Cuninghame v. Anstruther.

1872

in trust after payment of his just and lawful debts, death bed and funeral charges, and the expenses of carrying the trust into execution, to pay over or invest the sum of £20,000 for the sole use and behoof of Lucy Anstruther and her heirs and assignees. And his trustees are to hold and invest the sum of £30,000 for payment to his promised spouse of the interest during her lifetime, and after her death the principal to the children of the marriage. The whole of the settlement has more the appearance of a disposition of his own property than of the exercise of a power by which his authority was limited. But as in [237 the allotment of the shares of the two other daughters the provision for Lucy is declared to be in full satisfaction of all claims she may have for bairn's part of gear, legitim, portionnatural, or through the marriage contract between her father and mother, and Lucy in token of accepting the provisions in full of all such claims subscribes the settlement, I think that if it had been to Lucy's interest to reject this provision as not being an exercise of the power of apportionment in her favor, it would not have been competent to her to do so; nor can her sisters successfully contend that there has been no due exercise of the power to the extent of this £20,000. But the £30,000 given to the second wife could only be a valid disposition if Mr. Anstruther were fiar of the fund remaining unapportioned amongst the children of his first marriage, because it would then be, as the Lord Ordinary said, "subject to his disposal for onerous causes or just and rational consideration." But he having only a power to divide and proportion the fund amongst the children of the first marriage, the disposition to the second wife was clearly void, as she was not an object of the power. The result is, that the whole remaining fund, beyond the two sums of £5000 to Mrs. Cuninghame and Mrs. Mercer, and the £20,000, to Lucy Anstruther, comes to be distributed equally amongst the three sisters, share and share alike, according to the provisions of the marriage contract of Mr. and Mrs. Anstruther.

I agree with my noble and learned friend in the judgment which he has proposed to your Lordships.

LORD WESTBURY:

My Lords, it is a matter of regret to observe the uncertainty and variety of opinions upon what in England would be deemed a very simple case; where, however, our Courts would not proceed upon any grounds that are not common to the jurisprudence of Scotland in this matter.

I must advert to the notion that seems to have been entertained by some of the learned Judges of the Court below, that the language of this power required an execution uno flatu -

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Cuninghame v. Anstruther.

238] once for all (1). *Some of them appear to have imagined that the language required an entire apportionment, and that it did not adniit of appointments from time to time; which would be to put an interpretation on the words utterly at variance with the objects of the power, and utterly subversive of any useful application to be made of the power. No appointment could be made to a child settled in life or married, until all the other children had also become of such an age that their future destination could be ascertained and fixed. It is quite clear that the reason of the thing demands that the power given to the parents-in one instance to the father, in the other instance to both parents to apportion at any time must be interpreted so as to warrant the appointment being made from time to time; and so, in truth, it appears to have been conceded at the bar, because it was admitted that after the appointment to Mrs. Cuninghame and to Mrs. Mercer further appointments might have been made.

The next difficulty felt by the learned judges in the Court below was on the words which have been denominated a “release" in the appointment to Mrs. Cuninghame and in the settlement for Mrs. Mereer, and various effects have been ascribed to these alleged words of release. Some learned Judges appear to have imagined that they operated as an assignment by contract to the father, or the donee of the power, of the whole extent of the portion which in an equal division of the entire fund might have been attributed to the objects of the power. Now, it is quite clear that that would destroy the very foundation upon which the powers given to the parents are rested. If it were possible to admit any contract between a father and a child as the reason for the exercise of the power, fraudulent transactions might be introduced, destructive of the interests of the child, and giving to the father that which he ought not to obtain. In accordance with the settled principles of equity, it is impossible to hold that the father could gain any benefit to himself in the residue of the trust fund by having made an appointment on one part of it as to one of the children.

But some of the Judges imagine that the release might enure to the benefit of the two other sisters who were the objects of the power. Sometimes it was imagined that the release of Mrs. 239] Mercer's *settlement might enure to the remaining sister. It is utterly impossible to find in either settlement any contract to that effect, or that the words should receive that interpretation, even if it were possible that such a transaction should have force given to it consistently with an honest exersise of the power. The truth is, that what are called the words of release amount (1) See the opinions, 3d Series, vol. viii, p. 1017.

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1872

to no more than this, that the sum appointed to the child shall be taken as part of the settlement provision in which the child under the trust settlement had an interest. The whole case, therefore, assumes a very simple aspect as soon as the or-, dinary suggestions of common sense are applied to the interpretation and to the effect which, having regard to the intention of the power, ought to be attributed to it.

Now, the relative position of the children is perfectly clear. They stand on an equality with regard to the undistributed and unappointed parts of the fund. The father's right to determine the quantity is thereby acknowledged, so far as he has exercised that right. He thought proper to appoint £5000 to Mrs. Cuninghame, reserving, of course, the right of making a further ap portionment. In like manner he has given £5000 to Mrs. Mercer, and in like manner he has given to Miss Lucy £20,000. But, supposing these sums not to exhaust the fund, the residue falls under the disposition contained in the settlement, and will be. divisible equally among the three sisters.

I consider that the settlements on Mrs. Cuninghame and Mrs. Mercer are respectively appointments under the power contained in the settlement of 1828. I prefer the word "appointment" because the word "apportionment" seems to imply a dealing with the entirety of the fund. But the alleged release contained in each of the settlements does not amount to, or effect, any bar to the right of participation in any portion of the property, subject to the power of appointment, which may not have been appointed under the power. Neither does the release give to the third child, or operate by implication as an appointment to the third child, of the residue of the funds which were subject to or comprised within the power. The gift made by the trust settlement of 1866 (that is, Mr. Anstruther's will) of £20,000 to the third child, Lucy, is, in my opinion, an appointment to Lucy under the power, and which it was fully competent to [240 the donee of the power to make. But if (as in this case) the two sums of £5000 and the £20,000 do not together equal the aggregate amount of the funds brought in by Mr. Anstruther under the settlement of 1828, and of the funds of Mrs. Marian Anstruther, also brought into that settlement, the balance of these funds (after deducting the three sums amounting in all to £30,000) is unappointed property, and is distributable under the trusts of the settlement of 1823 among the three children in equal shares; for I do not think the children are bound in this division of the surplus to bring into hotchpot the sums appointed to them respectively. The right of the children to the provisions brought in by Mr. and Mrs. Anstruther under the settlement of 1828 was not defeated by the provisions for the

1

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Cuninghame v. Anstruther.

second Mrs. Anstruther under the settlement of 1866. On the death of Mrs. Marian Anstruther, her surviving husband became fiar in trust of all the property brought in by Marian, and could not defeat the interests of the children.

Therefore the interlocutor of the 11th of July, 1870, was totally wrong. The judgment in Mrs. Mercer's case is wholly inconsistent with it, inasmuch as it finds that Mrs. Mercer was entitled to share with her sister Mrs. Cuninghame in the estate and effects of their mother so far as not settled and appropriated by their father and mother jointly, or by their father after their mother's death. It will be observed that my observations would give the surplus to the three sisters. The difference of the decision in Mrs. Cuninghame's case from that in Mrs. Mercer's case cannot be supported by any difference in the wording of the alleged releases in the two settlements, for they are identical. And it is evident that the question as to the fee of the settlement funds is wholly immaterial, it being admitted that the power of apportionment remained unaffected, and that, subject to that power, the effect of the settlement of 1828 was to give the whole of the settlement estate to the three children as substitutes to their parents in equal shares.

There is no question with any creditor or alienee for value of Mr. Anstruther.

I think it expedient that the order of the house shall embrace both appeals. Subject to any alteration that may hereafter be deemed advisable, I will read what I should propose as the form 241] *of the judgment for the information of the counsel at the bar: [Here Lord Westbury gave the heads of the judgment which was afterwards adopted by the house.]

There is a point which I must submit to your Lordships' attention, and that is the question how the enormous amount of the costs which have been incurred in this unfortunate litigation are to be met. Now, considering how the decisions in this case have varied, the wanderings of the parties themselves may in some degree be excused, and I should, therefore, humbly submit to your Lordships that the costs of all parties should be paid out of the free estate of Mr. Anstruther.

I am desirous that if possible we should dispose of this matter in such a way as not to leave any door ajar that may be pushed open in the Court below so as to admit of further litigation. Whether we can do that or not may be very problematical. I understand that your Lordships wish to reserve to yourselves the power of considering the exact form of your order. I am not at all sure that the words I have now read comprehend the whole of the matter, but in case any alteration therein should be desirable, perhaps your Lordships will approve of the form of

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account being given, before the order is made, to the counsel on either side, not to afford an opportunity for any further argument at the bar, Lat that they may be at liberty to send in such amendments in the form of account as they may think desirable. THE LORD CHANCELLOR:

My Lords, with reference to the last remark that my noble and learned friend has made regarding the expense of this litigation, I should go so far with him as to think that ultimately Mr. Anstruther's property, he being really the cause of the mode in which these instruments were executed, and therefore the source of the vexation and intricacy that have subsequently occurred in solving the various questions which have arisen, might be charged with that expense; but one does not know how the course of events may turn out with reference to the proportion of property in the several estates. As between the three sisters I apprehend that all costs should come equally, if they are obliged to have recourse to their own funds, out of that free fund which is left after the apportionment, but having recourse to the fa- [242 ther's estate, in the event of that estate being sufficient to answer them, in order to recoup the diminution of the fund. The father's estate therefore will pay the costs in the first instance if sufficient to do so. If not, the costs will necessarily have to come out of the fund to be divided.

LORD WESTBURY: I have not the least objection to that.

THE LORD CHANCELLOR: Then the question will be, that the interlocutors complained of, so far as they are inconsistent with the declaration afterwards to be contained in your Lordships' order, be reversed. We will postpone the exact form of the declaration, though I believe we agree in substance with the proposal of the noble and learned Lord. And as to the expenses, that they be borne in the manner prescribed in the form of order as it will be finally drawn up.

The final judgment of the house was as follows:

Ordered and adjudged, that the interlocutor of the 11th of July, 1870, be reversed; and that such parts of the interlocutors of the 18th of March, 1859, and of the 6th of March, 1871, as are inconsistent or at variance with the findings and declarations and order hereinafter expressed, be also reversed; and this house doth find and declare, that the marriage settlement of Mrs. Cuninghame, and the marriage settlement of Mrs. Mercer, were respectively valid appointments of the two sums of £5000 in exercise of the power contained in the settlement of 1828; but that such appointments did not exclude Mrs. Cuninghame or Mrs. Mercer from participating in so much of the funds or property comprised in the said deed of 1828 as have not been appointed under the powers therein contained. And this house doth further find and declare, that the trust disposition and settlement of Mr. Anstruther of the 8th of October, 1866, was a good appointment under the power in the said deed of 1828 to Lucy Anstruther of the sum of £20,000, but that she is not thereby debarred from participating equally with Mrs. Cuninghame and Mrs. Mercer in the residue of the settlement funds of 1828 3 ENG. REP. 24