Scottish Court of Session Decisions

In November 1901 Symon Flett Sutherland, S.S.C., Edinburgh, raised an action against Andrew Bremner, flsh-curer, Wick, Andrew Louttit, Edinburgh, and William Smitton, Bank Agent, Wick, as trustees and executors under the trust-disposition of the deceased Mrs Margaret Mackay or Bremner, the said Andrew Bremner as trustee under the trust-disposition and settlement of Mrs Marjory Wares or Mackay, and the said Andrew Bremner, Andrew Louttit, and William Smitton as individuals.

The conclusions of the action were (1) for reduction of an assignation dated 31st January and 4th February 1901, granted by the defenders Andrew Bremner, Andrew Louttit, and William Smitton, as trustees and executors of Mrs Bremner, in favour of the pursuer, assigning to the pursuer the sums contained in a decree dated 26th November 1898 obtained by Mrs Bremner's trustees against Mrs Margaret Bremner or Sutherland and Mrs Catherine Bremner or Musgrave, with interest, together with the extract decree, and the execution of arrestment dated 26th January 1899 following thereon used by Mrs Bremner's trustees in the hands of the said Andrew Bremner as trustee of Mrs Mackay to the extent of £250, and the said defenders' claim or right to the funds or goods or others arrested thereby; and (2) for decree ordaining the defenders as trustees and executors foresaid and also as individuals, conjunctly and severally or severally, or otherwise equally or in pro rata shares, to make payment to the pursuer of £256, 6s. 1d., being the consideration in respect of which the above assignation was granted to him, together with interest thereon from 26th September 1899.

The pursuer averred (Cond. 2) that in 1898 Mrs Bremner's trustees obtained a decree for expenses, amounting to £244 odds, against Mrs Sutherland and Mrs Musgrave, who were daughters of Mrs Bremner and

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sisters of the defender Andrew Bremner, and used arrestments proceeding on said decree in the hands of the trustee of Mrs Mackay; (Cond. 4) that in 1898 and 1899 Mrs Bremner's trustees were in the bona fide belief that Mrs Sutherland and Mrs Musgrave were beneficiaries on the trust estate of Mrs Mackay, and in consequence of that belief used the arrestments above mentioned; (Cond. 5) that in March 1899 Hector Sutherland, of Hector Sutherland & Green, who were agents in the trust estates of both Mrs Bremner and Mrs Mackay suggested to the pursuer that it would avoid unpleasant complications between Mrs Bremner's trustees and Mrs Sutherland and Mrs Musgrave as members of Mrs Bremner's family if the pursuer were to pay Mrs Bremner's trustees the amount contained in the decree and the expenses of charging, and take over the decree and the arrestment following thereon; and that the pursuer, although he was not at this time or throughout the subsequent negotiations aware of the terms of Mrs Mackay's settlement, intimated that he was willing to adopt this course provided he was certain to obtain repayment from the arrested funds.

He also averred (Cond. 6) that on 11th April 1899 Messrs Hector Sutherland & Green, on the instructions of Andrew Bremner in his trust capacities and as an individual, wrote to the pursuers as follows:—“ Wick, 11th April 1899.

“Dear Sir,—1. As agents for the trustee on the trust estate of the late Mrs Marjory Wares or Mackay, we beg to inform you that on said estate being realised we think a sum of about £150, more or less, will fall to be paid to each of Mrs Alexander Sutherland, 5 Granville Terrace, Edinburgh, and Mrs Edgar Musgrave, 13 Queen's Road, Bradford, as their shares of said estate. 2. We agree, on your paying us the sum of £244, 7s. contained in a decree of the Court of Session held by the trustees of Mrs Marjory Mackay or Bremner against Mrs Sutherland and Mrs Musgrave, dated 14th July and 26th November 1898, together with £2, 7s., the expense of the extract thereof, and interest on said sum at the rate of 5 per centum per annum from 19th December 1898 until payment, and also £ as expenses incurred since said 19th December 1898, to have assigned to you the said decree with all diligence that has followed thereon. 3. We also agree to pay to Mrs Sutherland her said share on production of a discharge by her and her husband, and with the consent of your firm, as agents for Captain John Henderson, 5 Smith's Place, Leith, when the estate of the said Mrs Marjory Wares or Mackay has been realised and is ready for division, it being of course understood that there be no legal cause then supervening preventing the said trustee of Mrs Mackay from doing so. 4. We further agree, on your producing to us a decree of furthcoming under the arrestment of Mrs Musgrave's said share, used at the instance of Mrs Bremner's trustees in the hands of Mrs Mackay's trustee, to pay you the sum decerned for in said decree… . 6. On settlement as above our clients, the trustees of the late Mrs Bremner, will have no claims in any manner of way against Mrs Sutherland or Mrs Musgrave.—Yours faithfully,

Hector Sutherland & Green.”

The pursuer also averred (Cond. 7) that on the faith of the representations contained in this letter the pursuer agreed to take an assignation of the decree and diligence and to pay Mrs Bremner's trustees the full amount of the debt due to them by Mrs Sutherland and Mrs Musgrave; that accordingly, on 26th September 1899, he paid Mrs Bremner's trustees £256, 6s. 1d., and received from them the assignation now sought to be reduced; (Cond. 9) that from an opinion of counsel obtained in 1901 by the purchaser of the heritage of Mrs Mackay's trust estate the parties became aware that Andrew Bremner, as Mrs Bremner's heir in heritage, was entitled to the whole of the proceeds of the heritage belonging to Mrs Mackay's estate, and that the pursuer was advised that this was so, and that Mrs Sutherland and Mrs Musgrave were not and had never been beneficiaries to any extent on Mrs Mackay's trust, and that nothing was attached by the arrestments assigned to him.

The pursuer further averred as follows:—“(Cond. 10) The pursuer and the defenders Mrs Bremner's trustees, and the defender Andrew Bremner as Mrs Mackay's trustee and as an individual, all entered into said assignation under the mutual essential error that the said Mrs Sutherland and Mrs Musgrave were beneficiaries to the extent of £150 each or thereby upon Mrs Mackay's trust estate, and that the defenders Mrs Bremner's trustees were in a position to convey, and did in point of fact convey, said beneficial rights to the pursuer by virtue of the arrestments assigned. Further, the pursuer entered into said assignation under essential error to the effect foresaid induced by the representations contained in the said letter dated 11th April 1899 by Messrs Hector Sutherland & Green, written by them as agents for the defenders Mrs Bremner's trustees, and for the defender Andrew Bremner as Mrs Mackay's trustee and as an individual, which representations now prove to be false and unfounded. In the defences the defender Andrew Bremner for the first time repudiates the position that when the assignation was arranged for in 1899, and down to the time when it was executed in 1901, he was in the bona fide belief that Mrs Alexander Sutherland and Mrs Musgrave were entitled to £150 each or thereby from Mrs Mackay's trust. On the assumption that his repudiation is well founded the representations in the said letter of 11th April 1899 were not only false and unfounded but were made by the said defender fraudulently for the purpose of inducing the pursuer to enter into the said assignation. In these circumstances the pursuer has called upon the defenders Mr Bremner's trustees to repay him the said sum of £256, 6s. 1d., with interest thereon since the date of payment on 26th September

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1899, but they decline or delay to do so, and the present action has been rendered necessary.”

In the assignation, of which reduction was sought, warrandice was granted by the granters “as trustees and executors aforesaid from all facts and deeds done or to be done by us.”

The pursuer pleaded—“(1) The pursuer is entitled to decree of reduction as concluded for because the pretended assignation sought to be reduced was entered into under mutual essential error on the part both of the pursuer and of the defenders Mrs Bremner's trustees. (2) The pursuer is entitled to decree of reducas concluded for—(1st) Because the said pretended assignation was entered into by him under essential error; (2nd) because in entering into said assignation he was under essential error induced by the defender Andrew Bremner, and by Messrs Hector Sutherland & Green acting as agents for said defender, both as an individual and in the various trust capacities condescended on; and (3rd) because said essential error was induced by false and unfounded representations made by or on behalf of the said defender; and (4th) Separation, because said essential error was induced by false and fraudulent representations made by or on behalf of the said defender.”

The defenders pleaded, inter alia—“(1) The action as laid is incompetent. (2) The averments of pursuer being irrelevant and insufficient to support the conclusions of the summons, the defenders are entitled to absolvitor with expenses.”

On 29th October 1902 the Lord Ordinary ( Kincairney) pronounced the following interlocutor:—“Repels the first plea-in-law for the defenders, and under reservation of the pleas of parties allows both parties a proof of their respective averments on record and to the pursuer a conjunct probation.”

Note.—“This is an action of reduction of an assignation dated 31st January and 4th February 1901 granted by the trustees of the deceased Mrs Bremner, one of whom is her son Andrew Bremner, in favour of the pursuer, and for repayment to the pursuer of the sums paid by him in consideration of the assignation.

The assignation bears to assign the sum in a decree for expenses in favour of Mrs Bremner's trustees against Mrs Musgrave and Mrs Sutherland, daughters of Mrs Bremner, pronounced in a litigation between them, together with the decree and executions and the claim of Mrs Bremner's trustees to the funds attached by them by arrestments used in the hands of Andrew Bremner as trustee of Mrs Mackay (Mrs Bremner's mother) of the funds due by him as such trustee to Mrs Musgrave and Mrs Sutherland. It is averred that the pursuer in consideration of the assignation paid the sum in the decree to Mrs Bremner's trustees.

The assignation is peculiarly expressed, but I think it clear enough that the arrestments were assigned only to enable the pursuer to repay himself.

The reason why the pursuer desires to reduce this assignation in his own favour is that he avers that nothing was due by Mrs Mackay's trustee to either Mrs Musgrave or Mrs Sutherland, and therefore that the arrestments used by Mrs Bremner's trustees attached nothing, and that the assignation by Mrs Bremner's trustees of their claim on the funds said to be arrested carried nothing. This is clearly enough averred (if there be anything clear in this confused case) and on what I think very plausible grounds, and I assume it to be true for the purposes of this judgment.

I cannot, however, find any averment that the pursuer ever asked payment of the sum in the decree from Mrs Musgrave or Mrs Sutherland, or that he is unable to recover payment from them.

The ground of reduction is error in regard to this arrestment. No question is raised about the decree nor about the validity of the arrestment, but only about its value, which it is said plausibly (probably truly) is nothing.

The pursuer maintains that this error was essential, and pleads (1) that it was a mutual error, or (2) an error of the pursuer induced by the misrepresentations (not fraudulent) of the defenders, or (3) (inconsistently, or at least alternatively) induced by the fraudulent misrepresentations of the granters, Bremner's trustees.

The pursuer has moved for a proof. The defenders plead that the action is incompetent, and that the averments are irrelevant.

“The record is very verbose, difficult to read, and extremely obscure.

It is averred that Mrs Bremner's trustees, in using arrestments In the hands of Andrew Bremner as Mrs Mackay's trustee, did so in the belief that under Mrs Mackay's trust-deed certain sums of money were payable to Mrs Musgrave and Mrs Sutherland. This averment is supported by a very confused letter dated 11th April 1899, written to the pursuer by the agents of Andrew Bremner as Mrs Mackay's trustee and of Mrs Bremner's trustees, intimating that they (law-agents on Mrs Mackay's trust) thought that £150, more or less, would be payable out of Mrs Mackay's estate to each of Mrs Musgrave and Mrs Sutherland, and there is no reason to doubt that such was the belief of Mrs Bremner's trustees at that time; and it is averred that the pursuer, believing this statement made by the agents on Mrs Mackay's estate, was of the same opinion. It is now averred (as I have said, on plausible grounds which I need not here discuss) that this was a total mistake, that no such sums were payable, and that the arrestments were worthless. I see no reason to doubt that there is a relevant averment of mutual error on this point when the assignation was granted and the sum in the decree paid by the pursuer.

The first question is—Was it an essential error? It was not an error regarding the whole subject assigned or the principal subject assigned, which was the decree and the sum in the decree, but a secondary and

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accessory subject, namely, the arrestment. But it might be essential error notwithstanding. One of the clearest definitions of essential error to be found in our books is that by Lord Watson in Menzies v. Mensies, March 10, 1890, 17 R. (H.L.) 25, 29. His Lordship says, ‘Error becomes essential whenever it can be shown that but for it one of the parties would have declined to contract.’ I find no averment on record in terms of this dictum. But perhaps it might be reading the record too strictly to hold that such an averment should not be implied from what is said in Condescendence 5; and I would not be disposed to hold the record utterly irrelevant on that ground. It is too common in framing records to leave the essential points to be reached by inference.

On the subject of mutual error there are not many cases in our reports. The pursuer referred to Hamilton v. The Western Bank, June 12, 1861, 23 D. 1033, which is authority for him, so far as it goes, both on the point of mutuality and essentiality. He further referred to Pollock on Contracts, p. 488, and to the following cases— Couturier v. Hastie, 1856, 5 H.L. 673; Emerson, 1866, 1 Ch. 433; Strickland, 1852, 7 Exch. 208; Cochrane v. Willis, L.R. 1 Ch. 58; Cooper v. Phibbs, 1867, L.R. 2 H.L. 149. But I doubt the application of these cases. They related to errors which regarded the whole subject of the contract, and consisted in believing that there was an existing subject of contract when in fact there was none; as for example when it related to an annuity when, unknown to either contracting party, the annuitant was dead at the date of the contract. These cases might have applied had nothing but the arrestments been assigned. But as it is there seems to be difficulty in applying them.

But it seems unnecessary to decide this point at present, because the pursuer has an alternative case of essential error induced by the misrepresentations of the defenders, as to which he relies on Stewart v. Kennedy, 1890, 17 R. (H.L.) 25.

Further, the pursuer avers essential error induced by the fraud of the defenders or those acting for them. This ground of action seems wholly inconsistent with the averments of mutual error; but the case on this point is very special, and I am disposed to think that this is a case in which it may be possible to put forward these alternative views.

The misrepresentations said to have been made by or on behalf of the defenders are said to be contained in the letter of 11th April, and it is said that if Bremner's trustees believed the statements in that letter then there was misrepresentation without fraud, but if they did not believe them the averments were fraudulent.

On the whole, I am disposed to think that the pursuer has stated a case which, confused as it is, is not utterly irrelevant.

The defenders maintained in argument two separate grounds of defence in answer to the pursuer's case. The one was that the assignation is only a part of or incident in a complex contract expressed in the letter of 11th April, and that it is really a partial reduction of the contract. I doubt, however, whether this letter can be called a contract at all, and when it is considered that the pursuer's case rests on the averment that the arrestments attached nothing, I am disposed to think that in any view this assignation of the decree is separable from the other paragraphs in the letter, and to reject this defence at this stage as not sufficiently substantial.

Again, it was argued that the defenders should be assoilzied because the pursuer does not offer restitution in integrum. But it seems to me that there is nothing to which this plea can apply, at least that I cannot affirm that there is without inquiry. It is said that their position will be different because the arrestments will be prescribed. But if they attach nothing, which seems to be a condition of the pursuer's success, it matters nothing whether they are prescribed or not.

On the whole, I am not prepared to throw out this action on these special grounds, particularly as they are, in my opinion, not covered by the defenders' pleas. I hesitate certainly to send such a confused record to proof; but I think the pursuer has stated a case which he is entitled to try.

I am of opinion that the first plea should be repelled, and a proof should be allowed to both parties under reservation of all the other pleas.”

The defenders reclaimed, and argued—This was not a case of mutual essential error. The pursuer had received the decree and arrestment which he had contracted for. There was further no error as to the nature of the contract. There was no doubt an opinion expressed in the letter that the subject of arrestment was worth so much. But an opinion did not constitute a guarantee. A mere representation of opinion was not a representation of fact. No expression of opinion would ever found a case for reduction. The case of Hamilton v. The Western Bank, supra, was clearly distinguished from the present, as in that case there was no consensus in idem as to the subject sold. The case of Cooper v. Phibbs, supra, and the other English cases quoted by the Lord Ordinary in his note, were also quite distinct, as they all related to errors with regard to the subject of the contract. There were further no facts stated on record to support the plea of misrepresentation. The law of Scotland on the subject of essential error and misrepresentation had been accurately summed up by Lord Kyllachy in his opinion in Woods v. Tulloch, March 7, 1893, 20 R. 479, 30 S.L.R. 497. Further, there was no statement on record that the pursuer had tried to put the decree in force. The arrestments were merely ancillary to the decree. Until the pursuer put the decree in force it was premature for him to come against the defenders.

Argued for the pursuer and respondent—The case was relevant. There was here mutual essential error as regards what

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Lord Watson called “The quality of the thing engaged for”— Stewart v. Kennedy, March 10, 1890, 17 R. (H.L.) 28, 27 S.L.R. 469, 471. The only thing on which the pursuer relied in order to get back his money was that the arrestments had attached about £300 of Mrs Mackay's estate. That was the only consideration he received for his money, and the arrestments were placed in his hands in order that he might get this share. It now turned out that so far as concerned the arrested fund the subject purported to be assigned was non-existent. The case therefore fell within the scope of the decisions of Hamilton v. The Western Bank, supra, and Cooper v. Phibbs, supra. If there was not mutual error there was here at least essential error on the part of the pursuer induced by misrepresentation on the part of the defenders. The pursuer's error was induced by the statements made on behalf of the defenders. The defenders stated as a fact that a share of Mrs Mackay's estate fell to be paid to the two ladies. They stated as their opinion that that share amounted to a certain sum. It turned out that there was no such share in existence. There was thus misrepresentation in essentialibus by the defenders. It would not do for the defenders to say, “You have got the decree and arrestment.” The decree and the arrestment were the subject of the contract only in so far as they attached the shares of Mrs Mackay's estate mentioned in the letter— Adam v. Newbigging, 1888, 13 A.C. 308.

At advising—