Scottish Court of Session Decisions

In 1880 John Clough and his wife, Ann Mudie or Clough, executed a mutual disposition and settlement disponing certain shares and bonds to the last survivor of them for his or her liferent use allenarly, whom failing to their son George Mudie Clough in fee, “declaring, in the event of the said George Mudie Clough, our son, dying before the last survivor of us without leaving issue, and intestate, that the shares and monies above mentioned shall, in such event, be divided into two equal parts,” one of which was to be divided among the children of Richard Clough, and the other to be paid to the wife's brother James Mudie. The settlement proceeded—“In regard to the residue of the means and estate belonging to us respectively, we severally leave and bequeath, assign, and dispone the same to the last survivor of us, and we severally nominate and appoint the last survivor of us to be executor to the first deceaser, … and we severally give full power to the survivor of us” to alter or vary the securities, and to realise and sell the shares, and reinvest the proceeds thereof. The deed was declared to be irrevocable, unless with the joint consent of the parties, as regards the investments and money to be liferented by the survivor.

The securities and shares so disposed of represented part of Mrs Clough's interest in the estate of her deceased granduncle, and amounted in value to between £1000 and £1200. The investments were taken in the joint names of the spouses. There was no

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antenuptial marriage-contract between the spouses.

Mrs Clough died in 1881.

The son George Mudie Clough predeceased the surviving spouse intestate in 1889.

After the death of his wife John Clough realised part of the estate dealt with by the mutual settlement, and invested it in his own name in such a manner that most of it has been lost.

On 11th December 1895 James Mudie raised an action against John Clough to have it declared that he had a valid and indefeasible vested right in one half of the investments dealt with in the mutual settlement, and further to have it declared “that the defender has not validly and effectually revoked, and is not entitled to revoke, said mutual deed so as to prejudice or affect the pursuer's right thereunder,” and to have the defender interdicted from mortgaging, selling, or disposing of said investments to the pursuer's prejudice.

The pursuer pleaded—“(3) The mutual deed not being in the circumstances in which it was granted revocable by the defender alone, the pursuer is entitled to declarator to this effect as craved.”

The defender pleaded that he was “entitled to revoke the said mutual deed if so advised,” and was therefore entitled to absolvitor.