. The pursuer avers that the trading was done by Mrs Ferguson, but the defenders deny that this was the case. I do not think that it is necessary to have inquiry upon the point, as the money traded with was Mr Ferguson's, and the £30,000 in question is the produce of his means.

The summons concludes for reduction of the testamentary writing of 1890 and for declarator that Mrs Ferguson is entitled in fee, for her own absolute use and behoof, and free of all burdens and deductions, except the payment of Mr Ferguson's debts, to his whole means and estate, conform to and in virtue of the provisions of the mutual settlement of 1878.

The pursuer contended that the mutual

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settlement was an onerous deed which Mr Ferguson could not revoke; that the holograph will was therefore ultra vires of Mr Ferguson and should be set a side; and that Mrs Ferguson should be found entitled to the whole estate under the mutual settlement.

The defenders, upon the other hand, argued that the marriage-contract was altogether revoked and set aside by the mutual settlement, and that the latter deed, being entirely testamentary and gratuitous, could in turn be revoked by either spouse, as regarded his or her estate. They therefore maintained that Mr Ferguson's succession was ruled by his holograph will alone.

I am unable to agree altogether with either of these views.

In the first place, assuming that it was in the power of the spouses to revoke the whole provisions of the marriage-contract, I do not think that they did so. In the mutual settlement they expressly revoke and recal—1st, All provisions in the marriage-contract in favour of their next-of-kin; 2ndly, the forfeiture attached to the marriage of the surviving spouse; and 3rdly, the nomination of trustees and executors. Further than that there is no express revocation of the contract. The defenders, however, maintained that there was an implied revocation (in the event of there being no children) of all the remaining provisions of the contract involved in the declaration that (failing children) the whole estate of the predeceaser should belong to the survivor. That, they maintained, was a new and complete settlement of the whole estate, leaving no room for the operation of the marriage-contract, and therefore superseding it. No doubt the declaration in the mutual deed necessarily revoked the provision in the contract whereby the surviving spouse was, as regards one-half of the estate, restricted to a liferent, and enlarged the right of liferent to one of fee. But to effect that object it was not necessary to revoke the conveyance in the contract of the fee of one-half of the estate to the survivor. And, in my judgment, the scheme and phraseology of the mutual deed show that it was only the intention of the spouses to revoke, and that they only did revoke, the marriage-contract in so far as that was necessary in order to give effect to the views that they then entertained as to the disposition of their estates. In the deed they state that they have agreed not to revoke the contract as a whole, but only ‘to revoke and alter the same in manner and to the extent and effect under written.’ Then, as I have pointed out, there follows the express revocation of three of the provisions of the contract, and the implied revocation of one provision. Beyond that it seems to me that the contract was allowed to stand. It certainly remained operative, except in so far as expressly revoked, in the event of children being born, and I think that it also remained operative in so far as it gave a fee of one-half of the estate to the survivor. I see no reason why the spouses should have revoked that provision, because it was in accordance with their wishes, and I am of opinion that upon a sound consideration of the mutual deed, it absolutely revoked the provisions of the contract which were expressly revoked, and altered the contract to this extent, that if there were no children, the surviving spouse was to have a fee of the one-half of the estate of which he or she was under the contract only entitled to a liferent. The result is, that in my judgment Mrs Ferguson, as the surviving spouse, was entitled under the contract to one-half of the estate.

The next question is whether the spouses had power to revoke or alter the marriage-contract to the extent to which they did alter and revoke it. Whatever might be said in regard to such provisions of the contract as were proper marriage provisions for the spouses and their issue, I think that it can hardly be doubted that the spouses were entitled to alter and revoke the provisions in favour of next-of-kin. These were provisions of a testamentary nature, and were not even protected by the condition that the marriage-contract should not be altered without the consent of Mr Christal, because that condition was limited to the provisions in favour of the spouses.

By the revocation of the destinations in the marriage-contract to the next-of-kin, the spouses set free the fee of one-half of their joint estate for re-settlement, and they re-settled that half by declaring that it should belong to the survivor. In these circumstances the question is whether Mr Ferguson, the predeceasing spouse, was entitled to revoke the destination in the mutual settlement of one-half of his estate to his wife.

If I am right in the view which I have taken, that the mutual deed did not revoke the provision in the marriage-contract of one-half of the joint estate to the surviving spouse, there is no question here of a reasonable provision for Mrs Ferguson. The question is whether the mutual settlement was onerous, and could not be revoked by either party without the consent of the other. That, I think, depends upon whether the provisions made by Mrs Ferguson for her husband bore any reasonable proportion to the provisions made by her husband for her. I do not think that they did so. At the date of the mutual deed Mr Ferguson's estate amounted to £10,000, and it was an estate which was growing year by year, as is shown by the fact that when he was married in 1860 he had only a few hundred pounds, and when he died in 1890 he had some £30,000. Mrs Ferguson, on the other hand, had (even assuming the pursuer's averment, which is denied, to be correct) only £800 in possession, and certain expectations from her father, which are said to have ultimately turned out to be worth £1400. In these circumstances, I do not think that there was a reasonable proportion between the fortunes dealt with on the one hand and on the other. There was £800 in possession

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as against £10,000 in possession, and an expectancy of succession which ultimately turned out to be worth £1400, as against a probability of increase which, in the end, amounted to £20,000. I am therefore of opinion that the liferent of Mr Ferguson to his wife of the fee of one-half of his estate was a donation and was revocable by him.

The result in my judgment is, that the fee of one-half of Mr Ferguson's estate was carried by his will of 1890.

The question remains whether Mrs Ferguson is or is not entitled to the liferent of the one-half of her husband's estate which she does not take in fee. This is a question upon which no argument was submitted to me, and upon which I express no opinion. The only claim which is made for Mrs Ferguson in this case is to the fee of the whole of her husband's estate, and for the reasons which I have given I am of opinion that she is not entitled to decree to that effect.”

The pursuer reclaimed, and argued—With regard to the objections to the form of the summons, reduction was a perfectly competent way of getting rid of a deed a non habente potestatem—Stair, iv. 20, 35; Shand's Practice, i., 215; Mackie v. Gloag's Trustees, infra. The provisions in the marriage-contract in favour of the next-of-kin were both testamentary and contractual—testamentary because they were only to come into operation on the death of one of the spouses, contractual because the spouses agreed to make corresponding destinations in favour of the next-of-kin of the other—Ersk. i. 6, 29. By the marriage-contract rights were secured to the wife which put her in a position to contract with her husband on a footing of equality in 1878, when the spouses proposed to renounce the provisions in favour of next-of-kin. The deed of 1878 was therefore an onerous contract and irrevocable. The wife was therefore entitled to the whole estate—to one half under the marriage-contract, and to the other half under the mutual deed which was onerous in respect of the surrender of rights secured by the marriage-contract. The case of Beattie's Trustees, May 23, 1884, 11 R. 846, seemed to be a contrary authority; but the provisions in the antenuptial contract in favour of the next-of-kin of the wife distinguished the present case— Lang v. Brown, May 24, 1867, 5 Macph. 789; Rae v. Nielson, May 14, 1875, 2 R. 676; Hall's Trustees v. Macdonald, March 8, 1892, 19 R. 567, were also cited.

Argued for the defenders—The conclusions of the summons were not appropriate to try the question; the reductive conclusions were incompetent. The proper course would have been to bring an action of multiplepoinding in the hands of the testamentary trustees. On the merits—It had been argued that the spouses were on an equal footing, each having the same estate to surrender and receiving the same equivalent. But the postnuptial contract on the face of it repudiated the existence of mutual and equal rights secured by the marriage-contract, for it declared that the marriage-contract was granted under essential error. That was fatal to the argument that there was valuable consideration. Again, the husband had under the marriage-contract the power of testing on one-half; for on a true construction the provisions to the spouses and their children were contractual and could not be innovated on by either, but the destination to next-of-kin was testamentary and revocable. The presumption was against the surrender of the power to test as regards third parties, as these were not within the purpose of the matrimonial provisions— Mackie v. Gloag's Trustees, March 9, 1883, 10 R. 746 ( per Lord Rutherfurd Clark)—March 6, 1884, 11 R. (H. of L.), 10 ( per Lord Watson); Mitchell v. Mitchell's Trustees, June 5, 1877, 4 R. 800; Hall's Trustees (per Lord M'Laren), 579.

At advising—