Scottish Court of Session Decisions

Lord Deas—I concur. Many family provisions must have been made since the case of Russell, on reliance on the decision. It was a reasonable and expedient conclusion if the law allows it, and we must hold that it does.

Lord Ardmillan concurred.

Lord Kinloch—I consider it settled that in order to the application of the Act 1695, c. 24, in that part of it which gives efficacy to the debts and deeds of an apparent heir more than three years in possession, these must be onerous, not gratuitous. The question therefore is, Whether the trust-disposition of the late William Orr is onerous or gratuitous.

By that disposition he conveyed his whole estate, including his lands of Kaim and Balmocloch to trustees, first for payment of expenses, debts, and legacies; and next for conveyance of the lands of Kaim and Balmocloch to his son William Orr Orr, burdened with payment of an annuity of £50 to his wife, now his widow, and of an annuity of £40 to his daughter Margaret Orr—payable this last till his son should attain majority, when it should be superseded by payment of a capital sum of £1000.

This deed has at first sight the aspect of a gratuitous family settlement. But attending more closely to its terms, and having regard to the authorities on this subject, and more particularly to the case of Russel v. Russel, 7th December 1852, D. 15, 192, I am of opinion that these provisions form claims of debt against the son William Orr Orr, under the Act 1695, c. 24.

The provisions are admitted in the Special Case to be reasonable provisions to be made by the granter for his wife and daughter. Being so, I am of opinion that they constituted onerous debts of the granter. It would be no answer to say that these provisions, or either of them, could not come into competition with the granter's general creditors. This happens in various cases, and yet the provisions form valid debts against the granter and his representatives. Such is the general character of post-nuptial provisions, so far at least as children are concerned.

In this view, I cannot have any doubt that if the deceased had granted personal bonds to his wife and daughter respectively for the provisions in question, these bonds would be now valid grounds of claim against his son under the Act 1695. Again, if in place of personal bonds he had granted in their favour heritable securities over his landed estate, the same result would have arisen. If the bonds had been granted not to the parties directly, but to trustees in their favour, this, I very clearly think, would have created no difference in this case.

The question, then, is, whether the case is different because the deed is a trust-deed, couched in words of present conveyance, though only, as in any event would happen, operative after his death, conveying his estate to trustees with instructions to dispone the estate to his son under the real burden of these provisions. I am of opinion that the statute still applies. If the deed had been in favour of the trustees, with instructions to them to sell the estate for payment of the provisions, or to create them burdenson the estate, I think the statute would make the deed operative against the entering heir. This would just be a trust-deed for payment of creditors, which I see no room for doubting would be good under the statute. I think the case is not varied in substance because the creditors are to be paid or secured by the deed being granted in the heir's favour, with the provisions made a real burden on the conveyance.

To this effect I think the case of Russel supplies a conclusive authority. In that case James Russel, who possessed the estate of Garbethill on apparency for more than three years, granted a trust-disposition, mortis causa, of his whole estates in favour of trustees, first for payment of debts and expenses; and secondly, for payment of £500 to each of two daughters. The question was raised after his death whether this provision formed a valid claim against his successor in the estate, who had passed him over and served to a remoter predecessor. The case was argued very fully and elaborately. The objection, in particular, was anxiously discussed, that according to the form of the deed the provision was not onerous in the meaning of the Act, but a gratuitous family arrangement. By au interlocutor of Lord Wood, affirmed by the Court, this objection was repelled, and the claim against the successor given effect to. The Lord President observed—“We must look to the substance of the thing rather than its form. If there had been no previous provisions, but only that in the trust-deed, it would, I think, without doubt have been held to be onerous. There is no prescribed form for such obligations. The trust-deed was the mere machinery by which effect was given to the provisions; and to the extent of their provisions the daughters are creditors under that deed.”

I cannot distinguish, in point of principle, between that case of Russel and the present. The terms of the deed are somewhat different. But the cases are the same in this, that the granter was settling fair and reasonable family provisions, such as the law considers onerous; and that in the words of the Lord President, “the trust-deed was the mere machinery by which effect was given to the provisions.” Had the title of the deceased been made up, there cannot be any doubt that the provisions would have constituted a good claim against his son; and I think that the effect of the statute, in the circumstances in which things are placed, is to give to the claim precisely equivalent force.

I am of opinion that the first and second questions should be answered in the affirmative. The third question becomes in that case unnecessary; and the fourth has been withdrawn.

The Court answered the first and second questions in the affirmative; found it unnecessary to answer the third; and found the first parties liable as tutors in expenses to Mrs Orr and Mrs Dickie.