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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Menzies v. Menzies and Another [1892] ScotLR 29_677 (2 March 1892) URL: http://www.bailii.org/scot/cases/ScotCS/1892/29SLR0677.html Cite as: [1892] ScotLR 29_677, [1892] SLR 29_677 |
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( Ante, vol. xxvii., p.721; 17 R. 881.)
The only son and heir-apparent of a Baronet and heir of entail, an officer in the army, and dependent on his father except for his pay, had for some years lived beyond his allowance, and had more than once to apply to his father to pay his debts. His father did so. The son again fell into debt, and consulted the family agent, his most pressing liability being a bill for £3000 granted to a money-lender, on which he feared he might be made bankrupt, and so ruined in his profession. The son, if he survived his father, became absolutely entitled to the fee of the estates, which were worth upwards of £300,000. After much correspondence and consultation, it was arranged that the estates should be disentailed and conveyed to trustees to hold for the father in liferent, and the son in liferent alimentary allenarly, and for the heirs of the son's body, whom failing the heir to the baronetcy in fee. As part of the arrangement the son's debts were to be paid, and an increased allowance secured to him by charges on the estates. The son about three years afterwards raised an action against the trustees and his father for reduction of the deeds by which the arrangement had been carried out, on the ground that his father and the family agent, in pursuance of a joint scheme which they had laid some years before, to deprive the pursuer of the fee of the estates, induced him to enter into the arrangement by false and fraudulent representation and fraudulent concealment, and that the pursuer had consented to the arrangement (1) under essential error, (2) under essential error induced by the father and his law-agent, and (3) under essential error fraudulently so induced. A former action raised by the pursuer against the same defenders with the same conclusions, in which action, however, there had been no averment of any scheme on the part of the father and law-agent, and no averment or pleas of fraud, had been thrown out as irrelevant.
The Lord Ordinary (Low), in the present action, held, after a proof, that the pursuer was induced to enter into the arrangement by representations as to a matter of fact—viz., the possibility of raising the necessary funds in some other way—made by the agent, acting as agent for the father and with his authority, these representations being different from the representations averred in the former action, and being false, though not fraudulent or intended to deceive.
On a reclaiming-note, the Court by a majority recalled the findings of the Lord Ordinary, and assoilzied the defenders, on the ground that the facts now proved amounted to no more than had been averred by the pursuer in the previous action, and that the matter was therefore res judicata.
Opinions per the majority of the Court that the facts proved did not warrant reduction on any of the grounds pleaded by the pursuer— diss. Lord Rutherfurd Clark, who held that the representations on which the Lord Ordinary proceeded were false, and having been made without inquiry or consideration, were fraudulent, and therefore were not protected as res judicata, and warranted reduction.
This action followed on the previous action reported ante, vol. xxvii., p. 721, and 17 R. 881. The Lord Ordinary in the former action dismissed it as irrelevant, and to his judgment the Court adhered.
Captain Menzies now raised an action for reduction of the deeds connected with the disentail and resettlement of the estates, which he had attacked in the previous action, calling the trustees who now held the estate and his father as defenders. The reason which induced him to raise these actions was that he had again incurred debt, and had thus, as he said, for the first time discovered how far he had been placed under restraint by the trust-deed. The main difference in averment of fact between this action and the former was that he now averred that his father had “for sometime prior to 1885 determined, if and when possible, to deprive the pursuer of the fee of the estates of Menzies and Rannoch, which he had then in expectancy, for the purpose of re-selling them according to his own wishes, and had communicated his intention to Mr James Auldjo Jamieson, his personal friend and legal adviser, whom during the next two years” (the trust-deed was signed in December 1886) “he made his instrument to attain this object.” He further averred that to carry out this scheme negotiations were prolonged and obstacles interposed by Sir Robert and Mr Jamieson to accelerate the pursuers' difficulties, to impress upon him that ruin was inevitable, and that there was no other means of escaping it than the resettlement which was eventually carried out. These representations, he said, were false, and were known to Sir Robert and Mr Jamieson to be false.
The pursuer pleaded—“The pursuer is entitled to decree as concluded for, in respect—1st. The documents of which reduction is sought were impetrated from him without consideration, to his lesion, by the exercise of undue influence on the part of the defenders Sir Robert Menzies and Mr Jamieson. 2nd. The pursuer was
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induced to assent to the arrangement embodied in the said documents, and to sign the same, by false and fraudulent representations and fraudulent concealment, as above set forth. 3rd. The pursuer gave his assent to the said arrangement, and signed the said documents—( a) Under essential error, as above set forth; ( b) under essential error induced by the defenders Sir Robert Menzies and Mr Jamieson, as above set forth; and ( c) under essential error induced by false and fraudulent representations and fraudulent concealment, as above set forth.” The defenders stated what their actings had been in the way of borrowing money to carry out the various purposes of the trust, and denied the material averments of the pursuer.
The defenders pleaded—“(1) The pursuer's statements are irrelevant. (2) The pursuer's material averments being unfounded in fact, the defenders should be assoilzied. (3) Restitutio in integrum being impossible, the defenders should be assoilzied. (4) The agreement sought to be reduced being the result of a transaction between the pursuer and defender Sir Robert Menzies, the pursuer is not entitled to reduce the same.”
The Lord Ordinary ( ), before whom the case at first depended, dismissed the action.
On a reclaiming-note the Second Division, with consent of the defenders, recalled this interlocutor, and allowed a proof. No opinions were pronounced by their Lordships.
It was proved that the estates in question were worth upwards of £300,000. Sir Robert was born in 1817; Captain Menzies in 1855. The sum which Sir Robert would have had to pay his son if he had proposed to disentail without his consent was about £150,000. In 1874 Captain Menzies obtained a commission in the Scots Guards, and had an allowance of £300 from his father besides his pay. In 1878 his allowance was increasd to £500, and in 1883 to £600. Besides this he had no means. In 1876 Sir Robert paid out of his own funds £1200 of debt incurred by his son, and in 1881 he again paid £5000 which his son had gambled away on horseraces, and in 1883 paid £6000 to the Eagle Insurance Company, from whom, through the agency of Messrs Pawle & Fearon, London solicitors, Captain Menzies had borrowed a sum of £5500 to pay additional debts. The sums paid in 1881 and 1882 were charged upon the estates. For the sum of £6000 Captain Menzies had granted a post obit bond to the insurance company. When this company's debt was paid this bond was not discharged, but an assignation of it was taken in favour of trustees. This transaction was a leading topic in connection with the subsequent negotiations between Captain Menzies and Mr Jamieson.
The events which immediately led up to the execution of the agreement began in 1885. In the beginning of that year Captain Menzies was about to go on active service with his regiment, and wrote to Mr Jamieson, who had always been on friendly terms with his father and himself, and had long acted as family agent, that he was in debt again, had granted a bill for £3000 to Samuel Engel, a money-lender in London, and owed some £700 besides. From this point the correspondence and negotiations which the pursuer averred to be fraudulently carried on with him to induce him to surrender his rights for inadequate consideration started.
Captain Menzies, in support of his case, subsequently referred to a letter dated 1st December 1882 from Mr Jamieson to Sir Robert as the first indication of the scheme which he asserted to exist—“I venture to think it would be better for himself certainly, and also I think for you, that he should not completely give up his profession, but should go into some line regiment. I think also that some effort should be made to have the estates so put that they should be protected against the possibility of being affected by any similar charge, or being left, as they would be if he were to succeed at present, entirely in his power to do what he chose with them.” This letter was written at the time of the advance of £6000, and was in reply to suggestions by Sir Robert that his son should leave the army and settle quietly at home. Sir Robert, in correspondence following immediately on this, recurred more than once to Mr Jamieson's suggestion— e.g., on 12th March 1882 he wrote to Mr Jamieson—“I find that Neil's loss has been on the turf again, and I do not see my way to leaving him in the army at all—I mean out of the Guards. These changes seldom produce much good, and I do not care to send him to India. … I am seriously thinking of disentailing the estate and leaving him only the liferent of it”—and again on 12th May he wrote to Mr Jamieson—“What would it cost to disentail this property—I mean the whole—and leave Neil the liferent of it only, settling it on his son or the next heir.”
When the Eagle Insurance Company was paid, Mr Jamieson, at Sir Robert's request, wrote to Captain Menzies to explain the effect of the assignation which was taken in place of a simple discharge being granted—“21st August 1882.—The object, as I thought I had explained to you, simply was this, that if the bond is discharged, as you propose, it would relieve the estate entirely of any charge on your interest in the property, and would enable you, so soon as the bond is discharged, again to raise a further sum just as you did before, while if the bond remains on the property, by being transferred to trustees it would be a prior security affecting your interests in the estate, and would therefore render it more difficult, or perhaps impossible, to raise a further sum on your succession during your father's life. This I thought I had explained, but, as you can understand, it is not a subject which I cared to put so prominently before you as I now do in this
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In this state of matters Captain Menzies wrote in 1885 the letter to Mr Jamieson already referred to; he asked Mr Jamieson not to disclose the state of affairs to Sir Robert, but Mr Jamieson thought it right to do so. While the regiment was abroad Sir Robert would not allow Mr Jamieson to communicate with Captain Menzies on the subject. In his evidence Mr Jamieson said on this subject—“I did not write to the pursuer before 18th June with reference to his letter of 20th February, because his father asked me, as he was on active service in Egypt, not to write to him about a matter which he thought would necessarily very much affect him and make him reckless when he was there. I explained that to the pursuer afterwards. With regard to Sir Robert's feeling about his son, I may say that I don't think I have often seen a father who has shown so consistent an affection for his son as Sir Robert has done. The consideration for his son's welfare which led him to prevent his son getting any news in Egypt which would lead him into recklessness is a specimen of the general tone of his conduct towards his son.”
A correspondence began on 18th June which ended in the agreement now under reduction. To explain the terms of that correspondence it may be noted that the general provisions of the agreement as finally ad justed were these, viz., the estates were disentailed with Captain Menzies' consent, and conveyed to trustees to hold in trust for Sir Robert in liferent, thereafter for the pursuer in liferent for his life-rent alimentary use allenarly, and for the heirs-male of the body of the pursuer, whom failing the person entitled to the baronetcy of Menzies, in fee. The deed further provided that although the pursuer should have large powers of management of the estates during his liferent, he should not be entitled to assign the liferent, nor dispose of the same in anticipation, nor should the same be liable for his debts or deeds, or be subject to the diligence of his creditors, and in the event of his ‘assigning or otherwise disposing thereof in anticipation, or in the event of the same being liable for his debts or deeds, or becoming subject to the diligence of his creditors, then his liferent of the said lands’ should ipso facto cease and determine. In the event of the pursuer's liferent being so terminated, the trustees were to enter into possession of the estates and pay the free income to the pursuer as an alimentary allowance. The trustees were given power to borrow a sum not exceeding £12,000, and were assigned into the right to borrow £10,700 which Sir Robert had in 1881 acquired by an agreement with his son. These sums, together£22,700, were to be applied (1) in payment of expenses; (2) in paying Captain Menzies' debts; (3) in purchasing an alimentary annuity of £300 for Captain Menzies, payable so long as his father and he were both in life; (4) in purchasing an annuity of £1430 on Sir Robert's life to pay the interest on these various sums charged on the estate. Sir Robert also bound himself to pay Captain Menzies an alimentary annuity of £600 (making with the annuity already referred to an allowance of £900 per annum), with power to the trustees if he failed to do so to borrow an annuity of £600 on the fee of the estate on the joint lives of father and son. There were other provisions for the event of the son's marriage, and of the father, who was a widower, marrying again.
Mr Jamieson then, on 18th June 1855, opened negotiations by making certain suggestions for Captain Menzies' consideration—“I have not troubled you on the subject previously, because I was desirous not to write to you on a matter which I feel cannot be otherwise than most painful to you while you were abroad on service, but it is necessary now to communicate with you on the subject, and see what is to be done, for unless some arrangement is made about these bills and Mr Engel's acceptance I see nothing for it but ruin to you, and I need hardly say that I would do anything in my power to prevent such a result. Sir Robert is, as you can quite realise, very much distressed and annoyed about this fresh debt, and he declines, at present at least, to do anything. The only suggestion which occurs to me for extricating matters from their present most painful position is, that he and you should arrange to disentail the whole estates, and put them in trust on the footing of paying these debts, making such terms as I best can with Mr Engel for taking a reduced amount for this bill, and making arrangements for paying you a certain annual sum, to be fixed during your father and your joint lives, and after his death for paying you the free income of the estate during your life, the fee to go to your eldest son, if you have one, or to the Baronet, whoever he may be. I write this letter to you without having Sir Robert's authority for this proposal, and merely with the object of ascertaining what your own views are upon the matter. Will you be so good as consider the matter carefully, and inform me what you think and would propose, for something must be done speedily in regard to these debts, otherwise I can only see one result, a result which I feel so anxious to prevent.” Captain Menzies received this letter on his way home, and asked Mr Jamieson to meet him. Mr Jamieson before meeting him wrote to his father—“28th July 1885.—… I think he should give me a note of what he proposes to do, and that I would then consult with you on the subject, and see what can be arranged. I hope he will do this, and if he does, may I, at the risk of seeming to give advice where it is not asked, venture to suggest to you that, in the interests of your son and of the estates,
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Sir Robert, by return of post, acquiesced in the suggestion Mr Jamieson had made to him—“29th July 1885.—… I quite agree with you that any arrangements necessary for Neil's debts had better be made between you and him, at all events in the first instance, without my being so far implicated in them. At the same time I should be disinclined to go so far in a secondary way, by my agent and Neil coming to any arrangement that might, even in an informal manner, commit me to them. As you will well understand that if you and Neil come to an understanding, even to which, while I had been no direct party, never having been consulted on the subject, it would still be so awkward for me to refuse to agree, and if I did not agree I should be in rather a false position, and one that I had not made for myself. I think, if you are careful what is done, any such difficulty may be avoided, and under these circumstances I can in the meantime leave you to do the best you can for Neil.” Mr Jamieson wrote again to Captain Menzies on 3rd August, repeating in substance the proposal of 28th June, which he stated was a suggestion from himself, and was not known to Sir Robert. Captain Menzies replied to this letter, but did not accept the suggestions it contained—“20th August 1885.—… It seems to me that the scheme you propose in your letter of the 3rd Augt., as to disentailing the estates and re-settling them, is unnecessary for the raising of so small a sum. Could not the money (£4000) be raised on the estate in the same manner as before, and I would agree to pay half the interest if necessary, which would be I suppose £200 a-year. Please let me know if this could be done, and, if not, what other scheme you would propose.” Mr Jamieson had a meeting with Captain Menzies on 25th August, and next day wrote to Sir Robert an account of what passed between them—“26th August 1885.—… We discussed the matter very fully. He had written to me that he proposed that the amount required should be charged on the estate. I told him that this could not be done, and yesterday I had an opportunity of telling him very plainly the reason. He was extremely averse to any re-settlement of the estate, and pointed out that he would have the power of dealing with the estate as he chose should he happen to survive you, as things are. This I of course admitted, but I said that that did not alter the matter, because you might, and probably would, live for many years, and during that time he would have no income, and I did not see how he could pay the debts unless with your assistance, and upon your terms. I said that what had occurred before might occur again, and that you emphatically declined to make any arrangement which would make the estates subject to his disposal; that if he desired assistance from you he would have to take it on your terms or not at all; and I asked him to come back again after he had considered the matter, which I had explained much more fully to him than I have done here. I may say that he said he had not the least wish or intention to sell the estate even if he succeeded to it and had the power. I told him that might be so, but that the experience of the past went rather to show that unless things altered he might not have the option of saying whether he would sell the estates or not, because his creditors might be in the position of dictating to him in that matter, and you were resolved, if you could, to prevent sale. When he came back, after an interval of some hours, he said he was prepared to entertain the proposal of a re-settlement of the estate provided a reasonable provision were made for him during his life. I said I had not received your authority (though he read me a letter in which apparently you said you would favourably consider whatever he and I arranged), and I therefore said that anything I might say was of course necessarily subject to your approval. In making the proposal which I did make to him I had in view both your position and also his. So far as you are concerned, I did not see how it was possible that you should, in your circumstances and at your time of life, have to pay further sums out of your income on account of his extrava-gances—for I could use no other term to describe what has occurred—and on his side it was necessary that he should, in my humble opinion, have such an income as would make him above the temptation of further extravagances, or at least if he should be tempted, that the world and all who knew the circumstances would be able to say that you had done everything in
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The correspondence then proceeded, Sir Robert objecting strenuously to the amount of the allowance which it was proposed by Mr Jamieson to secure to Captain Menzies as too large, and insisting as a sine qua non that Captain Menzies should give his word to cease gambling. Captain Menzies in a letter to Mr Jamieson on 9th October pressed for some immediate settlement, and tabled an alternative—“In answer to your letter of the 7th October, I beg you will inform my father that I will not give any promise to abstain from anything. If he had only allowed me a sufficient income to live on to start with, I should not have had to recourse to what he calls ‘those practices which have made it necessary for me to incur obligations.’ As to my paying the interest of the sum borrowed to pay my previous debts, I shall be delighted to do so, provided the annuity is fixed at £1200. Engel, of Marlborough Street, has instituted proceedings against me, and I should like to know, as soon as possible, what my father intends doing, as I shall be obliged to borrow the money to pay him with soon if nothing is arranged.” Sir Robert on 25th October wrote to Mr Jamieson suggesting a reference to three family friends to settle matters between him and his son—“What he” (Colonel Moray yr. of Abercairney) “proposed should be tried, seeing Neil refused to say he would not cease gambling by cards or the turf, should be, that his case should be submitted to the consideration of Lord Stormont, or the Duke of Athole, and Colonel Moray, all three or any one, and that they should abide by their decision, and, so far as I am concerned, I shall be quite ready to submit to whatever they say I should do and Neil should do, if he agrees.” Captain Menzies on 26th October 1885 wrote Mr Jamieson a letter in which it was strongly maintained that Mr Jamieson and his father were entitled to deal with him as having independent professional advice—“Since I saw you on Monday last I have been thinking over my affairs, and I have come to the conclusion it would not be fair to myself to agree to the conditions you made in the proposal to pay off my liabilities. Surely by insuring my life, which is a good one, say for £10,000, I could borrow a sufficient sum on the policy to pay off my liabilities, always supposing my father would agree to an annuity being bought for me large enough to enable me to pay the interest on the policy, and on the money borrowed on it. I don't suppose for a moment my father would agree to this, but in the event of his not doing so I don't see what is to be done, as I am advised not to agree to the conditions mentioned in your proposal.” Mr Jamieson's reply to it on 28th October was also much commented on—“The proposal I suggested was, as you know, made in your interests, for your father would make no proposal, and repudiates entirely any suggestion that he wishes to make any proposal on the subject. He says he regrets that any proposal is necessary on your part, but he maintains that if any proposal is made for his consideration, it must be accompanied by an arrangement for resettling the estates, so as to prevent their being burdened or sold by you when you succeed. It was this statement of his decision that induced me to suggest the plan I did suggest. I never suggested that it was a proposal which gave you compensation to the full amount, or anything like it, for your consent to such an arrangement. But it is only when the heir in possession (your father in this case) asks his son's consent to a disentail that full compensation is given. If nothing is done, you, as things stand at present, if you succeed, can sell the estates, or burden them without any consent, and this your father can do nothing to prevent. But if you come to him, as, unfortunately, you are obliged to do, and ask him for money to pay your debts, and to give you a stated annual allowance, he is entitled to say, as he does say, that he will only agree to do so on certain terms, and I quite admit, and have stated to you, that these terms are, as you say, not fair to yourself in the sense that they are not compensation for your consent to disentail, but they are the terms which your father requires, and if you do not agree he can say, as I presume he will, that he does not agree to do anything. Do not, therefore, for a moment suppose or refer to my proposal as one which was fair if you were making terms for the disentail, and I certainly never ‘advised’ it; therefore, if you have, as you say, been advised not to agree to my terms, I can quite understand the propriety of the advice, but you must keep in view, and will, I hope, tell your adviser that it was not a question of fair terms of compensation, but a question as to the terms on which your father could agree to do anything. The proposal you suggest as to an insurance could be very easily effected if your father were to agree, but from what he said to me he will agree to no proposal which does not include as part of it a re-settlement of the estates, and your proposal as to the insurance leaves you with the same income as before (£600) for the future, and I thought you found that insufficient, and one great object I had in view was to give you an income from a source independent altogether of your father during his life.”
Sir Robert had, at a somewhat later date, a meeting with his son, and on 8th December 1885 wrote to Mr Jamieson the result of his meeting, which seemed likely to lead to Captain Menzies consulting some one on his own behalf—“I hoped to hear from you about Neil, but have had no reply for some time, and,
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Captain Menzies then agreed to refer the matter to the determination of the Duke of Athole, Lord Stormont, and Colonel Moray. Mr Jamieson prepared a memorandum and laid it before these gentlemen, and also attended a meeting of the three referees, which took place at Perth. The memorial laid before the three friends contained these clauses—“Sir Robert, however, proposes as a condition of his agreeing to these arrangements, and in consequence of the repeated debts contracted by his son at very short intervals, that the estates should be disentailed and put under trust in such a manner that Mr Menzies cannot, either now or on his succession, sell them or burden them with further debt…. The title to the estates would no doubt be held by the trustees, but they would have no right to interfere with the complete administration and management of the estates. In all respects, under the express provisions of the trust, Mr Menzies would be proprietor of the estate as Sir Robert is at present, would have entire control and management of it, and would be the sole person, under provision to that effect in the deed, to grant leases and deal with the tenants as he pleased. All he would be prevented from doing would be affecting the estates, as he had done in the past, by debts he might again hereafter contract during Sir Robert's life, or from selling or burdening the estates after Sir Robert's death.”
After his meeting with the three friends at Perth, Mr Jamieson saw Captain Menzies and reported to the friends that he had explained to him the nature of the trust. A letter from the Duke of Athole to Mr Jamieson on 21st January 1886 was also produced to instruct this—“I have a letter from Neil Menzies, telling me you had explained the nature of the proposed trust to him—nothing more on the subject.” Mr Jamieson in forwarding the draft of the proposed trust-disposition to the three friends made further explanations regarding it—“February 9, 1886—I have provided that the liferent right to be granted to Mr Menzies shall be held to be strictly alimentary, so as to prevent the possibility of it being burdened or attached by crs., and I have also provided that, in the event of the right being burdened or attached, it shall cease, and that the trs. shall then enter into possession of the estates, and uplift the rents, and pay over the free income to Mr Menzies as an alimentary provision, the trustees having power, at the same time, to allow Mr Menzies to occupy any part of the estate they think proper.” The three friends approved of its terms with the exception of the amount of allowance proposed to be made to Captain Menzies. Lord Stormont on 1st May 1885 wrote thus to Mr Jamieson—“I have been asked by the Duke of Athole and Colonel D. Moray to inform you that we three, having considered the memorandum that was sent to us regarding the affairs of Sir Robert and Mr Menzies, are of opinion that the proposed trust for the Menzies estate does not meet with our approval, except Sir Robert makes a substantial increase to the allowance that he at present makes to Mr Menzies (we do not mention any sum), as a compensation for the possible loss that he might sustain by what is really re-entailing the estate, and also giving power to Mr Menzies, should he survive his father, to sell a portion of the estate, with the consent of the trustees, for the purpose of paying off any debt that has been incurred previous to the trust being formed. We wish this to be considered as our final decision.”
Mr Jamieson was at this time in correspondence with the money-lender Engel, and was endeavouring to obtain delay from him. Mr Jamieson informed Captain Menzies from time to time of the course of this correspondence.
Sir Robert, in spite of the approval of the three friends, was still unwilling to execute the agreement, one of his main objections being to any increase in the allowance to his son. Captain Menzies, on the other hand, was anxious that it should proceed. On 18th March 1886 he wrote to Mr Jamieson—“If any change is made in the proposal, I shall of course consider myself quite at liberty to withdraw my consent, and to have the case again referred to a man of business on my own account.” Mr Jamieson was pressing Sir Robert to go on, and wrote to Captain Menzies that he was doing so, and endeavouring to work on him through Lord Mansfield. On 13th May 1886 he wrote in these terms to Captain Menzies, concluding with a sentence on which the pursuer founded as being a false representation—“Failing
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Sir Robert still continued to hold out. Mr Jamieson in writing to Captain Menzies on 20th May 1886 to tell him so, stated plainly the impossibility of moving Sir Robert on the points on which he took his stand, and pointed out what he represented as the consequences of this—“It is necessary you should tell me your decision at once, because Mr Engel threatened to go on with the bankruptcy proceedings on Monday. I have got him to delay for one month, on the ground that I am endeavouring to arrange matters, but if you do not agree, I must tell him that he may proceed as the arrangement has fallen through, and, in that case, your right to succeed to the estates will be sold by the trustee in the bankruptcy for a comparatively small sum especially in these times, and then, if you survive your father, you would not succeed to the estates, but the purchaser of your succession would do so, and would be able to sell them out and out, as he would then acquire the right you possessed, were you to survive your father, of acquiring his estates in fee-simple. I think it right also to point out this result if the bankruptcy proceedings were to be pressed to the end.” Finally a reference to Mr Mackintosh, Dean of Faculty, of the points remaining unsettled, and particularly the amount of the allowance, was agreed to. Sir Robert was not satisfied with the terms of the memorial, and in writing to Mr Jamieson on the subject stated that he had recommended his son to be separately advised—(no date, p. 222 of correspondence)—“I wished Neil to employ Mr Mann (of Hope, Mann, & Kirk, W.S.), but he preferred remaining with you, and I allowed it to be so, promising that, in all the transaction, I was not to be considered as other than ready to give attention to any proposal that Neil had to make.”
Sir Robert continuing obdurate after the Dean of Faculty's award had been given against him, Mr Jamieson wrote to Captain Menzies deploring this. Captain Menzies' reply stated his view of the situation—“7th August 1886—I have received your letter of the 5th inst., in which you say, among other things, that you ‘do not know what the result may be, or where the end is to come.’ Now, I see clearly what the end will be unless something is settled at once. Failing a very early settlement of affairs, I see nothing for it but to sell the reversion rather than let Engel do so, as it is imperative that I should have money almost directly. As I suppose, having no security, it is impossible for you to get any money for me, I see nothing else for it.” Sir Robert at last gave way, and the trust-disposition was executed.
On 30th April 1889 Captain Menzies wrote this to Sir Robert, viz.—“I regret to say I am in debt, and am threatened with legal proceedings of an extreme character. On asking a solicitor to raise money for me on my expectancy, he informed me that I had debarred myself from doing so by some deeds which were signed in 1886. The meaning of those deeds I never understood until now, and I was amazed at the information given to me. I know you are not able to pay my debts yourself, and I do not ask you to do so, but I ask you to agree to the cancelling of the deeds made in 1886, to the extent of enabling me to exercise the same powers over the estates which I had before they were granted. I need hardly say that had the import and effect of those deeds, as affecting my rights, been fully explained to me, I never would have signed them, and it is only fair to you to say that they must either be altered or set aside.”
Captain Menzies was examined for himself as to the course of the transactions, and Mr Jamieson and Sir Robert for the defenders. The examination was in the main an explanation, hinc inde, of the understanding of the different parties of the phrases used in the correspondence, and a disclosure of what had taken place at their various meetings.
Captain Menzies deponed—“In considering whether I should consent to disentail or not, Mr Jamieson's statement that I would have no income, and that he did not see how I could pay my debts without Sir Robert's assistance and upon his terms, would certainly have a great effect upon my mind. I was impressed with the idea that it was the only way I could get out of the difficulty. (Q) Were you very unwilling to consent to the disentail?—(A) Very. (Q) If there had been any other reasonable plan proposed to you do you think you would have objected to it?—(A) No, certainly not. I understood at this time that Mr Jamieson's proposal was that the estate should be disentailed and re-entailed, so that I should be in the position of an heir of entail instead of succeeding to the property in fee-simple. He had not said anything to me about making me merely an annuitant with an alimentary annuity on the estate. … When I wrote to Mr Jamieson on 19th October 1885 I had no particular scheme in my mind as to how was to get money to pay Engel, I merely put in that I would be obliged to borrow money if nothing was arranged, as a draw. … No other scheme occurred to me at that time for getting money except by giving in to Mr Jamieson's proposals. When I signed the documents requesting the intervention of the three friends I had no communication with them at all in regard to how they were to carry out their duty. That was attended to by Mr Jamieson; I left my interests entirely in his hands as regards that. … I did not consult a solicitor of any sort. I have no recollection of anything passing between my father and me about Mr Antrobus by name, but I suppose I must have mentioned him, otherwise my father could not have had his name. I certainly cannot have spoken to my father of Mr Antrobus as a solicitor. I may have said I was going to London to
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Mr Jamieson deponed—“When I wrote in my letter of 18th June to the pursuer about ‘the position I occupy with reference to Sir Robert and yourself,’ I meant my being Sir Robert's agent. I never acted for Captain Menzies as his agent. Further on in the letter I explained to the pursuer that without his father's assistance it was utterly impossible for me to make any arrangement. The impossibility arose because I was Sir Robert's agent alone. When I said further on in the letter that unless an arrangement was made about the bills I saw nothing for it but ruin, I meant that unless the bills were paid Engel would certainly take proceedings which would result in bankruptcy, and Captain Menzies losing his captaincy, and I could do nothing as Sir Robert's agent, because Sir Robert would not give me authority. The only capacity in which I could act was as Sir Robert's agent. It is the case that the only suggestion which occurred to me as Sir Robert's agent ‘for extricating matters from their present most painful position’ was what is set forth in the letter…. The idea of suggesting to Captain Menzies that he should again have recourse to money-lenders or to a post obit bond upon the estate never entered my mind at the time; I could not have suggested such a thing owing to the fact that I was the father's agent, and the position I held with regard to the son. (Q) Would you have considered it a breach of your duty to have done so?—(A) Yes. … I had a very full discussion with the pursuer. I explained to him that his interest in the estate under the trust proposed would be an alimentary interest, that is to say, I told him he would not be able to pledge the income during his life, the object being to prevent him getting into debt. I stated that the income would be protected from his creditors. That had been my intention from the first initiation of the scheme. (Q) Did you explain to him that the proposal that you thought should
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Sir Robert Menzies deponed—“I heard the statements made on record put to my son and Mr Jamieson as to the fraudulent scheme, misrepresentation, concealment, and so on. There is no truth in any of these allegations. I concur in all Mr Jamieson said as to that. There is not a word of truth in the suggestion that the reference to the three friends was intended to give an appearance of bona fides to a fraudulent transaction.”
Mr Sprague, the manager of the Scottish Equitable Life Assurance Society, Mr Sorley, actuary and secretary to the Scottish Life Asssurance Company, and Mr Gunn, colonial secretary to the Standard Insurance Company, and lately assistant actuary to that company, deponed that Captain Menzies would have had no difficulty in getting an advance of £6000 in the circumstances on a post obit bond. Such bonds were ordinary, and in their opinion legitimate business, and were dealt in by the offices they represented, by the North British and Mercantile, the Edinburgh Life Association, and a number of English offices of high standing. They were aware that questions had been mooted as to the security afforded by such bonds in the event of the bankruptcy of the borrower before he succeeded, but these questions were not considered by the officer named to be serious.
On the other side, Mr Meikle, actuary to the Scottish Provident Society, deponed—“If I were asked to advise my office with reference to the lending of a sum of £6000 on a post obit bond, I would make inquiry into the whole circumstances of the applicant. I would inquire as to his previous history, and as to what the money was wanted for. I think it would be a material element if it was ascertained that the money was to pay gambling debts. We should not like any one to borrow money from us to pay gambling debts. (Q) In short, would you take into account the moral risk?—(A) Yes, we would. Cross-examined—Mutual offices do business of this class, I have had actual experience in many such calculations. It is quite legitimate business fora mutual office to go into a transaction under which the heir of entail will, for a bond postponed till his succession, and contingent upon that succession, acquire a sum down from the company. For £6000 the insurance company would require a bond of £11,900. I do not see anything to hinder that being a legitimate insurance business if the security is complete. (Q) Excepting the moral question which you referred to?—(A) Yes. (Q) Is it the morals of the borrower or the morals of the insurance company you desire to protect?—(A) It is to protect the morals of the insurance company. Re-examined—What I mean is that we would protect the interests of the insurance company by looking to the moral risks which surround such a transaction by providing against them.”
Mr Hewat, secretary of the Edinburgh Life Insurance Company, deponed that that office did not lend on post obit bonds, as they were not satisfied that they afforded a good security.
On 10th September 1891 the Lord Ordinary ( Low) pronounced this interlocutor:—Finds that the pursuer was induced to enter into the agreement for the disentail and resettlement in trust of the estates of Menzies, Rannoch, and others, embodied in the documents sought to be reduced, by representations in regard to a material matter of fact made to him by the defender James Auldjo Jamieson while acting as agent for and with the authority of the defender Sir Robert Menzies; that the said representations, although not made fraudulently, or with intent to deceive the pursuer, were not consistent with fact; and that the said agreement was to the lesion of the pursuer, he having thereby surrendered rights of great value for a wholly inadequate consideration: And finds that in law these facts constitute a sufficient ground for reduction of the documents libelled: With these findings, appoints the cause to be put to the roll for further procedure, &c.
“ Opinion.—[ After narratiny the effect of the transaction]—The practical result of the transaction so far as Sir Robert is concerned, therefore, seems to me to be that on the one hand he was relieved of the payment of some £500 a-year of interest upon money borrowed to pay his son's debts, while upon the other hand he became bound to pay an allowance of £600 a-year to his son, which he had previously paid voluntarily….
It was contended for the defenders that the only respects in which the averments in the present action differ from those in the former case are, that it is now averred (1) that prior to 1885 Sir Robert had determined when possible to deprive the pursuer of the fee of his estates; (2) that Sir Robert and Mr Jamieson entered into a fraudulent scheme for the purpose of inducing the pursuer to place absolute confidence in Mr Jamieson and abstain from taking independent professional advice; and (3) that the alleged misrepresentations and concealment are now said to be fraudulent. The defenders maintained that all that it was competent for me to do was to consider whether these additional averments were established by the proof, and that if I was of opinion that they were not established,
I must throw the action out upon the authority of the decision in the previous case. I do not think that I can assent to this view, even upon the assumption that
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It may be well, however, to say at once that in my judgment the averments in regard to a fraudulent scheme and fraudulent dealings are not established. I think that it is impossible to read the correspondence which constitutes the most important and reliable evidence in the case without being convinced that whatever may be said as to undesigned misrepresentation of fact, there was nothing of the nature of imposition or deceit. The pursuer having got into difficulties applied to the family solicitor. Sir Robert, naturally irritated at his son's extravagance, was of a mind to allow him to bear the consequences of his own folly, and would make no proposals for his relief. Sir Robert was, however, most anxious to save the estates, to prevent them being squandered, and to keep them in the family. He therefore intimated that he would consider any proposal made to him by his son, and Mr Jamieson then suggested a re-settlement of the estates upon the lines of the agreement ultimately concluded. During the negotiations which succeeded the suggestion, although it may be thought that Sir Robert drove somewhat a hard bargain with his son, he made no attempt to deceive him. He stated what he was willing to do, and put it to the pursuer to take it or leave it. Mr Jamieson, on the other hand—although in my opinion he committed a grave error in judgment in not insisting upon the pursuer having independent legal advice—was obviously actuated by no other motive than a desire to do what was fair and right for Sir Robert and for the pursuer. He urged upon Sir Robert again and again in the strongest way the necessity of making some arrangements for paying the pursuer's debts, and giving him an income amply sufficient for all reasonable requirements, while he told the pursuer distinctly that under the proposed arrangement he was not getting compensation for the rights which he was asked to surrender. In short, Mr Jamieson did his best to make such a family arrangement as would do justice to both parties in the very difficult circumstances which had emerged. If, therefore, the pursuer is entitled to set aside the agreement which he made, it must in my opinion be upon some other grounds than that of fraud and deceit.
The question therefore comes to be, whether the pursuer was induced to enter into the agreement by undesigned misrepresentation as to material matters of fact, or by concealment of something which ought to have been disclosed to him, or whether he was under essential error as to the nature of the agreement induced by Sir Robert or Mr Jamieson?
By far the most serious aspect of the case to my mind is that which is rested upon alleged misrepresentation.
It is said that the pursuer was induced to enter into the agreement by representations made to him by Mr Jamieson, acting as Sir Robert's agent, to the effect that by reason of his existing liabilities there was no other way open to him of avoiding ruin than to consent to a re-settlement of the estates upon Sir Robert's terms. If such a representation was made, I do not think that it can be disputed that as matter of fact it was not true, however honestly it may have been made. The pursuer's then liabilities were under £6000, while the value of his interest in the estates was very large, and there seems to be no doubt that he could without difficulty have raised a sufficient sum to pay his debts without his father's consent, and without any re-settlement of the estates. In fact he could have borrowed the money required to pay his debts without burdening his prospective fee to anything like the extent to which it was actually burdened under the re-settlement. Further, if such a representation was made to the pursuer, and he believed it, it seems obvious that he was put into a position in which it was impossible for him to judge of the propriety of agreeing to the re-settlement, because in that case the alternative put to him was re-settlement or ruin instead of the question merely being whether it was better for him to agree to the re-settlement or to borrow upon his expectancy. Again, if Mr Jamieson made the representations imputed to him, I do not think that Sir Robert can plead that it was not known to or authorised by him. A principal cannot take advantage of a contract obtained by his agent's fraud, and in the same way I do not think that he can take advantage of or maintain a contract obtained by his agent's misrepresentations made when negotiating the contract with his authority.
[ His Lordship then reviewed the evidence and the contentions of parties upon it, and proceeded]—“Such being the contentions on either side I think that the questions I have to decide are—(I) Whether the fair and natural meaning of what Mr Jamieson said and wrote to the pursuer, when considered in view of all the surrounding circumstances, was that the only alternative open to the pursuer was either to accept the terms to which Sir Robert would agree, or to face bankruptcy with all its consequences? and (2) In the event of the previous question being answered in the affirmative, whether the pursuer was induced to enter into the agreements by Mr Jamieson's representations?
In regard to the first question I have come to the conclusion, after most anxious consideration, and, I confess with great reluctance, that the pursuer's contention is well founded.
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I think that it is plain that the pursuer placed complete confidence in Mr Jamieson. He did not regard him as the agent of an opposing party, but as the family solicitor, as a man on whom he could rely, and as a lawyer whose ability and experience would suggest the best means of getting him out of his difficulties. So when Mr Jamieson, who in 1883 had informed the pursuer that the Eagle bond had been so dealt with as to make it practically impossible for him to borrow again upon his expectancy, wrote to him on 18th June 1885, ‘without Sir Robert's authority … and merely with the object of ascertaining your own views on the matter,’ and told him that unless an arrangement was made about the debt he saw nothing but ruin for the pursuer, and that the only suggestion which occurred to him—the experienced and trusted lawyer—was a re-settlement of the estates, I think that the natural, and indeed the only inference for the pursuer to draw was that Mr Jamieson—who had taken four months to consider the matter—was of opinion that there was no means of meeting the debt except such an arrangement as he suggested. I think, further, that the pursuer was not to blame for having accepted Mr Jamieson's opinion. I think that he was entitled to assume that if a gentleman of Mr Jamieson's standing and experience could suggest no other means, it was because no other means were, in fact, available. Further, it seems to me that Mr Jamieson really misled the pursuer by the very friendliness of his letter. Mr Jamieson now says that he wrote only as Sir Robert's agent, and that he was only considering what was possible in the way of an arrangement between the pursuer and Sir Robert. But he did not say so to the pursuer. On the contrary, he told the pursuer that Sir Robert ‘did not see how it is possible to make any arrangements,’ and he is careful to explain that his suggestion—the only one ‘which occurs to me’—is made without Sir Robert's authority. I think that the pursuer would naturally conclude that Mr Jamieson was writing to him not merely as Sir Robert's agent, but as a friend, or, at all events, as the family solicitor giving a member of the family his opinion in regard to the position in which he was placed. Then Mr Jamieson's statement to the pursuer at the meeting of 25th August 1885, when the pursuer first consented to a re-settlement, and the subsequent letters of 13th and 20th May 1886, repeat the representation made in the letter of 18th June 1885. In the letter of 13th May 1886 in particular Mr Jamieson tells the pursuer specifically that he saw no alternative between accepting Sir Robert's terms and allowing Mr Engel to go on with bankruptcy proceedings. Now, if Mr Jamieson was looking at the matter solely from Sir Robert's point of view, and had not considered what the pursuer could do without his father's consent and assistance, I think that he was bound to say so. He should have told the pursuer that if he would not consent to Sir Robert's terms, he would have to consult some one else as to what he could do without his father's assistance, because as to that he (Mr Jamieson), being Sir Robert's agent, could not advise him. Instead of saying anything of the sort, however, Mr Jamieson stated it as his opinion, without any qualification, that the only alternative was acceptance of the terms offered, or bankruptcy. Then in the letter of 20th May 1886 Mr Jamieson sets before the pursuer the disastrous results which, by reason of bankruptcy, would follow his rejection of Sir Robert's terms, and he intimates that if the pursuer did not at once accept Sir Robert's terms ‘I must at once tell him’ ( i.e., Engel) that he ‘may proceed.’ Now, if Mr Jamieson was acting only as Sir Robert's agent, and had not considered, or had any duty to consider, what means were open to the pursuer to escape bankruptcy without his father's assistance, what duty lay upon him, or what right had he in the event of the pursuer refusing Sir Robert's conditions to assume the part of the pursuer's agent, and tell Engel that he might proceed to make the pursuer bankrupt unless Mr Jamieson had made up his mind that as matter of fact there was no other course open to the pursuer, and was willing to take the responsibility of advising him that that was the case. It seems to me that his plain duty was to tell the pursuer that if he refused his father's terms he must consult an independent agent as to how the threatened bankruptcy proceedings were to be met. When therefore Mr Jamieson said that if the pursuer did not accept Sir Robert's conditions he ‘must’ tell Engel that he might proceed, it seems to me he said what was equivalent to declaring himself satisfied that no other alternative was open to the pursuer.
But then it is said that for Mr Jamieson to suggest to the pursuer that he had any other means of escape from his difficulties would have been equivalent to suggesting that he should borrow money upon a post obit bond, a suggestion which Mr Jamieson had not only no duty to make to the pursuer, but which, as Sir Robert's agent, it would have been improper for him to make. I agree that Mr Jamieson, as Sir Robert's agent, was not bound to suggest any other means to the pursuer, but he was also bound not to mislead the pursuer, and if he made statements, as I think he did, the natural meaning of which was that there were no means of paying the pursuer's debts except an arrangement with his father, then he did mislead the pursuer, because the statements were untrue in point of fact.
Again it was suggested that Mr Jamieson's statements were at all events true in this sense, that no other legitimate or reputable means of paying his debts were open to the pursuer. Now no doubt raising money by post obit bond is generally looked upon with disfavour. It is of course an expensive mode of raising money, and for that reason is seldom resorted to except by young men with good expectations who have got into debt.
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It was also suggested that the pursuer, having referred the proposed arrangement to the three friends to say whether in their opinion it was fair and reasonable, is barred from challenging the agreement. I think, however, that if the pursuer was induced to consent to a resettlement by the representations to which I have referred, these representations must be held also to have induced him to consent to the reference.
The next question is, whether the pursuer was in fact misled by Mr Jamieson's representations, and induced thereby to enter into the agreement? I am of opinion that he was. He all along viewed the proposed resettlement with disfavour, and he was constantly casting about for some other means of paying his debts. He suggested borrowing upon the estates with the consent of his father, and he suggested insuring his life and borrowing upon the policy, but as these things could not be done without Sir Robert's consent, he was driven back upon the resettlement as the only means of avoiding bankruptcy and ruin. It is worthy of notice that the pursuer never threatened either to Mr Jamieson or his father that if the latter pressed him too hard he would raise the money by post obit bond. Judging from his letters and his evidence, I think that he would have done so if only as a ‘draw,’ as he himself phrases it, if he had not believed that such a thing was out of the question, and that the threat would not even act as a ‘draw.’ I have no doubt upon the evidence before me that if the pursuer had known that his interest in the estates was of a large present value, and that the money he needed could be borrowed from an insurance company, he would never have hesitated to adopt that course rather than consent to resettlement upon Sir Robert's terms.
It is said that the pursuer could not have been misled by Mr Jamieson, because he knew about borrowing upon a post obit bond. In proof of this the Eagle Company transaction is referred to. But, in the first place, Mr Jamieson told the pursuer that the Eagle transaction had been so arranged that he could not borrow again upon his expectancy. And, in the second place, I do not think that the pursuer ever clearly understood the nature of the transaction with the Eagle Company. He employed Pawle & Fearon to raise the money, and so long as he got it he did not trouble himself with the methods employed. Indeed, he seems to have thought that the money was borrowed upon the security of a policy of insurance on his life.
I am therefore of opinion that it is proved that Mr Jamieson represented to the pursuer that the only alternative open to him was to accept Sir Robert's terms or be made bankrupt, and that it was that representation which induced the pursuer to enter into the agreement under reduction. If I am right in this view, I think that the pursuer is entitled to have the transaction set aside. It was a family arrangement, and not an agreement made by two parties dealing with each other at arm's length. The pursuer had no independent legal adviser, as he ought to have had, and he surrendered rights of great value for altogether inadequate consideration, so far as immediate benefit to himself was concerned. It is true that by the trust he was protected against himself, was secured in a sufficient income during his life, and the estates were preserved in the family. I do not think, however, that protection against himself, or the preservation of the estates in the family were considerations which had much weight with the pursuer, while the additional income which he received during his father's life was purchased with money borrowed upon the fee to which he had an indefeasible right of succession, and his liferent after his father's death was fettered with irksome and even humiliating conditions. Sir Robert, on the other hand, got an addition of £500 a-year to his income, and the change of his position from heir of entail to liferenter appears to me to have been only nominal. Such a transaction, I take it, is not difficult to upset if it can be shown that the party surrendering his rights has in any material respect been misled. The considerations upon which the Court will proceed in such a case are succinctly stated by Lord Westbury in the case of Tennent v. Tennent's Trustees, 8 Macph. (H. of L.) 10, Lord Westbury's opinion, p. 27. That was a case in which a son sought to reduce a transaction by which he had surrendered his rights under a partnership of great value in consideration of his father paying a debt of £8000 which he could not otherwise meet. Lord Westbury said—‘If I found it carried out with any speck of imposition on the son, if anything was told or represented to him which ought not to have been told or represented, if anything was withheld from him which ought not to have been concealed, if he was placed in the hands of an adviser who leant more to the father and to the brother than to him, I should have thought that this family agreement, with respect to which it is required that there should be on all sides uberrima fides, ought not to be upheld.’
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Now, in the present case, my opinion is that representations were made to the pursuer which ought not to have been made, which were not true as matter of fact, and which were calculated to mislead and did mislead the pursuer. I therefore think that the agreement should not be upheld.
I have come to this conclusion unwillingly and with regret. It is perhaps the worst thing which could have happened to the pursuer that the agreement should be reduced. That, however, is not in my judgment a consideration to which a court of law can give much, if any, weight. The pursuer's right as heir-apparent under the entail was absolute. He was in law entitled to deal with that right as he chose, and he cannot be held to an agreement surrendering it if he was induced to enter into that agreement by misrepresentation in regard to material matters of fact by the other contracting party or those for whom that party was responsible.
In coming to the conclusion that Mr Jamieson misled the pursuer, I repeat that I believe that he had no intention of doing so. As I have already said, his intention appears to have been to do what was best for both parties, and I have a strong impression that by the agreement which he carried through he accomplished the object which he had in view. But it was not for Mr Jamieson, nor is it for the Court, to judge as to what was best for the pursuer. He was entitled to form his own judgment, and in my opinion he surrendered his rights without knowledge of facts which it was essential that he should know if he was to form an intelligent and deliberate opinion for himself.
There are two other points to which I must allude before leaving this branch of the case. The first is the plea that the transaction cannot be reduced as restitutio in integrum is impossible; and the second is the bearing of the judgment in the previous case upon the point which I have been considering.
As regards restitutio in integrum, the defenders say that the trust having come into operation, and money having been borrowed on the faith of it, it is impossible now to restore matters to the position in which they were prior to the agreement. I understand that no instrument of disentail of the estates was executed or recorded, and that the effect of reduction of the deeds libelled would be to revive the entail. Then Sir Robert is, I apprehend, the only person who has a title to state the plea, and the pursuer offers to restore matters, so far as he is concerned, to the position in which they were prior to the agreement, and I see no reason to suppose that it is impossible to do so. I shall not, however, pronounce any decree at present, but merely put the conclusion at which I have arrived in shape of findings, so that the parties may have an opportunity of being further heard upon the matter, and that the pursuer may state specifically what his proposals are.
As regards the bearing of the judgment in the previous case, I do not think that the particular representation with which I have been dealing was made the subject of judgment at all. Apparently the ground of reduction which was mainly relied on in the previous action was the failure of Sir Robert and Mr Jamieson to disclose that there were means by which the pursuer might have obtained the money necessary to pay his debts without entering into the agreement. Not to tell the pursuer that there were other means of raising money open to him is, however, a very different thing from telling him that there were no other means open to him. It is true that the Lord Justice-Clerk refers to the alleged representation that there were no other means of raising the money, but his Lordship says—‘Nor if he (Sir Robert) made a representation that he would not deal with his son except upon these terms, was there anything in it of the nature of a representation.’ It therefore appears that the Lord Justice-Clerk read the not very specific averments in the first record as amounting to no more than an agreement that Sir Robert told the pursuer that he would not deal with him except upon his own terms. It seems clear that such a representation is one which Sir Robert would have been perfectly entitled to make, but the representation averred in the present record, and which I hold to be proved, is of a totally different character.
The second ground of reduction is that the pursuer was induced to enter into the agreement by concealment on the part of Sir Robert and Mr Jamieson. The allegation is that with the intention and effect of inducing the pursuer to consent to the resettlement Sir Robert and Mr Jamieson concealed from him that there was another method of obtaining all that he required. This was the principal ground upon which reduction was asked in the former action, and I do not think that anything more is proved in regard to concealment in this case than was averred in the previous case. I must therefore hold that as regards this part of the case the previous judgment is directly in point, and that it is settled that there was no duty upon Sir Robert or Mr Jamieson to disclose any other method of raising the money, and that their concealment of any other method is not a good ground of reduction.
It was argued, in the last place, that the pursuer was under essential error as to the meaning and effect of the deeds which he signed, that error being induced by Sir Robert and Mr Jamieson.
The pursuer says that he understood from Mr Jamieson that the estates were to be disentailed, and practically re-entailed after being charged with a sufficient sum to pay his debts, and that upon his father's death he would be in the same position as a fettered heir of entail. He says that he did not know that it was proposed to make him a mere alimentary liferenter, and that he did not know that he would have no power to use his income as a fund of credit, or that if he anticipated his income to the smallest degree his liferent should
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In support of his allegation the pursuer founds (1) upon the fact that in Mr Jamieson's letters to Sir Robert he repeatedly refers to tying up the pursuer's income and similar restrictions, while he never mentions such a thing in his letter to the pursuer; (2) upon the statement in the memorandum which was laid before the three friends that ‘In all respects under the express provisions of the trust, Mr Menzies would be proprietor of the estate as Sir Robert is at present’; and (3) upon the letter of Lord Stormont of 1st May 1886, announcing the decision of the three friends, in which he speaks of the transaction as ‘really re-entailing the estate.’ The pursuer contends that this shows that Lord Stormont was under the same erroneous impression as regards the effect of the transaction as he was. I shall deal shortly with these points in the order in which I have stated them:—(1) Mr Jamieson says that he told the pursuer distinctly at an early meeting that it was an essential part of the proposed arrangement that his liferent should be strictly protected against creditors and the contracting of debt. He says that the pursuer quite understood what he was told, and that being the case it was unnecessary again to refer to an unpleasant matter in correspondence. The only reason why he mentioned the matter several times in writing to Sir Robert was—Mr Jamieson says—because of Sir Robert's anxiety that his son's creditors should be excluded from the estates in every possible way, and also because Sir Robert thought that he was inclined to give too favourable conditions to the pursuer. I have no doubt of Mr Jamieson's truthfulness as a witness, and his explanation appears to me to be a natural and intelligible one. (2) There is no doubt that the statement in the memorandum which I have quoted is inaccurate. The passage in which it occurs, however, was inserted to meet an addition which the pursuer had made to the memorandum pointing out that to put the estate under trust would destroy his interest in it, and in the tenants. I am satisfied that there was no desire to mislead the three friends, and that the intention was to state what would be the result of the transaction in popular language. (3) The expression in Lord Stormont's letter is not to my mind very inaccurate, because the estates were practically re-entailed. At anyrate it is quite certain that before Lord Stormont wrote the letter the three friends had seen the draft of the trust-deed, and that Mr Jamieson had told them, both verbally and in writing, that the pursuer was to be restricted to an alimentary liferent only.
Further, the deeds were sent in draft to the pursuer for his revisal. He read and understood the agreement, but he wrote to Mr Jamieson on 22d October 1886 saying that he could not understand the trust-disposition. I may remark that this was not to be wondered at, because it appears that he had not taken the trouble to read beyond the preamble. Mr Jamieson, on the 25th October, wrote to the pursuer saying, ‘Of course you should not sign the trust-disposition until you quite understand it, and get the explanations you desire.’ Mr Jamieson and the pursuer accordingly had a meeting, and Mr Jamieson swears that he went over the deed, clause by clause, with the pursuer, and explained it to him. The pursuer does not contradict this statement, and I have no doubt of its truth. If therefore the pursuer did not understand precisely the meaning and effect of the deed it was his own fault. I do not mean to say that the pursuer is telling an untruth when he says that he never understood the way in which his liferent was restricted until lately. I think that it is quite possible that he did not. It may have been on account of his confidence in Mr Jamieson, but he certainly showed extraordinary apathy in regard to deeds which so largely affected his whole future life. I have already pointed out that when the trust-deed was sent to him he did not read further than the preamble, and he says in his evidence in regard to Mr Jamieson's explanations, ‘I cannot say I paid particular attention; in fact, he (Mr Jamieson) bored me very much over the details.’
I am, therefore, of opinion that the plea of essential error cannot be sustained.”
The defenders reclaimed, and argued—1. No case of fraud had been proved; it was quite plain that Sir Robert was not fraudulent, and indeed that had not been maintained. Of Mr Jamieson it might truly be said, as Lord Glenlee had said in another case—See footnote at p. 421 of Stewart v. Stewart, 1839, M'L. & Rob. 401—“It was a very poor compliment to say he had acted blamelessly. … I think it right to say that he acted a most friendly and judicious part throughout.” The proposal to refer the matter to the judgment of three friends came, not from Sir Robert or Jamieson, but from Colonel Moray; the reference to them was on the footing that the money was to be found, and they were to say whether there should be a trust or not. These facts make it vain to attempt to say that the whole matter was a scheme or conspiracy between Sir Robert and Mr Jamieson. On this point the Lord Ordinary's judgment was well founded. Mr Jamieson had no duty to advise the pursuer, and even if it were conceded that he might have had such a duty, if he knew that Captain Menzies was without assistance, he was clearly relieved of any such duty when Captain Menzies wrote to him telling him that he was “advised” not to accept his terms. The pursuer admitted
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Argued for the pursuer—The issues in fact were—(1) Was a certain representation made, viz., that there was no alternative but ruin if Captain Menzies refused his father's terms? (2) Was this representation, if made, false? (3) If false, was it also fraudulent? (4) If it were false or fraudulent, did it lead to the agreements now under reduction? Two and four could be
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At advising—
The history of the case, in so far as it is necessary for the understanding of the question involved, is not complicated. The defender is proprietor of a large estate in the Highlands, which is considerably burdened, and for which he has incurred much debt for improvements. Shortly before the transactions in question he had also been compelled by the agricultural depression to take large sheep-farms into his own hands and to pay for stocking them. Thus, although his gross rental was large, his actual income was comparatively small, and he was not in the position for the time being of a wealthy proprietor, having to let even his residences and shootings. The pursuer, who is his only son, became an officer in the Guards in the year 1874. The defender, after consulting officers of experience, gave his son an allowance at first of £300 a-year, afterwards raised to £500, and in 1881 to £600. It is now alleged that his allowance was so insufficient that he was driven to gamble in order to increase his income. Whether it was or was not sufficient is of no consequence; the fact is that the result of his gambling was, as any sensible person would have expected, that instead of increasing his income he fell rapidly into debt, so that early in 1881 he was already not only in debt to trades-men to the extent of £1000, but was in the hands of the Jews and pressed for payment of bills to the extent of nearly £4000 for money borrowed at 60 per cent. interest.
He was cleared of these debts at the end of July 1881, he is found only thirteen months afterwards sunk in debt to the extent of no less than £5500, £3650 of which is on promissory-notes at three months to the Jews. He had thus, besides his pay and allowance, which together cannot have amounted to less than £600 at this time, squandered in gambling and by resort to money-lenders for relief, upwards of £5000 in one year, having been relieved of debt to the extent of £5000 only the year before. For these new debts he borrowed money from the Eagle Insurance Company through a firm of solicitors in London upon a post obit bond for £5500 on somewhat unfavourable terms. This transaction came to his father's knowledge through it being necessary that the charge should be intimated to him. The pursuer intended the transaction to be kept secret from his father, as appears from the insurance company's solicitors' letter of 30th April 1883, where they say “he is more than disgusted at your having given notice of his dealings with the Eagle Office to his father.” This new revelation of the pursuer's extravagance and folly caused the defender great distress, and he and Mr Jamieson set themselves once more to endeavour to bring matters straight. They endeavoured to induce the pursuer to promise to give up gambling, but he distinctly declined to give any promise to do so, and ultimately arrangements were made by which the pursuer's bond to the Eagle Insurance Company was cleared out of the way. But as the pursuer would give no promise of amendment, it was arranged that the bond should not be discharged but should be transferred to trustees, the purpose, as was clearly explained to the pursuer, being to put an obstacle in the way of the pursuer raising money on his prospects of succession in the future. The father was very anxious that every obstacle should be put in his way for his own sake, and thought himself quite entitled to make a promise in writing not again to bet or gamble on the turf part and portion of the arrangement, “it being the fact,” as he said, “that Neil is no sooner, so to speak, out of one scrape than, quite regardless of what has happened, he gets into one just as bad, in fact rather worse, and I should be very unhappy to think that he had left it open for himself to repeat the same misfortune again.” As before mentioned, the effort to obtain a promise from him failed entirely. The arrangements, however, for taking up the Eagle bond proceeded, and were combined with certain financial arrangements connected with the estate which it is unnecessary to particularise, except to say that these were such as might quite properly have been carried out between father and son even had there been no question of paying the son's debts. Provision for the pursuer's bond was included, and the bond was ultimately
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These transactions were completed in the end of 1883, and within a year the pursuer was again deep in debt, and had raised money by bill, the amount in the bill being £3000, besides having £700 odd of debts. As he was leaving for Egypt with his battalion he informed Mr Jamieson of these facts.
It was this condition of debt which led up to the transactions which the pursuer now impugns, and it may suffice to say that they eventuated in the agreement and trust-disposition under reduction. It is unnecessary to give any narrative of them at this point, as I shall have to refer to them in what it will be necessary to say in regard to the record in this case and its narrative of these transactions.
Your Lordships will remember that after this case had been heard upon relevancy upon a reclaiming-note from an interlocutor of Lord Wellwood dismissing it as irrelevant, it was thought desirable, without pronouncing any judgment on the relevancy, to allow a proof before answer, so that whatever the future of the case might be it should be finally disposed of once and for all, and the parties not exposed to the risk in a certain possible event of its being sent back to this Court to be put through a new course. I shall not now conceal my opinion that had we dealt with the case directly upon relevancy I should have concurred in the judgment arrived at by the Lord Ordinary. But the case having been gone into upon evidence, it is, I think, desirable to treat it with reference to that evidence on the assumption of relevancy. In doing so, it cannot be left out of view that this is not the first case relating to the same matter between the same parties. It will therefore be desirable to consider first the evidence in regard to those averments of the pursuer, which differ from those contained in that former action which was held by the Lord Ordinary and in this Division to be irrelevant—I mean the first litigation raised on the 18th November 1889, and of which the present action is the sequel. For if these allegations have been proved, then we may be held to have a new case before us, as to which we are not tied up by our former judgment on relevancy.
On the other hand, if the pursuer has failed to prove these averments which are new, or if they have been disproved, then the case before us comes back into the position of the previous case, and directly falls under the operation of our judgment by which the pursuer was held to have no relevant case.
I proceed therefore to consider what are the averments made by the pursuer in the first case, which it has been decided were irrelevant, and what are the averments of the present case differing from those contained in the first.—[ His Lordship then narrated these averments].
When we turn to the pleas in the present case it is found that if the adjective “fraudulent” is deleted from them, they are, though not in exact words, yet in their actuality, an echo of the pleas in the former case. The misrepresentation, the undue concealment, the undue influence, and the essential error are repeated in practically the same connection, the word “fraudulent” being added or substituted in each case.
I turn now to the consideration of the evidence adduced by the pursuer for the purpose of proving his case of conspiracy and fraud. First, is there any evidence of the defender and his agents having conceived a fraudulent scheme to induce the pursuer to confide in the latter and not to take independent advice, and to procure his consent to the defender's wishes by pressure, misrepresentation, and concealment? I have studied the evidence over and over again, and I can find nothing whatever to suggest that the defender and Mr Jamieson formed any such scheme. On the contrary, the evidence satisfies me that there was no scheme arranged or even tacitly adopted between them; that both of them were moved by the most uncorrupt motives, and were sincerely desirous that the best thing that could be done for the true interests of the pursuer as they honestly estimated them should be done, and that neither of them was actuated by any motive but such as was honourable and of kind intention towards the pursuer, and free from all sinister intent. I consider the whole correspondence, which records the feelings and actions of the parties at the time, to be highly creditable to the defender as a kind and forgiving father, who did not allow his just disapproval of his son's gambling and disreputable dealings with the Jews to rouse in him any unfriendly resentment towards the pursuer. Although evidently a man who is stiff in adherence to his own views about business matters, and not very easy to deal with, he throughout never deviated from a friendly attitude towards his son, or allowed his natural distress at the foolish and discreditable conduct of the pursuer to cause him to harbour harsh or unjust intentions towards him. The documentary evidence convinces me that throughout he was actuated by an honest desire worthy of his position, both as a man and a father, to consider what was best for every interest in the circumstance in which he and his son were, he being the heir in possession, and his son the heir to succeed to an estate which he was very anxious to save, that it might go with the baronetcy. I believe also that it was his sincere conviction—a conviction which was, I think, the right one in the circumstances—that unless his son could be placed in a position which would protect him from himself, irretrievable ruin was the certain and speedy end which was before him, and that his refusal to consider any proposal which would not protect the son from himself was the result of this conviction. As regards Mr Jamieson, I can find nothing in the correspondence which took place between him and his client in the slightest degree indicating that they had entered into any arrangement as to how the pursuer was to be dealt with. The correspondence which, it is not
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There is one particular matter which is alleged to have been part of the conspiracy but which, whether it was done in pursuance of a conspiracy or not, would be very important to the pursuer's case if it were true. It is averred that inducements were used to prevent the pursuer from taking independent advice. Had this been done, either by the defender or by his law adviser, whether by arrangement between them or not, it would have been a very important fact for consideration on the question of fraud. No more deadly adminicle of evidence in support of an allegation of fraudulent impetration of a deed could possibly be brought forward than proof that the party accused of the impetration or his agent had used artful means to prevent the other party from having neutral advice.
I consider this point to be the most important in the case, for upon the truth or falsehood of the pursuer's evidence in regard to the matter, the complexion of nearly the whole of the rest of the case must necessarily depend. If, on the one hand, it be true that means were used to prevent the pursuer having independent advice, the colour of the fraud would much more easily spread itself over the whole case. On the other hand, if the pursuer's averments on this matter are false, and if he not only never was influenced not to consult a separate legal adviser, but as matter of fact intentionally induced the defender and Mr Jamieson to believe that he was obtaining legal advice elsewhere, he is in the record here either knowingly stating a false case, or had when he instructed his lawyers how to frame his case been afflicted with a sad want of memory. Either of these latter views must necessarily seriously affect the aspect of his own evidence, on which his whole case depends. It seems to me therefore that it may be well at this stage to turn to and consider the evidence as it bears upon this particular point. But in order to do this with effect it will be necessary to consider some general questions in regard to the evidence first. For it is of importance to have it ascertained at the outset which evidence in the case presents itself as most satisfactory in its general aspect. If on the face of it the evidence for one side produces an unsatisfactory impression as to its trustworthiness, whether from witnesses being either forgetful or uncandid or directly untruthful, or from such causes combined, the view to be taken of the evidence on any special point may be very seriously affected. And the same will follow if evidence on one side commends itself generally as straightforward and accurate, either by itself or in contrast with the evidence upon the other side.
Now, there is no evidence which relates to the facts of the case upon the part of the pursuer except that of the pursuer himself. And I feel bound to express the opinion which I have formed after earnest study of the whole case that the evidence of the pursuer is most unsatisfactory and most untrustworthy. It is a very remarkable feature of his case that in order to support it he makes part of it to represent himself as being an untruthful man who makes statements which are inconsistent with facts in order to gain his own ends. It is a somewhat novel way of supporting one's own case, and has the one merit of courage. On not fewer than five occasions, when pressed to explain, if he can, what he said at the time, and bring it into consistency with what he says now, he states with almost brutal frankness that his statements at the time were the reverse of the truth. He indicates that it was quite according to his ideas of honour in dealing with his own father and the family solicitor to state what was false on
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I feel justified in saying that the pursuer's testimony gives me a most unfavourable general impression, and makes it impossible for me to accept it in any important particular where it stands by itself, and makes my choice not doubtful where it conflicts with that of other witnesses or with contemporaneous documents. The opinion which I have formed is that where the pursuer speaks to any fact, corroboration is necessary before I can give it credence, and that where in speaking to any fact he is contradicted by the evidence of any ordinarily credible witness, his evidence must be rejected. In a word, it does not inspire me with any confidence. Its own intrinsic qualities compel me to distrust it.
I turn back now to the first special point in the pursuer's allegations for which an examination of the evidence is necessary, and proceed to examine it in the light of the judgment I have formed upon the parole evidence for the pursuer, which consists of his own deposition and nothing else. That point is the allegation that the defender and Mr Jamieson in carrying out a predetermined fraud induced the pursuer not to take independent advice. The point is one of such general importance that it was referred to in connection with the question of the pursuer's credibility from a general point of view, and sufficient was said then, in my opinion, to demonstrate its untruth. But the point is so important, being indeed that on which in one view the case principally turns, that I feel bound to examine it more minutely.
I shall first recapitulate the pursuer's averments in order to compare them with the evidence—[ His Lordship then quoted these averments].
It is certain that the pursuer was no novice in the art of raising money on his expectancy, as he had in 1882 done so on an extensive scale, and had on that occasion employed solicitors in London to act for him, Messrs Pawle & Fearon, expressly intending to keep the matter secret from his father. The fact that he was so raising money without using Mr Jamieson as his agent is certain, and he intimated it in cold blood to Mr Jamieson by his letter of 16th September 1882, in which he says—“I am borrowing a sum of money on a policy of life insurance;” and asked Mr Jamieson to send him a copy of the deed of entail of the property. It is noteworthy that the pursuer requested him to keep it to himself, and that Mr Jamieson at once meets this by intimating that he holds “the deed of entail only as the father's agent,” and declines to send a copy without the father's sanction. The pursuer by his answer on 20th September 1882 makes it plain that he does not desire Mr Jamieson's aid in his affairs, and Mr Fearon his solicitor's letter of 30th April 1883 makes it plain that he desired to act without his father's knowledge. This proceeding in 1882 indicated distinctly that the pursuer, when he wanted to raise money without the concurrence and aid of his father, and without regard to his father's pleasure as to the mode, could do so without Mr Jamieson's aid, and indeed I think it indicated also that he did not expect aid from that quarter in raising money in such a way. It certainly became quite plain to him that Mr Jamieson could not approve of such a course, and would be no party to it. For Mr Jamieson expresses himself as “extremely sorry” at hearing of it, and the whole effort of Mr Jamieson, acting for the defender in 1882 and 1883, was to get rid of the Eagle transaction, as one that the defender and Mr Jamieson thought objectionable, and that never should have been entered into in the opinion of both of them. The pursuer made it quite clear by his own conduct that he already knew he could get no advice in such a direction from Mr Jamieson, and Mr Jamieson made it equally clear that this view was right by directly expressing his disapproval. It was also made plain that the pursuer knew where to go if, in disregard of his father's wishes and his father's agent's views of what was right, he was determined to raise money by such means. Therefore when the negotiations opened in 1885, it was not and could not be a question of what might be done regardless of the defender's approval. The pursuer knew quite well that Mr Jamieson would give him no advice applicable to such a course. They opened, according to the view I take, solely upon the understanding that the pursuer was coming to his father for aid, well knowing what was the only footing upon which any negotiation could take place through Mr Jamieson, and that Mr Jamieson could not and would not be his adviser in any other capacity than that of the father's agent, responsible not to advise the son as to any course which the pursuer knew that the father would disapprove of. The pursuer also knew that his father and Mr Jamieson had taken practical steps to indicate how much they disapproved of the previous transaction, for they had made it a sine qua non in spite of his remonstrances that the Eagle bond should be assigned and not discharged, and this with the avowed intention expressed in writing to the pursuer of putting difficulty so far as possible in the way of any similar transaction for the future. That this was distinctly brought home to the pursuer is proved by the fact that Mr Jamieson so expressed
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But I am satisfied that not only did he wish them to believe that he was taking independent advice, but that they did believe it, and that they knew at the time that they did believe it. The evidence in the correspondence upon this matter is remarkable. On 26th October 1885 the pursuer wrote to Mr Jamieson a letter which upon the face of it bears that he was in consultation with advisers who knew the arts of money-raising by heirs who are in debt. I cannot do otherwise than hold that the pursuer desired Mr Jamieson by that letter to understand that the scheme he proposed was one which he was advised was preferable to that which he was negotiating with his father, and that he had advice from a person who understood such matters not to agree to the conditions on which alone his father would negotiate. Whether that person was a legal adviser in the sense of being a legal practitioner is of little consequence. He was held out as being a person of legal knowledge as to the raising of money. I think any reasonable person would read his letters as meaning that he had competent advice upon the subject. It would not be reasonable to suppose that he meant that some irresponsible, ignorant person had given him this advice, and that without any aid from a trustworthy adviser routined in such matters he had accepted the advice. Let it be that the words “as I am advised” were used “as a draw.” The pursuer says so. It is clear that the draw was successful, for Mr Jamieson understood him to mean that he was advised by a man of legal knowledge in such matters, and he so expressed himself in his letter as to indicate this to the pursuer, and the pursuer never disabused him of the impression, for he takes up what the pursuer says as meaning that the advice he got was to the effect that what was proposed did not compensate him for what he was agreeing to.
When Mr Jamieson says that he can quite understand the propriety of the advice he can only be referring to the advice of a person of legal knowledge, acquainted with the rules of compensation to heirs of entail on a disentail, and it is in that view he asks him to tell his “adviser” what was the real question. Now, it is very remarkable that from that date, 28th October 1885, onwards there was no correspondence between the pursuer and Mr Jamieson for nearly two months. The pursuer sent no answer to the letter I have read. He tacitly accepted Mr Jamieson's reading of his communication. But we know that between that time and 16th December, when he next wrote to Mr Jamieson, a very important conversation bad occurred between his father and him, and we know that this conversation was a considerable time before 8th December, when Sir Robert wrote in reference to it, for Sir Robert so depones. Before reading this letter I desire to refer to Sir Robert Menzies' evidence, where he says—“I think I mentioned the name of Mr Mann to my son at Rannoch Lodge as a person he had better consult.” … The pursuer admits that his father on one occasion advised him to consult a solicitor, but does not recollect Mr Mann being named, but I have no doubt of the defender's accuracy. The pursuer says it was in June 1886. He
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This conspiring lawyer expresses his satisfaction that a delay by him in answering a letter has led to conversations between son and father, the only practical result of the conversations being, so far as he is informed, that the son is to consult a solicitor for himself, the very thing which the pursuer now avers both the father and his correspondent desired should not take place, and in concert took fraudulent means to prevent. Can anyone doubt that this is a perfectly genuine expression of Mr Jamieson's feelings? And if it be so, can anyone refuse to believe him when he says—“I understood he was being advised upon the main point whether it was an advisable thing for him to go into.” I see no ground for disbelieving him, and I disbelieve the pursuer, finding ground for doing so in his own evidence—[ His Lordship also read the pursuer's letter of 18th March 1886].
I have, I think, referred to every part of the written evidence which touches upon this matter, and it all points one way and tends to confirm the parole evidence for the defence, and to discredit that of the pursuer. I therefore find the second point of the pursuer's charge of fraud to be disproved by the evidence. Not only has the pursuer failed even to make a presentable case upon it, but it is effectively negatived by his own evidence and his own conduct, and it is proved that the defender did the very opposite of that which is alleged against him, for it proves that the defender advised the pursuer that he should take advice on his own account, and this with the approval of his alleged co-conspirator.
The next averment of fraudulent proceeding is to the effect that the defender and Mr Jamieson, in pursuance of their pre-arranged scheme for defrauding the pursuer, purposely created delays in order to accentuate the pursuer's difficulties. Upon this I remark, in the first place, that the averment is a novelty in the history of impetration of deeds by fraud. The usual case of impetration is one of hurry, the purpose being to induce the victim to sign the deeds by which he is to be defrauded as quickly as possible, leaving him as few opportunities as may be of finding out the intended fraud, or getting advice which may prevent its success. I never heard before of a case in which the perpetrators of the fraud delayed the carrying of it out, and I confess myself unable to understand how it could benefit them to do so. Upon the question of fact I can only say that there is not one tittle of evidence to prove that the defender and Mr Jamieson ever combined to do anything of the kind. On the contrary, it is, I think, impossible to read the letters without being convinced that all the delay which took place was due to the defender's raising points which to him seemed of importance, and objecting to the allowance which Mr Jamieson pressed upon him as proper to be given to his son. Mr Jamieson had great difficulty in getting the defender to proceed, he being evidently a gentleman who holds strong views on minor points on matters of business, holding on to every point which strikes him, with equal tenacity, without discriminating between the important and the unimportant. This appears throughout the whole correspondence—[ His Lordship then referred to the correspondence]. I find the third point of the pursuer's case of fraud negatived by the evidence.
The fourth allegation of fraud is to the effect that the defender and Mr Jamieson impressed upon him that ruin would follow unless he adopted the terms which alone Sir Robert would accept.
This averment is based upon one or two passages in Mr Jamieson's letters, and in particular upon one in the letter of 18th June 1885, in which Mr Jamieson says—“I see nothing for it but ruin to you.” But in the connection in which these words were used they were quite accurate. This was the first letter in which Mr Jamieson referred to what should be done about Engel's (the money-lender's) proceedings, and followed on a letter from Sir Robert to him, in which Sir Robert stated that he had “no instructions to give as to Neil's bills for £3000 to the Jew in London,” and that he preferred to wait and “see what arrangements might be proposed for me to consider about.” Mr Jamieson is careful in his letter to make the pursuer understand that he can do nothing without his client Sir Robert's authority. He then says—“Unless some arrangement is made about these bills and Mr Engel's acceptance, I see nothing but ruin for you.” Now, this was literally correct. Unless an arrangement
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The next averment is, that as part of the conspiracy of fraud the defender and Mr Jamieson combined to impress upon the pursuer that he had no alternative but to accept the re-settlement of the estates, and knowingly to conceal from him that he could get all he wanted on less onerous terms. There is no evidence that any such fraudulent scheme was formed between Sir Robert and Mr Jamieson—none whatever. The correspondence between Sir Robert and Mr Jamieson, which bears the stamp of candour upon the face of it, is negative of any such idea. As regards Mr Jamieson, certain passages in his letters are referred to and founded upon as showing that he made such representations, and it is said that he made them fraudulently. I shall have to examine these letters more closely, in connection with what the Lord Ordinary has found apart from fraud, and I shall therefore content myself with saying at this point that I concur with the Lord Ordinary in holding that whatever may be said about Mr Jamieson's actions in this particular, that there was nothing in them of the nature of “imposition or deceit,’ and that if the pursuer is to succeed it must be upon “some other ground than fraud and deceit.” This observation equally applies to a fraudulent concealment of other modes of raising money. If there is anything certain in the case it is, that, rightly or wrongly, Mr Jamieson believed that the pursuer could not get what he wanted otherwise than from his father on any terms that were not prohibitory from the point of view of good business, and did not mean a breaking up of the prospects of the pursuer as to keeping up his position as a baronet when he should succeed. That he held that view all along from 1883 downwards is demonstrated by the correspondence. If wrong, he was certainly not fraudulently wrong in not suggesting any other mode to the pursuer. I am satisfied that he would have held it dishonest as Sir Robert's agent to have done so, and that he would have been right in so holding. It is next alleged that the proposal to lay the matter before three friends by a reference was devised with a view of giving an air of bona fides to the transactions. This allegation is wholly groundless. I am at a loss to see why this very base accusation is made against his father by the pursuer—made not only as matter of ingenious pleading by his lawyers, but spoken to in evidence by the pursuer himself. It has as little the look of fraud as any proposal could have, taking it without the surrounding circumstances, and when the surrounding circumstances are looked at the absurdity of the accusation is apparent. It appears from the letter of 25th October 1885 that the proposal to refer to three friends came not from Sir Robert but from Colonel Moray, in view of the pursuer's refusal to reform, and that the other two friends were named by that gentleman, and so little were Sir Robert and Mr Jamieson anxious to press the proposal upon the pursuer that it is after this, and on his not taking to the proposal, that Sir Robert advised him to consult Mr Mann, and that the pursuer went to London saying he was to consult a solicitor, and the next reference to the matter of the three friends is in a letter of the pursuer's written eight weeks after it had been broached to him. It then appears that the pursuer and defender agreed at a meeting on 22nd December to a reference to the three gentlemen formerly named, viz., Colonel Moray, the Duke of Athole, and Lord Stormont; and it is noteworthy that in doing so Sir Robert knew that his son had been consulting the Duke of Athole, and that his advice was that the pursuer should resist being put under trustees. This appears from the pursuer's letter of 28th December 1885.
In my opinion he then deliberately and of his own free will, without any inducement, and knowing that he was free to go to any lawyer or to follow any course he chose, selected to have his future financial position settled by these three friends. I am therefore not surprised that in a case in which he desires to reduce an agreement to refer certain points in the award of the friends to a referee, and the referee's awards thereon, he should attack the submission to the three friends as having been fraudulently brought about. For if it was not, it is difficult to see how reduction of the award following it is to be obtained. For what was referred to the three friends was whether the proposal by Sir Robert, as the condition of his clearing the son of debt was, in the words of the memorandum, “a fair and reasonable condition in the circumstances, and one which Mr Menzies should
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It was impossible to pretend that the pursuer did not understand the references and know what he was doing in agreeing to it otherwise. Every circumstance connected with it is at variance with any such idea. Therefore it was necessary to endeavour to ascribe it to a fraud, an effort which has entirely failed. There is an important fact to be noted in connection with the matter, that the sudden change of the pursuer from sullen stubbornness to reasonable action in taking steps to give up gambling and racing, thus giving practical promise of amendment, and the reference to the three friends, occurred shortly after the pursuer had told his father that he would take the advice of a lawyer, and when the defender and Mr Jamieson say that they believed that he did so, I believe them. If they did they might well assume that if the lawyer was a worthy man, and the pursuer was frank with him, his agreeing to the reference was the result of the advice he got, which if it was sound advice would be advice not only as to what he had the power to do, but what in the circumstances it was wisest to do. Can it be doubted that any honest adviser who knew all would have advised him to place himself in the hands of his three friends?
Lastly. It is said that the pursuer was under essential error as to the nature of the transactions, the essential error being induced by fraudulent representations and fraudulent concealment. Upon this matter the pursuer avers that the restriction to an alimentary liferent, and preventing him from using his expectancy as a fund of credit, was (1) not referred to in the negotiations, nor (2) placed before the friends in the submission; that (3) it appeared for the first time in theagreement and trust-disposition; (4) the pursuer did not understand it, and that it was not explained to him; (5) that he did not agree to it; and (6) that it was no part of the bargain between the parties; (7) that the terms and effect of the deeds were not explained to him; and (8) that he did not peruse them. It is only necessary to say, without going into detail, that each of these averments is in its substance untrue in point of fact. The only plausible ground for stating any one of them is that the memorandum laid before the three friends was not distinct upon the matter of the alimentary liferent, but this was, as the Lord Ordinary points out, in no way intended to mislead and did not mislead, as the draft of the trust-deed was put before them, and they had both verbally and in writing been distinctly informed that the pursuer was to have an alimentary non-assignable liferent only. That the pursuer understood this I am convinced, and his statements as to his perusing and understanding the documents are quite untruthful. He wrote at the time that he had carefully read the agreement, and that he did not understand the trust-deed. Mr Jamieson replied that he “ought not to sign the trust-deed until you quite understand it,” and they had a meeting at which Mr Jamieson did explain it to him. The pursuer himself admits that Mr Jamieson explained to him what he had difficulty about, and says—“My impression is that I did ask the meaning of the expression ‘in liferent for his liferent alimentary use allenarly,’ and I think Mr Jamieson explained it.” I can only say that when the pursuer says he did not understand the passages which restrict his powers over the liferent, and say that he “shall not be entitled to assign or dispose of it in anticipation,” and that it “shall not be liable for his debts and deeds,” or be subject to the diligence of his creditors, I do not believe one word of what he says.
Further, I do not believe that he was—as he said he was—amazed to find that he could not assign away his liferent in 1889. I consider his evidence on this matter, as on many others, to be destitute of truth. The pursuer says he believed he could raise
Page: 705↓
I have now gone over all the allegations of fraud made by the pursuer, and, with the Lord Ordinary, I find that they are unfounded. But, as I pointed out in alluding to the record, if the case of alleged fraud fails, there is no case left different from that which was formerly dealt with in this Division. We are left practically with the same case which Lord Trayner in the Outer House held to be irrelevant, and in which we affirmed his judgment. The result therefore must be, that following that judgment we must throw out the whole case. That would be the direct way of dealing with the matter. But the Lord Ordinary has not proceeded upon this footing. Although he has absolutely negatived the case of fraud, and has therefore considered the case apart from fraud, he has practically held the averments of the pursuer relevant with all allegations of fraud negatived, and with practically no averments apart from fraud other than those contained in the former case. It is true that his Lordship draws a distinction in one point. He says—“Apparently the ground of reduction which was mainly relied on in the previous case was the failure of Sir Robert and Mr Jamieson to disclose that there were means by which the pursuer might have obtained the money necessary to pay his debts without entering into the agreement. Not to tell the pursuer that there were other means of raising money open to him is, however, a very different thing from telling him that there were no other means open to him.” I cannot agree with the Lord Ordinary in this matter. I find that in the former record it is alleged that Mr Jamieson “urged the scheme upon him as the only one that could be devised,” and at a subsequent interview repeated that it was the only scheme that could be devised, and did induce the pursuer “to believe that no relief was possible for him which did not involve surrender of the expectant fee of the estates,” and that “the pursuer gave his consent to this proposal” (viz., the proposal to refer to the three friends) “with the greatest reluctance, under extreme pecuniary distress, and only upon Mr Jamieson's assurance that it was the one way of escape from impending ruin and disgrace.” I am therefore at a loss to understand the distinction which the Lord Ordinary draws between the former averments on this matter and those in the present case when he says, in the passage which I have read from his opinion—“Not to tell the pursuer that there were other means open to him is, however, a different thing from telling him that there were no other means open to him;” and therefore holding, as his Lordship does, that apart from allegations of fraud this record is different from the record in the former, it seems to me that the passages I have quoted are distinct allegations of that which the Lord Ordinary says it does not contain, and I cannot agree with him when he says that the representations averred in the present record are of “a totally different character from that contained in the former.” One would be inclined to look with some suspicion upon a record which stated the crucial facts of a case so as to make the case of a totally different character from that contained in a previous record relating to the same matter. But in point of fact it is not so here. The record, apart from allegations of fraud, which the Lord Ordinary negatives, is in its essence the same as the former one, and the Lord Ordinary erred in holding otherwise. Had he not done so, he would, according to all rule of procedure, have given effect to the judgment already pronounced, by which the allegations made by the pursuer—fraud being out of the case—were held irrelevant, and would have dismissed the action. Accordingly the logical result of the opinion I have already expressed would be to throw out this action, as the last was thrown out. But while I should be quite prepared to take that course, I prefer, in view of the fact that the Lord Ordinary has thought that he had legal grounds for dealing with the case as relevant, although there was no case of fraud on the merits, to consider the case on the footing that our former judgment was erroneous, and to express my opinion upon it as a case of fact, on the assumption that if the pursuer's case were true upon the facts, he would in law be entitled to succeed in his action. I proceed therefore to consider those points of fact as to which what I have said in dealing with the case of fraud does not directly or fully apply.
The first is, that it is alleged that Mr Jamieson misrepresented to the pursuer his position by telling him that there was no way out of his difficulties except by consenting to a re-settlement of the estates. This, it is said, was untrue in point of fact, and its untruth is based upon evidence of insurance officials, who say that the pursuer could have got payment of his debts and an annuity equal to his present allowance on a post obit bond for a sum of £25,500. On the other hand, other persons of equal
Page: 706↓
The whole structure upon which the pursuer's case rests in this matter consists of one or two isolated passages in the early part of the correspondence. The first is one already referred to, in which Mr Jamieson says that “unless some arrangement is made about these bills, and Mr Engel's acceptance, I see nothing for it but ruin to you.” I have already pointed out that this is quite an accurate observation. Some arrangement was necessary, and without some arrangement ruin would follow. This is all it means. The next is in a letter to Sir Robert, where Mr Jamieson says that he told the pursuer that “he did not see how he could pay the debts unless with your assistance and on your terms.” This also is an expression of the most general kind, and must be taken along with the whole context, which plainly shows that Mr Jamieson was tied up to Sir Robert, and could not act for the son in any way by advice or otherwise, except with the full knowledge of the father, and only within the limits of the father's instructions. And that this expression of Mr Jamieson's view did not make the impression upon the pursuer which he now says it did, is proved by his refusing doggedly the promise his father required, by his resisting the father's terms upon advice, and coming to no arrangement, until ultimately, on the suggestion being made of a reference to three friends, he, as I believe, in an interval of better feeling as regards his past conduct, agreed to place his future in their hands, they having full power to deal with the whole case as they considered best for the true interests of both. The only remaining passage is one in a later letter, in which Mr Jamieson says—“But if you come to him” (the father), “as unfortunately you are obliged to do, and ask him for money to pay your debts, &c.” It is said that the expression “you are obliged to do” means that no other course was open to him for relief. I consider that to be a strained reading of the passage, which I think means only that the pursuer, being sunk in debt, is obliged to look for means of clearing himself, and naturally looking to his father as his best friend, comes to him. Mr Jamieson in this very letter expresses himself distinctly that he has never “advised” the pursuer, and asks him to tell his adviser that the question was not fair terms of compensation, but the terms on which the father would agree to do anything. Now, the pursuer takes no notice of that letter. He accepts
Page: 707↓
It is certainly a very remarkable circumstance in this case, that while it is put forward as a misrepresentation by Mr Jamieson that the pursuer was told that he could not get the debts paid without agreeing to the re-settlement, it seems never to have occurred to the friends who advised him, or to Mr Engel, the lender, or to Mr Engel's legal adviser, that there was this easy way out of difficulties. He took the advice of Captain Anderton, who was a man who “had experience in borrowing money.” He spoke to numerous friends, many of whom advised him to resist his father's terms, and on their advice he did so for a long time. Surely when he intimated that he was advised to refuse these conditions it was reasonable for Mr Jamieson to suppose they were giving him some aid as to how he could be freed otherwise. Advice to refuse to do a particular thing in order to get rid of pressing liabilities must, if it deserve the name of advice, take into account the pressure of the debts, and suggest some alternative to relieve the friend advised. The pursuer knew that no other terms would be agreed to by his father, and presumably told this to his advisers.
The Lord Ordinary says the pursuer did not know that there was this mode of raising money. But if such a course is open, how is it that he did not know? It is curious that Mr Jamieson should be held bound to know, and therefore bound to say, for unless bound to know he could not be bound to say, that which upon the face of it the money-lenders and their advisers did not know. Surely they must be held to be quite as well up in the moves of raising money, and keeping their grip on heirs of entail, as a respectable Edinburgh lawyer. Engel had every interest not to bring the pursuer down if he could get his money and keep him up. It was Engel's interest to keep the pursuer up, while threatening him with bankruptcy. He surely knew all about raising money, and could have kept his pigeon from perishing by a little advice as to how to proceed so that he might have a few live feathers left to pluck later on. Yet it never seems to have occurred to him, or to anybody versed in the modes of dealing with embarrassed debtor's affairs, that the pursuer had this easy mode at his hand, which it is now said it was a misrepresentation on Mr Jamieson's part to say that he did not see. I am of opinion that Mr Jamieson was not bound to know the mode, even if it was a certain mode, and that he did not know it. If Mr Jamieson had used false arts to induce in the pursuer the belief that he was studying for him the mere financial modes of getting out of the difficulty regardless of Sir Robert, his client, and of the future of the son, if there was a case of that kind, that he had as acting for him studied money-lending as a specialty, and having ascertained that there was such a mode open to the pursuer, and then assured him that he had done so on his behalf, and that there was no mode, I could imagine a case such as that being relevantly stated as a fraud. But I find nothing of that kind here. Mr Jamieson honestly believed that there was no such mode except at ruinous rates, and he left the pursuer perfectly free to get any contrary advice if it was procurable, and believed the pursuer when he said that he was engaged in consulting other advisers, who advised him to refuse the father's conditions, and was entitled to assume that they were his advisers as to what he should do instead.
But it is said that Mr Jamieson was acting as the family agent in this matter, and therefore he made any representation on it as the pursuer's agent. I do not assent to this. This was not a case of a father proposing that his son should do
Page: 708↓
The Lord Ordinary says that the pursuer “did not regard Mr Jamieson as the agent of the opposing party, but as the family solicitor, as a man on whom he could rely, and as a lawyer whose ability and experience would suggest the best means of getting him out of his difficulties.” To the first part of this sentence I assent, to the latter part I distinctly demur, and to the deduction the Lord Ordinary makes from it. I hold that the whole history of the proceedings makes it certain that the pursuer did not and could not expect Mr Jamieson to “suggest” any means of getting out of his difficulties except such as his father, his client, would countenance. The only matter he brought before the son was what proposal he might make to the father, and it never was a question what could be done regardless of the father. I think that the pursuer knew quite well that Mr Jamieson would make no suggestion and give no aid to any scheme of such a kind. Accordingly when the pursuer speaks of other modes, he never does so as if Mr Jamieson could act for him, but says “I shall have to borrow. I see nothing for it but to sell the reversion.” The Lord Ordinary seems to me upon this matter to state the case in a somewhat curious manner; he says—“Now, if Mr Jamieson was looking at the matter solely from Sir Robert's point of view, and had not considered what the pursuer could do without his father's consent and assistance, I think he was bound to say so. He should have told the pursuer that if he would not consent to Sir Robert's terms he would have to consult some one else as to what he could do without his father's assistance, because as to that he (Mr Jamieson), being Sir Robert's agent, could not advise him. Instead of saying anything of the sort, however, Mr Jamieson stated it as his opinion, without any qualification, that the only alternative was acceptance of the terms offered or bankruptcy.”
I think he did so. He not only invariably said that he could only act under Sir Robert's authority, but he distinctly told the pursuer that he did not “advise” him—that what was suggested and considered between them was what occurred to Mr Jamieson as what Sir Robert might be got to agree to, but that he did not “advise it,” but left the pursuer to consider it for himself, without a suggestion that he should not take any advice he pleased, and Mr Jamieson so expressing himself as to show that he understood the pursuer was taking advice, which was what the pursuer himself wished he should understand. I therefore think that the Lord Ordinary's view of what should have been done was distinctly satisfied. But the Lord Ordinary goes on—“Then in the letter of 20th May 1886 Mr Jamieson sets before the pursuer the disastrous results which, by reason of bankruptcy, would follow his rejection of Sir Robert's terms, and he intimates that if the pursuer did not at once accept Sir Robert's terms ‘I must at once tell him’ ( i.e., Engel) ‘that he may proceed.’”
The Lord Ordinary seems to me to have fallen here strangely into error. He seems to forget or misunderstand altogether the position in which Mr Jamieson stood to Mr Engel. This money-lender had instituted bankruptcy proceedings against the pursuer, and it had become necessary to stave these off, if both the pursuer and defender were to escape the disgrace attaching to them. Accordingly Mr Jamieson had most properly applied to him to stay his hand, upon the footing that an effort was to be made to take the pursuer out of his difficulty, and had obtained delay. Mr Jamieson says in his letter of 31st December 1885, “The result of my correspondence with Mr Engel is that he agrees to postpone further proceedings on our undertaking to let him know if there is any likelihood of the arrangement you have in contemplation not being carried into effect within a reasonable time.” It thus appears that Mr Jamieson obtained the delay on an honourable understanding which would compel him to intimate to Mr Engel any failure of the negotiations, and when the Lord Ordinary asks, “What duty lay upon him (Mr Jamieson), or what right had he, in the event of the pursuer refusing Sir Robert's conditions, to assume the part of the pursuer's agent, and tell Engel that he might proceed to make the pursuer bankrupt?” The answer is, that having obtained delay from Engel by assuring him that active steps were being taken for a settlement, he was in honour bound, whenever the negotiations definitely failed, to inform Mr Engel of the fact. Accordingly, when several months elapsed, Mr Engel threatened to proceed, Mr Jamieson succeeded in getting a further delay for a month on assuring Mr Engel that the negotiations had not yet been broken off; and as he truly said to Sir Robert, “If your son declines to agree, I must inform Mr Engel and let
Page: 709↓
It is necessary still to notice one other contention of the pursuer, viz., that Mr Jamieson always told him that he would be in the same position as his father. This I entirely disbelieve, although with the distorted views of the pursuer as to what is true and what is false, he may possibly be stating this without conscious falsehood. I have no doubt whatever of the truth of Mr Jamieson's statement that he made the very opposite plain to the pursuer, and that the pursuer knew perfectly well that his powers were to be restricted in the way and to the extent which he is compelled to admit were explained to him. What enables the pursuer to make the statement at all is, that it was intended, and was also explained to him, that while he would be restricted and restrained by the trust, yet externally in his management of the estate, dealing with tenants, &c., &c., he would be ostensibly in the same position as his father—would, in short, be the real manager of the estate, and nothing noticeable to those with whom he had to deal to distinguish his position from his father's. This I have no doubt was thoroughly understood at the time, and that Mr Jamieson is to be believed when he says, “I told him always that his income would be in such a position that he could not pledge it.”
I have now, I fear at tedious length, gone over the principal points of a very serious case. I felt that it was one in which a careful analysis was a duty, that no consideration of convenience could justify dealing with it only in a general way, but that it must be dealt with fully as regards all its aspects. The Lord Ordinary has negatived all fraud by his judgment, and I concur with him entirely in his opinion upon that matter. But he has found for the pursuer in the case notwithstanding, and although I see no relevant case apart from fraud, and hold that the case apart from ‘fraud falls under our former judgment, I have thought it proper to consider it upon the basis he has taken. I have considered it upon the footing that there is in law issuable matter in the record apart from fraud, and I am called upon to give a verdict in fact on the whole case, as on a direction that misrepresentation without fraud was sufficient for a verdict for the pursuer, and my verdict upon the facts is for the defender. I have therefore to move your Lordships to recal the interlocutor of the Lord Ordinary and to assoilzie the defender.
Now, before stating my opinion on this head, I wish to call attention to the defender's plea of res judicata, dealing with it only with reference to this, the only ground of action sustained by the Lord Ordinary. It is the first plea-in-law of the
Page: 710↓
Now, is that res judicata, or is it not?—that if the pursuer should prove those averments regarding this misrepresentation ever so clearly and satisfactorily, he is not entitled to the relief which he asks. Is that res judicata to that effect, or is it not? I had intended—I may supply the omission now—to refer to the opinion of Lord Trayner, who decided the former case as Lord Ordinary, and whose judgment we affirmed as I have stated. He deals with the averments in the record which we held to be irrelevant as we did in affirming his judgment. He says—“The misrepresentation said to have been made by Mr Jamieson is this—that he informed the pursuer that there was no other way out of his difficulties except that which was carried out by means of the challenged agreement.” It is not that he failed or omitted to point out another way, but stated there was no other way. Now, that shows that the Lord Ordinary who decided the case, and whose judgment we affirmed, read the averments as I am doing now—that is to say, that they are exactly the same as the averments under the same head in the present case. Now, it is quite true that every judgment upon relevancy is a judgment with an “if” in it. It is this—if the pursuer should prove that, he is nevertheless not entitled to succeed; he is
Page: 711↓
Now, upon that I must refer to what I said in the previous case, for it expresses my view of the case which is now before us. I do not think there is any case of misrepresentation, wilful or not, relevantly averred or proved. The Lord Ordinary think sotherwise both in law and fact; he thinks there was misrepresentation—that Mr Jamieson told the pursuer that there was no other way of avoiding ruin than by assenting to the proposal which was made to him on behalf of his father, and he says that was untrue. He thinks it was honestly made and with good intention on Mr Jamieson's part, but that it was inaccurate and misleading, and therefore affords a good ground of reduction. Now, I doubt the inaccuracy of anything which Mr Jamieson said, or is alleged to have said. There is really no doubt about what was said—we have it in writing—and I think it must be judged of with reference to the business in hand and to the relations of the parties. A good deal was said in the course of the argument on the propriety of the son being provided with another agent, and not being dealt with until he had provided himself with another agent. I cannot agree in the observations for the pursuer on this topic. I think there was no impropriety in allowing a man of full age—he was over 30—to judge for himself as to whether or not he should have a separate agent to attend to his particular interests. He was certainly invited, and even urged by his father and Mr Jamieson to consult a man of business for himself. Sir R. Menzies was, I think, induced to take action, not by any desire of gain for himself or any others, but by the pursuer's own conduct and for his protection against its continuance. I do not want to use any avoidable harsh expressions in speaking of that conduct. For ten years prior to 1886, when he was just over thirty years of age, he had been foolishly extravagant, and had repeated recourse to moneylenders, the result of which was debt to a serious amount having regard to his father's estate which was not very large at the best, and was already heavily burdened. He had repeatedly got into debt to moneylenders, from whom, I suppose, he got very much less than the amount of the obligation which he gave them in return. His father was apprehensive that if this went on the family estate would disappear, leaving his son in poverty even during his own lifetime, and with nothing to succeed to. These were no doubt fears and apprehensions about the future, and nobody could say that they were well founded in the sense that they were certain to be realised, for there is nothing certain to be realised in the future—nothing of that kind at least. The only question is, whether there were grounds for them—whether they were warrantable. Now, I cannot doubt—I agree with the Lord Ordinary in not doubting that the father's fears and apprehensions were natural and reasonable—that the son, if he proceeded in this course of life, might bring himself to absolute ruin, and leave nothing for himself to succeed to, not to speak of his heirs. His reformation was a thing to pray for, but like other things to be prayed for, it was precarious. He might pull up and enter upon a course of life more creditable to himself; but that he should continue as he had begun and continued for so many years was very probable—and in fact he did. It was reasonably to be apprehended, and not the less because of what your Lordship has noticed, that when his father entreated him to promise to give up this course of life—betting, gambling, extravagances which led him into the hands of moneylenders—he declined to give such a promise. When I mention that, I am far from doing so to his discredit;
Page: 712↓
With respect to the annuity which the pursuer's father gave him, it is not my duty to express any opinion as to whether it was a liberal and generous annuity or not; I am not looking to the conduct which the pursuer had been pursuing, and was continuing to pursue, but it was urged upon us that money-lenders, or even a respectable insurance office, would have given him an annuity of £900 a-year during his father's lifetime upon cheaper terms, and would have advanced as much money as would pay off the debts of the rather pressing Jews who were urging him, upon cheaper terms. To take the annuity first. Any annuity which he could have got from a moneylender or insurance company would have been saleable, or a fund of credit on which money might be raised, so that the annuity would cease so far as he was concerned, and he would be left to starve until he bought another, which would be subject to be dealt with in the same way. It was very desirable to avoid that. Was there any other way of avoiding it than that taken? His course of life continues. He goes on contracting debts. He borrows money upon the prospect of succession from speculative money-lenders. I do not say that some insurance offices do not enter into those speculative transactions, but these are the things which lead to poverty and ruin with a man of those habits which the pursuer unfortunately had, and which he stated distinctly and honestly that he had no power to leave off. Now, I think that is what Mr Jamieson meant. I cannot see anything in the expression of his mind to find fault with. I should like to take the opportunity of saying, and I think it is only just to Mr Jamieson to say, that I can find nothing in his conduct throughout which is open to censure. I think he acted not only legally and regularly, but as a sensible and experienced man of business and of right and gentlemanly feeling ought to do. I think in all respects his conduct in this matter was unexceptionable. I do not think there is anything here which was calculated to mislead, or did mislead. I think what I have said disposes of the whole case according to my view of it. For a man of sound mind—I do not speak of good sense and judgment or right feeling, and desire to avoid expressing any opinion upon these things—but for a man of sound mind, capable of managing his own affairs, quite understanding what he was asked to do, and meaning to do it, and what he did being, in the opinion, I think, of every judge who has considered the matter, the best for himself, to get rid of it must be a very hard matter indeed. I think the plea of res judicata ought to be sustained. I think, however, whether we put it in our judgment or not, it is quite right to give our opinion on the merits of the case irrespective of that plea.
Before these deeds were executed the estates were held under a strict entail. Sir
Page: 713↓
These estates, after deducting existing burdens and charges, are worth in round numbers £245,000, subject to a reduction of £21,000 if Sir Robert has exercised or chooses to exercise the power of making provisions for his younger children. It may thus be taken that before the execution of the deeds, which are now challenged, the pursuer had a right of succession to estates of the value of £224,000.
Sir Robert, the heir in possession, was entitled to disentail, but on the condition of paying to the pursuer the value of his chance of succession. The sum which in that event would have been payable to the pursuer was nearly £150,000. In no other way could the pursuer's right of succession have been defeated.
The pursuer was born after 1848. By consequence he was entitled on his succession to execute an instrument of disentail and acquire the estates in fee-simple. He could do so without making any payment whatever.
Such was the position and such were the rights of Sir Robert and the pursuer when the deeds were executed which are now under challenge.
The pursuer was improvident, and incurred debts of considerable amount. They were paid with the aid of his father. The debts which were due in 1884 were paid off in that year. The money was raised on the estate by the joint consent of Sir Robert and the pursuer in terms of an agreement dated 15th November 1883 and 5th February 1884. But the sum so raised was not limited to the debts of the pursuer. On the contrary, it amounted to £70,000. Of this sum £10,731, 7s. 8d. was applied in payment of the pursuer's debts. The balance was to enable Sir Robert to pay certain road debts, to take over the stock on certain farms, to cover expenditure in estate improvements, and to compensate his younger children. I do not profess to give a complete detail of the purposes to which it was to be applied, but only to show that the money was not raised for the benefit of the pursuer alone.
It is proper to notice one particular in regard to the application of this money. The pursuer had in 1882 obtained an advance from the Eagle Insurance Company on a post obit bond. An arrangement was made with that company by which they agreed to take a sum secured on the estate in lieu of the amount due under the bond. Their debt was paid out of the money which had been borrowed on the estate on an assignation of the security to the trustees of that money. It remained therefore an apparent burden on the estate to the amount in round numbers of £10,000.
Unfortunately the pursuer incurred new debts. They amounted at the date of the deeds which are now under reduction to about £6000.
The extravagance of the pursuer caused Sir Robert grave and natural anxiety. He feared lest his son's improvidence might ultimately deprive him of the means of livelihood, and lest the family estate might be carried off by his creditors. I cannot say that these fears were without foundation, nor am I surprised that Sir Robert should have been desirous to provide against the evil consequences of his son's improvidence. He communicated his fears and anxieties to his agent Mr Jamieson, and sought his assistance.
This matter had been the subject of discussion between Sir Robert and Mr Jamieson before the agreement above mentioned. So early as 1st December 1882 Mr Jamieson wrote to Sir Robert—“I think also that some effort should be made to have the estates so put that they should be protected against the possibility of being affected by any similar charge, or being left, as they would be if he were to succeed at present, entirely in his power to do what he chose with them.” Sir Robert had thought of disentailing. This idea was definitely put aside as it involved the payment of so large a sum to the pursuer. Sir Robert, however, approved of Mr Jamieson's suggestion. The evidence shows very clearly that Sir Robert very anxiously desired that if his son's new debts were to be paid by a charge on the estates some plan should be devised for protecting the estates against his future extravagance; that Mr Jamieson devised a plan to that end; and that Sir Robert employed him to carry it out.
By a letter dated 18th June 1885 Mr Jamieson communicated to the pursuer “the only suggestion” which occurred to him for relieving him of his existing embarrassments. His words are—“The only suggestion which occurs to me for extricating matters from their present most painful position is that you and be should arrange to disentail the whole estates and put them in trust on the footing of paying these debts…. and making arrangements for paying you a certain annual sum, to be fixed during your father's and your joint lives, and after his death for paying you the free income of the estate during your life.”
This was the plan which was carried out by the deeds under reduction.
If the improvidence of the pursuer continues, it may well be that this arrangement would be to his advantage. But in no other sense is it beneficial. On the contrary, it seems to me that he has surrendered very large pecuniary interests for a small consideration. His debts to the amount of £6000 were paid, and he got a right to an annuity of £900 during his father's lifetime instead of being as theretofore dependent on his father's bounty. He did not, however, receive that benefit without consenting to burden the estates and thereby diminish his prospective liferent with a charge of £22,700. But from the evidence of the officers of two very respectable insurance companies it is clear that the pursuer could have obtained the same benefit by charging his expectant succession with £25,000. If this be so, it is to my mind very plain that in consenting to the disentail and to the arrangements consequent thereon he made a very bad bargain.
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It is true that a question might be raised as to the sufficiency of the security in the event of the pursuer's bankruptcy before the date of his succession. But we are told by Mr Sprague and Mr Gunn, as the representatives of the Scottish Equitable and Standard Insurance Companies, that that question has been considered, that these offices are satisfied with the security, and that a loan on such a security and on the terms above mentioned is an ordinary transaction. Mr Sprague says that he is advised by his solicitor that the legal difficulty “need not interfere with a transaction of the sort.” Mr Gunn says—“We take our risk of the bankruptcy of the borrower occurring before the death of the heir in possession.” With such evidence before me—given by witnesses to whose truthfulness no exception was taken—I am bound to hold that the pursuer could have obtained all the pecuniary benefits secured to him by the agreement for a charge over his succession of £25,000. To put it in another form, no one would be justified in asserting that he could not.
It was known to Sir Robert and Mr Jamieson that the pursuer was extremely averse to consent to the disentail. I do not pause to examine the evidence on this point. The fact is abundantly established both by the parole proof and by the correspondence. Indeed, I am using the very phrase which Mr Jamieson in his letter of 26th August 1885 employs to describe the feelings with which the pursuer regarded the proposal that he should disentail and accept a prospective liferent in lieu of a prospective fee.
I have now to inquire into the circumstances in which the pursuer's consent was given and obtained to the deeds in question. His case is that his consent was obtained by fraudulent misrepresentations, or by misrepresentations which led him into essential error.
It will conduce to clearness if I first determine the condition of the pursuer's mind when he consented to the disentail. In my judgment it is not difficult to do so. He says that he consented because he thought it was the only course to relieve himself of debts for which he was much pressed. I entirely believe him. Nor do I think that this point is open to doubt. Nothing else will explain the fact that his extreme reluctance was overcome. He had made several proposals to Mr Jamieson with a view to the money being raised in another way. These had been all put aside. He had to choose between the surrender of his inheritance and immediate bankruptcy, involving, I suppose, the loss of his position in the army. He chose the former, and consented to the disentail.
I have said that I do not think this point to be attended with doubt. I am aware that the clearness of my opinion does not relieve me of the duty of showing the grounds on which it is based. I do not do so at present. For I shall have occasion to examine the evidence when I come to consider the cause which produced this belief, and this will necessarily include the evidence of its existence. But I may refer to the pursuer's letter to Mr Jamieson, dated 7th August 1886, which to my mind shows very clearly that the state of the pursuer's mind was such as I have represented it to be. This letter was written about three months before the pursuer gave his final consent to the disentail. It was not answered.
We are not left in any doubt as to the representations which were made to the pursuer, and which he asserts produced this belief in his mind. He says that Mr Jamieson told him that the money could be raised in no other way than by consenting to the disentail. His words are—“He also said that he did not see how I could pay my debts without my father's assistance and upon his own terms. I believed him when he told me that.” Mr Jamieson makes precisely the same statement. The pursuer was first induced to entertain the proposal at a meeting between him and Mr Jamieson on 25th August 1885. In a letter dated 26th August Mr Jamieson records what passed at this meeting. He says—“We discussed the matter very fully. He had written to me that he proposed that the amount required should be charged on the estate. I told him that this could not be done, and yesterday I had an opportunity of telling him very plainly the reason. He was extremely averse to any resettlement of the estate, and pointed out that he would have the power of dealing with the estate as he chose should he happen to survive you, as things are. This I of course admitted; but I said that that did not alter the matter, because you might, and probably would, live for many years, and during that time he would have no income, and I did not see how he could pay the debts unless with your assistance and upon your terms.” In his evidence Mr Jamieson acknowledges that the letter contains an accurate record of what he said. It proceeds—“When he came back after an interval of some hours he said he was prepared to entertain the proposal of a resettlement of the estate, provided a reasonable provision were made for him during your life.”
With this evidence before me I do not think that it is necessary to examine the rest of the correspondence or proof, though I may say that in my opinion it is all to the same effect. The pursuer had already been told by Mr Jamieson that his consent to a disentail was the “only way” which occurred to him by which he could be relieved of his difficulties. The letter of 26th August is a reassertion of the same statement, which, so far as I can see, was never qualified or withdrawn. The value of that letter is, that it contains a record of what passed on the day before it was written, and that it is admitted to be accurate. I say, therefore, that we are in no doubt as to the representations which were made. The pursuer was told by Mr Jamieson in the plainest terms that he had no way of extricating himself from
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It was urged that inasmuch as Mr Jamieson acted for Sir Robert alone, he said and meant no more than that if the pursuer was to raise the money with the aid of Sir Robert, he could have it only on Sir Robert's terms; or, in other words, that he was doing no more than communicating to the pursuer the ultimatum of his father. To my mind there is no foundation whatever for such an argument. The contemporary record contained in the letter of 26th August, which is the best evidence we have, is conclusive against it. Mr Jamieson's words are plain and unambiguous. They admit but of one meaning, and that meaning could not be more clearly expressed by any other form of words. Mr Jamieson said—“I see no way in which you can raise the money without your father's assistance.” He was showing the pursuer that he must of necessity accept his father's terms, inasmuch as there was no other course for raising the money. It is his own view—not in any sense that of Sir Robert—which he puts forward to that end. It was a matter which fell entirely within his province.
It must be remembered that when this transaction was pressed on the pursuer he was altogether without professional advice. He was in fact in a much more unfortunate position. He thought that he had an agent and he had none. He thought that Mr Jamieson was acting as his agent and attending to his interests. He was wrong. Mr Jamieson tells us in the most emphatic way that he acted for Sir Robert alone. He says—“He came to me solely in the capacity of his father's agent, and I think I should have been doing what was clearly not my duty if I told the son he could make a post obit on his father's life, as he had done before. I conducted the negotiation on the footing that I did not feel myself called upon to consider on his behalf whether there was any other way of getting the money. (Q) In short, you negotiated with him that day as Sir Robert's agent exclusively?—(A) Certainly. I had no other authority.” He is asked—“Suppose you had known of an easy unobjectionable mode of his getting money otherwise, would you have considered yourself bound to tell him?—(A) I would not. I was not his agent.”
This evidence is startling, but nothing can be plainer. It shows that Mr Jamieson was merely the agent of Sir Robert to procure the deeds under reduction, and that he had no regard for the interests of the pursuer. He did not even consider these interests in the matter most vital to the transaction with which we are concerned. It is difficult to conceive how Mr Jamieson came to assume such an attitude to the pursuer. It certainly goes far to account for the existence of the deeds in question.
It is true that Mr Jamieson says—“I always told him that I was solely Sir Robert's agent. I let him know my position clearly.” I wish that he had been more explicit. He might be Sir Robert's agent solely, though he was also charging himself with the interests of the pursuer. For Sir Robert was his sole employer in the sense of being alone responsible for his account. I do not think that he ever told the pursuer that he was paying no regard to his interests, or explained his position, as he defines it, in the passages which I have quoted from his evidence. If he had, it is plain enough that the pursuer's communications with him would have ceased, or at least that he would have seen the necessity of taking independent advice. Nor can I think that Mr Jamieson was acting fairly to the pursuer when he did not inform him that he was looking upon his interests with such unconcern—an unconcern which can only be attributed to his zeal for the interests of Sir Robert.
If the evidence of the pursuer is true, it is clear that he believed Mr Jamieson to be his agent. I think it is true, and that he was justified in his belief. Looking to the letters which he received from Mr Jamieson I cannot see what other inference he could draw. They are full of advice on legal questions more or less connected with the matter of this action, and they seem to me to indicate that Mr Jamieson was doing his best for him. Sir Robert thought Mr Jamieson was acting for the pursuer as well as himself. In a letter to Mr Jamieson, dated June 1886, he says—“I wished Neil to employ Mr Mann, but he preferred remaining with you.” When he received that letter Mr Jamieson could have no doubt that he had not let the pursuer “know my position clearly.” He received it without explanation or observation. I think that he is mistaken in his recollection when he says that he told the pursuer that he was acting for Sir Robert solely. I am satisfied that he did not reveal to the pursuer his true position. He could not have done so without bringing to an immediate end the negotiation which he was carrying on on behalf of his client Sir Robert, in the success of which Sir Robert was so much interested.
Mr Jamieson states that he believed that the pursuer had “separate advisers, lawyers in London.” He ascribes that belief to a letter which he received from the pursuer on 26th October 1885, and another from Sir Robert on 8th December of the same year. I have examined these letters. I cannot find in them any justification for his belief. His recollection must to my mind be at fault. If he knew or thought that the pursuer had an independent agent, it is not doubtful that for his own relief in conducting a negotiation so delicate and
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Much was made of the circumstance that in some of his letters the pursuer says that he had been taking advice, and that he told Mr Jamieson that he had been doing so “as a draw.” To my mind it is of no moment. It did not alter or affect Mr Jamieson's position. It was, as the pursuer explains, merely a way of trying to get more favourable terms than those which Mr Jamieson, as the agent of his father, was pressing upon him, and of avoiding the necessity of assenting to a proposal to which he was so very averse. It has no bearing that I can see upon the case.
I have digressed from the main argument, though I have touched on matters to which the parties attributed great importance. But in closing my observations on these topics, I may say that in my judgment the material fact is that the pursuer entertained the well-founded belief that Mr Jamieson was acting as his agent. For if he did he could not fail to believe the representations of Mr Jamieson, when he understood them to be made in that capacity.
Let me now turn back to 26th August 1885, when the pursuer was first induced to entertain the proposals which had been made to him. I go back to that date, because we have a written and contemporary record of what passed, and because I think that there was no change in the situation in the future. I have to consider the representation which was made by Mr Jamieson, and the effect which it produced on the pursuer's mind.
If we resort to the direct instead of the indirect form of speech, Mr Jamieson said to the pursuer—“I do not see how you can pay your debts without your father's assistance and upon his terms.” I have already said that to my mind the meaning of these words is clear. They mean that so far as Mr Jamieson saw, the pursuer had but one way of paying his debts.
There cannot, I think, be any doubt of the effect of that statement on the pursuer's mind. We must keep in view the position of the gentleman by whom these words were spoken. Mr Jamieson deservedly holds a very high position in his profession, and in making the statement he pledged his professional reputation for the truth of it. It was a statement which reached the pursuer from a very authoritative source. It reached him from one whom he believed to be his agent, and knew to be very capable of advising him. He could not but believe it. He says that he did. I think that he is speaking the truth, and, as I shall immediately show, he acted on it because he believed it.
It has been suggested that as the pursuer had already raised money on a post obit bond, and consequently knew that that mode of raising money was open to him, he could not be misled. Mr Jamieson had the same knowledge, but his statement meant, and could only be understood as meaning, that that mode was not available to the pursuer. Of course it was a question of rates, of which the pursuer knew nothing except from one not very fortunate experience, but as to which he could not doubt that Mr Jamieson was well informed. According to his own evidence, Mr Jamieson did entertain the opinion that the rates would be “perfectly ruinous.” I am using his own words. This opinion is the justification of the statement which he made to the pursuer. He had already in 1883 told the pursuer that the arrangement by which the Eagle Insurance Company's bond was not discharged but assigned to the trustees—an expedient to which he had recourse in order to protect the pursuer against himself—-“would render it more difficult, if not impossible, to raise a further sum on your succession during your father's lifetime.” This is not true, and I do not see how Mr Jamieson could think it to be true. For he knew that the assignation was an apparent and not a real difficulty, inasmuch as the trustees were only apparent and not real creditors. But the fact that he made such a statement shows his extreme desire to impress on the pursuer the difficulty or impossibility of raising money by post obit bonds, and that he was not scrupulous as to the means he employed to obtain that end. He entirely succeeded. For after the statement made at the meeting in August 1885, the pursuer, averse in the extreme to surrender his birthright, and surrendering it only because he believed that he had no alternative, never proposed to raise money in that way.
Again, it is urged that the pursuer knew that he could sell his reversion. But even in that case he was assured that the terms would be ruinous. I do not think this matter to be of any moment, for I am not prepared to hold that if the money which he needed could only be procured by such a sale the arrangement which was made could have been to the prejudice of the pursuer. The point of his case is that there was an easy and advantageous way open to him, which in consequence of the representations of Mr Jamieson he did not use. I do not think it necessary therefore to notice more particularly what is said about the sale of the reversion. It shows nothing more than the pursuer's extreme reluctance to surrender the prospective fee of the estates.
Next, I am of opinion that the pursuer was induced to sign the deeds under reduction solely by reason of the representations made to him by Mr Jamieson. I have already spoken of his extreme aversion to sign these deeds. As the matter presented itself to his mind, in
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The following passage occurs in Mr Jamieson's evidence—“(Q) For what purpose did you make the representation to him at that meeting that his debts could not be paid unless he would agree to Sir Robert's terms?—(A) I did not see how his debts could be paid while the bond which he had assigned appeared on the register. (Q) Was it for the purpose of inducing him to agree to Sir Robert's terms?—(A) Not at all.” I cannot comprehend this passage. I have already said that I cannot see how the bond on the register could present any difficulty to Mr Jamieson's mind. Nor can I see for what other purpose the statement was made than to obtain the consent of the pursuer. Mr Jamieson was anxious to obtain that consent—not of course from any personal interest—but in order to carry into execution the wishes of Sir Robert. He forced the pursuer into the choice of becoming bankrupt or of giving that consent. The instrument which he used to effect that end was the representation that there was no other choice. That representation had no other purpose to serve. I cannot but hold that it was made to serve that purpose.
I have now to consider whether Mr Jamieson was justified in making the representation.
I can see no justification for it. It is not in accordance with fact. He says that he believed it to be true. But he had no right to believe it to be true, for he made it without inquiry or consideration. He says“I did not apply my mind at all to the question whether there was an easier mode for him to get out of his difficulties than the one I suggested.” Again he says—“I conducted the negotiation on the footing that I did not feel myself called upon to consider on his behalf whether there was any other way of getting the money.” If so, what right had he to say that there was none? I should have thought that no professional man could honestly say that there was but one course open unless he had applied his mind to the subject on which he was speaking.
Mr Jamieson explains. He is asked—“If you did not apply your mind to that, how do you justify your letters to him making suggestions as to the course which he should adopt?” The answer is—“Because he came to me as his father's agent, and these were the only terms to which his father would agree.” Again—“(Q) Was it because you were family agent that you made these suggestions?—(A) Because I could make no other suggestion. I had no authority.”
If Mr Jamieson had confined himself to a mere statement of the terms on which Sir Robert would assist his son, his statements would have squared with his theory of his duty. But he did nothing of the kind. In my opinion he pledged his professional reputation to the statement that the pursuer had no means of raising money except by agreeing to his father's proposals.
The fact that Mr Jamieson was acting solely as the agent for Sir Robert can, in my opinion, be no justification for the representations which he made to the pursuer. It might be a good reason why Mr Jamieson should feel that he was not at liberty to suggest that money could be raised on post obit bonds. But it could not justify the assertion that money could not be raised in that way. It might be a good reason for reticence. It might justify his failure or refusal to reveal an easier way of raising the money than Sir Robert proposed. But it could never justify him in saying that there was no other unless he had by sufficient inquiry honestly satisfied himself of the fact. It could never justify him in representing to be true a statement on a matter which he had never considered or inquired into.
If he had told the pursuer that he “had never applied his mind to the question at all,” it is plain that the pursuer would neither have relied nor acted on his representations. It is the merest mockery to say that he would. Considering the attitude which Mr Jamieson says he assumed towards the pursuer, it is to me inconceivable that the deeds in question could have been fairly obtained.
The result in my opinion is, that the deeds under reduction were obtained from the pursuer under essential error, produced by a false representation made by Mr Jamieson as the agent for Sir Robert Menzies; that that representation was in law a fraudulent misrepresentation, inasmuch as Mr Jamieson made it recklessly, and without applying his mind to the question whether it was true or false, for the purpose of inducing the pursuer to give his consent, and that it was made by Mr Jamieson in order to serve the ends of his client. Consequently, I hold that the pursuer is entitled to the judgment of the Court. I do not enter upon any consideration of the law applicable in such a case. I understood that it was conceded that if the facts be as I have stated them, the deeds could not be defended. But apart from all concession, it is to my mind clear that they must be reduced.
Before I conclude, I wish to say that I believe that Sir Robert and Mr Jamieson were persuaded that the arrangement which was made was the most beneficial for the pursuer. Indeed, I think this persuasion dominated their minds as to the origin and cause of these unfortunate proceedings. But a good motive cannot justify a wrong.
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The terms of the agreement thus entered into between the pursuer and the defender Sir Robert Menzies were practically those which had been determined by the three friends already alluded to, and which were approved by the then Dean of Faculty in a submission regarding the same into which the pursuer and defender entered—[His Lordship summarised the agreement\.
Such being the import of the agreement in question, I come now to consider the grounds on which it is challenged, and of these, first, the alleged essential error. The pursuer's allegations in regard to this ground of challenge are set forth in the condescendence, and shortly stated amount to this—that under the agreement in question and relative trust-disposition the pursuer's interest in the family estates were reduced to a mere alimentary liferent, so restricted as to prevent its being anticipated or used by him as a fund of credit with, what he calls “penal clauses” attached. This restriction the pursuer alleges he did not agree to—that it was no part of the bargain between the parties—that it appeared for the first time in the minute of agreement and trust-disposition, the technical language of which he was unable to understand; that it was not explained to him; and, moreover, that he did not peruse the deeds in which the technical language was used. It seems rather inconsistent to say that the pursuer did not understand the technical language of the deeds, and at the same time to say that he did not peruse them. But this inconsistency in the pursuer's averments is not of much moment; it is much more important to observe that his averments are inconsistent with the facts established. When under examination-in-chief as a witness for himself, the pursuer supported by his deposition the statements made upon record, but in cross-examination he directly contradicted them and himself. There was no other course open to him when confronted with his own letters. I do not wish to say that the pursuer said anything in the witness-box which he knew to be incorrect, and I would be glad to think it was the pursuer's memory only which was at fault. The fact remains, however, that the averments on record and the evidence given by the pursuer in support of them are both wrong, and the pursuer has to admit that this is so. On 2nd September 1886 Mr Jamieson wrote to the pursuer sending him copies of the agreement and trust—deed for perusal, and requesting them to be returned “with any observations which may occur to you upon them.” On 19th September the pursuer returned the copy agreement to Mr Jamieson in a letter which commences thus—“I have had time to-day to carefully read through the draft agreement which you sent me the other dayand he then makes some observations upon its terms which I need not here consider. The matter I am dealing with now is whether he perused the agreement, and this letter proves that he did so carefully. Referred to that letter and his evidence given to the effect that he had not read the agreement, he says—“I wrote stating that I had read the agreement carefully, but I do not think I did so. (Q) Why did you say you had done it when you had not?—(A) I do not know, I suppose I did. If I wrote in the letter that I read it I must have done so. What I wrote in my letter
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The second ground of challenge is fraud.
Leaving out of view in the meantime the fraud involved in the alleged misrepresentation and concealment, which I shall separately consider, the averments of the pursuer on this part of his case are not very material to the issue, but they require passing notice—[ His Lordship then referred to the condescendence]. As I have said, these averments do not appear material to the questions here at issue, because it matters nothing to this case whether Sir Robert Menzies bad formed the design which he is said to have formed to deprive the pursuer of his succession to the fee of the family estates, if ultimately the agreement under which the pursuer was deprived of or agreed to surrender that fee was entered into by the pursuer voluntarily in the full knowledge of what he was doing, and was not obtained by fraudulent concealment or misrepresentation. But with regard to the pursuer's averments, I notice, in the first place, that the averment that the defenders conspired to induce the pursuer to abstain from seeking independent professional advice, and to entrust the protection of his interests to Mr Jamieson alone is altogether imaginary. The correspondence shows that the pursuer represented himself in the course of the negotiations which led to the agreement now challenged as being advised by some person or persons other than Mr Jamieson, and that he was encouraged to seek such advice and to lay before his adviser the views which Sir Robert and Mr Jamieson held. Nothing could be more plain than this, even were no other evidence of it offered beyond the terms of the pursuer's letter to Mr Jamieson of date 26th October 1885 and Mr Jamieson's reply of 28th October. But there is other evidence to the same effect abundantly afforded by the pursuer's correspondence, and the pursuer cannot deny (whatever the fact may be) that he represented to his father and Mr Jamieson that he was obtaining for himself professional advice. In the second place, the delay which took place in the negotiations arose from this, that the pursuer would not consent to take his father's assistance which he had sought, on his father's terms, and Sir Robert would not listen to the counter proposals of the pursuer. I think Sir Robert was very obstinate, and disinclined to accept the views which the three friends of the family had expressed, and delay was undoubtedly thereby occasioned. But that such delay was the result of any scheme entered into between the two defenders, or arose from any intention or desire on their part to prolong the negotiations and so accentuate the pursuer's difficulties, is negatived by the letters written by Mr Jamieson to Sir Robert, from which it appears that Mr Jamieson was urging Sir Robert to give up his own views, and to come at once to a settlement with the pursuer on the terms proposed by the three friends. And, lastly, the reference to the three friends of the family (suggested by Sir Robert to bring about an arrangement with the pursuer, and not to hinder or delay such an arrangement), so far from being a pretence intended to give “an appearance of bona fides” to Sir Robert's proposals, was so genuine that it resulted in advantage to the pursuer which Sir Robert was unwilling to concede, but of which the pursuer is now reaping the benefit.
The Lord Ordinary has expressed his opinion that the pursuer's “averments in regard to a fraudulent scheme and fraudulent dealings are not established,” and that “if the pursuer is entitled to set aside the agreement which he made, it must be upon some other ground than that of fraud and deceit.” In that opinion I entirely concur. But I go a step further. Not only are the pursuer's averments of fraudulent scheme and fraudulent dealings not established, but in my view there is nothing to suggest (that such a scheme ever existed, or that such dealings were ever practised. The pursuer has charged his father with trickery and deceit practised on him for the purpose of depriving him of his succession,
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I now come to consider the only remaining grounds of challenge, namely, concealment and misrepresentation, which I take together. The Lord Ordinary is against the pursuer in so far as the alleged concealment is concerned, because he thinks that has already been decided against him by the Court. But on the matter of misrepresentation the judgment of the Lord Ordinary is favourable to the pursuer, and there I am unable to concur with the Lord Ordinary. The pursuer's averments on the matter may be stated in a sentence. He says that every benefit he obtained under the challenged agreement could have been obtained through an insurance office on terms far less burdensome and greatly more advantageous to him than those imposed upon him by the agreement; that the defenders knew this, and fraudulently represented that there was no other way open to him to obtain what he desired and required to get than by entering into the agreement in the terms which they proposed.
The averments that the concealment was fraudulent, and that the representations made were false and fraudulent, need not be further noticed. The Lord Ordinary thinks that the misrepresentation made (as he regards it) was innocent and undesigned, and I do not understand that there is any difference of opinion upon that subject.
As regards the alleged concealment, I can only repeat what I said in the former case between these parties. Sir Robert was under no duty to disclose to the pursuer (assuming it to be the fact) that he could make a better bargain with an insurance company than that which Sir Robert proposed to him. Upon that matter Sir Robert had no knowledge or information which was not equally open to the pursuer. Concealment or non-disclosure of a fact which one of the contracting parties is not bound to disclose to the other is no ground for annulling a bargain. Nor was Mr Jamieson, as Sir Robert's agent, bound to make the disclosure which his client was not bound to make. If, on the other hand, Mr Jamieson was acting as the pursuer's agent in the transaction, and failed in his duty to disclose what he was bound tc know and tell his client, that might give rise to an action of damages against him for failure in his professional duty, but would not afford any ground for setting aside a transaction which but for such failure would not have been entered into. 1 think, therefore, that the alleged concealment cannot avail the pursuer any more than his allegations of essential error and fraud. Then, was there any misrepresentation on the part of either defender, inducing the pursuer to enter into the agreement under challenge. None certainly was made by Sir Robert, but he will be responsible and must take the consequences if any such misrepresentation was made by Mr Jamieson as his agent.
The Lord Ordinary has, in his opinion, made a very full reference to the letters in which the alleged misrepresentation was made, or from the terms of which the misrepresentation may be gathered. He has also stated the arguments addressed to him hinc inde on this part of the case, so that I need not repeat what is thus in sufficient fulness before your Lordships. But in my opinion there was no misrepresentation made to the pursuer, and I shall explain how I reach that conclusion. I think it is essential to a proper understanding of Mr Jamieson's letters, and to get at their fair construction and meaning, that the circumstances should be kept prominently in view which led to these letters being written. The pursuer had more than once before 1885 got seriously into debt, and had applied for advances of money to meet these debts not only to his father but also to money-lenders. The latter had charged the pursuer for the advances they made to him what he himself terms “fabulous interest.” It would be termed more correctly “ruinous,” for I think it was 60 per cent. Among other borrowing transactions entered into by the pursuer, there was one entered into by him in 1882 with the Eagle Insurance Company, under which he borrowed £5500 on a post obit bond. This debt was ultimately paid, like others, by Sir Robert, who raised money for the purpose on the security of the family estates; but the bond to the Eagle Insurance Company when paid was not discharged. It was assigned to trustees, with consent of the pursuer, and thus kept up as a charge against him for the avowed purpose, communicated to him, of making it “more difficult if not impossible,” for him to pledge his life-interest to other moneylenders for future advances during his father's lifetime. When the pursuer again became in pressing need of money in 1885, he applied through Mr Jamieson to his father, and his desire then was to borrow more money on the family estates to enable him to pay his debts. Obviously the reason why he applied to his father rather than to the money-lenders was this, that money could be borrowed on security of the Menzies estates at a very small rate of interest, and thus the ruinous rates of the money-lenders would be avoided. The interest, besides, of this further loan to be raised on the estates would have come out of Sir Robert's pocket so long as he lived, although it is right to say the pursuer proposed to pay the half of this interest out of his allowance. No money, however, could be borrowed on the family estates without the consent of Sir Robert, and this consent he declined to give except on conditions. The position of matters therefore was this—The pursuer wanted money at a cheap rate, and he could only raise it at that rate on the family estates and with his father's
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1 have said nothing on the question whether the pursuer could have borrowed money, as he avers he could, “from any respectable insurance company” on the terms and conditions set forth by him. There is some evidence to the effect that according to the practice of some offices he could, and that evidence is entitled to considerable weight. But that evidence proceeds upon the view that the title which the pursuer could have given to the insurance company under such a transaction would have been a perfect title, and one which would have availed the lending company in competition with other creditors in theevent of thepursuerbeingrendered bankrupt between the date of the transaction and the date of his succeeding to the estate. I express no opinion whatever as to the effect of such a title, and have referred to this matter only in order to say I am not to be regarded as acquiescing in the view presented by at least one of the pursuer's witnesses, that such a title is attended with “no risk.” The question appears to me to be attended with considerable difficulty, and when it arises will deserve more consideration than probably has yet been given to it.
I concur in the opinion which has been expressed, to the effect that nothing has been proved in the present case beyond what was averred in the former case between the parties, which was decided to be irrelevant, and that therefore the case now presented is res judicata. But while concurring in that opinion, I have preferred to deal with the case as I have done, and to give judgment on the effect of the proof which the pursuer has adduced in support of his contention.
In closing my observations I feel bound to add, that in my opinion the pursuer has throughout been considerately dealt with by his father; that in imposing on the pursuer the conditions of the agreement challenged, Sir Robert was, as he believed,
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The Court recalled the Lord Ordinary's interlocutor and assoilzied the defenders.
Counsel for the Pursuer and Respondent— D.-F. Balfour, Q.C.— Asher, Q.C.— H. Johnston— M'Clure. Agents— Smith & Mason, S.S.C.
Counsel for the Defenders and Reclaimers—Sol.-Gen. Graham Murray, Q.C.— Comrie Thomson— Dickson— Salvesen. Agents— Tods, Murray, & Jamieson, W.S.