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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Wink v. Reid and Others [1866] ScotLR 2_40 (31 May 1866) URL: http://www.bailii.org/scot/cases/ScotCS/1866/02SLR0040.html Cite as: [1866] SLR 2_40, [1866] ScotLR 2_40 |
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Page: 40↓
Issues adjusted in a reduction founded on the Act 1621 and on allegations of fraud.
This action of reduction was founded on the following averments:—
David Reid was in 1856 proprietor of certain heritable subjects in the parish of Neilston. In that year, being indebted to James Harvey & Co. to the extent of £200, he granted to trustees for that firm an ex facie absolute disposition of the property which was granted truly in security of that sum. On 11th June 1858, Reid paid up the £200, and the said trustees conveyed the subjects, in conformity with his request, to Reid and his wife, and the survivor, for their conjunct liferent alimentary use allenarly, and to the children of the marriage between them, born and to be born, equally between them. Infeftment passed on this disposition on 23d June 1858. In so far as the deed bore to convey any right in favour of Mrs Reid and her children, it was an alienation made by Reid when he was insolvent, without any true, just, or necessary cause to the prejudice of his lawful creditors, and as a fraudulent and collusive device for defeating their rights. Some months after the date of it, Reid suspended payment and was rendered notour bankrupt. On 31st March 1859, with consent of his wife, he disponed the subjects to certain persons as trustees for his creditors. In this deed it was narrated that the previous disposition was null and void under the Act of 1621, as well as at common law. Notwithstanding the execution of this deed, Reid remained in possession and continued to carry on business, contracting new debts, with the proceeds of which he satisfied the debts of a number of the creditors for whose behoof the trust conveyance had been granted. In January 1864, the trustees, on the narrative that the purposes of the trust had been exhausted, disponed and reconveyed the subjects to Reid and his wife and children, with a destination similar to that contained in the disposition to them in 1858. At the date of this disposition Reid was utterly insolvent; and in so far as it bore to convey any right to the subjects to Mrs Reid and her children, it was granted without any true, just, or necessary cause to the prejudice of Reid's lawful creditors, and as a fraudulent and collusive device for defeating their legal rights. On 15th January 1864 Reid's estates were sequestrated, and the pursuer was afterwards elected trustee. It was also averred that Reid has been continuously insolvent from 1858.
The pursuer sought to reduce on these grounds, inter alia, the disposition to Reid's wife and children in 1858, and the other disposition to them in 1864. The action was defended by them and also by Reid. Issues were proposed for trial and reported.
Scott, for the defenders, objected that the issues proposed did not raise an important question as to which the parties were at variance—namely, whether the pursuer represented creditors prior to the granting of the first disposition. The pursuer averred that he did, but this the defenders denied. All these creditors had been paid.
Gifford and Hall, for the pursuers, answered — At common law a deed by an insolvent may be challenged by creditors who were not so till after the deed was granted, but whose debts were contracted to pay off the debts of creditors who were so prior to the deed— Edmond v. Grant, 1st June 1853, 15 D. 703. They were willing, however, to insert in the issues that the pursuer now represented the creditors who were prejudiced.
The following issues were accordingly adjusted, the words in italics having been inserted by the Court in those proposed by the pursuer:—
“It being admitted that the estates of the defender David Reid were sequestrated on or about the 15th day of January 1864, and that the pursuer is trustee on the said sequestrated estates,—
Page: 41↓
1. Whether the disposition, No. 8 of process, so far as in favour of the defender, Mrs Martha Hopkins or Reid, and the children born or to be born of the marriage betwixt the defenders, David Reid and the said Mrs Martha Hopkins or Reid, was an alienation by the said David Reid to conjunct and confident persons of property belonging to him, without true, just, or necessary cause, to the hurt and prejudice of prior creditors of the said David Reid, now represented by the pursuer, contrary to the Act 1621, cap. 18?
2. Whether the defender David Reid, when insolvent, procured the said disposition, No 8 of process, to be executed, so far as in favour of the defender, Mrs Martha Hopkins or Reid, and the children born or to be born of the marriage betwixt the said David Reid and the said Mrs Martha Hopkins or Reid, fraudulently to disappoint the legal rights of his creditors, now represented by the pursuer?
3. Whether the disposition, No. 11 of process, so far as in favour of the defender Mrs Martha Hopkins or Reid, and the children born or to be born of the marriage betwixt the defenders, David Reid and the said Mrs Martha Hopkins or Reid, was an alienation by the said David Reid to conjunct and confident persons of property belonging to him, without true, just, or necessary cause, to the hurt and prejudice of prior creditors of the said David Reid, now represented by the pursuer, contrary to the Act 1621, cap. 18?
4. Whether the defender David Reid, when insolvent, procured the said disposition, No. 11 of process, to be executed, so far as in favour of the defender, Mrs Martha Hopkins or Reid, and the children born or to be born of the marriage betwixt the said David Reid and the said Mrs Martha Hopkins or Reid, fraudulently to disappoint the legal rights of his creditors, now represented by the pursuer?
”Solicitors: Agents for Pursuer— Neilson & Cowan, W.S.
Agent for Defender— D. F. Bridgeford, S.S.C.
