Scottish Court of Session Decisions

Subject_1 FRAUD.
Subject_2 SECT. V.

Latent deeds are presumed to be fraudulent in order to protect against Creditors.

Robert M'Christian
v.
Walter Monteith, Merchant in London, and William Cuningham his Factor

Date: 10 February 1709
Case No. No 38.

A reduction of a disposition of lands granted by a nephew to his uncle, was raised at the instance of a creditor of the granter, whose debt was contracted after the disposition, upon presumed fraud, that the disposition being betwixt conjunct persons, did not prove its onerous cause, but must be presumed to have been granted to protect the subject from the disponer's debts, and to have been kept latent to ensnare creditors. The Lords assoilzied the defender.

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David M'Christian, apparent heir in a piece of land called Monkhill, dispones the same to Robert M'Christian his uncle in 1699, and turns a merchant-chapman in England; and taking ware to the value of L. 40 or L. 50 Sterling from William Monteith factor in London, he takes bond for the same; whereupon he causes charge him to enter heir special to his grand-father, who died last vest and seized in these lands of Monkhill; and thereon obtains a decreet of adjudication against him in February 1707. This awakens Robert, who, in July thereafter, compleats his disposition, and infefts David his author by hasp and staple, and himself on the procuratory of resignation; whereupon Monteith, the adjudger, and he competing about the mails and duties of the said lands; it was objected by Monteith, that Robert M'Christian's right was inter conjunctos, uncle and nephew; and so did not prove its own narrative to be onerous, till it were otherwise instructed; and was a latent right kept up animo decipiendi creditores; and was never compleated till I had fully denuded him by my adjudication, which is some months prior to your infeftment; and so intervening betwixt your disposition and sasine, it was a medium impedimentum to hinder the retrotracting of your sasine to the date of your disposition; and the Lords, on the 21st January 1669, Pollock's Creditors contra Pollock, No 31. p. 4909., found the latency a great presumption of fraud; and, although the act of Parl. 1621, against the alienations of bankrupts, mentions only anterior creditors, yet the Lords, from the common law, have allowed posterior creditors to quarrel the same, as was found in the case of Street and Jackson contra Mason, 2d July 1673, No 32. p. 4911.; where the Lords reduced a disposition he had made to his son, though their debt was contracted thereafter, and declared him infamous. Answered, You Monteith was not so much as creditor at the time of my disposition, nor for several years after; and though you have inhibited and adjudged, yet this is all but personal, because you neglected to infeft yourself thereupon; so I having the first compleat real right, must be preferred; and Street and Mason's case toto cælo differs from this; for there a long tract of correspondence in trade preceded his infefting his son, an infant, of the same name with himself, which ensnared his creditors; and the current trade continued after, which made them upon the matter creditors ab ante, though the date of their bond was posterior; but here, David M'Christian had no trade nor dealing with Monteith for several years after his disposition to his uncle; and so the deed could never be reputed to be done in defraud of Monteith, whose debt was not then in being. The Lords preferred the disposition to the adjudication, though perfected after the same.

Fol. Dic. v. 1. p. 334. Fountainhall, v. 2. p. 490.