Scottish Court of Session Decisions

Subject_1 FACULTY.
Subject_2 SECT. III.

Faculties when effectually Exercised. - Effect on Heirs. - Effect on Singular Successors. - Competition of Creditors claiming under Reserved Faculties.

James Davidson of Tullimorgan
v.
The Town of Aberdeen

Date: 16 December 1708
Case No. No 15.

Faculty to burden or contract debt, reserved in a disposition by a father to his son, was not sustained to make a bond granted by the father without infeftment, real, in prejudice of a posterior disposition granted by him to a third party, altho' the bond narrated the faculty to burden the son's right, and that the granter had actually burdened the same with the debt in the bond.

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Andrew Skene, who purchased the lands of Rutherstane, having taken the right to himself in liferent, and to his son Robert in fee, with a faculty to Andrew to burden, contract debt, to sell or otherways dispose at his pleasure; Andrew Skene in the year 1670, granted a bond of corroboration to Tullimorgan of some debts he formerly owed him, narrating the faculty to burden, and that the granter had burdened the fee with these debts; in the which bond Robert accepted the debt upon him, and as a burden upon the fee, but no infeftment appeared to have followed thereon. In anno 1673, the Town of Aberdeen got the said lands disponed to them by Andrew Skene, and were infeft. There arose a competition for the mails and duties betwixt the Town and Tullimorgan, who had adjudged the lands for his debt, and claimed to be preferred upon this ground, that the bond of corroboration was a real burden upon the lands, and an exercise of the reserved faculty, which the Town was bound to know might have been exercised, as it truly was; and a disposition with the burden of the father's debts, was sustained to make these debts real, so as they could not be prejudiced by the son's subsequent deeds, Ballantine against Dundas, voce Personal and Real. Again, had the son truly paid Tullimorgan's debt, and taken renunciation from him, it would have been hard to allow the father to prejudice his son by a posterior voluntary disposition. And in the case of the Creditors of Kinfawns, No 14. p. 4106., a father's exercise of a faculty in favours of his son of a second marriage, not extant the time of making the disposition, was found real in favours of the son, and preferable to posterior creditors contracting.

Answered for the Town; The father's reserving to himself a power to contract debts and burden the estate, was not designed to make every exercise of the faculty, a real burden upon the estate; but only to be effectual against the fiar, so as he could not hinder the father to burden really when he thought fit to do it. For that can be no real burden, which afterwards may be, or may not be; and every one is at freedom to contract with him who has only a faculty to burden, till interpelled by some record or diligence known in law; seeing none could be sure of what latent personal debts might have been contracted. Law has determined real burdens to be only such as are to be found in the registers of sasines, hornings, and inhibitions; or are contained in the bosom of the author's right; or which are real of their own nature, as servitudes; under none of which Tullimorgan's bond falls. 2do, Though where a father dispones a right to his son with the burden of debts contracted, or to be contracted by him, none can contract with the son, but with the burden of these debts; yet the father's creditors with whom he contracted before or after, remain with respect to one another as personal creditors, till they rank and secure themselves by habile real rights or diligences, though they be real creditors as to the son's deeds, who hath no right but with the burden of the father's debts.

The Lords found, that the bond granted to Tullimorgan was no real burden upon the estate of Rutherstane, which could affect or prejudge the disposition in favours of the Town of Aberdeen.

Fol. Dic. v. 1. p. 293. Forbes, p. 288.