Scottish Court of Session Decisions

In July, 1827, the late Alexander Forsyth, writer in Edinburgh, and confidential agent of the late Lord Cringletie, made offer, in his own name, for a purchase of the estate of Westshield, from Sir James Steuart Denham of Coltness, at the price of £7000, of which £4000 was to be paid at the following Martinmas, upon Sir James granting to Forsyth a disposition to the lands, and the remaining £3000 at a term thereafter. The following memorandum of equal date with the offer was annexed to a copy of it:—

“It is contracted and agreed upon, that Mr Forsyth shall purchase, for behoof of Lord Cringletie, those remaining parts of the lands of Westshield, belonging to Sir James Steuart Denham of Coltness and Westshield, presently under sale, at the price of seven thousand pounds, and for the purchase of which he has now subscribed, and addressed to Sir James an offer of that sum, a copy of which is prefixed; that, provided the same is accepted, Mr Forsyth, upon receiving a disposition in his favour, shall obtain himself infeft, and advance or borrow, upon the security of the lands, the sum of four thousand pounds, to be applied as part of the price, in the discharge of a debt to that extent, due by Sir James to the agents for his regiment, and that the lands shall be resold for Lord Cringletie's behoof; Mr Forsyth, on being relieved of his engagements, to hold himself accountable to his Lordship for the price, or bound to divest of the property, as his Lordship may direct.

“(Signed) Alex. Forsyth.”

Lord Cringletie acknowledged himself a party to this agreement by a writing under his hand.

The offer having been accepted, Forsyth paid the price, and received a disposition, upon which he was infeft. The relative memorandum was not exactly followed out. The whole of the purchase-money was paid up by January, 1828, and Forsyth entered into and continued in the possession of the property as absolute proprietor. He never received any part of the price from Lord Cringletie, and he continued till his own death, which happened some years afterwards, to draw the rents and proceeds, without accounting to his Lordship.

Lord Cringletie died in May, 1836, leaving the claimant James Wolfe Murray, his eldest son and heir-at-law, Mrs Dennistoun, and other children. His Lordship had executed a trust-disposition and deed of settlement in 1821, and a relative codicil in 1834, conveying his estate of Cringletie, his house in Edinburgh, &c. and other heritable property of which he might die possessed, to certain trustees, to be thereafter conveyed over to his eldest son, whom failing to his second son. In neither of these deeds was any particular mention made of the property of Westshield. Shortly before his death, he had made a testamentary settlement of his moveable estate in favour of Mr William Pitt Dundas, advocate, as executor for behoof of the claimants Mrs Dennistoun, and his other younger children.

Thereafter Forsyth's representatives, reverting to the original agreement of 1827, required payment of the price of the property of Westshield, on their granting a conveyance to Lord Cringletie's heir. Doubts having arisen whether this debt was payable out of the executry, or was on the other hand a burden upon the heir, and payable primarily out of the lands of Westshield, in order to have the matter determined, his Lordship's executor brought a process of multiplepoinding as to the moveable succession vested in his person. In this process Lord Cringle-tie's trustees and heir, his younger children, and Mr Forsyth's representative respectively lodged claims. The latter falling to be preferred primo loco upon the fund in medio, the question of law arose between the other claimants, whether the debt due to Forsyth's representatives was heritable or moveable, the trustees and heir contending that it should be paid out of the executry as an ordinary debt due by the deceased, while the younger children contended that it was primarily payable out of the lands of Westshield, since by the agreement between Mr Forsyth and Lord Cringletie, and the disposition and infeftment following thereon, a real lien or heritable security for the money advanced by him, was constituted in Forsyth's favour, as in a question with Lord Cringletie.

The Lord Ordinary having ordered cases, it was

Pleaded for the Trustees and Heir,—

This is the ordinary case of a purchase of heritable property made by a person who dies before paying the price, when the estate goes to the heir, the executors becoming liable for the price. The property of West-shield was undoubtedly heritable at Lord Cringletie's death, quoad succession. The debt due to Forsyth's representatives was merely a personal debt at his Lordship's death, and so payable out of the executry; being neither heritably secured over the lands, nor declared a real burden upon the property. These parties might be entitled to hold the property until paid the debt, upon the principle of retention; but the debt was not thereby rendered real, or its nature altered in a question between the debtor's heir and executor. ¹ There is nothing in the circumstances of the present case to take it out of the general rule. There is no room for any distinction between a case of the price being due to the seller, and being due to a third party, such as Forsyth, who has advanced it for the actual purchaser. Neither does the present question arise upon the construction of Lord Cringletie's testamentary deeds, so that intention, if such could be shown one way or other, can be brought to regulate. It depends on the legal effect which the transaction between Lord Cringletie and Forsyth is to have upon the respective rights or liabilities of the heir and executor. The only proper modes of making a debt real upon lands is by heritable bond, disposition in security, or an express declaration in a deed of transference. One may have an indirect or incidental security over lands, and yet not be a real creditor, having his debt heritably secured thereon. Though in such case retention of the lands may be competent, the debt and obligation to pay remain entirely personal; the security arising only out of the common law right of retention, and implying no real right. But the liability of the heir is merely a consequent of the debt having been made real by the act of the ancestor, according to one or other of the modes recognised in law, and there seems to be no authority for holding that a debt may be heritable virtually or by equipollents, though not actually or properly so.

Pleaded for the younger Children,—

If the intention of the testator be held to enter into the present case, the presumption is, under all the circumstances, that Lord Cringletie did not intend the debt in question to be a burden upon the younger children. But the matter in dispute depends almost exclusively on the legal construction to be put upon the agreement between Lord Cringletie and Forsyth at the date of the sale, when considered with reference to the other parts of the transaction. The circumstances of this case take it out of the general rule founded on by the heir. The debt contracted by his Lordship to Forsyth does not stand on the footing of a debt contracted

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¹ Arbuthnot, June 23, 1773, M. 5225; Clayton v. Lothian, 2 W. and S. 44 (Lord Ordinary's Note), and 40; M'Nicoll, June 16, 1814, and Jan. 31, 1816, (F. C.)

by a purchaser to the seller of an estate. No debt is due to Sir James Steuart, who received the price before Lord Cringletie's death. The money was advanced by Forsyth, and the estate was conveyed directly to him, to be either held or resold in security and repayment of the price, but subject to the understanding which existed between him and the party for whom the purchase was made. The transaction was of the same nature as if a conveyance had been first made by Sir James Steuart to Lord Cringletie, and Lord Cringletie had then executed a disposition to Forsyth by way of security for his advances. It can make no difference in the real nature of the transaction that Sir James conveyed directly to Forsyth, without the intervention of Lord Cringletie, if the proceeding took place with the assent of the latter, and under his sanction. The form by which the debt is made to affect the estate is immaterial, if it truly affect it, which in cases of this kind is the leading point of enquiry. But a real security could hardly be constituted in a form less equivocal than by an absolute title, subject only to an agreement in the nature of a backbond by Forsyth to divest himself in Lord Cringletie's favour, on receiving repayment of the money advanced, and being relieved from any engagements he might have come under with regard to it. Thus the claim for the price of the property was heritably secured to the creditor Forsyth, Lord Cringletie having enabled him to take what was equivalent to a real security for his repayment; and the debt is consequently such as will fall to be primarily payable by the heir. ¹

The Lord Ordinary pronounced the following interlocutor, adding the note subjoined: ^*—“Finds that the debt due to the trustees of the late

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¹ Erskine If. 2, 5, “All rights constituted,” &c.; Frazer, Nov. 13, 1804, M. App. to Heir and Executor, No. 3; M'Nicoll (in 1816), supra; Clayton, supra.

^* “The leading provision in the memorandum or agreement of 19th July, 1827, being, ‘that Mr Forsyth shall purchase, for behoof of Lord Cringletie, the lands of Westshield, &c.,’ it is plain enough that Lord Cringletie was truly the purchaser; and as he died without paying the price, the case seems to fall clearly within the principle of the admitted rule applicable to such circumstances. That Mr Forsyth advanced the price out of his own pocket, and took infeftment in his own name, did not in any way change his character from that of a trustee, or give him any right or interest in the property, as a proper heritable creditor in the sense of law. The trust being fully admitted, he is merely a personal creditor for the price advanced to the seller, as Lord Cringletie's bankers might have been, if he had over-drawn his deposit account in order to make payment; and his resulting right to retain, or refuse to denude of the estate, till relieved of this advance, is precisely parallel to what theirs would have been to retain any title-deeds, or other documents lodged or empledged in their hands.

“In a subsequent part of the agreement, it is no doubt provided that Mr Forsyth, after getting himself infeft,‘ shall advance or borrow on the security of the lands,’ a certain part of the stipulated price; and it is said that this is equivalent to a declaration in a deed of settlement, that the sum so to be advanced shall be a burden on those lands, and not on the executry. But in answer to this, it is to be remarked, 1st, That it is by no means clear that the words, ‘on the security of the lands,’ were intended to he applied to the case of an advance by Mr Forsyth, and not to the case only of his borrowing, or at least that they were intended to be applied to the former case in the same sense as to the latter; and, 2d, That even if this should be held to have been the intention, it has not been followed out or carried into effect in such a manner as to make the advance, in such a case as the present, a burden on the heir instead of the executor of the party. If Mr Forsyth had borrowed, instead of himself advancing the money, he must have given the lender a regular infeftment in the lands, in order to produce this effect; and without this, the clause in the agreement would, as a mere power unexecuted, have been, in this respect, entirely inoperative. In the same way, if it really was intended that he should have a power to make himself a proper heritable creditor for his own advances, it was equally requisite that, in order to execute that power, he should have granted a regular infeftment in security to himself (as a trustee) for such special advances.

“But the conclusive answer is, that a stipulation of this kind, in an onerous agreement inter vivos, can never be regarded as at all parallel to an express declaration or direction by an absolute proprietor, in a settlement intended to regulate the interests of his lucrative successors after his death. In such a case, being arbiter rei suæ, every declaration of his will is justly considered as a condition of the several provisions he has made out of it, and necessarily binding on those who take benefit from them; whereas in the former, it implies only a personal obligation between him and the other contracting party, and can never be interpreted, in a case where that party insists only on a personal right to repayment as a trustee, into a deliberate invasion of the rights and liabilities of his legal successors in heritage and personally respectively. If Mr Forsyth had attempted, after Lord Cringletie's death, to make himself a proper heritable creditor, by a special infeftment in security, or even if his executors were now suing the heir for such an infeftment, a case might be raised on the construction of the clause already referred to in the agreement, under one result of which the judgment now given might be liable to some question. But as things now stand, there seems no serious difficulty.”

¹ Dec. 14, 1825, ante, IV. 313; (new ed. 317).

Alexander Forsyth must be satisfied out of the executry, or personal estate of the late Lord Cringletie; and cannot, in a question with the executors, be charged upon the heir succeeding to the lands of Westshield, or the trustees acting for behoof of such heir; and before farther answer, appoints the cause to be enrolled, that parties may explain what decerniture may be required to give effect to this finding, in the present state of the process.”

The younger children reclaimed.