Scottish Court of Session Decisions

By antenuptial contract of marriage between James Weir Cathcart and Miss Constance Margaret Valentine Hagart, dated 27th and 28th November 1885, Mr Cathcart, inter alia, gave, assigned, and disponed to his said wife as her absolute property, if she should survive him, the whole household furniture which should be in or about his house at the time of his death, “and also the liferent use of any one house he may die possessed of.” This was Mr Cathcart's second marriage. No children were born of the marriage.

Mr Cathcart died on 29th July 1890, leaving a trust-disposition and settlement by which he, after conveying to trustees generally his whole heritable and moveable means and estate, inter alia directed them to apply said means and estate, “In the first place, in payment of all my just and lawful debts, sickbed and funeral charges, and the expense of executing this trust, which debts, charges, and expenses my trustees may pay without requiring legal constitution: In the second place, in implement, so far as the same have not been implemented, of the provisions contained in my antenuptial contract of marriage with my wife, the said Constance Margaret Valentine Hagart or Cathcart.”

At the date of his marriage and at the date of his death Mr Cathcart was owner of a house No. 29 Palmerston Place, Edinburgh. Mr Cathcart had no other heritable property. The children of Mrs Cathcart's first marriage were, in terms of his settlement, fiars in the property and residuary legatees.

For some time after their marriage Mr and Mrs Cathcart occupied this house, but prior to Mr Cathcart's death they had gone to live elsewhere, and the house was let by Mr Cathcart to a rent-paying tenant. The house was burdened with bonds amounting to £2750.

On 20th April 1895 Mrs Cathcart married Mr Allardice.

In 1897 Mr Cathcart's testamentary trustees, with the approval of Mrs Allardice and all parties interested in Mr Cathcart's estate, sold the house at the price of £3600. It was part of the bargain that the purchaser should take over the bonds along with the property. The testamentary trustees accordingly received the purchase price of the house under deduction of the sum of £2750, the net balance received being £850.

Certain questions thereafter arose with regard to the rights of Mrs Allardice in relation to the house and the price that was obtained for it; and for their settlement a

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special case was presented to the Court by (1) Mr and Mrs Cathcart's marriage-contract trustees; (2) Mr Cathcart's testamentary trustees; (3) Mrs Allardice, with consent of her husband; and (4) Mr Cathcart's children by his first wife.

The questions of law were—“(1) Was the third party liable in payment ( a) of the interest upon the bonds, and ( b) of the whole other annual outgoings connected with the ownership as opposed to the occupancy of the property? (2) Upon the sale of the house, were the second parties bound to set apart for the liferent use of the widow ( a) the whole price received, or ( b) only the balance after deducting the amount of the bonds?”

Argued for first and third parties—The right conferred by the marriage-contract on the third party was a right to use No. 29 Palmerston Place during her lifetime in such manner as she might deem most beneficial, either by personal occupation thereof or by lease to tenants for a rent. The right of use did not subject her to payment of any annual burdens affecting the property except such as were incident to occupancy, and did not make her liable to bear the payment of interest on the bonds over the house. The extent and measure of right depended on the measure of the grant, and there was here no conveyance of liferent estate on which the third party could take infeftment. It was a gift of the use of the house, not of the house itself, in liferent, and the widow was only liable in payment of rates payable in respect of occupancy— Clark v. Clark, January 19, 1871, 9 Macph. 435; Bayne's Trustees v. Bayne, November 3, 1894, 22 R. 26. The third party was in the same position as if she had been granted absolute warrandice— Strong v. Strong, January 29, 1851, 13 D. 548. Upon the sale of the house in 1897 the third party was entitled to have the gross price received therefor, and not the net price after deducting the amount of the bonds, set apart as a special fund, the interest of which was due to her as a surrogatum for the use of the house. Alternatively, in the event of the right of use conferred upon the third party being decided to be a “liferent” in the ordinary legal sense, implying liability for all annual burdens affecting the property, the testamentary trustees, in terms of the directions in the truster's settlement to pay his debts, were bound to pay the amount of the bonds from the residue of his moveable estate, and thus free the liferented subjects thereof.

Argued for the second and fourth parties—The right conferred on the third party was not a mere right of occupancy, but was one of liferent in the proper legal sense of the word. The cases of Clark and Bayne were totally distinct from the present. There was no question in these cases of liferent. In Clark it was the testator's intention that his wife should be the occupant of a particular furnished house; and in Bayne the house was to be “made over” to the widow as a residence for the testator's family. In the present case the “liferent use” of the house was given, and the widow was entitled to let it as a subject of profit; and the legal obligation incumbent on a liferenter being the payment of all annual burdens affecting the property when the liferent becomes operative, the third party while entitled to receive the rents of the house as let, was liable in payment of these burdens, including the interest on the bonds. Although the fiars in the property and the residuary legatees in the truster's moveable estate were the same—namely, the truster's children—the testamentary trustees were not entitled either to pay off the bonds out of the residue of the moveable estate, or to burden the same with said bonds to the effect of freeing the third party from payment of the annual interest thereof, there being no express direction in the truster's settlement to do so— Macleod's Trustees, June 28, 1871, 9 Macph. 905. The case of Strong did not apply, as in that case there was a clause of warrandice. The usual general direction (which was all that the trust-disposition and settlement contained) to pay the truster's debts was not to be construed as an express direction to that effect, and in the absence of express direction, or at least of clear implication, the testamentary trustees were bound to follow the ordinary rule of law that a liferented heritable subject under a mortis causa deed must be taken cum suo onere as regards the obligations both of liferenter and fiar. Similarly, on the sale of the house the testamentary trustees were bound to set apart the net price thereof, or the price after deducting the amount of said bonds, as a surrogatum for the heritage for the liferent use of the third party.

At advising—