Scottish Court of Session Decisions

This action was raised by Mrs Downie against the trustees of her deceased husband for payment of the sum of £12,000 sterling, being the amount or value of her jus relictæ, or the just and equal one-third part or share of the free moveable means and estate left by her said deceased husband under the charge of the defenders as trustees foresaid; or of such other sum as the said jus relictæ or share may amount to, as the same shall be ascertained in the course of this process; together with the sum of £3000 sterling as the amount of the fruits, profits, or interest which have accrued or may yet accrue on the said share of the said estate in the hands of the defenders, or such other sum as may, in the course of this process, be ascertained to be the amount of such fruit, profit, and interest; and there was also a conclusion that for the purpose of ascertaining the extent of the pursuer's rights, and the amount of the jus relictæ or share of the said moveable estate payable to her, and accruing fruits, profits, and interests, the said defenders, as trustees foresaid, ought and should be decerned and ordained, by decree foresaid, to exhibit and produce a full, true, and particular account of the said moveable estate, and of the profits and interests which have accrued or may yet accrue thereon, and of the intromissions had by them therewith, together with all writs and vouchers necessary to instruct the same.

The pursuer averred that she was entitled to jus relictæ out of, or to one-third of the following sums belonging to her deceased husband at his death, and constituted by the following documents of debt, viz.—(1) The sum of £10,000, being the balance of a bond or mortgage for £14,000, granted in his favour by Henry Langlands, Melbourne, dated 29th January 1855, and rent or interest thereof due at the deceased's death amounting to £619, 2s., together with one-third of the interest due thereon. (2) The sum of £5000, being the amount of a bond or mortgage granted in his favour by the Glasgow Waterworks Commissioners, dated 11th March 1858, and interest thereon from the date of the last payment thereof prior to the truster's death, and to fall due thereon in time coming. (3) The sum of £700, being the amount of a bond or mortgage granted in his favour by the Glasgow, Dumbarton, and Helensburgh Railway Company, dated 23d March 1860, and interest thereon from the date of the last payment thereof prior to the date when the same was paid off, and of the said principal sum thereafter. (4) Rent due by Alexander Downie, farmer, for land belonging to the deceased at Yanyean, Victoria, from 1st October 1858 to 20th February 1862, at £8o per annum, less received to account, £233. (5) Amount due on mortgage by James Callender, merchant, Melbourne, £100.

The defenders admitted the pursuer's right to jus relictæ out of Mr Downie's moveable estate, but they pleaded that her claim was untenable, in so far as participation was sought—(1) in property which is not moveable; and (2) in sums which have not been recovered, and cannot be dealt with as available assets.

It was considered advisable that the law of Australia, with reference to the heritable or moveable character of the mortgages over property in that colony, should be ascertained before judgment. Accordingly a case was prepared on the subject, and submitted to W. W. Mackison, Esq., barrister-at-law, for his opinion.

The Lord Ordinary (Jerviswoode) thereafter found, with reference to the particulars of the pursuer's claim, as above set forth, that the five sums specified by her formed part of the moveable estate of the deceased, and were affected by her jus relictæ, with the exception of the sum second mentioned, being that contained in the bond or mortgage granted by the Glasgow Corporation Waterworks Commissioners, which he held to be heritable, as respects the rights of the pursuer as relict. He added the following

Note.—The only question of real difficulty here is, as the Lord Ordinary thinks, that which has relation to the claim of the pursuer to the one-third of the sum of £5000 under bond or mortgage granted by the Glasgow Waterworks Commissioners. Looking to the terms of the bond under which the debt is constituted, it appears to the Lord Ordinary that prior to the Statute 1661, cap. 32, that debt must have been held as heritable, as being in its character a bond for the payment of the principal sum at a certain term—viz., 15th May 1861—and with a stipulation of interest at 4 per cent. per annum from the date of the bond until the principal sum shall be fully paid and satisfied.

On this question the Lord Ordinary has adopted the views, as he understands them, expressed by Professor Bell in his Commentaries, vol. ii. p. 7, sec. 12; in his Principles, sec. 1495; by Mr Erskine, b. 2, tit. 2, sec. 10, and b. 3, tit. 9, sec. 22; and by Lord Stair, b. 3, tit. 4, sec. 24. C. B.

Both parties reclaimed.

After hearing oral argument, the Court on 16th March 1866 appointed the parties to lodge cases.

Argued for the pursuer—I. In regard to the mortgage by the Glasgow Water Commissioners. This debt is moveable in its own nature. If it is heritable quoad the rights of the pursuer, it must

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be so either (1) in respect of its being heritably secured, or (2) in respect of its falling within the description of personal bonds, which previous to the Act 1661, c. 32, were heritable to all effects, and are still heritable as regards the fisk, and husband and wife. (1) It is not heritably secured. It is essential to the constitution of a heritable security that it shall give to the creditor some definite rights in a heritable subject (Bell's Prin., sections 898–900). The mortgage confers on the mortgagee no feudal or real right in any heritable subject. It does not contain words sufficient to convey heritage, Nor is it made heritable by the provisions of the Glasgow Water-Works Act by virtue of which it is granted. It is granted in favour not of heirs, but of “executors, administrators, and assigns.” By the Glasgow Water-Works Act, 28 Vict., c. 69, passed since the date of this mortgage, it is provided that all such mortgages shall be moveable or personal estate, and transmissible as such. This Act was declaratory of the law. (2) The doctrine of the old law prior to the Act 1661 did not apply to all obligations, but only to personal bonds, having a clause of annual-rent. But this mortgage is not a bond at all. It contains no obligation whatever. An action for payment founded upon it as containing an obligation to pay could not be maintained against the Water Commissioners. It merely pledges the works and the water rates until the loan is repaid. “Mortgage” is an English law term, and corresponds to the Scotch term “wadset,” and both instruments are intended to secure parties in payment without obligation (Wharton's Law Lexicon, 1 Stephen's Com., 289, Ersk. 2, 2, 5; Hamilton v. Hope, 26th March 1853, 15 D. 594). Farther, this mortgage, even if it is a bond, contains no clause of annual-rent. As the law stood before 1661, only such bonds were heritable as indicated on the part of the creditor a desire to make a permanent investment (Ersk. 2, 2, 9, Bell's Prin., Sec. 1495; Menzies' Lectures, p. 195). In this case it is plain that the creditor considered the sum as moveable. The mortgage is dated in 1858, and the sum lent is to be repaid in 1861. The following cases were referred to:—Smith, M. 5503; Douglas, M. 5504; Stewart, M. 5505; Breadalbane's Trs., 15 S. J. 389; Porteous, M. 5463; Fraser, Hume's Dec. 210; Haining, Hume's Dec. 214. 2. In regard to the funds in Australia. Their character as heritable or moveable must be determined not by the law of Scotland, where the creditor was domiciled, but by the law of the country in which the funds were invested, and the debtors reside (Egerton, 27th November 1812, F. C.; Ross, 4th July 1809, F. C.; Newlands, 11 S. 65; Clarke, 14 S. 488; Breadalbane's Trs., 15 S. J. 389; Story's Conflict of Laws, sec. 447). This being so, Mr Mackison's opinion is conclusive that the funds are moveable estate.

Argued for the defenders—1. Bonds or provisions bearing interest were held prior to 1661 to be quasi feuda, and to be heritable. The Act 1661, making them moveable, expressly excepted widows and husbands from its operation (Stair, 2, 1, 3; 3, 4, 24; 3, 8, 47; Ersk., 2, 2, 9; Bell's Prin., sec. 1495; Menzies' Lectures, p. 195; Duff on Moveable Rights, pp. 6, 8, 14; and More's Notes, p. 146). The criterion by which the character of the mortgage is to be determined is the clause of interest. Interest was payable on this mortgage until May 1861, and this term of payment was afterwards extended to May 1866. There are here (1) the postponement of the payment of the principal sum to a distant period; (2) an obligation for payment of interest in the interval; and (3) the creditor's survivance till February 1862, the first payment of interest under the extended arrangement being due at Martinmas 1861. Such a mortgage may be moveable as regards children, but it is heritable in regard to a widow. There is no importance in the nature of the destination. An intention to exclude the heir will not advance the cause of the widow; but, farther, the terms of the destination are not the test, but the presence or absence of a clause of annual-rent. Again this mortgage assigns in security the property and works vested in the Commissioners which are heritable subjects. It is a statutory document, and does not profess to be in the ordinary form of an heritable bond. The words which are used in it being statutory are habile to convey heritage. 2. The sums due under the Australian mortgages are heritable estate. As the truster died domiciled in this country, his succession must be governed by our law; but if he has left real estate in a foreign country, the law of that country, if different from ours, will prevail. These mortgages are not real estate fixed in the colony; they are simply vonchers of debt secured over property abroad, and the creditor may carry them about with him wherever he goes. The law of the domicile must therefore regulate the interests of all concerned; and by the law of Scotland the debts are heritable in a question with the widow, because they are secured over real estate and contain an obligation for the payment of interest.

The defenders did not reclaim against the Lord Ordinary's finding in regard to the £700 contained in the mortgage by the Glasgow, Dumbarton, & Helensburgh Railway Co., the moveable character of which was fixed by the Company's Act of Parliament.

At advising—