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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Macalister, Petitioner [1867] ScotLR 4_175_1 (10 July 1867)
URL: http://www.bailii.org/scot/cases/ScotCS/1867/04SLR0175_1.html
Cite as: [1867] SLR 4_175_1, [1867] ScotLR 4_175_1
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SCOTTISH_SLR_Court_of_Session
Page: 175↓
Court of Session.
Facts:
Held that money borrowed by an heir of entail, and expended and charged on the estate under the Drainage Act 1846 (9 & 10 Vict. c. 101), cannot be constituted a burden on the estate, under the 16th sect. of the Entail Amendment Act.
This was a petition under the Entail Amendment Act (11 and 12 Vict., cap. 36) for leave to constitute and charge certain improvements executed by the petitioner on the entailed estate of Glenbar. By the 16th section of the Act it is provided—“That where all heir of entail in possession of any entailed estate, holden by virtue of any tailzie dated prior to the 1st day of August 1848, shall, whether prior or subsequent to the passing of this
Page: 176↓
Act, have executed improvements on such of the nature of the improvements contemplated by The said last recited Act (the Montgomery Act, 10 Geo. III., cap. 51), but shall not have obtained decree therefor in terms of the said Act, by reason of the provisions thereof not having been adopted, or not having been duly complied with, it shall be lawful for such heir to apply by summary petition to The Court in manner hereinafter provided, setting forth such improvements and the amount of money, not exceeding the amount authorised by the said Act, expended thereon, and praying the Court for authority to grant bond of annualrent,” &c. A part of the improvements was executed with money borrowed under the Drainage Act of 1846 (9 and 10 Vict. cap. 101) by which the Treasury is authorised to make advances to proprietors on the security of the land, re-payable in twenty-two years by instalments of £6, 10s. per cent. per annum. Section 38 of that Act provides that heirs of entail, “as between such person and the persons in remainder or reversion,” shall be bound to pay the half-yearly payments of the rent-charge.
The petitioner has paid the rent-charge for about sixteen years, and latterly offered to redeem the remainder in the manner provided by the Drainage Act.
Mr Webster, to whom the Lord Ordinary remitted to report on the improvements, disallowed those executed under the Drainage Act. The petitioner objected to Mr Webster's report. A curator ad litem was appointed, and argued in support of the report; and the Lord Ordinary repelled the objection of the petitioner. On a reclaiming note, the First Division ordered written argument to be laid before the whole Court.
The consulted judges, with the exception of Lord Barcaple, were for adhering to the Lord Ordinary's interlocutor.
“We are of opinion that the interlocutor of the Lord Ordinary on the point in question should be adhered to.
“The petitioner seeks to charge the entailed estate of Glenbar with a bond of annuity, or other bond, to an amount corresponding to the statutory proportions of certain sums said to have been expended by him in improvements of the nature contemplated by the Act 10 Geo. III., c. 51, the Montgomery Act. The point in dispute relates to the competency of making such a charge in consideration of expenditure for operations made in the first instance under the Drainage Acts, 9 and 10 Vict., c. 101, and others.
“The money so obtained for drainage was converted, in terms of the Drainage Acts, into a half-yearly rent-charge, at the rate of £6, 10s. per cent., payable for twenty-two years, The petitioner has paid this rent-charge for about sixteen years, and he has latterly offered or declared his readiness, which he had not done before the Lord Ordinary, to redeem the remaining payments in the manner allowed by the Acts. On that footing he now seeks to have the expenditure so made treated as if it had been made originally under the Act 10 Geo. III., and to have it created a burden on the estate, in terms of the Entail Amendment Act, section 16.
“It appears to us that the expenditure thus made under the Drainage Acts, and charged on the estate in terms of those Acts, cannot now be dealt with as an improvement debt with which the estate or the heirs of entail are to be burdened under the Entail Amendment Act, as if executed under the Montgomery Act.
“By the 16th section of the Entail Amendment Act it is enacted that where an heir of entail shall ‘have executed improvements’ contemplated by the Montgomery Act, ‘but shall not have obtained decree thereof in terms of the said Act, by reason of the provisions thereof not having been adopted, or not having been duly complied with, it shall be lawful for such heir to apply’ as the petitioner has here done.
“Before such an application can be ascertained it is necessary, of course, that the heir applying shall, in terms of the Act, have ‘executed the improvement.’ This, we conceive, means that he shall have done so at his own expense, or from his own resources. He must be in the position described by the Montgomery Act, of an heir that ‘lays out money upon improvements.’ It is immaterial, no doubt, from what source he gets the money, if it is his own. He may pay it out of his pocket, or may borrow it on his own credit or security, or on that of his life-interest in the entailed estate. But the position of an heir availing himself of the Drainage Acts is entirely different. The object of these Acts is to ‘facilitate works of drainage, by advances of public money on the security of the lands to be improved.’ Accordingly, by the 34th section, the land is to be charged, in payment of the advance, with the rent-charge, payable for twenty-two years; and every heir of entail is by the 38th section taken bound to pay the rent-charge half-yearly during the continuance of his life-interest. Hence the heir raises the money, not by his own credit or means, but on the credit and security of the whole heirs of entail, and of the entailed estate itself, with its rents and profits, though not to the effect of a attaching the fee.
“Now if the question be asked, whether an heir so proceeding ‘has executed improvements’ of the nature contemplated by the Montgomery Act, in in terms of the 16th section of the Entail Amendment Act, and so as to have the benefit now sought by the petitioner, that inquiry suggests this other question, whether an heir so proceeding can obtain the benefit of the Mongomery Act, or of section 16 of the Entail Amendment Act, immediately upon the drainage operations being executed, and at the same time at which he is binding the estate for the rent-charge imposed by the Drainage Acts. The improvements, if properly executed, are executed at once. The money, if expended by the heir, is expended at once. If the making of the improvements and expenditure of the money is all that is necessary, and the mode of obtaining the money is immaterial; and, in particular, if the arrangement with the Drainage Commissioners is virtually the same as any other mode of borrowing the money by the heir;—then he stands from the first in the position of being able both to bind the estate for the drainage rent-charge, and to burden it or the heirs with the bound of annualrent allowed by the Entail Amendment Act as for general improvements. In the view supposed there is no incompatibility between the two things any more than if he were simul et semel to borrow money on his life-interest, and to lay it out so as to be charged under the Montgomery Act. If it is not competent for him to do the two things referred to simul et semel, it must be because an heir executing drainage operations, or getting them executed, under the Drainage Acts, is not executing or laying out money in improvements, as contemplated under the Montgomery
Page: 177↓
“It seems to be the true rule in such matters, that where a burden laid on the entailed estates is borne by the proper debtor in it, according to the natural and appointed mode of satisfying it, it is thereby for every extinguished, and cannot be further kept up. Here, however, it is proposed that after the true debtor had made these annual payments, as he was bound to do inter hœredes, he should be allowed to rear them up ex post facto as a fresh burden upon the subsequent heirs.
“Besides these general objections in principle, some other considerations here seem to weigh against the petitioner.
“An heir who proceeds under the Drainage Acts, not only in the first instance burdens the estate, and pledges the credit of the succeeding heirs, but by the continuance of the rent-charge for a number of years exposes them to the risk of having to hear the greater part of that burden. In the early part of its currency the death of the original heir, after a payment of only one or two instalments, would leave the great bulk of the debt still to run, and to be paid by his successors. After the heirs have borne and have so far escaped from that risk, the question is, whether they ought, in the latter period of its currency, to be subjected in a new liability for three fourths of the original expenditure, to reimburse the first heir to that extent. It seems the fair import of the Drainage Acts, that while all the heirs are taken bound to the Government, there is a statutory compact among them that every heir shall in his turn bear the half-yearly payments that ‘become payable during the continuance of his interest;’ and it seems a violation of that compact if after the first heir has, by living long, defrayed the burden thus imposed upon him, he should to any extent shift it again from his own shoulders to those of the subsequent heirs.
“This seems all the more inequitable, and the more at variance with the meaning of the statutes, when it is considered that the drainage-advances are only made when it is estimated that the operations will effect am improvement in the annual value of the land exceeding the amount of the rent-charge. The heir obtaining the advance in this manner by way of rent-charge truly expends nothing; and probably in many, if not in most cases, the tenant in occupation bears the whole burden from year to Fear. To allow the heir in such circumstances to run up a new debt in his own favour against the succeeding heirs seems out of the question, and would be giving to him, not reimbursement, but profit on the transaction, at the expense of his successors.”
“It is an entirely different question, Whether, if the rent-charge be brought to an end, and the lands entirely disburdened, during the life of the heir of entail who executed the drainage, either by his having paid it during the whole term of its endurance, or by his having redeemed it, the fact of its having been once constituted excludes him from exercising the powers conferred by the Entail Amendment Act?
“In the present case a portion of the rent-charges is still a subsisting burden on the estate; and no proposal to redeem it is made in the petition, and none appears to have been made when the case was before the reporter and the Lord Ordinary. In these circumstances I think that the Lord Ordinary rightly held that the petitioner was debarred from exercising the powers of the Entail Amendment Act. But in the Inner-House, and in the printed papers now before the consulted judges, the petitioner has proposed to redeem that portion of the drainage-charge which still subsists. The petition is, in general terms, merely setting forth the expenditure on improvements, and making no reference to the rent-charges, the existence of which has been very properly brought forward by the reporter as an objection to the application being granted. If the objection will be obviated in point of principle by the remaining terms being redeemed, I do not think it incompetent, or contrary to practice, for the Court to allow that to be done now before disposing of the petition.
“I am of opinion that when a rent-charge for drainage-advances has been brought to an end, either by payment or redemption, in the life of the heir who made the improvement, the fact of it having been once constituted does not debar him from exercising the powers conferred by the Entailed Amendment Act. It does not appear to me to be of any importance that the discharged burden was constituted, and could only be constituted, under an Act of Parliament. The two Acts—the Drainage Act and the Entail Amendment Act—make no reference to one another. The objection to the petitioner's application, as matters now stand, seems to me to be, that by granting it a double burden would be imposed on the future heirs of entail. That objection would be precisely the same whether the rent-charge were imposed under powers created by a public statute or in any other conceivable way.
“It is of no consequence where or how the heir making the improvements obtains the money with which he does so. All that is necessary under The Entail Amendment Act to entitle him to exercise the powers conferred by that statute is that, whether with money of his own, or obtained on loan or otherwise from any other party, he has executed improvements of the nature there defined. It appears to me that the only ground on which it has been necessary or proper in the present case to inquire into the mode in which the money was obtained is, that it created a subsisting burden against the future heirs of entail. If no such burden had subsisted when the petition was presented, I do not think that the inquiry would have been relevant at all.
“It is not sought by this application to create any burden on the estate in respect of payments made by the petitioner to the Government, either in liquidation of the rent-charge or for its redemption. No such payments could possibly constitute
Page: 178↓
“In the view which I take of the case, it is necessary for the petitioner to satisfy the Court as to the improvements and the expenditure upon them, that no portion of the rent-charge remains a burden on the estate. Upon his doing so I am of opinion that he will be entitled to the authority for which he applies.”
At advising—
The
Agent for Petitioner— G. Cotton, S.S.C.
Agent for Curator ad litem— James Finlay, S.S.C.