Scottish Court of Session Decisions

This question arose in the adjustment of issues in the action at the instance of Alexander Munro, coachbuilder, Edinburgh, and others, trustees under a trust-disposition and settlement of the now deceased James Paterson, pawnbroker, Edinburgh, against the Right Rev. John Strain and others, trustees under a later trust-deed of the said James Paterson, and against his representatives.

The purpose of the action was the reduction of the trust-disposition and settlement under which the defenders were trustees, on the ground that it had been fraudulently obtained from the said James Paterson by the Rev. George Rigg, one of the clergy of St Mary's Roman Catholic Chapel in Edinburgh, whilst the said James Paterson was weak and facile in mind and easily imposed upon. It appears that Mr Paterson, who was possessed of property to the extent of £35,000, had in August 1,872 executed a trust-disposition and settlement by which he disposed of his whole property. The trustees (of whom the defender Mr Rigg was one) were directed to pay an annuity of £500 to the truster's son, and a legacy of the same amount to each of his six grandchildren. The bulk of the property was then to be applied by the trustees to a purpose which the truster describes in the following terms:—“The chief object I have had during my life in earning and saving money being the foundation and endowment of an institution in Edinburgh or elsewhere in Scotland for the education of poor orphan females, between the ages of 10 and 18 years, of sound healthy constitution, and for their instruction and training in all kinds of domestic and household duties, with the view of fitting them properly to perform such duties in after life, and to teach others to do so, … . my said trustees shall” (after accumulation for ten years as mentioned in the deed) “apply the free proceeds of my whole means and estate in the foundation and endowment of the above mentioned institution.” The pursuers alleged that “shortly after the execution of the trust-disposition and settlement of 31st August 1872, the defender Mr Rigg, following out his design of obtaining Mr Paterson's fortune for the benefit of the Roman Catholic Church, attempted to induce him to alter his settlement to the effect of making the institution which he proposed to found an institution limited beneficially to persons of the Roman Catholic faith, and formed the fraudulent design of procuring from the said now deceased James Paterson, by false representations, such a deed as would (if given effect to) frustrate Mr Paterson's intention, as expressed in said trust-disposition and settlement of 31st August 1872, and give persons of the Roman Catholic persuasion the benefit to a greater extent of his fortune, by permitting it to go to the children of his deceased son and daughter, which children, with the exception of the defender Edward Simpson, were and are Roman Catholics. Mr James Paterson had by this time, owing to ill health and otherwise (he had for long been ill of the disease of which he ultimately died), become weak in mind, and facile and easily imposed upon, especially by persons in whom he had confidence; and Mr Rigg, whose scheme was that the grandchildren should in effect receive the property, was afraid that if the deed (which he designed should be executed by Mr Paterson with the result of giving his property to them) was couched in such terms as to clearly make them his heirs, his suspicions might be aroused and he might refuse to sign it. He accordingly resolved to have prepared a deed, the terms of which (should be, against his desire be compelled to read it to Mr Paterson) would not be so likely, in his then weak state of health, to excite his attention or arouse his suspicion. Mr Paterson was an illiterate man, of little education. The said pretended deed is not the deed of the said now deceased James Paterson. It was not read over to him, and neither the agents who prepared it, or any one on their behalf, ever received instructions from Mr Paterson, or consulted him regarding it. When Mr Paterson signed it he was wholly unaware of its nature and effect, and did not know that it cancelled all previous deeds made by him, and in particular the said trust-disposition and settlement of 31st August 1872.

Even on the assumption that when he subscribed the said pretended deed of 28th November 1872 the said now deceased James Patertson was not so totally bereft of reason as to make him wholly incapable of executing a settlement, he was so very facile from mental disease as to make him liable to circumvention, and incapable of resisting importunity, and the said pretended deed was procured from him, to his prejudice and lesion, by fraud and circumvention and undue influence, or one or other of them, on the part of the defender, the Rev. George Rigg, acting in pursuance of the fraudulent design conceived by him as aforesaid. Mr Rigg fraudulently represented to Mr Paterson that the only alteration which the said pretended deed would effect upon the trust-disposition and settlement of 31st August 1872 was to add Bishop Strain and the Rev. Mr Geddes as trustees, and to do away with the provision for accumulating his property during the ten years subsequent to his

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(Mr Paterson's) death. Assuming that he was capable of understanding to any extent what he did when he subscribed the said pretended deed, the said deceased James Paterson signed it under essential error as to its nature and effect, induced by the said fraudulent misrepresentation in regard to or fraudulent concealment of its true meaning on the part of the defender Mr Rigg, and it was signed by him in the belief, induced as aforesaid by the misrepresentation of the said Mr Rigg, that excepting in the matter of appointing new trustees, and accelerating the period when the beneficial interests in his property should arise, the said pretended deed did not in any way alter or infringe upon or affect the said trust-disposition and settlement of 31st August 1872.”

This second deed the pursuers now sought to reduce, and proposed the following four issues as the issues suitable for trying the cause:—“(1) Whether the trust-disposition and settlement of 28th November 1872, of which reduction is sought, is not the deed of the said deceased James Paterson? (2) Whether, on or about the 28th November 1872, the said deceased James Paterson was weak and facile in mind, and easily imposed upon; and whether the defender, George Rigg. taking advantage of the said weakness and facility, did by fraud or circumvention obtain and procure from the said James Paterson the said trust-disposition and settlement, to the lesion of the said James Paterson? (3) Whether the said trust-disposition and settlement was obtained from the said deceased James Paterson through undue influence on the part of the defender George Rigg, his spiritual adviser? (4) Whether the said trust-disposition and settlement was executed by the said James Paterson under essential error as to its nature and effect, induced by the misrepresentations of the said George Rigg?

On adjustment before the Lord Ordinary his Lordship disallowed the third issue in the following interlocutor:—

24 th January 1874.—The Lord Ordinary having heard counsel for the parties—Approves of the first, second, and fourth issues for the pursuers in No. 11 of the Process; disallows the third of said issues; and appoints the issues now approved of to be the issues for the trial of the cause.

Note.—The Lord Ordinary has approved of the first, second, and fourth issues proposed by the pursuers, with the alterations thereon as in the paper, No. 11 of Process; and he has disallowed entirely the third issue, as asked for by the pursuer in that paper.

In regard to the first and second issues as now allowed, it is enough to say that they were not objected to; and, at any rate, that they are in the usual terms, and appear to be sufficiently supported by the pursuers' allegations on record, and particularly their allegations in articles 10 and 11 of their condescendence.

The fourth issue, as now allowed, was objected to by the defenders on the grounds—1st, that the pursuers have not made allegations sufficient to support it; and 2dly, that their case, in so far as it could be said to be founded on alleged error at all, was covered by the second issue as now allowed. It appears, however, to the Lord Ordinary that the pursuers' allegations in articles 10, 11, and 12 of their condescendence are sufficient to support the fourth as well as the second issue; and that, while under the latter fraud or circumvention on the part of the defender Mr Rigg requires to be made out, it will be enough under the fourth issue that essential error on the part of the granter of the deed in question as to its nature and effect, induced by the misrepresentations of Mr Rigg, whether fraudulent or not, is proved. This distinction appears to have been given practical effect to in the issue settled for trial in the case of Harris v. Robertson, 16th February 1864, 2 Macph: 664, as indicated in the report of the case, and as the Lord Ordinary has verified by an examination of the session papers. In the case, also, of M'Conechy v. M'Indoe, 23d December 1853 ( 16 D. 315), a separate issue was allowed, founded upon essential error as to the nature and effect of the deed sought to be reduced, without the addition ‘induced by misrepresentations of the defender.’ In Couston v. Miller, 26th February 1862 ( 24 D. 607), besides an issue on fraud or circumvention, a separate one was allowed on essential error as to the substance and effect of the deed sought to be reduced, caused by misrepresentation on the part of the defender. And in Hogg and Others v. Campbell and Others, 12th March 1864 ( 2 Macph. 848), a separate issue—besides one of fraudulent impetration—was allowed on essential error caused in the particular way there stated.

The Lord Ordinary is not aware of any precedent, and was referred to none, in support of the third issue, which he has disallowed. Nor does he think it can be supported on principle. He cannot, indeed, very well understand what is meant, in the present case by the expression ‘undue influence’ as used in the issue and in article 11 of the pursuers' condescendence, unless it is ‘fraud or circumvention,’ but if it means the same thing as ‘fraud or circumvention,’ then the pursuers will have the benefit of it under their second issue, which has been allowed. If the present had been the case—which the Lord Ordinary cannot hold it to be—of a man's legal, or medical, or spiritual adviser obtaining from him a gratuitous deed in his own favour, the pursuer might perhaps have been entitled to an issue founded on undue influence, as well as one upon fraud or circumvention, as in the above case of Harris v. Robertson, but even in such a case the issue would require to be differently expressed—as it was in the case of Harris v. Robertson, and the other cases before referred to—from what it is in that now asked for by the pursuers.”

The defenders reclaimed, and argued:—The Lord Ordinary is wrong in allowing the 4th issue at all. The 1st and 2d issues are enough to exhaust the whole case on record. There is no substantial difference between the case stated in Art: 12 from that in Art. 11. But assuming that there is a third alternative on record in Art. 12, we are entitled to have the word “fraudulently” introduced into the issue on the principle of the case of Dempsters v. Rae, 11 Macph. 843.

Argued for respondents:—The Lord Ordinary is right in allowing issues 1, 2, and 4. There are three cases on record, and there should be an issue applicable to each, but he should have allowed the 3d issue also, undue influence by a person in the position of a spiritual adviser being of itself a relevant ground of reduction.

At advising—