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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 >> Patrick Cruikshank and Another, Trustees of James Cruikshank, Deceased v. Lady Anne L. Cruikshank [1845] UKHL 4_Bell_179 (24 April 1845) URL: http://www.bailii.org/uk/cases/UKHL/1845/4_Bell_179.html Cite as: [1845] UKHL 4_Bell_179 |
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Page: 179↓
(1845) 4 Bell 179
CASES DECIDED IN THE HOUSE OF LORDS, ON APPEAL FROM THE COURTS OF SCOTLAND. 1845.
No. 10
[Heard
Subject_Obligation. — Provisions to Heirs, &c. —
An obligation by a father in the marriage contract of his son to pay the son's widow an annuity held not to be satisfied by an annuity provided by the son to his widow, out of the rents of lands to which he had succeeded as heir, under an entail executed by his father previous to the date of the contract of marriage, which contained a power of alteration or revocation.
Subject_Ibid et Ibid. —
Held that an annuity provided by a son out of the rents of lands, purchased with the accumulations of the general estate of his father after payment of debts, and entailed pursuant to a direction by the father to that effect, could not be imputed in satisfaction pro tanto of a joint obligation by the father and son, in the son's contract of marriage, to provide the son's widow in an annuity.
Subject_Trustee. — Executors. —
Trustees or executors purchasing and entailing lands with the residue of a testator's estate pursuant to a direction in that behalf held personally liable for payment of a bond of annuity granted by the truster.
ON the 2nd August, 1819, James Cruikshank executed an entail of his lands of Langley Park in favour of himself and his wife in life-rent, and their eldest son James in fee, and a series of substitutes. The deed contained an exception from the prohibitions of entail in favour of the institute and substitutes in these terms:
“But, with this exception, that it shall be lawful to and in the power of the said James Cruikshank my son, and the whole heirs of tailzie succeeding to the said lands, mills, teinds, and others, and to each of them, to provide their wives and the wives of the apparent and presumptive heirs in a life rent locality of any part of the said lands, teinds, and others above written, not exceeding a fourth part of the free rent of the said lands at the time such locality is granted, after deducting former
Page: 180↓
On the 4th of August, 1819, the entailer executed a trust, disposition, and settlement of his whole lands and estate, real and personal, other than the lands entailed, upon the following among other trusts.
“ Secondly, in trust for the payment and satisfaction of all my just and lawful debts, death-bed and funeral expenses, and obligations of every denomination or description, which may be due and prestable by me at the time of my decease, in any manner of way, together with the legacies and provisions here-inafter mentioned, or which I shall make, leave, or bequeath by any other deed, writing, or codicil. Sixthly, in farther trust, that so soon as my said trustees shall have paid off or extinguished my whole debts, funeral expenses, and legacies, and such other bequests and legacies as I may afterwards think
Page: 181↓
In the month of January, 1821, James, the institute under the entail, made proposals of marriage to the respondent, the
Page: 182↓
On the other hand, the Earl of Northesk gave the following obligation:
“For which causes, and upon the other part, the said William, Earl of Northesk, has, of the date of his subscription hereto, executed a disposition and assignation of a bond by the Right Honourable John, Earl of Hopetoun, to him the said William, Earl of Northesk, and his heirs and assignees, for 2000 l. sterling, dated the 3rd day of February, 1809, with interest thereof from the 14th day of November, 1820, in favour,” &c., “in trust, for the uses and purposes, with the powers, and under the conditions and provisions therein mentioned, and that in name of portion or provision agreed to be paid by him, the said William, Earl of Northesk, with the said Lady
Page: 183↓
In January, 1830, James Cruikshank, the maker of the entail, died, having been predeceased by his wife; and upon his death, James, the institute under the entail, entered into possession of the entailed lands under the entail, and in the month of March, 1830, he put the entail upon record.
While so in possession, Cruikshank, on the 29th of May, 1830, executed a bond of provision, whereby on the recital that by the 5th Geo. IV., c. 87, “power is granted to every heir of entail in possession of an entailed estate, under any entail then made, or thereafter to be made in that part of Great Britain called Scotland, to grant provisions to their wives and children in manner therein fully set forth; and now seeing that I am desirous to exercise the said powers in manner hereinafter written,” he bound himself to infeft the respondent in a life-rent provision out of his entailed lands of 600 l. a-year, free of all burdens or deductions whatever; “declaring, as I hereby expressly declare, that the annuity to be payable to the said Lady Anne Letitia Cruikshank, from and out of the said entailed lands and estate, in virtue of these presents, is not granted by me, nor to be received by the said Lady Anne Letitia Carnegie, now Cruikshank, nor to be in
Page: 184↓
Thereafter the lands of Tayock, part of the entailed estate, were sold under the powers of the 3 & 4 Will. IV., cap. 30, and 11,000 l. was borrowed on the security of the other lands. To disencumber the title, the respondent renounced her infeftment over the lands sold and those made subject to security for the loan.
Afterwards, the trustees under the entailer's trust disposition and settlement, out of the accumulations of his general estate, and in exercise of the power in that behalf contained in that deed, repurchased the lands of Tayock, and by deed in January, 1836, settled them under the fetters of the entail of 2nd August, 1819; and under the precept in this deed, Cruikshank was reinfeft in these lands, and his infeftment duly recorded in February, 1836.
In March, 1836, Cruikshank executed another bond of provision, on a recital of the powers given to heirs of entail by the 5th Geo. IV., cap. 87, and his desire to exercise them, whereby
Page: 185↓
On the 4th May, 1842, Cruikshank died in insolvent circumstances.
In July, 1842, the respondent brought an action against the appellants, the trustees of the entailer, to have them ordained to pay to her 250 l., the half year's annuity, payable to her under her marriage contract at Whitsunday, 1842, and to secure to her the future due and regular payment of the annuity.
The appellants stated in defence, that after satisfying the primary purposes of their trust, the only fund remaining was a West Indian estate, which had become so depreciated in value, that it was doubtful whether there would in fact be any trust estate out of which to satisfy the respondent's demands, and they pleaded:
“I. The pursuer not being entitled to two jointures, and having that provided to her by the marriage contract, secured or nearly so by the charge on the entailed estate, the provision in the marriage contract has to that extent been satisfied, and the debt discharged.
II. No act or deed, and far less any mere declaration on the part of Mr. Cruikshank, junior, whilst substantially satisfying the provision in the marriage contract, could avail to keep up the debt against his father and his father's separate estate.
III. At all events, the separate estate of Mr. Cruikshank, senior, is clearly liberated to the extent of one-half of the debt, which was in any view the debt of James Cruikshank, junior, himself.
IV. The defenders, as trustees, are in any view only liable to the extent of the trust estate under their charge.”
The record was made up on the summons and defences, and
Page: 186↓
“The Lord Ordinary having considered the closed record and whole process, and heard parties procurators, and made avizandum, repels the defences and decerns in terms of the libel, finds the pursuer entitled to expences, and remits the account thereof when lodged to the auditor to tax and report.”
“ Note. The obligation undertaken by James Cruikshank, senior, and the late James Cruikshank, junior, in the marriage contract executed in 1821, upon the marriage of the latter with the pursuer to pay an annuity of 500 l. to the pursuer for life, in case of her surviving her then intended husband, is expressed in absolute terms. There is no provision for its terminating in any event, except that of her decease, nor is there any other event, even pointed at or indicated, by the occurrence of which it was to be extinguished. Farther, it does not appear that the entail and trust deed, and settlement, which James Cruikshank, senior, had previously executed in 1819, if referred to, warrant any different construction being put on the obligation in the marriage contract, than that which it must independently have received. Whether the contract be taken by itself or in connection with these deeds, it is thought that nothing will be found which admits of the obligation in question being construed so far as regards James Cruikshank, senior, and his estate, other than the entailed estate, to be an obligation which was to be extinguished wholly or partially upon James Cruikshank, junior, either to its full amount or a part of its amount, making provision for the pursuer out of the entailed estate, if he should succeed to it; or that if it was thereafter to continue to subsist to any extent, it was only to the effect of enabling the pursuer to draw one annuity of 500 l., and no more. But if so, then there seems to be no ground for holding that by James Cruikshank, junior, as subsequently heir of entail, granting in the
Page: 187↓
Page: 188↓
On the 24th February, 1843, the Court adhered to this interlocutor.
Mr. Russell and Mr. Rolt for the appellants.—The obligation of the father and son to pay the annuity sued for was joint and several. When the father became a party to the contract of marriage, he was aware of the power he had given his son to provide his wife out of the entailed land. It cannot be presumed he contemplated a double provision for her, and therefore, when he entered into the contract, without exercising the power of alteration reserved by him in the entail, he must have contemplated that a provision by the son in exercise of the powers in the entail, would satisfy the obligation in the contract. In another view, the entailed lands were the estate of the father at the date of the contract over which he had an absolute right, as he could at any time have exercised the power of revocation, and therefore the bond of provision satisfied his obligation out of his estate, pro tanto, and set him free. The father, by allowing the land to go to the son, satisfied every obligation upon him, and it was then the duty of the son to provide the 500 l.
Though, as against the respondent, the father and son were jointly and severally bound, as between themselves, they had undoubtedly rights,—there was no antecedent obligation upon the father to provide for the wife,—the marriage was no consideration to him, but it was to the son,—the father therefore was in the nature of a surety for the son. Assuming him to be so, and that the lands were not his but the son's, he was discharged by what had taken place with the son, the principal debtor, who had satisfied the obligation out of his own assets, and in this view it was not in the power of the son by his declaration, to alter the effect of his own act—a pure donation by a principal debtor will discharge his surety.
Page: 189↓
But whatever view may be taken of the bond for 600 l. it is impossible that the respondent can be entitled to the annuity of 133 l. 6 s. 8 d., as the lands out of which it is payable, were purchased out of the general assets of the father—that purchase was made by the appellants on the assumption that all the liabilities of the father had been satisfied—she cannot therefore claim her marriage provision as an unsatisfied liability by him, and at the same time claim this annuity out of lands which it would not have been in the power of her husband to charge with it, but for the supposition that the liability had been satisfied. As regards this annuity, it must be viewed as satisfaction, pro tanto, whether the father were a co-obligor or a surety. The respondent is an appointee under a power in the father's gift by virtue of the statute. She takes, in fact, therefore, under the father's will.
The argument is strengthened by a consideration of the purposes of the several deeds. In Garshore v. Chalie, 10 Ves. 1, the Court looked at the intention of the provision, and the party taking by provision of law something similar to the provision by covenant, the one was held to be satisfaction, pro tanto, of the other. Here the intention was to provide for the wife of the son, and the son, accomplished it, out of what fund matters not to the respondent. In Wilson v. Piggott, 2 Ves. 351, it was said, “The Covenantor having suffered property to go so as to produce the same effect, that is held a satisfaction of the covenant as in Lechmere v. Carlisle, 3 P. Wms. 211, when lands suffered to descend, were held a satisfaction of a covenant to purchase.” Here the father suffered property to go, so as to produce the effect of satisfaction.
The two bonds were identical in intention with what the father had covenanted.
The summons concludes against the respondent, as personally liable to pay without regard to whether they may have assets of their truster or not; but they cannot in any view be liable beyond the fund in their hands, and no account has yet been
Page: 190↓
Mr. Stuart and Mr. Monteath appeared for the respondent, but were not called upon.
The defence is, that the son, after the father's death, being in possession of the entailed estates, executed two bonds, by the first of which he charged the entailed estate under the power he had under Lord Aberdeen's Act, with the payment of 600 l. a-year to his wife, in terms stating that that was to be without prejudice to the 500 l. a-year. Therefore, as far as intention was concerned, excluding any argument on that ground. The other was a bond for the payment of 133 l., charged upon estates which had been purchased with the accumulation of interest from a portion of the residue of the father's estate, and in a similar way he charged the annuity on that portion of the estate. Therefore, as far as intention goes, there is no question on which an argument can be raised. The son intended this provision for his wife, in addition to the 500 l. a-year provided for her by his marriage settlement. He has in terms so expressed himself by these several grants.
Then it is said, first of all, this cannot be in satisfaction. That is matter of intention. There is no evidence that it is in satisfaction; on the contrary, the evidence is all the other way. It is not intended in satisfaction by the granter, the husband, or the wife who accepted it.
Page: 191↓
Then the argument is put in this way—that the father and the son having joined in this marriage contract to pay the 500 l. a-year, the father is to be considered as a surety only for the son, and that the principal debtor, namely, the son, has in fact done all that by the joint obligation the parties contracted to do. So that the contract and stipulation is performed.
Now, that rests entirely upon the supposition of the father and son being principal and surety, that is to say, that the father who joins in the contract or obligation upon his son's marriage, can say to his son, or to the wife, or to the wife's friends, who have entered into a corresponding contract, that he is not to bear any part of the burthen himself, but that if he is compelled by law to make any payment under such contract, he can recover it against his son, which is a general consequence of these parties standing in the relative situation of principal and surety. That to be sure would be a great surprise upon the wife and the friends of the wife, who, considering that they have got a beneficial pecuniary contract from the father, find that it turns out, that the family for whom they meant to provide are to receive it, but are in fact to repay it when they have received it, so that, in fact, the provision for the married couple would turn out to be of no benefit to them.
That clearly being so, and it being clear that the consideration runs through the whole, and that the parties are not principal and surety, all the rest of the argument entirely fails. Because, if they are not principal and surety, but both are liable as principals, then, unless it is to be contended that parties under a joint obligation cannot, by any possibility, confer a benefit on the obligee, the son has in terms said, “I mean to confer an additional benefit on the obligee.” He has availed himself of his right; it is clear that he had that right, and intended to exercise it.
Therefore, as far as the 600 l. annuity is concerned, there is no argument whatever on which an objection can be founded.
Page: 192↓
Then with regard to the 133 l., how does that stand? It is said, the wife has received so much of the 500 l. a-year out of the father's estate. It was impossible to maintain that argument without supposing that she received that benefit from the father's estate. But she has not received it out of that at all. The 10,000 l. was a legacy to another party totally distinct from her. She had no connexion with that 10,000 l. It was a benefit to the son and those who might take under the entail. But those who took under the entail having received that bounty from the testator, the husband's father, beyond all doubt, had a right to do with it as they pleased. Had they no right, deriving their title under the father's will, to charge that property so derived with an additional annual payment to the son's wife? It originally constituted part of the father's estate; but her title to it is not under the father's will, nor is her title to it under his estate, but it is given, and flows entirely from the bounty of her husband.
Then it is said that the decree is defective because it makes a personal charge against these trustees, and makes them pay. They are only undoubtedly in law liable to pay so far as they have assets. But parties may so conduct themselves that they cannot dispute the possession of assets. If an executor thinks proper to pay legacies, and to pay over a part of the property as the residue of the estate after payment of the legacies, is he to tell a creditor that he will not pay the debt, or that he cannot, because he has not got in hand assets of the testator? Whether he has kept those assets in his hands, or thought proper to pay them away from these persons, who could only claim them after payment of the debts, is precisely the same thing to the creditor. What are the provisions of this will? The provisions, of this will are, “In trust after satisfaction and payment of all my just and lawful debts, death-bed and funeral expenses, and obligations of every denomination or description.” Then they are to pay certain legacies,—6000 l. a piece
Page: 193↓
Then are we to be told, (not that it is put forward as a fact,) that they had no assets. It is quite obvious that could not be presumed. They have, therefore, dealt with this property, assuming that they had ample to pay all obligations of whatever denomination, and this is one, and the executors, from the mode in which they have conducted themselves, have excluded themselves from the power of contesting the fact of having received assets. Whether they have them now is immaterial. Having had means with which this obligation could be performed, it was their duty to have paid it over before they applied any portion of the estate in payment of the legacies. Independently of the legal result of the course they have pursued, the amount is such as to satisfy every one who looks into the mode in which they have applied the property, that in point of fact it was amply sufficient for this purpose.
The sole question, therefore, being whether any legal defence has been stated and proved against this obligation to pay out of the father's estate, I am of opinion that no such defence has been established, and that the decision of the Court of Session is right.
Page: 194↓
The argument very ably and clearly urged by Mr. Rolt, would have very much to say for it if the parties, (the situation of the parties here is that of father and son,) had stood in the relation of principal and surety. It is quite clear on every ground, that they do not stand in that relation. There is a consideration moving to both in the marriage contract; and whether there is a provision made for the son or not in that marriage contract, it is equally a consideration moving to both. And the best answer to the argument which is set up, is, Can anybody say that if the father had paid, he could have had recourse over against the son in respect of his payment? It is not to be endured. It is impossible it could be so.
Then, my Lords, with respect to the decree being against the trustees personally, there is an end of that. At first I was disposed to think that perhaps there had been a slip in the decree, and that we might have corrected it by the insertion of a few words. But it is no such thing. There is no occasion for that, for it does not lie in the mouth of the executors to say that they have no assets, when as volunteers they have chosen to pay legacies, and not only legacies, but legacies out of the residue, which assumes that all the other legacies have been paid in priority of the administration of the estate. My noble and learned friend has justly observed that that of itself deprives them of the possibility of denying assets. It is an admission of assets — whether they have assets or not, whether they have used them in any way or not,—it is an admission on their part which they cannot gainsay or get rid of here.
My noble and learned friend read the statement in which it is said that they are to pay the legacies out of the residue, after having paid so and so, and “after having paid all my obligations.” I do not care whether that is in the will or not, because the law would have inserted that.
Page: 195↓
Suppose a testator says, I give to A. B. a legacy of 10,000 l., without saying, “to be paid out of my residue,” it is clear that his debts must be paid in the first instance; whether he says, “I give it to be paid after my lawful debts, and all obligations which I owe,” or not, the executor is bound not to pay the legacy until he has paid the honest creditor. Here it is in evidence, that there was money in hand.
Therefore, there is not really, as I said before, a probable ground, not even a prima facie argument, to call upon your Lordships to hear the respondent. Therefore, you cannot hesitate what judgment you are to give.
I conclude as I began, with making my complaint, that I think it is not right, that this House is not well used, in having its time occupied by cases such as we have had the whole of this day.
But, my Lords, the foundation of that argument seems to me utterly fallacious, and there is no use in saying another word about it.
With regard to the objection as to the form of the decree, there is no doubt when one looks at the summons it does seem to charge the trustees personally, and the decree would make them personally liable. But, my Lords, they are personally liable, if they have assets in their hands out of which these payments might be made. And I think it is quite clear that
Page: 196↓
I therefore regret that the parties should not have been satisfied with the opinion of the Court below. It was thought below, there was an argument in the case that might be successful. But I should think if the learned gentlemen who have argued this case as well as it could be argued, had been consulted, they would hardly have certified to this House, that there was reasonable ground for appeal.
Ordered and adjudged, That the petition and appeal be dismissed this House, and that the interlocutors therein complained of be affirmed with costs.
Solicitors: Purrier & Wright— G. & T. W. Webster,— Agents.
