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In Re: CertaIn Trusts Created by the Will of George Bridge; in Re: Official Trustees Act Ii of 1913 - Court Judgment

LegalCrystal Citation
Decided On
Reported inAIR1938Cal486
AppellantIn Re: CertaIn Trusts Created by the Will of George Bridge; in Re: Official Trustees Act Ii of 1913
Cases ReferredScott v. Morley
- .....regard to the restraint on anticipation contained in the will, and to the proviso to section 8, married women's property act, 1874 added by section 2, act 21 of 1929. on the former occasion on behalf of the creditor a secondary point was argued before me to the effect that income already accrued due in contradistinction to income to become due is not protected by the restraint on anticipation. this point has not been reargued before me. on this application mr. b. n. 'ghose for the creditor while acknowledging that my previous decision is in point, sought and obtained an opportunity to are-argue the main point of principle. of this opportunity mr. ghose made full use. mr. ghose's points were as follows : (1) that the restraint being general, and not in terms confined to restraint.....

Ameer Ali, J.

1. This matter again arises out of the will of George Bridge dated 1st September 1924. Of this will the Official Trustee is now trustee and the matter comes before me on an application for directions. It is by no means the first time that the effect of this will has had to be considered by this Court. On 26th November 1936 I dealt, on an application in execution with the point which is raised in the present application. The facts are as follows: On 27th February 1936, Mrs. J. O. Hill, a married woman, borrowed from Sm. Lalmohini Dassi a sum of Rs. 20,000. Lalmohini Dassi filed a suit on 17th September 1937 and on 27th September 1937 a decree was passed by consent, whereby M. L, Khaitan, the attorney, was appointed receiver, without security, of the income and other moneys payable to the defendant by the Official Trustee of Bengal out of the estate of her father George Bridge. There was a scheme for payment to various creditors including the plaintiff; 'the Official Trustee to act on counsel's endorsement without the order being drawn up.' It should be mentioned that the decree is a plain money decree in favour of the plaintiff for principal and interest. In the plaint, para. 2, is set out an agreement for repayment, on indication that the money was borrowed with reference to the income to be received by J. C. Hill, under the settlement contained in her father's will. This agreement however was not proved at 'the trial. In these circumstances, the Official Trustee asks by way of directions to be advised whether he should make the payments directed by the consent decree of 27th September 1937.

2. Under the will of George Bridge, so far as it is material, a certain share of the testator's estate was settled upon his daughter J. C. Bridge (she being then unmarried) 'during her life for her separate use without power of anticipation.' 'The Official Trustee relies upon my judgment of 26th November 1936 whereby I held that no creditor of Mrs. J. C. Hill in respect of debts incurred by her, while a married woman, could attach income already accrued or to accrue, having regard to the restraint on anticipation contained in the will, and to the proviso to Section 8, Married Women's Property Act, 1874 added by Section 2, Act 21 of 1929. On the former occasion on behalf of the creditor a secondary point was argued before me to the effect that income already accrued due in contradistinction to income to become due is not protected by the restraint on anticipation. This point has not been reargued before me. On this application Mr. B. N. 'Ghose for the creditor while acknowledging that my previous decision is in point, sought and obtained an opportunity to are-argue the main point of principle. Of this opportunity Mr. Ghose made full use. Mr. Ghose's points were as follows : (1) That the restraint being general, and not in terms confined to restraint during coverture, it amounts to an absolute restraint against alienation and is, therefore void. This point was raised on the previous application before me and decided adversely to the creditor. Mr. Ghose relies upon a statements in the text of Halsbury's Laws of England, Vol. 16, p. 639 and the ease in Re Wolsten Holme (1881) 43 LT 752 (Article in Halsbury's p. 1009). An explanation of this case is to be found in Lush on Husband and Wife, Edn. 4, p. 192. In my opinion the restraint clause must be read as intended to operate upon the marriage of the beneficiary to which extent the restraint is valid in law.

3. The next point argued by Mr. Ghose is by reason of Section 15 of the Act 21 of 1929, the transaction in this case is not hit by the proviso introduced into Section 8 of Act 3 of 1874 by Section 2 of the Amending Act. Having regard to the wide terms of Section 15, I desired that the matter should be considered irrespective of the Amending Act. As I shall ultimately decide that Section 15 does not exclude the operation of Section 2, the discussion becomes, to some extent, superfluous. On the other hand so much emerged during the course of that discussion. It became so obvious that when dealing with the last application my own grasp of the matter was at best superficial that I consider it desirable to state the result. Moreover, from the result it becomes apparent that there are difficulties in the way of creditors of married women entirely independent of Section 2 of the Act of 1929. It has been usual to regard the liability of married women as general, limited only by the proviso introduced by Section 2 of the Act of 1929. This is wrong. Mr. Ghose conceded that even if he is able to exclude the proviso of Section 2 of the Act of 1929, the decision in Hippolite v. Stuart (1886) 12 Cal 522 is against him and this decision, though differed from by other Courts in India, is binding upon me. He invited me, however to consider the ratio decidendi at that case. In that case which fell to be decided under Act 3 of 1874 before the amendment, the subordinate Court held that the initial requirements of Section 8 were fulfilled, i.e.

the contract was made with reference to Mrs. Stewarts property and on the faith that her obligation would be satisfied thereout.

4. The point of law referred to the High Court was whether, having regard to the concluding portion of the section,

shall be entitled to sue her and to recover against her whatever he might have recovered in such suit had she been unmarried at the date of the contract and continued unmarried at the date of the decree

the property was or was not protected by the restraint. The view taken by the Judge of the Court of Small Causes, endorsed by the High Court was based upon a similarity in the wording of Section 9 and the latter part of Section 8.

5. By Section 9, ante-nuptial debts were made payable out of separate property after marriage. Under the corresponding section Section 12 of the English Act of 1870, the Courts had held that against such ante nuptial debts separate property was not protected by restraint: Sangar v. Sangar (1871) LR 11 Eq 470. The decision in Sangar v. Sangar (1871) LR 11 Eq 470 obviously applied to the debts mentioned in Section 9 of the Indian Act. The language of the last part of Section 8 appeared to the Judges indistinguishable from that in Section 9. Hence, they concluded that ante-nuptial debts and postnuptial debts must stand on the same footing with regard to restraint. This is the ratio decidendi in Hippolite v. Stuart (1886) 12 Cal 522. It is a possible construction of the words of the statute but it disregards certain important principles which, had they been considered might, I think, have led the Judges to a different conclusion. In England, before 1870, married women had no rights at law material to the present discussion. Their rights to property were limited to those created by separate use in equity. They had no power to contract in the ordinary sense, though in some cases and under limited conditions they had power to render available their separate property for the discharge of obligations. (see Lush p. 273) If a married woman induced another person to advance money or to undertake burden or liability on the face of her promise to repay him out of her separate estate, equity would compel her to make that promise good. If she promised to repay money lent her out of her separate estate, if she bound the estate with the burden of the obligation she enter ed into, equity would enforce her promise against that estate:

Her separate estate was dosed with a kind of entity of its own which the married woman could bind almost as an agent binds his principal. A person who sought to obtain in equity a remedy against the separate estate of a married woman had first to prove that she had actually bound it;: or as it was said, to prove that her .engagement was entered into on the faith of and with reference to her separate estate. (Lush 276.)

6. No general presumption was raised where a married woman entered into an engagement that she meant to bind her separate estate and the onus of proving that she had done so was upon the person who sought to make it liable : (Lush 277). In equity, further, a married woman could only bind separate estate that belonged to her and over which she had a disposing power. If she was possessed of separate property settled upon her without power of anticipation, she could not render either the corpus or the future dividends subject to her debts and engagements : (Lush p. 205). In England prior to the Act of 1870 (M. W. P. Act. 1870, C. 93), married women had neither power to contract nor separate estate except in equity. This act created a limited. separate estate at law. By Section 12, it continued the liability for ante-nuptial debts after marriage. It did no more. The Married Women's Property Act of 1882 (45 & 46. Vict. c. 75), revolutionised the position of woman at law. This Act created the general separate property of married women and also recognised their capacity to contract (see Section 1, Sub-section ii). This power was still limited. A contract must be 'in respect of and to the extent of her separate property'. By Section 1, Sub-section (iii) every such contract was deemed to be a contract entered into by. her with respect to her separate property, unless the contrary was shown'. By Section 1, Sub-section (iv) every such contract bound her separate property, whether existing at the date of the contract or subsequently acquired.

7. The nature of married women's contract-under this Act was frequently discussed in the Courts with the following result : (1) That the contract would have no effect unless at the time of the contract the married woman actually had separate property. (2) (a) That the presumption contained in Section 1, Sub-section(iii) was in all cases subject to. rebuttal, (b) That the presumption would be rebutted automatically in the case of separate property, subject to restraint. See Pallaiser v. Guerney (1887) LR 19 QBD 519, Harrison v. Harrison (1888) 13 PD 180 and Leak v. Driffield (1890) 24 QBD 98 6 at p. 102. Now these decisions were based upon the nature of the power to contract contained in Section 1, sub-s (ii). They were not based upon Section 19 of the Act which saved the effect of settlements containing restraint. In point of fact Section 19 restricted rather than extended the recognised effect of restraint in equity. The Act of 1893, therefore, was passed to extend the liability upon the contract with married women. By Sub-section (1) (a) her separate property became automatically bound whether she had any property at the date of the contract or not. The proviso saved the effect of restraint. It is this proviso that has been added by Act of 1929 to Section 8 of the Act of 1874. The effective provisions of the Act of 1874 have not been amended.

8. The course of legislation in India has been peculiar. Section 4, Succession Act of 1864 anticipated the creation of separate property in England. Its wording is original and so far as it is material may be parapharased as follows : 'No husband shall, by marriage acquire any interest in the property of the wife and no wife shall become incapable of doing any act in respect of her own property which she could have done if unmarried.' This appears to give the wife an independent power of disposing with her own property. Is it intended to deal with the married women's power to contract? Is it intended to effect restraint on anticipation? The terms are wide enough to do so. (See Peters v. Mauuk (1874) 13 Beng LR 383.) I think not. I am of opinion that this section has nothing to do with the power of married women to contract. The Act of 1874 created a further statutory separate property in the case of married women's earnings and by Section 8, as I think, for the first time gave legal effect to married women's contracts. In my opinion Section 8 was intended merely to recognize and give effect to the principle of equity already stated. I consider its terms and effect to be narrower or at best as narrow as those of Section 1, English Married Women's Property Act, 1883. I consider therefore that the cases already referred to, relating to married women's contracts under the English Act of 1883, to be relevant to contracts made by married women in India under the Act of 1874. Applying these considerations to the case in Hippolite v. Stuart (1886) 12 Cal 522, the result is, I think as follows: The words of the latter portion of Section 8 do not determine the matter. The question is whether the contract of the married women was at all covered by the operative part of the section. Was it such a contract that the Court could find to have-been entered into 'with reference to the married woman's separate property' etc.? Applying the principles I have mentioned, it was not. The finding therefore of the subordinate Court was in my opinion erroneous. This finding was not considered by the High Court, as the point above discussed was not raised.

9. If I am right as to the effect of Section 8 of the Act of 1874 it means that apart altogether from the proviso introduced by Section 2 of Act 21 of 1929 before a creditor can obtain a decree against a married woman on her contracts much more has to be done than mere proof of the contract and breach. Moreover the decree when obtained will not be an ordinary money decree as has been made in this suit. The decree must be in the form laid down in Scott v. Morley (1887) 20 QBD 120. In my opinion since as to the main question, we are still at a stage 1874 India 1883 England, the insertion of the proviso by Act of 1929 was logically and legally unnecessary. It is to some extent misleading because it creates an impression that the liability of married women is more extensive than it is. It produces an atmosphere of the English Act of 1893. Clearly therefore the Act of 1874 requires redrafting and when it is redrafted the necessity of including provisions such as are contained in a later English Act giving jurisdiction to the Courts to remove restraint should be considered. On the above grounds therefore, even without the proviso added by Act 21 of 1929 I should have been of opinion that the creditor is debarred from attaching or from obtaining a receiver of the income payable by the Official Trustee to J. C. Hill. I hold however that the proviso does apply. The creditors' rights have all accrued since April 1930. It is suggested that it is sought to apply the proviso to some 'incident of the disposition,' i.e. the will of George Bridge in 1924.I think not. The restraint is certainly an incident of that disposition but it is no more valid or effective after 30th April than it was before. By the Act of 1874, on a view which I myself have rejected a contract made before 1930 could operate against property, notwithstanding the restraint. Any contract made after 1930 by reason of the proviso, cannot do so. In the circumstances I direct the Official Trustee to dispose of the income of the settled funds irrespective of the decree dated 27th September 1937.

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