Archibald, Duke of Hamilton, &c. (since deceased), and Alexander, Marquis of Douglas, &c.; And by Revivor, Alexander, Duke of Hamilton, &c. v. Mrs. H. P. Esten, (now Scott Waring,) and John Scott Waring, her Husband, for his interest [1820] UKHL 2_Bligh_196

UKHL
Archibald, Duke of Hamilton, &c. (since deceased), and Alexander, Marquis of Douglas, &c.; And by Revivor, Alexander, Duke of Hamilton, &c. v. Mrs. H. P. Esten, (now Scott Waring,) and John Scott Waring, her Husband, for his interest
[1820] UKHL 2_Bligh_196
[1]If it is not in the power of the memorialist, to let leases at present, of such of his farms as expire at Mantinmas next, or Martinmas 1799, for any period of years not exceeding twenty-one, and at the present rent?[2]If the granting such a lease to his female friend, or a trustee for her, would be effectual, although not actual resident tenants?[3]If so, could he, instead of one farm only, include perhaps twenty or thirty in one lease?—On Page: 214 ↓ would a separate lease for each be necessary, and would all of these be effectual?[4]If one lease, to comprehend the whole, should be deemed sufficient, would it be necessary in it to specify the rent presently payable for each, and make a specific rent payable for each? Or would a general set and cumulo rent for the whole be sufficient, resting on the knowledge that the rent was not less than the present?[5]Under the particular circumstances of her situation, would it be advisable to have any lease in the name of the lady herself?[6]If in the name of a trustee, would it not be sufficient that he granted a declaration of the lease being only in trust, with an obligation on him and his heirs to pay the surplus rent arising from the subsets? The Solicitor General gave the following opinion. “As to the first query, I have no doubt that A . B . may at present grant leases for twenty-one years, for such of the farms as will be out of lease at Martinmas next or Martinmas 1799, such leases being granted without diminution of the rental. I even think, that A . B . is under no limitation with respect to the endurance of the leases, which he may choose to grant upon the entailed estate, for although there is a clause in the entail giving power to the heir in possession to set leases for the space of twenty-one years, or the setter's lifetime, which would seem to imply, that the heir was understood to be restrained from granting leases for a longer endurance, yet I observe no such limitation in the clauses of the entail Page: 215 ↓ itself, and it is a received rule in the construction of entails, that restraints of this sort are not to be fixed upon an heir by implication alone, or from the presumed will of the entailer, however clear. An heir of entail in the eye of law, is proprietor of the entailed estate, and is entitled to exercise every power inherent in the right of property, except so far as he is limited and restrained by the express words of the entail. Query second. I do not think it will affect the validity of the lease, whether granted to the lady herself or to a trustee for behoof of her and her child, that the lessee does not reside upon the farms, and cultivate the same personally, as the lease may contain an express power to assign or subset.” Much argument has been made at the bar, upon the question, whether supposing this had been bonâ fide bonâ fide a transaction between the lessor and lessee, the lessee at the time when the lease was constituted, and for some time after, was not a trustee for the lessor. If the appellant herself had been made the lessee, it might have been otherwise; but is is insisted, that during an interval of time (how short they say does not signify) the lessee is trustee for the lessor, and that he did not become at the time when the lease was executed immediately a trustee for the lessee, whereas, if the lady herself had been made the lessee, I think, (under the circumstances, which I shall have occasion to speak to presently,) that argument could not have been urged. With respect to queries three and four, the learned counsel says, “I see no objection to including any number of farms in the same lease; it may, however, be proper to specify a separate rent to be Page: 216 ↓ paid for each farm, so as to make it appear with certainty, that there is a rise of rent, however inconsiderable, upon each farm, or at least, that they are all set without diminution of the former rental. Queries five and six. Under the whole circumstances of this case, I consider it to be the most eligible plan, that the proposed lease should be granted to a trustee, who must execute a back bond, declaring that he holds the same in trust, and binding himself to account for the surplus rents to the lady for behoof of herself and child, in such proportions and in such manner as shall be agreeable to the parties, and in the event of either dying during the currency of the lease, to be accountable to the survivor for her sole benefit.” It will be recollected that other great lawyers have in former cases given opinions more qualified, by stating, that this would be all right, unless it could be said to be in fraud of the entail, and it was that expression which led to a discussion in former cases * in this House, as to what was fraud upon the entail, and that qualification of the opinion to which I have alluded, was certainly of some importance; I mean, if there can be such a thing as fraud upon an entail. Acting upon the advice of that eminent lawyer, the parties finally resolved that the leases should be granted to Mr. Boyes, and that he should declare; by a separate deed, that they were held in trust by him for the respondent and her daughter, and oblige himself to account on their behalf for the excrescent rents. Accordingly, in a letter to the respondent Mrs. Footnote * The Queensberry Leases, ante , vol. i. Page: 217 ↓ Waring, Mr. Cochrane says, “Agreeably to your desire, the scroll of the lease was sent to Mr. Eiston, who, after revising it, returned it to Mr. Warrender. Two copies being necessary, one to be kept by the Duke, the other by Mr. Boyes, I accordingly send them both by this night's post, under covers addressed to the Duke. Mr. Boyes will explain the form, as to signing and witnesses. Upon the Duke's executing this lease, it will become necessary that Mr. Boyes should on his part execute the trust obligation in regard to the surplus.” The respondents then state, in their case, that “instructions were accordingly given to Mr. Eiston to frame the trust obligations.” Mr. Eiston is represented, however, as labouring under indisposition, and for that reason, as it is alleged, the execution of the deeds was delayed, and this, they say, is “a circumstance which will explain the interval of time between the dates of the principal leases and the dates of the trust obligations.” In another letter to the respondent, Mrs. Waring, dated the 27th of December 1798, Mr. Cochrane says, “Mr. Eiston will, I suppose, have mentioned to you the cause of the delay in drawing up the back bond, (that is, the declaration of trust,) occasioned by his health not permitting him to attend to it. I have, however, been this moment informed by Mr. Warrender, that Mr. Eiston will send it to you in a day or two.” On the 9th of January 1799, Mr. Cochrane writes to the respondent, Mrs. Waring —“Immediately upon receiving your letter this morning, I went to Mr. Warrender who informed Page: 218 ↓ me, that the obligation which he had sent off to Mr. Boyes, had not been as yet returned to him. As soon, however, as it is returned to him, I shall not fail to acquaint you.” On the 30th of November 1798, the Duke let to Mr. Boyes, his heirs, assignees and subtenants, certain farms, parts of the entailed estates of the family (the names of which it is unnecessary to detail), some for twenty-one years after Martinmas 1798, and the rest for the same period after Martinmas 1799. These farms (as the case of the respondent states) were all out of lease at the time, and a separate rent is stipulated for each, somewhat higher than had been paid by the former tacks. At the same time, the regulations, which were in use to be observed on the estate for the cultivation of the farms, were carefully preserved, and other clauses were superadded, which they say “are greatly for the benefit of the heirs of entail.” The case of the appellant states that the farms so let were thirty-nine different farms. By a second lease, dated on the 8th of February 1799, the former having been executed on the 30th of November preceding, (and therefore about two months and eight days afterwards), his grace also let to Mr. Boyes, his heirs, assignees and subtenants, for twenty-one years after Martinmas 1798, certain other farms, being also part of the entailed estates of the family, specifying a separate rent for each, exceeding the rents payable by the tack which had just expired, and the lease contains the same conditions and provisions as the former, for securing the interest of the grantor and the heirs of entail. Page: 219 ↓ A third lease was made on the 20th and 25th of June 1799, by which there was let to Mr. Boyes, also for twenty-one years, the farm of Bonhard, in Linlithgowshire, for a rent exceeding the former tack duty, and upon the same conditions and provisions as were contained in the former leases. The declarations of trust bear date on the 2d of January, the 26th of April, and the 3d of October 1799, the leases being dated on the 30th of November 1798, the 8th of February 1799, and the 20th and 25th of June 1799, so that there is an interval of time between each lease, and each declaration of trust, executed at those respective periods. Mr. Boyes declares in the following manner:
“that he held them in trust for the benefit of the respondent and her daughter,” namely, “that for certain causes and considerations,” (not stating what,) “it had been agreed upon between Mrs. Harriet Pye Esten and him, that whatever advantages or rise of money-rents could be obtained,” (so that you observe here, Mr. Boyes is agreeing with Mrs. Esten, and Mrs. Esten is agreeing with Mr. Boyes, as to the advantages or rise of money-rents which could be obtained, that is, according to the ordinary sense of the language, could be obtained by Mr. Boyes from these leases), “by subsetting the lands and farms before mentioned, or by assigning the said leases, or any part thereof, should be held by him in trust for the use and behoof of the said Mrs. Esten during her lifetime, and of Anne Douglas Hamilton, her daughter, and any other child or children that may be procreated between the said duke and her, in manner underwritten, and that Page: 220 ↓ she had further reposed in him the trust and charge of collecting the surplus money-rents to be obtained by subsetting, or the prices or considerations to be got by assignments.”
On this narrative, Mr. Boyes bound and obliged himself and his heirs to use all manner of diligence in getting the said farms subset, and to report his progress thereon, by delivering to the respondent “a faithful and true account from time to time, of the rises of rent that might be obtained by subsetting, and to pay over to her during her natural life all and whatever sum or sums of money, as (which) may so be got, raised and recovered by him from subtenants or assignees, upon subsetting the said lands and farms, or any part or parts thereof, and after her death to pay over the same, along with what remains unaccounted for to herself, to the said Miss Anne Douglas Hamilton, or any other child or children she may have as aforesaid, equally amongst them or in such proportions as the said Mrs. Harriet Pye Esten may direct and appoint by any writing under her hand; and that yearly and termly during the currency of the lease, and as soon as the same can be got in and uplifted and recovered by the ordinary and usual modes of process and diligence, deducting always all charges of management, and a reasonable allowance for his own trouble.” Within a very few weeks after granting the third lease, the Duke of Hamilton died, (I believe within the sixty days). Mr. Boyes proceeded to grant subleases of the farms, whereby a surplus beyond the rents payable Page: 221 ↓ to the proprietor was obtained upon the whole of about 1,370 l . The questions which arise in this case between the parties, (putting out of the case now all that has been stated about the vicious consideration of this transaction,) are, whether leases made under these circumstances are to be considered as leases made within the power which the possessor, as heir of entail, had, or whether they are to be considered as leases at all; whether they are to be considered as leases in trust for Mrs. Esten, or whether they were originally to be considered as leases granted according to the power, and from the moment when they were granted, leases in trust for her, and good against the succeeding heirs of entail. These questions came to be discussed in different actions, which have produced different interlocutors. The last interlocutor, which is a material one, is to this effect, “having considered, &c. finds, that the leases in question are proved to have been granted in trust for the pursuer, Mrs. Scott Waring, and her daughter Miss Hamilton, and not as in the case of Westshiel, to create in or reserve to the grantor a right to part of the rents of the lands, after his interest in them as proprietor under a strict entail had ceased.” The case of Westshiel was a case where a person in possession of a tailzied estate, let leases without a diminution of the rental, that is, not below the last rent that was paid; but at the same time, instead of taking a grassum, that is, instead of taking what the Scotch call a slump sum, at the time when the leases Page: 222 ↓ were made, he took bonds from the tenants to pay him yearly certain sums of money. If I recollect that case rightly, the yearly sums were not reserved payable at the same period as the rents, but they were reserved payable by bonds yearly from the respective tenants. It was contended on the one hand, that this was to be considered as a grassum. It was held that it was not a grassum, because it was not a slump sum, according to the then notions of grassum. On the other hand, it was said, inasmuch as the heir of tailzie in possession might have taken grassum, there was no reason why he who could have taken 1,500 l . at once, might not reserve 1,000 l . to be paid to him at certain times during the currency of the lease; and if he might reserve 1,500 l . to be paid to him prior to his making the demise, it was nothing to the subsequent heirs of tailzie what he got from the tenants for the forbearance. Instead of taking it in one sum he took it in portions of yearly payment, having just as much for his forbearance in that respect, as the value of the money during that period. The Court of Session was at last of opinion, that although he might have taken 1,000 l . in presenti , (for such was the position in that case) although he might have enjoyed that 1,000 l . together with the interest of it, by laying it out in loans to a third person, yet that he could not lend the money to the tenants themselves, but that what was secured by these bonds was to be considered as rent, and that although the bonds had been assigned, or might have been assigned, Page: 223 ↓ for a valuable consideration, they were in truth to be taken as so much yearly rent, and being to be taken as so much yearly rent, the succeeding heirs of entail were entitled to these yearly payments, although they would not have been entitled, as the law then stood, to any part of the 1,000 l . if it had been paid before, or at the time of executing the lease. We then, as it appears to me, get into a considerable difficulty in this case, because if the Duke of Hamilton could not have reserved these surplus rents for his own benefit, in the form of bonds for money, and if the surplus rents, reserved for his own benefit in the form of bonds for money would have been bad in the hands of persons holding for a valuable consideration, you will have to consider whether it is argued unanswerably at the bar, that nothing was reserved for himself. Surely, as between the tenant in tail in possession, and the person to take after him, it is a very nice distinction, that for the actual use and enjoyment of the tenant in possession, he cannot reserve, by a separate security, such a payment; but if he has to provide for a person with whom he cohabits, and her natural daughter, he may then relieve himself of the necessity of making that provision out of another part of his fortune, and make it at the expense of the entailed estate. That is one way in which the House will have to consider this case. The interlocutor proceeds in these words:
“finds, that in so far as the leases were granted for the benefit of Miss Hamilton, they must be held to be Page: 224 ↓ altogether legal and unexceptionable; finds that so far as any benefit was by the leases conferred on Mrs. Scott Warring, it does not appear to have been with a view of her entering into or continuing in an improper course of life, but to secure a permanent income to a person who had been induced by the grantor to withdraw from a lawful and lucrative employment, and who was the mother of his only daughter, and having been so long acquiesced in and unchallenged , it ought not to have been made the subject of judicial discussion.”
This was afterwards adhered to by subsequent interlocutors. In this interlocutor of the 9th of July 1814, there are many findings, which it has become unnecessary by what has been stated at the bar to attend to, and the question in which alone the House can deliver any judgment now, is, whether under all the circumstances appearing in this case, under which these instruments were made, (call them leases, or by whatever denomination you think proper to give to them), this is to be considered as a transaction which lies within the true intent and meaning of the power which the Duke of Hamilton had, or whether on the other hand, this transaction is of such a nature, that it cannot be sustained against the subsequent heirs of entail. I will at this time only add again, that with respect to the other question, which has been very largely argued at the bar, (the question of homologation,) I am afraid we cannot deal with it. If we could, provided there has been sufficient homologation, it would not be necessary to consider whether these leases Page: 225 ↓ are in themselves good or bad; but as we are not in a situation to authorize us to consider whether there has been homologation, we must enquire whether the leases themselves are valid according to the law of Scotland. I move that the discussion which belongs to that important question, be reserved till the House shall meet to-morrow. 24 July 1820. The Lord Chancellor :—I have stated from the papers, the case of the Duke of Hamilton and Brandon against Mrs. Scott Waring. The two questions which have been submitted to your consideration are, first, whether the leases which were made by the late Duke of Hamilton are to be considered as valid and effective leases? and secondly, if they are not, whether you are to consider the circumstances which have been stated to you in argument, as circumstances proving that these invalid leases have received validity from what is called, homologation; or whether on the other hand there is only acquiescence, not in its effect equivalent to homologation? With respect to the latter question, I stated the other day, that it appeared to me that we should not rightly proceed according to our usage, if we now gave an opinion upon it. If you hold the leases to be valid, it is not necessary to consider the other question: if you hold the leases to be invalid, it appears to me it will be absolutely necessary to remit the cause to the Court of Session, in order that the court may consider whether the circumstances stated to amount to homologation, do or do not give validity to these leases. Page: 226 ↓ The first question, whether the leases are valid or not, is certainly an important question in a great many views. It appears to me, that your decision may bear on a great many cases which have not yet come into controversy. I have endeavoured to look at the case in all the points of view in which it may possibly affect such cases, but into the discussion of those points it does not appear to me prudent, or at all events necessary at present to enter. The opinion which I have formed with respect to these leases, (an opinion which I entertain with great confidence) is, that these leases are not valid. The ground upon which I satisfy my mind as to that question, is, that when these leases were executed, they appear to me to have been leases for the benefit of the Duke of Hamilton himself. Without entering into the question whether the making a provision for another person is a benefit to himself, it appears to me, that at the time when these leases were actually made and in existence, the Duke of Hamilton might have disposed of the leases as he pleased. He was under no more obligation to give them to Mrs. Esten than to any other person, and if a lease under such circumstances, executed by the person in possession of an estate tail, would not be a good lease, it appears to me that it will make ho difference in principle, whether he makes a present of that lease soon after it is executed, or at a distant period from the date of its execution, and upon that ground alone, my opinion is, that these leases were not good. There are other grounds also on which, as it appears to me, the validity of the leases Page: 227 ↓ might be affected; but it is not necessary for me, at least in my view of the case, to proceed to examine those other grounds. The judgment, therefore, which I think the House ought to pronounce is, a judgment asserting the invalidity of these leases, and sending the case back again, with that finding, to the Court of Session, in order to have the question determined how far the plea of homologation can or cannot be supported. I therefore move the House to find, that the leases in question were leases not warranted by the power contained in the deed of entail, and were therefore subject to reduction, unless the same were homologated by the late Appellant Archibald Duke of Hamilton, deceased, and by the present Duke of Hamilton and Brandon; and so far as the same were not so homologated, to reverse the interlocutor complained of, and to remit the cause to the Court of Session to review, subject to this finding, and to do therein as is consistent with right. Order. 24th July 1820. The Lords find, that the leases in question were not warranted by the power contained in the deed of entail, and therefore subject to reduction, unless the same were homologated by the late Appellant Archibald Duke of Hamilton, deceased, and by the Appellant Alexander now Duke of Hamilton, and so far as the same were not so homologated respectively; and therefore, it is ordered and adjudged, that the interlocutors complained of be reversed; and it is further ordered, that the cause be remitted back to the Court of Session, to review the same, subject to the above finding. 1820