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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Herries, &c, v Brown [1838] CS 16_948 (9 March 1838) URL: http://www.bailii.org/scot/cases/ScotCS/1838/016SS0948.html Cite as: [1838] CS 16_948 |
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Page: 948↓
Whole Court.
Subject_1. Provision to Children—Jus Crediti—Spes Successianis—
2. Trust—Provision to Children—Jus Crediti—Entail.—
In an antenuptial contract, the husband, standing infeft in certain lands, bound himself to pay £20,000 to the younger children of the marriage, “payable at such times, and in such proportions as he should appoint by any will or other writing to be executed by him;” failing which appointment, “payable within 6 months after the day of his death,” and divisible equally among the children; interest was to run “from the day of his death:” he granted a precept to infeft trustee for behoof of the younger children, “in security, and for the more sure payment of the sum of £20,000 to the younger children of the marriage;” he also disponed the lands to himself, and a certain order of heirs, “but with and under the burden of the provision to younger children aforesaid:” infeftment was taken by the trustees, and also by the husband: Held by the whole Court, in an action raised by subsequent creditors of the husband, that the trustees for the younger children were, “in their character as trustees infeft in security, entitled to compete with the diligence of the pursuers, and to rank in their proper order, according to their right of preference, conferred by their said security.”
A party, infeft in lands in fee-simple, executed a conveyance thereof, with powers of sale, to a trustee for payment of debts then existing, the trustee being bound to recouvey the lands, so far as remaining unsold, or the reversion of the price, to the truster, or to any party named by him; the trustee was only liable to denude, on being “relieved of the whole engagements he may have come under, in consequence hereof;” the trustee was infeft; the truster afterwards married, and the trustee became a party to the antenuptial contract, under which a sum of £10,000 was paid to him, by the lady's father, for the purposes of the trust; the trustee consented to the truster's disponing the lands (under burden of the trust) to himself (truster), and the heir-male of the marriage, and certain other heirs of entail, under the whole fetters of a strict entail, which were referred to as being already engrossed in a particular deed, and were declared to affect the truster, as well as the heirs; the trustee consented to the truster's obliging himself to infeft himself and the heirs of entail, subject to the trust; and farther, the trustee bound himself, upon the termination of the trust, “to denude of the lands, or of so much thereof as shall remain unsold for the purposes of the trust, in such manner as to secure the succession to the said lands, to the heirs” above-mentioned; the truster took infeftment in favour of himself and the said heirs, but “subject to the trusts and purposes specified in the said trust-deed:”—Held, in an action by subsequent creditors of the truster, against the trustee and the heir-male of the marriage, that the trustee was “bound to denude of the lands conveyed by the trust-deed, or such part thereof, or of the price thereof, as shall remain after satisfying the purposes specified in the said trust-deed, in such manner as to secure the succession to the heir-male of the marriage, whom failing, the other heirs therein referred to, all as provided for by the said contract of marriage; and that the pursuers, as creditors of the truster, are not entitled to do any diligence against the said lands, or the price thereof, so as to affect the rights of the said heir, or heirs therein.”
In 1810 Ranald George Macdonald stood infeft in fee-simple in the lands of Clanranald and others. In that year he executed a deed of strict entail of these lands in favour of himself in liferent, and the heirs whatsoever of his body in fee; whom failing, other substitute heirs. The deed reserved the fullest power of alteration and revocation in favour of the granter. This deed was, in 1810, recorded in the register of entails, and also in the books of Council and Session. No infeftment followed on it. In the same year, Macdonald also executed a trust-conveyance of his estates, narrating his intention to transmit them, free of debt, to the heirs of entail, and setting forth various trust purposes. It contained full power of revocation; it was not delivered when executed; and was merely a mortis causa settlement.
In 1811, Macdonald executed another trust-disposition of the whole lands above mentioned, in favour of several persons, of whom Robert Brown, chamberlain of the Duke of Hamilton, proved ultimately the sole, surviving acceptor. The deed narrated that the father and grandfather of Macdonald had left debts, some of which were still outstanding, and that Macdonald had, himself, contracted various debts. It then contained a list of debts, and it farther referred to a separate signed list of other debts, which had been contracted by Macdonald, and declared that separate list to be then signed as relative to the trust-deed. It thereafter proceeded:—“And farther, considering that it is necessary, and that I am desirous to make a proper arrangement of my affairs, for the mutual benefit and advantage of my creditors and myself, I have therefore resolved, as wit ye me the said Ranald George Macdonald, but with and under the burdens after mentioned, to have given, granted, and disponed, as I do hereby give, grant, and dispone, to and in favour of the said Robert Brown, as trustee for the several creditors above named, and any other just and lawful creditors of my said grandfather, my father, or of me the said Ranald George Macdonald, in just and lawful debts contracted before the date of these presents, and whom the said trustee shall have power to assume into the benefit hereof, and to the assignees of my said trustee, in the event of a sale, as after specified, All and haill the lands, &c., and that in trust, for behoof of my whole creditors aforesaid, and others who may be assumed by my said trustee in manner above written, and in real security to them of the several principal sums respectively above written due to them, with the annual rents now due and to become due thereon: But declaring, that although particular sums are here mentioned as due to the said creditors, it shall not prevent them or me the said Ranald George Macdonald, from instructing that the sums truly due are more or less, and my said trustee shall have power, and is hereby specially authorized to fix and ascertain the real extent of each debt, and to determine and settle all such disputes as may arise relative thereto: But reserving always full power and liberty to me the said Ranald George Macdonald to sell, alienate, dispone, convey,
or make over the superiority or dominium directum of all or any part of the aforesaid lands and others above disponed, and that to such person or persons as I shall think proper, and with which alienations my said trustee shall have no concern: And moreover, these presents are granted to my said trustee for the purposes, and with the special powers after mentioned,” viz. 1st, To enter into possession, uplift rents, &c., with power to name factor, cashier, &c.: 2d, After paying expenses, to apply, annually, the proceeds in the cashier's hands, in payment of the debts: 3d, To remove tenants, grant leases, and act as proprietor, &c.: 4th, To enter into submissions, transactions, &c., or pursue or defend at law, &c.: 5th, Authority was “specially “given to borrow such sums as the trustee should judge necessary “for answering any demands which may be made upon my estate, or for paying off” any of the debts at present due by me, or in general for answering any of the purposes of this trust, and to grant bonds,” &c., personal, binding Macdonald, or heritable affecting the estate: 6th, Power was given to complete buildings, roads, and other improvements on the lands, and “to erect such other buildings, and to make such other improvements as may and shall be agreed upon by and between me and my said trustee: 7th, My said trustee is hereby specially authorized and empowered, if he shall think it expedient, to sell and dispose of my said lands,” &c., and to grant dispositions to a purchaser, binding Macdonald in absolute warrandice. The deed then declared, that, as there were certain liferent annuities heritably secured over the lands, the trustee should be specially empowered, in the event of selling part of the lands affected by these annuities, to arrange with such annuitants and grant them new heritable securities, if necessary, over the remainder of the estate. The deed reserved power to Macdonald, in the event of his marrying prior to the termination of the trust, to infeft his spouse “in a liferent annuity over such part of my estates as shall remain unsold, and that to the extent of £1000 per annum, and such farther sum as may be agreed by and between me and my said trustee: it being hereby declared that such liferent infeftmcnt shall not in any way whatever affect or hurt the interest of my said creditors, but shall only be effectual to the extent of my remaining property, after all my creditors shall be satisfied and paid.” Macdonald also reserved power to himself, with concurrence of his trustee, to secure one of his brothers in a specific heritable annuity out of the lands, in a certain event. The deed then expressly declared that it was granted “without hurt or prejudice, in any manner whatever” to the deed of entail and the trust-disposition executed in 1810, “which two deeds it is hereby understood, are to be equally good and effectual as if these presents had never been granted, save and except that the said deed of entail and the said trust-disposition shall be applicable only to the lands and estate above disponed, as they may be burdened by my said trustee, pursuant to the powers hereby granted, or to such part thereof as shall remain unsold, in the event of a sale being made by my trustee under the authority of these presents: And it is hereby declared that the present trust-deed shall continue only during my life, and shall also terminate and be concluded whenever the whole of the debts at present due by me shall be paid off by my said trustee, or by me; and my said trustee shall, in either of these events, be obliged to denude of the said trust, and reconvey the said lands and estates, and others before specified, or such parts thereof as may remain unsold, and yield the possession to me, or, in the event of my death, to the trustees named in the said trust-deed, if the same shall be then unrevoked, and the trustees should accept of the trust, or in case of the same being revoked by me, to the heir who shall be entitled to succeed to my said lands and estate, pursuant to any settlement or conveyance thereof to be executed by me; and in the event of a sale of the whole, or of a greater part of my said estates, than is sufficient to pay all my debts, and the expense of management, my said trustee shall be obliged to account for and pay the residue of such price to me, or, in the event of my death, to the trustees named in the said trust-deed as aforesaid; or in case of the same being revoked, to the heir who shall be entitled to succeed to me in the said estates in virtue of the said deed of entail or future settlements of the same to be executed by me; my said trustee being always previously relieved of the whole engagements he may have come under in consequence hereof, and I or my heirs being obliged to execute a ratification of the whole deeds granted, and transactions entered into, by my said trustee: Provided always, and it is hereby provided and declared, that these presents are granted, subject to the condition that my said trustee shall, during the subsistence of this trust, pay and allow mc the sum of £4.000 sterling per annum, payable at four terms in the year, Candlemas, Whitsunday, Lammas, and Martinmas, by equal payments, beginning the first payment at the terra of Lammas next, and continuing such payment at each term of Candlemas, Whitsunday, Lammas, and Martinmas during the subsistence of this trust: Providing always, that it shall be in the power of my said trustee to increase or diminish the said yearly sum to be paid to me to such sum as my said trustee shall from time to time think reasonable.” The deed then contained an assignation of the rents to the trustee “until the whole debts aforesaid are completely satisfied and paid, or until the said trust is at an end in manner foresaid.” There followed an assignation of writs, and other usual clauses, including a precept of sasine to give infeftment “in trust for the purposes above specified; but always with and under the burdens and conditions above expressed.” The trustee (Brown) was duly infeft under this conveyance, in part of the lands, in 1811, and in the rest, in 1823. He entered on the management of the trust, sold part of the lands, paid off certain debts, and made various advances under the trust
In 1812, Macdonald married Lady Caroline Ann Edgecumbe, and an
antenuptial contract was entered into, in which there were four parties set forth as being respectively obligants. These were, Macdonald, of the first part; Lady Caroline, and her father the Earl of Mount Edgecumbe, of the second part; Robert Brown, as trustee, infeft “in virtue of, and for the purposes mentioned in the trust-disposition” 1811, of the third part; and Lord Suffield and others, afterwards the Marquis of Lothian and Lord Valletort, of the fourth part. The contract stated that Lord Mount Edgecumbe had paid, as his daughter's marriage-portion, the sum of £10,000, to the said third party, Brown, Macdonald's trustee, “for the purposes, and upon the trusts, mentioned in the said trustdeed”—“in consideration whereof, the said Ranald George Macdonald, with the consent of the said third party (Brown) hereby binds and obliges himself, his heirs and successors, at his own expense to infeft and seise the said Lady Caroline Ann Edgecumbe, during all the days of her natural life after the death of the said Ranald George Macdonald, in a clear jointure or annuity of £2000”—“without prejudice nevertheless to the sale of any part of the said lands and others that may be found necessary for the trusts and purposes specified in the said trust-disposition, executed by the said Ranald George Macdonald on the 8th day of June, 1811, any of which lands so to be sold, shall be held free and disincumbercd of the said annuity, in the same manner as if these presents had not been made.” The annuity was to be held by two manners of holding, one thereof to be held of and under Brown, the other thereof to be held from Macdonald, and of and under his immediate superiors; both in free blench farm. Macdonald bound himself in absolute warrandice, and to pay the annuity whether infeftment followed or not, beginning at the first term after his death. “And in farther security of the payment of the said liferent annuity of £2000 at the terms before specified, the said, third party (Brown) binds and obliges himself to take assignments from creditors whose debts are charged upon the said lands and others hereinafter conveyed, to the extent of £10,000, conceived in favour of the said fourth parties to these presents, in such manner as that such debts may remain a charge upon the said lands and others during the lifetime of the said Lady Caroline Ann Edgecumbe, in the persons of the said fourth parties to these presents, so that in case the said annuity should not be regularly paid, they may enable the said Lady Caroline Ann Edgecumbe to operate payment of such debts out of the said lands and others, for the purpose of satisfying and paying to such extent the foresaid liferent annuity of £2000 per annum to the said Lady Caroline Ann Edgecumbe, at the terms before specified, during all the days of her life after the death of the said Ranald George Macdonald; such assignments to be subject to this condition, that such debts, so to be assigned, shall be discharged, and the said lands and others disencumbered thereof, so soon as all the debts now due by the said Ranald George Macdonald shall be paid and extinguished: and further, the said Ranald George Macdonald, with the consent of the said third party (Brown) binds and obliges himself to infeft and scise the said fourth parties to these presents in the lands and others hereinafter conveyed, in security of the payment which the said Ranald George Macdonald hereby binds and obliges himself to make to the said Lady Caroline Ann Edgecumbe for her separate use, during the subsistence of the said marriage, of the sum of £400 per annum, of good and lawful money of Great Britain, payable quarterly upon her receipt alone,” &c. This infeftment was also to be by two manners of holding, and without prejudice to a sale of the lands, under the trust-disposition 1811. Macdonald farther, “with the consent of the said third party (Brown) binds and obliges himself, upon his own expenses, to infeft and scise the said fourth parties to these presents in the lands and others hereinafter conveyed, in security, and for the more sure payment of the sum of £20,000 of good and lawful money foresaid, which the said Ranald George Macdonald hereby binds and obliges himself, his heirs and successors, to pay to the children of the said marriage, if there shall be more than one besides the heir, who shall succeed to the lands and estates hereinafter conveyed, payable at such times and in such proportions as the said Ranald George Macdonald shall appoint by any will or other writing to be executed by him; and failing such appointment, the same shall be payable within six months after the day of the death of the said Ranald George Macdonald, and shall be divided equally among such younger children, and of the sum of £10,000 money foresaid, in case there shall be only one child of the said marriage besides the heir who shall succeed to the said lands and others, payable to such child at such time as the said Ranald George Macdonald shall appoint by any will or writing to be executed by him, and failing such appointment, within six months after the day of his death; which provisions and provision to younger children and a younger child, shall bear interest at the rate of £5 per centum per annum from the day of the death of the said Ranald George Macdonald; and the said Ranald George Macdonald binds and obliges himself to maintain and educate such younger children and child suitably according to their station, during all the days of his natural life; and such last-mentioned sasine in favour of the said fourth parties to these presents, shall and may be by two several infeftments and manners of holding, but without prejudice to the sale of any part of the said lands and others as above provided, with reference to the said jointure and annuity.”—“And which annuity to the said Lady Caroline Ann Edgecumbe, and the aforesaid provisions and provision to younger children and a younger child, are hereby declared to be in full of every thing that the said Lady Caroline Ann Edgecumbe, or such younger children or child, can demand from the said Ranald George Macdonald or his estate, in name of terce, jus relictae, legitim, or any claim whatsoever: and further, the said Ranald George Macdonald, with the consent of the said third party (Brown) does hereby, but subject to the trusts and purposes declared and specified in the foresaid trust-disposition executed by the said Ranald George Macdonald, upon the 8th day of June, 1811, and with and under the burden of the aforesaid jointure to the said Lady Caroline Ann Edgecumbe, and provisions and provision to younger children and a younger child, as aforesaid, dispone, convey, and make over, the whole of the lands and others herein after described, in case the trusts and purposes specified in the said trust-disposition executed by the said Ranald George Macdonald on the 8th day of June, 1811, can be accomplished without a sale of any part thereof, or of so much thereof as shall remain unsold after these trusts and purposes shall be accomplished, viz.—(Here followed the description of the whole lands.)—To and in Favour of the said Ranald George Macdonald himself, and the heirs-male of the said marriage, and the heirs whomsoever of their bodies, the eldest heir-female succeeding without division, and excluding heirs-portioners; whom failing, the heirs-male of the body of the said Ranald Gcorge Macdonald in any subsequent marriage,” &c., whom failing, the heirs called under the entail 1810, “but always with and under the conditions, provisions, restrictions, limitations, exceptions, clauses prohibitory, irritant and resolutive, declarations and reservations therein written; or to the heirs of entail to be specified in any other nomination or deed of entail which may hereafter be executed by the said Ranald George Macdonald: Providing always and declaring, as the said Ranald George Macdonald hereby binds and obliges himself, his heirs and successors whatsoever, that any deed of entail so to be executed shall be with strict prohibitory, irritant, and resolutive clauses, which shall affect himself as well as the heirs hereby called to the succession of the said lands and estates, and the other heirs to be called by such deed of entail, and that until the execution of such deed of entail, the prohibitory, irritant, and resolutive clauses contained in the said deed of entail, executed by the said Ranald George Macdonald upon the 8th day of March, 1810, shall apply as well to the said Ranald George Macdonald himself, and to the heirs hereby called to the succession of the said lands and estates, as to the heirs called to the succession by the said deed of entail already executed by the said Ranald George Macdonald, so that the succession to the said lands and estates may be at all events secured to the heirs called by these presents to the succession thereof; and the said Ranald George Macdonald hereby specially renounces the reservation contained in the said deed of entail, to alter, or in any way to innovate the same, so far as regards the heirs called by these presents to the succession, but always with and under the burthen of the trust-deed before mentioned, executed by him on the 8th day of June, 1811, and the provisions granted by these presents in favour of the younger children of the said intended marriage, the said deed of entail being hereby declared to be obligatory on him and them in its whole prohibitory, irritant, and resolutive clauses: In which lands and others so disponed, the said Ranald George Macdonald with the consent of the said third party (Brown) binds and obliges himself, his heirs and successors, to infeft and seise the said Ranald George Macdonald himself, and the heirs-male of the foresaid marriage, whom failing, the other heirs above mentioned, in the order above specified, but always subject to the trusts and purposes declared and specified in the aforesaid trust-disposition executed by the said Ranald George Macdonald on the 8th day of June, 1811, and with and under the burden of the aforesaid annuity to the said Lady Caroline Ann Edgecumbe, and the aforesaid provisions and provision to younger children, and a younger child.”—“And farther, the said third party (Brown) binds and obliges himself, upon the termination of the trust vested in him, by the trust-disposition executed by the said Ranald George Macdonald on the 8th day of June, 1811, to denude of the lands and others above described, or of so much thereof as shall remain unsold, for the purposes of the said trust, in such manner as to secure the succession to the said lands and others to the heirs-male of the said marriage, and the heirs whomsoever of their bodies, the eldest heir-female succeeding without division, and excluding heirs-portioners; whom failing, to the other heirs above mentioned, in the order above specified: And the said Ranald George Macdonald hereby binds and obliges himself, and his heirs and successors whatsoever, to concur with the said third party, in enabling him so to denude.”—“Moreover, the said Ranald George Macdonald, with the consent of the said third party, does hereby desire and require you and each of you, his bailies in that part, to the effect underwritten, specially constituted, that on sight hereof ye pass to the grounds of the said hinds and others above described, and there give and deliver to the said Lady Caroline Ann Edgecumbe, heritable state and sasine, real, actual, and corporal possession of all and whole the foresaid free liferent annuity of £2000 of good and lawful money of Great Britain, to be uplifted and taken during all the days of her natural life after the decease of the said Ranald George Macdonald her husband,” &c.; “but without prejudice always to a sale of such part of the said lands and others that may be necessary for the trusts and purposes of the said trust-disposition executed by the said Ranald George Macdonald on the 8th day of June 1811, which lands so to be sold shall, upon such sale, be free and disincumbered of the said annuity: And also, that ye give and deliver to the said fourth parties to these presents, heritable state and sasine, real, actual, and corporal possession of the said lands and others above described, in security and for the more sure payment to the said Lady Caroline Ann Edgecumbe of the foresaid sum of £400 per annum, of good and lawful money of Great Britain, to be paid to her quarterly, for her separate use as aforesaid; and also of the sum of £20,000 of good and lawful money of Great Britain to the younger children of the said marriage, if there shall be more than one besides the heir who shall succeed to the said lands and others, and of the sum of £10,000 of money foresaid to the younger children of the said marriage, if there shall be only one child of the said marriage besides the heir who shall succeed to the said lands and others, payable at the times, and bearing interest in the manner hereinbefore provided, but without prejudice always to the side of such part of the said lands and others as may be necessary for the purposes of the aforesaid trust-disposition executed by the said Ranald George Macdonald on the 8th of June, 1811, which lands so to be sold shall, upon such sale, be free and disencumbered of the said separate allowance and the said provisions and provision to younger children and a younger child: And further, that ye give and deliver to the said Ranald George Macdonald, and the heirs-male of the said marriage, whom failing, the other heirs above mentioned, in the order above specified, heritable state and sasine, real, actual, and corporal possession of all and whole the said lands and others above described; but such last-mentioned sasine to be given always subject to the trusts and purposes specified in the said trust-deed executed by the said Ranald George Macdonald on the 8th day of June, 1811, and with and under the burden of the foresaid annuity to the said Lady Caroline Ann Edgecumbe, and the aforesaid provisions to younger children and provision to a younger child.” This antenuptial contract was recorded in the register of entails, and in the books of Council and Session. Lady Caroline, and also the fourth parties to the marriage-contract, were respectively infeft under the marriage settlement, in 1812. Macdonald was infeft under it in 1817.
In 1823 Macdonald contracted a debt of £5000 to Hemes, Farquhar, and Co., bankers in London, and granted a bond in the English form, for the amount. They afterwards effected an insurance on his life.; but, in consequence of arrears of interest and premium being allowed to accumulate, they first raised an action which was extrajudicially arranged, and afterwards, in 1832, they again raised an action, as farther arrears had then accumulated. The action concluded against Macdonald for declarator of the amount of debt due by him; it concluded against Brown, as holding a trust conveyance to the estates of Macdonald, or intromitting with these estates, that he should be decerned qua trustee to pay the debt, interest, and arrears of premiums of insurance; and it concluded against Lord Lothian and Lord Valletort, for declarator, that they, “the alleged trustees under the marriage settlement,” had “no claim as onerous creditors of Macdonald to entitle them to compete or interfere with the diligence of the pursuers.” The action also concluded alternatively, that if Brown failed to pay, or alleged want of trust-funds, then the pursuers should have decree ordaining Macdonald to make payment of the above debt, interest and premiums, “for the purpose of enabling the pursuers to do all lawful diligence” against him and his estates, “heritable and moveable, in so far as not affected by the claims of onerous creditors under the said trust or otherwise.”
Before this action was raised, Lady Caroline Ann Macdonald had died,
leaving Ranald J. Macdonald, and five other children, as the issue of the marriage. No defences were lodged by Macdonald, against whom decree was accordingly pronounced. Defences were lodged by the other parties, and cases were ordered. Brown stated that he was under large advances or obligations, of which he was entitled to be relieved, before he could be required to denude; and, among others, he alleged that he had come under an obligation as a party to the marriage-contract, 1812, to denude only so as to secure the succession of the lands remaining, and that, under a strict entail, in favour of Macdonald the truster, and the heirs-male of the marriage, and others. But he contended that, before disposing of this question, the heir-male ought to be called for his interest.
The pursuers did not dispute that Brown had a right to be relieved of all obligations and advances undertaken by him, in virtue of the powers, and for the purposes of the trust-deed, 1811. But they denied that the subsequent alleged obligation to secure the succession to the heir-male of the marriage, was one of these, or was so conceived or secured as to be effectual against subsequent onerous creditors. They raised however a supplementary action against the heir-male, in which this question was fully and separately considered. 1 In the present action, the main question thus came to be, whether, under the marriage settlement and relative; writs, the younger children of the marriage held a jus crediti against Macdonald, and, if so, whether it was duly secured by infeftment; or whether they had only a spes successions, so that they could not compete with the pursuers. In regard to the alleged arrears of the £400 annually falling due to Lady Caroline Macdonald as pin-money, though their amount, or existence, was disputed, it was not denied that, in so far as such arrears existed, they formed a preferable debt, now exigible by her representatives. In regard to the main question above stated, it was
_________________ Footnote _________________
1 See infra p. 974.
Pleaded by the Pursuers,
1. The alleged obligation undertaken by Macdonald, in favour of his younger children, was to pay to them £20,000, if there were more than one, “besides the heir who shall succeed to the lands,” &c.—“payable at such times, and in such proportions as the said R. G. Macdonald shall appoint by any will, &c.; and failing such appointment, payable within six months after the death of the said R. G. Macdonald,” and equally divisible among the children. It was declared that interest on the provision should only run “from the day of the death of the said R. G. Macdonald,” Laying aside, in the mean-time, the existence of the previous trust, and of the subsequent infeftments, it was settled that such an obligation by a father, in favour of children naseituri not being prestable,
_________________ Footnote _________________
1 3 Ersk. 8, 39—M'Tavish. Nov. 15, 1787 (12922)—Gordon, June 3, 1748 (4398 & 12915)—Brown, Feb. 1, 1820, F.C.
2. But if there was thus no true obligation creating a jus crediti as against the father, the infeftment in security was inept, whether regard was had to the infeftment of the trustees for the children (Lord Lothian and Lord Valletort), or to the infeftment of their father, Macdonald. An infeftment in security was, sua natura, merely of an accessory nature, and could not make the principal right broader than it was before. 2 Unless, therefore, a true obligation was undertaken by Macdonald, his younger children never were creditors of his at all; and not being creditors, there were no termini habiles for their infeftment securing any thing in competition with creditors of their father. A direct infeftment of themselves could not do so, and the infeftment of trustees for them, was, at best, no better than that. And although Macdonald had also expede an infeftment in favour of himself, as if under the burden of the provisions to his younger children, that procedure was liable to two objections; (1.) That there was no obligation existing to be thereby secured; and (2.) That as he was already infeft, it was not an apt mode of creating a real burden, to infeft himself over again in virtue of his own precept.
_________________ Footnote _________________
2 Brown, Feb. 1, 1820, F. C.
3. The existence of the trust, 1811, did not vary the case. It did not add any new element so as to rear up the obligation in the marriage-contract, and create a true jus crediti against Macdonald. That which was the very basis of the younger children's case, remained therefore the same as if no trust had existed. Nor did the trust at ail affect the infeftments, or the force of them. The radical fee of the lands was all along in Macdonald, subject to the mere burden of the trust; and if an infeftment by Macdonald, supposing there had been no trust, would have been unavailing, an infeftment by him with consent of his trustee, was no better. And, in relation to the provision to the younger children, the trustee had himself come under no obligation whatever.
Pleaded for the defenders—
1. There was no legal principle which prevented an obligation from rearing up a true jus crediti against the granter, though the term of payment was postponed to a period which must necessarily arrive only after his death; nor although the party in whose favour the obligation was granted, was the child of the granter. And even if the child were still nasciturus, the obligation was effectual, at least, if conceived in favour of
2. There was, ex figura verborum, an absolute obligation undertaken; and the question was, whether there were any circumstances to take off the effect of this, and prove that no true obligation was intended. But the circumstances proved the reverse. It was natural, in reference to the position of the parties, that it should be bona fide intended to secure some provision absolutely to younger children. The granter, by giving instant infeftment to trustees for the children nascituri, evinced, by the strongest evidence, his desire and intention to create a genuine obligation, effectual against himself; and this was farther proved, by his taking a new infeftment to himself under the express burden of that provision. There was thus a true and genuine obligation undertaken by him, creating a jus crediti in favour of the children, and therefore the infeftment of trustees for their behoof, being equivalent to a direct infeftment of themselves, created a real security in their favour, which made them preferable to all subsequent creditors, whether personal or real. 1 In addition to this the infeftment taken by Macdonald, in his own favour, but under the express burden of their provision, formed a separate real security in their favour. And as these several infeftments imposed actual and instant restraint on Macdonald's own power of administering his estate, they distinguished this case from any precedent referred to by the pursuers, and necessarily limited the right of Macdonald's subsequent creditors to attach the estate.
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1 Bushby, June 23, 1825 (ante, IV. 110; or 112, new ed.); Marjoribanks, Feb., 1682 (12891); Mackenzie, Feb. 2,1792. Bell's Cases, 404; Gibson and Arbuthnot, Feb. 4, 1786 (11,481), 1 Bell, 50.
3. The trustee under the trust-deed 1811, consented to all the obligations undertaken by Macdonald. And as he was only obliged to denude in favour of the heir-male of the marriage, whose right was qualified by the burden of the provision to younger children, that also created a right in their favour which was preferable to any other that could be pleaded by subsequent creditors of Macdonald, claiming against the trust-estate.
The Lord Ordinary pronounced this interlocutor;—“Finds, that
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“ Note.—According to the principle recognised in several cases, the radical fee-simple title to the estates must be held to have remained in the person of Ranald George Macdonald, subject-only to the burden which was created by the trust-deed, and was defensible on the accomplishment of the purposes of the trust. But, again, as the marriage-contract, though disponing the estates remaining after the execution of the trust to the disponer himself, and the heirs-male of the marriage, &c., under the provisions and restrictions of the former entail of 1810, not completed by infeftment, did not contain any special or express prohibitory, irritant, and resolutive clauses, the fee-simple right remaining in the disponer, cannot be held, in a question with onerous creditors, to have been abridged or limited by that deed, or the infeftment following upon it. Neither does it appear to the Lord Ordinary, that this consequence is in any way obviated or affected by the circumstance of the trustee, in the deed of 1811, consenting to the marriage-contract, and binding himself to denude of the remaining estate in such a way as to secure the succession of the heirs-male of the marriage. For, as in every question with onerous creditors, the fee-simple right must be held to have remained in Clanranald, subject only to the burden created by the infeftment of the trustees,—the radical infeftment of the truster, and the rights thence arising to his onerous creditors, could in no way be affected by this private and personal agreement of the trustees, in regard to the form of the reconveyance of the residue. The extent of the real right vested in the trustees, was limited by the proper purposes of the trust; and it does not appear to the Lord Ordinary, that the radical right remaining in the person of the truster, could be effectually limited by any deed of theirs, extrinsic to those purposes.
“ The defenders, the Marquis of Lothian and Lord Valletort, are infeft under the marriage-contract, in security of the annuity of £400 a-year, payable to Lady Caroline Edgecumbe, during the subsistence of the marriage, and of the £20,000, payable to the children of the marriage on the death of the father. If any arrears of the annuity are actually due to the representatives of the Lady Caroline, there seems no reason to doubt that the security is effectual, and that the conclusion of the summons against these trustees, ' that they have no claim to entitle them to compete and interfere with the diligence of the pursuers,' is unfounded. The question regarding the provision of £20,000 to the younger children, is attended with much more difficulty. The money, it will be observed, is not payable to the trustees. By the terms of the contract, Ranald George Macdonald binds himself to infeft and seize the trustees, ‘for the more sure payment of the sum of £20,000 of good and lawful money foresaid, which the said Ranald George Macdonald hereby binds and obliges himself, his heirs and successors, to pay to the children of the said marriage.’ The obligation to pay being in favour of the children of the marriage, and being expressed in terms which are understood in law, not to create a jus crediti; the question is, whether the construction of the obligation is altered by the circumstance of the real security vested in the trustees? Upon this point, two cases have been referred to in the pleadings, which certainly appear very nearly to resemble the present. The first, being that mainly relied on by the pursuers, is that of Brown against Govan, 1st February, 1820, in which the nature of the right conceived in favour of the children nascituri, seems to have been held by the Court to depend on the terms of the obligation, without regard to the circumstance of the real security by which that obligation was fortified. Upon looking at the report, however, it rather appears doubtful to the Lord Ordinary, whether the circumstances of that case properly raised the question, on the effect of the security being taken in favour of trustees. There were words, indeed, in the marriage-contract, in that case, which admitted of the construction, that the mother was to be infeft in trust for the children. But these expressions were by no means unambiguous; and looking at the report of the opinions of the Judges, the question seems to have been considered as one dependent on the obligation to infeft, and the infeftment taken by the children, without any reference to the speciality of a trust supposed to have been created in the person of the mother. On the other hand, the later decision, that of Bushby against Renny, 23d June, 1825, seems to be exactly in point. By the marriage-contract there, the provisions were payable to the children at the death of the father; and in the general case, would certainly not have created a jus crediti in favour of the children. But there was, besides, an obligation to infeft certain persons, ‘as trustees for the children, one or more, to be procreated of the said marriage, for securing unto them the said sum of £20,000 money foresaid, in All and Whole the ten-merk land of Kirkmichael.’ The question having arisen, with the creditors of Mr Bushby, whether the provisions of the children were to be held as constituting a proper right of credit entitling them to enter into competition with onerous creditors, that question was decided in the affirmative. Upon the authority of this decision, the Lord Ordinary has conceived himself warranted in sustaining the claims of the children as onerous creditors, and in repelling the conclusions of the summons directed against the trustees, the holders of the security.”
At advising the cause, the Judges of the First Division directed a hearing in presence of the whole Court, in respect of the alleged conflict between the case of Brown, decided in the Second Division of the Court, and the case of Bushby, decided in the First Division. A hearing accordingly took place, and the consulted Judges were requested to answer the following question:—“Whether, in virtue of the infeftment in favour of the trustees for the younger children of the marriage in October, 1812, in terms of Clanranald's marriage-contract, and of the infeftment in favour of Clanranald himself in February, 1817, under the burden of the provisions of the younger children, also taken on the said marriage-contract—the trustees are entitled to interfere and compete with the diligence of the pursuers against his estate, as onerous creditors of Clanranald, contracting with him posterior to the dates of said infeftments?”
The following Opinion was returned by
“Whether a provision in an antenuptial contract of marriage, to children nascituri, does or does not vest in them, when they come into existence, a proper right of credit, depends on the terms in which the obligation is conceived, and the conditions with which it is affected. If it be a simple unconditional obligation for s sum payable at the father's death, and bearing interest from the term of payment it vests no proper right of credit. That rule is settled by a long and uniform trail of decisions; but the grounds on which those decisions are rested have not been equally uniform.
“At an early period of the law, it appears that children, taking a provision by virtue of an obligation liberis nascituris, in whatever terms it was conceived, were held to take necessarily as heirs of the marriage, or heirs of provision; of consequence, to represent their father, and to be liable to his creditors to the extent oi the sum which they received. This is the view taken in the case of Graham v Rome, and various others about that time. The Court found, ‘that not only the eldest son, but that all the children were heirs of provision to their father, and therefore that they cannot come in pari passu with his creditors; and so far was the principle carried, that there are cases in which creditors were preferred to children claiming on bonds of provision granted in terms of a marriage-contract, though payable in their father's lifetime. On the same principle, a cautioner for the obligation in the contract was found not liable to the children, because, although his obligation was conceived in their favour, yet, as representing their father, they were bound to relieve him. The debt, therefore, was held to be extinguished confusione,—or, more correctly it was ineffectual, on the maxim frustra petis quod mox es restituturus. There are various decisions to that effect in the end of the 17th century. If that principle had been adhered to, it would have signified little in what terms, or under what conditions, the obligation was granted; for the children availing themselves of it, could not divest themselves of the character of heirs and representatives.
“But it was soon discovered that there is no principle, either in natural justice, or in the law of Scotland, to prevent a father from contracting a debt in favour of his children, or that they should always take, ex necessitate legis, as heirs of provision. Neither is there any principle for holding that an obligation cannot be effectual, because it is conceived in favour of children nascituri, in other words, that it is a future and contingent obligation; and therefore the rule came to be defended on other grounds. The feudal maxim was resorted to, that a fee cannot be in pendente; and as a clause of this nature in the contract does not bind the father to denude of the sum provided during his life, but allows him to retain the liferent use of it, therefore it was argued that the father is fiar, and the children merely substitutes; or that the case was the same as if the father had conveyed a sum or subect to himself in liferent and his children nascituri in fee, which fee being necessarily an nsusfructus casualis, leaves the whole power of disposal in the father. This is the favourite argument in all the cases during the earlier part of the eighteenth century, and still is often resorted to. It is exposed, however, to the objection, that the subsistence of the fee in the father, affords no good reason why an obligation, conceived directly in favour of the children, should not be held as strictly onerous, and constitute them proper creditors when they come into existence, as
“The difficulty of supporting the rule solely on the feudal maxim with regard to the pendency of fees, seems accordingly to have been felt, and other grounds have been resorted to in its defence. Thus it has been argued, that as the father's creditors have, or may have, executio parata for their debts, which the children cannot have, because they are not in existence at the date of the obligation, therefore every extraneous creditor must be preferable to them. But whatever might have been the case at an early stage of our law, this argument could not be listened to, as soon as it was settled that contingent as well as future debts may be secured so as to compete with debts instantly exigible. Again, great stress has always been laid on the danger of latent obligations of this nature, to which there is a stronger temptation in the case of children than of other creditors; and certainly on that ground the expediency at least of the rule may, to a certain extent, be vindicated. At the same time, as it is natural that fathers should provide for their younger children, to some extent at least, it may be asked, why should not extraneous creditors be on their guard against this as well as any other latent obligation?
“The origin of the rule of law appears to have been this:—At the time when it was introduced, Scotland was a poor country, and there was a great deficiency to disposable capital among all ranks. When a man entered into a contract of marriage, although it might be desirable to make some provision for younger children, it was very unlikely then that the father should give up the command of the property during his own life, and in the general case it would be for the benefit of the family that he should retain it in his own power, in as far at least as onerous deeds were concerned. To tie up his hands in the administration, either with regard to his own means, or the portion which he received with his wife, would be thought not only an irksome restraint in so far as his feelings were concerned, but that it might prevent him from advancing his fortune, and from turning his capital to the best account for his children. Accordingly, this view will be found to run through the argument in many of the old cases upon the subject.
“But there must have been instances, even at that time, in which it was neither prudent nor reasonable that the sum or subject provided to the children should be left at the father's disposal, and it might have been the intention of parties, that although the terms of payment did not arrive till the father's death, the children should nevertheless have a proper right of credit during his lifetime, so that they might compete with his posterior creditors, or even be made preferable to them; and these instances must have increased in number, with the growing prosperity of the country. Now, as there is no rule in the law of Scotland to render a stipulation to that effect illegal or ineffectual, it becomes a question of construction, what is the import of the clause of provision which parties have adopted. As we have already observed, if it be a simple and unconditional provision liberis nascituris, the term of payment being suspended till the father's death, the presumption
“Let us now attend to the terms in which the marriage-contract of Mr Macdonald of Clanranald is conceived. In 1811, previous to the date of the marriage, Mr Macdonald's estate had been conveyed to trustees for payment of his debts, and they were infeft in it. These trustees are the third parties to the contract of marriage; and trustees are nominated in the contract, for behoof of the lady and the children of the marriage nascituri, who are the fourth parties. In that situation, Mr Macdonald, ‘with the consent of the said third parties to these presents, binds and obliges himself, upon his own expenses, to infeft and seize the said fourth parties to these presents, in the lands and others hereinafter conveyed, in security, and for the more sure payment of the sum of £20,000 of good and lawful money foresaid, which the said Ranald George Macdonald hereby binds and obliges himself, his heirs and successors, to pay to the children of the said marriage, if there shall be more than one besides the heir’ (the event which has happened). That provision was made payable six months after Mr Macdonald's death. Afterwards Mr Macdonald binds himself to convey the estate, subject to the trusts for the creditors contained in the deed 1811, and under burden of the lady's jointure, and of the provisions to younger children, to himself and the heirs-male of the marriage, and a series of substitutes under the fetters of an entail; and he binds himself to infeft himself and those heirs, Bubject to the trusts of the deed 1811, and under the burden of the jointure and provisions. Lastly, Mr Macdonald grants a precept of sasine, first, for infefting the lady in her annuity, secondly, for infefting the marriage-trustees in security, and for the sure payment of £400 per annum, for her use during the subsistence of the marriage; and also ‘of the sum of £20,000' (that is in security and more sure payment of £20,000) ‘to the younger children;' and thirdly, for infefting Mr Macdonald himself, and the heirs-male of the marriage, subject to the trusts of the deed 1811, ‘and under burthen of the jointure and provisions to the younger children.’
“Now it must be evident at first sight, that this is not the case of a simple unconditional provision of a sum payable to younger children at the father's death, in which the presumption of law would operate (contrary to the apparent terms of the obligation), that the father was to be laid under no restraint with regard to the disposal of the sum, and that the children were only to have a hope of succession. On the contrary, the obligation is qualified with conditions, which necessarily import that the father was to be laid under restraints, and that it was the intention of parties that the provision should, in all events, be made effectual to the children. Suppose it had been stipulated that the children were to be infeft, to the extent of their provision, when they came into existence, or that the father
“The case may be viewed in another light. We have seen, that an obligation to infeft the husband and wife in conjoint fee and liferent, and the children nascituri in fee, in a certain sum, which unquestionably left the husband the fiar, nevertheless constituted a jus crediti, because it was followed by an obligation, that as often as the husband should uplift the sum, he should re-employ it; and that consequently, the husband being bankrupt, action lay against the cautioner, the Court finding the import of the obligation to be, ‘that, in all events, the sum should be secured to the children.’ But in this case there is a much stronger obligation than to employ and re-employ,—for the fund is in effect placed in the hands of the marriage-trustees, that they may prevent it from ever being employed except in implement of the provision. Nay, there is a double heritable security granted to the children, for not only are the trustees infeft in the lands for more sure payment of the provision, but it is stipulated that the fee shall return to Mr
“The argument on which Messrs Herries, Farqnhar, and Co. chiefly rely, and which was also resorted to in the case of
Brown v. Govan, is founded on the nature of a right in security. If it be conceded, they say, that Mr Macdonald, by becoming bound to pay a sum to his children nascituri at his death, conferred upon them no right of credit, neither did he confer it by becoming bound to find security, or by actually finding security for implement; because an obligation, purely accessorial, cannot extend or alter the obligation to which it is an accessory, for it is an axiom of law, that the cautioner cannot be bound farther than his principal. We think that there is a satisfactory answer to that argument. The obligation in the marriage-contract, as we have already remarked, confers in terminis a right of credit; and it is not so construed, only because a presumption arises, from the relative situation of the father and his children, that he does not intend to restrain himself in the disposal of the sum provided, or against any acts except those of gratuitous or fraudulent alienation. But the very circumstance that the father binds himself expressly to find, or does find security ‘for the sure payment of the sum,' shows the meaning of parties to be, that it should in all events be made furthcoming to the children, and the extraneous presumption being removed, the obligation is left to take effect, according to the natural and proper import of the terms in which it is conceived. Take the case, that the father binds himself in his marriage-contract, to find personal caution for implement of a provision of this kind, or that a person is bound as cautioner along with him in the contract, it is admitted on all hands, that in modern practice (though anciently it was not so) the cautioner is liable to the children, if the father should become bankrupt. But if the father's obligation imported nothing more than that he should do no gratuitous deed to the prejudice of the children, and if he does no gratuitous deed to their prejudice, the implement on his part is complete, and consequently his cautioner for implement ought to be no further liable. But Mr Erskine observes, that marriage-settlements of this description are ‘effectual against a cautioner who has engaged himself in the marriage-contract for the father's performance of his obligation, for the plain language of that engagement is, that he shall make the provision effectual to the heir, in case the father himself should fail.’ On the very same principle, if the father's heritable estate is engaged for the performance of the obligation, by an infeftment over it, standing in the person of the children, or what is precisely equivalent, in the person of trustees for their behoof, the plain language of that engagement is, that the provision shall be made effectual by means of the infeftment, if the father fails to do so out of his other means. We can see no distinction, in so far as this point is concerned, between the obligation of a personal cautioner, and the incumbrance on an heritable estate. If the incumbrance is effectual as security only against gratuitous deeds, the obligation of the cautioner should not extend farther; and, on the other hand, if the cautioner is bound that the whole sum shall be forthcoming to the children, the infeftment must, in like manner, be available for the whole sum. If there is any distinction between the two cases, we think it is in favour of the children; for, since the infeftment is published by the record, all the arguments against a jus crediti, founded on the
“It appears to us that the opinion of Lord Eskgrove, in the case of Redcastle, throws light upon this point. It was strongly argued for the creditors in that case, that, as the provision was not payable till after the father's death, it only afforded a spes successionis; and although interest was payable from a term which might happen in his lifetime, that action could be competent against him only for the amount of the interest, but not of the principal, and consequently, that quoad the principal, the obligation stood in the ordinary situation. Lord Eskgrove observes—‘I am for adhering to the former judgment. Every question in a marriage-contract, in which children are concerned, is to be interpreted favourably for the children; for marriages, so far as children are concerned, are onerous, and entitled to a liberal construction in favour of the children. If clauses appear, which can receive no other interpretation than a jus successionis, there is no help for it. But when a provision is given in terms that bestow a jus crediti, and give a ground of action to the children against the father, they are as truly onerous as any debt which the father can be owing. This contract gives a provision to the children: bad there been trustees, might not they have pursued the father for security? Surely. Had the marriage dissolved after the existence of two children, then the younger must have had an interest to pursue for security;—when there is none, they have all a joint interest. It is highly proper for the community, that obligations of this kind should be liberally interpreted.’ It was inferred in that case, therefore, from the clause with regard to interest, that if there had been marriage-trustees, they might have pursued for a security, on which ground it was held that the provision conferred a proper jus crediti. But in the present case there are marriage-trustees; and it is not matter of inference that they might pursue for security, because it is expressly conditioned that they shall have a security; and moreover, the security itself is actually given to them by means of an infeftment, the highest of all securities. This, therefore, is plainly an a fortiori case, according to the opinion of one of the first legal authorities of the last century.
“Further, it may be remarked, that the presumption of law has been reversed with regard to provisions of this nature, and that it is now more in accordance with the present state of society, and the probable views of parties entering into marriage settlements. Formerly, it ‘was held that contracts of marriage are favourable and onerous, in so far as concerns the liferents provided to wives; but quoad children's provisions, they are never reckoned onerous but in competition with the father or children of another marriage, and noways restrain or bind up the father from contracting posterior debts, but only that he shall do no voluntary, gratuitous, or fraudulent deed to their prejudice.’ And the rubric of the case of
Gordon v. Sutherland is in these terms—‘A settlement in a contract of marriage is, in dubio, not understood to give more to the heirs nascituri, than a spes successionis.’ But the presumption, as laid down by Lord Eskgrove, is exactly the
“Two precedents only have been found, which can be considered as exactly or nearly in point. The first is that of Brown v. Govan, just alluded to, in which a jointure was provided to a wife, and a sum to children nascituri, by the marriage-contract, and there was an obligation on the husband to convey in security a piece of ground in favour of the wife and children, with a precept of sasine for infefting her for her own behoof, and in behalf of the children. In that case, the Second Division of the Court found that the children had only a spes successionis. We think it possible to take a distinction between that case and the present, founded on the ambiguous and blundered terms in which the deed was executed. But it is unnecessary to do so, for the decision was pronounced by the narrowest possible majority, reversing the judgment of Lord Pitmilly, who was the Ordinary. On the other hand, in Bushby, &c. v. Renny, the same point was decided unanimously the other way, in the First Division of the Court. If the second decision is not held to derogate from the first, and to render it of no authority, they ought, at least, to neutralize each other, and leave the question open, for there is no other case in point,
“The attempts which have been made by Messrs Hemes, Farquhar, and Co. to distinguish the case of Bushby from the present, appear to us entirely unsuccessful. First, It is said, that in Bushby's case the sum provided for the children, was set apart as a capital for answering the widow's jointure. But it is plain that that circumstance would not affect the right of the children, nor was it ever held to do so in similar circumstances. In the case of
Young v. Carse, the father was obliged to employ the tocher in security to his wife in liferent and the children in fee; yet his onerous assignee was preferred to the children. And in
Lockhart v. Lockhart, a similar judgment was given. Then it is said that Bushby executed a bond of corroboration, and certainly that would have been of importance if the bond had been granted to the children nominatim after they came into existence. But that was not the case. It was intended solely to supply a defect in the execution of the contract, which had not been duly subscribed. The provision in the bond was the same verbatim as in the contract, and it was in favour of liberi nascituri.
“For these reasons, we are of opinion that the interlocutor of the Lord Ordinary is well founded.”
To the above Opinion the following addition was made by Lord Glenlee;—
“Although cases may be imagined, to which I might doubt if some parts of the foregoing opinion could be safely applied, yet, in so far as concerns this individual case itself, I concur in the result, that the Ordinary's interlocutor ought to be adhered to.”
The following addition was made by Lord Medwyn:—
“I have great hesitation in going the whole length that the reasoning in this opinion, and the dictum referred to in the case of Kedcastle, would seem to warrant; and I am not inclined to hold that the views entertained by our predecessors, of the obligation by a rather in his contract of marriage in favour of children nascituri, can be got the better of at once by the theory here so well argued, and that they must now be held obsolete, and inapplicable to the present, as an altered state of society. There are various methods by which a jus crediti can be vested in children, and the power of the father to defeat their interests, even by onerous deeds, excluded; and if none of these are adopted, it may well be supposed that it was not intended to deprive the father of the management of his property, which, if left with him, he may manage most beneficially, the advantage of which, it is natural to suppose, will accrue to his children. I do not question the law laid down in Douglas, 22d July, 1724. It was approved of in the case of Sutherland of Little Torboll, and also in a case reported by Monboddo. The anonymous case mentioned by Karnes, who gives only his own argument in the case of Sutherland, is not known to be reported any where, and is not noticed, either by Kilkerran or Falconer in their reports of the case of Little Torboll, so that the particulars of it, or the reasoning of the Court, we have not in so full and authentic a manner as would be desirable: And most assuredly the Court did not subsequently draw the inference from it that is now done, nor to the same, or indeed any extent, in consequence of it, alter their former views on this subject. And I confess I would not incline to bold, in
“I am not moved by the circumstance, that if a father binds himself, along with a cautioner, to provide a certain sum for his children, the cautioner is liable to the children, if the father should become unable to fulfil the obligation; although it is said, if the father does no gratuitous deed to their prejudice, the implement on his part is complete, and consequently the cautioner for implement ought to be no further liable. For it is well known that a cautioner may be more strictly bound than the proper debtor. One may be ‘cautioner for a debtor who is not himself civilly or fully obliged, for a cautionary obligation may be effectually interposed to an obligation merely natural. Thus a cautioner in an obligation where the debtor's subscription is not legally attested, or a cautioner for a married woman, or for a minor acting without his curators, is properly obliged, although the debtor himself should get free by pleading the statutory nullity, or his own legal incapacity.’ And why is it that the cautioner interposes? Just to provide for the case of the inability of the father, if by onerous contractions he should render himself unable to fulfil his obligation: and why is the cautioner in such a case bound to the children? Because the claim competent to the child in such a case, is not as heir of the father, but as creditor to the cautioner, who has bound himself absolutely to fulfil the obligation; and he must do this without relief from the party in whose favour he is bound, or from any of the onerous creditors of the father with whom he cannot compete, nor could he interfere to prevent their securing themselves by diligence. He might, no doubt, secure himself by an infeftment in security of his obligation, but in no other way could he compete with subsequent creditors. But I cannot see the analogy between the obligation of a cautioner in such a case, and the adjection of heritable security to the personal obligation of a father in his contract of marriage. The father and the lands in this case do not become two distinct debtors to the child, the one of which may be bound when the other is not: there is but one debtor liable in his person and personal property, but binding also his real property in further security of his personal obligation. It is but one obligation with
“I am not prepared to hold the case of Brown against Govan ill decided, nor the opinion of Mr Bell, vol. i., p. 553, ill-founded, that ‘it has no effect in conferring a jus crediti upon the children, that he grants heritable security to the wife or any other person in the name of his children.’ And if I concur in the conclusion arrived at in this opinion it can only be by considering this, as to the obligation in favour of the children, as a very special case;—for the obligation is very peculiar. There is not here a personal obligation complete in itself, and bearing to be the amount of the obligation come under, and followed up by the addition of heritable security. But the primary obligation comes to be the constitution of this security, showing that this was mainly in the contemplation of the parties, and that their intention was to make the provision of the children indefeasible by any act of the father. For Clanranald ‘binds himself to infeft and seise the trustees for the children in the lands hereinafter conveyed, in security and for the more sure payment of the sum of £20,000, which he hereby binds and obliges himself to pay to the children of the said marriage, payable within six months after his death.’ The contract then contains a precept of sasine for infefting them in the lands, in security and more sure payment of the provision; and farther, there is a precept for infefting Clanranald and the heir-male of the marriage in the lands, ‘with and under the burden of the aforesaid provision to the younger children,' Infeftment being taken by the trustees in October, 1812, and by Clanranald in February, 1817, in terms of the respective precepts in their favour, the burden in favour of the one, and under which the other held the lands, was duly published to the world, when in 1823, Hemes, Farquhar, and Co. made the advance to Clanranald which they now seek to secure by this process. And, upon the whole, without trenching on what seems well fixed in our law, I think I may come to the conclusion, that the meaning and object of the parties is so plain, to give more than a defeasible spes successionis, and the intention and endeavour to carry it into effect so palpable, by the peculiar terms of the clause in which the heritable security seems alone contemplated; and farther, as this was not latent, but made known by publication in the records, it may be held that here the children have a jus crediti, which will be effectual against subsequent onerous contractions of the father.”
The
“Notwithstanding the circumstances which no doubt do distinguish the present case from most of the others that have occurred, with regard to a provision in a contract of marriage by a father liberis nascituris, but the payment neither of the principal nor interest of which is to take effect till after his death, I cannot entirely acquiesce in the grounds of the opinion which has been delivered by the great body of the consulted Judges. But on attending to the circumstances of this case, and particularly to the infeftments in the estate of Clanranald, which followed under the contract of marriage in question, both in favour of the trustees for the children, and also in the person of Mr Macdonald himself, under the express burden of the provision contained in his contract of marriage, I feel myself warranted,
On resuming the cause, their Lordships of the First Division delivered the following Opinions:—
Judgment in the cause was delayed until the supplementary action against Ranald J. Macdonald, the heir-male of the marriage, should also be disposed of. That action concluded for declarator, that the pursuers were onerous creditors of Ranald George Macdonald of Clanranald, and that the defender, “the eldest son, and heir-male of the marriage, under or by virtue of the marriage-settlement or otherwise,” had no claim “as an onerous creditor of the said Ranald George Macdonald, to entitle him to compete or interfere with the diligence of the pursuers, or be preferred thereto.”
Defences were lodged and cases were ordered.
Pleaded by the Pursuers—
1. Laying aside, in the mean-time, the trust-deed 1811, it appeared that the pursuers must prevail. No actual entail of the lands existed in favour of the defender, so as to exclude the pursuer's debt and diligence. The entail 1810 was revocable, and no infeftment had followed on it. The trust 1810 was mortis causa, revocable, and never delivered. The disposition in the marriage-contract 1812 did not engross any specific fetters whatever. It merely disponed the lands to Macdonald and the intended heirs of entail, generally under the conditions, fetters, &c., contained in the entail 1810. This did not effectually impose the fetters of an entail; and these fetters had never been engrossed in any infeftment whatever.
1 No other part of the marriage-contract amounted to an actual
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1 Viscount of Garnock, July 28, 1725 (15596); Executor creditors of Murray Kynnynmound, July, 5, 1744 (15380).
2. Even taking into view the trust 1811, and the trustee's participation in the marriage-contract 1812, there were still no termini habiles for rearing up a real or preferable right against the pursuers. The purposes of that trust were special and limited. They were to pay off prior debts, and, so soon as these were paid, it was declared that the trust should terminate. The infeftment of the trustee, Brown, gave a real right only for the trust-purposes, and it possessed no elasticity so as to expand, and cover subsequent obligations which were not among the trust-purposes. The records therefore exhibited the fee-simple infeftment of Macdonald, affected only with that limited and special trust-burden, which left the radical property of the lands, so far as unsold, standing in Macdonald on his fee-simple title. 1 Even the right of relief in favour of Brown, contained in the trust 1811, could only apply to obligations undertaken for the trust purposes; and such as it was, it was never engrossed in any sasine. Unless therefore a preferable right was created by virtue of the mere obligation by Brown, in the marriage-contract, “to denude of the lands, &c., or of so much thereof as shall remain unsold for the purposes of the trust, so as to secure the succession to the said lands to the heirs-male of the marriage,” there was no preferable right at all. But the pursuers could not be affected by this obligation, (1.) Because it was not engrossed in any sasine, and they contracted with Macdonald, relying on the limited nature of the burden which the records showed to affect his radical right; (2.) The obligation was not undertaken by Brown for any of the trust purposes of the trust 1811, as it was not then in existence; and neither the disposition nor infeftment in his favour, under that trust, gave a right of relief against such obligation. As there was no subsequent disposition or infeftment in his favour, the obligation so undertaken by him was not really secured in any way, and created no legal impediment against the pursuer's right to do diligence, and carry off the lands so far as remaining in Macdonald after satisfying the purposes of the trust 1811. (3.) There was not a proper jus crediti raised against Macdonald, in favour of the defender, under the marriage-contract. In particular, if there was no sufficient entail effected, there was no claim at the defender's instance for damages, as had been found in the case of Ascog, and there was no jus crediti of any sort. 2
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1 Campbell, Jan. 14, 1801 (Dict, voce Adjudication Appx. No, 2.); Barbour, July 7, 1826 (ante, IV. 806; or 813, new ed.); M'Millan, March 4, 1831 (ante, IX. 551).
2 Stewart, Feb. 23, 1827 (ante, V. 418; or 396, new ed.) and W. & S. Appeals, July 16, 1830.
Pleaded by the Defender—
1. The entail 1810 was registered both in the register of entails, and in the books of Council and Session. The marriage-contract referred to that entail, and contained an express disposition of the lands to Macdonald, and the defender, and other heirs “with and under the conditions, provisions, restrictions, limitations, exceptions, clauses prohibitory, irritant, and resolutive, declarations and reservations therein written.” It renounced all power of alteration as far as related to the heirs of the marriage. The marriage-contract was registered in the register of entails, and infeftment was taken in favour of Macdonald, and the heirs of entail, the sasine in which engrossed the above clause. Taking these deeds, and registrations together, the whole requisites of a strict entail were satisfied, and the defender was entitled to plead that thereby the pursuers were excluded. 1 It was true that even thus the life-interest of Macdonald might be attached by the pursuers; and to this the defender did not object.
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1 Don, July 5, 1713 (15591); Laurie, July 24, 1764 (15612).
2. But at all events, the operation of the trust 1811, and the obligations undertaken by the trustee, as a party to the marriage-settlement, 1812, sufficed to give a preferable right to the defender. By the trust-disposition 1811, the whole lands were conveyed to Brown, with powers of sale, for the trust-purposes. And the deed contained a clause, universally found in all trusts, that Brown should only be liable to denude, on being “previously relieved of the whole engagements he may have come under, in consequence hereof.” It was also provided that Brown should denude in favour of Macdonald, or such party as he might direct by settlement. In this position matters stood when the marriage-contract 1812 was entered into; and, what was then done, jointly by Macdonald and Brown, was at least as effectual in favour of the defender, as if Macdonald had then disponed his estate to Brown, first, to pay the debts existing prior to 1811; second, to pay certain provisions to his spouse and younger children; and third, absolutely and irrevocably, after relieving himself of his own obligations as above, to denude of the remaining lands under a strict entail, fettering Macdonald as well as the heirs. Had this been the species facti, and infeftment followed, the pursuers must have been postponed to the defender; and what was done, was equivalent to this. Brown, expressly as trustee infeft under the trust 1811, became a party to the marriage-contract, and received from the father of the lady a sum of £10,000, for the purposes of that trust. He then consented to the several obligations undertaken by Macdonald, including the obligation to execute a strict and irrevocable entail (of the lands remaining unsold for the purposes of the trust 1811), which entail should be binding on Macdonald as well as the heirs. And he farther took on himself the express obligation to denude of the said lands, as above quoted, “so as to secure the succession to the
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1 1 Bell, 36; Brough, Nov. 26,1793 (2585); 2 Bell, 490.
2 3 Ersk. 8, 30, 31, 40, and 41; Falconer, Jan. 20, 1825 (ante, III. 455; or 317, new ed.)
The Lord Ordinary made avizandum with the cases, and their Lordships of the First Division, after ordering minutes of debate, and hearing one counsel on each side, delivered the following opinions:—
In regard to the other point, whether the defender had at least a right, as an onerous creditor, to compete pari passu with the other personal creditors, my opinion is quite clear in favour of his right to that extent. The only plea raised against it was rested on a reference to the case of Ascog. But that case is not at all in point. A claim of damages was there made, which rested on the defeasance of a defective
But, by the last argument in the minutes, and at the bar, the case was put on a different footing. The heir betakes himself to a defence, not upon the entail, but retreats to the shelter of the trust-deed, and there his position is less assailable.
In 1810 a complete and regular entail of the estates of Clanranald, with the usual clauses and fetters, was executed and recorded in the register of entails, but infeftment did not pass upon it.
Though it had been clothed with infeftment, it could not have been effectual against creditors, for the fetters were not directed against Macdonald himself, and it was besides a gratuitous deed. It contained a power of revocation and alteration.
Of the same date, Macdonald executed a trust-deed by which he directed the trustees to convey the residue of his estate to the heir under his entail under all the conditions it contained.
Then in 1811 Macdonald executed a second trust-deed, and this is to be particularly examined. The main purpose of it was for payment of his debts contracted before its date in 1811. To enable his trustees to do so, various powers were granted to them. Particularly, under the 7th head, the trustees are empowered to sell the whole estate, if they think it expedient, and to grant effectual conveyances to purchasers. It is equally important to remark that the estate is conveyed to the trustees under the burden of the entail and trust-disposition 1810, which entail, as already mentioned, contained a power of alteration. Then follows a clause which is very material—“And it is hereby declared that the present trust-deed shall continue only during my life, and shall also terminate and be concluded whenever the whole of the debts at present due by me shall be paid off by my said trustee, or by me; and my said trustee shall, in either of these events, be obliged to denude of the said trust, and reconvey the said lands and estates, and others before specified, or such parts thereof as may remain unsold, and yield the possession to me, or, in the event of my death, to the trustees named in the said trust-deed, if the same shall be then unrevoked, and the trustees should accept of the trust, or in case of the same being revoked by me, to the heir who shall be entitled to succeed to my said lands and estate, pursuant to any settlement or conveyance thereof to be executed by me; and in the event of a sale of the whole, or of a greater part of my said estates than is sufficient to pay all my debts, and the expense of management, my said trustee shall be obliged to account for and pay the residue of such price to me, or, in the event of my death, to the trustees named in the said trust-deed as aforesaid; or in case of the same being revoked, to the heir who shall be entitled to succeed to me in the said estates in virtue of the said deed of entail or future settlements of the same to be executed by me.” A clause of relief then follows, which, even though it had not been expressed, would have been implied, but which is expressed in very distinct and ample terms—“My said trustee being always previously relieved of the whole engagements he may have come under in consequence hereof, and I or my heirs being obliged to execute a ratification of the whole deeds granted, and transactions entered into, by my said trustee.”
In the following year, 1812, the marriage-contract is entered into between Macdonald and Lady Caroline Anne Edgecumbe. The trustees take advantage of the marriage to enter into a contract with the bride, with the consent of her father on the one part, and the marriage-trustees on the other part, by virtue of which they receive the Lady's portion, being £10,000, which they become bound to apply towards extinction of Macdonald's debts contracted before 1811, i. e., the debts for which the trustdeed was granted; and accordingly they did so apply it. In consideration of this sum, among other obligations they “bind themselves upon the termination of the trust vested in them by the trust-disposition executed by the said Ranald George Macdonald on the 8th day of June, 1811, to denude of the lands and others above described, or of so much thereof as shall remain unsold, for the purposes of the said trust, in such manner as to secure the succession to the
Now, the question is, whether this obligation on the part of the trustees, being unquestionably onerous, nay, of the most onerous nature known in law, was within the power of the trustees. If it was, it is clear that they were liable to fulfil it; and if they are liable, it is equally clear that they are entitled to hold the estate for their relief, under the clause already read. To illustrate this, let me suppose the case of a sale by the trustees. Suppose that they had sold all, or part of the estate, and received the price, and applied it in payment of debts contracted before 1811, but had not granted a disposition, could the personal creditors have stepped in and attached the lands to the prejudice of the purchaser? Certainly not. Until the trust purposes were executed, no personal creditor can interfere with the estate. But it appears to me to lead still more conclusively to the same result, that the trust deed was granted under the burden of the entail 1810, which contained a power of alteration, and they are bound to denude in favour of the heir of that entail, or of “the heir who shall be entitled to succeed to my said lands and estate, pursuant to any settlement or conveyance thereof to be executed by me.
It appears to me that Macdonald was entitled to alter that entail which he did by the marriage contract, and that the trustees are bound to denude in favour of the heir of the new entail, pursuant to that settlement and conveyance. But by that settlement they are expressly bound to denude in such a manner as to secure the succession to the heir of the marriage, and they cannot do so, without executing an entail in such terms as to exclude Macdonald's creditors. There is no question here with regard to certain creditors having, or not having, real burdens by virtue of the trust, which is the question whieh generally occurs. The question is, whether the trustees, in the execution of the trust, have, or have not exceeded their powers, for if they have not, they are entitled to be relieved.
On this point the case of Lord Elibank, 19th February, 1765, v. Creditors of Dornoch, is very instructive. It is to the effect, “That no man is denuded of his estate by a disposition to trustees with certain powers, unless so far as the trustees execute those powers; and, if they never execute, then the disposition falls as if it had never been granted.”
Here the trustees did execute their powers, by the contract which they entered into with the bride, and with her marriage-trustees.
The case of Nairn is not in point.
At all events, the heir is an onerous creditor, agreeably to the opinion of the Court in the other branch of the cause, and is therefore entitled to compete with every other onerous creditor.
The Court then pronounced the following interlocutor, conjoining the original and supplementary actions, and disposing of them both:—“The Lords having advised the original and supplementary action and records, with the reclaiming note and cases for the parties, and heard counsel in presence of all the Judges; and having received the Opinions of the consulted Judges in the question raised by the original summons; and having thereafter advised the minutes of debate, and heard counsel in the question raised by the supplementary summons, conjoin the said actions; adhere to the interlocutor of the Lord Ordinary reclaimed against, in so far as it finds the Marquis of Lothian and Viscount Valletort, in their character as trustees infeft in security, entitled to compete with the diligence of the pursuers, and to rank in their proper order according to their right of preference, conferred by their said security; and, to that extent, refuse the desire of the reclaiming note; and farther, in the said original action, and supplementary action now conjoined, assoilzie the defender, Robert Brown, as surviving trustee, from the original action, in so far as it concludes to have him found liable as trustee foresaid, for the debt of the pursuers; and find that the said Robert Brown, as the surviving trustee, under the said deed of 1811, is bound to denude of the lands conveyed by the trust-deed, or such part thereof, or of the price thereof, as shall remain after satisfying the purposes specified in the said deed, in such manner as to secure the succession to the heir-male of the marriage, whom failing, the other heirs therein referred to, all as provided for by the said contract of marriage; and likewise find that the pursuers, as the creditors of the truster, are not entitled to do any diligence against the said lands, or the price thereof, so as to affect the rights of the said heir, or heirs, therein; assoilzie the said Ranald J. Macdonald from the conclusion of both actions, reserving to the pursuers, under their decree against the said Ranald George Macdonald, all competent diligence against him, and his life-interest in the said estates, or any part of the same, or price thereof: Find no expenses due to any of the parties; and find, decern, and declare, accordingly.”
Solicitors: W. Bennet, W.S.— Hunter, Campell, and Co., W.S.— Top and Romanes, W.S.—Agents.
