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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Kinnear (Ferguson's Trustee) v. Mrs Janet Tainsh or Ferguson and Others [1871] ScotLR 9_39 (7 November 1871) URL: http://www.bailii.org/scot/cases/ScotCS/1871/09SLR0039.html Cite as: [1871] SLR 9_39, [1871] ScotLR 9_39 |
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Page: 39↓
A married woman succeeded to a legacy of £500, the not being excluded. To the extent of £405 it was invested in the purchase of heritable subjects, the disposition being taken to the husband in liferent and the wife in fee. It was not proved that the husband was insolvent at the date of the purchase, but six months thereafter he was sequestrated. Held, in an action of reduction at the instance of the trustee in the sequestration, that the settlement was not more than a reasonable provision for the wife.
In 1869 the defender Mrs Ferguson succeeded to a legacy of £500 from an uncle. The jus mariti was not excluded. The legacy, to the extent of £405, was invested by Mr and Mrs Ferguson in the purchase of certain heritable subjects in Portobello. The price of the subjects was £705, the remaining £300 being raised by a loan from the Standard Investment Company, secured over the premises. A feu-charter was obtained from the superior, by which the subjects were disponed “to and in favour of the said Janet Tainsh or Ferguson, and the said George Ferguson, her husband, in conjunct fee and liferent, and to Helen Ferguson, only child procreated of the marriage betwixt the said George Ferguson and Janet Tainsh or Ferguson, and to any other child or children which may yet be procreated of said marriage, jointly, in fee.” The charter contained a declaration that, notwithstanding the destination therein, it should be competent to the said Janet Tainsh or Ferguson “to sell or. burden the said subjects, and exercise every other right of ownership.” The charter was dated 7th August, and recorded 30th August, 1869.
On the 26th February 1870 George Ferguson was sequestrated, and on 9th March the pursuer was elected trustee. On the 12th July 1870 he raised the present action against Mrs Ferguson and George Ferguson, for himself, and as taking burden on him for his wife, and also as administrator-in-law for Helen Ferguson, only child of the marriage, to have it declared that the subjects in question were purchased by George Ferguson, to the extent of £405, with funds which belonged to him jure mariti, and are his property notwithstanding the feu-charter: and that the subjects are now vested in the pursuer, as trustee on the sequestrated estate of George Ferguson; or otherwise that the conveyance in favour of the said Janet Tainsh or Ferguson was a donation by George Ferguson in her favour, made stante matrimonio, and while he was in insolvent circumstances, and is now revocable by the pursuer, in the bankrupt's right; or otherwise that the conveyance is null, under the Act 1621, c. 18. The summons also concluded for reduction of the feu-charter, so far as it imported a conveyance in favour of the wife or children.
Defences were lodged for Mrs Ferguson and her husband. They pleaded—“(1) The investment of the legacy left by the female defender's uncle being made, not in contemplation of bankruptcy or in the knowledge of insolvency, and not as a donation by a husband to his wife, but as a moderate and suitable provision for her out of funds to which she had in equity the primary right, the deed in question, in so far as favourable to her, ought to be maintained. (2) The legacy in question being money to which the female defender has a primary equitable right, the pursuer ought not to be allowed to obtain possession of the property paid for by it, without making a provision for her adequate to secure her against absolute want.”
A proof was taken, chiefly on the point whether George Ferguson was or was not insolvent at the date of the purchase of the property.
The Lord Ordinary ( Mure) found that it was not proved that George Ferguson was insolvent at the date of the purchase: “Finds that previous to that date no provision had been made, by antenuptial contract of marriage or otherwise, by the defender George Ferguson in favour of the other defender; finds, in these circumstances, in point of law, that the defender George Ferguson was entitled to apply a portion of the said legacy in making a reasonable provision for the other defender; and that the application of the sum of £405, in the purchase of the said property to the extent of £250, and the destination thereof in favour of the defender Mrs Ferguson, to the same extent, was, in the circumstances, a reasonable provision, and was not revocable by the said George Ferguson, and is not revoked by his sequestration; and that the defenders are, to that extent, entitled to be assoilzied from the conclusions of the action; but
Page: 40↓
After a review of the evidence of Ferguson's solvency or insolvency at the date of the purchase, his Lordship's note proceeds—
“2d, Holding the defender therefore to have been solvent in August 1869, the Lord Ordinary—having regard to the sums which were held to be reasonable provisions in the cases of Craig and Galloway, 17th July 1861, 4 Macph. p. 267, and of Rust, 14th Jan. 1865—has come to the conclusion that £250, or one-half the value of the legacy, was not an unreasonable sum to set apart as a provision for the other defender. Had this money not belonged originally to Mrs Ferguson, the Lord Ordinary would have been disposed to hold that about a third of the amount would, in the circumstances, have been a proper sum to apply by way of a provision. But as the money came through the wife, her provision may, it is thought, be fairly fixed at a larger sum; and he has taken it at the one-half, being the amount which, with the apparent approbation of the Court, was fixed in the case of Small, 24th February 1870, as a reasonable provision for a wife, in dealing with a question of this description under the 16th section of the Conjugal Rights Act, 24 and 25 Vict. cap. 86.
3d, Upon this assumption, the Lord Ordinary has found that the application of the legacy, to the extent of £250, in the purchase of the property in question, is not challengeable as a donation, and was not revoked by the defender's sequestration, but that the conveyance is revocable, and may be cut down as regards the excess, which seems to have been recognised as a competent course in disposing of the case of Craig and Galloway in the House of Lords, and to be sanctioned by the principle of the decisions in the case of Kemp and Napier, 1 Feb. 1842; and of Dunlop Trs., 24 March 1865, both in this Court and in the House of Lords.
It was contended, on the part of the pursuer, that the effect of the declaration in the feu-charter, empowering the defender Mrs Ferguson to dispose of the subjects during her life, might have enabled her to deprive her husband of his liferent, and may prevent the creditors from now taking any benefit from the bankrupt's liferent interest in the property. The Lord Ordinary is disposed to doubt, as at present advised, whether the declaration would necessarily have that effect, inasmuch as the right of fee appears to be expressly burdened with the liferent interest of the bankrupt. But assuming that this would have been its effect, and that the husband, by consenting to its insertion, had thereby put it in his wife's power to defeat his liferent, and to dispose of the property for her own benefit during her husband's life, this was, it is thought, challengable by the husband as a donation; and the Lord Ordinary has therefore found it to be revoked by the sequestration. The effect of this will be to make the liferent interest of the bankrupt available for the creditors, after payment of the interest due upon the bond.”
The pursuer now put in a minute, proposing to secure a provision to Mrs Ferguson of £250, payable to her in the event of her surviving her husband, and upon his death; to be effected by a policy of insurance with the North British and Mercantile Insurance Company; and moved the Lord Ordinary to approve of the proposal, and in respect thereof decern in terms of the conclusions of the summons, superseding extract till the policy has been effected.
The Lord Ordinary, on 16th June 1871, approved of the proposal contained in the minute, and found, that upon the policy being effected, the pursuer would be entitled to decree in terms of the reductive conclusions; found no expenses due to either party.
The defender reclaimed.
Campbell Smith, and Mackintosh, for them, argued—(1) That if the Conjugal Rights Act applied, Mrs Ferguson was entitled to a present provision out of the money to which she had succeeded; that in any view the contingent reversion of £250, the provision made by the Lord Ordinary, was much too small; Somner, March 2, 1871, 9 Macph. 594; Taylor, October 28, 1871, 9 Scot. Law Rep. 22; (2) That at common law, the provision being reasonable, and the husband solvent at the date, the deed should stand, and the defender be assoilzied.
( Millar,) Q.C., and ( Mair), for the pursuer.
During the debate the Court asked the counsel for the defenders whether they argued on the footing that the liferent given to the husband was defeasible by the wife or not.
( Mackintosh)—We ask for absolvitor in either view.
The Court—Unless we have some argument, from either party, for holding it defeasible, we shall hold it to be indefeasible.
At advising—
( Lord President)—The object of the present action is to claim for the trustee and creditors the whole property embraced in the feu-charter. The defence stated for the wife is that it makes no more than a reasonable provision for her, as the wife of the bankrupt. That I am prepared to sustain. The case comes within the operation of section 16 of the Conjugal Rights Act. Mrs Ferguson succeeded to money, and that money was not reduced into the possession of the husband, and so the proviso at the end of the section does not apply. The effect of the deed taken by the husband and wife from the superior is to make this arrangement. The money succeeded to by Mrs Ferguson, to the extent of £405, was paid pro tanto as the price of the subjects. The remainder of the price was advanced by the Standard Investment Company. The deed settles the fee on the wife. There is a destination over in favour of the child; but as far as the fee is concerned, she has an absolute power of disposal, notwithstanding the destination over. The husband gets a liferent. The only question before us is, whether that provision of the fee of £405 to the wife exceeds a reasonable provision?—not whether it comes up to a reasonable provision. I am of opinion that it does not exceed a
Page: 41↓
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The Court recalled the interlocutor of the Lord Ordinary, and assoilzied the defenders, with expenses.
Solicitors: Agent for Pursuer— William Officer, S.S.C.
Agents for Defenders— J. B. Douglas & Smith, W.S.
