Scottish Court of Session Decisions

Subject_1 BANKRUPT.
Subject_2 DIVISION I.

Reduction of Alienations made by Bankrupts where the Reducer has done no Diligence.
Subject_3 SECT. XI.

The Onerosity of Provisions in Favour of Children.

Creditors of Cult
v.
The Younger Children

Date: 5 August 1783
Case No. No 90.

In cases regarding bonds of provision to children, the solvency of the granter when these became effectual against him, must be proved by the children, unless the other creditors have been in mora.

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In 1775, Mr Wardrobe died possessed of the estate of Cult, and some moveable funds. In 1777, his creditors, and among these his younger children, upon their bonds of provision, adjudged; and in the end of the year 1782, the lands were sold judicially.

In the ranking, the Lord Ordinary found, “That as the creditors of the father were guilty of no culpable neglect, and as there is now a confessed bankruptcy, the children are not entitled to compete on their bonds with the creditors of the father.”

Against this interlocutor the younger children reclaimed, and pleaded, The object of the statute 1621 was not to render every gratuitous right dependent on the future circumstances of the donor, but to restrain fraudulent alienations, by persons in a state of insolvency, in favour of their confidents and relations. The validity therefore of rights with regard to this statute must be regulated by the situation of the granter when these became effectual against him. In the case of provisions to children, which are subject to revocation, the father's death is the period to be attended to; and no subsequent alteration, whether proceeding from the conduct of the other creditors, or any other contingency, ought to impair settlements, which, though not viewed as onerous in a question with the granter's creditors, are in every other respect of the most favourable and rational nature, Erskine, book 4. tit. 1, § 34.; January 6. 1677, Children of Mousewell contra his Creditors, No 80. p. 961.; December 11. 1679, inter eosdem, No 60. p. 934.; February 7. 1679, Hamilton contra Hay, No 81. p. 968.; January 12. 1697, Kinfawns contra Carnegie, No 85. p. 970.

Answered, The Lord Ordinary's interlocutor, when duly compared with the circumstances occurring in this case, does not in the least impinge on the principle, that provisions to children in a question of this sort depend on the solvency of the granter at the period when these became the foundation of a proper action against him. Here the younger children are unable to point out any diminution of their father's funds, from misconduct on the part of the heir, or any other extraneous accident. Theirs competitors have used every dispatch in discussing the estate of their debtor which the nature of their diligence could admit. No reason therefore can be offered for supposing that the funds would have been more productive at the common debtor's death than at the moment of this ranking.

Observed on the Bench, In the circumstances of this case the justice of the Lord Ordinary's decision cannot be disputed. Yet as the words are capable of the interpretation given to them by the petitioners, it may be proper, for preventing any misapprehension from the precedent, to vary the terms in which it is conceived.

The interlocutor pronounced by the Court was in these words:

“Find, That the creditors were guilty of no culpable neglect, in not doing diligence sooner for their debts: Also find, That there is now confessedly an insufficiency of funds belonging to the late William Wardrobe, for payment of his debts; and that the younger children of the said William Wardrobe have not produced sufficient evidence to show that their father's estate in Scotland, at the time of his death, was sufficient to answer the debts he then owed, and their provisions; and therefore find; that the said younger children are not entitled to compete with these creditors of their father.”

Lord Ordinary, Braxfield. For the Creditors, Honyman. For the Younger Children, Henry Erskine, Dickson. Clerk, Colquboun.

*** The younger children insisted, that among the funds a debt due by one of their number should be computed; which, with the price of the estate of Cult, would have satisfied the whole debts as they stood at the father's death. The Court were of opinion, as the debtor was confessedly unable to pay, and had been in that state since the father's deceased, not be complied with. One of the Judges, however, suggested, event of a future recovery of this debt; the younger children would be entitled to a preference on it to the effect of receiving what they would have drawn out of the estate of Cult had their father been solvent at his death. No precise judgment was pronounced on this points.

Fol. Dic. v. 3. p. 49. Fac. Col. No 117. p. 182.