Trs. v. Sandilands

25, 1903

It

LORD JUSTICE-CLERK-We have had an able argument from Mr Watson which really covered the whole case. I am of opinion, in view of the decisions already pronounced in this Court and in the House of Lords, that Mrs Simpson is not excluded from a share in the unapportioned fund after payment to her marriage-contract trustees of the one-fifth apportioned to her by her mother in view of her marriage to enable her to make a provision. appears to me that that apportionment is practically the same as in the cases referred to, in which it was held that such apportionment did not exclude the party in whose favour it was made from a share of such part of the fund as had not been apportioned. The decisions seem to me to rule this case, and therefore I think the question should be answered in the affirmative.

A

LORD YOUNG-Notwithstanding the decisions, I cannot assent to the conclusion at which your Lordship has arrived upon the construction and import of the deed of apportionment. A power of apportionment, such as exists here, is a power to make a will, with respect to the fund to which the power applies, as to its division amongst those to whom it is destined. deed of apportionment is to be construed as a will, taking the language used by the maker of it in the exercise of the power as expressing the maker's will. It is different from a testament in this respect, no doubt, that it must be within the power which is given-limited to the estate and to the beneficiaries mentioned in the deed which gives the power. Now, reading the deed of apportionment here as an expression of will by the party having the power to apportion, I should have no difficulty in arriving at the intention of the testator or apportioner.

In contemplation of the marriage of a daughter Mrs Sandilands directs the trustees of her father's trust-disposition and settlement to stand possessed of one-fifth of the fund over which she had a power of apportionment in trust for that daughter. Now, the words of the deed are important, as indicating, I think irresistibly, the intention of the testator or apportioner to apportion one-fifth of the fund in question to her daughter who was about to be married. Her father intended, unless this lady should think otherwise, that her children should have equal shares in the division of the fund. She had five children. On the marriage of a daughter she exercises her power of apportionment by enabling that daughter to convey her one-fifth of the fund to her marriage-contract trustees. I should have read that as expressing her will that this daughter should have one-fifth, and no more, and that the other four children, if she did not otherwise determine with respect to them, should have the other fourfifths of this equalising legacy. The contest is between that view and the view that this particular daughter should have more than twice as much as any of the other children that is to say, one-fifth

under the apportionment and another fifth of the remaining four-fifths. I cannot attribute the latter intention to the party to whom the power was given, whatever may have been decided in other cases as to the intention of the maker of the deeds before the Court in those cases. I am judicially satisfied that the meaning of the language of the maker of this deed was not that this daughter should have more than any of the other children, but was that she should have her equal one-fifth share, the other children having each of them their equal one-fifth shares, unless there was subsequent provision to the contrary.

My opinion therefore is, notwithstanding the decisions, that upon a construction of the deed before us the intention of the apportioner in this case should have effect according to the views which I have expressed.

LORD TRAYNER-I think the question before us is concluded by authority. The late Mr Johnson by his settlement directed his trustees to hold a certain part of his estate for behoof of his daughter Mrs Sandilands for her liferent use allenarly, and for her children in fee, in such proportions as she might direct and appoint, and failing such appointment equally among them. In exercise of this power Mrs Sandilands by the deed before us appointed "one equal one-fifth part or share" of the fund to be paid to her daughter Mis Simpson. No further appointment was made by Mrs Sandilands. It appears to me that the remaining four-fifths of the fund not having been appointed by Mrs Sandilands, must, according to the direction of Mr Johnson's settlement, be now divided equally among Mrs Sandilands' children. Much stress was placed upon the fact that in the deed of appointment the part of the fund there given to Mrs Simpson was described as "an equal onefifth" part of the fund, as indicating that all the children were to have equal fifths. Probably that was Mrs Sandilands' intention, but if so it was never carried out. But I cannot say I attribute any particular significance to the word "equal." The sentence would be precisely the same in effect if that word were omitted and the share given to Mrs Simpson simply described as one-fifth. The material fact is that fourfifths were not apportioned, and failing such apportionment the fund must go according to Mr Johnson's settlement-that is, equally among all Mrs Sandilands' children. This, as I have said, is settled by authority.

LORD MONCREIFF was absent.

The Court answered the question in the affirmative.

Counsel for the First and Second Parties -Clyde, K.C.-Watson. Agents-Dundas & Wilson, C.S.

Counsel for the Third Parties-M'Clure -R. B. Pearson. Agents-Adam & Sang, W.S.

Wednesday, February 25.

SECOND DIVISION.

[Lord Kyllachy, Ordinary. PRINGLE'S TRUSTEES v. WRIGHT. Bankruptcy-Illegal Preferences-Act 1696, c. 5-Cash Payment by Insolvent DebtorSums in Receipts granted to Daughters— Loan-Proof.

A husband, who from time to time had received from his wife certain sums, partly her own and partly savings out of her housekeeping, on his undertaking to credit her in his books with principal and interest, within a fortnight after his wife's death in 1896, and in accordance with a promise made to her on her death-bed, granted to each of his daughters receipts for certain sums, amounting together to the sums at his wife's credit, as received. by him from them respectively, and at the same time opened accounts in their names in which these sums were put to their credit, and in which interest was regularly added in subsequent years. At that time he was solvent.

In 1902 the father found himself in difficulties, and on 3rd May he was unable to meet bills amounting to £1600. He subsequently cashed through his sons and son-in-law certain cheques which he had collected, and on 7th May he applied the proceeds to payment of the amounts due to his daughters, who were at the time aware that he was in difficulties. On 9th May the father granted a trust-deed, and on 17th May the trust-deed was suspended by sequestration.

Held that the trustee on the sequestrated estate was not entitled to recover the amounts paid to the daughters, these being payments in cash of debts duly constituted and resting owing.

Thomas v. Thomson, January 13, 1865, 3 Macph. 358, and Coutts's Trustee v. Webster, July 8, 1886, 13 R. 1112, 23 S. L. R. 810, followed.

In July 1902 James Alexander RobertsonDurham, C.A. Edinburgh, trustee on the sequestrated estates of Robert Pringle, conform to act and warrant of confirmation by the Sheriff-Substitute at Edinburgh, dated 31st May 1902, raised an action against the five daughters of Mr Pringle, namely, Mrs Janet Tait Pringle or Wright and her husband for his interest, Christina Pringle, Mrs Catherine Pringle or Crouch and her husband for his interest, Agnes Pringle, and Nellie Pringle.

The conclusions of the action were that each of the defenders Mrs Wright and Christina Pringle should make payment to the pursuer of £131, 7s. 10d., with interest from 7th May 1902, and each of the defenders Mrs Crouch, Agnes Pringle, and Nellie Pringle should make payment of £26, 6s. 3d., being sums paid to them in cash by their father about a fortnight before his sequestration.

The pursuer pleaded-"(1) The said payments having been collusive alienations by the bankrupt to conjunct and confident persons without true, just, and necessary cause after he was insolvent, in contravention of the Act 1621, cap. 18, the pursuer is entitled to decree as concluded for, with expenses. (2) Said payments having been made out of the ordinary course of business within sixty days of notour bankruptcy are reducible under the Act 1696, cap. 5, and the pursuer is entitled to decree as concluded for. (3) The payments by the bankrupt to his daughters being donations fraudulently made and received in knowledge of his insolvency, the pursuer is entitled to decree as concluded for."

The defenders pleaded-"(3) The pay. ments to the defenders having been justly due to and exigible by them, and having been made In discharge of bona fide debts due by the bankrupt, the defenders should be assoilzied. (4) The payments sought to be reduced having been made for a true, just, and necessary cause, and in respect of a valid payment by the defenders, are not struck at by the Act 1621, cap. 18. (5) The said payments being in implement of an obligation legally incumbent on the bankrupt, and being paid in cash, are not reducible under the stat. 1696, cap. 5. (6) The pursuer's averments of collusion and fraud on the part of the defenders being unfounded in fact, the defenders should be assoilzied, with expenses."

Proof was allowed and led.

The following statement of the facts is taken from the opinion of the Lord Ordinary (KYLLACHY):

"The facts of the case, as they appeared at the proof, are, I think, shortly theseThe bankrupt's wife (who died in June 1896) was at the time of her marriage in 1862 possessed of some small savings, which were used in furnishing the house. She subsequently, as her husband prospered, made certain savings out of her housekeeping, which she came to regard as her own, but which she gave to her husband from time to time, on his undertaking to credit her in his books with principal and interest. These sums, including the sum spent on furnishings, seem to have amounted, with interest, to about £200. At least that is the bankrupt's evidence, which I am disposed to accept. She had besides at her death, which occurred as I have said in June 1896, accumulated a further hoard, put aside in a wardrobe drawer, and amounting to about £80. Of this sum also her husband obtained possession after her death, and on her death-bed he seems to have promised to leave or gift the whole sums assumed to belong to her to her daughters in certain proportions. course the money was legally the husband's, or at anyrate was at his disposal. But it may perhaps be fairly considered that he was under a certain moral obligation-an obligation which he accepted and recognised -to carry out his wife's wishes.

Of

"In these circumstances what seems to have happened was this. The bankrupt being then solvent and, indeed as I think

Trs. v. Wright

25, 1903

pro

is sufficiently proved, prosperous ceeded within a fortnight after his wife's death to make his several daughters his creditors for the amount at his wife's credit in his books, together with certain small sums received by him, but not at her credit, and together also with the £80 which, as I have said, was found at her death. He did so in a manner which was, I think, quite effectual, and which (he being solvent) was quite regular. He granted to each of his daughters receipts for certain sums as received by him from them respectively, and he opened at the same time in his books accounts in their several names, in which these sums were put to their credit, and in which interest was regularly added in the subsequent years. In short he constituted the sums in question as loans by his daughters to him, duly vouched-the basis of the transaction being no doubt a remuneratory donation, but the effect being to make his daughters his creditors, so that at any time they might have demanded payment. So far I had no reason to doubt the evidence of the bankrupt and his cashier Mr Small, together with the real evidence afforded by the entries in the books. And so standing

matters, I cannot doubt that if any of the daughters on getting married, or otherwise Wanting the money, had brought an action against the bankrupt for payment, such action must have succeeded.

"In 1902, however, the bankrupt (having as he says, embarked in a new line of business which proved unprofitable) found himself in difficulties, and on Saturday the 3rd of May he was unable to meet or to obtain renewals of bills due on that day amounting to about £1600.

"I am satisfied upon the evidence that the bankrupt then, if not previously, realised that bankruptcy was impending. And that being so, he seems to have stopped paying into his bank account-which was overdrawn-certain cheques and other payments which he subsequently collected, and having cashed the cheques through his sons and son-in-law, he seems to have applied the proceeds in paying debts, particularly certain household accounts, a small sum due to a relative in Kirkcaldy, and the debts, or what I have held to be debts, due by him to his daughters. This he did in the early days of the following week. Particularly on Wednesday, the 7th May, he paid in cash to his daughters the sums now in question, taking from them the receipts, as to which receipts it is only necessary to say that, although dated the 6th for reasons is I think proved, obtained by him in which the bankrupt explains, they were, it exchange for the money on Wednesday the 7th. To be quite accurate, there was one of the receipts signed on the 8th by a daughter who did not reside at home, and who received the money through her sister. But that does not seem material. daughters, as is I think proved and indeed admitted, knew when they got the money that their father was in difficulties, and that the money (for which they were not

The

reason, but they do not appear to have

66

Note. "This is an action whereby a trus tee in bankruptcy seeks to obtain repetition of certain cash payments made by the bankrupt about a fortnight before his sequestration, and when he was, although not notour bankrupt, insolvent. The payments were made to certain of his daughters, and the ground of action is that they were either gratuitous or, if made in discharge of just debts, fraudulent preferences at common law.

[His Lordship then stated the facts ut supra.]

I am of opinion, in these circumstances, that the pursuer is not entitled to recover the payments in question. They were not, as I think, proved to be gratuitous payments, but were payments of debts_duly constituted and resting-owing. Being such, and being payments in cash, they are not, I think, challengeable either under the statutes or at common law. The case is, I hold, ruled by the cases of Thomas v. Thomson, January 13, 1865, 3 Macph. 358, and Coutts' Trustee v. Webster, July 8, 1886, 13 R. 1112, and I do not feel at liberty to canvass the doctrine of these cases, or by any strained construction to read the decisions otherwise than as establishing, or rather recognising, the general proposition that payments in cash made by a debtor while he is still in administration of his estate, in discharge of debts justly due, are not challengeable on the ground that the debtor was or knew that he was insolvent, and that the creditor also knew or had reason to know that fact.

"The result is that I assoilzie the defenders, with expenses."

A

The pursuer reclaimed, and argued-The present was not a cash payment of a debt in the ordinary course of business. It might therefore become the subject of inquiry followed by reduction M'Cowan v. Wright, March 10, 1853, 15 D. 494, opinion of Lord J.-C. Hope, 503; Angus' Trustee v. Angus, November 21, 1901, 4 F. 181, 39 S.L.R. 119. The only documents of debt in the present case were receipts. receipt was not per se a binding obligation. A receipt did not create an obligation. It did not constitute a debt. A receipt was only an adminicle of evidence. It was prima facie evidence of an obligation to pay. But proof could be led to show that there could be no legal obligation to pay, and if it was proved that this was the case the receipt was valueless -Thomson v. Geikie, March 6, 1861, 23 D. 693, opinion of Lord Wood, 698; Neilson's

V.

Trustees v. Neilson's Trustees, November 17, 1883, 11 R. 119, 21 S.L.R 94; Paterson Paterson, November 30, 1897, 25 R. 144, 35 S.L.R. 150. In the present case it was clearly proved that the money for which the bankrupt had granted a receipt was the bankrupt's own. Further, the case did not fall within the decisions of Thomson, supra, and Coutts' Trustees, supra, because the payment in this case was not made to satisfy a debt. The case of Shaw's Trustee v. Stewart and Bisset, November 15, 1887, 15 R. 32, 25 S. L.R. 38, showed that there might be exceptions to the general rule that a payment in cash might be made by an insolvent debtor while still in the administration of his estate for debts due by him. The present case was an exception to the rule.

Counsel for the defenders and respondents were not called on.

LORD JUSTICE-CLERK-In the course of Mr Younger's argument I do not think anything has been brought forward which shows that this case is distinguishable from those cases which have already been decided upon the point.

In the present case the fact is not disputed that the receipts were given for the money at a time when the bankrupt was quite solvent. That being so, if prior to his bankruptcy he chose to pay off the obligations in cash I do not think that it is a matter with which the Court will interfere. There is no doubt a certain anomaly in the law in the matter, but it has been satisfactorily decided that if a man, even if he knows that he is insolvent, but yet being in the administration of his estate, pays in cash a debt due to one of his creditors, that payment is not struck at by the law.

LORD YOUNG-I think the facts in this case are in substance these-I may state them almost in a sentence-that this gentleman was under the honest belief-the feeling-that in all honour it was his duty to pay this sum of £200 to his daughters. I think, whether he ever gave his mind to the question whether the law obliged him, or a court of law would interpose to compel him to pay to the daughters, he had a feeling that he was in honour bound to do it; and regarding it as a gift, I think he not only made the gift, looking to the receipts and to the evidence of the circumstances under which they were granted, but he also fulfilled it and implemented it. It is a rule of law, in my opinion, which I am prepared to act upon, that while this Court will not interpose to compel the fulfilment of a gift, it will, on the other hand, certainly sustain a gift if fulfilled, and protect the recipient in the possession. Now, I think the gift was fulfilled here by giving it at the date when these receipts were granted to the daughters without going through the operation of handing their money to them and taking it back on a receipt given by him to show it. I think it is established that the gift, which he made according to a feeling of duty, with which I entirely

I am therefore

ympathise, was fulfilled. of opinion that the judgment of the Lord Ordinary`is well founded.

LORD TRAYNER-I concur. I think the Lord Ordinary has stated correctly what is the result of the transaction between the bankrupt and his daughters. He says that by granting them the receipts "he constituted the sums in question as loans by his daughters to him duly vouched, the basis of the transaction being no doubt remuneratory donation, but the effect being to make his daughters his creditors, so that at any time they might have demanded payment." This view is in accordance with the cases of Thomson v. Geikie, 23 D. 693, and Christie's Trustees v. Muirhead, 8 Macph. 461. Accordingly the only remaining question is, whether the obligation constituted and proved by the receipts was fulfilled in such a way as to be unchallengeable under the statute. I think it was because it was a payment in cash. No doubt the bankrupt at the time of payment was in insolvent circumstances, which I think the daughters knew. But still that does not invalidate a payment in cash made by the bankrupt to a duly constituted creditor who is in a posi tion to demand payment of his debt. On these grounds I concur with the Lord Ordinary.

LORD MONCREIFF was absent.

The Court adhered.

Mrs Janet Brand or Aitken raised an action in the Sheriff Court at Stirling against William Gourlay, builder, 13 Forth Crescent, Stirling, and Thomas M'Nab, joiner, Friar Street there, to recover damages for the death of her child James Brand Aitken, aged five years and five months, who was killed by an accident for which the pursuer alleged the defenders were responsible.

The pursuer averred - "(Cond. 1) The pursuer resides at 6 Viewfield Place, Stirfing, along with her family, which at the date of the accident after mentioned consisted of three boys and a girl. One of said boys died as the direct result of said accident, and another from shock as a result of his brother's death. The surviving girl and boy are aged respectively fourteen and twelve years. By decree of the Court of Session of 18th January 1902 the pursuer obtained divorce against Thomas Aitken, who was her husband, and also custody of the children of the marriage, and in particular of, inter alia, James Brand Aitken after mentioned. The said Thomas Aitken deserted the pursuer about five years ago, and she has no knowledge of where he is, and she does not know whether he is dead or alive. The pursuer has been the sole means of support of her Children since her husband deserted her, both prior to and subsequent to the divorce."

The pursuer pleaded-“(1) The pursuer's said child James Brand Aitken having been deprived of life through the fault and negligence of the defenders, or of those for whom they are responsible, the pursuer is entitled to damages and solatium from the defenders therefor, with expenses." Separate defences were lodged for Gourlay and M'Nab, and each of the defenders pleaded "No title to sue.

On 12th June 1902 the Sheriff-Substitute (BUNTINE) sustained the pleas of no title to sue, and dismissed the action.

Note. "This is an action of damages brought by a mother against two parties whose negligence she avers was the cause

of the death of her son.

a decree of divorce on the ground of deser"It is admitted that the pursuer obtained tion in January of this year. She states that she does not know whether her former husband is dead or alive. I must therefore assume that the father of this child is still alive. If that be so, then he is the person who has the primary right to recover damages for the death of his son.

the father of a child while he lives, even after divorce, just as the obligation on the child to aliment his father is not removed by the divorce of his parents.

"That right is founded on the mutual obligation to aliment which exists between father and child. See Eiston, 8 Macph. 980. "That obligation does not cease by the

divorce of the father.

"If, however, the father were to renounce his right of action, or if the pursuer could prove that he was dead, then I think that she would have a good title to sue. I have accordingly dismissed the present action instead of granting absolvitor to the defenders."

See the case of

Foxwell, 2 F. 932, where a divorced father was held primarily liable for the aliment of

his child.

On appeal the Sheriff (LEES) by interlocutor dated 12th August 1902, adhered to the interlocutor of the Sheriff-Substitute.

Note. "I concur throughout in the opinion of the Sheriff-Substitute. I was favoured with an able argument on the question of relevancy; but it would be improper to express any opinion on the point if the pursuer has no title to bring the action before the Court. And I agree with the learned Sheriff-Substitute that she has no title to sue.

right of an action like the present cannot "It is, I think, clearly settled that the exist in two persons at the same time for the same injury. See Darling, L.R. 1892, App. Cases, 576, and the opinion of Lord M'Laren in the case of Whitehead, 20 R. 1049. That right of action remains with

"It is not doubtful that in the ordinary case a married woman has no title to sue an action for the death of her child if her husband is alive and has not renounced his right to sue or assigned it to her. But in the present case the pursuer is not quite in the ordinary position. She was granted decree of divorce from her husband in January last on the ground of desertion, and she contends that this gives her a title to sue, especially as the custody of the children was given to her. Or, she says, at anyrate it gives her a right to sue if her husband is not alive, and that it is for the defenders to prove that he is alive.

"I am unable to agree with either of these propositions. The decree granted did not affect the reciprocal relations and obligations of the father and his children, even if their custody was taken from him. If need be, he would have to support them or they him; and the law of succession to property obtaining between them would not be affected by the decree of divorce.

"The decree of divorce therefore does not, in my opinion, confer a title to sue on the pursuer, or indeed affect the matter at issue. If the father is alive he has the title to sue, if he is dead it does not matter whether he was divorced or not.

"The next question is, on whom is the onus of proving the death of the pursuer's husband? The circumstances of the case do not yield any presumption of his death. Nothing is said of the husband's age, and the length of his disappearance would not yield any presumption of his death even under the Presumption of Life Act. The decree of divorce may be said to assume that he was then alive. Decree of divorce would not be granted against a deceased husband.

"On whom then does the onus rest of proving that the pursuer's husband is dead? I think it rests on her. If under a contract or a delict a right arises in favour of A and B. and B's right emerges only on the failure of A, it is plain that it is for B to prove that his conditional institution has emerged by the failure of A. That is just the position in the present case, and the pursuer