Scottish Court of Session Decisions

The late Mrs Menzies or Stewart, for onerous considerations, executed a deed of settlement in 1817, in favour of her eldest son James Stewart of Crossmount, who had made considerable provisions on his mother, and his three sisters. Under her settlement, Mrs Stewart reserved power to burden her son's succession with debts and legacies not exceeding £500. In 1824 she executed a deed of revocation, and made a new settlement, leaving a considerable legacy to her eldest son, but making provisions also in favour of her second son, and her daughters. She subsequently executed various writings in favour of her two unmarried daughters, Misses Margaret and Jane Stewart, and, inter alia, put them in possession of a sum of £500 which she uplifted from a bank on 7th August, 1826, and which was immediately placed in the hands of Robert Smythe of Methven, who granted a bill for it. Mrs Stewart died in 1827, and after her death, James Stewart of Crossmount raised an action to have it found and declared that the settlement of 1817 was onerous and irrevocable, and to reduce every deed or transaction which defeated his rights under that settlement. In the summons he set forth the settlement, and the reserved power of burdening with debts or legacies to the amount of £500. He libelled particularly on the transaction by which the bill for £500 had been acquired by his sisters, and concluded for declarator, that Mrs Stewart had no right to defeat his vested interest under the onerous settlement 1817; and “that the attempted transference of the aforesaid sum, placed in the hands of Robert Smythe, Esq., was at variance with, and in contravention of the stipulations come under by Mrs Stewart” in the settlement 1817. The action called for production of the settlement 1824, and various other writs, including the bill for £500, and concluded for reduction of any indorsation on it, which might exist in favour of the pursuer's sisters, and for count, reckoning, and payment, on the footing that they had no right to the sum in the bill, in respect that their right was acquired from Mrs Stewart, in contravention of her obligations to the pursuer, and his vested interests, under the settlement 1817, and as having been obtained, either in virtue of a plan concocted between Mrs Stewart and her daughters to defeat the pursuer's rights, or, in virtue of their having impetrated it from Mrs Stewart by fraud and circumvention.

Miss Jane Stewart died, but defences were lodged by Miss Margaret Stewart. She pleaded that the settlement 1817 was not onerous, but gratuitous and revocable. She also pleaded that, even if it were onerous, the £500 for which the bill had been granted, was part of a distinct fund, not falling under that settlement; farther, that that sum did not belong to Mrs Stewart at her death, and on that separate ground, did not fail under the settlement; and that, even if it did fall under the settlement, it was competent to Mrs Stewart to bequeath it to the defender and her sister, under the reserved power which she possessed of burdening with, debts and legacies to the amount of £500.

A record was made up, in which the pursuer made no averment as to the amount of Mrs Stewart's debts.

The Court found that the settlement 1817 was onerous and irrevocable; that the settlement 1824, and various other writs were liable to reduction, in so far as they injured the pursuer's rights under the settlement 1817; “but, in respect that the effect of these last mentioned writs depends essentially on certain matters of fact, as to which the parties are at variance, appoints parties procurators to be farther heard as to the mode in which such matters of fact may be ascertained.” ¹ One of the writs here referred to was the bill for £500. The cause was afterwards remitted to the jury roll, and, as to that bill, the following issue, being the first of two issues, was prepared and sent to trial. “It being admitted that the late Mrs Stewart, the mother of the pursuer and defenders, on the 16th day of September, 1817, for onerous causes, executed in favour of the pursuer, James Stewart, the deed No. 5 of process, by which she conveyed to the said James Stewart, all the property which should belong to her at the time of her death, subject to the payment of debts and legacies to the amount of £500: Whether, in defraud of the said James Stewart's right under the said deed, the said Mrs Stewart, on or about the 7th day of August, 1826, uplifted from the bank of Scotland's office at Perth, and wrongfully delivered, or wrongfully caused to be delivered, to the said Misses Stewart, the sum of £500, contained in a deposit receipt of the said banking company; and, whether the said Miss Stewart, for herself and as representative of her said sister, is indebted and resting owing to the said James Stewart in the said sum of £500, or any part thereof, with interest thereon.”

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¹ January 29, 1833 (ante, XI. 327), which see.

At the trial, the pursuer, after leading his proof as to the question whether the bill was Mrs Stewart's money, was proceeding to prove that she had left debts exceeding £500, and so had no power to bequeath any thing to her daughters, when the defender objected, that no averment to that effect was made on the record, and that proof of the fact, therefore, could not be allowed. The Lord President, who tried the case, stopped the proof from being entered on, and the jury returned a verdict by which they “found for the defender Miss Stewart on the first issue.” At the same time, the following judicial minute was entered into. “The defender, in the first issue, admits, that, notwithstanding the verdict returned for her on that issue, it shall be competent for the pursuer to prove that the £500 referred to in that issue, and lent out to Mr Smythe of Methven, was the money of the late Mrs Stewart, uplifted on the 7th August, 1826—subject to all answers which the defender can make, either on the fact or on the competency, or other grounds.” In this action the Court afterwards pronounced this interlocutor:” Apply the verdict in this case, and in respect thereof, found on the first issue for the defender, Miss Margaret Stewart, assoilzie her from the conclusions of the libel, in so far as regards the £500, embraced in that issue, and decern—reserving entire the effect of the judicial minute signed by the counsel for them in reference to that issue, being No. 412 of process, and Miss Margaret Stewart's objections thereto, as accords; and of new remit the cause to Lord Cockburn, ob contingentiam of the supplementary process betwixt the parties.”

This supplementary process was an action raised, relative to the bill for £500, narrating the procedure in the first action, and setting forth the fact that the bill for £500 was Mrs Stewart's money, and that at her death she left a larger amount of debts than £500, It concluded, that, “without prejudice to the foresaid action and process, and conclusions contained in it, and in supplement thereof, it ought and should be found and declared, by decree, &c, that, at the decease of the pursuer's mother, Mrs Jean Menzies or Stewart, there were just and lawful debts resting and owing by her exceeding the sum of £500 sterling; and it being so found and declared, the said Miss Margaret ought and should be decerned and ordained, by decree foresaid, to make payment to the pursuer of the sum of £500 sterling, with lawful interest thereof from the 7th day of August, 1826, till payment, in respect that, in defraud of the pursuer's right under the deed of 1817, the said Mrs Jane Menzies or Stewart, of the date aforesaid, uplifted that sum from the Bank of Scotland's office at Perth, and wrongfully delivered, or caused the money to be delivered, to the defender and her deceased sister, whom she represents, and which sum the said Miss Margaret Stewart unjustly retains.” The pursuer died and the action was thereafter insisted in by his widow and heir as his representatives.”

The two first pleas of the defender objected to the competency of bringing the supplementary action, but the Court “repelled ¹ the 1st and 2d pleas on the record of the defenders' pleas as preliminary—and find, that, under the minute in process, it is competent for the pursuer in this action to prove the facts therein alleged relative to the £500—reserving to the defender all answers either on the fact or on the competency, or other-wise, in terms of the minute. And quoad ultra, remitted to the Lord Ordinary to hear parties, and to proceed as shall be just, reserving all questions of expenses.”

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¹ December 8, 1836 (ante, XIV. 226), which see.

Under this remit the Lord Ordinary, “before answer, remitted the cause to the issue clerks.” ^*

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^* Note.—“The Lord Ordinary does not mean, by sending the case to the Jury-roll, to fix, or even to indicate, that there must necessarily or probably be a trial. His object is merely to get it ascertained, before answer, what the issue or issues, if any, ought to be made, and thereby to enable the defender either to demur to the relevancy, or to admit the fact in issue, which, until the precise point or points on which the case turns be determined by an issue or issues, she can scarcely do.”

The following issue was prepared by the Jury clerks: “It being admitted that the late Mrs Stewart, the mother of the original pursuer and defender, on the 16th September, 1817, for onerous causes, executed in favour of the original pursuer, James Stewart, the deed No. 5 of process, by which she conveyed to the said James Stewart all the property which should belong to her at the time of her death, subject to the payment of debts and legacies to the amount of £500: Whether, at the time of her death, the said Mrs Stewart left debts to the extent of the said sum of £500 mentioned in the said deed: and whether a sum of £500, uplifted from the Bank of Scotland's office, at Perth, on or about the 7th day of August, 1826, and lent to Robert Smythe, Esquire, of Methven, on or about the said 7th day of August, 1826, was the property of the said Mrs Stewart: and whether, in violation of the conditions of the said deed, she wrongfully gave the sum of £500, lent aforesaid, to the original defenders, Misses Jane and Margaret Stewart, or either of them?”

The defender then lodged a minute by which “she admitted the £500 referred to in the issue, and lent to Mr Smythe of Methven, was the money of the late Mrs Stewart, uplifted on the 7th August, 1826, subject to all answers which the defender can make either on the fact or on the competency or on other grounds.”

The pursuers craved a remit to a jury or to an accountant for the purpose of ascertaining the fact “whether at the time of her death, the said Mrs Stewart left debts to the extent of the said sum of £500?”

The defender objected that they had no right to go into this inquiry. Under the first action, the question of right as to the contents of the bill for £500 was fully put in issue between the parties, and the pursuer insisted in that action, on the same ground as his representatives did in this, which was, that the defender had acquired the sum in violation of the pursuer's rights under the settlement 1817. Among other defences stated against the first action, the defender had specially pleaded, that, even though the money had been Mrs Stewart's, still, under the reserved power in the settlement 1817 of burdening the succession with debts and lega- cies amounting to £500, she had effectually conveyed the sum to the defender and her sister. In order to overcome the pleas of the defender in that action the pursuer was bound therefore to have averred and proved that the debts of the late Mrs Stewart amounted to £500; which he omitted to do. By the verdict returned in that action, it was found that Mrs Stewart had not uplifted and wrongfully delivered the sum of £500 to the defender, and that the defender was not indebted to the pursuer in the said sum. This verdict was subject to one single qualification, as specified in the judicial-minute, that it should be competent to the pursuer to prove that the £500, referred to in that issue, “was the money of Mrs Stewart, uplifted on 7th August, 1829, subject to all answers which the defender can make either on the fact, or on the competency or other grounds.” It was now admitted by the defender that the money was Mrs Stewart's, and uplifted on 7th August, 1829. And the pursuers had no right to go a single step farther, as the verdict was absolutely conclusive between the parties, subject only to the effect of this admission. But although the money was Mrs Stewart's, that did not impair the defender's right to it, unless Mrs Stewart had left debts amounting to £500 which was denied, and which the pursuers could not now be allowed to go into. The second action was brought substantially on the same medium concludendi with the first, and only differed from it, in placing upon record an averment which might and should have been on the record of the first action. But this was barred by the plea of competent and omitted; ¹ in virtue of which the defender was now entitled to maintain that there was res judicata in her favour, unless the admission which she had made that the money was Mrs Stewart's, could, when coupled with the verdict in the former action, support the conclusions of this action. But as the verdict and that admission did not overcome the defender's plea, rested on the right of Mrs Stewart to bequeath £500 to her, the defender was entitled to be assoilzied.

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¹ 4 St. 1, 46, and 50; A. S. July 11, 1828, § 105; Magistrates of Dumbarton, July 11, 1810 (F. C.); Barbour, Nov. 14, 1828 (ante, VII. 18), 6 Geo. IV. 120, §10.

The pursuer answered, that, the reservation in the judicial minute never could have been meant to be limited to the single inquiry whether the money was Mrs Stewart's, as a mere abstract question, but as a question to be inquired into in reference to the other facts of the case, so far as not exhausted by the verdict. One of these was the amount of Mrs Stewart's debts, which was not touched by the verdict, as no averment had been made respecting it on the record, and the pursuer had been therefore stopped from leading any evidence on it. It was therefore open to him to go into that inquiry now, and it was essential to the justice of the case, as well as consistent with the obvious intention of the parties to the judicial minute, that such inquiry should be made.

The Lord Ordinary ordered minutes of debate, after which his Lordship pronounced this interlocutor:—“Imo, Finds, that, under the minute signed by the counsel for the parties, when the issues in the original cause were tried, on 16th July, 1834, it was reserved to the pursuer to prove that the sum of £500, therein specified, as uplifted by the defenders on 7th August, 1836, and afterwards lent out to Mr Smythe of Methven, ‘was the money of the late Mrs Stewart:’ 2do, Finds that, by another minute lately lodged, it is now admitted by the defenders that the same sum was the money of Mrs Stewart; and as it is proved by the record that the money continued in Mr Smythe's hands during the remainder of Mrs Stewart's life, it is necessarily implied in the admission that the money was Mrs Stewart's at the period of her death; 3tio, Finds that the pursuers are entitled to maintain such legal claim as may be competent to them upon the said £500, consequent on its being now proved to have belonged to Mrs Stewart, and that they are not barred by the reservation in the said minute of 16th July, 1834, of ‘all answers which the defender can make, either on the fact, or on the competency, or on other grounds’—in respect that no relevant plea has been stated by the defenders, in cither of the processes, to absolve them from accounting for the said £500: 4to, Finds that it has been already found, by a judgment of the former Lord Ordinary, confirmed by the Court on 29th January, 1833, that it was ultra vires of the said Mrs Janet Stewart to alter, or revoke gratuitously, a certain settlement executed by her for onerous causes in favour of her son, Captain James Stewart, on 16th September, 1817, by which settlement she conveyed to her said son, and his assignees, the whole goods and effects, debts, and sums of money, that should pertain to, or be in any way claimable by her at the time of his death—reserving only to herself a power to burden said conveyance by such debts as she might contract, or such legacies as she might leave, by a writing under her hand, ‘provided the whole of the said debts and legacies do not exceed the sum of £500 sterling:’ 5to, Finds that the pursuers have relevantly offered to prove, in article 9 of their condescendence in the present supplementary action, that Mrs Stewart left debts to the amount of £789, 1s. 1d., which amount is denied by the defenders: Therefore, Finds that a proof or investigation, in the most suitable and convenient form, must be made into the said debts, with a view to a final judgment in this as well as in the original cause—and appoints the case to be enrolled, in order that parties may be heard on the best mode of carrying this part of the judgment into effect—reserving, in the mean-time, hinc inde, all questions of expenses.” ^*

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^*“Note.—The minutes which have been lodged here, are far more voluminous and elaborate than the Lord Ordinary expected. They were ordered chiefly in the expectation that the counsel on each side would state fairly and explicitly what was the real meaning and object of the parties, or their counsel, in entering into the minute at the trial which is subscribed by the counsel, and has given rise to so much discussion. The minute was evidently hurriedly written out at the moment of the trial, and something, perhaps much, was taken for granted, which probably is now forgotten from lapse of time, and possibly from the lamented death of one, if not of two, of the excellent persons who acted as counsel for the defender.

“Instead of precise information on the point chiefly requiring elucidation, there is here, at least on the side of the defenders, a very long argumentative minute—but it does not meet the point the Lord Ordinary was so anxious to see distinctly explained. When such a minute was entered into, it certainly was for some available purpose—in a contingent or possible adjudication of the rights of the parties at some future period. But, according to the defenders' argument, no claim whatever was to be open to the pursuer which he or his successors could ever urge, supposing the fact reserved for proof to be clearly established. The Lord Ordinary does not think this either a probable or intelligible explanation of the reservation.

“In order to judge properly of this matter, it is suggested, that the Court should re-peruse, in any of the printed reports, the report of the principal question when it first came before the First Division in 1833.—See printed Reports, 29th January, 1833.

“The judgment then pronounced finally ascertained and found that old Mrs Stewart could not gratuitously alter or defeat a certain settlement made by her, for highly onerous causes, on her son, Captain James Stewart—predecessor of the present pursuers—and he also concluded, that sundry alienations made by her in different forms should be reduced, and the funds paid to him. So far all is clear. But, on referring to the record, it appears that there were two sums of £500 and £200, which the defenders—daughters of the old lady—had got possessed of, and which Captain Stewart insisted should be paid to him.

“As the defenders denied that these last sums ever were any part of their mother's funds, or came to them through her, these facts could only be made the subject of a jury trial.—See, in particular, Defenders' Answers to Art. 22 of the record in the original cause. That record ought to be before the Court when any reclaiming note against the present interlocutor is advised.

“When the case came to trial respecting the two sums above specified, it evidently took the following course:—The pursuer, probably, had proof to establish that the £500 was the old lady's, which now seems to have been absolutely indisputable. But that fact was not enough to exhaust the pleas which remained behind to both parties. For, as the old lady was entitled to contract debt or bequeath legacies to the amount of £500, the sum in dispute might have been retainable by her successors on that ground.

“Still to enable them to set up that plea, the defenders had no statements on record. They denied—in the article above quoted—that the £500 was ever a part of their mother's funds, or derived by her from Miss Margaret Menzies, as stated by Captain Stewart—and having done so, they had no plea on the first record—for it would have been a little inconsistent with their other statements, to entitle them to retain it to account of the reserved fund which their mother was entitled gratuitously to alienate. At the same time, and probably from the above defect in the defenders' record, the pursuer had no counter-statement that the defenders' claim of retention was precluded from the circumstance of Mrs Stewart having left other debts far more than sufficient to exhaust her right by the settlement to alienate gratuitously £500 of her funds,

“The record of both parties being thus, to a certain extent, defective, they were relieved from the difficulty by the minute framed by their counsel, which has given rise to this fresh litigation. The Lord Ordinary confesses that he has formed a clear opinion as to the object of that minute. It was so framed as to leave every plea open to both parties relative to this fund, in the same manner, and to the same effect, as if they both had had a record from the beginning in all respects as complete as could have been desired in every possible view of their rights—and it is much to be regretted that such a litigation should have been subsequently got up from the laudable efforts of counsel to cut short proceedings and expense. This must have a material effect at least on the costs latterly incurred, which are for the present reserved.”

The defender reclaimed.