The Earl of Galloway v. Alexander M'Hutchon, Charles Selkrig, and Others [1807] UKHL 5_Paton_169

UKHL
The Earl of Galloway v. Alexander M'Hutchon, Charles Selkrig, and Others
[1807] UKHL 5_Paton_169 · 1807-04-21
A lease was granted to the tenant and his heirs, secluding assignees and subtenants, for 21 years. The tenant died two years thereafter, in considerable debt; and the question was, Whether certain transactions gone into with the heir, by which the latter entered into possession cum beneficio inventarii , giving the creditors the benefit thereof, was not a covered assignation, and the tenant had thereby incurred an irritancy of the lease? The heir, pending the action, entered into an agreement with the creditors, whereby the latter discharged their claims, and transferred the stock for a certain sum; Held that there was no ground for removal, and the defenders assoilzied. Affirmed in the House of Lords.Dec. 24, 1796.Oct. 26, 1798.The respondent's brother, the deceased Hugh M'Hutchon of Chanque, held a lease from the appellant of the four farms of Bargrennan, Falbains, Glengrubbock, and Drumla-whanty. In 1796, when this lease was granted, two of these farms were held under previous leases, which did not expire until 1803 and 1807 respectively; but, on condition of his renouncing these leases, and granting an immediate increase of rent, the lease in question was granted, in the following terms:
“In assedation let to the said Hugh M'Hutchon, his heirs and successors , secluding assignees and subtenants, legal and conventional, in whole or in part, all and whole the said lands of Bargrennan, Falbains, and Glengrubbock; and all and whole the said lands of Drumla-whanty, with the houses and haill pertinents thereto belonging, or presently occupied by himself, lying in the parish of Menigaff, and stewartry of Kirkcudbright, and that for the space of twenty-one years from and after the term of Whitsunday last; and, after the expiry of the said twenty-one years, during all the days and years of the said Hugh M'Hutchon's natural life.”
The rent fixed was £210 per annum. They were improving leases, and it appeared necessary, in order to make the lands yield anything like an adequate return, in order to pay this rent, to undertake laborious and expensive improvements. With

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A second meeting of the creditors took place, whereupon it was resolved by the creditors to apply to Mr. M'Hutchon to allow his name to be used, on their guaranteeing to keep him free of all responsibility. This was consented to, upon his receiving a bond of indemnity freeing him of all trouble except the signing of the necessary papers.Under this arrangement, the property of Chanque, and the moveables, were easily disposed of; but there seemed to be more difficulty about the farms, owing to the leases secluding

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Durham v. Henderson & Livingston , Jan. 23, 1773. Mor. 15283, Vide Note at the end of the case of Dalhousie v. Wilson , Dec. 1, 1802, F. C.Having gone thus far, the appellant raised his action of removing, under the act of sederunt, before the sheriff. The sheriff assoilzied the defenders (respondents), whereupon an advocation was brought, to which was added a declarator; and both actions having been conjoined, the appellant pleading, 1st, That the transactions gone into amounted to an assignation of the lease on the part of the respondent Alexander M'Hutchon. 2d, That the respondent had no control over the committee appointed as managers, whom he suffered to remain in the natural possession of the land. 3d, That they had subset and assigned the farms from year to year, and were neglecting the interests of the farm, and contravening the stipulations of the tack. 4th, If it was competent for a person entered heir cum beneficio inventarii to appoint managers with instructions to account to the creditors of a deceased tenant, the clause secluding assignees and subtenants would be defeated. In answer, the respondent contended that the managers were no more than stewards or servants answerable to him. The last appointed managers were appointed by himself, the managers appointed by the creditors having ceased to act. These managers were therefore no way connected with the creditors, nor accountable to them, but accountable to the respondent, whom the creditors had discharged. A proof was allowed to both parties, in which it was clearly proved that the farm was managed by certain creditors, but that no assignation had been granted.

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Pending the action, an agreement was entered into by the respondent Alexander M'Hutchon, on the one part, and Charles Selkrig and others, acting for the creditors, whereby, for a certain sum, they discharged all claims against him as representing his brother, and sold to him the stocking.Jan. 19, 1803.June 7, 1803.The cause was reported to the Court; and, on advising memorials, the following interlocutor was pronounced:—which sought, at all events, for a decree of removing against Selkrig, trustee for the creditors, the Court found, “In respect Charles Selkrig, the trustee for the creditors of M'Hutchon, does not claim possession of the farms in question, it is unnecessary to pronounce any decree of removing against him, and quoad ultra adheres to their former interlocutor, and refuse the desire of the petition.”
“The Lords having the mutual memorials for the parties, with the proof adduced, and further proceedings, they, in the advocation, advocate the cause, and conjoin the same with the process of declarator, sustain the defences, and assoilzie the defenders from the conclusions of both actions, find the pursuer liable in the full expense of extract, but find no other expenses due.” * On reclaiming petition,

Footnote

* Opinions of the Judges:—

Unreported.

Lord President Campbell said:

—“Both parties seem here to have been in a mistake, in supposing that the defender could not succeed to this farm, as heir to his brother in the lease, without incurring a passive title, unless he entered cum beneficio inventarii , which, it is supposed, made him a trustee for the creditors; 1st. The heir in a lease, which excludes assignees and subtenants, takes a right which no other person can enjoy. It is a sort of tailzied fee, which creditors cannot touch; and the heir taking it after the death of the original tacksman, does not represent him, but takes it suo jure , as conditional institute by the joint will of the original tacksman and the landlord. It is one of the conditions of the transaction, that it shall not be a subject of representation, but that the person who is heir designative, shall take, as eventual tacksman, or at least as an heir under a strict entail, and of course be liable to the landlord in all the prestations of the tack, and run the sole risk of profit or loss, as he is not accountable to any other person. So it was considered by the Court in the case of Ogilvy v. Arnot , 18th May 1796, and 1st March 1799. The defender, therefore, might, with perfect safety, have taken up this tack upon his brother's death, without any service cum beneficio , or any transaction with creditors; and it was imprudent in him to introduce their trastees into the possession, which has given a colour to the action now raised against him. In all events, he was an heir of provision in the strictest sense, and not liable ultra valorem .
“2d. It appears, however, that as he did this, either from ignorance, or from a laudable desire to see his brother's debts paid, the only consequence which could follow in law was, that the landlord had a right to insist that these trustees, as virtual assignees, should

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Against these interlocutors the present appeal was brought by the landlord to the House of Lords.Pleaded for the Appellant .—In the present case, the lease to the deceased Hugh M'Hutchon and his heirs, expressly excluding assignees and subtenants, legal or conventional, in whole or in part, meant nothing more nor less than an exclusion of either creditors of the lessee adjudging or attaching his right by legal process, or persons acquiring by purchase or voluntary transmissions; and, accordingly, the

Footnote

be removed, and that the defender himself should take the possession and management, as the only person entitled to do so. The lease contains no clause of forfeiture, nor can any take place.3d. The defender is now in full possession, in consequence of the transaction by which the creditors have given up any claim, which, although unnecessary, was perfectly legal and fair. The entry cum beneficio inventarii was a superfluous step, and can make no difference upon the question. Could the creditors have forced him not to remove?”Lord Bannatyne .—“I think the possession by managers was in defrad of the lease.”Lord Meadowbank .—“The lease is descendible to heirs, and M'Hutchon cannot be removed. He may apply the profits as he pleases. The heir is liable in valorem .”Lord Hermand .—“He is not like an heir of entail, who does not represent his predecessor, but only the tailzier. The entry cum beneficio inventarii was proper, in order to save him from the risk of passive title. I am clear that he could not take this tack without being liable to creditors. This he very soon declared, and that he would not possess, and that the creditors must keep him free of all claims.”Lord Craig .—“There is here no assignation, and the possession is for the tenant, i. e . the deceased tenant, for whose debts we must suppose the present tenant liable, to the extent of the profits of the farm, ergo , the management must be under him.”Lord Balmuto .—“M'Hutchon is the tenant to all intents and purposes. He cannot give it up without Lord Galloway's consent. He is liable to all the prestations of the lease.”

Lord President Campbell's Session Papers, vol. 110.

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Pleaded for the Respondents .—1st. Neither the assignment, nor any such transaction as that alluded to, ever existed. 2d. If there had been an assignment of the lease, or any transaction equivalent thereto, although it might have furnished ground for an action of damages, it would not have been relevant to infer the appellant's conclusion of irritancy and removing against the respondent. 3d. Even if the transaction libelled had been proved, and had been relevant to infer an irritancy against the respondent, it must have been competent for the respondent to purge it at any time before final judgment; and he must be held to have purged it, by obtaining a discharge from the creditors, which is dated 27th and 29th December 1802, and 5th and 8th January 1803.

After hearing counsel, it was

Ordered and adjudged that the interlocutors be, and the same are hereby affirmed.Counsel: For the Appellant, Wm. Adam, Charles Hay. For the Respondents, John Clerk, Wm. Alexander, David Cathcart.Note .—One of the cases founded on by the appellant, Durham v. Henderson and Livingstone , 23d January 1773, Mor. Dict. 15,283, it was observed on the bench, had been prematurely and erroneously collected, as that judgment had been altered by a subsequent interlocutor of the 18th January 1775; and the final judgment of the 8th March same year, refused a reclaiming petition, complaining against that alteration.