Scottish Court of Session Decisions

John Scott, surgeon, Langshaw, Moffat, by trust-disposition and settlement dated 26th August 1879 disponed his whole heritable and moveable estate to and in favour of trustees for certain purposes, inter alia, as follows—“After payment of all my just and lawful debts, and deathbed and funeral expenses, and the expense of executing this trust, my said trustees shall pay and make over to Mistress Janet Carruthers or Brand, wife of the said William Brand, my sister-in-law, in liferent, for her liferent use allenarly, and to Jane Anne Scott Brand, their daughter, and their other children in fee, one-half of the residue of my estate, the said Jane Anne Scott Brand being entitled to one-third part of said half, and the other children equally among them, share and share alike, to the remaining two-third parts of said half of the residue, and shall pay and make over to Isabella Scott, Samuel Kennedy, David Kennedy, Margaret Kennedy, and Jane Kennedy or Lawrie, my brothers and sisters, equally among them, share and share alike, the other half of the residue of my said estate.”

On 6th August 1889 he executed a codicil by which he disponed and made over to “Mrs Janet Carruthers or Brand, widow of William Brand, Esquire, merchant in London, my sister-in-law, in liferent for her liferent use allenarly, and to Jane Anne Scott Brand, their daughter, and her heirs and assignees whomsoever, heritably and irredeemably in fee all and whole my dwelling-houses, offices, and grounds of Langshawbank or Langshaw, in the parish of Kirkpatrick-Juxta and county of Dumfries, all as now occupied by me and as described in the title-deeds thereof; together with the whole household furniture, silver plate, and other moveables in the said dwelling-house: And I revoke the said settlement only in so far as the same conveys generally the said dwelling-house, offices, and grounds, and the said household furniture, silver plate, and moveables in the said dwelling-house, hereby confirming the same in all other particulars.”

Dr Scott died upon 22nd July 1890. His whole property amounted to about £12,000. At his death Langshaw was burdened with a bond and disposition in security for £4000 granted by the testator to Mrs Brand's husband in 1880. Upon Dr Scott's death the firm of W. & H. Brand & Company intimated a claim for £9097, the amount due to them by Dr Scott. His trustees paid the sum upon receiving an assignation by the late Mr Brand's trustees as executors, to the said bond for £4000, which sum appeared ex facie of the record to be a charge upon Langshaw.

Mrs Brand and her daughter therefore raised this action against Dr Scott's trustees to have it found and declared that they had obtained a valid right to the estate of Langshaw under the aforesaid codicil, and that they were entitled to hold and possess the said lands free and disencumbered of the bond and of the debt therein contained, and that the defenders were bound to deduct the sum of £4000 from the moveable estate of the deceased Dr John Scott administered by them.

The pursuers averred that in August 1879 Dr Scott was proprietor of a sugar estate in Demerara, called Zeelugt. Messrs W. & H. Brand & Company, merchants in London, managed this estate for him, and they had made large advances to him, which upon 4th January 1881 amounted to £11,764. Dr

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Scott was anxious that Mr W. Brand, one of the partners of the firm, should suffer no loss through his inability to meet his engagements, and he instructed his agent Mr Tait, Moffat, to prepare a bond and disposition in security over his estate of Langshaw to the amount of £4000, and on 11th December 1880 he wrote William Brand, senior partner of the firm, as follows—“I have requested Mr Tait to make out a bond giving you a lien on Langshaw for Four thousand pounds (£4000). As the document will have to be registered in Edinburgh, I think you had better write Mr Tait authorising him to do so. This falls far short of your claim upon Zeelugt, but you may rely upon me doing everything in my power to protect your interests.” Mr Brand sent the authority asked for, and the bond was recorded by Mr Tait on 5th January 1881. “(Cond. 5) At the time said bond was executed it was not intended by the parties that it should ever be acted upon except in the event of Dr Scott's bankruptcy. Accordingly the bond was never delivered to the creditors therein, but was retained by Dr Scott in his repositories. At his death a careful search was made, but the bond was not amongst the papers of the deceased, and the pursuers believe and aver that it was intentionally destroyed by the deceased after his affairs had become more prosperous, in the belief that by so destroying it the bond would cease to be operative. … (Cond. 6) At or about the time when the bond in question was written out, Dr Scott also placed certain other securities, intended by him to protect the said firm of W. & H. Brand & Company, in the event of his bankruptcy, in a canister which he kept in the Bank of Scotland at Moffat. At his death there was found a memorandum in the following terms—‘(Private.) Your bond on Langshaw has been registered, and I have enclosed some railway scrip in an envelope addressed to you, saying you hold it as security for your advances on Zeelugt. Should anything happen to me, you will find these documents in a canister in the safe of the Bank of Scotland.— John Scott.’ This memorandum, which is holograph of the testator, was enclosed in an envelope and addressed in handwriting ‘Wm. Brand, Esq.,’ amongst whose papers it was found after his death. None of the documents mentioned in said memorandum were found in the canister kept by the testator at said bank, or in his repositories, and, as already stated, the probability is that he destroyed the bond after the purpose for which it had been made out at the testator's request had been in his view served. … (Cond. 10) The estate of Langshaw, as possessed by the testator, was never of the value of £4000, and as at the date of the codicil of 6th August 1889, as well as at the date of Dr Scott's death, it was not worth more than £3000.” …

The pursuers pleaded—“(1) The said settlement and codicil fall to be construed under reference to the facts condescended on, and it being the intention of the testator, as appearing therefrom, that the estate of Langshaw should go to the pursuers free of the said bond for £4000, the pursuers are entitled to decree as concluded for. (2) Separatim—On a sound construction of the settlement and codicil in question, it is implied that the testator intended the estate of Langshaw to go to the pursuers free of debt, and the pursuers are therefore entitled to decree in terms of the conclusions.”

The defenders pleaded—“(1) The action is irrelevant. (2) On a sound construction of the testamentary writings of the testator, the pursuers are not entitled to take the subjects except under burden of the bond and disposition in security affecting same. (3) The sum contained in said bond and disposition in security having been made by the testator a burden on said subjects, falls to be defrayed out of same primo loco.”

Upon 18th March 1892 the Lord Ordinary ( Kincairney) allowed a proof.

“ Opinion.—[ After stating the facts]—The pursuers ask a proof of their averments in support of their conclusion, and after a careful consideration of the record, I have come to the conclusion that a proof before answer cannot safely be refused. But I think it desirable to indicate my view of the law on the point, in order that the expense of a proof may be avoided, if the pursuers come to be satisfied that they will not be able to bring up their case to the requirement of the law on this point.

The pursuers may be entitled to have the lands disencumbered, but only in virtue of the desire of Dr Scott to that effect sufficiently indicated. It was open to Dr Scott to direct the manner in which his debts should to be paid, and to point out the funds to be applied for that purpose. But unless he directed that the bond over Langshaw should be paid out of his personal estate, or clearly indicated his intention to that effect, the lands must continue to bear the burden of the bond. The lands can only be disburdened in virtue of the will of Dr Scott.

The general rule as to the incidence of the debts and burdens on the estate of a deceased, whether testate or intestate, is not open to any doubt whatever. Heritable debts are payable out of heritable estate; each heritable estate bears its own burden; and the personal debts are payable out of the personal estate; and a general direction to a trustee or executor to pay debts will not affect this general rule.

This was decided in the case of Frazer v. Frazer's Executors, 1804, M., ‘Heir and Executor,’ App. 3, and 1812, 5 Pat. App. 642, and other cases; and was very distinctly explained and enforced in Douglas' Trustees v. Douglas, January 17, 1868, 6 Macph. 223.

The case of M'Leod's Trustees, June 28, 1871, 9 Macph. 903, while confirming the general rule, sanctions the proposition that something short of a testator's direct and express testamentary direction might be sufficient to charge the personal estate with an heritable debt; but it was laid down that the indications of the testator's

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intention to that effect must be of an unmistakeable kind. On that point the Lord President says—‘I am not disposed to extract from these authorities so strict a rule as this, that nothing but an express statement or declaration by a testator that one heir or executor shall relieve another heir of the burden affecting the subject bequeathed to him, is necessary; but I do think we gather from them this conclusion, that nothing but an indication so strong as to be equivalent in effect to an express declaration will be sufficient to justify such a result.’

Taking the rule to be as thus expressed, the question is whether there are sufficient grounds for departing from it in the present case.

It is not said that there is any testamentary or written expression of Dr Scott's desire to that effect. The pursuers seek to infer Dr Scott's intention from the facts and circumstances which they aver. They are certainly extremely peculiar and special. It is averred that Dr Scott became indebted to his relatives, the Messrs Brand, and was anxious to give them some security for their debt. Accordingly in 1880 he ultroneously granted them a bond and disposition in security for £4000 over his property, consisting of the house in which he lived and the grounds around it. His debt to Messrs Brand considerably exceeded £4000, but that was apparently the full value of Langshaw. The bond was registered in the Register of Sasines, but it was never, except by this registration, delivered to the creditors. It was retained by Dr Scott, and has now disappeared altogether. Dr Scott's circumstances improved after he granted the bond, and his estate became amply sufficient to pay the advances of his relatives without taking Langshaw into account.

The pursuers further aver that at the date of the codicil the lands of Langshaw were of less value than £4000, so that the bequest of it by the codicil was of no value at all unless it was relieved of the heritable bond.

These averments do not seem very seriously disputed by the defenders; but if these had been all the averments I could not have considered them relevant. I should not have felt warranted in inferring from these facts only, either that Dr Scott did in fact destroy the bond, or that he did so with the intention and in the belief that it would thereby be rendered inoperative as a burden on Langshaw.

But then the pursuers have averred that the bond ‘was intentionally destroyed by the deceased after his affairs had become more prosperous, in the belief that by so destroying it the bond would cease to be operative.’

If the pursuers should prove that averment in all its particulars so as to place it beyond the region of conjecture, and should also prove the other averments, I am not at present prepared to say what the result might be.

I am, therefore, not prepared to throw out the action as irrelevant; but I have thought it desirable to indicate what appears to be the clear requirements of the law on the question, because it would be regrettable if the pursuers should incur the cost of a proof, and should in the end have no more than conjecture to offer in support of the averment to which I have specially adverted.”

The defenders reclaimed, and argued—The pursuers were not entitled to parole evidence of the testator's intention when there was no indication in the testamentary writings that the testator intended the deeds to mean anything different from what, prima facie, was their import. The rule of law plainly was that a heritable debt had to be paid out of the heritable estate, not out of the moveable estate. Even if what the pursuers averred to be true was proved, the facts were not sufficient to permit the Court to draw the inference that the testator intended the heritable debt to be paid from his moveable estate— Frazer v. Frazer, 1804, M., voce “Heir and Executor,” App. No. 3; Macleod's Trustees et al., June 28, 1871, 9 Macph. 903.

The respondents argued—The Court was entitled to construe testamentary deeds to discover the testator's true intention, having regard to the extraneous circumstances, although there was not anything in the writings which necessarily implied that the testator had intended anything different than what appeared ex facie of the deeds. All the averments of the pursuer for which proof was sought were of a kind to indicate a different intention in the mind of the testator from what might be observed from the terms of his bequest. In the first place, it was averred that the bond and disposition was granted solely ou the motion of the debtor, and for the creditor's greater security. The creditor never asked for it. Secondly, the bond was kept in the debtor's own repositories, and disappeared just when he made the codicil, at least as far as could be ascertained. In the third place, the estate of Langshaw was never worth more than £3000, while the bond over it was for £4000. It plainly appeared from the codicil that the testator intended to convey a benefit to the widow and daughter of Mr Brand, but to leave them an estate which they could only take under burden of losing £1000 could not be described as conferring a benefit upon them. These facts, which the pursuers were ready to prove, indicated such an intention on the part of the testator, that the Court must draw the inference that he had not intended the ordinary rule of law to apply, but that he had intended the heritable bond to be paid out of the moveable estate— Glendonwyn v. Gordon, May 19, 1873, 11 Macph. (H. of L.) 33; Duncan, &c., June 22, 1883, 10 R. 1042 (Lord President's opinion, 1044).

At advising—