Scottish Court of Session Decisions

This case has been reported in a previous stage, of date May 24, 1878, vol. xv. p. 571, 5 R. 820. The action was at the instance of Charles William Gray, and was brought against the trustees under the trust-disposition and settlement of his mother Mrs Carsina Gray, heiress of the estate of Carse Gray, in Forfarshire, viz., Mr Graham Binny, W.S., and Mr James Webster, S.S.C. It concluded for reduction (1) of a deed of consent to the disentail of the estate of Carse Gray, granted by the trustees on 18th August 1875; and (2) of a trust-disposition and settlement by Mrs Gray, which, inter alia, conveyed the disentailed lands to her trustees. Mr Binny was now the sole surviving trustee.

The other circumstances of the case will be found in the previous report, vol. xv. p. 571. The Lord Ordinary then held that a plea stated by the defenders to the effect that the destination in the original entail had been evacuated by the trust-disposition fell to be given effect to, and to that extent the Lord Ordinary had assoilzied the defenders. The Court had affirmed that judgment, and the case was then remitted to the Lord Ordinary for further procedure and the disposal of the remaining pleas-in-law. These were, for the pursuer—“(1) The pursuer having been induced to execute the said deed of consent by fraudulent misrepresentations and concealment, and separatim, having executed it under essential error caused as aforesaid, the said deed and all that has followed thereon ought to be reduced. (2) The said deed ought to be reduced in respect that the transaction which it embodied was exorbitant and unconscionable, and separatim, it was a catching bargain with an expectant heir. (3) The said deed ought to be reduced in respect that it was impetrated and obtained by parental influence unduly used by the pursuer's mother for her own benefit and to the pursuer's lesion.”

The defenders pleaded—“(2) The pursuer cannot insist in the action in respect that he has homologated the said deed of consent. (3) The action cannot be maintained in respect the arrangement, of which the deed of consent was a part, has been carried into effect, and matters cannot be restored to the position in which they were prior to the granting of the said deed. (3) The averments of the pursuer are not relevant to support the conclusions of the summons or any of them. (7) The averments of the pursuer being unfounded in fact, the defenders are entitled to absolvitor.”

A proof was led, the general result of which, including the whole material facts of the case, are fully stated in the Lord Ordinary's judgment and in the opinion of the Lord President.

On 16th April 1879 the Lord Ordinary ( Young) pronounced an interlocutor repelling the defences, sustaining the reasons of reduction in so far as not already disposed of by previous interlocutors, and reducing, decerning, and declaring in terms of the conclusions of the summons.

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The following judgment was annexed:—

“On 18th August 1875 the pursuer executed a deed of consent to the disentail of the estate of Carse, of which his mother was then in possession, he being the heir next in succession. He now asks reduction of that deed, and of the disentail that followed on it. The reasons of reduction are—1st, Misrepresentation and undue concealment; 2d, Abuse of the confidence which he reposed in his mother, and unconscionable advantage taken to his prejudice and her gain of the influence and dominion which she had over him.

The material facts are these:—The pursuer was born 28th October 1851, and was the eldest son and heir of Mrs Gray, the heiress in possession of Carse, an estate worth about £4000 a-year net rental. His father died in 1861, and in 1865 his mother married Captain Hunter, her deceased husband's brother, by whom she had several children. In 1869 the pursuer, then eighteen years of age, entered the army, and having no regular allowance made to him by his mother between that time and 1875, contracted improvident debts to money-lenders to the amount of about £2000. It is alleged on record that all regular allowance was withheld from the pursuer by his mother and Captain Hunter, with the object and intention of involving him in pecuniary difficulties and getting him into their power, and forcing him to consent to a disentail.’ I decline to attribute this or any other base motive, and only take notice of the fact that the pursuer had no such regular allowance as his parent might, from prudential as well as affectionate considerations, have been expected to afford to him, and observe that it to some extent palliates as well as accounts for his conduct in resorting to money-lenders. His transgressions in this way were not in a great scale, although sufficient to involve him in debts which he could not pay, and so to increase his dependence on his mother, and consequently her power over him.

It seems to be the fact, although it is not specially accounted for, that Mrs Gray was unable to live within her income, and incurred considerable debt, including one of about £8000, to her solicitor Mr Binny. The fact is not, as far as I can see, accounted for to any extent by the extravagance of her eldest son, or any undue liberality to him, although it was frequently represented to him as a reason for compassionating the position of his mother and uncle and their family, and keeping to the resolution in which he had been brought up of consenting to a disentail when he was of age to do so. I refer to the correspondence and to the following passage in the pursuer's evidence:—‘(Q) Before you went into the army had your mother spoken to you about agreeing to disentail the estate?—(A) Yes, it was a foregone conclusion that when I was of age to cut off the entail it was to be done. (Q) How had the conclusion been arrived at?—(A) It seemed to be a matter of course that I would help her to cut off the entail and make up her pecuniary position. That subject was not often talked about between us, but every now and then. Neither she nor anyone else explained to me what I would be entitled to for consenting. She spoke to me on the subject once or twice after I joined the army.’ And again—‘It had sometimes been talked about to sell parts of the estate, but the whole thing was very indefinite. I got a letter from Mr Binny, dated in August 1875, asking me to come to Edinburgh. So soon as I got leave I came, and arrived in Edinburgh on Monday 16th August late at night. After breakfast next morning I went down to Hart Street to Mr Binny's house, and met Mr Binny and my mother there. I cannot remember anything exactly that was said; but they talked about the disentailing and about my having to sign the disentail. It was a foregone conclusion that I should sign the disentail.’

‘ By the Court.—(Q) Do you mean that you had agreed to it before?—(A) No; I had not exactly agreed. It was understood I should sign it; I had never made objection to signing it.

Examination continued.—(Q) Was it in consequence of what your mother said that you expressed your willingness to sign it?—(A) Yes.

By the Court.—It was because she wanted it; it was done to please her.’

Prior to the Entail Act of 1875 the pursuer could not validly have consented to a disentail till he was twenty-five years of age. By that Act he was enabled, being in his twenty-fourth year, to consent at once, and certainly no time was lost in calling upon him to fulfil the ‘foregone conclusion.’ That his own legitimate interests in the matter were of considerable magnitude, and that it would be unreasonable to ask him to sacrifice them absolutely, unconditionally, and at the same time gratuitously, must, one would think, have occurred to Mrs Gray as well as her solicitor Mr Binny. That this occurred to Mr Binny appears from his letters, although I regret to say that I find no expressions in them signifying that he took a right view of his duty as a family solicitor advising a mother regarding a delicate transaction with her son. In his letter to his client of 20th July 1875 he says—‘One point alone is to be thought of at present, and even that must be deferred for a fortnight, by which time we will know for certain whether the Bill passes the House of Lords. The point which will then arise for consideration is the price at which the Borderer will be asked to give his consent. He must be gently handled on the subject, for without his consent nothing can be done; and after I have obtained your views I am not sure but it would be the best course for me to send for him to come across for a day to discuss the matter with him outwith your presence.’ Again, in his letter of 24th July he says—‘The keeping of the Borderer (the pursuer) sweet, and up to what he promised, is all that in the meantime requires attention.’ In the same spirit he writes on 5th August—‘I suppose you have had no further correspondence with the Borderer on the subject? He wrote me once that he was quite willing to give his consent; but then he was without the power. It ought not to be different now; but still it may be, for his necessities may be greater than they were. It is a matter of the greatest moment to you, and one which will require some adroitness in the management. I wish I had an opportunity of explaining my views and receiving yours.’ So, also, on 6th August he writes—‘And I am so glad to hear that the Borderer continues sweet. I will write him an official letter, such as he can produce in his application for leave. The question is, when could you most conveniently take a run down? for I would like to arrange so as to see

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you first. Parliament is expected to rise on the 13th, and very possibly the Act will not be dated sooner. The 16th is Monday—could you come then, or when after? so as to give time for my writing to Charles, whose address please give. I would ask him to come the day after. To have the consent in black and white is of great moment, as the disentailing process, of which that is only the first step, is a tedious affair rather, in which no progress whatever can be made until the consent is signed.’ Lastly, on 9th August 1875 he writes to his client thus—‘I am perfectly alive to the difficulty of the card you have to play in Charles’ case; at the same time you must not forget how much you are at his mercy. Provision for payment of his debts (if at all within the mark) will be a point to be conceded. How much beyond (if anything), and in what shape, are the great questions for consideration at the proposed meeting. My expectation is that he will come to the meeting with high hopes. Of course I'll do my utmost to keep him down. It is vain for us to make any attempts at defining terms until we see how the wind blows. The cardinal point is to get the consent at the cheapest possible price, and it won't do to be very higgling about terms, for an actuary would probably annex a larger figure to the Borderer's expectations than he himself would think of. The terms of the consent being fixed, other arrangements must be comparatively easy, because they will then be entirely in your own hands. At present it is useless to speculate on the subject. If our meeting ends satisfactorily I will then cheerfully explain my views.’

If Mr Binny wrote these letters to Mrs Gray as her solicitor, aiding her to act adversely to her son as to a stranger with whom she had business to transact, and without any reference to his interests, which he was left to protect for himself as he best might, I should not condemn them. But was that his position? Or was it the position which he intended the pursuer to understand, and believed that he did understand, that he occupied? I think very clearly not. It is, in my opinion, the result of the whole correspondence and of the whole evidence that the pursuer was invited to place confidence in his mother and in Mr Binny as persons attached to him and his proper interests, who knew the subject in hand much better than he did, and would require of him nothing which it was not right that he should do, and which it would not be unbecoming on his part to refuse. That the pursuer responded to this invitation I have no doubt, and that Mrs Gray and Mr Binny both knew that he reposed confidence in them accordingly I regard as proved, and proceed upon as a fact in the case. If both or either meant to decline the confidence, and to put the pursuer to protect his own interests, and that as against them acting adversely towards him, they were bound to inform him, and this neither of them did. I think they concurred in inviting and encouraging the pursuer's confidence, and succeeded in winning and maintaining it to the end. That they abused this confidence is another proposition, but that it was given to their knowledge and not repudiated by them I must hold to be established.

The pursuer was called suddenly from Ireland, where he was stationed with his regiment, and arrived in Edinburgh on 16th August. He was certainly aware of the nature of the business, and knew that it was serious, although I think his knowledge was general and vague. It occurred to him that he ought to have independent legal advice, and he made the suggestion timidly to his mother. ‘I said I thought, strictly speaking, I ought to have a legal adviser of my own, and my mother said that if I did not trust in her—and left the rest to be imagined. I imagined that it vexed her, and I did not press it. That was said going up Albany Street to meet Mr Binny. It was never suggested to me by anyone that I should have a separate agent or advice in connection with this matter.’ This most reasonable thought of his was thus stifled by his mother's influence, and without further resistance he yielded to her and Mr Binny by gratuitously and unconditionally renouncing his birthright and inheritance. When he signed the deed, which was all ready for his signature, he said to Mr Binny—‘I suppose this is all right.’ He said, ‘Of course it is; you are your mother's boy.’ He thus, without any consideration or condition for the protection of his interest to any extent renounced his assured succession to an estate of £4000 a-year, which was of the present market value to him of £41,000. His mother and Mr Binny seem to have concurred in thinking that he ought to have something for this sacrifice which he had made ‘without any stipulation,’ and in anticipation of their success in inducing him to make it had framed the letter of 18th August, whereby his mother agreed—1st, to make him an allowance of £200 a-year; 2d, to repay a Miss Child and Mr Binny £594, 17s. 4d. which they had advanced to pay his debts; 3d, to pay him a further sum of £1500 to meet his unpaid debts; and 4th, to leave him a legacy of £4000. This letter was handed to the pursuer after he had executed the deed of consent. It bears to be quite gratuitous, and although it may therefore be doubtful whether it ought to be taken account of in estimating the character of the transaction, I am not indisposed to consider the case on the footing that for the considerations promised in it the pursuer was persuaded to consent to the disentail. Mr Jamieson says that the present value in 1875 of these considerations was £6277, 17s. 3 1 2d. With respect to the allowance of £200 a-year, it will probably occur to most people that this was a moderate allowance to an eldest son in the army being heir to an estate of £4000 a year, irrespective of the purchase of his consent to a disentail, and with respect to the payment of his debts, extending over a period of seven years, during which he had no allowance, I am unable to think that £2094 was a great sum considering the terms on which he was obliged to borrow. The legacy of £4000 instead of an estate of that annual rental was a mockery, and except this the pursuer had indeed nothing beyond what any eldest son in the army and with his prospects might reasonably have expected even from a parsimonious parent without thought of purchasing a renunciation of his legal right of succession.

I must therefore say that in my opinion the pursuer was hardly and unconscionably dealt with, and in a manner that would not have been proposed or thought of had his legitimate interests been protected by a sensible and honourable man of

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business. It was proper and becoming that he should aid his mother so far as necessary to enable her to pay off Mr Binny and any other creditors that were pressing her, and also, I shall assume, to enable her to make a suitable provision for her children by Captain Hunter, of whose illegitimacy he was properly indisposed to take any advantage, but beyond this I think there was no just claim upon his filial piety. A disentail to such extent as might be necessary to effect these purposes by selling or borrowing, while the succession to the residue of the estate was secured to him, would have been a simple matter, and is, I think, what a man of business charged with the pursuer's interest would have recommended. I suggested for the consideration of the parties whether what was, I think unfortunately and improperly done might not by arrangement and consent be reformed so as to effect only what good sense and right feeling dictated, and which would probably or certainly have been done had an honourable and experienced man of business been charged with the pursuer's interests. The parties took a long time to consider the suggestion, but came in the result to the conclusion that the interests of minors being involved they could not act upon it.

I have thus to consider the case as it stands, and my opinion is that the transaction ought not to be upheld.

There is some evidence of misrepresentation. Thus the pursuer says that when he said to his mother on one occasion that perhaps he would not consent to cut off the entail, ‘she said in that case she would burden the estate, so that it would not be of any good to me, and leave farms to each of my brothers and sisters.’ But I attach little weight to this otherwise than as bearing on the fact, which I think clear, that the pursuer never exactly realised his position as having an indefeasible right of succession, or the magnitude of the sacrifice which he made by executing the deed of consent to disentail. I think it is proved that he did not; but I venture to say, that looking to the whole circumstances of the transaction it is sufficient that there is no reasonable ground of assurance that he did. The transaction is on the face of it so inequitable and unjust as to suggest unfair advantage taken of simplicity and ignorance. On the one side there was age and experience, assisted by a solicitor who had himself, as it happened, a personal interest to serve. On the other there was youth and inexperience and ignorance of business. On the one side there was the dominion of a mother's not illegitimate influence over her son and the confidence commanded by a family solicitor. On the other there was the son subject to the influence and reposing the confidence. It was so obviously the duty of Mrs Gray and her solicitor to see that the pursuer had the protection of independent legal advice in transacting business of such serious importance to him, that I find it impossible to account for their neglect of it if they meant to deal fairly by him. Instead of this, Mr Binny suggests that ‘he must be gently handled on the subject’—that he must be ‘kept sweet, and up to what he promised’—that the matter is one ‘which will require some adroitness in the management’—that ‘the cardinal point is to get the consent at the cheapest possible price, and it wont do to be very higgling about terms, for an actuary would probably annex a larger figure to the Borderer's expectations than he himself would think of.’ These expressions show that Mr Binny at least had no thought, and did not imagine, that his client to whom he wrote so frankly had any thought of dealing fairly by the pursuer. The object of both was to win his confidence—to prevent him from resorting to any other for enlightenment and advice—and then to take an unfair and unconscionable advantage of him. This, in my judgment, is what they did, and I am accordingly of opinion that the pursuer is entitled to the relief which he asks.

What I have said explains, I hope sufficiently, my view of the law applicable to the case. It belongs to a class of which our practice affords few examples, and which is much more extensively and variously illustrated by English decisions. I was favoured by counsel with a copious reference to Chancery cases and the dicta of Equity Judges, and also to, I believe, all the Scotch cases in this department of the law. Our own decisions were familiar to me, and I was not ignorant of the leading Chancery cases—cited in Tudor's Leading Cases under Huguenin v. Baseley, 2 Tudor's Leading Cases in Equity, 547.

I have considered all the authorities to which I was referred, and the decision at which I have arrived is, I believe, according to the principle which pervades them, applied to the facts with which I have to deal. The principle is that where a relation subsists which imports influence, together with confidence reposed, on the one side, and subjection to the influence and the giving of the confidence on the other, the Court will examine into the circumstances of any ‘transaction of bounty’ (to use Sir S. Romilly's expression) between parties so related, whereby the stronger party (using the term for brevity) greatly benefits at the cost of the weaker, and will give relief if it appears to have been the result of influence abused or confidence betrayed. I do not represent this as a complete and exhaustive statement of the principle, which is very general and applicable to an infinite variety of cases, and only submit it as sufficient for the case I am now dealing with. That a person sui juris may be as liberal as he pleases and to whom he pleases is a truism, and assuredly no bounty is more natural or commendable than that of a son to his mother. The facts of particular cases are nevertheless to be considered, and when it appears that the bountiful party has not been fairly dealt by, relief may, at least in many cases, be given. What shall be accounted unfair dealing towards a party from whom a benefit is taken may be a question of more or less difficulty, and there are, no doubt, cases in which the Court will decline to interfere on any ground short of fraud of a character which would taint any ordinary transaction. It is here that the doctrine of the cases applicable to relations importing influence and confidence reposed on the one side, and subjection to that influence and the giving of that confidence on the other, is of practical importance. The doctrine limits a class of cases which the Court may investigate and decide by rules which, while importing no interference with liberty, are promotive of justice and public utility. That a party has obtained from a dependent what appears prima facie to be an undue advantage, is not, in general (subject to some exceptions), conclusive,

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for the dependent, in the full knowledge of what he was doing, may have meant to give it him. In such a case a Court will only suspect some abuse of influence and confidence, and therefore investigate the circumstances of the transaction. One very general rule of the Court (I do not put it more strongly) is that in a transaction such as is generally accomplished with professional assistance, the party from whom any considerable benefit is taken by one standing to him in a relation of influence and confidence ought to have the protection of independent professional advice, and that there is a presumption (which it will be at least hard to overcome) of unfair dealing if he had not. The present case, in the view I take of it, is a peculiarly strong one for the application of this rule. There was not only professional advice and assistance on the one side and none on the other, but the case is, so far as I know, unique in this respect, that the family solicitor, in whose integrity and justice every member of it naturally confided, aided the mother to strip her son of his inheritance—conspiring with her beforehand to manage the son dexterously to that end, and carrying through the transaction on terms which must be pronounced unconscionable in the knowledge that the son was confiding in him as a friend who would not permit him to be wronged. I have already said that I find no ground for a reasonable assurance that the pursuer knew the absolute and indefeasible nature of the right he was renouncing, and my belief is that he did not. It is reasonably certain that he was not made aware of the whole state of the case, and in particular was not informed that there was any alternative between refusing to afford any reasonable and efficient aid to his mother and signing away his inheritance altogether. He was thus kept ignorant of the very first and most important fact which a man of business charged with his interest would have represented to him, and of the course certainly open to him, and the most obviously proper for him to adopt.”

The defender reclaimed, and argued.—1. On the evidence the pursuer had acted of his own will, and the transaction must stand. He was not of an age to be “unduly influenced” at will, and admitting that the result was to his prejudice, he consented, not with a view to pecuniary advantage, but from filial affection. He knew that his rights were valuable, and that they were indefeasible, and further that Mr Binny was a family creditor, and so not merely an impartial friend. Even if he had had the fullest knowledge of his position and the advantage of independent legal advice, he would have acted as he did. No complaint of any kind was made by him till after his mother's death. 2. The pursuer's case in order to succeed must be brought up to one of fraud or circumvention, such as might have been tried before a jury under an issue of fraudulent misrepresentation or concealment, or of facility or circumvention. “Undue influences” or “dexterous management” had never been recognised, in Scotch law at least, as a ground of reduction. No case of “fraud” had here been made out, and the transaction therefore could not be reduced.

The pursuer (respondent) replied—1. On the evidence the scheme for disentail had originated in Mr Binny's desire to secure payment of his debt, and the pursuer had been purposely brought up by his mother and Mr Binny to the idea of disentailing. He had been induced to enter into the transaction without the advantage of independent advice and assistance, and without full and adequate knowledge of his position and circumstances. Undue influence had been brought to bear—he had not acted as a free agent, and this was enough to prevent the transaction from standing. 2. In law it was unnecessary to bring the facts up to a case of “fraud.” Abuse of influence in any of the confidental relations of life ( e.g., parent and child, agent and client, priest and parishioner or penitent), where one of the parties had a natural ascendancy over the other, though subtler and less coarse than fraud, had been held to be equally a ground of reduction in many English and some Scotch cases. No fixed criterion or definite standard was necessary—the circumstances in each case afforded the measure for reduction. The transaction here having been manifestly to the pursuer's prejudice, the onus lay on the defender (reclaimer) to show that the pursuer had acted with full knowledge and perfect freedom, and that the bargain was not unconscionably exorbitant, and this they had failed to show.

Authoritiescited— Agent and Client— Hughenin v. Baseley, 1807, 2 White and Tudor (Eq.) 547; Gibson v. Jeyes, 1801, 6 Ves. 266; Harris v. Robertson, Feb. 16, 1864, 2 Macph. 664; Grieve v. Cunningham and Others, Dec. 17, 1869, 8 Macph. 317; Anstruther v. Wilkie, Jan. 31, 1856, 18 D. 405; M'Pherson's Trustees v. Watt, Mar. 2, 1877, 4 R. 601—Dec. 3, 1877, 5 R. (H. of L.) 9. Parent and Child— Grahame v. Ewen's Trustees, Feb. 5, 1828, 6 S. 47—Nov. 17, 1830, 4 W. & S. 346; Smith Cunninghame v. Anstruther's Trustees, and Mercer v. Anstruther's Trustees, April 25, 1872, 10 Macph. (H. of L.) 39; Tennent v. Tennent's Trustees, May 27, 1868, 6 Macph. 840—Mar. 15, 1870, 8 Macph. (H. of L.) 10; Archer v. Hudson, 1844, 7 Beavan 551. Family Settlement Cases— Stapilton v. Stapilton, 1739, 2 White and Tudor (Eq.) 836; Kempson v. Ashbee, 1874, 10 L.R. (Chan.) 15; Hoghton v. Hoghton, 1852, 15 Beavan 278; Turner v. Collins, 1871, 7 L.R. (Chan.) 329; Wardlaw v. Mackenzie, June 10, 1859, 21 D. 940. Priest and Penitent— Munro v. Strain, Feb. 14, 1874, 1 R. 522. Cases as to Form of Issue— Marianski v. Henderson, June 17, 1841, 3 D. 1036; Clunie v. Stirling, Nov. 14, 1854, 17 D. 15; Mann v. Smith, Feb. 2, 1861, 23 D. 435.

At advising—