Scottish Court of Session Decisions

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Cite as: [1867] ScotLR 3_291, [1867] SLR 3_291

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SCOTTISH_SLR_Court_of_Session

Page: 291↓

Court of Session Inner House Second Division.

Lord Cowan

3 SLR 291

Leighton's Trustees

v.

Leighton and Others.

Subject_1Trust
Subject_2Powers of Trustees
Subject_3Actual Payment
Subject_4Resolution to Pay—Vesting.
Facts:

Circumstances in which held that trustees having formally resolved to bring an action of multiple poinding for winding up the trust, the share of a beneficiary dying before the action was raised, had vested.

Headnote:

Alexander Leighton, tenant in Drumcairn, by his trust-disposition directed his trustees to hold his estate for behoof of his three sons equally, either paying them the income of their shares, or buying annuities for them, or making money advances to them on any fit occasion. The shares were not to vest until payment. The advances were to bear interest until repayment or readjustment, the trustees having the power to enforce repayment when they thought proper. The testator died in 1857. At that date two of the sons, Robert and Stewart Leighton, had had advances made to them by the testator himself, which were to be reckoned against them in accounting to them for their shares of the trust-estate. The trustees, during their management of the trust, made advances to the sons at various times. They gave over the crop and stocking of certain farms to Stewart, taking his bond for the amount, and in 1860 the advanced him a sum of about £3000, to enable him, jointly with his brother George, to buy a property called Westerton. Altogether Stewart's advances amounted to more than a third of the trust-funds. Stewart Leighton died in February 1865. This multiple poinding was raised in October following. The question was, whether Stewart's share of the trust-estate had vested in him before his death, so as to be carried by his disposition and settlement to Mrs Soutar, who claimed in the action as his disponee?

The Lord Ordinary (Barcaple) held, on a view of the whole circumstances of the case, looking to the state of accounts, and to the minutes of the meetings of the trustees, that vesting had taken place. In 1861 the trustees had contemplated bringing the trust to an end, and had taken legal advice as to their power to do so, while in November 1864 they “resolved to institute an action of multiple poinding, in order to obtain a free and indisputable discharge of their trusteeship.” The Lord Ordinary held this to be a distinct resolution by the trustees, never departed from, to wind up the trust immediately, on the footing of making over their shares to the sons absolutely. He therefore sustained Mrs Soutar’s claim.

Robert, one of the surviving sons of the testator, reclaimed.

Young and Broun for him.

Gifford and Spittal for Mrs Soutar.

At advising,

Judgment:

Lord Cowan said there was no doubt that the provisions of the trust-deed were somewhat peculiar, and unusual powers were conferred upon the trustees, who might, in the event of any of the sons misconducting themselves, limit their right in the estate. But, in the circumstances in which the case had arisen, he thought the Lord Ordinary was right, and that the shares had been vested at all events some time before the death of Stewart. It was contended that the advances were to be repaid, and that, therefore, they had not vested. Now, it was quite possible that, at an earlier period, these sums might have been re-demanded; but the question here was, what was the state of

Page: 292↓

matters when Stewart died? It was plain, from the minutes of the trustees, that for some time they were preparing to close the trust. In April 1864 they were ready to pay over finally if they had the power. After getting advice that they had power, they resolved to raise an action of multiple poinding for their own exoneration, and at the same time recommended the sons to adjust the trust accounts so that there might be as little delay as possible. It was probably owing to this recommendation that the delay in the dual raising of the action took place, but that delay was not to affect the rights of the parties. The action was necessary for exonerating the trustees; and although the powers of trustees in management of a trust may be, as here, very large, it does not follow that the rights of the beneficiaries are to be prejudiced by delay, on the part of agents or others, in carrying out the resolutions of the trustees No doubt, the clause of vesting was very strong, but after the resolution of the trustees in November 1864, it could not be held that Stewart's share had not vested in him. His Lordship could not give effect to the contention of the reclaimer, that even after the action was raised, it would still be competent for the trustee to interfere, and refuse payment to any of the sons.

Lord Benholme and Lord Neaves concurred. The Lord Justice-Clerk not having been present at the hearing of the case, did not take part in the advising.

Counsel:

Agent for Leighton— T. Sprot, W.S.

Agents for Soutar— Mackenzie, Innes, & Logan, W.S.
1867