John Wilson and Others - Shadwel - Adam v. Sir William Francis Eliott of Stobs and Wells - Spanki - Brougham Et e contra. [1828] UKHL 3_WS_60

UKHL
John Wilson and Others - Shadwel - Adam v. Sir William Francis Eliott of Stobs and Wells - Spanki - Brougham Et e contra.
[1828] UKHL 3_WS_60
John Wilson and Others, Appellants.—Shadwell—Adam v. Sir William Francis Eliott of Stobs and Wells, Respondent.—Spankie—Brougham Et e contra.May 2 . 1828 .Lord Eldin .

Subject_ Sale — Entail — Land-tax — Fraud. —

(affirming the judgment of the Court of Session, but superseding their findings),—1. That the sale was not effectual; and, 2. That a singular successor infeft, and whose author was also infeft, could not be affected by the fraud of his author.Part of an entailed estate, which was greatly more than sufficient, having been sold under the 42. Geo. III. c. 116. for redemption of the land-tax; and no evidence having been taken that it could not have been divided, so that an adequate part only might have been sold; or that the sale of the whole would have been more eligible and advantageous for the estate and heirs-substitutes than the sale of a part only;—Held, in an action at the instance of an heir-substitute,

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By the 61st section of the 42. Geo. III. c. 116. it is enacted, “That where any heir of entail in possession of an entailed estate in Scotland, or his or her tutor or tutors, or where he or she is an idiot or lunatic, his or her curator or curators mean to sell part of the said estate to purchase the land-tax of the estate in terms of this Act, it shall be competent and requisite for him, her, or them, to apply by petition to the Court of Session, stating the amount of the land-tax payable out of the said estate, what part of the estate it is proposed to sell, and the rent or annual value of that part of the estate; and praying the Court, upon the allegations on these points being proved to the satisfaction of the Court, and it being shewn that the sale of the part of the estate proposed to be sold will not materially injure the residue of the estate remaining unsold, and that the part so proposed to be sold is proper (considering all circumstances) to be sold for the purpose aforesaid, to authorize such sale to proceed in manner herein after enacted; and the Judges of the said Court are hereby authorized and required to order such petitions to be intimated upon the walls of the Outer and Inner-House of the said Court, in common form, for ten sederunt days, and also to be advertised weekly for two weeks successively in the Edinburgh Gazette; which intimation and advertisement shall be a valid and effectual intimation, advertisement, and service, to all intents and purposes, as much as if the said petitions had been personally intimated to or served upon all persons having, or pretending to have, any interest with regard to the said estate, as substitute heirs of entail, creditors on the said estate, or in any other way or character whatever; and such intimation being duly made, the Court shall proceed summarily in the matter, and shall authorize the sale of that part of the estate which the petitioner or petitioners are willing to sell, which the Court thinks ought to be sold for the purpose above-mentioned, and against the sale of which no sufficient reason is stated by any person having interest; and the extract of the decree of the Court authorizing the sale, shall be sufficient authority to the commissioners acting under this Act to carry on the sale in the manner herein directed.” Again, by the 63d section, it is declared, “That if any farm, lands, or tenements, usually possessed together, shall be proposed to be sold

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In May 1803 the late Sir William Eliott, Bart. the proprietor of the entailed estate of Stobs, presented a petition to the Court of Session, setting forth, that “he was heir of entail in possession of the estate of Stobs, lying in the county of Roxburgh, and he intended, under the authority of the Act of Parliament passed in the 42d year of his present Majesty, cap. 116. entituled an Act for consolidating, &c. to sell a certain part or parts of the said entailed estate, and to apply the price to the redemption of the land-tax payable therefrom; that the amount of the land-tax of the said estate would be specified in the course of the proceedings under the present application; and that the most eligible part of the estate for that purpose appeared to be the farm of Hallrule, Hallrule-mill, and Town o' Rule, possessed by George Currie at the yearly rent of L.230 sterling; that the sale of the above-mentioned parts of the estate would not materially injure the residue of the estate remaining unsold; and that the part so proposed to be sold was proper (considering all circumstances) to be sold for the purposes aforesaid.” The petition prayed their Lordships “to appoint this petition to be intimated in the usual manner; to allow the petitioner a proof of the facts herein set forth; and upon the same being proved, to authorize the sale of the said lands, directing the prices to be applied in terms of the said Act of Parliament.”The Court, on the 24th May 1803, appointed the petition “to be intimated in terms of the statutes; and when these intimations are made and reported, they will resume consideration of the petition.” On the same day, and on the 31st May, intimation was made in the Edinburgh Gazette, on the walls of the Inner and Outer-House, and in the Minute-book. The report of the intimation stated, that the pursuer proceeded under the 61st section of the statute; and his agent certified, that the intimation on the walls had been done as directed by the same section. It was also alleged, (in the course of the present suit),

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“Lynford-Hall, Norfolk, June 22. 1803. Sir,—I received your letter of the 4th, intimating to me, that you intended to make application for leave to sell the farm of Town of Rule, and Hallrule, for redeeming the land-tax of the entailed estate of Stobs, and for other purposes of the Act of Parliament. I am,”
&c. The letter to which this was an answer, was not produced, and it did not appear that any notice had been given as to Hallrule Mill. Of the same date, a minute was lodged, stating, “that since the petition was given in, the petitioner had obtained a certificate from the proper officer, of the amount of the petitioner's land-tax, which is thereby ascertained to be L.56. 8s. 7 6 ⁄ 12 d.; and that the application had also been intimated upon the walls of the Outer and Inner-House of the Court, in common form, for ten sederunt days, conform to certificate subjoined to the petition; and also intimated or advertised weekly, for two weeks successively, in the Edinburgh Gazette, as appears from copies of that publication, of dates 24th and 31st May last, both herewith produced.” He therefore craved, that their Lordships would sustain the notices, and allow a proof in common form. The Court thereupon “having resumed consideration of this petition, with the intimations thereof, in terms of their former deliverance, and having advised the same with the minute this day given in for the petitioner, and no objection being made by any party having interest, they allow the petitioner to prove prout de jure the amount of the land-tax payable to the public, for the year 1798, out of the petitioner's estates in the county of Roxburghe; the rent or the annual value of the lands mentioned in the petition, proposed to be sold for purchasing the said land-tax; if the same can be sold without injury to the remainder of the estate; and if it is the most proper part of the estate to be sold, (all circumstances considered);—all in terms of the statutes made in that behalf; and grant commission to the Sheriff-depute,” &c. A proof was accordingly led, of the amount of the land-tax payable out of the estate,—the rent or annual value of the part of the estate proposed to be sold,—that the sale would not materially injure the remainder of the estate,—and that the part so proposed to be sold was proper under all circumstances; but no proof was adduced to shew that the lands could not be divided, nor that the

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“The rent or value of the lands proposed to be sold appears to be L.234. 9s. sterling, including conversions; and without doubt, in the event of a sale, they must bring a price considerably more than is necessary for the redemption of the land-tax. But this price will be vested in a trustee for fulfilling the purposes of the Act of Parliament,—1 st , In redeeming the land-tax, and defraying the expenses of the proceedings in carrying through the sale of the lands and purchase of the land-tax; and, 2dly, In applying, under the authority of the Court, the surplus in payment of debts affecting the entailed estates. These, in the present case, amount to above L.7000 sterling, which will fully exhaust the surplus arising from the price of the lands proposed to be sold, after purchasing the land-tax. In these circumstances, therefore, it is humbly submitted, that there can be no objection to the sale of those lands being allowed to proceed.”
A draft of the articles and conditions of the roup and sale was laid before the Court, who were craved to authorize the lands to be exposed to sale, and to approve of the trustee and cautioner named by the petitioner. On the 9th July. 1803, their Lordships “found it sufficiently instructed and proven, that the land-tax, payable in the year 1798, for the petitioner's estate of Stobs, lying in the county of Roxburghe, amounted to L.56. 8s. 7 6 ⁄ 12 d. yearly: Find, that the yearly rent of the lands proposed to be sold amounts to L.234. 9s. sterling, exclusive of an obligation upon the tenants to assist, with a specified number of men, women, and horses, for casting, winning, and leading peats and hay to the landlord: Find, that this is the most proper part of the estate to be sold for raising money to purchase the above-mentioned land-tax: Approve of William Riddell, Esq. W. S. as trustee for the petitioner, and of Lieutenant-Colonel Edgar Hunter, of Linthill, as his cautioner, for the due execution of the trust in terms of the statute; and likewise approve of the articles and conditions of sale subjoined to the state of the proof, with the addition * to the 5th article made by order of the Court: Grant

Footnote

* The addition is in italics:—V. “Upon the purchaser's making payment of the price

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The draft of the articles of roup and sale was blank in the names of the trustee and cautioner, and in the upset price.The trustee and cautioner lodged bond, and an act and warrant was extracted in favour of Sir William and the trustee, authorizing the roup and sale, and fully setting forth the tenor of the petition, and the detail of the intimations, proceedings, and interlocutory orders. In this act and warrant, the upset price remained blank. Sir William afterwards filled up the blank in the articles and sale with the sum of L.9000. He also added a clause, declaring, that the bond to be granted by the purchaser should be also signed by a sufficient co-obligant; that the right to the teinds of the lands under sale was reserved; and that the land-tax payable for and in respect of the lands under sale, was not to be redeemed by the exposer. At the sale, which took place in September 1803, the tenant of the lands at once offered L.12,000; and after some competition Sir William bought them for L.15,420, and granted the trustee a bond for the price. In April of the following year, he agreed to sell Hallrule to John Wilson for L.6912. 10s. At this time Sir William had not completed his own fee-simple title in the lands; but he bound himself forthwith to complete that title, to be holden of the Crown, and to infeft Wilson in due form à me vel de me. Thereafter, in May 1804, Sir William completed his own title, by executing a disposition of the lands, as heir of entail in possession, (with consent of the trustee), in favour of himself, his heirs and assignees, founding upon the act and warrant of Court, and of the roup following thereon, and granted procuratory of resignation and precept of sasine. He, of same date, executed a disposition in favour of Wilson, which bore, that in regard the price at which I, the said Sir William

Footnote

“to the said trustee, and the trustee producing evidence of the application thereof in terms of the statute, the said Sir William Eliott shall be bound and obliged to grant and subscribe a formal and valid disposition of the foresaid subjects to the purchaser, containing all usual and necessary clauses,” &c.

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In January 1805, Sir William agreed to sell to Wilson another parcel, being a part of the lands of Town o' Rule, with the teinds, and of valued rent sufficient to afford a freehold qualification. He executed a regular disposition thereof in January 1806, which also contained the clause just quoted, and Wilson took infeftment. Thomas Cleghorn subsequently bought the remainder of Town o' Rule, and the superiority of Weens, from Sir William, and also from Wilson a portion of the lands of Hallrule.The whole of the property which Sir William had thus purchased under the proceedings in the Court of Session, he sold for L.23,600.In the meanwhile, Sir William and the trustee presented an application to the Court of Session for approbation and exoneration, resuming the state of the previous proceedings, and detailing what had been done. They stated, that besides redeeming the land-tax, debt affecting the entailed estates had been paid to the extent of L.7854. 12s. 5d., and that there remained an unappropriated balance of L.6157. 3s. 7d.; which, in terms of the statute, must be laid out in the purchase of lands, to be limited and settled in the same way as the lands sold were limited and settled, or otherwise applied and secured as the Court should direct; and suggested, that it should be heritably secured over the lands of Town o' Rule and others now belonging to Sir William in fee-simple, or otherwise; and that such part of these lands as were equal in value to that balance should be disponed back to himself and the heirs of entail. The Court remitted to the Lord Ordinary, with power to intimate to the substitute heirs of entail, (and these failing to appear), to appoint an agent

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The trustee did not pay the price into the Bank of England; nor did he ever produce evidence of the price having been applied in terms of the statute.Sir William died, and burdened the entailed estate with certain provisions to his younger children, four of whom in 1819 petitioned the Court to have this balance applied in payment thereof, which was authorized, (leaving a very trifling balance still to be accounted for by the trustee), on the petitioners assigning their claims in trust for behoof of the heir of entail in possession of the estate of Stobs for the time.The purchasers from Sir William entered into possession, and laid out large sums in ameliorations.In 1822 Sir William Francis Eliott, Bart. of Stobs, eldest son of the deceased Sir William, raised an action of reduction against Wilson and Cleghorn, the purchasers, calling for production of the act and warrant of the Court authorizing the sale of the lands of Hallrule, Town o' Rule, and HallruIe Mill; the articles and conditions of roup, and minutes of roup; the dispositions granted by Sir William in favour of himself as purchaser, and all the subsequent titles; and concluding, that these deeds and writings should be reduced and declared to be null and void, and the pursuer restored thereagainst in integrum; and being so reduced, it should be found and declared, that the pursuer had the only good and undoubted right and title to the said lands, and to possess the same, and uplift the rents thereof; with conclusion of removal against the defenders, and those holding under them.The Lord Ordinary, on the 10th June 1824, reduced, decerned, and declared in terms of the reductive conclusions of the libel. The Court, on advising a petition and answers, on the 23d June 1825, pronounced this interlocutor:of 42. Geo. III. c. 116., set forth the amount of the land-tax proposed to be redeemed, and that the petition was intimated under the authority of the Court in this imperfect state: Find, that a minute was afterwards given in, containing a certificate of the amount of the land-tax; but that this minute, even if it could be held as supplying the original defect in the petition, was not intimated as the Act requires the petition to be, and therefore cannot supply the defect in the petition. 2do, Find, that as the petition prayed for authority to sell lands in point of rent and value much more than sufficient to redeem the land-tax of the whole estate, it was requisite, by the 63d section of the Act, that the petition, besides being intimated on the walls of the Court, should be intimated personally to the next heir of entail in Great Britain being of lawful age: Find, that no evidence of such intimation was laid before the Court: Find, that the letter from Mrs Guy, which has since been produced in this process, does not contain evidence that sufficient intimation was made to her; as from that letter it does not appear that the Mill of Hallrule and mill lands had been included in the intimation to her, of which her said letter is an acknowledgment. 3tio, Find, that the articles of roup, as prepared by Sir William Elliot for the approbation of the Court, did not specify any upset price, but left that blank, and the upset price was thereafter fixed by some private authority, without any warrant from the Court. 4to, Find, that the articles of roup, even as thus imperfectly prepared, were afterwards altered by Sir William Eliott, without any authority of the Court, by excepting the teinds, and by declaring that the lands to be sold were to remain subject to their proportion of the land-tax. 5to, Find, that this alteration was not only not warranted by any authority from the Court, but was in itself in the face of the statute, which provides, that no lands shall be sold, except for the redemption of the land-tax thereof. 6to, Find, that no proof was offered to the Court of the necessity or expediency of selling so large a quantity of land and superiority to redeem this comparatively small amount of land-tax; while, from subsequent proceedings, it appears that these lands might have been disjoined, and any part of them sold separately, which, in fact, was soon afterwards done by Sir William Eliott to these defenders. 7mo, Find, that the price was not paid into the Bank of England, as required by the Act, before granting dispositions to the purchasers. 8vo, Find it proved by the terms of the dispositions to the defenders, that they were made aware that the Act had not been followed out. 9no, Find, that the sales in question never were reported to and approved of by the Court. Therefore, on the whole matter, adhere to the interlocutors complained of, and refuse the desire of the petition, reserving to the defenders their claims for repetition of the price from the pursuer, in so far as any part of it was applied to redeem the land-tax, and to discharge the burdens which either affected, or which could have been made to affect, the entailed estate, or the pursuer, the heir in possession; as also reserving to the defenders any claim they may have for ameliorations on the lands respectively purchased by them; and to the pursuer, on all these points, his objections, as accords; also reserving to the pursuer his claim for repetition of the rents, and to the defenders their objections thereto, as accords: And remit to the Lord Ordinary to hear parties on all these points, and to do therein as he shall see cause, and decern.”
“Find, that the defenders cannot be hurt by any alleged fraud on the part of the late Sir William Eliott, in carrying through the sale under the authority of the Act of Parliament, or, as alleged, in deceiving the Court against the pursuer or other heirs of entail, if the sale, in other respects, had been regularly conducted in terms of the Act of Parliament; but find, lmo, That the original petition to the Court for authority to sell the lands in question did not, in terms of the Act.

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And thereafter, on the 9th February 1826, their Lordships adhered, but gave leave to the defenders to appeal. The pursuer had also petitioned the Court on two points, with which he was dissatisfied:—1st, As to the defenders not being hurt by any alleged fraud on the part of the late Sir William Eliott; and, 2dly, As to the intimation to Mrs Guy being to the proper party. But the Court refused his petition, and adhered; giving him, however, also leave to appeal. *Both parties, accordingly, appealed.Wilson and others (appellants in original, respondents in cross appeal) .—I. The plea of the respondents is, that Sir William Eliott ought to have proceeded under the 63d, and not the 61st section of the statute, he having in contemplation to sell more land than sufficient to redeem the land-tax. But the 63d section is merely supplementary of the 61st section. The Act of 42. Geo. II. on which Sir William founded generally, consolidated the previous statutes on the subject; and these statutes shew that the respondents' objections are unfounded. The 63d section was never intended to operate by itself, since it is quite silent as to advertisements and intimation on the walls. † Even if the respondents were right, that the Court had in some respects deviated from the strict letter of the statute, this would not

Footnote

* See 4. Shaw and Dunlop, No. 289.† The appellant went into a great deal of argument, to shew that the different findings of the Court of Session were erroneous; but as the House placed their judgment on a different ground, it is not necessary to advert to it.

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II. But it is also alleged, that Sir William wished to appropriate the lands to himself at an under-value. There is no evidence of that charge; but even if true, it cannot affect the appellants.—‘Fraus auctoris non nocet successori.’ They acquired the properties for value,—were in perfect good faith,—have been long feudally invested in the subjects they bought; their rights therefore cannot be touched by any fraud of their author. To meet this defence the respondent contends, that the sale and fee-simple title in the person of Sir William never having been approved of by the Court of Session, there is even yet, in the eye of law, no feudal title at all, and therefore no protection afforded to the appellants against the fraud of their author. But the interference and approval of the Court of Session are not required by statute to give validity to the title of a purchaser; and the fee-simple investiture of Sir William, and of his disponees, was as complete as any express sanction of the Court could have

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Sir William Francis Eliott (respondent in original, and appellant in cross appeal) .—I. The late Sir William Eliott, wishing to benefit himself at the expense of the entailed estate, sold (under pretence of redeeming L.56. 8s. 7 6 ⁄ 12 d. of land-tax) entailed property for L.15,420; he became himself the purchaser; and, although the only hypothesis on which he could have been permitted to sell that amount, was, that the portion sold was not susceptible of expedient division, he, within little more than a twelvemonth, disposed of it in four portions for L.23,600. At this time the respondent and the rest of the children were in pupillarity. The only way the late Sir William could effect his purpose was by misleading the Court. If he wished to sell more land than the land-tax required, the 63d section was his guide; if only the precise amount requisite for the redemption, then the 61st. But he so shaped matters as to induce the Court to believe that the latter was his purpose; and they issued their orders accordingly, overlooking every part of the statute they ought to have, under the true circumstances of the case, enforced, and

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II. Besides, the appellants were aware of the imperfection of these proceedings, and of the devices practised by Sir William. But, if so, their title must be annulled, as flowing from a person who held a vitious title. It is clear law, that when a purchaser acquires an heritable estate from a party, who has not been infeft in it previous to the sale, or, even when infeft, if he were aware of the fraud of his author, then, Fraus auctoris nocet successori,— under the exceptions of purchasing on the faith of the record, or (as to moveables) in open market. Of course, this destroys Wilson's title to both portions; and also destroys the titles of Cleghorn, whose title-deeds betray their knowledge of the imperfection

Footnote

* The respondent argued at much length in support of the findings of the Court, but this, for the reason already mentioned, does not require to be particularly noticed.

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The House of Lords, in respect it appears “that the Court of Session, before pronouncing their interlocutor of the 9th of July 1803, authorizing and appointing the sale therein mentioned, had not before them any evidence that the farms, lands, or tenements thereby appointed to be sold, could not be divided, so that an adequate part only might be sold, nor any evidence that the sale of the whole of such farms, lands, or tenements, would be more eligible and advantageous to the said entailed estate, and to the successive substitute heirs of entail, than the sale of a part thereof only; It is ordered and adjudged, by the Lords spiritual and temporal in Parliament assembled, That the said several interlocutors complained of in the said original appeal be, and the same are hereby affirmed; but it appearing to their Lordships that the said interlocutors ought to be affirmed for the reason above stated, this House does not think it necessary to pronounce any judgment upon any of the other reasons stated in the interlocutor of the 7th of June (signed 23d of June) 1825, adhering to the former interlocutors therein referred to: And it is further ordered, that the said original appeal, and also the said cross appeal, be, and the same are hereby dismissed this House.”Appellants' Authorities .—42. Geo. III., and previous Redemption of Land-tax statutes; 54. Geo. III. c. 123. § 12.; Lord Wemyss, Feb. 28. 1821, (affirmed on appeal, Feb. 25. 1824.; Shaw, vol. i. No. 1.); Lawrie, Feb. 11. 1806, (App. 1. Pub. Bur. No. 2.) affirmed on appeal, July 27. 1814, (Dow's Rep. vol. ii. p. 556.); Voet, 44. tit. 4.; Kames' Elucidations, art. 3.; Stair's Inst. 4. 40. 21.

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Respondent's Authorities .—42. Geo. III., and previous Redemption of Land-tax statutes; Stair's Inst. 4. 40. 21.; M'Donells, Nov. 20. 1772, (4974.); Bankton's Inst. 1. p. 259. § 65.; Burdon, (Elchies on Fraud, No. 11.); Stair's Inst. 3. 1. 21.Solicitors: Fraser— Richardson and Connell,—Solicitors.