Scottish Court of Session Decisions

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Cite as: [1868] ScotLR 6_5_1, [1868] SLR 6_5_1

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SCOTTISH_SLR_Court_of_Session

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Court of Session First Division.

Saturday, October 17 1868.

Lord President Lord Deas Lord Ardmillan

6 SLR 5_1

Mann

v.

Turner.

Subject_1Bankrupt
Subject_3Bankruptcy Act 1856, section 103
Subject_4Discharge—Hamilton's Estate Act 1866— Husband and Wife—Succession reverting to Bankrupt—Reduction—Agreement—Compromise.
Facts:

A bankrupt
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was sequestrated in 1858. In 1860 an aunt of his wife died, leaving a will excluding her heirs. The heirs brought a reduction of the will, and obtained decree of reduction, but the decree was suspended. No judgment was ever pronounced in the suspension, all parties interested having made an agreement, sanctioned by a special Act of Parliament, regulating the succession in a particular way, the bankrupt's wife obtaining a certain share. This Act was passed in 1866, but meantime, in 1863, the bankrupt was discharged. In a petition by the trustee, under the 103d section, to have that share in the aunt's estate transferred to him, held that no right vested in the bankrupt or in his wife till the passing of the Act, and petition refused.

Headnote:

In 1858 the estates of David Turner were sequestrated, and John Mann, accountant in Glasgow, was appointed trustee on the estate. In 1860, while the sequestration still subsisted, Agnes Hamilton, an aunt of the bankrupt's wife, died, leaving considerable property, heritable and moveable. In May following, Mr White was appointed judicial factor on her estates. Agnes Hamilton left a trust-disposition and settlement conveying her whole property to the Managers of the Barony of Gorbals directing payment of certain debts and annuities, and mortifying the whole residue of her estate to the Managers for the payment of small annuities to decayed natives and residenters for forty years in the barony, under certain conditions.

In January 1861 the heirs-portioners and next of kin of Agnes Hamilton raised in the Court of Session a reduction of her settlement. After various procedure, decree of reduction was pronounced in March 1862. Shortly thereafter, a note of suspension of this decree was presented by certain parties, who claimed to be possible beneficiaries under the settlement, as belonging to the class for whose benefit the estate was mortified. This suspension was opposed by Agnes Hamilton's heirs-portioners and next of kin. A multiplepoinding for distribution of the residue of Agnes Hamilton's estate was also instituted by the raisers of the suspension. No judgment was pronounced in these actions, but an agreement was entered into between the parties to the effect that a sum of £7500 should be set aside out of the estate of Agnes Hamilton to meet the payment of the small annuities contemplated by the settlement, and that the remainder should be paid to Agnes Hamilton's heirs, under authority of an Act of Parliament, to be obtained by the parties. An Act of Parliament was accordingly obtained in 1866, giving effect to this agreement. In the meantime, in 1863, the bankrupt obtained his discharge.

The trustee on his sequestrated estate now petitioned the Court to declare all right and interest which belongs to the said David Turner, in and to his wife's, the said Margaret Eadie Kerr or Turner's share of the heritable estate of the said deceased Agnes Hamilton, and the rents and annual proceeds thereof, to be vested in the petitioner as trustee aforesaid, as at the date of the acquisition thereof, to the same effect as is enacted in the Bankruptcy (Scotland) Act 1856, in regard to the estates belonging to the bankrupt at the date of the sequestration.

The petition was opposed by the bankrupt and his wife, who contended that no right to any share of Agnes Hamilton's estate had vested in the bankrupt before 1866, the date of the passing of the Act.

The Lord Ordinary ( Mure) found that the petitioner was entitled to have the share of estate in question vested in him, to an extent sufficient to meet the claims of creditors, subject to any claim competent to the wife of the bankrupt to have a reasonable provision made out of the estate for her maintenance—holding that the decree of reduction in 1862 must be taken as fixing the nature of the right acquired by Mrs Turner as one of the heirs-portioners of Agnes Hamilton, and that right was declared to be one of succession to a party who had died intestate prior to the date of the bankrupt's discharge.

The respondent reclaimed.

Solicitor-General (Millar), and Fraser for reclaimers.

Moncreiff, D.-F., and Pattison for respondent.

At advising—

Judgment:

Lord President—The petition in this case is presented under the 103d section of the Bankruptcy Act 1856, and it falls on the trustee to make out that the estate which he desires to have made over to him for division among the creditors is estate which, after the date of the sequestration, and before the date of the discharge, has been acquired by the bankrupt, or has descended or reverted or come to him. Now the estate in question reverted to the bankrupt through his wife, but, of course, if his jus mariti is not excluded, it would carry the estate to him in the same way as if coming to himself. All that is perfectly plain. But the question is, whether this event—I mean the coming of this estate to the wife, and through her to the husband, occurred before or after the date of the bankrupt's discharge?

Now the first fact in this case is certainly this, that the estate or share of estate which has been acquired by Mrs Turner did not come into her possession until at least 1866. It had been previously in the hands of a judicial factor. The next question is, under what authority did he pay over that estate to Mrs Turner? Can there be any doubt of the answer? It was under authority of an Act of Parliament. It follows pretty clearly that Mrs Turner's title to that estate is the Act of Parliament and nothing else. And the more one examines the proceedings antecedent to this Act of Parliament, and the reasons for it being passed, the more clear it is that her title is this Act of Parliament and nothing else. There was an agreement on which the Act was founded, but it must be observed that that was worth nothing without the Act, for not only had they no power to make that arrangement without the Act, but the agreement itself in its eighth head stipulates that “failing such Act being obtained, it is hereby agreed and declared that this agreement shall fall and expire, and the whole rights and pleas of both parties shall revive in the same way as if these presents had not been entered into, and neither party shall be entitled to found on this agreement, or on any statements therein, or what may follow thereon, in any way or to any effect whatever.” Now the agreement itself was really a compromise of a depending litigation. It is vain to say that there was any final judgment. If there had been there would have been no room for compromise. But it was just because the whole matter was open in the suspension and in the multiplepoinding raised for the distribution of Agnes Hamilton's estate, that the parties were in a position to make this compromise. The settlement of Agnes Hamilton had been challenged on two grounds—(1) failure of the trustees

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appointed to execute the purposes of the will; and (2) uncertainty as to the objects of the testator's bounty. All I shall say at present as to these grounds of reduction is, that prima facie they appear to me to be insufficient, and that in all probability the reduction would not have been brought to a successful issue. But be that as it may, certainly the reduction was never finally determined. In these circumstances, it appears to me that no party had any existing title to Agnes Hamilton's estate when this agreement was entered into, and no one could obtain anything under it until it was fortified by Act of Parliament. All who take her estate take it under this Act of Parliament, and have no other title. Therefore the date at which this estate came to Mrs Turner, and vested in her husband, is 1866, and that being after the date of the bankrupt's discharge, this petition falls to be refused.

Lord Deas—The way in which this property stood originally was, that Mrs Turner was excluded by a formal probative deed. That deed was challenged in a reduction, and decree was pronounced, but that decree was brought under review, and when matters were in that position, before any final decree of reduction, this agreement was made. But it could have no effect without an Act of Parliament. An Act was obtained confirming the agreement. Apart from that it has never been decided that that formal deed should be set aside, and in so far as it is set aside it is by Act of Parliament, and, of course, only from the year 1866. Now, what the trustee says is, that before the bankrupt's discharge this right had come to the bankrupt's wife. That discharge was in 1863. Can we hold that this right had come to her before that? We may hold speculative views as to the greater or less probability of having that deed set aside. But it never was set aside, it was superseded by an agreement. I am clearly of opinion that the date when this property must be held to have come to Mrs Turner was the date of the Act of Parliament.

Lord Ardmillan—I have no doubt in this case. These heirs of Agnes Hamilton had no right to her estate, standing the deed. They had a right to sue a reduction of the deed; but a right to sue a reduction of a settlement is no right to the property conveyed by the settlement, until they succeed in the reduction. A decree of reduction was obtained; but it appears to me to have been to some extent a decree in absence, and it was re-opened, and the whole matters were in suspense. I think the true position of the case is, that the proceedings in the reduction stood suspended, and it was agreed that on the passing of the Act there should be a certain distribution of the estate. I have no doubt that the date when the property came to Mrs Turner was the date of the Act of Parliament.

Interlocutor recalled, and petition dismissed.

Counsel:

Agent for Trustee— R. Pasley Stevenson, S.S.C.

Agent for Respondents— J. F. Wilkie, S.S.C.
1869