Scottish Court of Session Decisions

This was an action in which the Crown sought to recover the sum of £4750 from the Earl of Fife in name of succession duty, at one per cent. on £475,000. The claim was made in the following circumstances:—The late Earl (the father of the defender), who died in 1879, was heir of entail in possession of large estates in the counties of Aberdeen and Banff, but he had incurred a very considerable amount of personal debt, and a variety of arrangements were entered into at different times by which that debt might be liquidated, while the interests of all parties were preserved.

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The first of these arrangements was a trust-deed executed by the late Earl in favour of certain trustees named, and the object of the trust was to manage the estates and pay off his debts. The trustees under it continued to manage the estate from 1857 to 1873, in which latter year a new agreement was entered into, the parties to which were the late Earl, his trustees under the trust-deed, and the defender (then Viscount Macduff). The scheme of the new arrangement was to wind up the first trust, to consolidate the debts of the late Earl and the defender, which amounted to £465,000 in the case of the late Earl, and £35,000 in the case of the defender, and to charge the whole upon the fee-simple of the estate. The manner in which this scheme was to be carried out was that the defender, on attaining twenty-five years, was to concur with his father in obtaining a disentail of all the entailed lands, which, having been born after the date of entail (which was subsequent to the Rutherfurd Act), he was entitled to do, and upon this being done to dispone them to the Earl and his trustees in trust, subject to existing incumbrances, and the Earl on his part was to dispone to the trustees certain policies of insurance on his life. The main purposes of the trust were to raise money upon the fee-simple estate, to pay off all the debts incurred both by the Earl and the defender, to pay the premiums upon the policies over the Earl's life out of the rents, and to pay over to the Earl any residue of the rents—upon the Earl's death the money received under the policies was to be applied in paying the debts and winding up the trust; lastly, the trustees were to convey the unsold estates to such persons as the Earl and defender should appoint, and failing such appointment, to entail them on the defender and the heirs-male of his body.

In 1874 a supplementary agreement was made, by which the debt of the Earl to be provided for was to be £475, 000, and that of the defender £45,000.

In 1875 a disposition and declaration of trust was executed setting forth that the disentail had been effected, and that the Earl now held the estates in fee-simple, and that a further conveyance to trustees was now necessary. Therefore the Earl and defender assigned the policies of assurance on the lives of each upon trust—1st, for the payment of the expense of the trust; 2d, that the trustees should raise £520,000 for payment of debts owing by the Earl and the defender; 3dly, to pay the interest on debts charged on the fee of the estates and the premiums of insurance; 4thly, to pay the yearly balance to the Earl during his life; …7thly, “upon trust that the trustees shall, after the death of me the said Earl, receive and realise the several sums of money which shall thereupon become payable under and in respect of the policies of assurance on my life hereby assigned, and of any others effected under the trusts hereof, and all other sums of money due to me the said Earl, or to which I may be entitled, and which form part of the trust-estate, and apply the same in payment and satisfaction of all sums of money borrowed, for the purpose of paying my debts under the trusts hereof, and in defraying and discharging all claims, liabilities, and expenses of every description incurred by them, or to which they may be liable in or about the trust hereby created, or in winding up the same, and in obtaining a full and sufficient discharge of all their actings and intromissions, and thereafter to pay over the balance or surplus, if any, to me the said Viscount, whom failing to the heirs, executors, or assigns of me the said Earl of Fife.” Lastly, on the Earl's death to convey the estates not sold to such persons as should be appointed by the Earl and his son; and failing such appointment, to execute a deed of entail in favour of the defender and the other parties mentioned. But this direction was qualified by a clause in these terms:—“And such disposition and deed of entail shall contain an express provision and declaration that I the said Viscount Macduff may, by myself alone, and without the consent or concurrence of any other person, revoke and cancel, or alter and innovate, the same at any time at my sole will and pleasure.”

In 1876 the arrangement took place upon which the present claim of the Crown was based. In that year an agreement was entered into between the Earl, his trustees, and the defender, which proceeded on the narrative of, inter alia, the disentail and the deed of 1875, and that the trustees under the powers conferred upon them had borrowed, on the security of the fee-simple of the estates, a sum of £520,000, and applied it to pay the debts of the defender and the Earl, and had obtained a further advance of £40,534, and that it was for the advantage of the Earl and the defender that the trust be brought to a close. It was agreed that the defender should take over the whole estates burdened with the whole debts both of the trustees and his father, and that he should have disponed to him by the Earl and his trustees the policies of insurance both on the Earl's life and on his own, that he should guarantee the Earl an annuity of £10,000 a-year for life, and that he should be at the expense of maintaining the mansion-house, gardens, and policies in good repair. The defender was not taken bound to keep up the policies upon the Earl's life. The amount of debt with which the lands were at this time burdened was about £577,070. The net rental of the estates at this date was £52,746, and the annual payments which the defender required to make in order to fulfil his obligations to his father under the deed, and pay the interest on the debts, and keep up the policies on his father's life amounted to £59,353, of which sum the premiums on the policies on his father's life, if he should keep them up, came to £15,353. There was thus a deficiency of £6607 from the annual return to meet the annual outgoing. The defender paid the premiums, and kept up the policies until his father's death in 1879, when the £475,000 contained in them fell in.

In 1882 this action was brought for, as already stated, the amount of one per cent. succession duty upon that sum of £475,000, on the grounds that “the assignation of the policies to the defender was a disposition of property by which the defender became beneficially entitled to the sum in the policies, and conferred on him a succession within the meaning of section 2 of the Succession Duty Act 1853 (16 and 17 Vict. c. 51).” Section 2 of the Act provides—“That every disposition of property, by reason whereof any person has or shall become beneficially entitled to any property or the income thereof upon the

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death of any person, …. and every devolution by law of any beneficial interest in property, or the income thereof, upon the death of any person, …. shall be deemed to have conferred or to confer on the person entitled by reason of any such disposition or devolution a ‘succession.’” Section 17 provides—“No policy of insurance on the life of any person shall create the relation of predecessor and successor between the assurers and insured, or between the insurers and any assignee of the assured, and no bond or contract made by any person bona fide for valuable consideration in money or money's worth, for the payment of money or money's worth, after the death of any other person, shall create the relation of predecessor and successor between the person making such bond or contract, and the person to or with whom the same shall be made; but any disposition or devolution of the moneys payable under such policy, bond, or contract, if otherwise such as in itself to create a succession within the provisions of this Act, shall be deemed to confer a succession.”

The defender denied that the conveyance in question was in any sense gratuitous, and alleged that he had given money or money's worth for it, both in consenting to the disentail and in the burdening the estates with his father's very large personal debts. He also alleged that his father was materially benefited by the arrangement, as he was freed of his debts, had the mansion-house upheld, and was secured in an annuity of £10,000 a year for life, whereas his previous income was under £5000.

The Crown pleaded—“The defender having by the assignation of the policies of assurance on his father's life become beneficially entitled to the proceeds thereof on his father's death, and having now realised the same, is bound to pay succession duty thereon at the rate of one per cent., with interest and expenses as concluded for.”

The defender pleaded—“(2) The relation of predecessor and successor between the late Earl of Fife and the defender not having been constituted within the meaning of the Succession Duty Act in reference to the said policies, the defender is entitled to absolvitor. (3) The defender having acquired a complete title to the policies during the late Earl's lifetime by a bona fide onerous transaction, no succession within the meaning of the said Act has by the assignation been conferred on the defender. (4) The agreements and assignation referred to being onerous inter vivos deeds, and having been acted on by the whole parties, the defender is entitled to absolvitor.”

On 6th November 1883 the Lord Ordinary ( Fraser) pronounced this interlocutor:—“Finds that by assignation, dated 30th September 1876, granted by the late Earl of Fife and the defender, with the consent of certain trustees therein mentioned, the granters assigned to the defender the policies of assurance then subsisting on the Earl's life,’ with all bonuses declared or accrued thereon: Finds that the said Earl died on 7th August 1879, and that the defender recovered, under the policies of assurance so assigned £475,000: Finds that the said assignation was a contract made bona fide for valuable consideration in money or money's worth, given to the said Earl by the defender, and therefore is not a succession within the meaning of the Succession Duty Act 1853: Therefore assoilzies the defender from the conclusions of the action, and decerns,”&c.

Opinion.—The Crown sues for payment of the sum of £4750 with interest, as being succession duty payable by the defender in respect of the amount recovered under policies of assurance to the extent of £475,000 on the life of the defender's father the late Earl of Fife, which policies were assigned to the defender on 30th September 1876. This demand is resisted by the defender upon the ground that the assignation of the policies did not confer upon him a succession within the meaning of the Succession Duty Act 1853.

“The 2d section of that Act provides that every ‘disposition of property by reason whereof any person has or shall become beneficially entitled to any property or the income thereof upon the death of any person….and every devolution by law of any beneficial interest in property or the income thereof upon the death of any person, …. shall be deemed to have conferred or to confer on the person entitled by reason of any such disposition or devolutiona “succession.”’

To this enactment there are exceptions, as stated in the 17th section of the statute, thus:—‘No policy of insurance on the life of any person shall create the relation of predecessor and successor between the insurers and the assured, or between the insurers and any assignee of the assured, and no bond or contract made by any person bona fide for valuable consideration in money or money's worth, for the payment of money or money's worth, after the death of any person, shall create the relation of predecessor and successor between the person making such bond or contract and the person to or with whom the same shall be made.’ Sir George Jessel, Master of the Rolls, in the case of Fryer v. Morland, 3d August 1876, 3 Ch. Div. 675, stated that in his opinion this 17th section was totally unnecessary, seeing that a contract of assurance as between the insurer and assured was not a ‘disposition of property’ nor a ‘devolution by law.’ ‘It does not,’ said the learned Judge, ‘appear to me to be within the words of the first part of the 2d section any more than it is within the second part of the 2d section. Why was it excepted? Well, I do not know. I find it quite impossible to answer the question. It probably was excepted to quiet the fears of persons interested in insurance companies ex cautela. But if I am right, it was not required, as not being within either branch of the 2d section.’ As to the second part of the 17th section,’ declaring that no bond or contract made for money or money's worth should create the relation of predecessor and successor, he adds—‘The same observation applies to that. A bond or contract for the payment of money is not a disposition of property.’

This 17th section has not hitherto been made the subject of judicial construction in Scotland, except in Lord Advocate v. Sidgwick, 4 R. 815, as to whether marriage is a valuable consideration in money or money's worth. It was undoubtedly intended to be an exception to the 2d section of the Act, and it renders the duty of the Court in such a case as the present all the easier that it is there. In the case of Floyer v. Bankes, 33 L.J. Chan. 1, Lord Chancellor Westbury had the subject of the 17th section under consideration. The essential requisites,’ said his Lordship, ‘of

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a contract which is not to create a succession are clearly defined by the 17th section. First, it must be a contract by one person to pay money or money's worth to another; secondly, it must be made bona fide for a valuable consideration existing in money or money's worth—the contract creating personal liability between the contracting parties.

Now then comes the question, whether the defender obtained the assignation of the policies of insurance from his father under a contract ‘made bona fide for valuable consideration in money or money's worth,’ and this question can only be answered after a reference to various deeds which were executed by the late Earl of Fife and the defender.

(1) The late Earl was heir of entail in possession of large estates, and the defender, his only son, was his presumptive heir. Without the defender's consent these estates could not be disentailed. The Earl had executed a trust-deed in favour of William James Taylor and William Leslie, for the purpose, amongst others, of managing his estates and paying off debts. Under this trust the trustees continued in the management from 1857 down to 1873. In the latter year an agreement was come to between the late Earl and the defender and the late Earl's trustees. This agreement narrated that the Earl was indebted to various parties in £465,000, and the defender in £35,000 at the least; that it was proper that the trust executed by the late Earl should be wound up and a new trust constituted, and the debts owing by the Earl and the defender consolidated and charged upon the fee-simple of the estates. It was therefore agreed to enter into arrangements, which were described as ‘equitable and advantageous’ to both the Earl and his son. These arrangements were—First, that the Earl and the defender should, on the latter attaining the age of twenty-five years, obtain a disentail of all the entailed lands, and upon this being done, to dispone them to the Earl and Mr Taylor and Mr Leslie in trust, subject to existing incumbrances; secondly, that the Earl should dispone to the trustees the policies of insurance on his life. The purposes of the trust were:—(2) That the trustees should raise, upon the security of the fee simple of the estates, such a sum of money as should be necessary for paying off the debts of the Earl not exceeding £465,000, and the debts owing by the defender not exceeding £35,000; (3) that the trustees should, out of the rents, pay the interest on debts charged on the fee of the estates, and the premiums of insurance upon the Earl's life; (4) raise, if required by the Earl, further sums of money upon the security of his life interest in the estates, as might be required to pay off any debts which he might afterwards incur, and any future policies of insurance that might be effected; (5) pay over to the Earl, if these purposes are satisfied, the residue of the rents of the estate; (6) power is reserved to charge the estate with a jointure in favour of the Earl's widow and provisions for his children; (7) upon the death of the Earl to apply the moneys received under the policies of insurance in payment of debts and winding-up the trust. Lastly, to convey the unsold estates held by the trustees for behoof of such persons as the Earl and the defender should appoint, by deed under their hands, and failing such appointment, to execute an entail of the lands in favour of the defender and the heirs-male of his body.

(2) A supplementary agreement was entered into between the Earl, the defender, and the Earl's trustees in November 1874, from which it appears that the debt of the Earl had increased to £475,000, and the debts of the defender to £45,000.

(3) In March 1875 a deed called a ‘disposition and declaration of trust’ was executed by the Earl and the defender, which set forth that the father and the son had executed six several instruments of disentail in terms of the first agreement, and that in consequence of these deeds of disentail the Earl then held the lands and estates in feesimple, and that it was now necessary, in pursuance of the agreement, to grant a further conveyance to the trustees; therefore the Earl and the defender assigned the policies of assurance on the lives of each, upon trust—1st, that the trustees should raise £520,000 for payment of debts owing by the Earl and the defender; 3dly, to pay the interest on debts charged on the fee of the estates, and the premiums of insurance; 4thly, to pay the yearly balance to the Earl during his life; 7thly, ‘upon trust that the trustees shall, after the death of me the said Earl, receive and realise the several sums of money which shall thereupon become payable under and in respect of the policies of assurance on my life hereby assigned, and of any others effected under the trusts hereof, and all other sums of money due to me the said Earl, or to which I may be entitled, and which form part of the trust-estate, and apply the same in payment and satisfaction of all sums of money borrowed, for the purpose of paying my debts under the trusts hereof, and in defraying and discharging all claims, liabilities, and expenses of every description incurred by them, or to which they may be liable in or about the trust hereby created, or in winding up the same, and in obtaining a full and sufficient discharge of all their actings and intromissions, and thereafter to pay over the balance or surplus, if any, to me the said Viscount, whom failing to the heirs, executors, or assigns of me the said Earl of Fife.’ Lastly, on the Earl's death to convey the estates not sold to such persons as should be appointed by the Earl and his son, and failing such appointment, to execute a deed of entail in favour of the defender and the other parties mentioned. But this direction was qualified by a clause in these terms:—‘And such disposition and deed of entail shall contain an express provision and declaration that I the said Viscount Macduff may, by myself alone, and without the consent or concurrence of any other person, revoke and cancel, or alter and innovate, the same at any time at my sole will and pleasure.’ The defender had the right under the old entail, by himself alone, upon succeeding to the estate, to disentail it; and this right was, by the clause in question, preserved to him with reference to the new entail which was to be made. Under the Rutherfurd Act an heir under an entail made after 1st August 1848 could disentail if born after the date of the entail and of full age, and if born before the date of entail (which was the case in hand), with consent of the heir next in succession, providing that the consenting heir be capax, born after the date of entail, and twenty-one years old. It was to get rid of these restrictions upon the power of an heir of entail born before the date of the entail, that the clause

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in question was introduced into the agreement, and which assimilates the case of an heir under a new entail born after 1st August 1848 to an heir of entail under an old entail born after that date, and who is twenty-one years of age.

(4) The trustees proceeded to act under these trusts, and the effect of the arrangement made was (so far as regards the Earl) to pay to him the whole balance of the rents, after providing for the interest of the debts of himself and his son. The latter obtained no further benefit from the deed than the provision made for the payment of his own debts by means of money borrowed on the disentailed estates, and the further important provision made for keeping up the policies of assurance, which was the source to which the parties looked for enabling the defender to obtain an unencumbered succession. It is very clear that this must have operated strongly in the mind of the defender when he consented to disentail the estates and to allow upwards of half a million of debt to form an incumbrance upon them.

(5) So standing matters, a new agreement was come to in September 1876 between the Earl, the defender, and the trustees, which it is said created a new departure altogether. Under the former deeds the policies were kept up, and the proceeds were to be applied by the trustees after the Earl's death in paying off debt. That was the condition of the bargain by which these debts could be made burdens on the estate. It is maintained, however, on the part of the Crown, that in 1876 the whole position of the parties was altered by an agreement which, while it conveyed over to the defender the policies of assurance, without the intervention of a trust, did so in such a manner as to make that conveyance a ‘succession’ within the meaning of the Succession Duty Act.

This deed proceeds upon the narrative of the disentail and of the supplementary disposition and conveyance in favour of the trustees of the estates and of the policies of assurance, and of the fact that the trustees under the powers conferred upon them had borrowed upon the security of the fee-simple of the estates £520,000, and applied that sum to the payment of debts owing by the Earl and his son, and they had obtained further advances from the City of Glasgow Bank to the amount of £40,534, 17s. 10d.; that it was for the benefit and the advantage of the Earl and his son that the trust should be brought to a close; therefore the parties contracted and agreed,—

1st, That the Earl and the trustees should dispone to the defender (1) the lands and estates held in trust, (2) the policies of assurance on the lives of the Earl and his son.

2d, That the defender should execute in favour of his father a bond of annuity for £10,000, with security over the estates, but postponed to the existing incumbrances thereon, and to a cash-account bond for £50,000.

3d, That the Earl should enjoy the right to occupy the residences of Duff House, Innes House, and Mar Lodge, with their contents, and the gardens and policies—the defender undertaking to keep up and maintain in good order and repair the said residences, gardens, and policies.

4th, The defender ‘undertakes and hereby binds and obliges himself and his heirs and executors to pay, and so free and relieve the first and third parties, or either of them, of the whole annuities, debts, claims, demands, and obligations of every kind exigible from or due by the first party or the third parties as trustees foresaid, as well those secured upon the estates as those standing upon personal obligation, and on payment to procure the said parties formally discharged thereof.’

There was here a contract by which very onerous obligations were undertaken by the de-dender. These are shown by a joint minute of admissions lodged by the parties. The fourth head of the agreement stipulates that the defender shall pay the whole annuities, debts, payments, cliams, and demands of every kind. This personal liability was here for the first time undertaken by him. The joint minute, taken along with the statements in the deeds, enables one to ascertain the amount of the debt for which the defender became responsible; and also it enables one to ascertain the amount of the annual payments he had to make. Take first the amount of the debts without reference to the annual payments.

“1st, Debts, as set forth in the supple-mentary agreement of November 1874, due by the Earl,	£475,000 Note.—This is included in the bonds to the Scottish Widows' Fund for £520,000, mentioned in the minute.
“2d, Personal debts of the Earl and his trustees, as stated in the joint-minute as at 1876, when the agreement of that year was entered into,	51,000
“3d, Bonds of annuity to several annuitants, payable during the Earl's lifetime, amounting annually to £5107, which at ten years' purchase is 51,070
	£577,070

Such was the amount of debt that required to be cleared off, and on account of which the defender obtained the conveyance to the estates and to the policies of assurance.

“Now, to take the annual payments which the defender was bound to make in order to fulfil his obligation. They are as follows, as set forth in the joint minute:—

“(1) Annual interest on Scottish Widows' Fund bonds for £484,000	£20,570
“(2) Annual interest on bonds for improvement expenditure,	1,700
“(3) Annuities payable during the Earl's life,	£ 5,107
“(4) Annuity to the Earl,	10,000
15,107
“(5) Interest on £51,000 of personal debts of the Earl and his trustees as at 1876,	2,550
“(6) Maintenance of the three mansions and policies of the Earl, 3,250	£43,177
“(7) Annual premiums of insurance on the Earl's life,	15,128
“(8) Premiums of insurance on the defender's life, 1,048	£59,353
“The amount of the nett rental of the estates acquired by the defender in consequence of the conveyance to him, is, per minute,	52,746
Deficiency,	£6,607

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There was thus a deficiency in the annual return from the property conveyed to meet the annual outgoings, and if it had not been the circumstance that the defender's father died about three years after the agreement of 1876 was entered into, the transaction would have been unfortunate, in a pecuniary sense, for him. In these circumstances it requires some little ingenuity on the part of the Crown to make out that this was a gratuitous conveyance on the part of the late Earl of Fife to his son the defender. It is contended that the agreements of 1873, 1874, and 1875 must be thrown out of view altogether, and that of 1876 alone looked at. As therefore in the year 1876 the Earl of Fife, in consequence of the defender consenting to the disentail of the estates, became fee-simple proprietor, the conveyance of the policies to his son was, it is contended, a gratuitous deed. No consideration for consenting to the disentail on the part of the son can, it is said, be considered. That was a former bargain, all of which was accomplished and at an end. The case must be dealt with as standing alone on the agreement of 1876, and as if the Earl of Fife had never been hampered by entails. All this is very unreasonable and very unsound. The whole deeds must be taken together. It was one entire scheme from the beginning, whereby the father and the son agreed to certain operations for the purpose mainly of clearing off the father's debts. There was first one trust, then a second trust with larger powers, and then the trust was dispensed with, and a more economical administration adopted by handing over the whole property to the defender with the burden of all the father's debts and the securing of an annuity to the latter.

“But it is further said that the conveyance was gratuitous, because there must be deducted from the annual payments which the defender made the sum of £15,108, being the annual premiums of insurance on the Earl's life, in which case the nett rental received by the defender would be greater than the payments he had to make under the agreement. And the ground upon which this proposition is rested is, that the defender is not taken bound to pay the premiums on the policies of assurance although he gets an assignation to them. The reason for not taking him expressly bound to keep up the policies, but leaving it optional to himself, is obvious enough. The father left him to exercise his own judgment as to continuing the heavy payment of £15,000. The father was at the time of the agreement only sixty-two years of age, and the nett rental being insufficient to make this payment of £15,000, along with the other payments already specified, it was for the defender to consider whether he would risk the venture of continuing to keep up the policies or to sell them. The father had no interest in this question if he got his £ 10,000 a year. But although it was left optional to the defender to keep up these policies, the doing so was clearly a part of the scheme by which he expected to lift up the decayed fortunes of his family and free his estates from the debt which burdened them.

“The only hope which the defender could have of saving his position was by paying off the debts upon the estates by means of the policies of assurance. At every hazard these policies must be kept up, and the payment of the premiums must have been contemplated, although not expressly made obligatory, as one of the obligations which the defender must discharge. Although the deed of 1876, unlike the former deeds, did not expressly order him, as it did the trustees, to apply the proceeds of the policies in payment of the debts, this was plainly implied in the whole transaction; and therefore in considering what were the annual payments he had to make, as compared with the nett rental that he received, it is only right and proper to take into consideration the premiums of insurance that were to be paid.

“Further, it is a mistake to suppose that the 17th section of the Act of Parliament requires that the person giving valuable consideration in money or money's worth shall give the exact value which the subsequent casualty of an early death shows it to have had. All that the statute requires is, that the contract shall be bona fide for valuable consideration in money or money's worth. The contract in question was of this character, and it being so, the Crown is not entitled to duty as claimed in this action.”

The pursuer reclaimed, and argued—The deeds of 1876 (conveyance of the estates and the policies to the defender, bond of annuity by him, &c.) stood by themselves, and could not be interpreted by any of those which preceded them. As by these deeds the lands were made over to defender during his father's lifetime, and as he was very substantially benefited by the agreement then entered into, the transaction of 1876 was of a gratuitous character, for which money or money's worth had not been given. As the defender came into possession of £17,000 a year in 1876, the agreement could hardly be called onerous. It was a question, too, whether an out-and-out assignation was a disposition within the meaning of sec. 11 of the statute, and so liable to duty, for if money was paid upon a death it was clearly a succession within the meaning of the statute. In the present case money was paid in consequence of a death, upon an assignation, and that seemed to bring a policy-holder under the provisions of this Act. Where the policy was assigned by the father, who had paid premiums upon it for some time, the son could only be a “successor” for the amount of the premiums paid by his father. Looking at the transaction as a whole, it was clearly a case in which duty was exigible under the Act.

Authorities— Floyer v. Bankes, 1864, 33 L.J. Ch. 1: Lord Advocate v. Sidgwick, June 6, 1877, 4 R. 815; Fryer v. Morland, August 2, 1876, 3 Ch. Div. 675; Lord Advocate v. Earl of Glasgow, January 15, 1875, 2 R. 317.

Argued for defender—It was unfair to isolate the deeds of 1876 (which only modified an existing agreement) to determine whether the assignation was onerous or not—the whole deeds must be looked at, and it would be found that money or money's worth had been given for these policies. The agreement of 1876 was of great benefit to the late Earl, who got all his debts paid and a handsome annuity secured to him. The policies had never been in the late Earl's own power to dispose of; they belonged first to his trustees for creditors, and then to the defender, to whom they were assigned as a means of liquidating the debt upon the estate. The only party really benefited by the agreement of 1876 was the late Earl, and so the transaction was not in any

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sense gratuitous. To make the defender liable the Crown must bring their case up to the closing words of section 17. It is said that the policies were given for the land, but the policies and the land went together for one consideration. The lands were entailed, and the defender by mere survivance would succeed to them all, but free of the debt, so his consent was essential to any scheme for securing the debts upon the land.

At advising—