Scottish Court of Session Decisions

This was a declarator of irritancy and forfeiture, brought by John Alan M'Donald, residing at Croyde House, Croyde, in the county of Devon, the second son of General Sir John M'Donald, against Colonel Alastair M'Iain M'Donald of Dalchosnie, eldest son of General M'Donald. The action concluded for declarator that the defender had forfeited his right to the whole lands contained in the deed of entail of Dalchosnie, Kinloch Rannoch, and Loch Garry executed in 1837; that the same had devolved to the pursuer; that the defender ought immediately to cede possession of the estates of Dalchosnie, Kinloch Rannoch, and Loch Garry; and that the said lands and the writs ought to be adjudged from the defender to the pursuer as at the next term of Lammas (the summons being signeted on 17th June 1876). There was also an alternative conclusion that the defender, as heir-at-law and executor, or heir-at-law or executor of and as successor to his father General M'Donald, should be ordained to free and relieve the entailed lands of—(1st) a sum of £25,000, contained in a bond and disposition in security over the said estates, granted on 13th October 1828 by General M'Donald, the entailer, in favour of Mrs Elizabeth M'Inroy and others, trustees under the trust-disposition and settlement of the deceased James M'Inroy, recorded in the Books of Council and Session 27th August 1825, and relative instrument of sasine; and (2) the sum of £9000 contained in a bond and disposition in security over the said estates, granted by the defender with the authority of the Court of Session, on 5th July 1867, in favour of the Central Bank of Scotland. By an amendment lodged in

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the Inner House, the pursuer alternatively concluded for decree that it was a condition of the defender retaining possession of the estates of Loch Garry and Kinloch Eannoch that he should relieve these estates of the debt of £25,000. In a previous litigation between the parties (ante, vol. xii. p. 635) it had been determined that the sum of £25,000 contained in the said bond and disposition in security was validly apportioned to the defender; by a joint settlement and deed of division, executed by his parents in 1837. Since the judgment of the House of Lords in that case, the defender had assigned to three separate lenders the said bond, in security of advances of £4000, £5000, and £16,000. The pursuer founded on these assignations as constituting a contravention of the fettering clauses of the entail. The said sum of £9,000 was originally due on a promissory note by General M'Donald; and on the defender's succeeding to his father he obtained the authority of the Court to charge the amount on the entailed estate. The pursuer averred that the defender, as executor, ingathered his father's moveable estates to the extent of £3528, Is. 4d; but the defender explained that this had been exhausted by payment of debt. The pursuer further averred that in 1857 General M'Donald acquired at the price of £22,500 the estate of Mount Alexander or Dunalastair, marching with the estate of Loch Garry. On this he erected a mansion-house at a cost of £20,000. The estate was then entailed on the same series of heirs as those of Dalchosnie, &c., and the defender had entered into possession of the whole estates. The pursuer maintained that this estate, entailed in 1857, was liable in relief to the estates entailed in 1837. The conclusions against the defender for relief were founded on a clause contained in the entail of 1837, whereby the entailer, in order to render the entail more effectual, bound and obliged himself and his heirs-at-law, executors and successors, to free and relieve the lands and estate before disponed, and the heirs named or to be named to succeed thereto, of and from the payment and performance of all the debts and obligations to which the entailer, for himself or as representing any of his ancestors, was then or should be liable, and of and from all claims and demands whatever, whereby the said lands and estate, or any part thereof, might be evicted. The pursuer further averred that the defender had contravened the entail by granting certain tacks of the mansion-house, and of certain portions of the entailed lands; but it clearly appeared that the prohibitions founded on were not directed against the defender.

The defender pleaded that he had not contravened the entail, and further—“(5) The defender is not bound to disburden the estates contained in the entail of 1837 of the debts in question; (1) In respect that the defender has taken no benefit by the entailer's succession, except as heir of entail under the entails of 1837 and 1860; (2) That the obligations in the entail of 1837 to relieve the estates thereby entailed of debt does not on a sound construction import an obligation to relieve the said estates at the expense of estates entailed by the entailer on the same series of heirs; (3) That the debt of £9000 was charged under the authority of the Court; (4) That the pursuer has no title or interest to insist on the debts in question being charged on the estate of Dunalastair.”

The Lord Ordinary ( Lord Shand) pronounced the following interlocutor:—

Edinburgh, 22 d November 1876.—Having considered the cause, finds that the pursuer has stated no relevant grounds in support of the conclusions of the action for declarator of forfeiture and denuding by the defender in favour of the pursuer of the estates of Dalchosnie, Loch Garry, and Kinloch Rannoch, and assoilzies the defender from these conclusions, and also from the conclusions that the pursuer shall be found entitled to be now infeft in the lands, and to delivery of the title-deeds thereof, and decerns; and with regard to the remaining conclusions of the action, Finds that it is not disputed that the free executry of the estate of the late Sir John M'Donald is liable in relief for the debts mentioned in said conclusion; and in respect the parties are not agreed as to the amount of the executry estates, appoints the defender, as executor of his late father, to lodge an account thereof within the next eight days; further, Finds that the defender is not bound to free and relieve the estates of the said debts in respect merely of his having succeeded to Dunalastair as heir of entail and provision of his late father under the deed of entail of these lands of 1860, and assoilzies the defender from the conclusions of the summons to that effect, but reserving to the pursuer to take all competent proceedings directed against the lands of Dunalastair and the heirs of entail called under the deed of 1860 to have these lands sold, in order to free and relieve the lands held under the entail of 1837 of the entailer's debts affecting the same, and meantime reserves all questions of expenses; and grants leave to the pursuer to reclaim against this interlocutor.

“ Note.—This action presents practically two questions for decision—the first, whether the defender has incurred a forfeiture of his right to the entailed estates of Dalchosnie, Loch Garry, and Kinloch Rannoch; and the second, assuming that no forfeiture has taken place, whether the defender is bound to disburden the entailed estates of certain debts of £25,000 and £9000 which now affect them.

The pursuer maintains the conclusions of forfeiture on two grounds. The first of these is, that in contravention of the entail the defender has assigned to third parties, in return for money advanced by them, his right to a bond and disposition in security for £25,000, granted by his late father over the estates in favour of marriage-contract trustees, and which has been the subject of much discussion in two previous litigations between the parties. It is maintained on record that forfeiture of the estates also resulted from certain leases which the pursuer granted, but this point was given up in the argument, and the assignation to various creditors of the £25,000 security is now the sole ground on which the alleged forfeiture is maintained. I have no difficulty in holding that the defender is entitled to succeed on this part of the case.

It cannot be disputed that the debts of the entailer, the late Sir John M'Donald, the father of the pursuer and defender, form a proper charge against the entailed estates, and may lawfully be made burdens upon the estates by bonds and dispositions in security in ordinary form. The entailer at his death was indebted to the Central Bank of Scotland the sum of £9,000, and assuming

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that there was no executry or other estate to meet this debt, the pursuer does not dispute the right and obligation of the defender to grant the bond and disposition which he executed in security of this debt affecting the entailed estates. The conclusion for forfeiture is not based to any extent on the fact that the defender granted this heritable security. It cannot be disputed that the defender was entitled to charge the estates with entailer's debts, which could not be provided for out of his general estate.

The decision of the case, as regards the alleged forfeiture, thus depends on the question, whether the £25,000 security was an entailer's debt, and, if so, whether there be any obligation on the defender in the deed of entail to discharge the debt, or any provision which precludes him from assigning the debt to other creditors.

There is no doubt that the debt was due by the entailer. It was not only due, but the entailer himself, on 13th October 1828, nine years before he executed the entail, which is dated 18th July 1837, granted a bond and disposition in security for the amount in favour of his marriage-contract trustees, from whom he borrowed the money, which was part of his wife's fortune settled by the marriage-contract. By this deed the entailer acknowledged the debt, and granted a disposition in security over the lands, containing a power of sale in common form.

The defender acquired right to this entailer's debt by assignation in his favour granted by the marriage-contract trustees, in terms of a direction to that effect contained in the mutual general settlement and deed of division by his father and mother, executed on the same day as the entail, viz., on 18th July 1837. It is clear that in ordinary circumstances an institute or heir of entail acquiring right to an entailer's debt, and to a security over the estate granted by the entailer, held by a creditor, is under no obligation either to pay the debt or to refrain from assigning it to third parties. If an institute or heir of entail purchase a debt, he is in no different position from any other creditor, except that he cannot charge succeeding heirs with the interest becoming due year by year during his possession. It was at one time contended that the debt became extinguished confusione, but a series of decisions settled that this was not so; that the estate was practically the debtor, and the heir of entail, as an individual, the creditor (Bells Principles, 6th edition, sections 1728 and 1743; Welsh v. Barstow, 11th February 1837, 15 S., 537, and authorities there cited.

It makes no difference in the case that the defender acquired right to the security for £25,000 by succession, or by virtue of the provisions of the marriage-contract of his parents, and relative deed of division. So far as the deed of entail is concerned, all entailer's debts are in the same position. They are properly chargeable against the estates, whoever may become the creditor, and whether the creditor's title has been derived by purchase or succession. An entail might no doubt provide that an institute, or any succeeding heir, by accepting the estates should be bound personally to pay off the entailer's debts, but there is nothing of the kind in this entail, which contains only prohibitory clauses to the usual effect, that is prohibiting alienation of the estate or the contraction of debt by the succeeding heirs; and I think, therefore, there is no room for the pursuer's contention on this subject.

The declarator of forfeiture is founded entirely on the provision of the deed of entail; but even if the provisions contained in the deed of settlement and division can be imported into this question it would make no difference, for it has been settled beyond question by the decision of the House of Lords in the former litigation between the parties (Law Reports, Scotch App. vol. ii. p. 482) that the deed imposed no obligation on the defender to discharge the debt, or to refrain from enforcing it. It was there held that he was entitled to a conveyance of the security in favour of himself, and that the expressions in the deed of settlement, which the present pursuer pleaded as creating an obligation on him to allow the debt to be discharged, were either an expression of a wish merely, which was of no legal effect, or an attempt to adject a condition which was void. The result is, that this provision of £25,000 is in no different position from any other entailer's debt; and that being so, there is no reason for saying that the defender is under restriction as to his power of assigning it, any more than another creditor would be.

The alternative conclusion of the summons is founded on the clause contained in the deed of entail of 1837, by which the entailer bound and obliged himself, and his heirs-at-law, executors, and successors whomsoever, to free and relieve the entailed lands, and the heirs to succeed thereto, ‘of and from the payment and performance of all the debts and obligements to which I, the said John M'Donald, for myself, or as representing all my ancestors, are or shall be liable, and of and from all claims and demands whatever, whereby the said lands and estate, or any part thereof, may be evicted.’ This clause in express and stringent terms binds the entailer and his heirs, executors, and successors, to relieve the entailed estate of all his (the entailer's) debts.

The pursuer alleges that the defender succeeded to free executry estate; and he claims that this estate shall be applied, so far as it will go, in extinguishing the debts for £25,000 and £9000 which now affect the lands. The defender does not dispute that if there had been free executry estate he would be bound so to apply it. He explains, however, that there was no free executry. Inquiry into this matter of fact is therefore necessary, and the defender has been appointed to lodge an account of the executry, to which the pursuer will have an opportunity of objecting.

But the pursuer further maintains that the defender is bound to relieve the entailed estate of the entailer's debts, because the defender succeeded as heir of entail to the estate of Mount Alexander, now called Dunalastair, on the death of his father in 1866. This estate was purchased by Sir John M'Donald in 1853, at the price of £22,500; and the pursuer explains that after the purchase his father expended about £20,000 in the building of a mansion-house and on the policies, and that the debt of £9000 to the Central Bank was incurred in consequence of this expenditure. The estate of Dunalastair adjoins the lands and estate contained in the deed of entail of 1837; and the pursuer explains that it was his father's intention that the house built by him should be the mansion-house for all the estates. The entail

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of this estate is in favour of the same series of heirs as are called by the deed of 1837. It is dated and registered in the Register of Taillies in July 1860, and was conceived in favour of the entailer himself, and to the heirs thereinafter called, of whom the defender and the heirs-male of his body are the first; but the deed contained a reserved power of revocation which might be exercised at any time during the entailer's life.

It appears to me to be beyond question that, however desirable it may be for the whole series of heirs that Dunalastair and the other estates should continue in time coming to be practically one entailed estate, yet, if the pursuer should insist on it, he is entitled to have the estate of Dunalastair sold, in order that the price should go towards the extinction of the entailer's debts affecting the estates contained in the entail of 1837. Dunalastair must be regarded as having been within the power of Sir John M'Donald on the day of his death. He might have disposed of it as fee-simple estate by revoking the entail. It follows that Dunalastair in the same way as the executry was liable for Sir John M'Donald's debts and obligations, and one of these was the obligation, contained in the deed of 1837, to free the lands thereby entailed of all the entailer's debts.

In a proper action to that effect, therefore, I think the pursuer, as a near heir of entail, would succeed in having Dunalastair sold to meet the debts affecting the other estates. I am, however, of opinion that the present action is not one in which a decree to that effect could be given. The pursuer concludes that the defender, as successor to his father in the lands of Dunalastair, should be decerned to pay the debts which affected the other estates. But Dunalastair is not fee-simple property in the person of the defender. It is entailed, and has been held by the defender as an entailed estate for the last ten years. The defender is not personally liable to disburden the lands held under the entail of 1837 merely because he has taken the other estates as heir of entail under the fetters of the deed of 1860, which is the view presented by the conclusions of the summons and the pursuer's third plea-in-law in support of them. The obligation by the late Sir John M'Donald, binding his ‘successors whomsoever,’ will no doubt give relief against the lands, but cannot be construed as imposing personal responsibility for the debts on each individual who obtains the limited rights of an heir of entail in possession.

It has been maintained, however, that at least the defender is bound to take the initiative by a petition to the Court, or by an ordinary action, to obtain authority to sell the estate of Dunalastair, and that a decree to that effect should be pronounced in this action. With every desire to avoid the necessity of other legal proceedings between the parties, I do not think that even to this extent the pursuer can succeed in this particular case. There is no conclusion to the effect now suggested. The only conclusion on the subject, and relative plea, are based on the view that the defender has become personally liable to pay the debts because he has succeeded to Dunalastair, and it is clear that his limited interest in Dunalastair imposes no such liability. There is no conclusion to have the defender ordained to take proceedings to bring Dunalastair to a sale in any action for that object. It appears to me it would be necessary, in an action with such conclusions, to call the other parties having interest in Dunalastair under the entail of 1860.

It was assumed that the defender could proceed to have Dunalastair sold to meet the entailer's debts by a petition to the Court under the Entail Statutes; but even if the present action were not open to the objection that it is without any conclusion either in form or in substance to that effect, it appears to me that the provisions of the Entail Statutes are not such as could be made available for the sale of the estates. The Rosebury Act, 6 and 7 Will. IV., chap. 42. throughout its provisions contemplates and provides for the case of the sale of a part of the entailed lands only to meet debts affecting the whole, and not the case of a sale of the whole estate to meet the entailer's personal obligations otherwise. The Rutherfurd Act limits the power of sale to entailed lands other than the mansion-house and offices, and this power would be of no use in the present case, where the mansion-house also must be sold. It seems to me that if the pursuer or any of the heirs of entail desire to have the lands of Dunalastair sold in respect of the obligation contained in the deed of 1837, the proper course of proceeding is by action of declarator (probably having conclusions for reduction of the entail of 1860 as a deed ultra vires of the granter) to have it found that the estate was liable in relief of the debts which might affect the lands in the entail of 1837, and to have the estate of Dunalastair sold at the sight of the Court. The defender does not desire that this should be done, and for obvious reasons does not propose to raise such an action. The pursuer appears to have the same title to enforce the obligation as the defender has. It therefore appears to me that the pursuer's remedy is by an action of the kind indicated, with conclusions directed against the lands, and in which all parties interested should be called; and at all events I do not think the pursuer is entitled to succeed in the conclusions in this action for decree against the defender requiring him to pay the debts in question.”

The pursuer reclaimed.

At advising—