Page: 348↓
Subject_Title to Pursue—Res Judicata—Trust—Agent and Client.—
1. A party raised an action of reduction of a disposition, and of a decree in foro, founding his title to insist on a deed which stood reduced by that decree; and no relevant grounds were stated for setting aside the decree; defence sustained against reducing the decree, and action dismissed as, in respect of that decree, the party had no title to challenge the disposition. 2. Questions relative to the effect of pactum de quota litis; and a trustee purchasing a trust-estate.
In 1813 the late Mrs Duncan succeeded to a small property called Balgray, near Glasgow. Her succession exposed her to a variety of heavy claims, and involved her in much discussion with the claimants. For the purpose of extricating it, and administering it for her behoof, she executed a trust-conveyance in favour of Alexander Cowan, paper-maker at Valleyfield, and James Nairne, W. S., with full powers of administration and sale. These gentlemen entered on the management and made advances to her, and undertook obligations on account of the trust-estate to a large amount. Fart of their administration consisted in granting a heritable bond over the lands of Balgray, with a power of sale, to Miss Robertson, a creditor of the trust-estate. Mrs Wilson died in 1818, after executing a settlement in favour of John Drysdale, cooper in Edinburgh, which was made within a few days of her death. John Duncan, her heir-at-law, got himself entered by precept of clare constat, and raised a reduction of the settlement, on the head of death-bed, and, in the course of the process, Miss Robertson brought the estate to sale by public roup, under the powers in her heritable bond. As it appeared by this time that the trustees were likely to be losers to a considerable extent, from the inadequate price of the trust-subject, Mr Nairne, after taking the advice of counsel, became the purchaser of the subject at a price of £4600. He took various precautionary steps, by the same advice, for the purpose of certiorating Mrs Wilson's heir-at-law, that, in the event of the subject ultimately yielding such a sum as would indemnify the trustees and leave a surplus, it should be accounted for to him.
A submission was afterwards entered into between Nairne and Duncan, the arbiters being Lords Moncreiff and Cockburn, who were then at the bar. The arbiters decerned Duncan to execute an absolute conveyance in favour of Nairne, which he did, and infeftment followed upon it.
Nairne's purchase from Miss Robertson occurred after Duncan had obtained a judgment of the Lord Ordinary, reducing Mrs Wilson's settlement on the head of death-bed, but the judgment was kept open by a representation on the part of Drysdale. Answers were lodged by Nairne, in which he expressly set forth his title as the disponee of Duncan. The Lord Ordinary refused the representation, and adhered to the decree of reduction. Another full representation was given in by Drysdale, with answers by Nairne, and the Lord Ordinary again adhered. In these pleadings Nairne was specially designed as a writer to the signet. The judgment was allowed to become final. Nairne afterwards sold the lands of Balgray to William Black, merchant in Glasgow, at a price of £4850. It was said that this left a deficiency of considerably more than £2000, advanced by the trustees on behalf of the estate.
In 1830, Drysdale raised an action of reduction against Duncan, the heir-at-law, and also against Nairne and Black, libelling on the deathbed
The reasons of reduction were, 1. That Nairne being trustee on the lands of Balgray, could not effectually become purchaser of the trust-estate, and therefore Miss Robertson's disposition in his favour was invalid : And 2. That the disposition from Duncan, during the dependence of the process of reduction, in which Nairne was sisted, was reducible both at common law as a pactum de quota litis, and under the stat. 1594, c. 220, in respect of his being a member of the College of Justice; and, consequently, that Black's right, derived from Nairne, was inept, as it flowed a non habente potestatem: And also that the farther procedure in the action of reduction, after Nairne's purchase, was null and void. Drysdale farther pleaded, in making up the record, that Duncan's title to challenge the death-bed deed had been cut off by certain prior deeds of Mrs Wilson.
Nairne pleaded in defence, inter alia, that Drysdale had no title to pursue, except the death-bed deed, which stood reduced by a decree in foro contentioso; and every ground which he stated for the purpose of shaking that decree, fell under the exception of competent and omitted, or proponed and repelled. The nullity of the death-bed deed was therefore res judicata, and his action was barred.
The Lord Ordinary found—“lmo, That the pursuer has made no allegations relevant to infer reduction of the decreet in foro of this Court of December, 1822, setting aside the disposition in his favour by the late Mrs Wilson, on the ground of death-bed; and therefore sustained the defences, and assoilzied the defender from the conclusions of this action, in so far as they applied to that decreet, and decerned. 2do, Found, that as the pursuer's title and interest to challenge the other writs now sought to be reduced, depends entirely on the disposition above mentioned, which stands reduced by the decreet in foro, and by the finding and decerniture above written, the said pursuer has no title to insist farther in the conclusions of this action, and is excluded by the res judicata constituted by the said decreet in foro; and therefore dismissed the action as to those other writs, assoilzied the defenders, and decerned; and found the pursuer liable in expenses.” *
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* “The grounds of reduction of the decreet 1822 (which was undoubtedly a decreet in foro, having been originally pronounced after a full debate, and adhered to, on advising two long representations) do not import any denial of the fact, or the law of death-bed, or in any respect impugn that decreet on its merits; but resolve altogether into personal objections to the right of the defender, Mr Nairne, to maintain the action on which it was pronounced. The admitted fact is, that Mr Nairne purchased the lands of the defunct, and took an assignation to the current process, from the heir-at-law, after decreet of reduction had been obtained by the heir himself; but while the case was still open on representation: And the first reason of reduction accordingly is, That he being a member of the College of Justice, was not entitled to make such a purchase, and that all subsequent proceedings in the action were null, by the Act 1594, c. 220. The other reason mainly relied on was, That he having been a trustee on the property for the defunct and her creditors, was disabled from purchasing that property, and that the transaction on this separate ground also, was radically null.
“The Lord Ordinary is of opinion, that both these allegations are irrelevant. Neither of them appears to have been stated during the six months of active litigation that took place in the original action, after Mr Nairne had been sisted as pursuer, by the designation of a Writer to the Signet, and upon a full narrative of the title which he had acquired: and the Lord Ordinary has great doubt whether he would not have been bound now to reject them as competent and omitted in the proper suit But however that may be, he thinks it impossible to admit them as grounds for reducing the final decreet by which that suit was terminated.
“1st, As to the Act 1594, c. 220, the penalty annexed to its contravention, if it could be thought to be incurred in a case like the present, is, not the nullity of the subsequent step of the process, but simply the forfeiture of office, or status, on the part of the supposed delinquent, and this has accordingly been settled as the just and practical construction of the statute for a period of 200 years. See the cases of Richardson against Sinclair, 30th July, 1635, Mor. p. 2310; Purves against Keith, 20th December, 1683, Mor. 9500; Sir S. Home against Lord Home, 15th December, 1713, M. 9502.
“2d, As to the supposed unlawfulness and incompetency of a purchase made by a trustee of property, of which he had a charge in that particular relation; this may, no doubt, be a relevant ground for reducing the purchase of such property, at the instance of any one having a title and interest to pursue such a reduction. But it is no ground for challenging the proceedings of a trustee in following out the reduction of a death-bed deed, by which the application of the property to the purposes of the trust was, or might have been, impeded. On the contrary, it might have been a high and important duty in the trustee to obtain such a reduction; and, after obtaining it, he would of course be liable to account, as trustee, to all concerned, in the same manner as before. It is obviously impossible to hold that he was trustee in this case, for the death-bed disponee, whose right only emerged three or four days before the death of the truster, and who does not seriously dispute that this right was reducible (as it was in fact at once reduced), at the instance of the heir-at-law, for whom, and for the creditors of the defunct, the trustee had been invested, for years before, with full powers of sale and administration.
“The Lord Ordinary having decided the case on the preliminary question of the validity of the decreet in foro of 1822, and the subsequent defeasance of the pursuer's title, quoad ultra, as to which alone the case was fully debated before him, is not, of course, entitled to give any judicial opinion on the general merits of the cause. But he thinks it due to the principal defender (Mr Nairne) to say, that after a careful perusal of the record, and the whole relative documents, he has not Bern the slightest reason for questioning the fairness and liberality of his conduct: and he may add, that he is altogether unable to understand how the pursuer can expect to get rid of the titles in Mr Nairne's person, without reducing the decreet arbitral of Lord Moncreiff and the Solicitor-General, which is not included in this action, or what interest he can expect to derive even from success in this process, while there is any heir-at-law of the defunct in existence.”
The pursuer reclaimed.
The Court unanimously adhered, and awarded additional expenses against the pursuer.
Solicitors: D. Manson, S. S. C.—J. and C. Nairne, W. S.—Agents.