Scottish Court of Session Decisions

By the deed of entail of the estate of Wardhouse and Kildrummy, executed in 1740, the estate was disponed to Arthur Gordon, the entailer's eldest son, as institute, and a certain series of heirs, whom failing to Mary Gordon and the heirs-male of her body. John Joseph Gordon, the last heir in possession of the estate, died in 1866, and was succeeded by his uncle Carlos Pedro Gordon, as next heir-male of Mary Gordon. The Crown proposed to charge Carlos Pedro Gordon with succession duty at the rate of 5 per cent., and maintained that in the sense of the Succession Duty Act his nephew was his predecessor, and he took the estate by devolution from him. The heir in possession maintained that the entailer was his predecessor; that he took by way of intestative limitation from him, and his succession was liable to be assessed at the rate of 1 per cent. This Special Case was brought to try the point, and the questions submitted for the opinion and judgment of the Court were—

“(1) Who is to be regarded in the sense of the Succession Duty Act as the predecessor of the said Carlos Pedro Gordon?

(2) What is the rate of duty to which the succession of the said Carlos Pedro Gordon is liable?”

The following interlocutor and note of the Lord Ordinary ( Ormidale) fully explains the circumstances:—

“ Edinburgh, 19 th June 1872.—The Lord Ordinary having heard counsel for the parties, and considered the argument and proceedings, finds (1) that the deceased John Joseph Gordon, the heir of entail last in possession of the estate in question, is to be regarded, in the sense of the Succession Duty Act, as the predecessor of Carlos Pedro Gordon; and finds (2) that the rate of duty to which the succession of the said Carlos Pedro Gordon is liable is 5 per cent.

Note.—The Lord Ordinary has found this case to be attended with considerable difficulty, and that difficulty would, he thinks, have been still greater had it not been for the judgment of the House of Lords in the case of the Lord Advocate v. Lord Saltoun, 21 D. 124, and 3 Macq. 659, and the light which has been thrown on the subject by the discusssion which took place in that case, as well in this Court as in the Court of last resort. Although the case of Lord Saltoun is not exactly the same in regard to all its circumstances as the present, the Lord Ordinary is of opinion, for the reasons to be immediately explained, that the principles upon which it was decided in the House of Lords, reversing the judgment of this Court, are applicable to and must govern the present case.

By the deed of entail of the estate in question in the present case, executed in 1740, the estate was disponed to or settled on Arthur Gordon (the entailer's eldest son), as institute, and a certain series of heirs, whom failing to ‘Mary Gordon, spouse of James Gordon of Beldornie, and the heirs-male of her body, which failing the heirs whatsoever of her body, all which failing, to the heirs and assignees of the last possessor of the said estate who shall succeed thereto and be infeft therein in virtue of this present settlement, the eldest heir-female excluding heirs-portioners, and succeeding without division.’

The previous heirs having failed, and the destination to ‘Mary Gordon, spouse to James Gordon of Beldornie, and the heirs-male of her body’ having come into operation, the estate devolved in 1762 upon Alexander Gordon, grandson of Mary Gordon and James Gordon; from Alexander Gordon it descended to his son John David Gordon; from him to his son Peter Charles Gordon; and from him to his son John Joseph Gordon, the last possessor, all as heirs-male of Mary Gordon, spouse of James Gordon of Beldornie, in terms of the entail.

John Joseph Gordon, the last heir in possession of the estate, having died in 1866 without leaving any heirs-male of his body, but leaving three sisters, the estate devolved on Carlos Pedro Gordon, the present possessor, as next heir-male of Mary Gordon. Carlos Pedro Gordon is the uncle of the last possessor of the estate, being a younger brother of his father.

The transmission of the estate, as now referred to, is made very plain by the genealogical tree appended to the Special Case.

The first question submitted in the Special Case for the determination of the Court is, Who is to be regarded in the sense of the Succession Duty Act as the predecessor of Carlos Pedro Gordon? Is it the last possessor of the estate, John Joseph Gordon, or the maker of the entail? If the former, Carlos Pedro Gordon must be held, in the sense of the Succession Duty Act, to have taken by ‘devolution of law,’ in which case the rate of duty will, in terms of sec. 10 of the Act, be 5 per cent. If the latter, he must be held to have taken, in the sense of the Act, by ‘disposition,’ in which case the rate of duty payable by him will be 1 per cent.

By the Succession Duty Act it is provided (sec. 2) that ‘every past or future disposition of property, by reason whereof any person has or shall become beneficially entitled to any property or the income thereof upon the death of any person dying after the time appointed for the commencement of this Act, either immediately or after any interval, either certainly or contingently, and either originally or by way of substitutive limitation, and every devolution by law of any beneficial interest in property or the income thereof upon the death of any person dying after the time appointed for the commencement of this Act, to any other person, in possession or expectancy, shall be deemed to have conferred or to confer on the person entitled by reason of any such disposition or devolution a “succession;” and the term “successor” shall denote the person so entitled; and the term “predecessor” shall denote the settler, disponer, testator, obligor, ancestor, or other person from whom the interest of the successor is or shall be derived.’

Having regard to this clause of the Act, it might not inaccurately be said that Carlos Pedro Gordon has taken partly by ‘disposition’ and partly by ‘devolution of law,’ inasmuch as while, on the one hand, the deed or disposition of entail is the origin of his right, on the other hand, it was only after establishing, in accordance with the ordinary rules of the law of succession applicable to his position, that he was heir-male of Mary Gordon substituted to John Joseph Gordon, the last possessor of the estate, that he could assert any claim to it. It is in this way that the difficulty which attends the present case arises.

It appears, however, to the Lord Ordinary that the difficulty has to a considerable extent been removed by the judgment in Lord Saltoun's case, and the very ample discussion which preceded it, both in this Court and in the House of Lords. It may now, the Lord Ordinary thinks, be held as settled—(1) That as the Succession Duty Act applies to the whole United Kingdom, its language must be interpreted in a popular sense, without regard to the technicalities of conveyancing or of title,

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whether of English or Scotch law, so that the same rule may govern the taxation of the succession to property in every part of the United Kingdom; (2) that where the succession is by ‘disposition,’ the granter or settler of the disposition, that is to say the maker of the deed of entail in the present case, is the predecessor, and where by ‘devolution of law,’ the last possessor of the estate is the ‘predecessor;’ (3) that substitute heirs of entail succeeding not nominatim or as one of a fresh stirps, but in their order in accordance with the ordinary rules of the law of succession applicable to the case, under a general destination to heirs whether male or female or other character, take by devolution of law; (4) that, as a corollary to the last rule, the predecessor of the heir so taking is not the maker of the entail, but the last heir who possessed the estate; and (5) that when a party succeeds under an entail as an heir named by the entailer in his deed of entail, or as one of a fresh stirps called to the succession by the entailer, he is to be held as taking by disposition, and not by devolution of law.

In accordance with these rules, it was decided in Lord Saltoun's case that the party succeeding to the estate there in question, being expressly nominated by the maker of the entail as the head of a fresh stirps to take failing certain other heirs, was to be dealt with as having succeeded by disposition. But in the present case Carlos Pedro Gordon has not been expressly named by the entailer, and does not succeed as one of a fresh stirps. He takes as one of the class of heirs-male of Mary Gordon, succeeding in his order on the death of the last possessor John Joseph Gordon; and this being so, the last possessor John Joseph Gordon must, in the opinion of the Lord Ordinary, be held to be the predecessor of Carlos Pedro Gordon, who, on his part, must consequently be held to have succeeded by devolution of law.

Although Carlos Pedro Gordon is not expressly nominated to the succession by the entailer, and is not one of a fresh stirps, but succeeds merely as one of the heirs-male of Mary Gordon, called generally as a class to the estate, yet as he is the uncle and not the lineal descendant of the last possessor John Joseph Gordon, it has been contended that Lord Saltoun's case cannot be held to govern the present, and that Carlos Pedro Gordon must be held as taking by disposition from the maker of the entail, and not by devolution of law from the last possessor John Joseph Gordon, as his ‘predecessor.’ This was maintained, as the Lord Ordinary understood, on the ground that it was only where a party succeeded not as an heir-male or female, or in any other restricted character, but as heir-general or at-law, that he can be held to take by devolution of law. The Lord Ordinary, however, has been unable to discover in Lord Saltoun's case any authority for this construction of the statute; on the contrary, he has been unable to read the opinions, as reported, of the noble and learned Lords who took part in the determination of that case, without concluding not only that they did not proceed upon any such construction, but that, having regard to their reasoning, they must be held to have considered it unsound. Thus the Lord Chancellor (Campbell), after stating (p. 677 of Macqueen's Report) that ‘in the present case the appellant is named and circumstantially described in the deed, he takes directly from the donor by virtue of the deed, and she unquestionably was the settler, disponer, or ancestor from whom, in one sense, his interest in the estate was derived,’ goes on to observe—‘I would not by any means presume to express any opinion beyond what was necessary for this particular case, but I may say that, in harmony with the decision which I venture to propose, viz., that here the maker of the settlement is the predecessor, and not the last preceding possessor, I consider it equally clear that if the appellant were to die leaving a son, the son would take by devolution, the appellant being considered his predecessor, and so it would go on by devolution from generation to generation till a new stirps came under the entail.’ Nothing, as it appears to the Lord Ordinary, could well be more in point to the present case, for Carlos Pedro Gordon is not one of a new stirps, expressly called by the entailer in a certain event to succeed, but one of the heirs-male of the body of Mary Gordon, the head of the last stirps. If he had succeeded not in his order according to the legal rules applicable to his class as an heir-male of the body of Mary Gordon, but as a fresh stirps called by the entailer, or as expressly named in the deed of entail, he would be in the position of Lord Saltoun, and would, like him, have had the entailer as his predecessor; but here the heirs-male of Mary Gordon, of whom Carlos Pedro Gordon, the present possessor of the entailed estate, is one, must be held to have taken, and to take by devolution of law, each in his order being the predecessor of the one immediately following him, till, in the words of Lord Campbell, a new stirps ‘came in under the entail.’ In like manner Lord Cranworth, in Lord Saltoun's case, uses expressions equally, if not more clearly, calculated to exclude the construction of the Act contended for by the private party in the present case, for he says (p. 680 of Report)—‘Where a successor derives his title by descent, whether as heir-general or as heir-in-tail, there, by a reasonable construction of the Act, the person from whom he claims as his ancestor is the predecessor, so that it then becomes unimportant to consider from whom the title was originally derived by settlement or will.’ There are other observations, in the opinions of all the noble and learned Lords in Lord Saltoun's case, to the same effect, and in none of them can the Lord Ordinary find—although that case related to the succession of heirs under a deed of entail—that heirs must be heirs-at-law in order to render applicable the rule that, except in the case where a substitute is called by the entailer nominatim, or as the head of a fresh stirps, they are to be held to be respectively predecessor and successor to each other. Not only can the Lord Ordinary find no such construction pointed at in the report of the case of Lord Saltoun as applicable to heirs of entail, but he finds much in it to the contrary.

On principle, and general reasoning also, as well as the authority of Lord Saltoun's case, the Lord Ordinary thinks that here Carlos Pedro Gordon must be held to have taken not by disposition, but by devolution of law. In a destination to heirs of the body of Mary Gordon, the deed of entail does not specify the individuals who are to succeed; and any person taking under a destination, as Carlos Pedro Gordon has done in the present case, must do so, not simply by force of the deed of entail, but by reason, further, of his being at common law the heir of the body of Mary Gordon. In the words of Lord Neaves in Lord Saltoun's case (Court of Session Reports, p. 133), ‘the destination being in favour of a certain class

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of legal heirs, which it is left to the law to work out, it seems reasonable to say that this series of persons would take by devolution of law, and might be held to derive right from the party to whom they are thus substituted in the character of heirs, the deed leaving it to the law to ascertain and fix their rights in relation to that party as their ancestor. In that view each of the heirs of this class would be held as the predecessor of the immediately succeeding proprietor, and would pay succession duty accordingly; and the same principle might, though not with equal force, apply to every class of legal heirs, such as heirs-male of the body, heirs-male,’ &c. This view of the matter, besides being reasonable in itself, appears to the Lord Ordinary to be in accordance with the opinion of the noble and learned Lords who took part in determining Lord Saltoun's case, and more especially with the reasoning of the Lord Chancellor in that case.

Without dwelling longer on the matter, the Lord Ordinary may state his ground of judgment in the present case, supported, as he thinks it is, by the case of Lord Saltoun, thus:—When the party who succeeds to an estate does so in respect of his having been called by the maker of the entail nominatim, or as one of a fresh stirps, he may be said to take by the express direction of the maker of the entail, who consequently is his predecessor, from whom his interest is derived; but, on the other hand, when the party who succeeds to an entailed estate does so not by the nomination of the entailer, or by his express direction as one of a fresh stirps, but as one of a class of a series of heirs in succession to a preceding heir of the same class, whether of the body male or female, or of other character, it must be held that his interest is derived from his immediate ancestor, who in that case must be held to be his predecessor. It is in accordance with the rule as thus stated that the Lord Ordinary has answered the questions submitted in the Special Case for the determination of the Court.”