Scottish Court of Session Decisions

The summons in this suit, at the instance of the nearest of kin and heirs-at-law of the late Dr Francis M'Cowan, against two of the legatees under his settlement, concluded for reduction of an agreement made between the pursuers and defenders under the following circumstances, as stated by the pursuers. Dr M'Cowan died on 6th October 1872 at Edinburgh. He executed a trust-disposition and settlement on 25th March 1870, and a codicil, dated 30th March 1871. Under these deeds the pursuers were entitled to the residue of the testator's estate, amounting to about £9000. To one of the defenders the testator left a legacy of £400, and to the other a legacy of £600. The pursuers, who were residing in England at the time of the testator's death, stated that they were not at the funeral of Dr M'Cowan; the notice sent to them not having reached them until the day on which the funeral took place. The defenders were present. After the funeral Dr M'Cowan's settlement was read in the presence of the defenders. The defenders, immediately after they became aware that they were only to receive the above legacies of £400 and £600, and that the pursuers would each be entitled to several thousands, formed a fraudulent scheme for the purpose of defrauding and circumventing the pursuers, and inducing them to forego their rights under the will, and to divide the estate equally with the defenders, so that, instead of the defenders getting only £400 and £600 respectively, each of them should carry off £2500 or thereby. In pursuance of this scheme one of the defenders wrote to one of the pursuers on 10th October 1872, the day after Dr M'Cowan's funeral, a letter stating, “You and your brother are not mentioned in the Dr's will, but you have a deep interest in it,” and invited them to come down to Glasgow to him, and that he would go to Edinburgh with them. Accordingly, the said pursuer arrived in Glasgow on the morning of 15th October 1872. The other pursuer arrived there on the evening of that day. The pursuers remained at the house of one of the defenders all night, and came to Edinburgh with him next morning. Before reaching Edinburgh the said defender did not communicate to the pursuers any facts regarding Dr M'Cowan's will, or the amount of his estate, or inform them of what had been left to the defenders, or what interest the pursuers had under the will, or what were their rights as next of kin and heirs at law; and the pursuers had no knowledge whatever in regard to these matters. The only information given by him to the pursuers was that he and his brother were mentioned in the will, but that the pursuers were not. The said defender, in pursuance of the defenders' fraudulent scheme, spoke in most unfavourable terms of the trustees to the pursuers, without having, as the pursuers have since learned, any ground for doing so—saying that they were very bad men, bore a bad character, and were not to be trusted; that it would be important for all parties interested in the estate to get rid of them if possible. The said defender informed the pursuers that the other defender would meet them in Edinburgh. On arriving in Edinburgh he took them at once to York Place, to Dr M'Cowan's house, and on the way there they were met by the other defender, who returned with them to the house. They were there shown into the dining-room, where David Kerr Smith, a writer, but not practising as such, and whom the pursuers had never before seen, was standing. The defenders at once began to abuse the trustees, stating that the trustees’ object was to protract the winding-up of the estate, and to cause expense, and that unless the estate could be got out of their hands, it might be years before anything could be got out of it. The defenders did not inform the pursuers what the amount of the legacies left to the defenders was, but they represented to the pursuers that, as they were not named in the will,’ they could claim no beneficial interest in the estate; but that as they, the pursuers, were the nearest of kin, their co-operation was necessary to get the estate out of the trustee's hands. They therefore proposed that, if the pursuers would cooperate with them, they would throw their legacies into the general estate, and divide it equally with the pursuers. This they falsely and fraudulently represented would be a most beneficial arrangement for all parties, and one by which the estate could be taken out of the hands of the trustees, who were trying to hang up proceedings and fritter it away in expenses, so that no party would get any substantial benefit under it. They further proposed that the pursuers should then and there sign the following agreement:—“The parties above named and designed, being the nearest relatives of the deceased Francis da Cruz M'Cowan of 27 York Place, Edinburgh, have agreed, and do hereby agree as follows, viz.— First, The said parties have renounced, and do hereby renounce, their respective interests and claims on the estate of the said deceased in favour of one another. Second, That the said parties shall aid and assist one another to the utmost in the winding-up of the estate of the said deceased; and in order that the same be done as speedily as possible, whatever money may require to be borrowed for this purpose, each is to take his share of the responsibility. Third, That on all legal claims on the said deceased or his estate being satisfied and paid, whatever residue of the said deceaseds estate remains is to be divided in equal portions between us, the parties hereto.” The pursuers signed the said document under essential error as to the nature and effect of the trust-disposition and settlement, and as to the nature and effect of the said document, induced by the false statements of the defenders, to the effect that it would be for their interest to do so, and by the fraudulent concealment by the defenders of the true circumstances of the case. They would not have signed the said document if they had not received and believed the representations of the defenders. The pursuers executed the said agreement under essential error as to their rights as next of kin and heirs-atlaw, induced by the defenders' representations foresaid. The granting of the said document was wholly gratuitous, and the pursuers received no consideration whatever for granting the same. On the contrary, the practical result of the document, as the defenders well knew at the time, was to deprive each of the pursuers of a sum of £2000 or thereby, to which sums they would have been entitled had the said document not been signed, and to make a gift of said sum to the defenders. This the pursuers did not know, and the defenders were well aware that they did not. The representations made by the defenders to the pursuers, by which

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the pursuers were induced to join in such an agreement, was given in their, the defenders, own interest, and to defraud the pursuers, and defeat their interests under the will; and the defenders, by giving said advice and making said representations, circumvented the pursuers, and induced them to sign said document by fraud, to their enorm lesion.

The defenders stated that on the 16th October a full explanation was made to the pursuers of the effect of the settlement; that it was one of the pursuers who proposed the agreement; and that it was entered into after due consideration.

The pleas in law for the pursuers were—“(1) The said agreement ought to be reduced, in respect that the subscription of the pursuers was obtained by fraud on the part of the defenders. (2) The pursuers having signed the said deed under essential error, induced by the fraudulent representations and concealment of the defenders, it ought to be reduced. (3) The defenders having circumvented the pursuers, and induced them to sign said deed when under essential error as to the effect of the said trust-disposition and settlement, and of their rights as next of kin and heirs-at-law foresaid, the said agreement ought to be reduced. (4) The defenders having, while professing to advise the pursuers disinterestedly as to the course they should follow, fraudulently represented that it would be a benefit to the pursuers to sign the said document, and fraudulently concealed important facts relating to the succession which formed the subject of the negotiations between them and the pursuers, and the deed in question having been granted in consequence thereof, it ought to be reduced. (5) The said deed being vitiated and erased in essentialibus, not duly tested, and deficient in the solemnities required by law, it ought to be reduced. (6) The witnesses to the said deed not having had any knowledge at the time of signing who the parties thereto were, it is null and void, and ought to be reduced.”

The pleas in law for the defenders were—“(1) The averments in the condescendence are irrelevant, and insufficient in law to support the conclusions of the action, or any of them. (2) The agreement sought to be reduced being a valid and binding agreement, and no good objection or reason of reduction being averred or existing in fact, the defenders should be assoilzied, with expenses.”

The Lord Ordinary issued the following interlocutor:—

“20 th June 1873.—The Lord Ordinary, in respect it is stated by the counsel for the pursuers, that they do not desire to lead the proof allowed by interlocutor of 11th June current, or to insist in their sixth plea in law, repels the said plea: Finds the defenders entitled to the expenses incurred by them in connection with the said proof since 11th June current: Allows an account thereof to be given in, and remits the same when lodged to the auditor to tax and report; Further, sists Mr John Boyd, farmer, Gilbertfield, Cambuslang, as mandatory for the pursuers in terms of the Minute No. 10 of process: Holds the issues No. 9 of process as amended at the bar as adjusted and settled: Approves of the same as now authenticated accordingly, and appoints the same to be the issues for the trial of the cause: On the motion of both parties, appoints the said issues to be tried by a Jury within the court-room of Justiciary, upon Thursday the 10th day of July 1873, at ten o'clock forenoon, and authorises and appoints a jury to be summoned for that purpose in common form.”

The issues approved of under this interlocutor were as follows:—“It being admitted that the writing, of which No. 6 of process is an extract, was executed by the pursuers and defenders on or about the 16th day of October 1872—(1) Whether the pursuers were induced to execute the said writing by fraudulent misrepresentations or concealment made or caused to be made by the defenders, or either of them, in regard to the pursuers' rights and interests as next of kin and heirs—at-law of the late Dr Francis da Cruz M'Cowan, of No. 27 York Place, Edinburgh? (2) Whether the pursuers executed the said writing under essential error, induced by the misrepresentation or concealment of the defenders, or either of them, as to the pursuers' rights and interests as next of kin and heirs-at-law of the deceased Dr M'Cowan?”

The defenders moved the Court to vary the said issues by substituting a single issue in the following terms:—“It being admitted that the writing, of which No. 6 of process is an extract, was executed by the pursuers and defenders on or about the 16th day of October 1872:

Whether the pursuer executed the said writing under essential error, induced by the fraudulent misrepresentation of the defenders, or either of them, as to the pursuer's rights and interests as next of kin and heirs-at-law of the late Dr Francis da Cruz M'Cowan, of No. 27 York Place, Edinburgh; or in such other terms as your Lordships may think meet; or otherwise to alter and vary the said issues by deleting from both of them the words, ‘or concealment.’”

The chief objection stated was to the second issue, and it was contended for the defenders that as there was no obligation on their part to divulge the contents of the settlements, the pursuers were not entitled to an issue of mere concealment.