Hardie v Macfarlan's Judicial Factor
| Jurisdiction | Scotland |
| Judgment Date | 08 February 1912 |
| Date | 08 February 1912 |
| Docket Number | No. 73. |
| Court | Court of Session |
Lord Skerrington, Lord Salvesen, Lord Guthrie, Lord Justice-Clerk.
Alimentary provision—Liability to diligence—Trust—Alimentary liferent to beneficiary under trust—Debt due by beneficiary to trust-estate—Retention of liferent in satisfaction of debt—Excess over reasonable alimentary provision.
A person entitled under a will to the liferent of a share of residue, was also a debtor to the trust in respect of money which had been advanced to him by the testator. The liferent was declared to be strictly alimentary and not attachable for debt. After paying all creditors on the trust-estate, a balance, without including the debt due by the liferenter, remained for division among the residuary legatees.
In an action by the beneficiary for payment of his liferent provision, held that the judicial factor on the trust-estate was not entitled to retain the whole of the beneficiary's share of income in satisfaction of the debt, but (rev. judgment of Lord Skerrington) that he was entitled to retain so much thereof as exceeded a reasonable aliment.
On 11th October 1910 Joseph Hardie, farmer, Brown Summit, U.S.A., brought an action of declarator, count, reckoning, and payment against Alexander Herbert Brown, C.A., Glasgow, judicial factor on the trust-estate of the deceased Alexander Macfarlan. The action concluded, inter alia, for payment to the pursuer of one-fourth of the income of the residue of Alexander Macfarlan's estate.
Alexander Macfarlan died on 1st July 1909 leaving a trust-disposition and settlement dated 23rd April 1909. As none of the trustees accepted office, the defender was appointed judicial factor on the trust-estate.
The testator by his trust-disposition and settlement, after directing payment of his debts and making various other testamentary dispositions, provided by the eleventh purpose thereof as follows:—‘(Eleventh) After fulfilling or providing for the foregoing purposes I direct my trustees to hold the residue of my means and estate and produce and proceeds thereof for my nephews and nieces, Joseph Hardie [the pursuer] and Alexander Macfarlan Hardie, both sons of my late sister Catherine, and Mrs Jessie Fleming or Mercer and Mrs Elizabeth Fleming or Smith, both daughters of my late sister Margaret, in liferent, for their liferent alimentary use allenarly, equally share and share alike, and their lawful issue per stirpes in fee.’ The testator further declared that ‘the whole of the alimentary provisions hereinbefore provided shall be strictly alimentary allenarly and shall not be assignable nor attachable for the respective beneficiaries' debts, deeds, or obligations.’
The pursuer averred that he was entitled to an alimentary liferent of one-fourth of the income of the residue of the estate.
Defences were lodged by the judicial factor.
The nature of the defence and the admitted facts of the case were thus summarised by the Lord Ordinary:—‘At the date of the will the pursuer was indebted to the testator in a sum of nearly £5000, being advances received by the pursuer from time to time in order to enable him to carry on his business as a farmer in the United States of America. There is an action in this Court at the instance of the judicial factor against Mr Hardie, in which he sues the latter for £4795, 12s. 8d., being the amount of said advances. The present action was debated upon the assumption that the judicial factor's claim was a good one, and that he held a decree for the amount.* The question in the present case is whether the defender, the judicial factor, is entitled to operate repayment of his debt by impounding the pursuer's liferent interest under his uncle's trust. It is obvious from the averments of both parties that the judicial factor may find it difficult to recover payment of the debt by taking proceedings in the United States. The pursuer, who is sixty-two years of age, alleges that he retired from business three years ago; that his farm was purchased in the name of his wife, and belongs to her; and that the stock belongs to his eldest son. In these circumstances, the defender claims that he is entitled, on the principle of retention or of compensation, to impound either the whole of the pursuer's liferent provision, or at least so much thereof as exceeds a reasonable aliment. He alleges that an allowance of £300 of aliment from the trust-estate would enable the pursuer to maintain himself and his wife comfortably according to their position in life. The estate left by the
testator was very considerable.* The pursuer estimates his one-fourth share of the income of the residue at £1500 per annum, and the defender at £1000.’
The pursuer pleaded, inter alia;—(2) The pursuer being entitled to the alimentary liferent of one-fourth of the residue of the testator's estate, the defender is bound to hold just count and reckoning with the pursuer and to make payment to him as concluded for in the second conclusion of the summons.
The defender pleaded, inter alia;—(1) The defender being justly entitled to retain the pursuer's share of the revenue of the trust-estate against, and apply it towards satisfaction of, the debt due by the pursuer to the testator and interest thereon, decree of absolvitor should be pronounced with expenses. (4) In any event the sum of £300 a year, in view of the station and circumstances of the pursuer, being a reasonable provision for his aliment, the defender is entitled to apply the pursuer's said share of the revenue of the trust-estate—in so far as it exceeds said sum—in satisfaction of pursuer's indebtedness to the trust-estate.
On 19th January 1911 the Lord Ordinary (Skerrington) pronounced this...
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Tennent's Judicial Factor v Tennent
...42 Ch. D. 203; Logan v. M'LellanUNK, (1877) 14 S. L. R. 454; Mackenzie Stuart on Trusts, p. 373. 4 Hardie v. Macfarlan's Judicial Factor, 1912 S. C. 502, Lord Salvesen at p. 5 11 and 12 Geo. V, cap. 58. 6 Anderson, (1855) 17 D. 596; Anderson, (1857) 19 D. 329; Tosh's Judicial Factor, 1913 S......