Scottish Court of Session Decisions

The pursuer in this action sought to reduce a trust-assignation granted by him for behoof of creditors. The defender was the trustee.

John Rogerson, Esq. of Girthhead, in Dumfriesshire (pursuer's father), and his wife, executed a trust-disposition and settlement in 1859, conveying their whole means and estate to trustees for certain purposes. By the second purpose of the trust John Rogerson directed and appointed his trustees to hold the lands of Broomhillbank and Shawside, belonging to him, together with the whole stock and farm implements on the same, in trust for Samuel Rogerson, his eldest son, and Joseph Kirkpatrick Rogerson, his second son (the pursuer), equally betwixt them, each son being entitled to one-half of the return or annual produce thereof during his lifetime, and on their death to dispone the said lands to the eldest heir-male of the bodies of each of his said sons equally between them. The settlement also contained the following clause—“And further, we hereby expressly declare that none of our said sons shall have power to sell the lands respectively to be held for them, or to burden the same with debt, neither shall the lands or rents be attachable by their creditors, neither shall our sons have power to sell or assign the same or any interest or annual produce thereof to any party whatever, with this exception,” that in the event of their marrying they should have power to make a certain provision for their widows.

John Rogerson died in 1864, predeceased by his wife.

The trustees appointed in his settlement entered into possession of and administered his estate.

In 1878 Joseph Kirkpatrick Rogerson having become embarrassed in his affairs, his estates were sequestrated under the Bankruptcy Acts, and a trustee appointed. Shortly after the sequestration the pursuer granted the trust-assignation which he now sought to reduce.

By this deed, on the narrative that he was under his father's will entitled to one-half of the rents of Broomhillbank, Shawside, and others, which rents were thereby declared unattachable by his creditors, that he was desirous that all his creditors should be paid in full, and that they had agreed to accept of his offer to make the assignation, he assigned to the trustee under the assignation in trust for his creditors the rents of Broomhillbank, &c., with power to uplift the rents and grant discharges for them for certain purposes, and, inter alia, for payment to him out of the rents of £60 per annum by monthly instalments, and also any sum which might be received as his proportion of rent of the game on the lands of Broomhillbank, &c., which sums were declared to be the proportion of rents due to him, and which should during the subsistence of the trust be considered a reasonable alimentary allowance, and necessary for the maintenance and support of himself and his family; and (lastly) that whatever balance of free rents should remain after fulfilling the previous purposes should be held to be part of the assets of his bankrupt estate, and applied by the trustee in terms of the statutes till his whole creditors should be paid in full.

The lands of Broomhillbank, &c., were then, and at the date of this action, let by the trustees at a rental of £515, one-half of which was paid to the widow of Samuel Rogerson, who had died, and the other half was applied under the assignation.

In April 1885, J. K. Rogerson, his wife, and his six children raised the present action against William Glendonwyn Crosbie, as trustee under the assignation, concluding for reduction thereof. They averred—“(Cond. 6) The said trust-assignation was ultra vires of the granter, and in contravention of the terms of the trust-disposition and

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settlement under which the said Joseph Kirkpatrick Rogerson acquired rights to the rents in question. The provisions made by the late John Rogerson for his second son (pursuer) were expressly designed for the purpose of protecting him, and those dependent upon him, against the consequences of his improvidence, and the said assignation, if it remains unreduced, would defeat the object which the testator had in view. The said assignation is therefore null and void, or at all events reducible.”

They pleaded that the deed being ultra vires should be reduced.

The defenders stated that after the sequestration a question had been raised as to whether the interest under John Rogerson's trust which fell to the pursuer was alimentary or not, and that the trust assignation had been executed to avoid all question as to that matter.

They pleaded—“(5) The transaction contained in the deed under reduction is binding on the pursuers, and cannot be set aside by them. (6) Assuming that by the said trust-deed the interest conferred on the pursuer Joseph Kirkpatrick Rogerson is declared to be alimentary, the amount of the said interest beyond what is required for the aliment of the said pursuer, passed to the trustee in the said sequestration by virtue thereof, and due provision for the aliment of the said pursuer having been made in the deed under reduction, the defender is entitled to absolvitor. (7) The arrangement now challenged being legal, as well as reasonable, and having been entered into and acted upon by all parties concerned in the full knowledge of their respective rights, and within their powers, the action is groundless, and the defender is entitled to absolvitor.”

The Lord Ordinary ( M'Laren) pronounced this interlocutor:—“Finds that the pursuer's interest in his father's estate was not an alimentary trust, and that the pursuer had power to grant the assignation libelled in favour of his creditors: Therefore sustains the defences, dismisses the action, and decerns.

“ Opinion.—In this case the pursuer seeks to reduce a deed of assignation granted by himself in favour of his creditors, who are now represented by the defender. The deed conveys the pursuer's interest in the rents of the lands of Broomhillbank to the trustee on his sequestrated estate, to the effect that after payment of certain expenses and an alimentary allowance to the cedent the surplus rents may be applied by the trustee in satisfaction of the claims of the pursuer's creditors in conformity with the rules of bankruptcy.

The ground of reduction is, that the pursuer's interest in the rents is of an alimentary nature, that the rents are payable to him in virtue of the provision in his father's settlement, which contains a declaration that the grantees shall not have power to sell or assign the lands to be held in trust for them, ‘or any interest or annual produce thereof,’ and that the pursuer was thus put under disability to grant the conveyance which he desires to have reduced.

The action therefore raises the question—What is necessary, in substance and expression, to the constitution of an alimentary gift which shall be effectual against the voluntary acts of the donee? In one view of the case the further question arises whether the reservation of an alimentary allowance in the deed of assignment is not a sufficient fulfilment of the alimentary trust, if such be its character.

There is not much doubt as to what is the regular and complete mode of expression of an alimentary trust. In the ordinary clause of style, the truster begins by declaring his intention that the gift shall be an alimentary provision for the subsistence of the grantee, and in order that his intention may not be defeated by the improvidence of the grantee, the truster declares that the subject of the gift shall not be assignable or be subject to the diligence of creditors.

It may be doubted whether a declaration that the gift is not assignable or subject to diligence really adds to the force of the intention announced that the gift shall be ‘alimentary.’ In the case of a gift not intended for alimentary subsistence, but to be used by the grantee for commercial or speculative investment, I apprehend that the fund would be arrestable for debt notwithstanding the granter's declaration that it is not to be assignable or arrestable. In such a case a truster could no more withdraw the property of his grantee from the operation of the civil law of the country than he could withdraw his own property from its operation. Trusters may do many things, but they cannot create special personal laws for the benefit of the objects of their favour to the prejudice of creditors. I conceive, therefore, that the privilege which the law extends to gifts of this description depends entirely on the intention to give the annuity or annual rent as subsistence money; and that if this intention is clearly declared, the law will supply what is necessary to execute the trust by restraining the diligence of creditors, and, if necessary, cutting down alienations contrary to the terms of the trust.

In the present case it appears to me that the essential part of a provision of aliment is awanting—I mean the expression of an intention that the liferent shall be used for subsistence only; and I cannot read such an expressed intention into a clause which merely forbids the grantee to sell or assign his life interest. This is not in my opinion a merely technical view, because the gift occurs in a general settlement by the father, in which he makes a fair division of his estate amongst his children, and what we are asked to treat as an alimentary provision is really the pursuer's patrimony. There is nothing in the deed to show that this was appropriated to the pursuer's maintenance in any special sense, or that it was anything different from the ordinary case of a gift of a share of succession by a father to a son.

I do not overlook the circumstance that the father has said that his sons shall not have power to sell or assign their shares. A prohibition against selling heritable estate is a clause very familiar to the legal profession. Until the passing of the Entail Amendment Act it was effectual if fortified by irritant and resolutive clauses. Under that statute such a clause is ineffectual unless it is accompanied by the other clauses necessary to a complete entail. It is noticeable that under the older law a trust of the heir's life interest was not regarded as a contravention of the prohibition against alienation, because such a trust was not inconsistent with the purpose of the entail, namely, the transmission of an unencumbered

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estate to heirs. In this case I consider that the pursuer had power to grant a trust for creditors notwithstanding the prohibition against alienation.

Although in my view unnecessary for the decision of the case, I shall state my opinion on the other point raised in argument, that this was a good assignment of surplus rents. Under the deed of assignation the pursuer reserves to himself an alimentary allowance of £60 per annum, and this is made a first charge upon the estate after allowing for expenses of administration and the payment of insurance premiums. The surplus available for division amongst creditors must be small, because it is admitted that these payments, extending over seven years, have not amounted to more than five shillings in the pound. £60 a-year has not been shown to be an unreasonably small alimentary allowance. It was considered sufficient by the pursuer himself when he made the assignment, and I think that if there is here an alimentary trust, the trust has been recognised in the arrangement between the pursuer and his creditors.”

The pursuer reclaimed, and argued—The Lord Ordinary's ground of decision was a purely technical one, and he had cited no authority in support of it. It was enough to render the assignation ultra vires of the pursuer that it defeated the obvious purpose of his father's will. If the will showed a clear intention to make the fund alimentary, the mere want of the word “alimentary” would not invalidate the intention provided equivalent words were used. He was not barred from suing the reduction by the fact that he had reserved a certain amount of aliment—Bell's Comm. i. 124; Rennie v. Ritchie, 4 Bell's App. 221.

Defender's counsel were not called upon.