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SCOTTISH_Shaw_Court_of_Session

Page: 1082↓

Davidson

v.

Mackenzie No. 337.

Court of Session

1st Division D.

July 9 1835

Ld. Corehouse, Lord Balgray, Lord President, Lord Mackenzie, Lord Gillies.

James Gillespie Davidson and Robert Syme Wilson, Pursuers.— Keay— Whigham. John Mackenzie, Defender.— Sol.-.Gen. Cunninghame— Dick.

Subject_Trust—Proof—Title to Pursue.—

1. Acceptance of a trust inferred from the actings and correspondence of a party named trustee and executor. 2. A power of assuming new trustees was given to the major number of trustees nominated, accepting and surviving, but only in case of failure by death or non-acceptance—held, that, where there was but one vacancy, a deed, executed by one of two accepting trustees assuming two trustees, was ultra vires. 3. Held that trustees so assumed had no title to pursue an action, though they had acted for several years without challenge in the administration of the trust.

In October, 1822, the late James M'Kinnon Campbell executed a trust-disposition and settlement of his whole estate, comprising heritable and moveable property, in favour of “Major Alexander M'Kay, Neil Malcolm, Esq. of Poltalloch, and Hugh James Rollo, writer to the signet, and to the survivors or survivor, acceptors or acceptor, of them, the major number surviving and accepting from time to time being a quorum, and to the heirs of the survivor and acceptor of them.” A legacy of £1000 was left by Campbell to his natural brother, and “to the said Major Alexander M'Kay the like sum of £1000 sterling.” The trustees were named sole executors and intromitters with moveables, and it was declared, that, “as trustees or executors, they shall not be bound to do diligence, nor shall they be liable in solidum, nor for omissions, but only for their actual and individual intromissions; and in regard it may be necessary to assume some person or persons into the management of this trust, in the room of any of my said disponees deceasing, or not accepting; therefore, I do hereby give and commit full power and authority to my said trustees, or their quorum foresaid, to assume any person or persons, from time to time, to act along with them in the said trust-executry, and which person or persons so appointed shall be as fully vested in the subjects hereby conveyed, and have the same powers and privileges in all respects, as if he or they were specially nominated hereby.”

Campbell died in the beginning of November, 1822. Mr Malcolm declined to accept; Mr Rollo accepted and acted; but neither he nor Major M'Kay signed any express minute of acceptance. M'Kay had acted as Campbell's agent prior to his death.

From the death of Campbell till October or November, 1823, a series of correspondence ensued between Rollo and M'Kay, and also between Rollo and third parties transacting with the trust-estate, in the whole course of which Rollo set forth M'Kay and himself as the accepting and acting trustees. This was done in the most explicit terms in numerous letters to third parties, with the full knowledge of M'Kay, and it was implied, both in the terms of the correspondence between Rollo and M'Kay, and in the nature of the subjects about which they corresponded. Thus, on 19th November, 1822, Rollo notified to M'Kay the opening of Campbell's repositories, and the appointment of the executors; he added, “I beg you will inform me whether you will accept of the nomination of executor.” In December following, Rollo notified to several correspondents that Malcolm had declined, but M'Kay had accepted.

In one of these letters, he wrote to John Mackenzie, merchant, who had a large claim against Campbell, to state it in writing. Mackenzie did so, and M'Kay and Rollo wrote in answer on the 31st December, 1822:—

“We have your letter of the 30th instant, and before we come to any determination thereon, we beg to be favoured with a copy of the award for £3000 founded on by you.”

Rollo wrote to Mackenzie, on 2d January, 1823, that M'Kay and he declined to accept an offer of compromise made by Mackenzie; and, on the 3d, Mackenzie wrote to Rollo:—“In terms of what we arranged in Glasgow, I have written a letter to Mr Rucker, of which I beg leave to send you a copy, hoping you will approve thereof. I also wrote Mr Mackenzie in the terms we arranged as to him. Mr Newall's application has not yet been disposed of, but I hope it soon will.”

The letter to Rucker here referred to was expressly addressed to him on the part of Campbell's executors, and spoke of “Major M'Kay and I” (Rollo) as being these parties.

M'Kay answered, on the 6th:—“Your favour of the 3d instant, with its enclosure, I have received, which appears to me to contain the full substance of our conference with the other party.”

On the 4th, Rollo had written to Mackenzie:—“You have already stated you would not accept the sum mentioned by Major M'Kay; and as we were determined not to give more,” &c.

Rollo wrote to M'Kay, on the 20th, consulting him as to compromising Mackenzie's claim. M'Kay answered, “If Mr Mackenzie wish for a compromise, would it not be much better for him at once to furnish a memorial or statement on the subject, explanatory of the nature and extent of the service he had rendered, in order for ourselves, in the first place, to consider the matter, which he will be called upon to do, before the subject be taken into consideration by any other person or persons.”

Other letters followed between Rollo and M'Kay, in which Rollo spoke of his correspondent and himself as the executors, and advised relative to the estate, and M'Kay gave his advice accordingly, without hinting at any disclamation of the character of executor.

Two actions were raised against the trustees and executors of Campbell, in which appearance was made both for M'Kay and Rollo. In one of these Rollo had accepted the citation for M'Kay. ^*

In the end of October, 1823, and after a reduction of Campbell's settlement had been raised, some misunderstanding apparently arose between M'Kay and Rollo, and M'Kay declined to concur with Rollo in making a draft, as Campbell's executors, on Rucker, and Rollo, on 12th November, wrote M'Kay, “You will forgive me for saying, that it is not as a legatee I applied to you, but as executor under the will. That office you accepted, and I flattered myself, from what you said to me, that you would go through with it. Your refusing now to act is so contrary to what you formerly stated to me, that I cannot allow myself to think that you had been aware that it is as executor I applied to you. If you still continue in the opinion you have expressed, I have only further to request you will write me a letter, stating that you decline to act as executor; though I very much doubt if it is possible for you now to do so, having once signified your intention to accept.”

_________________ Footnote _________________

^* One of the actions had also been directed against Malcolm of Poltalloch, but appearance was made for him at an early stage to disclaim the character of trustee, and he was assoilzied.

No answer being returned, Rollo wrote on the 20th, and again on 9th December. M'Kay, on the 12th, wrote, “I think it right distinctly to state, that as matters at present stand, I have come to the resolution of intromitting with no money belonging to the executry until the forms required by law have been complied with. I am not sure that we would be in safety to pay the creditors at any rate, without a constitution of their debts; but however that may be, until letters of administration are taken out, or a confirmation expede, I will not give my name for the purpose of raising money to accommodate James M'Kinnon Campbell's creditors.”

Again, on the 26th, M'Kay wrote, through a law agent, that, on giving all due consideration to a letter of yesterday from Rollo, “Major M'Kay declines to act as executor.” He accordingly directed his name not to be used as a party in an action then pending.

Rollo proceeded to act as sole executor and trustee, and on 3d June, 1825, on the narrative that “Major M'Kay and Mr Malcolm have both declined to accept as trustees, whereby I am now the sole accepting trustee and executor,” he “nominated and assumed James Gillespie Davidson, and Robert Sym Wilson, as trustees, into the management of the said trust-estate: And in order to carry this nomination and assumption into full effect, I do hereby, in virtue of the powers contained in the foresaid trust-disposition and settlement, grant, alienate, dispone, assign, convey, surrender, and make over, to and in favour of the saids James Gillespie Davidson, and Robert Sym Wilson, and myself, and to the survivors or survivor, acceptors or acceptor of them, and me, the major number surviving and accepting being a quorum, and to the heirs of the survivor and acceptor, as trustees, for the uses, ends, and purposes, specified in the foresaid trust-deed,” &c.

Rollo subsequently executed a renunciation of the trust, and both he and M'Kay afterwards died. The action to reduce Campbell's settlement failed, and the settlement was sustained.

In February 1832, Messrs Davidson and Wilson, after having acted in the management of the trust-estate during the interim, raised an action against John Mackenzie, merchant in Greenock, and Newall's trustees, to reduce, on the ground of fraud, circumvention, and lesion, certain documents granted by Campbell in their favour.

The defenders pleaded as a preliminary defence that there was no title to pursue as the pursuers had never been effectually nominated or assumed as Campbell's trustees. In support of this they pleaded, that, though M'Kay had never signed a minute of acceptance, the fact of acceptance might be proved by the real evidence of his actings. ¹ For a considerable period of time he had acted along with Rollo as joint executors,

_________________ Footnote _________________

¹ 1 Ersk. 7, 20.

advising as to important concerns of the trust, and disposing of them. He had received letters from Rollo addressed to him expressly as executor and trustee, and had answered them in that character. Rollo had also held him out to third parties, with his knowledge, as an acting trustee, and two actions had been raised against Rollo and M'Kay as executors. ^* It was impossible after that to resign or devolve the trust at pleasure, ¹ and, even had it been possible, no deed of resignation had ever been executed. In these circumstances, Rollo's deed of assumption of new trustees was ultra vires, as the power of assumption was given only to the majority or quorum while more than one existed, and as the power was limited to the assumption of parties only in the room of such trustees nominate as had died or not accepted. There was thus but one vacancy to be supplied at the time when two trustees were assumed. The trust had, therefore, now devolved upon the heir of M'Kay, who had been the last survivor of the accepting trustees.

In answer the pursuers pleaded, that there was not sufficient evidence of M'Kay having accepted. ² He had previously been the agent of Campbell, and was naturally advised with as to the affairs on that account, and he lent his assistance the more readily from having been a legatee. But it was only in the correspondence of Rollo that he was stated to be an accepting executor, and he had specially declined the office while an action to reduce the settlement was yet in dependence. He had never been clothed irrevocably with the character of trustee, and if he had been held out as such to third parties, that might give rise to questions of liability to them individually, but would not make him a trustee. As the effect of sustaining this defence would be to throw loose the transactions of a long series of years, it could not be sustained unless most clearly established. And it was jus tertii to the defenders to discuss the question whether M'Kay had effectually accepted or effectually renounced the trust.

The Lord Ordinary “sustained the preliminary defence, that the pursuers of the reduction were not legally assumed as trustees by the acting and surviving trustees of the deceased James M'Kinnon Campbell, or by a quorum of these trustees; and therefore sustained the objection to the title of the pursuers, dismissed the action, and decerned, and found the pursuers liable in expenses.” ^†

_________________ Footnote _________________

^* The defenders did not found on M'Kay's taking the legacy, conceiving it to have been unconditionally left.

¹ Lord Lynedoch, Feb. 15, 1827 (ante, V. 358; 4 W. & S. p. 148).

² 1 Ersk. 7, 20.

^† “ Note.—James M'Kinnon Campbell granted a trust-conveyance in favour of Major Alexander M'Kay, Neil Malcolm, Esq., and Hugh James Rollo, W.S., and to the survivors or survivor, acceptors or acceptor of them, the major number surviving and accepting, from time to time, being a quorum, and to the heirs of the survivor and acceptor. A power of assumption is given to the trustees and their quorum; but no power to resign or withdraw from the office. Mr Malcolm declined to accept, and Mr Rollo expressly accepted. There is no express written acceptance by Major M'Kay; but in the Lord Ordinary's opinion, sufficient written evidence is produced that he virtually accepted, and that he continued to act as a trustee for a considerable time. Afterwards, on a misunderstanding with his co-trustee, Mr Rollo, he declined to act any longer; upon which Mr Rollo, holding himself as sole trustee, executed the power of assumption in favour of the pursuers. It is thought, that, in doing so, he acted ultra vires, as he was neither sole trustee, nor a quorum of the trustees. Major M'Kay having accepted, was not entitled to resign when he thought fit, and Mr Rollo might have compelled him to act, at least to the effect of validating an assumption of new trustees; or if there were grounds for it, he might have had Major M'Kay exauctorated by the Court. Without any measure of that kind, Mr Rollo proceeded to assume the pursuers, upon the supposition that Major M'Kay never had accepted, contrary, it is thought to evidence.

“The pursuers have pleaded, that it is jus tertii to the defender, whether Major M'Kay accepted or not, and whether the assumption is regular. There is evidently no foundation for that plea. Every defender in a suit has an interest that a pursuer shall have a good title to insist in it, otherwise a decree of absolyitor, after a long and expensive litigation, might be altogether inept”

Davidson and Wilson reclaimed.

Lord Balgray.—I think it proved that Major M'Kay accepted the office of trustee and executor, and after that, I entertain great doubt whether he had the power of resigning and renouncing effectually.

Lord President.—In the case of Lord Lynedoch v. Ouchterlony, the Court held that a trustee could not resign, to the effect of liberating himself from performing necessary acts in the administration of the trust. He could not refuse his concurrence to necessary deeds.

In regard to the question, whether Major M'Kay ever accepted, I think his acceptance sufficiently proved. The circumstance of his having previously been the agent of the truster only makes it the more likely that he should have accepted. And the correspondence and actings appear sufficient to instruct acceptance. If the defenders had by their actings acknowledged the pursuers as trustees, that might have raised a different question; but as that was not the case, it is unnecessary to consider the effect of any personal objection which might thus have arisen to the plea they now maintain.

Lord Mackenzie.—As the actings of a party may afford real evidence of his acceptance of a trust, perhaps also a question of some nicety might be raised, whether the actings of co-trustees, homologating and ratifying the deed by which one of their number had executed an assumption of new trustees, did not infer that they were truly parties concurring in such deed of assumption, or ratifying it effectually. I do not, however, mean to offer any opinion on such a question, as there are considerations of difficulty involved in it, and there are not facts in this case sufficient to make it necessary to decide the point.

I have no doubt that there is sufficient evidence of acceptance. As for the plea of jus tertii, I think it quite out of the question.

Lord Gillies.—I think the acceptance of the trust by Major M'Kay is sufficiently established. There were two actions raised against the trustees in which appearance was made for him; and he was besides a legatee to the extent of £1000. I am not at all prepared to say, that the legacy was so bestowed as to leave it open to him to decline the office of trustee and executor after accepting the legacy. Then there is the series of correspondence importing his accepting and acting. For example, on the 17th January, 1823, he himself writes to Rollo in reference to the compromise which they, as Campbell's trustees, were then proposing to make with Mackenzie. “If Mr Mackenzie wish for a compromise, would it not be much better for him at once to furnish a memorial or statement on the subject, explanatory of the nature and extent of the service he had rendered, in order for ourselves, in the first place, to consider the matter, which he will be called upon to do, before the subject be taken into consideration by any other person or persons.” This is a positive and express statement of himself as executor and trustee, and he could have no other meaning. The rest of the correspondence is of similar import. But as he accepted, and no power or prescribed form of resigning was specified in the trust-deed, I think he could not effectually cast off the trust at pleasure. And I am not satisfied, in point of fact, that he ever executed an effectual deed of renunciation of the trust, even if he had possessed the power to do so. In these circumstances, the deed of assumption executed by Rollo alone was ultra vires, as the power to assume a trustee, with all the privileges under the trust, could only be exercised in terms of the trust-deed by the major number accepting and surviving at the time; and, of course, not by one trustee out of two. But there is another objection, which I also think fatal. There is no room for exercising the power of assumption, except to fill up a vacancy created by death or non-acceptance. Now there was only one such vacancy at the time of Rollo's deed, as Malcolm alone had not accepted, and yet Rollo assumed two trustees into the trust. In regard to the circumstance, that the pursuers have acted for many years in the administration of the trust without challenge, that cannot cure the deed of assumption, and no deed of assumption could be effectual unless executed in terms of the trust. It does not appear that the defenders in this action acknowledged the pursuers to be trustees; and, on the whole, I am clear for adhering.

Lord Mackenzie.—Perhaps I may observe, in reference to a part of what has just been said, that I am not prepared to lay down the general proposition that, if a party has once accepted a trust, under a trust-deed which contains no special power or prescribed method of resigning the trust, it must be incompetent for such party to resign effectually, even where all the co-trustees, and all the parties beneficially interested in the trust, concur. I am not prepared to affirm so broad a principle without farther consideration, and I do not think it necessary for the decision of this case.

The Court adhered, but refused to give additional expenses.

Solicitors: Davidsons and Syme, W.S.— J. Pedie, Junior, W.S.—Agents.

SS 13 SS 1082 1835