Scottish Court of Session Decisions

In the first of these actions Henry Dryden and others, the heirs in mobilibus of Mrs Mary M'Gibbon, who died intestate and without issue on 24th December 1904, raised an action against John M'Gibbon, as executor of his wife Mrs Mary M'Gibbon, and Peter Dryden, and the Law Guarantee and Trust Society, Limited, for any interest they might have. It concluded for (1) reduction of a pretended discharge and renunciation granted by them in favour of John M'Gibbon, and (2) for count, reckoning, and payment against the said John M'Gibbon as executor of his wife in order that the balance due by him to the pursuers as her heirs in mobilibus might be ascertained and payment made. John M'Gibbon having died on 30th January 1906, after the raising of the action, his executor George M'Gibbon was sisted in his place.

The second action was brought by John M'Gibbon (his executor subsequently coming into his place) against Peter Dryden, the heir in heritage of Mrs M'Gibbon, for declarator that the dwelling-house, being the third storey of 142 High Street, Edinburgh, was purchased with funds belonging to John M'Gibbon, and that his taking the disposition in name of his wife constituted a donation inter virum et uxorem, which was accordingly revocable, and had in fact been revoked by him. [If the gift was revocable it was not disputed that it had been revoked.]

In the first action decree was by consent of the defender pronounced in terms of the first, the reductive, conclusion of the summons.

Thereafter a proof was taken before the Lord Ordinary ( Dundas), which was held applicable to both actions.

The facts and the contentions of the parties are stated in the opinion ( infra) of the Lord Ordinary, who, on 27th June, pronounced an interlocutor in the first action assoilzieing the defenders from the remaining conclusion of the summons, and in the second action an interlocutor in favour of the pursuer, in terms of the declaratory conclusions of the summons.

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Opinion.—“This action was raised on 14th November 1905 by the next-of-kin of the deceased Mrs Mary Jane Dryden or M'Gibbon, and the compearing defender was her husband, the now deceased John M'Gibbon. The conclusions are for reduction of a discharge and renunciation by the pursuers in favour of the defender, which has been reduced of consent by my interlocutor of 30th January 1906, and also for count, reckoning, and payment in respect of the defenders' intromissions as his wife's executor with her moveable estate.

I have also to dispose now of an action which was raised on 15th December 1905 by the said John M'Gibbon, and which is insisted in by his brother and heir-at-law, against Peter Dryden, the heir-at-law of his sister the said Mrs M'Gibbon. The history of the two cases arises out of the same facts, and the proof which has been led is applicable to both actions. The difficulty as regards the matter of evidence is greatly increased by the fact that both Mr and Mrs M'Gibbon are now dead. The story is a somewhat tangled one, but I shall endeavour to recapitulate succinctly the material facts to which it is necessary to advert.

John M'Gibbon and his wife were married on 28th November 1890. Prior to the marriage Mrs M'Gibbon had earned about ten or twelve shillings a-week, but at its date she had no saved earnings. She had, however, some furniture in a small house in Drummond Street where she had resided and where the spouses lived together after the marriage till Whitsunday 1891. The husband was a compositor, earning wages of not less than £2 per week. At Whitsunday 1891 the M'Gibbons removed to a house of three rooms and a kitchen in St Mary Street, where they took in lodgers. There is some evidence to show that Mrs M'Gibbon there acquired a certain amount of additional furniture from one of her lodgers. In November 1894 the couple became tenants at 142 High Street of two rooms and a kitchen; there was no written lease or missives of lease; the let was arranged by Mrs M'Gibbon with the factor Mr Clephane, who says that he looked to her for the rent, but the husband's name was put in the valuation roll—upon the wife's instruction, as Mr Clephane depones—in order that the vote in respect of the premises should not be lost. At Whitsunday 1895 the tenancy became extended to the whole of the flat at a rent of £26 per annum. This flat had formerly been used as a temperance hotel, and the business was revived at and from Whitsunday 1895. It is clear upon the evidence that Mrs M'Gibbon did in fact manage this business throughout, with slight (if any) practical assistance by her husband, he being engaged in his business upon the night shift and not available for work during the day. The business was from the first successful upon a modest scale, and continued to be so, at all events until the end of 1903. It appears that Mrs M'Gibbon, who died on 24th December 1904, had fallen into a habit of excessive drinking for some time prior to her death. The receipts for rent were granted in name of the husband. Such accounts as are produced, rendered by tradesmen and others, are in his name. His name also appeared upon a brass plate on the door of the premises; the plate had been brought from the house in St Mary Street. Upon the street side of the building the words ‘M'Gibbon's Temperance Hotel,’ or ‘Temperance Hotel,’ were painted. The pursuers produce and found upon a business card, No. 38 of process, on which the words ‘Proprietrix, Mrs M'Gibbon,’ occur, and about which some of the witnesses give evidence more or less vague. It appears that there was also a card, of which No. 73 of process is a type, upon which these words do not occur, but only ‘M'Gibbon's (late Fuller's) Commercial and Temperance Hotel.’ It is not, I think, clear whether or not cards such as No. 73 were in existence or use contemporaneously with those of which No. 38 is an example. In the Edinburgh Directories from 1896–97 onwards Mr M'Gibbon's name is in the list of hotelkeepers. A fire policy of insurance over the flat dated 21st January 1897 is in the wife's name. A fire policy of insurance over furniture, originally taken out in Mr M'Gibbon's name, was in June 1900 transferred to that of his wife.

In January 1897 an important event occurred, viz., the purchase of the flat at 142 High Street. It seems clear that this transaction was wholly carried out by Mrs M'Gibbon—both with the factor of the proprietor, Mr Clephane, and with the lawyer, Mr Wakelin. The destination in the disposition gives in effect a liferent to Mr M'Gibbon on his wife's death and the fee to his wife. I think that it is unfortunate that Mr M'Gibbon's own views were not ascertained at the time. But it seems that he signed the deed without demur—a fact strongly founded upon by the pursuers, and also by the defender in the second action, to which I have made reference. At the time of the purchase additional furniture appears to have been bought, which must,

I think, have been paid for out of the profits of the hotel business. The price of the premises was £475. A bond for £200 over them was obtained, which was signed by both Mr and Mrs M'Gibbon. It appears that at this time there were two bank accounts, and two only, in the name of the spouses or either of them. Copies of these are Nos. 28 and 29 of process respectively. Both were with the Savings Bank. No. 28 was in name of the wife and was headed ‘Own earnings.’ No. 29 was in the joint names of the husband and wife. I should say here that it is, in my opinion, clearly proved by witnesses upon both sides of the case, that Mr M'Gibbon was in the habit, during the entire period of the spouses' residence in High Street, of handing over to his wife substantially the whole of his wages weekly. These she kept, along with the profits of the business so far as not banked, in a locked box in a locked room in the house. As one of the witnesses tersely phrases it, ‘She was the bank.’ One must now see how the balance of the purchase price, £275, was paid, and how the

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sum in the bond, £200, was paid off. As regards the first of these, it is pretty clear that the money was paid by Mrs M'Gibbon to the extent of £80 from the account No. 28 of process, and to the extent of £57, 10s. 1d. from the account No. 29 of process, making together the sum of £137, 10s. 1d., and that the balance, viz., £137, 9s. 11d, was paid by her in cash. This cash must, in my opinion, be held to have come from the cash-box above-mentioned, in which it is proved that Mrs M'Gibbon was in the habit of keeping very considerable sums of money. There is no other feasible suggestion of a source from which the sum can have been raised. If this is the correct view, then I take it that this cash balance was paid out of the profits of the hotel business and the wages of the husband. The £200 due under the bond appears to have been paid by three instalments, viz.—(1) On 10th May 1899 a payment of £50. This, to the extent of £25, came apparently from account No. 29 of process. The balance was paid in cash, presumably from the cash-box. (2) On 14th May 1900, a payment of £50. The source from which this money came is not, I think, clearly proved. (3) On 1st July 1902, a payment of £100. This sum apparently came to the extent of £93, 5s. 2d. from account No. 29 of process, and the small balance was paid in cash. In June 1900 the account No. 28 of process was exhausted and ended by the withdrawal of its then existing balance of £192, 15s. 7d. At the same time there began a series of deposit-receipts with the Royal Bank of Scotland (Hunter Square Branch), which rose steadily from £350 as at 22nd June 1900 up to £750 as at 29th December 1903. These deposit-receipts stood in name of Mrs M'Gibbon, and at her death on 24th December 1904 the amount at credit was £744, 17s. 6d.

In these circumstances the pursuers aver ‘that the said flat was purchased, and the said bond paid, by the deceased Mrs Mary Jane Dryden or M'Gibbon with her own money, and that the sums placed on deposit-receipt with the Royal Bank of Scotland were also her own money. Said money was earned by her before marriage, or in the said hotel business.’ In my opinion, the pursuers' case fails entirely. It is, I think, established by the evidence that Mrs M'Gibbon had at the date of her marriage no saved earnings. As regards the hotel business, the case seems to me equally to fail. After Mrs M'Gibbon's death an inventory of her estate was prepared in Mr Wakelin's office, and given in for the husband's confirmation as her executor. That inventory contained the sum in deposit-receipt, but appended was a ‘ Note.—This money is claimed by the husband of the deceased as forming the joint savings of himself and his wife, or otherwise as money belonging to himself.’ It appear that Mr M ‘Gibbon had made statements to Mr Wakelin, and to those in his office, that he considered the money to be his own, as coming from the hotel business, which was in fact largely contributed to by his own earnings. The note was worded in cautious terms. But later on—after a more definite investigation into the facts—a corrective inventory was lodged, omitting the money upon deposit-receipt; and the duty which had been paid in respect thereof was recovered by Mr Wakelin from the Inland Revenue authorities. Mr M'Gibbon appears to me to have been singularly careless about his money matters, whether from exuberant trust and confidence in his wife as their manager, or from some other cause or causes. It seems that he was aware that there was at her death money on deposit-receipt, but that he was quite ignorant as to its amount. The pursuers' argument was briefly stated to the following effect. The deposited money, they said, belonged wholly to the wife, because it was made by her out of the profits of the hotel business; and that business was a separate business belonging to her. This last fact, it was urged, was evidenced by her sole management of the hotel, coupled with the terms of the disposition and of the bond. The pursuers relied also upon certain very vague statements said to have been made by Mrs M'Gibbon to some of the witnesses; upon the card, No. 38 of process; and some other small items of evidence. Now, I think that the pursuers have entirely failed to prove the crucial fact upon which their argument depends, viz., that the business belonged to Mrs M'Gibbon. The presumption, in my opinion, where a wife lives in a house with her husband, and is the active manager of a business carried on there, is that she is managing it as the agent of her husband. The Married Women's Property (Scotland) Act 1877, section 3, protects, as against her husband, the wages or earnings of a married woman gained by her ‘in any employment, occupation, or trade in which she is engaged, or in any business which she carries on under her own name.’ It has been decided, to quote the words of Lord President Robertson in M'Ginty v. M'Alpine, 1892, 19 R. 935, 939, that in order to come under that section ‘the wife must have some other “employer” than the husband, or the “occupation or trade” must not be simply the occupation or trade of her husband if it is to yield “earnings” in the sense of the section.’ It seems clear that Mrs M'Gibbon had no employer other than her husband; nor do I think that it can be successfully maintained that she carried on the hotel business under her own name within the meaning of the Act. I have referred to the evidence upon this matter; and I again emphasise the fact that the husband's wages were substantially contributed to the business of the hotel. The pursuers' case, then, as regards the money upon deposit-receipt, appears to me to fail. Their strongest point lies in the fact that under the title the wife was fiar of the house. But that fact is not conclusive, and is not per se sufficient to outweigh the presumption of her agency in the conduct of the business. This topic, which is important in the first action, enters vitally into the subject-matter of the second case, and may appropriately be here exhausted. There is no evidence to show with what idea, or

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with what knowledge, Mr M'Gibbon signed the disposition. It appears that he was much surprised when he was informed by the lawyers, after his wife's death, that he was not in a position to sell the house. When they so informed him he was already in Court as defender in the first action. As pursuer in the second action he took up the position that the premises were purchased with his money, and that the destination in the title was of the nature of a gift by him to his wife, which he was entitled to revoke, and which he bore to revoke by deed of revocation, dated 5th December 1905. I am satisfied, for the reasons above expressed, that the premises were purchased and the bond paid off with the husband's money; and I can see nothing which should prevent him, if the facts of the matter are as I have related them, from validly revoking the gift—unless indeed it was donatio remuneratoria—a, view with which I shall deal immediately. The pursuers' counsel insisted that Mr M'Gibbon's word is unreliable. It seems to be the case that he wrote and spoke falsely and deceitfully in connection with the discharge which he obtained from the pursuers, and which has since been reduced of consent. But that does not seem to me to alter or affect the fact that he did revoke the gift. Nor do I think that the facts bring this case within the region of a remuneratory and therefore irrevocable donation. There is no evidence at all that he intended it to be so. The presumption, and such evidence as there is, lie in the opposite direction.

The result of the whole matter is, in my opinion, that in the first action the defender is entitled to absolvitor; and that in the second action I ought to find, declare, and decern in terms of the conclusions of the summons.”

The unsuccessful parties reclaimed, and argued—1. Half of the total savings of the M'Gibbons were attributable to the husband's trade as compositor, half to the hotel business. To the latter the wife's representatives were entitled, whether now in the form of heritable (the hotel) or moveable property, inasmuch as the money made by the hotel fell under section 3 of the Married Women's Property Act 1877 and became the private property of the wife. The hotel was a “business which she carried on under her own name”— Morrison v. Tawse's Executrix, December 18, 1888, 16 R. 247, 26 S.L.R. 160. It was also a “trade” or “occupation” in which she was engaged. M'Ginty v. M'Alpine, June 28, 1892, 19 R. 935, 29 S.L.R. 825, was distinguishable, because in that case there was only one business in which both husband and wife were engaged. Her claim also fell to be sustained under section 1 (1) of the Married Women's Property (Scotland) Act 1881. Cf. also Ferguson's Trustee v. Willis, Nelson, & Company, December 11, 1883, 11 R. 261, at 266, 21 S.L.R. 170. 2. They were at any rate, separatim, entitled to the hotel, as the disposition in the wife's favour amounted to a remuneratory donation and was accordingly irrevocable—Fraser, Husband and Wife, vol. ii, pp. 926, 940; Stewart v. Stewart, February 25, 1904, 11 S.L.T. 721. Where a husband has received services from his wife, and recognised this by gift, the gift became ipso facto remuneratory. There was no necessity for him to express any intention— Countess of Oxenford v. The Viscount, 1664, M. 6136; Chisholm v. Brae, 1669, M. 6137. In the circumstances the onus of proof lay on the other side; see Loudon v. Young, December 6, 1856, 19 D. 140.

Argued for the respondent—(The Court having intimated that they required no argument upon the first point)—The appellants had failed to prove that the donation was remuneratory, the onus being on them. If the mere fact of services rendered by a wife to a husband and a subsequent gift by him to her were per se sufficient, then practically all gifts by a husband to his wife would be remuneratory. There must be proof of express intention. As a matter of fact it was obvious that the husband's intention was to make a testamentary provision for his widow. Compare Craig v. Galloway, June 22, 1860, 22 D. 1211, 4 Macq. 267.

At advising—