Scottish Court of Session Decisions

In November 1874 Alexander Baillie Watson, stationer, Glasgow, purchased from John Rowan, at the price of £4500, certain house property in Craignestock Place, Glasgow. The destination in the conveyance was “to Alexander Baillie Watson and Elizabeth Giffen or Watson (his wife), and the survivor of them, and to their or the survivor's heirs and assignees whomsoever.” Mr Watson signed the disposition as a consenter “in token of his approval of the destination.” Infeftment followed on this disposition.

On 12th November 1877 Mr and Mrs Watson executed a mutual settlement in the following terms:—“We, Alexander Baillie Watson, sometime stationer at No. 168 Great Hamilton Street, Glasgow, presently residing at No. 9 Binnie Place there, and Elizabeth Giffen or Watson, spouses, for the love, favour, and affection we bear to each other, and in consideration of the provisions herein contained, granted by each of us in favour of the other, have, with mutual advice and consent, agreed to grant these presents in manner afterwritten, That is to say, I, the said Alexander Baillie Watson, do hereby give, grant, dispone, and assign to and in favour of the said Elizabeth Giffen or Watson, for her liferent use allenarly, and to and in favour of my son Alexander Baillie Watson junior, whom failing to my own heirs, executors, and assignees and disponees whomsoever in fee, the whole means and estate, heritable and moveable, real and per-soual, of whatever nature and wherever situated, which shall be owing or belonging to me at my decease: … And in the like manner, I, the said Elizabeth Giffen or Watson, do hereby give, grant, dispone, and assign, to and in favour of the said Alexander Baillie Watson, for his liferent use allenarly, and to and in favour of my son the said Alexander Baillie Watson junior, whom failing to my own heirs, executors, and assignees and disponees whomsoever in fee, the whole means and estate, heritable and moveable, real and personal,

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of whatever nature and wherever situated, which shall be owing or belong to me at my decease, or of which I may have the power of disposal; …. and specially, and without prejudice to the foresaid generality, I, with consent of my said husband, dispone to him, for his liferent use allenarly. and to and in favour of my said son, whom failing to my own heirs and assignees and disponees whomsoever in fee, the just and equal half pro indiviso of All and Whole that steading of ground, part of the lands of Craignestock,” &c., “being the subjects acquired by the said disposition from John Rowan.” The settlement further declared “that though the interest granted by these presents in favour of each of us in the estate of the other is that of liferent only, it shall be at all times competent to the survivor of us to change, as he or she may think proper, the investments of the means and estate so liferented … also, that in every instance in which females take benefit under; these presents the same shall be taken and held by them exclusive of the jus mariti and right of administration of their respective husbands.” Power was reserved by the spouses to alter or revoke the settlement in so far as regarded the estate conveyed by them respectively.

Alexander Baillie Watson, the son mentioned in the mutual settlement, was the only child of Mr and Mrs Watson. Mrs Watson died on 23d October 1877, survived by her husband and son. After her death Mr Watson continued in the possession of the subjects, drawing and using the rents. Alexander Baillie Watson, the son, died on 10th December 1878, intestate and without issue.

On 30th October 1882 Mr Watson died, leaving a last will and testament, dated 19th August 1882, in these terms—“I hereby revoke all other wills and codicils heretofore made or purporting to have been made by me. I direct that all my just debts, and funeral and testamentary expenses, shall be paid in the first instance as soon as possible after my decease. I do hereby give and bequeath unto Mr James Baillie Watson, my brother, my whole moveable and heritable estate, consisting of heritable subjects situated at Nos. 2/1 Craignestock Place, and 168/160 Great Hamilton Street, and at 285 South Wellington Street, Glasgow, county of Lanark, household furniture, plenishing, jewellery, monies in bank and on hand, and everything else which may pertain to me after my decease.” In addition to the heritable properties mentioned in the will, the testator left personal estate to the amount of about £200. The moveable estate left by Mrs Watson at her death was of small amount.

This was an action of declarator at the instance of James Baillie Watson, merchant, the brother mentioned in Mr Watson's settlement, against John Giffen, engineer. Port-Glasgow, brother and heir-at-law of Mrs Watson, the conclusions of which were—( First), That the pursuer had right under and in virtue of (1) the disposition by John Rowan in favour of Mr Watson, and Mrs Watson, his wife, dated 10th and 11th, and recorded in the Register of Sasines the 13th November 1874; and (2) last will and testament of the said Alexander Baillie Watson, dated 19th August, and registered in the Books of Council and Session 21st December 1882, to the subjects situated in Craignestock Place, Glasgow; or otherwise ( second), that the pursuer had right, under and by virtue of the said two last-mentioned writs, to one half pro indiviso of the said subjects, and was entitled to make up a title thereto habili modo; and ( third), that the pursuer had also right, under and by virtue of (1) the said disposition, (2) the mutual settlement, and (3) the said last will and testament, and in consequence of Alexander Baillie Watson junior, mentioned in the said mutual settlement, having survived his mother the said Elizabeth Giffen or Watson, and predeceased his father the said Alexander Baillie Watson, intestate and without issue, to the other half pro indiviso of the said subjects, videlicet, the half conveyed by the said Mrs Elizabeth Giffen or Watson in the said mutual settlement, and was entitled to make up a title thereto. The pursuer averred, and the defender denied, that Mr Watson had purchased the Craignestock Place subjects with his own funds.

The action was founded on these pleas-in-law, viz.:—“(1) The late Mrs Watson having during her life no right of fee under the disposition of 1874, transmitted none to her son by the mutual settlement; and upon the death of Mr Watson (predeceased by Mrs Watson and their son), the right to the whole subjects passed to the pursuer under Mr Watson's last will and testament. Or otherwise —(2) By Alexander Baillie Watson junior predeceasing his father, the fee of one half pro indiviso of the subjects passed to the pursuer under the last will and testament; and (3) By Alexander Baillie Watson junior surviving his mother, the fee of the other pro indiviso half of the said subjects vested in him under said mutual settlement, and on his death fell to his father as intestate succession, and on the father's death to the pursuer, under the said last will and testament.”

The defender pleaded—“(1) Mrs Watson having been vested in one-half pro indiviso of the subjects in question under the disposition thereof by John Rowan, she had right to dispose of the said half in the mutual settlement of 12th October 1877. (4) Alexander Baillie Watson junior having died intestate, and without otherwise evacuating the destination in the said mutual settlement, the pro indiviso half of the subjects in question devolved on the defender under the said destination.”

The Lord Ordinary ( Lee) on 26th June 1883 pronounced this interlocutor:—“Finds that, under the deeds libelled, the pursuer has right only to that half of the subjects described in the summons which was conveyed by the deceased Alexander Baillie Watson, in terms of the mutual settlement executed by him and his wife to and in favour of Elizabeth Giffen or Watson, for her liferent use allenarly, and to and in favour of his son Alexander Baillie Watson junior, whom

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failing to his own heirs, executors, assignees, and disponees whomsoever, in fee; to this extent finds, declares, and decerns in terms of the second branch of the conclusions of the summons: Quoad ultra, finds that Alexander Baillie Watson junior having died without issue, and without disposing of the subjects, the destination in the conveyance of said mutual settlement is, on a sound construction of said deed, effectual as a substitution in favour of her [i.e. Mrs Watson's] own heirs and assignees and disponees whomsoever; and therefore assoilzies the defender from the conclusions of the action excepting as to the foresaid half of the subjects, and decerns: Finds the defender entitled to expenses, &c.

“ Opinion.—The question iu this case relates to the right of succession to certain subjects in Glasgow which in 1874 were disponed ‘to Alexander Baillie Watson and Elizabeth Giffen or Watson (his wife), and the survivor of them, and to their or the survivor's heirs and assignees whomsoever.’

The disposition bears to have been granted in consideration of a price of £4500 paid by the spouses; and although it is alleged by the pursuer that this price was truly paid by the husband out of his own funds, no proof was at the debate offered on that subject. It was contended for the pursuer that such proof was unnecessary, and for the defender that it was incompetent.

In 1877 the spouses executed the mutual settlement set out in the condescendence By that deed each of the spouses, in consideration of the provisions therein contained, granted by each in favour of the other, and of their having therefore ‘agreed to grant these presents,’ gave, granted, disponed, and assigned his or her whole means and estates, heritable and moveable, to the other in liferent allenarly, ‘and to and in favour of my son Alexander Baillie Watson junior, whom failing to my own heirs, executors, and assignees and disponees whomsoever in fee.’ And Mrs Watson specially, with consent of her husband, and without prejudice to the said generality, disponed to her husband, for his liferent use allenarly, ‘and to and in favour of my said son, ‘whom failing to my own heirs and assignees and disponees whomsoever, in fee,’ her half of the subjects in Glasgow.

This deed contains other clauses, conferring upon the survivor, though a liferenter only, power to alter the investments, and even to sell the estates; but it was not contended that either spouse had any power to revoke the settlement, excepting a qualified power as regards the estates conveyed by them respectively.

Mr3 Watson died on 23d October 1877, being survived both by her husband and by her son. The son died on 10th December 1878. The husband, Alex. Baillie Watson senior, survived till 30th October 1882, when he died, leaving a will dated 19th August 1882. By this will he revoked all other wills, and gave and bequeathed his whole estates, heritable and moveable, to his brother, the pursuer, who now claims the whole of the Glasgow subjects, as having been carried by his will.

Two questions are raised—( First), Whether, under the title by which the subjects were acquired, the whole belonged in property to the husband? ( Second), If one-half pro indiviso belonged to the wife, whether that half passed to the husband upon the death of his son Alexander Baillie Watson junior, and as his heir, or was governed failing him by a substitution in favour of the wife's ‘own heirs and assignees and disponees whomsoever?’ The latter question depends on whether Mrs Watson's own heirs and assignees whomsoever were only conditionally instituted in the event of the failure of her son before her, or were intended to be proper substitutes.

My opinion upon the first question is, that the terms of the disposition did not make the husband sole proprietor, and that any claim he might have advanced to alter or revoke that deed, so far as in favour of his wife, was discharged by his entering into the mutual settlement, by which, as matter of contract, he consented to her dealing with onehalf share of the subjects as her property. It is not alleged that any right conferred by him upon his wife by these deeds exceeded a reasonable provision, and I think that the pursuer's averments disclose no sufficient ground either for questioning the validity of the wife's conveyance by the mutual settlement or for regarding the will of 1882 as specially applicable to the subjects in question. There seems to be no reason to believe that Mr Watson intended by that will to deal with the subjects of the special conveyance by his wife, unless by the effect of that conveyance, and of the son's death, these subjects bad become a part of his estate.’

The second question is, I think, attended with more difficulty. It is very well settled, that in regard to moveable estate there is a strong presumption against substitution (Greig v. Johnston, 6 W. & S. 421). But it is not less clear, and from the same authorities, that in regard to heritable estate the rule is different, and that even in moveable rights there may be a substitution, especially where the period of payment is postponed (Ramsay v. Ramsay, 1 D. 83). The question, I think, is one of intention, to be determined by the language used in the deed.

There are some peculiarities in the terms of the present conveyance. In the first place, there is no destination to the heirs whomsoever of Alexander Baillie Watson, junior. The conveyance is ‘to my said son, whom failing to my own heirs and assignees and disponees whomsoever.’ This is a feature which distinguishes the case from Baillie v. Tenant (M. 14,941), and Suttie v. Suttie (January 19, 1809, F.C.), and Richardson v. Stuart ( 2 Sh. App. 149). And although it is true that a destination to A generally includes heirs (Bell's Pr. sec 1704), the effect of an immediate substitution in favour of the grautor's own heirs must be considered in the light of the fact that there is no destination to the heirs and assignees whomsoever of the institute, and therefore no difficulty from the use of such a technical expression in construing the clause as a proper substitution intended to take effect upon the failure at any time of the institute without heirs of his body, and without disposing of the subjects. Even in cases where the terms of the institution expressely included heirs, or heirs and assignees whomsoever, the terms of an ulterior destination have sometimes been held to explain and limit the meaning of these words. See Hunter v. Nisbet ( 2 D. 16), Tinnoch v. M'Lennan (26 Nov. 1817, F.C.), and M'Eican v. Pattison ( 3 Macph. 779).

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A second peculiarity is, that the clause seems to contemplate the possibility of the granter predeceasing both her son and her husband. For it gives a liferent to the husband, and the fee, failing the son, not to the granter herself, but to her own heirs and assignees, &c.

A third peculiarity is, that the clause occurs in a mutual settlement by husband and wife, and apparently has for its object the disposal by each of the spouses of the fee of his or her estates in such a way as to provide a contingent reversion of a share of the estates as at the period of distribution (viz. the death of the longest liver) to his or her ‘own heirs.’ The effect of reading the clause as a conditional institution of the granter's own heirs only, in the event of the son predeceasing her, is to give rise to an inequality in the operation of the deed as regards the wife's estate. For in the case of the wife's conveyance the result is, that unless she survived her son her own heirs could never come in; whereas the husband's heirs, being practically the same as his sous, would take in any event.

In the view of these circumstances, and dealing with an heritable subject, I think that there is no presumption in favour of conditional institution, but the reverse. And a subsequent clause, declaring ‘that in every instance in which females take benefit under these presents’ the jus mariti is to be excluded, seems to me to point rather at substitution being intended.

It was urged, on behalf of the pursuer, that as the moveable estate is dealt with in the same way, it was highly improbable that the words should mean a conditional institution in one part of the deed and a substitution in another. Perhaps that is so. The argument, however, may operate in either of two ways. In the present case I have only to deal with the heritable estate to which the pursuer has confined the conclusions of the action. In their application to that estate I am of opinion that substitution rather than an institution conditional upon Mrs Watson being predeceased by her son is the meaning of the clause.

It is not without difficulty that I have formed this opinion. But in the absence of any destination to the heirs-general of the son, I think that the case is free from any technical difficulty in the way of construing the clause according to the natural meaning of the words. So construing it in this mutual settlement, my opinion is that the words are apt and sufficient to signify, and do signify, the testator's intention to make a proper substitution in favour of his own heirs in the event of the failure of the son at any time without issue, and without disposing of the subjects. I think that a child of the son would have taken under the conditio si sine liberis, but that there is no ground in fact or in law for holding that the heirs of the granter are only conditionally instituted in case the son should predecease her.”

The pursuer reclaimed and argued—(1) It was always a question of intention whether the terms of a destination implied conditional institution or substitution— Snell v. White and Others, May 24, 1872, 10 Macph. 745; Stiven v. Brown's Trustees, January 10, 1873, 11 Macph. 262. This was a case of mixed succession, and therefore the presumption was in favour of conditional institution—M'Laren on Wills, i. 493; Allan v. Fleming, June 20, 1845, 7 D. 908; Stewarts. Stewart, April 8, 1824, 2 Sh. App, 149; Greig and Others v. Johnston and Others, July 1, 1833, 6 W. & S. 407, 421; Paul v. Home, July 5, 1872, 10 Macph. 957. Even if this was proper heritable estate, the evidence of intention was so clear as to override any presumption in favour of substitution. The liferenter had here power to convert the succession into cash. The words “whom failing” were not crucial— Brown v. Coventry, Bell's 8vo cases, 310, M. 14,863. (2) The form of the title in the disposition of 1874 left the fee of the Craignestock property in the husband—Ersk. Inst. iii. 8, 36. A proof may be allowed of where the purchase money came from if necessary— Steedman v. City of Glasgow Bank, October 31, 1879, 7 R. 111; Fraser on Husband and Wife, 925. Even if a gift was made to the wife by the form of the title, this could be redargued by proof of the source from which the money came—Ersk. i. 6, 30; Jardine v. Currie, June 17, 1830, 3 S. 937. At the date of the mutual settlement the husband was the fiar, the wife having a spes successionis in the event of survivance, or at anyrate the husband was the substantial fiar, for if there was anything in the wife the husband could have revoked it, and the wife could only dispose of her fee subject to the husband's right of revocation. This was a donatio inter virum et uxorem which was revoked. In questions of ouerosity as to postnuptial settlements the state of the funds as at the dissolution of the marriage is to be regarded— Mitchell v. Mitchell's Trustees, June 5, 1877, 4 R. 800; Rae v. Nelson, May 14, 1875, 2 R. 676 Bell's Prins., sec. 1618; Hatton Hally. Cranston, M. 6151. Even if the distinction in the mutual settlement implied a substitution, that was evacuated by the will of the husband.

The defender argued—The destination implied a substitution— Ramsay v. Ramsay, November 23, 1838, 1 D. 83. A substitution to the disponer's “own heirs” was the same as the destination in Tinnoch v. McLennan, November 26, 1817, F.C. The destination in the disposition of 1874 did not make the husband fiar; it did not give a right of conjunct fee and liferent—Ersk. Inst., iii, 8,36; Wallace v. Henderson, July 20, 1875, 2 R. 999. The husband had no power to revoke, the wife's conveyance in the mutual settlement, because (1) a right of fee was vested in the son so as to make him absolute disponee, and (2) the mutual settlement was an onerous contract— Rust v. Smith, January 14, 1865, 3 Macph. 368; Kidd, v. Kidds, December 10, 1863, 2 Macph. 227. The terms of the husband's will were not distinct enough to work the mutual settlement.

At advising—