Scottish Court of Session Decisions

An action was raised by the trustees of the late Mrs Macfarlane, 23 Park Crescent, Stirling, against Mrs Miller, Springfield, Dollar, and others, being the trustees and next-of-kin of the late Mrs Lawrie, for declarator that “the following deposit-receipts, viz.—(1)Ten deposit-receipts dated 16th June 1893 for the sum of £40 each, granted by the City of Melbourne Bank, Limited, in favour of Mrs Margaret Stoddart Macfarlane and Mrs Jessie Lawrie, repayable to either or survivor, and (2) Nine deposit-receipts dated 27th October 1893, granted by the National Bank of Scotland, Limited, in favour of Mrs Margaret Stoddart Macfarlane and Mrs Jessie Lawrie, repayable to either or survivor, four of them being for the sum of £25, 10s. 5d. each, three for the sum of £50, 16s. 8d. each, one for the sum of £50, 5s. 7d., and the remaining one for the sum of £50, 9s. 6d., together with the sums contained therein, and interest due thereunder, were the property of the deceased Mrs Macfarlane and were at her disposal at the date of her death; that the defenders have no right, title, or interest therein, and that the pursuers, as trustees foresaid, are entitled to uplift and administer the same as part of Mrs Macfarlane's trust-estate.”

There was a further conclusion that the defenders should be ordained to endorse the receipts so as to enable the pursuers to uplift the money, for an accounting, and for payment of any money due by the defenders.

Mrs Macfarlane died on 9th January 1894. At the time of her death she was possessed of considerable property. On July 17th 1895 it was decided by the Court that in terms of an obligation undertaken by her to her late husband she was bound to leave twothirds of her estate to certain relatives of her husband, but it was also decided that the obligation did not deprive her of the right to dispose of her estate by deeds inter vivos.

For a considerable period previous to her death Mrs Macfarlane was in weak health, and by 1st November she had become insane. For some time previous to that date she resided with the defender Mrs Miller, who was her cousin, and with Mrs Lawrie, a widowed daughter of Mrs Miller. Mrs Lawrie survived Mrs Macfarlane, but died on 2nd May 1895.

The deposit-receipts with regard to which the present action was raised were all found in Mrs Macfarlane's repositories at her death. Those granted by the City of Melbourne Bank bore to be dated the 16th June 1893—being the date of the reconstruction of the bank—but were really issued in September 1893 in exchange for two receipts for £200 each, which had stood in the name of Mrs Macfarlane alone. With regard to these receipts Mrs Macfarlane wrote on 9th September 1893 to her agent Mr Husband, expressing the wish that the new receipts should be taken in her own name, and failing her in that of Mrs Lawrie. Mr Husband replied on 11th September, explaining the effect of taking receipts in this way, and on 13th September she replied—“My wishes are to make the deposit-receipts, Melbourne Bank, repayable to me or Mrs Jessie Lawrie, that is, either or survivor.”

The National Bank receipts were issued on 27th October 1893, in exchange for previous receipts which had stood in Mrs Macfarlane's name. With regard to them Mrs Macfarlane wrote to the bank agent on 27th October 1893—“Be kind enough to put the enclosed deposit-receipts in my own name and that of Mrs Jessie D. Lawrie.” The bank agent called upon Mrs Miller the same day and saw her in the presence of Mrs Lawrie, and explained to her that when the new deposit-receipts were issued to her in the terms of her letter the bank would pay the money to herself or Mrs Lawrie, and that when she died the money could be uplifted by Mrs Lawrie as the survivor.

The sums in both these sets of deposit-receipts having been claimed by Mrs Lawrie and her representatives, the trustees raised the present action.

The pursuers averred—“For a considerable time before her death Mrs Macfarlane was suffering from a serious and complicated illness, which enfeebled both her body and her mind. For many months previously, and at any rate from a date prior to 16th June 1893, she had been weak and facile, and by the 30th October 1893 she had become quite insane. For some time previous to that date Mrs Miller, who was her cousin, and Mrs Lawrie, who was a widowed daughter of Mrs Miller and resided with her, or one or other of them, lived constantly with Mrs Macfarlane, to the exclusion of other relatives and friends. Both of them had great influence over her, and the pursuers believe and aver that if and in so far as the instructions and indorsations obtained from her relative to the said receipts were intended by her for other

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than purely administrative purposes, the same were impetrated from her by Mrs Miller and Mrs Lawrie, or one or other of them, by the exercise of undue influence, and by fraudulently taking advantage of her said weakness and facility.” They also averred that certain other deposit-receipts which had been cashed during Mrs Macfarlane's lifetime and re-deposited by Mrs Miller in her own name had either been endorsed by Mrs Macfarlane merely for administrative purposes or had been impetrated from her when she was weak and facile.

Answers were lodged by Mrs Miller, who averred that the deposit-receipts had been donated mortis causa to Mrs Lawrie, Mrs Macfarlane desiring to reduce the estate for division among her husband's, and to benefit her own, relations.

On 1st December 1896 the Lord Ordinary ( Stormonth Darling) allowed a proof. The result of the evidence sufficiently appears in the opinions of the Court.

The Lord Ordinary on 30th June 1897 assoilzied the defender from the conclusions of the summons.

Opinion.—“There are three questions here—(1) whether certain deposit-receipts were made the subject of donation by the late Mrs Macfarlane to Mrs Miller and her late daughter Mrs Lawrie, (2) if so, whether the alleged donations were impetrated from Mrs Macfarlane while she was weak and facile, and (3) whether the defenders are liable to account for certain other deposit-receipts belonging to Mrs Macfarlane which they are said to have uplifted. In the first of these questions the onus is on the defenders, in the second and third it is on the pursuers.

Now, the fact of donation which the defenders have to prove seems to me to be made out with exceptional clearness.

I take, first, the case of Mrs Lawrie, to whom all the donations are said to have been made mortis causa. These consisted, first, of certain deposit-receipts with the City of Melbourne Bank, amounting in all to £400; and, second, of certain deposit-receipts with the National Bank, amounting in all to £355, 6s. 9d. With regard to the Melbourne receipts, there is to begin with the language of the receipts themselves (‘payable to either or the survivor’), which has always been regarded as going a long way, although not the whole way, to prove the intention to make a donation; there is, further, the evidence of the donee herself, although from the fact of her being dead it had to he taken at second hand from her law-agent Mr Henderson. But there is much more. On 9th September 1893 Mrs Macfarlane wrote to her law-agent Mr Husband, expressing the wish that the new receipts should be taken in her own name, and failing her in that of Mrs Lawrie. Mr Husband replied on 11th September, carefully explaining the effect of taking the receipts in this way, so as to make sure that Mrs Macfarlane understood what she was doing. And on 13th September Mrs Macfarlane replied, ‘My wishes are to make the deposit-receipts, Melbourne Bank, repayable to me or Mrs Jessie Lawrie, that is, either or survivor.”

Again, with regard to the National Bank receipts, it seems that the very same thing happened. On 27th October 1893 Mrs Macfarlane sent a letter to Mr Ferguson, her banker at Stirling, requesting that certain deposit-receipts which she held should be renewed in her own name and that of Mrs Lawrie. Mr Ferguson, like Mr Husband, wished to satisfy himself that Mrs Macfarlane clearly understood what she was doing. Accordingly, he called on her and saw her in her drawing-room. He explained to her what the effect of carrying out her instructions would be, and she told him that that was what she wanted. I can hardly imagine better evidence of the lady's intention to do what the documents themselves represent her as having done.

In the case of the defender Mrs Miller, the alleged donations were not mortis causa but inter vivos—they consisted of deposit-receipts of the National Bank, which were handed to Mrs Miller and redeposited in her own name. Accordingly the transfer of title was completed absolutely in the lifetime of Mrs Macfarlane. As to the animus donandi, I see no reason to doubt the evidence of Mrs Miller herself, though I did not hear her examined. There was strong antecedent probability in Mrs Macfarlane desiring to benefit her. They were first cousins on the mother's side, a circumstance which derived additional importance from the bar sinister which prevented Mrs Macfarlane having any legal next-of-kin, and Mrs Miller, who was a widow, had lost her son, on whom she chiefly depended, in 1891. Mrs Macfarlane had already indicated her goodwill towards her by giving her £650 to buy a house, and by executing a deed, dated 23rd September 1892, under which she conveyed to her the whole of her household furniture, retaining possession of it during her life, But again, there is evidence, under Mrs Macfarlane's own hand, of her intention to make over some deposit-receipts to Mrs Miller, for there is a holograph note, dated 18th September 1893, not addressed to anybody, but containing the words, ‘Please pay the amount of these deposit-receipts to myself or Mrs Margaret Miller, Elmbank, Dollar.’ I am satisfied on the evidence that this note was put up with some deposit-receipts, and most probably with the deposit-receipts in question, in a box which contained all Mrs Macfarlane's important papers. It had fallen out of the box during a search made by Mr Husband, and was afterwards handed to him by the lady who was then in attendance on Mrs Macfarlane.

The element of antecedent probability is nearly as strong in the case of Mrs Lawrie as in that of Mrs Miller. She was Mrs Miller's daughter, and she had lost her husband in (I think) the year 1890. Mrs Macfarlane, who was childless, at one time desired to adopt her as a daughter. There is ample evidence, both oral and in letters, of the affectionate terms on which these two ladies stood towards Mrs Macfarlane.

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They were probably the most intimate friends she had.

There is one other circumstance to be noted as rendering in the case of this lady a donation by way of deposit receipt highly probable. She had been placed by her husband's will under an obligation to leave to his relations two-thirds of whatever she might possess at her death. There is evidence that she chafed a little under this restriction, and that she did not particularly care for her husband's relations. The report of the case of Murray v. Macfarlane's Trustees, 22 R. 927, shows that she executed various deeds during her life for the purpose of distributing part of her property among favoured friends. From an early period she indicated to her agent a wish to deal with her deposit-receipts in the same way. That is a form of testamentary gift which I imagine is never very popular with men of business, and Mr Husband did not encourage it. But the idea remained in the lady's mind, and I am not surprised to find that she carried it into effect.

On the question of impetration the onus is, as I have said, on the pursuers, and I think that they have wholly failed to discharge it. Mrs Macfarlane died on 9th January 1894 at the age of seventy or a little more, and undoubtedly during the last two months of her life her mind was affected. She had for some years suffered from valvular disease of the heart, and she had latterly been affected with insomnia, for which drugs had been administered. Probably all these causes contributed to weaken her mentally as well as physically, but there is no evidence of anything like delusions till the month of November 1893, and nobody except Dr Moodie is so bold as to say that before that month she was incapable of understanding business and managing her own affairs. In a question of this kind I would naturally attach considerable importance to the opinion of the patient's regular medical attendant, but I am bound to say that Dr Moodie weakened his evidence by showing a certain animus against Mrs Miller and Mrs Lawrie, and by going a great deal too far. His statement that for at least six months before November he would have granted a certificate of incapacity is absolutely inconsistent with the evidence of every other witness who had the opportunity of judging, including Mrs Macfarlane's other medical man Dr Cuthbertson, her minister Mr Stuart, her bank agent Mr Ferguson, her friend Miss Cook, all the servants in her house, and her law-agent Mr Husband, who as late as 25th October took her instructions for a codicil to her will, and had no hesitation in allowing her to execute it.

I do not leave out of view the opinion of Dr Olouston, who visited her on 15th November, that the mental incapacity which then existed had probably come on gradually. Dr Clouston, however, admitted that he was there in the region of conjecture, and that as to her actual condition at any particular time he would be guided by the testimony of those who had the opportunity from day to day of observing her conversation and conduct.

If the evidence of facility is weak, the evidence of circumvention is still weaker. Dr Moodie suggests it, but he has only impression to go upon, and he can state no definite facts. Some letters of Mrs Miller, and some of the conversations which other witnesses report, do undoubtedly betray a certain anxiety that Mrs Macfarlane should dispose of a portion of her fortune in favour of herself and Mrs Lawrie—but anxiety of this kind, though it may be wanting in delicacy, does not prove undue influence, and even the indelicacy of it is largely mitigated if one comes to the conclusion (as personally I do) that Mrs Macfarlane had previously intimated her intention to benefit these ladies in this particular way.

The only other evidence to which the pursuers can point as proving circumvention is that Mrs Macfarlane, in the closing weeks of her life, complained of having been induced by her Dollar friends to give away her money. But that I feel convinced was only one phase of the delusion of poverty under which she was then labouring. It was on a par with the notion that she was to be turned out of her house, and that she was to be devoured by dogs. Even in these mental wanderings, she never said anything to suggest that she did not wish Mrs Lawrie to get the proceeds of the deposit-receipts after her death, and as regards the remnant of her life, it was of course a pure delusion that she did not remain as much mistress of the money as she had been before. It may be that Mrs Miller was a stronger-minded woman than Mrs Macfarlane, and had a certain amount of influence over her. But there is a kind of influence which is legitimate and indeed inevitable, as well as a kind which is undue, and I fail to find in this case any convincing proof that either Mrs Miller or Mrs Lawrie in their dealings with Mrs Macfarlane overstepped the bounds of propriety.

With regard to the conclusion for accounting, it seems to me that the pursuers have failed to establish the obligation to account. It is not proved that Mrs Miller or Mrs Lawrie cashed any of the deposit-receipts mentioned in condescendence 6, but if they did, the disposal of the greater part of the money is sufficiently accounted for by gifts and household expenses, particularly looking to the fact that Mrs Macfarlane kept no bank-account, and really paid her way by cashing deposit-receipts.

The result is that, in my judgment, the compearing defender must be assoilzied, with expenses.”

The pursuer reclaimed, and argued—(1) What was done with regard to the deposit-receipts was done at a time when Mrs Macfarlane was really incapable of managing her affairs, and was in the hands of Mrs Miller and Mrs Lawrie. Accordingly there could not be an animus donandi if she were thus incapable, and the mere fact of proving that certain things were done

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which would instruct donation on the part of a sane person was not enough. The Lord Ordinary was wrong in keeping the question of donation and impetration apart, since the evidence with regard to the latter bore strongly upon the former— Sharp v. Paton, June 21, 1883, 10 R. 1000. (2) There had been no delivery in the case of the deposit-receipts to Mrs Lawrie, and accordingly the donation was not complete. The deposit-receipt did not itself constitute a donation, and accordingly it was only in very exceptional cases that donation could be set up without delivery, and there must be stronger proofs of intention than existed here. The case of Crosbie's Trustees v. Wright, May 28, 1880, 7 R. 823, was the only one where it had been held that delivery was not necessary. In other cases there was constructive delivery— Blyth v. Curie, February 20, 1885, 12 R. 674; Gibson v. Hutchison, July 5, 1872, 10 Macph.923. For the true definition of a mortis causa donation see Morris v. Riddich, July 16, 1867, 5 Macph. 1036; M'Nicol v. M'Dougall, October 25, 1889, 17 R. 25.

Argued for respondent—(1) It was proved that Mrs Macfarlane had special cause to dislike her husband's relations, and accordingly there was a presumption in favour of her trying to dispose of her estate to her own relations by mortis causa donations, since she could not by bequest. This was strengthened by the fact of the gifts, which it was not disputed she had made— Dawson v. M'Kenzie, December 8, 1891, 19 R. 261. (2) Delivery was not essential to donation. The real question was whether the intention of giving was proved, and the fact of delivery was merely a link in the chain of evidence— Gibson v. Hutchison, supra; Crosbie's Trustees v. Wright, supra; Blyth v. Curie, supra; Jamieson v. M'Leod, July 13, 1880, 7 R. 1131; Connell's Trustees v. Connell's Trustees, July 16, 1886, 13 R. 1175, at 4187. There was here an equivalent to delivery, viz., constructive delivery— Martin's Trustees v. Martin, January 22, 1887, 24 S.L.R. 484.

At advising—