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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Mercer v. Anstruther's Trustees [1872] UKHL 431 (25 April 1872) URL: http://www.bailii.org/uk/cases/UKHL/1872/09SLR0431.html Cite as: 9 ScotLR 431, [1872] UKHL 431 |
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Page: 431↓
(Ante, vol. vi, p. 446, and vol. viii, p. 405.)
Subject_Marriage-Contract — Provisions to Children — Discharge — Power of Apportionment — Reduction — Essential Error.
By antenuptial contract £4000 belonging to the husband, and the wife's whole estate, were settled on the spouses respectively and the survivor in conjunct fee and liferent, and the children of the marriage in fee, declaring that the father should have power to apportion among them the £4000; while, in regard to the wife's estate, the same power was conferred on the parents jointly, or the survivor; failing apportionment, the funds were to be divided equally. There were three children, all daughters. The mother had at her marriage about £8000, and she succeeded to about £50,000. The marriage-contract of the eldest daughter, to which her father and mother were parties, contained a discharge of her whole claims under the marriage-contract of her parents in consideration of £5000 paid to trustees for her in liferent, and her children in fee.
The marriage-contract of the second daughter was in like terms, but her father only was a party to the deed, her mother being dead.
Thereafter the father contracted a second marriage, and left a settlement by which he directed £20,000 to be paid to his youngest daughter in full of her claims; £30,000 was settled upon his second wife in liferent and the youngest daughter in fee, and his two elder daughters were expressly excluded from any interest in his succession. The youngest daughter signed the trust-deed in token of her acceptance of the provisions in her favour.
The eldest daughter raised an action after her father's death against his trustees, to have it declared that there had been no valid apportionment in terms of the marriage-contract, and that she was entitled to a third part of the provisions in favour of the children, deducting £5000, and to have her marriage-contract reduced on the ground of essential error so far as adverse to her claims.
The second daughter raised an action with precisely the same conclusions.
Held (altering the judgments of the Court of Session) that the provisions of £5000 in the marriage-contracts of the two elder daughters, and the subsequent provision of £20,000, were valid appointments, pro tanto, in exercise of the power contained in the marriage-contract of the parents, but that none of the daughters were debarred from participating in any residue of the funds comprised in that deed there might be after deducting the sums mentioned, and that the said residue fell to be divided equally among the three daughters.
A narrative of the circumstances of these cases will be found ante, vol. viii, p. 405, 6th March 1871.
In the case of Smith Cuninghame, the Court of Session, on 10th July 1870, assoilzied the defenders from the conclusions of the summons.
Page: 432↓
In the case of Mercer, the Court of Session, on 6th March 1871, pronounced the following interlocutor:—
“ Edinburgh, 6 th March.—Sustain the defences, and assoilzie the defenders from the conclusions of the summons, in so far as they apply to and embrace the sum of £4000, provided by the deceased James Anstruther in his contract of marriage with his spouse, the now deceased Marian Anstruther, dated 24th and 26th March 1828, and decern; but find that the marriage-contract between the pursuer John Henry Mercer, on the one part, and the pursuer Annie Catherine Anstruther or Mercer, with the consent of the said James Anstruther, her father, on the other part, dated 10th December 1861, and particularly, the clause therein contained by which the said Annie Catherine Anstruther or Mercer discharged all right and claim which she had or might have under the marriage-settlement of her father and mother to a share of the estate of her then deceased mother Marian Anstruther, was entered into and concluded by the parties thereto under essential error as to the nature of the right and claim which the said Annie Catherine Anstruther or Mercer thereby discharged and declared to be settled, and of the relative rights and power of herself and her said father in the estate of her deceased mother, as defined and settled by the said marriage-contract of 1828; therefore, in so far as regards the said marriage-contract of 4th December 1861, reduce, decern, and declare, in terms of the reductive conclusions of the summons, but in so far only as by the said clause the right and claim of the said Annie Catherine Anstruther or Mercer, pursuer, to a share of the estate and effects of her deceased mother, under the said marriage-contract of 1828, were discharged and declared to be settled, or are otherwise excluded or injuriously affected; find that, the said marriage-contract being to the extent and effect foresaid reduced and set aside, the said Annie Catherine Anstruther or Mercer was and is entitled, along with her sister Lucy Sarah Anstruther, defender, to so much of her said deceased mother's estate and effects as has not been settled and apportioned by her said father and mother jointly, or by her said father after her said mother's decease; find that of the said estate and effects of the said deceased Marian Anstruther the following sums must in the circumstances of this case, for the purpose of fixing the principle of division of the unappropriated balance of the said Marian Anstruther's estate between the said two children, be held and taken to have been settled and apportioned as aforesaid, videlicet, the sum of £5000 settled on the said Annie Catherine Anstruther or Mercer by her marriage-contract foresaid, and the sum of £20,000 settled on the said Lucy Sarah Anstruther by the trust-disposition and settlement of her father, the said James Anstruther, dated 8th October 1866; find that during his life the said James Anstruther had, in fact, the sole possession and management of the estate and effects which belonged to his said deceased wife at the time of her death; find that said estate and effects of his said deceased wife were not effectually conveyed by the said James Anstruther to the defenders, as his trustees by his said trust-disposition and settlement, and that the said defenders have no title to administer the estate and effects of the said deceased Marian Anstruther; find that the said defenders have, since the decease of the said James Anstruther, uplifted and intromitted with the estate and effects belonging to him, and also with the estate and effects left by the said Marian Anstruther as aforesaid; find that the said defenders are bound to separate and set apart the estate and effects belonging to the said Marian Anstruther at the time of her death from the estate and effects belonging to the said James Anstruther; ordain the said defenders to prepare and lodge in process on or before the second box-day in the ensuing spring vacation an account showing the entire property, funds, and effects belonging to the estate of the said Marian Anstruther as aforesaid; reserve in the meantime all questions as to the proportions in which the estate of the said Marian Anstruther remaining unapportioned falls to be divided between the pursuer Annie Catherine Anstruther or Mercer and the defender Lucy Sarah Anstruther, also all questions as to the amount for which, in any event, the pursuers may be entitled to decree under the conclusions of the summons; reserve also in the meantime all questions of expenses.”
The pursuers (Mrs Smith Cuninghame and husband) appealed against the first-mentioned judgment; and the defenders (Anstruther's Trustees and others) against the latter.
Dean of Faculty ( Gordon), Solicitor-General ( Jessel), and Kinnear for Mr and Mrs Smith Cuninghame and Mr and Mrs Mercer.
Lord Advocate ( Young), Sir R. Palmer, and J. T. Anderson for Anstruther's Trustees.
At advising—
With regard to the intended wife, Mrs Anstruther, the case was somewhat different. No specific sum was settled, but the whole of her property, then present or future, was disposed of in this way.—There was a similar limitation, conjunct fee in liferent, there was then a similar provision for the benefit of the children of the marriage or their issue if the spouses were so minded, proportionately, and then the apportionment was to be made by the spouses conjunctly during their joint life, and by the survivor after the death of one. And in regard to that portion of the property, it was settled that on failure of the children of marriage it was to go to the wife and her heirs.
Now, the events which subsequently took place were these.—There being three daughters the issue of the marriage, the eldest daughter, now Mrs Cuninghame, married in 1847. On her marriage a trust-disposition by way of settlement
Page: 433↓
Then, upon this arrangement being made, nothing being specifically stated in that part of the settlement on Mrs Cuninghame's marriage with regard to the previous settlement which had been made in 1828 on the part of the father and mother, but the father and mother concurring in this instrument, a discharge is taken, and that discharge is in these words;—“And which said sum of £5000 is hereby declared to be, and the said Maria Anstruther hereby accepts of the same, in full satisfaction of all legitim, portion-natural, or bairns' part of gear, and of all claims whatsoever which she, the said Maria Anstruther, has in any manner of way, by or through the death of her said father or mother, or by the contract of marriage entered into between her said father and mother, dated 24th and 26th March 1828, and as the share or division hereby allotted to her of her said father's and mother's property settled by said contract, all which claims are hereby settled accordingly.”
An exactly similar instrument was executed subsequently on the marriage of the second daughter, Mrs Mercer, but in the interim between the two settlements this difference had occurred in the position of the family, namely, that Mrs Anstruther, the original spouse referred to in the marriage contract of 1828, had died, and the settlement of £5000 made on the marriage of Mrs Mercer was of course made by the father alone (Mr Anstruther) but he took a discharge which may be described as being in substance identical with that which I have read as having been made upon the marriage of Mr and Mrs Cuninghame.
Some years after that, the father married again, in 1866, and on his marriage a trust-disposition was again executed. And by arrangements which he there makes, in effect, £20,000 is apportioned by him, or made over by him, to Lucy, the third and only remaining daughter, and there is a similar discharge contained in Lucy's settlement. Provisions are also made for his intended second wife. And Lucy, in the second instrument, in a similar form of words, discharges her interest under her father's and mother's settlement.
Now, that being the state of the circumstances of the family, the question arises as to what is the legal effect to be given to these several instruments—to the original marriage-settlement of 1828, and the two settlements executed on the marriage of Mrs Cuninghame and Mrs Mercer respectively, and the £20,000 made over to Lucy, for which she gave her discharge.
There appears to have been considerable difference of opinion in the Court below with reference to the position of Mrs Cuninghame as contrasted with the position of Mrs Mercer, and in the action in the present case, which we are first considering, Mrs Cuninghame's—(Mrs Mercer's case is, however, really in substance extremely similar to it, if not identical)—I say, in the action brought by Mrs Cuninghame, she sought to have a declaration that she was entitled to regard that £5000 as an apportionment of a part of the fund included in her father's and mother's settlement; that it was not competent to her father to aver that discharge which was contained in her settlement as a discharge of the whole fund from all possible claims upon it in the event of there being no further apportionment by him; but that what was taken by her, the £5000, was taken only as a partial apportionment of the whole fund which had been provided by the settlement of 1828. And in so far as it did not exhaust that fund, and in so far as the fund was not exhausted by any other apportionment of the property made to the children of the marriage, there would remain a surplus divisible as provided in the original settlement amongst the children, according as each parent had the power of apportionment, because it might have been made by either of the parents. She sought to have a reduction of that discharge if she was to be prevented by it from thus having such an apportionment as she desired to have made to her.
Now, the case has been argued very fully before us—first, upon the effect of the original settlement of 1828, and next, upon the effect of the apportionment made, or rather the sums provided, in the first instance to Mrs Cuninghame and Mrs Mercer, and ultimately to Lucy. And that being the first point, it will be right to say a few words (and they shall be very few) upon the subject of the first settlement; first premising that the fortune of Mrs Anstruther, which does not seem to have been so large at the time of the settlement of 1828 as it afterwards became, did become very considerable, so much so that the whole of Mrs Anstruther's fortune in present or future, including the whole which had been realised ultimately before her death, is said to amount (we have not got exact data to go upon) but it is said to amount, together with the £4000 which was provided by the father, to a sum of nearly £60,000—at all events, it was a very large sum, considerably exceeding the two sums of £5000 provided for the two elder daughters, and the £20,000 provided for Lucy.
Now, after the settlement of 1828, what is to be considered as the position of the parents with reference to the fund? The Lord Ordinary, before whom the matter came in the first instance, conceived that the father, Mr Anstruther, became, by virtue of the instrument of 1828, fiar as to both funds—both the fund of £4000 which Mr Anstruther had applied, and the sum that was provided by Mrs Anstrutlier. The Court of Session, on appeal from that decision of the Lord Ordinary, recalled his interlocutor in that respect, and held that the husband was a fiar of the £4000, but that he had only a liferent in the sum coming from Mrs Anstruther, that she, in effect, was the fiar of that sum, subject to her husband's liferent, and subject (as all the learned Judges held) as to both the sum provided by the father and the sum provided by the mother, to the rights of the children, whatever they might be, which rights could not be put lower,—and it is quite sufficient for the conclusion I have come in this matter to put them as high as I am about to state,—but that they could not be put lower than at least a spes successionis in each fund, which expectancy could not be defeated gratuitously, for, if defeated at all, it could only be defeated by some alienation for onerous or good cause.
Page: 434↓
Those being taken to be the rights of the parties when the settlement of Mrs Cuninghame came to be executed, what is the effect of that settlement? Upon that point some degree of doubt existed among the learned Judges in the Court below. Four of them were of one opinion and three of another opinion as to the case of Mrs Cuninghame, although they were more united as to the case of Mrs Marcer, for a reason that I shall afterwards have to mention; but the ultimate conclusion come to in Mrs Cuninghame's case by the majority of the learned Judges was this, that the sum of £5000 provided in her settlement, coupled with the release or discharge which she gave in the terms that I read from the settlement itself, operated as a complete extinguishment of the right of Mrs Cuninghame to any portion of the fund, and therefore, of course, the consequence was an absolute failure of her action, and, accordingly, the defenders were assoilzied absolutely.
On the other hand, it was contended, and it was so held by three, I think, of the learned Judges in the Court below, that that could not be taken to be the right view of the case; that the £5000 was in reality to be taken as an apportionment of the fund pro tanto to that daughter upon her marriage, and that that sum so apportioned would, of course, operate to the extent of that apportionment, as handing over to her a share in the fund which she would take, subject to the possibility of her having another portion—a third portion falling to her in the event either of the whole residue of the fund or of any part of it remaining unapportioned. In the one case she would take a third of the whole remainder; in the other case she would take a third of whatever might remain unapportioned.
It appears to me, my Lords, that that is the true and right conclusion to come to upon the whole case. The first question is, whether that sum of £5000 was really to be taken as an intended apportionment or not. I apprehend that there can be no doubt upon one point, which seems to have excited some doubt in the minds of some of the learned Judges. I say that there can be no reasonable doubt that in Scotland, as here, there is no necessity, where there is a power of apportionment of this description existing in the parent, for him to apportion the whole fund at one time; he may apportion it at intervals as the exigencies of his family require. Of course the very object of such a power of apportionment is to provide for such exigencies as they occur.
One argument which was pressed upon us for a different consideration is this—that the interest being a spes successionis, one which was wholly contingent during the lifetime of both the father and the mother, it might have failed in both of the funds had Mrs Cuninghame predeceased the distribution of the fund and the period of her acquiring a complete and absolute interest in it, and that therefore the payment of the £5000 on the part of the father might be regarded (as some of the learned Judges, who were, in fact, the majority, decided) as a purchase by the father of the absolute right to all the interest of the child in the fund, and not as an apportionment of the fund itself. Now, it appears to me that there are two reasons very strongly weighing against such a conclusion. In the first place, the very notion of a parent bargaining with a child in the language used by the learned Judges in Scotland, entering into a transaction with his child for the purpose of purchasing her share in this species of expectancy, would be a notion inconsistent with the law which has prevailed, I apprehend, in every country as to the protection of a child's interest that is to be expected on the part of a parent—such a protection as makes it very difficult, indeed, for a parent under any circumstances to deal with a child, and certainly does not render it possible for him to deal with a child without the child being fully protected and fully informed of all the rights vested in him. Therefore one would hesitate at any time to give to an instrument the construction of a bargain on the part of the parent, in respect of an expectant interest on the part of his child.
Now, in the particular case before us, it is undoubted that the child herself was not of full age. She was only eighteen years of age, and the child herself had to look to that parent, and that parent only, for protection. Some of the learned Judges say that the intended spouse might have afforded her sufficient protection. They seem to think that that actually was the case, and that she was so protected. But I think, according to any system of law that can be administered in any civilized country, it could not be permitted that a parent without the fullest evidence of such being the intention, and the circumstances of the case warranting the intention, and warranting the transaction to become the purchaser of an unascertained interest in the child—an interest which could never be ascertained if the child died in the mother's lifetime—for a sum of money paid down when the child's necessities required it at the period of her marriage. But putting that aside, I think there is quite abundant evidence to show that the parties did not intend anything of the kind. In the first place, the father and mother joined. If it was an interest to be acquired by the father, why did the mother join at all? In the next place, there is no previous recital of the settlement until we come to the discharge, and when we come to the discharge we find it to be an express discharge of all rights in the words I referred to just now, and refers expressly to the contract of marriage. It says “all claims whatsoever, by or through the death of her said father or mother, or by the contract of marriage entered into between her said father and mother, and as the share or division hereby alloted to her of her said father and mother's property settled by the said contract.”
Now, it seems to me, my Lords, that there is quite plain and sufficient reference to the instrument, and to the object and interest of the parties in the very form there used, and though it is quite true that it goes on to give a general release of her father's property under any circumstances whatever, yet even that is not inconsistent with the original settlement, because in the original settlement, whatever portions the children were to take under the settlement of 1828 are there expressed to be in discharge of whatever share they might be entitled to of the parents' property, either by way of legitim, portion-natural, or otherwise, so that it is only repeating the effect intended to be given to the original settlement, and to the taking under that settlement.
Now, as matters stood thus, even taking that £5000 as a part of the money that was to be settled, it was to be considered that Mrs Cuninghame would have her £5000 out and out and she was disposed of, and as some of the learned Judges expressed it, she was to be treated thereupon as if she were dead, as if she were wholly taken out of all interest under the settlement of 1828, and that
Page: 435↓
Now, certainly, I do not think that the instrument bears at all that construction, and it is a construction which one would not place upon the instrument unless one found some very clear and concise words to that effect. For observe what might happen—and what, in fact, really did happen,—so that there is no need to put it hypothetically as that which probably might occur. On the next daughter marrying, Mr Anstruther does the same thing—he gives £5000 in the same form and with the same discharge, and there is very little doubt that if Lucy had married, the form would have been exactly the same in her case, or, at least, it might have been so—so that he might have made three appointments of £5000 each,—taking all the daughters on that theory out of the case, as if each daughter were dead, depriving them of all further interest in the fund. And having thus provided £15,000 out of the £60,000, he might have said—everybody is now swept out of the fund, the whole fund is clear, and the consequence is that it will go back to the parties who provided it, the father having his share and the mother having her share, so that the provisions originally contemplated would never have taken effect. But that would be an entire contradiction of the whole scope and frame of the original settlement, which was that the children were to take the whole, except where it was disposed of for onerous considerations.
Now, that being so, it appears to me that this dealing with this sum of £5000 could only take effect as an apportionment pro tanto of the fund, leaving the rest of the fund to be apportioned. It was said, even by those who opposed Mrs Cuninghame's claim, that they could not put their argument so high as to say that the parent had no right to increase her portion if he thought fit.
It was conceded, as regarded the father, that however he might be himself protected by the discharge, he was not himself prevented from making a further apportionment if he thought fit.
When we come to Mrs Mercer's case, the sole difference is this—the mother having died, that interest which was a spes successionis had been absolute in Mrs Mercer, as regards the mother's property, subject only to the liferent of the father. The learned Judges were unanimous, I think, upon this case of Mrs Mercer, in setting aside the discharge in Mrs Mercer's settlement.
Lord Chancellor—But the other Judges, I think, all concurred, because they said that in Mrs Mercer's case the discharge was made in ignorance of her position—that there was ignorance of the true state of the case as regarded her, namely, that she would be placed in a much more favourable position than Mrs Cuninghame by the circumstance of her mother's death and her having acquired a positive interest in this fund with which she was parting to so large an extent. I need not deal now with Mrs Mercer's case, because, according to my view of the case, it was, if anything, a fortiori, —it could not be weaker than Mrs Cuninghame's case. I apprehend that what has happened is this—an apportionment was made, first, of £5000, part of the fund, to Mrs Cuninghame, and her discharge has not prevented her having any other part that may be unapportioned. And Mrs Mercer is placed in the same position, so that the two sums of £5000 having been taken out of the fund, it now remains to be seen what is to be done with the rest of it.
Then there is the dealing with Lucy, which is subject to the same remarks as I have made upon Mrs Cuninghame's case and Mrs Mercer's, namely, that there is an express recital that it is intended to operate by way of apportionment of the fund, and there is a discharge by Lucy, as in the other deeds. Therefore it appears to me that the proper conclusion to come to on that part of the case is, that the £20,000 made over to her upon the occasion of Mr Anstruther entering into arrangements for his second marriage must be taken as an apportionment of the fund pro tanto, so that you find that £30,000 out of the whole fund has been apportioned. It is said, and it is not denied, it is not proved, and it must be a matter of inquiry, that the £30,000 exhausts the whole fund. We have every reason to suppose that it does not, but that must be a subject of inquiry. If the precise amount cannot be ascertained by the parties without inquiry, inquiry and investigation must be made into the whole fund, taking the two amounts together, the £4000 of Mr Anstruther's and Mrs Anstruther's whole property included in that settlement of 1828. When you have added those two funds together you have to consider that the £30,000 has been paid out of that fund, and Mr Anstruther's estate is, of course, discharged entirely to the extent of the £30,000. Then the amount of the remainder will have to be ascertained, and when ascertained it will have to be divided among these three ladies in equal proportions. I think that in substance really reaches the whole of the case we have before us.
It is a case which, when analysed, may, I think, be reduced to these simple propositions. The first proposition being, that the children, in the event of the fund not being alienated for onerous causes, clearly had the right which has now accrued in the two funds—that of the father and that of the mother. That the sum paid over to the first child of the marriage, and accepted by her as her allotted portion, does not operate to bar and sweep her out of the whole benefit to be derived from the settlement; but only operates pro tanto as far as the £5000 goes, and that the sum allotted to Mrs Mercer in effect amounts to a similar appropriation or apportionment of the £5000 apportioned to her, and therefore what your Lordships have to do in this case will be this—To make a declaration that the settlement of Mrs Cuninghame and Mrs Mercer are respectively appointments or apportionments under the power (the Scotch call it apportionment—I shall have a word to say upon the language presently) contained in the settlement of 1828. But the alleged release contained in each of these settlements does not amount to or effect any bar to the right of participation in any portion of the property subject to the power of apportionment which may not be apportioned under that power, and that the release given by the third child in the same way does not operate as baring her from taking any share in the remaining fund, and that the gift made by the trust-settlement of 1866 of £20,000 to the third daughter Lucy is also
Page: 436↓
I ought to add, with reference to another noble and learned Lord who was present at the hearing of this case, Lord O'Hagan, that he expressed his desire that the judgment should not be postponed on account of his absence, and he also expressed his concurrence in the views I have expressed, that the sums advanced to Mrs Cuninghame and Mrs Mercer were in effect appointments made, and that the parties to whom the appointments were made were not debarred from sharing in the fund which might remain unappropriated and unappointed. I am not, of course, able to say that he has known absolutely all that I have now stated in giving my reasons for this judgment, but he concurs in the conclusions to which I have now come.
(1) What is the nature of the right or interest which the children of Mr and Mrs Anstruther took under their parents' marriage-contract?
(2) Was the power of apportionment amongst their children contained in that marriage-contract duly exercised by the obligation which the parents jointly took upon themselves in Mrs Cuninghame's marriage-contract, and Mr Anstruther alone in Mrs Mercer's marriage-contract, to pay £5000 to trustees in trust for them and their children respectively, and by the acceptance of each of them of that sum in satisfaction of all claims which they had under the marriage-contract of their parents?
(3) Is there any ground for the reduction of the clause of discharge in Mrs Cuninghame's and Mrs Mercer's marriage-contract, or either of them?
(4) Assuming that the sums of £5000 paid to trustees for Mrs Cuninghame and Mrs Mercer on their respective marriages were proper exercises of the power of apportionment, and the £20,000 given to Lucy Anstruther by her father upon his second marriage was also a good apportionment of that sum to her, and these several sums did not exhaust the fund over which the power existed, How is the unappropriated fund remaining after the apportionment to be dealt with?
The nature of the right and interest of the children under the marriage-contract of Mr and Mrs Anstruther seems to me to admit of little dispute. In each case of the property brought into settlement the fee was in the party from whom it proceeded, subject respectively to a liferent in the other surviving; and the children had a succession which has been indifferently called a spes successionis and a protected interest, but whatever its proper name, it was a contingent right which could have been defeated by a disposition for onerous causes, but not by a gratuitous alienation. The Dean of Faculty argued that the question whether the fee was in the parents or the children was one of intention, and that when there is a power of division among children, the parent necessarily becomes fiduciary fiar for behoof of the unborn children. If this is the law, it is rather extraordinary that it was not adopted by any one of the learned Judges of the Court of Session. They were unanimously of opinion that the fee of the £4000 provided by Mr Anstruther was in him, and they did not agree with the Lord Ordinary that the fee of the provisions made by Mrs Anstruther was in Mr Anstruther surviving, but with the exception of Lord Deas, who thought that the question did not require to be determined, they held that it passed upon her death to the children.
Upon the death of both their parents the children would have been entitled equally to the whole of the property, whether derived from their father or their mother, unless the power of apportionment amongst them contained in the marriage-contract were duly exercised. That power as to the father's £4000 is reserved to him to divide and proportion as he should think proper the provisions in favour of the children, and the mother surviving him was to have the same power. And as to the property provided by the mother, the power to divide and proportion it among the children was given to the parents during their joint lives, and afterwards to the survivors, and in both cases failing any division the provisions were to be divided among the children equally, share and share alike.
The next question, therefore, to be considered is, whether this power of apportionment amongst the children was duly exercised by the obligation to pay £5000 to trustees under Mrs Cuninghame's and Mrs Mercer's marriage-contract respectively, and their acceptance of those sums in satisfaction of all their claims under the marriage-contract of their parents. There is no difference in the cases of these two children, except that at the time of Mrs Mercer's marriage her mother was dead, and the obligation to pay the £5000 was undertaken by the father surviving. The clause of discharge in their claims is in the same terms mutatis mutandis in the marriage-contracts of each of the daughters.
Taking Mrs Cuninghame's as the example, it runs thus:—“And which said sum of £5000 is hereby declared to be, and the said Maria Anstruther hereby accepts of the same in full satisfaction of all legitim, portion-natural, or bairns' part of gear, and of all claims whatsoever which she, the said Maria Anstruther, has in any manner of way, by or through the death of her said father or mother, or by the contract of marriage entered into between her said father and mother, dated 24th and 26th March 1828, and as the share of division hereby allotted to her of her said father's and mother's property settled by said contract, all which claims are hereby settled accordingly.”
It was argued on the part of the appellants that this could not have been intended as an execution of the power of apportionment, because there was no reference to the power, and because of the release, not only of the daughter's claim under the marriage-contract of her parents, but also of the legitim, portion-natural, and bairns' part of gear, but that it was a transaction between the father and daughter, by which he, paying the £5000—not out of the trust-funds but out of his own monies,—
Page: 437↓
It appears to me that the obligation to pay the £5000 was intended to be, and was understood by all parties to be, an execution of the power of appointment. Little reliance can be placed upon the circumstance that the clause contains no express reference to the power. As Lord St Leonard says in his book on Powers (8th Edition, p. 289)—a donee of a power may execute it without refering to it, or taking the slightest notice of it, provided that the intention to execute it appears—and the reason of this is given in Scrope's case (10 Ex. Rep.) to which he refers, “quia non refert an quis intentionem suam declaret verbis an rebus ipsis vel factio.”
It appears clearly that the powers must have been in the contemplation of the parties from the words of acceptance of the £5000 by Mrs Cuninghame in satisfaction (inter alia) of the share or division thereby allotted to her of her said father and mother's property settled by their marriage-contract. It seems difficult to put any other construction upon these words than that of an acknowledgment that the £5000 was the share or division which Mr and Mrs Anstruther had the power to allot by their marriage-contract. The acceptance of this sum, not only as the allotted share, but also in satisfaction of the legitim, portion-natural, or bairns' part of gear, which is used as an argument against its being an exercise of the power, strengthens my opinion that it must have been so intended. For the creation or reservation of the power in Mr and Mrs Anstruther's marriage contract is immediately followed by the words:—“which provisions conceived in favour of the child or children of the said marriage shall be in full satisfaction to them of all bairns' part of gear, legitim, portion-natural, executry, and everything else that they should ask or claim by and through the decease of the said James Anstruther, their father, except what he may think fit to bestow of his own goodwill only.” The satisfaction of these rights and interests would have been followed up on the due execution of the power, and therefore it was unnecessary that it should have been expressly mentioned, but, having been so, it shows that the clause must have been framed with direct reference to the power, and it leaves no doubt in my mind that it was intended to be an exercise of it.
An objection was made to the execution of the power—that the appointment of the £5000 to the daughters respectively was not confined to them, but made to others who were not objects of the power. This is answered by the case of White v. St Barbe ( 1 Ves. and B. 339) in which it was decided that under a power to appoint among children interests may be given to grandchildren by way of settlement, with the concurrence of their mother (an object of the power), and her husband.
Having shown that the £5000 given to the daughters on their respective marriages was in exercise of the powers of apportionment, and not a transaction with their parents, the next proposed question as to the reduction of the clauses of discharge in their marriage contracts, and all the evidence given as to their ignorance of their rights at the time of their acceptance of the £5000 in satisfaction of their claims, fall to the ground, because if a parent has a power of appointing a fund amongst children in such proportions as he may think proper, he may exercise that power at his own will and pleasure; and whether the child who has a share allotted is a minor or of full age, or whether he knows or is ignorant of the extent to which he might eventually become entitled in succession, or whether he expressly accepts or not the provision which is made for him, is wholly immaterial, as he can by no possibility control the parent in his discretion to distribute the fund amongst the children as he thinks proper.
Mrs Mercer's case differs in no respect in the character of the provision made for her upon her marriage from that of Mrs Cuninghame. Both were in exercise of the power of apportionment or neither. Mrs Mercer's release of her claims could only be reduced upon the ground of its being a transaction with her father in ignorance of her right in the succession to her mother's property, and if it were of that character, the clause in Mrs Cuningbame's marriage contract is precisely similar. I cannot understand, if, in Mrs Mercer's case it was a transaction which ought to be reduced, why the same conclusion was not adopted in favour of Mrs Cuninghame. The Lord President draws this distinction between the two cases, “when Mrs Smith Cuninghame was married in 1847”—(he says)—“She had nothing but a contingent claim either against her father or mother under their marriage contract, and she was receiving a present consideration in money for a discharge of that contingent claim. But when Mrs Mercer was married in 1861 she had much more than a contingent claim, she had a joint fee along with her sister Lucy in the whole estate of which her father was liferenter.” But, with great respect, the question in the case of both daughters was not as to the nature of their rights, but as to their knowledge or ignorance of them; and, in this view, it seems to be immaterial whether the interests with which they were respectively dealing were contingent or vested. If they are to be considered as transactions which may be reduced on the ground of ignorance of facts, which disabled the daughters from exercising a right judgment, whether they should accept the £5000 in satisfaction of their respective claims. The case of Mrs Cuninghame seems to be stronger in favour of reduction than that of Mrs Mercer, as she was a minor, and her natural guardian, her father, does not appear to have afforded her the protection which she was entitled to expect from him. I could not avoid making these remarks upon the interlocutor of the Court of Session reducing the claim of discharge in Mrs Mercer's marriage-contract, and refusing to do so with respect to a similar clause in the marriage-contract of Mrs Cuninghame, although, as I have already shown, these clauses being in both cases introduced into the contracts in the exercise of the power of apportionment contained in Mr and Mrs Anstruther's marriage contract, reduction of them is out of the question.
There only remains to consider what is to be done with the trust-fund, which, after all the allotments made in exercise of the powers of apportionment, is left unappropriated. I do not think that by these allotments the parents put it out of their power to increase the provision made for the daughter, nor was the joint power in Mr and Mrs Anstruther so exhausted by their exercise of it in Mrs Cuninghame's favour as to render it incompetent to Mr Anstruther, surviving, to make an addition to what had been before given to her.
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Out of the unappropriated residue of the fund a sum of £20,000 was given to trustees by Mr Anstruther for his daughter Lucy, upon the occasion of his second marriage. There was a doubt suggested in argument, whether this ought to be regarded as an appointment of the fund over which the power existed, or was not rather a bargain with Lucy out of Mr Anstruther's own property. He certainly entertained the idea that after the death of his first wife he had the absolute fee in her property, and was entitled to transact with it at his pleasure; and the trust-disposition and settlement, upon his second marriage with Miss Anderson, proceeds upon this supposition. He thereby assigns, dispones, conveys, and makes over to trustees his whole means and estate, heritable and moveable, real and personal, in trust after payment of his just and lawful debts, deathbed and funeral charges, and the expenses of carrying the trust into execution, to pay over or invest the sum of £20,000 for the sole use and behoof of Lucy Anstruther, and her heirs and assignees; and his trustees are to hold and invest the sum of £30,000 for payment to his promised spouse of the interest during her lifetime, and after her death the principal to the children of the marriage. The whole of the settlement has more the appearance of a disposition of his own property than of the exercise of a power by which his authority was limited. But as in the allotment of the shares of the two other daughters, the provision for Lucy is declared to be in full satisfaction of all claims she may have for bairns' part of gear, legitim, portion-natural, or through the marriage-contract between her father and mother, and Lucy, in token of accepting the provision in full of all such claims, subscribes the settlement. I think that if it had been to Lucy's interest to reject this provision as not being in exercise of the power of apportionment in her favour, it would not have been competent to her to do so, nor can her sisters successfully contend that there has been no due exercise of the power to the extent of this £20,000, and, consequently, that it is part of the unappropriated residue. But the £30,000 given to the second wife could only be a valid disposition if Mr Anstruther were fiar of the fund remaining unapportioned amongst the children of his first marriage, because it would then be, as the Lord Ordinary said, subject to his disposal for onerous causes or just and rational consideration. But he having only a power to divide and proportion the fund amongst the children of the first marriage, the disposition to the second wife was clearly void, as she was not an object of the power. The result is, that the whole remaining fund beyond the two sums of £5000 to Mrs Cuninghame and Mrs Mercer, and the £20,000 to Lucy Anstruther, comes to be distributed equally amongst the three sisters, share and share alike, according to the provisions of the marriage-contract of Mr and Mrs Anstruther. I agree with my noble and learned friend in the judgment which he has proposed to your Lordships.
I must first advert to the notion that seems to have been entertained by some of the learned Judges of the Court below, that the language of this power required an execution uno flatu once for all. Some of them appear to have imagined that the language required an entire apportionment, and that it did not admit of appointments from time to time. My Lords, that would be to put an interpretation on the words utterly at variance with the objects of the power, and utterly subversive of any useful application to be made of the power. No appointment could be made to a child settled in life or married until all the other children had also become of such an age that their future destination could be ascertained and fixed. It is quite clear that the reason of the thing demands that the power given to the parents, in one instance to the father, in the other instance to both parents, to apportion at any time, must be interpreted so as to warrant the appointment being made from time to time, and so in truth it appears to have been conceded at the bar, because it was admitted that after the appointment to Mrs Cuninghame and to Mrs Mercer further appointments might have been made.
The next difficulty that was felt by the learned Judges in the Court below was on the words which have been denominated a “release in the appointment to Mrs Cuninghame and in the settlement of Mrs Mercer,” and various effects have been ascribed to these alleged words of release. Some learned Judges appear to have imagined that they operated as an assignment by contract to the father or the donee of the power of the whole extent of the portion which in an equal division of the entire fund might have been attributed to the objects of the power. Now, it is quite clear that that would destroy the very foundation upon which the powers given to the parents are rested. If it were possible to admit any contract between a father and a child as the reason for the exercise of the power, fraudulent transactions might be introduced destructive of the interests of the child, and giving to the father that which he ought not to obtain; it is clear, therefore, that in accordance with the settled principles of equity, it is impossible to hold that the father could gain any benefit to himself in the residue of the trust-fund by having made an appointment of one part of it as to one of the children. Well, but then some of the Judges imagine that the release might inure to the benefit of the two other sisters, who were the objects of the power. Sometimes it was imagined that the release of Mrs Mercer's settlement might inure to the remaining sister. It is utterly impossible to find in either settlement any contract to that effect, or that the words contained in the settlement should receive that interpretation even if it were possible that such a transaction should have force given to it as consistent with an honest exercise of the power. The truth is, that what are called the words of release amount to no more than this, that the sum appointed to the child shall be taken as part of the settlement provision, in which the child under the trust-settlement had an interest. The whole case, therefore, assumes a very simple aspect as soon as the ordinary suggestions of common sense are applied to the interpretation of the words, and to the effect which, their having regard to the intention of the power, ought to be attributed to it.
Now, that being the state of the case, the relative position of the children is perfectly clear. They stand on an equality with regard to the undistributed
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With these prefatory observations, I will read what I have written, and the conclusions at which I have arrived, and which have been sanctioned by what has fallen from the noble and learned Lords who have preceded me. I consider that the settlement of Mrs Cuninghame and Mrs Mercer are respectively appointments, and under the power contained in the settlement of 1828. I prefer the word appointment, because the word apportionment seems to imply a dealing with the entirety of the fund. But the alleged release contained in each of the settlements does not amount to or effect any bar to the right of participation in any portion of the property subject to the power of appointment which may not be appointed under the power. Neither does the release give to the third child, or operate by implication as an appointment to the third child, of the residue of the funds which were subject to or comprised within the power. The gift made by the trust-settlement of 1866 (that is Mrs Anstruther's will) of £20,000 to the third child, Lucy, is, in my opinion, an appointment to Lucy under the power, and which it was fully competent to the donee of the power to make. But if (as in this case) the two sums of £5000 and the £20,000 do not together equal the aggregate amount of the funds brought in by Mrs Anstruther under the settlement of 1828, and of the funds of Mrs Marion Anstruther, also brought into that settlement, the balance of these funds (after deducting £5000, £5000, and 20,000—£30,000) is unappointed property, and is distributable under the trusts of the settlement of 1828 among the three children in equal shares, for I do not think the children are bound in this division of the surplus to bring into hotch-potch the sums appointed to them respectively. The right of the children to the provisions brought in by Mr and Mrs Anstruther under the settlement of 1828 was not defeated by the provisions for the second Mrs Anstruther under the settlement of 1866. On the death of Mrs Marion Anstruther her surviving husband became fiar in trust of all the property brought in by Marion, and could not defeat the interests of the children.
Therefore the interlocutor of 11th July 1870 was totally wrong; the judgment in Mrs Mercer's case is wholly inconsistent with it, inasmuch as it finds that Mrs Mercer was entitled to share with her sister, Mrs Cuninghame, in the estate and effects of their mother, so far as not settled and appropriated by their father and mother jointly, or by their father after their mother's death. It will be observed that my observations would give the surplus to the three sisters. The difference of the decision in Mrs Cuninghame's case from that in Mrs Mercer's case cannot be supported by any difference in the wording of the alleged release in the two settlements, for they are identical; and it is evident that the question as to the fee of the settlement funds is wholly immaterial, it being admitted that the power of apportionment remained unaffected, and that, subject to that power, the effect of the settlement of 1828 was to give the whole of the settlement estate to the three children as substitutes to their parents, in equal shares.
There is no question with any creditor or aliener for value of Mrs Anstruther.
I think it expedient the order of the House shall be made in both appeals, and cover the whole of the subject matter. Subject to any alteration in the language of the order that my noble and learned friends may hereafter suggest, I will read what I should propose as the form of the order, for the information of the counsel at the bar at present. It may be as follows:—“Reverse the interlocutor of the 11th July 1870. Reverse such parts of the other interlocutors appealed from in either appeal as are inconsistent, or at variance with, the declarations and findings hereinafter expressed; and this House doth declare and find that the marriage settlement of Mrs Cuninghame, and the marriage settlement of Mrs Mercer, were respectively valid appointments of the two sums of £5000, in exercise of the power contained in the settlement of 1828; but that such appointments do not exclude Mrs Cuninghame or Mrs Mercer from participating in so much of the funds or property comprised in the deed of 1828 as have not been appointed under the power or powers therein contained: Declare and find that the trust disposition and settlement of Mrs Anstruther, of 8th October 1866, was a good appointment under the power in the deed of 1828, to Lucy Anstruther, of the sum of £20,000, part of the funds comprised in the deed of 1828; but that she is not thereby debarred from participating equally with Mrs Cuninghame and Mrs Mercer in the residue of the settlement funds of 1828 (if any) remaining unappointed or unexhausted by the said three appointments: Declare and find that, according to the true construction of the powers contained in the settlements of 1828, the same admitted of being validly exercised from time to time by several appointments: Declare and find that the estate of Mr Anstruther is entitled to have credit in the account hereinafter directed, for the two sums of £5000 paid by him to the trustees of Mrs Cuninghame and Mrs Mercer's settlements, and for any sum received by Miss Lucy Anstruther on account of the sum of £20,000.
Declare and direct that a reference be made to such person as the Court of Session shall appoint, under the remit hereby made, to take the following accounts.
An account of all the funds, monies, and properties that were comprised in or became subject to the trusts or dispositions expressed or made in and by the said settlement of 1828, and of the manner in which the same have been from time to time invested, and what were the particulars, value, or amount of all such funds and property at the death of the said James Anstruther, and to ascertain and state what, if anything, was, at the time of his decease, due from the said James Anstruther (subject as aforesaid) in respect of any trust property or
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This may not be necessary. It is only to ascertain what free general personal estate of James Anstruther there now is, to answer what will be the demand against him under the provisions of the settlement of 1828, and with the receipts and payments of his trustees for or representatives in respect of such estate not subject as aforesaid, and to ascertain what estate of the said James Anstruther is applicable to the payment of the balance that may be found due from him to the settlement of 1828 as aforesaid.
There is, then, a point which I must submit to your Lordships' attention, and that is the question, How the enormous amount of the costs that have been incurred in this unfortunate litigation are to be met? Now, considering how the decisions in this case have varied, the wanderings of the parties themselves may in some degree be excused, and I should therefore humbly submit to your Lordships that the costs of all the parties should be paid out of the free estate of Mr Anstruther.
I am desirous that, if possible, we should dispose of this matter in such a way as not to leave any door ajar that may be pushed open in the Court below, so as to admit of further litigation in this matter; whether we can do that or not may be very problematical. I understand that your Lordships wish to reserve to yourselves the power of considering the exact form of your order. I am not at all sure that the words I have now read comprehend the whole of the matter, but in case any alteration therein should be desirable, perhaps your Lordships will approve of the form of account being given before the order is made to the counsel on either side, not to afford an opportunity at the bar, but that they may be at liberty to send in such amendments in the form of account as they may think desirable in this case.
With these declarations, findings, and directions, I would submit to your Lordships to remit the causes to the Court of Session.
Lord Chancellor—My Lords, with reference to the last remark that my noble and learned friend has made regarding the expense of this litigation, I should go so far with him as to think that, ultimately, Mr Anstruther's property (he being really the cause of the mode in which these instruments were executed, and therefore the source of the vexation and intricacy that have subsequently occurred in solving the various questions which have arisen) might be charged with that expense, but one does not know how the course of events may turn out with reference to the proportion of property in the several estates, as between the three sisters. I apprehend that all costs should come equally, if they are obliged to have recourse to their own funds, out of that free fund which is left after the apportionment, but having recourse to the father's estate in the event of that estate being sufficient to answer them, in order to recoup the diminution of the fund. The father's estate, therefore, will pay the costs in the first instance, if sufficient to do so. If not, the costs will necessarily have to come out of the fund to be divided.
Lord Chancellor—Then the question will be that the interlocutors complained of, so far as they are inconsistent with the declaration afterwards to be contained in your Lordships' order, be reversed. We will postpone the exact form of the declaration, though I believe we agree in substance with the proposal of the noble and learned Lord; and as to the expenses, that they be borne in the manner prescribed in the form of order as it will be finally drawn up.
Solicitors: Agents for Mr and Mrs Smith Cuninghame, &c.— Hamilton, Kinnear, & Beatson, W.S.; Grahame & Wardlaw, Westminster.
Agents for Anstruther's Trustees— A. & A. Campbell, W.S.; Loch & Maclaurin, Westminster.
