Scottish Court of Session Decisions

Lord President.—This is one of those comparatively rare cases in which we are asked to say what is the law of Scotland. It would be strange indeed if only now, for the first time, the Court were invited to define the true limits and scope of the doctrine of collation inter liberos; but, undoubtedly, to decide this case it will be necessary to expound the doctrine once more,—for I cannot think it is for the first time.

The facts are few and simple. The testator died on 11th May 1912, survived by five children. By his trust-disposition and settlement, purporting to convey his whole estate, he made certain provisions for each of his five children. He had already, during his lifetime, made to all of them advances which are of a quality which renders them subject to collation. Only one child claims legitim. The other four refrain. They are content to take their testamentary provisions. The free executry amounts, we are asked to assume, to £1,000,000, and the only question put to us is this—what amount of that sum must be paid to the child who claims legitim? I answer, without hesitation, £100,000, being one-fifth of one-half of the free executry.

My reason is because, where only one child claims legitim, there is no room for the doctrine of collation. Collatio bonorum inter liberos is an obligation incumbent, by the law of Scotland, on children—I lay stress on the plural—on children who are actually claiming their share of the legitim fund, to compel other children who are also claiming on the fund to bring into computation advances which they have received from their father during his lifetime. It is an equitable doctrine introduced for the purpose of securing equality in the distribution of the legitim fund among the children who are actual claimants on the fund. It has no place among others than children. Its basis is a double fiction. It assumes that the father has paid a part or the whole of his indebtedness at a time when no relationship of debtor and creditor existed between the father and the child. It further assumes that the payment is made out of the legitim fund although confessedly the legitim fund is at the time non-existent. Now, it is apparent that a doctrine which rests on a foundation so narrow and so purely artificial is not susceptible of what is called logical extension. The attempt to give it reasoned expansion will inevitably end in confusion. The subtleties and intricacies, such as they are, which have encrusted themselves upon the doctrine are due entirely to a failure accurately to observe the terms in which the doctrine is explained by Stair and Erskine.

The situation in a case such as this is singularly free from complexity. The whole estate passes under the father's settlement subject to claims. One claim is that of a child for her share of the legitim fund. She may take it or she may leave it. If she takes it, the debt is extinguished; if she leaves it, it passes under the father's settlement—that is all.

Now, after the closely reasoned opinion of Lord Fullarton in the case of Fisher v. Dixon, and the admirably condensed summary of that opinion in the judgment of Lord Murray, it is not easy to explain what Lord President Dunedin would, I have no doubt, have called the “divergent rills.” It would be idle indeed to review the authorities on this question. So far as authorities prior to the year 1857 are concerned, that task has been well accomplished by Lord Ardmillan in his judgment in Keith's Trustees which was affirmed by this Division of the Court. And so far as authorities down to 1898 are concerned, the task was equally well accomplished by Lord Stormonth-Darling in a judgment which was not submitted to review. It would be equally idle, I think, to summarize the results of that review, for that task has been accomplished, once and for all, by Lord Rutherfurd Clark in his opinion in Monteith v. Monteith's Trustees, which I; for my part, adopt in its entirety. A close examination will show that it is exhaustive and leaves no points open. It would be idle indeed to attempt to repeat, in other and inferior language, what Lord Rutherfurd Clark has so well expressed. His judgment was adopted and approved by, I think, the Lord President (Dunedin), and certainly by Lord Kinnear, in the comparatively recent case of Young v. Young's Trustees . Nothing could be clearer than Lord Kinnear's opinion when he said: “I think it is the result of all the authorities that collation of legitim is an equitable claim competent only to the children competing on the legitim fund, who are entitled to draw in advances which another child may have received in circumstances which give rise to that equity.” And, again, “it is obvious that the right which is described at full length as collatio inter liberos is a right competent to the competing children alone.”

But I must acknowledge that I cannot follow Lord Kinnear when he says that he thinks that the exposition of the doctrine given by Lord Rutherfurd Clark in Monteith's Trustees, and by himself in Young's Trustees, is not inconsistent with anything that was decided in

Nisbet's Trustees v. Nisbet .I think that it was inconsistent with what was decided in Nisbet's Trustees, that Nisbet's Trustees proceeds on a complete misconception of the principles of law laid down and applied in Fisher v. Dixon, that the reasoning on which the judgment rests is fallacious, that the judgment itself cannot be supported, and that this decision can no longer be regarded as sound law. A close examination of Nisbet's Trustees clearly shows that the learned Judges of the Second Division there understood that they were deciding the point before them for the first time. It is equally clear from an examination of that decision that the point which they believed they were deciding was the very point that was decided in Monteith's Trustees and that we are invited to decide today. That is unmistakable from the abridgment of the argument found in the report. It is equally clear from the opinion of Lord Neaves who says “There is no doubt that the advances in question would need to be collated in a direct competition between several children claiming the legitim. But the question is, whether this equally holds where all the other children accept the conventional provisions instead of legitim.” Now, that is the very question which was decided in Monteith's Trustees, and which we are to decide today. It is not difficult to trace the fallacy which pervades the judgment in Nisbet's Trustees. It is this, that a child who refrains from claiming his debt—his share of the legitim—does not extinguish the claim, but keeps it open and assigns it to the general disponee and with it a right, which the child himself could only claim if he were asking payment of the legitim fund in competition with other children, to compel these other children to bring into computation the advances which they have received. As Lord Cowan puts it, the general disponee takes the place of the child in every question that can be raised with regard to the amount of the claim upon the legitim fund, even although the child himself could not claim upon it. The same fallacy reappears, in a somewhat different form, in Lord Benholme's opinion, where he says that there is no distinction between the legitim fund proper and the collated fund, and that the presumed assignation by a child who refrains from claiming legitim carries both the legitim fund and the collated fund to the general disponee. Now, that never was at any time the law of Scotland. It is contrary to all the authorities prior to Nisbet's Trustees and subsequent to Nisbet's Trustees. There will be found in Monteith's Trustees what I regard as a final and exhaustive exploration of the doctrine of collatio bonorum inter liberos. It is in complete harmony with all the authorities, and I think we must now hold that Monteith's Trustees has implicitly, if not explicitly, overruled Nisbet's Trustees. Holding that view, it appears to me that we cannot otherwise answer the question put to us here than thus: 1 (a) in the affirmative; 1 (b) and 1 (c) in the negative.

Lord Mackenzie.—The foundation of the second party's argument upon the first point in the case is that the doctrine of collatio bonorum inter liberos applies, although she is the only child claiming legitim, and although the other members of the family are content with their conventional provisions. According to her contention, the matter ought to be dealt with as if all the brothers and sisters were claiming legitim. The amount of the legitim fund, the second party argues, is not one-half of the moveable estate of the deceased which was in bonis at the date of his decease; it is one-half of that estate plus the funds previously advanced to children which are properly subject to collation. Collation, according to this theory, is not a mere option. It is a quality of the right which vests, and affects at death the interest of the child in the legitim fund. The benefit which the general disponee takes is what is left, i.e., is not in this case each child's one-fifth of one-half of the moveable estate, but that proportion diminished by the amount of the advances which have been made to the child by the parent during his life.

It was maintained on behalf of the second party that her contention did not depend on the view that the general disponee is in the position of an assignee of the other children who do not claim, a view which was founded on expressions in the judgment of Lord Cottenham in Fisher v. Dixon, and is the basis of the reasoning of Lord Cowan in Nisbet case. That view is not consistent with what was said by the majority in Monteith's case. The argument was that, although in Monteith the case of Nisbet was considered solely from the point of view of whether a general disponee could be regarded as an assignee, there was involved in Nisbet, a further question, which was not dealt with in Monteith, viz., what is the amount of the share that vests in the child? As I understand the contention, counsel for the second party adopted the view of Lord Benholme in Nisbet, that, in fixing the amount which vests in each child, the amount of the advances which are properly subject to collation must be taken into account. If the amount of the advances is large enough to operate a discharge of the child's share of legitim, then, it is said, this enures to the benefit of the other child or children, although the benefit of the acceptance by the child of its conventional provisions would enure to the general disponee. This contention appears to me to be contrary to the weight of authority. The true view, in my opinion, is that the legitim fund is one-half or one-third, as the case may be, of the moveable estate. An aliquot part vests at death, subject always to the equity which exists between children who may at a later stage come in to compete, by which a duty is imposed on each to collate the advances received during the lifetime of the father. The legitim fund is not the one-half or one-third plus the advances. Collation does not operate automatically when there is more than one child entitled to take. It operates only when there is competition between children, at the period of distribution. The passage in Ersk. Inst. III. ix. 24, bears this out. The answer to the question, What is the amount of the share that vests? depends upon the answer to the earlier question, Who are to be brought in? In my opinion, children cannot be brought in who are not competing.

We had an elaborate argument, with a citation of all the authorities. In such a question I think it enough to state the conclusion to which I

come with the authorities which seem to me to support it, viz.:—Clark v. Burns & Stewart, Keith's Trustees v. Keith and Villiers, Breadalbane v. Chandos, Monteith v. Gifford, Young v. Young's Trustees, Collins v. Collins' Trustees . More particularly I refer to the opinion of Lord Rutherfurd Clark in Monteith and the endorsation of that opinion by Lord Kinnear in Young's Trustees.

The second question is whether, if the advances of all are not to be brought into account, the advances to the second party herself must be. I do not think they ought. Regarding, as I do, the judgment in Monteith's case as sound, the case of Nisbet ought not, in my opinion, to be followed. The reasoning upon which that judgment proceeds is inconsistent with Monteith. Nor can I hold that the conclusion reached in Nisbet's case ought to be supported upon what was termed a wider equity than is involved in collation, under which the second party, it was said, was bound to impute the amount of the advance. I refer on this matter to what was said by Lord Ardmillan in Keith and Lord Stormonth-Darling in Collins.

I therefore concur in the judgment proposed.

Lord Skerrington.—I agree with your Lordships. Shortly stated, the contention of the second party comes to this, that collation operates automatically and ipso jure in every case where a person dies survived by several children who are entitled to claim legitim, and that, upon the death, there vests in each of these children a right to a share of the legitim fund neither more nor less than what each child would receive if all of them collated.

The best that can be said in favour of this view is that it is perhaps the logical consequence of the decision in the case of Nisbet. For my own part I am unable to reconcile that case with the later case of Monteith's Trustees, and I adopt the statement of the law of collation which was made by Lord Rutherfurd Clark in Monteith's case. In the present case, as there is only one child claiming legitim, the doctrine of collation cannot be invoked either in her favour or to her prejudice.