Scottish Court of Session Decisions

Charles Campbell M'Leod and others, marriage-contract trustees of the Rev. John Macleod, D.D. ( first parties); the said Charles Campbell M'Leod and others, testamentary trustees of the said Dr Macleod ( second parties); John Norman Macleod, the Rev. William Arthur Macleod, Charles Roderick Macleod, and Norman Augustus Macleod, sons of the said Dr Macleod ( third parties); the said Norman Augustus Macleod, executor of the deceased Duncan Archibald Macleod, another son of the said Dr Macleod ( fourth party); the Rev. Robert Baldock Scott and others, the marriage-contract trustees of Mrs Alexa Evelyn Macleod or Scott, a daughter of the said Dr Macleod, with the consent and concurrence of the said Mrs Scott and her husband ( fifth parties); and Leonard Walter Dickson and others, the marriage-contract trustees of Mrs Margaret Eleanor Macleod or Macdonald, a daughter of the said Dr Macleod, with the consent and concurrence of the said Mrs Macdonald and her husband ( sixth parties), brought a Special Case to determine whether the said Dr Macleod, by his trust-disposition and settlement, had validly exercised a power of apportionment reserved by him in his antenuptial marriage contract.

The Case stated—“1. By the contract of marriage of Dr and Mrs Macleod (hereinafter referred to as the marriage contract) Dr Macleod assigned to the trustees therein named a policy of assurance with the Life Association of Scotland for £1000, on his own life, upon the trusts and for the uses, ends, and purposes specified in the marriage contract, and he provided in the fifth place that after the death of the spouses the proceeds of the life policy should be held for the children of the marriage as therein set forth, and in particular he provided ‘that if there shall be more than one child of said intended marriage it shall be lawful to and in the power of the said John Macleod, at any time of his life and while unmarried, after the death of the said Alexandrina Macpherson, and even on deathbed, to divide and proportion, as he shall think fit and proper, among said children, the foresaid principal sum of £1000 or the balance thereof, and any additions thereto and interest thereof hereinbefore provided to them, and failing of any such division, then the said sum of £1000 or the balance thereof, and any additions thereto and interest thereof, shall belong to and be divided among said children equally and share and share alike.’ 2. The marriage contract also contains the following obligation by Dr Macleod, viz.—‘And for provisions to the children, if any, of the said intended marriage, the said John Macleod binds and obliges himself and his foresaids to pay to such child or children the sum of £2000 sterling as at the date of his death, with interest at the rate foresaid from that date till payment, and that in such shares and proportions, if more than one child, as he shall fix and appoint by any writing under his hand, and failing such writing, then equally and share and share alike. 3. It was also declared by the marriage contract

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that the provisions conceived in favour of the children of the marriage were in full satisfaction to them of all bairns’ part of gear, legitim, portion natural, executry, and everything else they could claim or demand by or through the decease of Dr Macleod, excepting what he might think fit to bestow of his own good will only.… 4. Dr Macleod died on the 4th day of August 1898, leaving the trust-disposition and settlement before mentioned (hereinafter referred to as the trust-disposition and settlement) by which he conveyed to the trustees therein named his whole estate and effects, heritable and moveable, belonging to him at his decease, ‘including therein any sum or sums of money to which I have right or over which I have power of disposal under and in virtue of the contract of marriage entered into between me and my said wife, dated 24th August, and recorded in the Books of Council and Session 31st October, both in the year 1863.’ 5. After providing for payment of his debts and deathbed and funeral expenses, and directing his trustees to fulfil all obligations incumbent upon or prestable against him in favour of his wife under the contract of marriage, Dr Macleod, by the fourth purpose of the trust-disposition and settlement, directed his trustees, at the first term of Whitsunday or Martinmas occurring not less than three months after his decease, to pay to each of his sons, on their respectively attaining majority, the sum of £25 sterling, and by the fifth purpose he directed his trustees to hold the residue of his estate for behoof of his wife in liferent. 6. The sixth purpose of the trust-disposition and settlement is as follows:—‘I direct and appoint my trustees, upon the death or second marriage of my said wife, or upon the youngest of my surviving sons attaining majority, should such event not take place before the death or second marriage of my said wife, and in the event of there being two or more of my daughters surviving, to hold, retain, and invest, in their own names as trustees foresaid, a sum of £7000 sterling out of the remainder of my means and estate, and to pay or apply the free annual income arising therefrom to or for behoof of my said daughters in equal proportions for their liferent alimentary use allenarly, and on the death of any or all of my said daughters leaving lawful issue, my trustees shall pay to or for behoof of such issue, in equal proportions, the share of free annual income which would have effeired to their mother had she survived, and on the youngest of said issue attaining majority (until which event vesting shall not take place), my trustees shall pay to the issue then surviving, and equally among them, the share of the capital of the fund hereinbefore directed to be liferented by their mother and them respectively.’ The residue clause is as follows, viz.—‘I direct and appoint my trustees in the event of there being any residue of my means and estate remaining after setting aside the sum of £7000 sterling … to pay and divide said residue equally to and among my sons on their respectively attaining majority, the lawful issue of any of my sons who may have predeceased taking their parent's share equally among them per stirpes.’ 7. By the trust - disposition and settlement Dr Macleod declared as follows:—‘I hereby declare that the provisions hereinbefore conceived in favour of my sons and daughters are made by me in exercise of the powers of apportionment and division conferred upon me by the foresaid contract of marriage in regard to a sum or provision of £2000 sterling, and the contents or proceeds of a policy of assurance for £1000 sterling effected on my life, both particularly mentioned in said contract of marriage, and shall be accepted of by my said sons and daughters in full satisfaction of all claims competent to them or any of them on my decease under said contract of marriage in regard to said sum or provision of £2000 sterling, and the contents or proceeds of said policy of assurance for £1000 sterling: And I hereby specially provide and declare that the share or proportion in said sum or provision of £2000 sterling, and the contents or proceeds of said policy of assurance for £1000 sterling, of any of my sons or daughters who may repudiate the provisions hereinbefore conceived in their favour and betake themselves to their rights under the said contract of marriage shall be limited and restricted to the sum of £25 sterling each, and the sons or daughters so repudiating shall forfeit, not only for themselves but also for their issue, all further interest, not only in said sum or provision of £2000 sterling and the contents or proceeds of said policy of assurance for £1000 sterling, but also in the remainder and residue of my means and estate, in the same way and manner as if such sons or daughters had predeceased me without issue.’ 8. Dr Macleod was survived by Mrs Macleod and the following children, who had all attained majority at the date of his death:—(1) John Norman Macleod; (2) William Arthur Macleod; (3) Charles Roderick Macleod; and (4) Norman Augustus Macleod, who are the third parties hereto; (5) the since deceased Duncan Archibald Macleod, whose executor is the fourth party; (6) Alexa Evelyn Macleod, now Mrs Scott, whose marriage trustees are the fifth parties hereto; and (7) Margaret Eleanor Macleod, now Mrs Macdonald, whose marriage trustees are the sixth parties hereto. 9. Mrs Macleod died on the 20th day of May 1910, survived by the children above named, other than Duncan Archibald Macleod, who predeceased Mrs Macleod, and died on 9th December 1907, survived by his children Duncan Crawford Macleod and Deirdre Macleod, who are in pupillarity. Mr Norman Augustus Macleod, Mr Duncan Archibald Macleod's executor, is the fourth party hereto … 12. At the date of Mrs Macleod's death the investments and cash representing the proceeds of the life policy amounted to £1170, 12s. 6d., and the investments and cash representing the estate

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belonging to Dr Macleod personally to £2813, 11s. 4d., amounting together to £3984, 3s. 10d.”

The following question of law was, inter alia, submitted:—“Is the exercise of the power of appointment contained in Dr Macleod's trust-disposition and settlement ( a) wholly valid, ( b) only partially valid, or ( c) wholly invalid as an exercise of the power reserved in the marriage contract with reference to the policy of assurance and the sum of £2000?”

Argued for the third and fourth parties—The power of apportionment had not been validly exercised, in respect that part of the fund was given to persons who were not objects of the power. But for the consent of the liferenters the apportionment was clearly bad, and their consent alone was not enough to cure the defect. There would require to be consent on the part of all the objects of the power, each of whom had a spes which extended over the whole fund— Crum Ewing's Trustees v. Bayly's Trustees, 1910 S.C. 484, per Lord Kinnear at p. 497, 47 S.L.R. 423, at p. 430. Mackie v. Mackie's Trustees, July 4, 1885, 12 R, 1230, 22 S.L.R. 814, relied on by the fifth and sixth parties, stood alone, and was inconsistent with the principle that a power of apportionment authorised apportionment among the objects of the power only. So far as Mackie (cit. sup.) decided that the consent of an object of the power whose right was restricted to a liferent would validate a gift of the fee to a stranger to the power, it was the considered judgment of the Lord Ordinary only, and the authorities relied on by him did not bear out the proposition— MacGillivray's Trustees v. Watson's Trustees, 1911 S.C. 1103, per Lord Dundas at p. 1109, 48 S.L.R. 887, at p. 891. Moreover, Mackie (cit. sup.) did not apply, as the present case contained no statement that the liferenters consented. The conditions were here so immixed with the benefits conferred by the exercise of the power that it was impossible to separate what was good from what was bad, and the exercise was consequently wholly invalid— Dalziel v. Dalziel's Trustees, March 9, 1905, 7 F. 545, per Lord President at p. 553, 42 S.L.R. 404, at p. 408; Middleton's Trustees v. Middleton, July 7, 1906, 8 F. 1037, 43 S.L.R. 718. The apportionment made by the testator in the event of his sons or daughters repudiating the provisions contained in the trust-disposition and settlement was not a valid exercise of the power, as it was not a bona fide exercise thereof, but an attempt to concuss the beneficiaries into acquiescence in an invalid exercise of the power— Dick's Trustees v. Cameron, 1907 S.C. 1018, per Lord Low at p. 1026, 44 S.L.R. 753, at p. 757.

Argued for the fifth and sixth parties—No doubt an apportionment to children in liferent and their issue in fee would be bad if the liferenters did not consent, but in the face of that consent such an exercise of a power of apportionment was not open to challenge. Here the consent of the life- renters must be assumed from the fact that they were in Court supporting the exercise of the power as valid. It would be perfectly lawful for the donee of a power of apportionment to give a share to one of the objects of the power, and for the beneficiary thereafter to divest himself of the fee of the share in favour of his issue. In this case the exercise of the power consented to by the liferenters was just doing in one act what could thus have been done in two. It would be a very narrow distinction to hold that the liferenters' consent could not be given after the death of the donee of the power. The present case was indistinguishable from Mackie (cit. sup.). The apportionment in the event of repudiation was not an attempt to concuss the sons, whatever it might be quoad the daughters, as the sons got the same under the alternative apportionment as under the first. The facts in the present case were quite different from those in Dick's Trustees (cit. sup.), where there was clearly an attempt to concuss children into accepting an apportion-ment which the father had no power to make.

At advising—