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United Kingdom House of Lords Decisions |
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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> James Scott (Lord Elibank's Trustee) - Mr. Serjeant Spanki - Mr. Rutherford v. John Allnutt - Mr. Hayes [1831] UKHL 5_WS_416 (10 September 1831) URL: http://www.bailii.org/uk/cases/UKHL/1831/5_WS_416.html Cite as: [1831] UKHL 5_WS_416 |
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Page: 416↓
(1831) 5 W&S 416
CASES DECIDED IN THE HOUSE OF LORDS, ON APPEAL FROM THE COURTS OF SCOTLAND, 1831.
2 d Division.
No. 32.
Subject_Heritable and Moveable — Foreign. —
Where part of an entailed estate was sold for redemption of the land tax, and the surplus price lodged in bank, and thereafter lent out on heritable security by the statutory trustees, and the heir apparent under the entail, during the life of the heir in possession, for onerous causes, executed in England an assignation in the English form of his right to draw the
Page: 417↓
interest thereof during his life, and after his succession granted a general disposition of all his property to a trustee for behoof of his creditors, with a special disposition of his life interest in the entailed estate on which the trustee was infeft:— Held, in a competition for the interest of the surplus price (affirming the judgment of the Court of Session), that the right to draw it was carried by the assignation, and could not be defeated by the subsequent disposition to the trustee.
By the statute 42 Geo. III. c. 116. for redemption of the land tax on entailed estates, it is provided that the price of the lands sold for that purpose shall be paid to a trustee (to be appointed by the Court of Session), who shall “find security to their satisfaction that the sum or sums of money to be paid to him by the said purchaser or purchasers shall be duly and faithfully applied in the manner and for the purposes herein-after directed.” The trustee is appointed to invest the whole price in the public funds; and after transferring what is sufficient for the redemption of the land tax, it is directed, that when there is any surplus “such surplus stock may be sold, and the money arising therefrom be paid into or placed in one or other of the two public banks of Scotland, with the previous authority of the Court of Session,” who are required to authorize this money to be employed, ‘as soon as conveniently may be,’ either in payment of debts affecting the entailed estate, or in the purchase of other lands to be entailed in the same manner, “and in the meantime, till the said surplus money or balance shall be so employed, to order and direct the money to be laid out upon such security as to the Court shall seem proper,” so that shall be “effectual to secure to the person or persons who would for the time have been entitled to the rents or profits of the said manors, messuages, lands, &c., in case such sale, &c. had not been made, and the succeeding heirs of entail who shall respectively come to the possession of the same, the enjoyment of the interest of the said money, and to preserve the capital until the money shall be employed as aforesaid.”
Under authority of this statute, the late Lord Elibank, in 1806, sold the farm of Redhouse, part of the entailed estate of Ballencrieff. Of the price, after redeeming the land tax, there was a surplus of 10,600 l., which was, in terms of the act, paid into the royal bank of Scotland by the statutory trustees, and was afterwards, by authority of the Court of Session, lent out
Page: 418↓
On the death of Alexander Lord Elibank, in September 1820, Sir John Lowther Johnstone's trustees (he being now dead) insisted on retaining the interest against the statutory trustees, in compensation of a personal debt due to them by the present Lord Elibank; but in a multiple-poinding raised by the trustees, in which claims were lodged by the trustees of Sir John Lowther Johnstone and by John Allnutt, the latter was preferred by an interlocutor of the Lord Ordinary pronounced in 1823, which was acquiesced in. Thereafter, in 1824, Lord Elibank granted in favour of James Scott, accountant in Edinburgh, a general trust disposition for behoof of his creditors, and payment to himself of such yearly sums as his creditors might allow of all his property, and all rights belonging to him, or that might belong to him, with an obligation to execute special conveyances, if necessary; but under this declaration, “that his trust right shall not be understood or interpreted to prefer any creditor or set of creditors to another, or postpone
Page: 419↓
Shortly, thereafter, Lord Elibank, in implement of his obligation to grant a special conveyance, executed an ex facie absolute disposition of the entailed estate of Ballencrieff, to subsist during his Lordship's life; and on this disposition James Scott was infeft, granting at the same time a back bond declaratory of its being only in trust, and of the purposes for which the trust was granted. Scott intimated this deed to the statutory trustees on the 11th of March 1824, and insisted that he was entitled to the interest of the surplus price of the land sold for redemption of the land tax. In order to have his right ascertained, he raised, in name of the statutory trustees, a process of multiple-poinding, in which claims were lodged for him and for Allnutt under his deed of assignation.
The Lord Ordinary found, “That the claim of Mr. John Allnutt is preferable upon the interests arising from the sum of 10,600 l. libelled, in so far as the said interests are in medio in this process.” His Lordship at the same time issued the subjoined note of his opinion. *
_________________ Footnote _________________
* “The assignment of Allnutt seems sufficient as an assignation of the interests payable to Lord Elibank by the trustees, and rents of lands to be purchased by them. The Lord Ordinary thinks the intimation to the trustees sufficient, so far as relates to interests, even before the succession of the present Lord Elibank, and the after proceedings likewise seem equivalent to intimation to the trustees. The Lord Ordinary does not think that an assignation of interests or rents needs to be intimated every term. Holding this, then, the Lord Ordinary sees no further question in respect to the interests which accrued before the conveyance to Mr. Scott. In respect to the interests accruing after that conveyance, the Lord Ordinary thinks, that if Lord Elibank had voluntarily made a conveyance to his creditors, evacuating the right he had previously for value granted to Allnutt, this would have been very wrong; but the Lord Ordinary is satisfied his Lordship neither intended to do nor has done this. The proviso in the general disposition seems sufficient to exclude this. If the assignation of interests, &c. to Allnutt had been in security of a debt, this proviso clause must expressly have supported it against being cut down by the conveyance to Scott, and in fair interpretation the Lord Ordinary thinks the clause must equally support the actual assignation to Allnutt, though it gave him right to the interest, &c. directly. But further, the Lord Ordinary does not think that, in the circumstances of this case, there was room for evacuating Allnutt's assignation to the interests by any right that Lord Elibank did, or indeed could at
Page: 420↓
Scott reclaimed, but the Court, on Nov. 16, 1827, adhered *, and thereafter the Lord Ordinary decerned for a specific sum in favour of Allnutt.
Scott appealed.
Appellant.—1. As the lands were sold for redemption of the land tax, the surplus price must still be considered as part of the entailed estate, and must therefore fall under the disposition to him of the lands of Ballencrieff. This being feudal, and followed by infeftment, is preferable to an assignation, unless the fund be held moveable. But it cannot be regarded as moveable; although converted into money vi statuti, it is truly real property, both in its own nature as part of, or a temporary surrogatum for, a portion of the entailed estate, and also in respect of its destination to the heirs of entail, and the object for which it was held, viz. the purchase of lands; consequently it could not be affected by a deed in the English form, which was confessedly ineffectual to convey Scotch heritage. Besides, at the date of the assignation to Allnutt, the fund was actually invested heritably; and although rights under a trust deed may be considered moveable where the trustees hold the trust estate for the purpose of selling land, this can never be so as to
_________________ Footnote _________________ this time grant. The Lord Ordinary understands that an assignation of rents may be evacuated by a disposition and infeftment in the lands yielding the rents granted to a third party; and perhaps this may hold even in the case of a disposition and infeftment granted by and limited to the life of an heir of entail, though that seems open to some question. But here there were, in relation to the present question, no lands for Lord Elibank to dispone, or Mr. Scott to take infeftment in. The lands of Redhouse had been sold, and the price was vested in judicial trustees, who held for the purposes; first, of paying the interest to Lord Elibank till land was acquired; second, of vesting the capital in land to be taken to the series of heirs of entail and under the entail. Now, as to the later purpose, it does not appear to the Lord Ordinary that Lord Elibank could convey over any right to Mr. Scott, or to any body. The duty of the trustees still appears to remain unchanged in that respect. They must convey the lands, not to Mr. Scott, but to the heirs of entail. In respect of the former, the purpose of the trust was already qualified by the assignation of the interests to Allnutt, and intimation thereof to the trustees, which made it the duty of the trustees to pay those interests to Allnutt, not to Lord Elibank; and after that, Lord Elibank could not dispone to Mr. Scott any right to these interests.” * 6 Shaw and Dunlop, 62.
Page: 421↓
Respondent.—On the supposition that the fund is moveable,— and there can be no doubt that it was capable of transmission by assignation and intimation—but the fund, or at least the interest, does not form part of the entailed estate—it was not even in the heir of entail for the time being, but was separated from the estate by statute, and held by trustees for special purposes, the heir having nothing farther under the statute than a right to the interest accruing therefrom. Lord Elibank, therefore, did not convey this fund with the lands of Ballencrieff to the appellant. Besides, having previously conveyed to the respondent his right to draw the interest of it during his life, he cannot be presumed to intend—and it was clear from the terms of the general disposition that he did not intend—to convey to the appellant what he had previously conveyed to another. The fund in question, being actually money, cannot be regarded as heritable suâ naturâ; it is necessarily moveable; and even as to rights heritable destinatione merely, they can be transferred by deeds not probative by the law of Scotland, if in the legal form according to the country where they were executed. It is only immoveable on proper territorial subjects, which require to be transferred by deeds, and executed according to the law of the territory; and, at all events, the right possessed by the heir of entail, under the statute (which must regulate the nature of it), of drawing the interest of this money, was a moveable right transferable by assignatur. The manner in which the fund was employed by the trustees for security could not alter its real character under the statute; besides, the respondent's right was ascertained and fixed by the decision in 1823.
The House of Lords ordered and adjudged, That the appeal be dismissed, and the interlocutor complained of be affirmed.
Appellant's Authorities.—42 Geo. 3.c. 116, sec. 63, 65, 101; Ewing, Nov. 29, 1752 (5476); Wilson, May 31, 1809 (76); Angus, Dec. 6, 1825 4 S. & D. 279); Kyle's Trustees, Nov. 14, 1827 (6 S. & D. 41); 3 Ersk. 2, sec. 10, 11, 12, 13, 14; Tait on Evidence, 57, 83, 88, 90; Voet, T. 1. L. 1. t. 4; 2 Ersk. 3, 39,
Page: 422↓
Solicitors: Magdougall and Calender,— Currie, Horne, and Woodgate,—Solicitors.
