Scottish Court of Session Decisions

William Finlayson, trustee on the sequestrated estate of John Wanliss Bell, Inveravon Bank, Perth, in September 1905 brought an action in the Sheriff Court at Perth against Henry Jameson, solicitor in Perth, as the sole accepting trustee and executor of the late William Bell, for the sum of £200, or such other sum as should be ascertained to be the legitim or bairn's part of gear falling to John Wanliss Bell as one of the lawful children of William Bell, who had died on 3rd September 1893, with interest from the 3rd of September 1893 till payment.

John Wanliss Bell, the bankrupt, had never claimed legitim, and the only question in the case was whether at the date of the action it was still open to him to make such a claim. It was not disputed that if this question was answered in the affirmative the claim could be now successfully made by his trustee in bankruptcy, although the bankrupt himself had no desire to make it.

The facts of the case (which are also briefly summarised in Lord Stormonth Darling's opinion infra) are fully set forth in the following findings of the Sheriff-Substitute ( Sym), pronounced after proof and subsequently adopted by the Sheriff and the Second Division:—“(1) That the late William Bell died on or about 3rd September 1893, leaving his wife and six children, of whom John W. Bell, the bankrupt, is one, him surviving; (2) that John W. Bell, who is not the eldest child, was then about twenty-three years old, and had already been engaged in training a few young horses, and had had a few small live stock transactions, but that he did not begin business till 1894, as after set forth; (3) that said William Bell's estate was entirely or almost entirely moveable; (4) that it amounted, according to the inventory given up for confirmation, to about £2632, 4s. 11d.; (5) that William Bell left a settlement in the form of a mutual settlement by him and his said wife which bore to dispose of the whole estates of the spouses at the death of the predecessor; (6) that no special mention of the legal rights of children is made therein, and that those had not been excluded by an antenuptial contract of marriage; (7) that these rights are not alleged to have been anticipated by gifts or advances to account of legitim in the case of any child; (8) that under the settlement the widow had the income of the whole estate, she maintaining those children who were in family with her, which is, and has ever since the said William Bell's death been, the case of John W. Bell; (9) that the settlement provided for equal distribution among the children surviving at the widow's death; (10) that, assuming John W. Bell to reside with the widow and to be alimented in her house (as has been the case), the provisions for him in the settlement were on the whole better for him than the taking of legitim, unless he had required an immediate capital sum, but that this superiority of the testamentary provision was not very great; (11) that no careful comparison of the testamentary provision with the right of legitim with a view to a definite election took place at the father's death in the case of John W. Bell, and no definite declaration of election was called for by the trustee of the settlement; (12) that no definite election was absolutely necessary at the time, and that in the case of those children who were still under full age a definite election might have been premature and have been inexpedient to the trustee to have asked; ( 13) separatim, that no written statement of election and discharge of the vested right of legitim was ever granted by John W. Bell; (14) that the questions whether the doctrine of equitable compensation would be applicable to the father's estate in the event of John W. Bell taking legitim, and whether, if so, it would be a good thing for him to take legitim on the footing that his action would not be forfeiture of testamentary provisions, but involve only compensation to the other interests affected, were not raised or considered by him or by the trustee of the settlement, and that he received no legal advice upon the subject from any solicitor in his own interest; (15) that the knowledge of John W. Bell upon the subject of legitim seems to have been simply that he had an interest, according to the number of his father's children, in one-third of his father's moveable estate if he insisted on taking it, but that that would affect (prejudicially, as he understood) the interests of his mother and his sisters; (16) that he was on friendly terms with the trustee of the settlement, who is a solicitor, and had conversations with him about the estate, and that this was the state of matters as it appeared to both; (17) that his wish at the time of his father's death was not to go into that matter at all, but to live on with his mother and sisters, the former having the undisturbed income of the whole estate, according to his father's

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intention; (18) that the family seem to have been on affectionate terms, that the children had even before the father's death been admitted to a knowledge of how he and Mrs Bell proposed to regulate their succession, and that from first to last the intention of the children, including John W. Bell, was generally that the mother should have, as the father wished, ‘her lifetime’ of the moderate means left by the father for the support of his wife and large family, and that if they survived her they should divide the means of the spouses after her death; (19) that John W. Bell began business in dealing in live stock in or about 1894, and that he was, so far, in a position to do without demanding immediate capital funds for his business, partly because it was on a moderate scale and partly because he had a legacy of £500 left by a relative; (20) that this legacy was from the state of the investment not available for immediate use, but that one of the Misses Bell after a time took it over and advanced him money for it; (21) that John W. Bell was, as a child interested in the funds settled by the father, made acquainted with and a consenter to the advance of funds required by the liferenter in consequence of some other money being tied up in an investment which was at least temporarily unprofitable, and that he was in the same capacity made acquainted with and was a consenter to certain necessary advances which his elder brother received, particularly when about six years ago the latter was acquiring business premises for his business as a civil engineer in Perth; (22) that John W. Bell during his residence with his mother as aforesaid made a contribution to the family expenditure in one year when his business profits allowed of it, but otherwise has been alimented and clothed by her out of her income, which consists of the income of the father's estate supplemented by some separate means of hers; (23) that Mrs Bell, while considering in thus affording aliment that she was doing so out of her husband's estate, was also affording it out of her own means, and acting rather as an affectionate parent than as administrator of family funds; (24) that the affairs of John W. Bell having become embarrassed, he, in July 1905, almost twelve years after his father died, applied for sequestration of his estates; (25) that Mr Finlayson, the pursuer, is the trustee in his bankruptcy, and that said pursuer as trustee has made a claim as in right of John W. Bell to take the legitim to which the latter was entitled at the death of William Bell, such claim being the only claim ever made as by or in right of John W. Bell.”

The pursuer pleaded, inter alia—“(2) The said right to legitim not having been discharged or satisfied, was carried to the pursuer by the sequestration of the said John Wanliss Bell's estates, and he is therefore entitled to the accounting and payment sued for. (4) The bankrupt having made no election between his legal rights as one of the children of the said deceased William Bell and the provisions made in his favour by his father's settlement, the pursuer is entitled to claim the legitim. (5) Assuming that the bankrupt did elect to take the testamentary provisions, the pursuer as his trustee in bankruptcy ought to be restored there against in respect — ( a) The election was induced by the defender with undue haste and in ignorance on the bankrupt's part of the extent of his legal rights and the considerations material to affect his choice. ( b) Matters are still entire, and he can be restored against the election without hurt to the testamentary beneficiaries.”

The defender pleaded, inter alia—“(2) The said John Wanliss Bell having in 1893, at the date of his father's death, accepted of the provisions conceived in his favour under the foresaid trust-disposition and settlement, and in terms thereof having already taken benefit thereunder, all as condescended on, the pursuer's present claim falls to be dismissed. (3) The said John Wanliss Bell's claim to legitim having been discharged or satisfied, the present action is barred, and defender should be assoilzied with expenses.”

The Sheriff-Substitute on 10th April 1906 pronounced the following interlocutor:—( After the findings in fact already quoted) — “Finds in law that the whole facts, circumstances, and qualifications proven are relevant to infer that said John W. Bell accepted the offer made to him by his father and his father's executor of a provision in lieu of legitim; that such acceptance may competently be inferred without a written discharge, from the facts, taken with the time which had elapsed between the father's death and the bankruptcy, and would have barred John W. Bell from opening up a claim to legitim at the date when his affairs were sequestrated: Therefore repels the pursuer's pleas-in-law: Finds that the action cannot be maintained by the trustee; and assoilzies the defender.”

The pursuer appealed to the Sheriff, who on 9th June 1906 affirmed the Sheriff-Substitute's interlocutor.

Note.—“The import of the evidence in this case appears to me to be that John Wanliss Bell knew that he was entitled to a share of his father's estate which the will could not defeat, but that he refrained from demanding it because of a family understanding that the whole should be left in liferent to the mother. I see no reason to doubt this evidence, particularly as it is not overstated. Now I do not think that such a definite family agreement is established that John Wanliss Bell might not have gone back upon it, had he thought better of it, within a few months of his father's death. But it is impossible to ignore the twelve years of acquiescence, and this following upon the understanding is sufficient to exclude the claim. Had John Wanliss Bell been himself the claimant I do not think that upon his evidence of his attitude at his father's death he could now, after the lapse of twelve years, during almost the whole of which he was maintained by his mother, successfully insist in this claim. His creditors are the claimants here, and that justified close scrutiny of the evidence. But if this evidence be accepted

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by the Court as true, the case is, I think, on the same footing as if he himself were the claimant. It was urged in Mr Hunter's very able argument, with some citation of authority, that so long as the estate is extant and matters intact, a widow or child may always go back upon a renunciation of legal rights. I do not think that this can be accepted as a sound general proposition, and any dicta which may seem to support it must be read with reference to special circumstances which do not exist here. It was further urged that John Wanliss Bell's knowledge of his rights was imperfect, and that in particular he did not understand the doctrine of equitable compensation. But if a due understanding of the doctrine of equitable compensation be necessary to give validity to a discharge of legitim, no layman, and I fear but few lawyers, are capable of discharging such a claim. I think that John Wanliss Bell knew enough to enable him to protect himself.

“As regards lapse of time, the pursuer relied strongly upon the case of Crellin v. Muirhead, 20 R. 51. In that case, however, there was not during the long interval a knowledge of the existence of the right, because it appears to have been supposed that the deceased daughter took a fee subject to her mother's liferent under her father's will. On the other hypothesis, which proved to be the true one, that the daughter had not taken a fee, there was not after her death any question of election. The legitim was an unqualified debt like the widow's claim to jus relictce in the case of M'Kenzie, 11 Macph. 681, which was also cited.

The bequest of the whole estate in liferent to the widow and in fee to the children surviving at the widow's decease is a very common form of settlement among persons of moderate means, and such settlements are generally acquiesced in by the family. Now no case was cited, and, so far as I am aware, there is no case where, under such a settlement, a claim to legitim was sustained which was first preferred at a longer interval than two years after the father's death. But it must often have happened that children so circumstanced got into difficulties or quarrelled with the mother or became bankrupt. If the claim were one which might readily be sustained after a long series of years I should have expected to find cases to that effect. Mr Hunter suggested that the reason there are no such cases is that the law is so clear that the claim must always have been acquiesced in. I am unable to accept this suggestion. I think, on the contrary, that the reason why there have been no such cases is that it has been recognised that abstention for a number of years to prefer an indisputable claim to ready money was, in the circumstances, evidence of election to abide by the will.

After the death of the head of a family who leaves means, there is always a period of winding-up and readjustments of family arrangements which may be measured even by years. But whilst every case must be judged by its own circumstances, it appears to me that it would be very unfortunate if the general rule of law should encourage members of a family, after a long tract of years, to disturb family arrangements in which at the time they had acquiesced, and upon the faith of which others interested had acted and ordered their lives.

But however that may be, in the present case I hold it to be proved that John Wanliss Bell agreed to abide by his father's settlement and not to claim legitim.”

The pursuer appealed to the Court of Session, and argued—Admittedly the bankrupt had never formally and in writing discharged his claim to legitim. Admittedly, however, such a charge might be inferred from facts and circumstances, and the only question therefore in the case was, were there here such facts and circumstances; there were not. For, firstly, res were still integrce, no occasion for election arising until the death of the widow—this rendered it a priori improbable that an election had been made. Secondly, there was no point of time at which it could be said that he had exercised his right to elect, and no special occasion on which it was even probable that he had done so. There had been no formal meeting with the law agent, no presentation of a formal state of the trust affairs. There was, thirdly, no evidence that he knew the precise nature of his legal rights, and if he did not, then no election made by him could be valid. Indeed it was found as a fact in the case that he did not know anything of the doctrine of equitable compensation under which he might in certain circumstances have obtained both his legal and conventional provisions— Macfarlane's Trustees v. Oliver, &c., July 20, 1882, 9 R. 1138, 19 S.L.R. 850; Gray's Trustees v. Gray, 1907, S.C. 54, 44 S.L.R. 39. The Court was very loth to hold that such a claim as that to legitim had been informally discharged, and mere acquiescence in a settlement was wholly insufficient— Crellin v. Muirhead's Judicial Factor, November 16, 1892, 20 R. 51, 30 S.L.R. 72; Stewart v. Bruce's Trustees, June 10, 1898, 25 R. 965, 35 S.L.R. 780; Duff and Others, 7 S.L.T. 46.

Argued for the defender—The whole facts and circumstances of the case clearly showed that the son had immediately after his father's death elected to take his conventional provisions. That was obviously the understanding on which the family had been living ever since, so it was absurd to say that res were still integrce. The question of equitable compensation did not come into the case at all. Further, there was here something very like an antecedent election, the son having known and approved of the settlement before his father's death. See Baxter's Trustees v. Baxter's Executor, June 27, 1884, 11 R. 996, 23 S.L.R. 803.