Scottish Court of Session Decisions

This was an action raised by Archibald Allan and others, parishioners of and residenters in the parish of Tranent, and having an interest in the due management and administration of Stiell's Hospital, against the Rev. William Cæsar, minister of Tranent, and others, the acting trustees or Governors of the hospital. The object of the action was to enforce the trust-disposition and settlement of the founder, and to have it found and declared that certain changes on the rules for the management of the endowment were illegal, and in violation of the fundamental purpose of the charity. It was further asked that the defenders should be ordained to lodge in process the draft of a scheme for the administration of the trust, or that the Court should make a remit for that purpose.

The truster George Stiell died in 1812, leaving a trust-deed, dated 27th January 1808, by which he provided that the yearly interest and profits of the residue of his estate should be “applied in founding and endowing an hospital or charitable institution within the village of Tranent, or in its immediate vicinity, in the county of East Lothian, and for the aliment, clothing, and education of poor children for ever,” to be always called “George Stiell's Hospital.” After making this provision, the testator proceeded in his trust-deed to give express directions as to the manner in which the trustees were to act in carrying out that fundamental purpose. They were directed immediately to acquire ground for the hospital, and to acquire sitting-room in the parish church of Tranent for the accommodation of the boys and girls to be admitted into the hospital, and for the master, assistants, mistress, and servants. The hospital was directed to be built with accommodation for thirty children, or a larger or lesser number according to circumstances, and for a master, assistants, and servants, and with a schoolroom for the education of these children, and of sixty children or a larger or lesser number as should be deemed expedient to be admitted as day-scholars. As soon as the hospital was fit to be possessed, the trustees were directed to select from the parish of Tranent sixty boys or girls, or a larger or lesser number according to circumstances, and to admit them into the day-school, where it should be the duty of the master or rector and his assistant to teach them the English language, writing, and arithmetic. When the yearly rents and profits should be more than sufficient to defray the salaries of the rector and his assistants, servants' wages, and expenses “of managing and maintaining the said establishment and hospital as a day-school,” the trustees were directed from time to time to choose from the residenters for at least three years in the parish of Tranent and to admit into the said hospital as many boys and girls as the surplus of the said yearly revenues would afford to maintain, clothe, and educate, who were to be clothed and maintained in the hospital, and to be educated in the day-school of the hospital. The trust-deed provided for the appointment of a mistress or governess, who was to act as housekeeper, and of a surgeon to attend any of the members of the hospital who might be sick; and it contained various minute directions for the management of the hospital. And lastly, the trustees were empowered “from time to time, as they shall see cause, to make such alterations, amendments, improvements, or additions to the rules laid down by me for the management of the said hospital and public school, they always keeping in view the original intention of the said charitable institution.”

The pursuers averred that the trustees had recently changed the whole character and constitution of the charity, in violation of the original intention of the truster, and that they had diverted, and were diverting, a large amount of the trust-funds from the class of poor children intended to be benefited, and had misapplied them in providing at low fees a cheaper and higher class education, embracing Latin, Greek, mathematics, and other branches, for the children of parents who were able to procure and pay for such higher class education at other educational establishments in the parish of Tranent or its neighbourhood. It was averred that in order to carry out these alterations the trustees had ceased to clothe, maintain, and educate any poor children as boarders in the hospital; and that not only had the number of poor day-scholars been restricted very far below the number to which the funds of the hospital if applied in accordance with the intention of the founder would have given education, but that nearly the whole services of the master or rector were devoted to the tuition of the children whose parents paid the fees charged.

The trustees answered, inter alia, that “about 1869 the question of education was much discussed in consequence of the several measures introduced into Parliament, both with reference to parochial schools and endowed schools, and a considerable outcry was raised against the monastic system of training children. It then occurred to the defenders that were a change made in the system of management and the regulations of the hospital, its usefulness, instead of being impaired, would be very much increased, while it would still remain in keeping with the original intention of the institution. Accordingly a report was obtained by the trustees from Mr Simon S. Lawrie, the secretary to the Education Committee of the Church of Scotland, and the trustees took into consideration the best mode of amending the regulations, with the view of increasing the usefulness and efficiency of the institution, in accordance with the intention of the founder. The changes recently introduced by the

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trustees were so introduced after frequent and careful deliberation, and in order to adapt the institution to the altered state of circumstances both in the neighbourhood of Tranent and elsewhere. The said changes were thought proper and necessary for the efficient management of the institution, keeping in view the original intention of the truster's bequest. These changes were—(first) The raising of the salaries of the master, assistant, and mistress or governess; (second) The addition of a female teacher for elementary branches, which was urgently required, and of a teacher of music, on the footing formerly explained, which was also very much wanted; (third) The admission of children as day-scholars on payment of fees, but without prejudice to the maintenance of the school as a free school for the same number of poor children as before; (fourth) The establishment of small bursaries tenable for three years. These bursaries were two in the elementary school, of the value of £2 per annum each, and two in the upper school, of £5 per annum each; (fifth) The discontinuance in the meantime of the practice of boarding and clothing a small number of children as inmates of the institution. This was done by arrangement with the parents of the inmates for the time. It is explained that the income of the trust was not more than sufficient to defray the salaries to the master, assistant, and mistress or governess, servants' wages, and other contingent and necessary expenses of managing and maintaining the said establishment and hospital as a day-school.”

The pursuers, inter alia, pleaded—“(1) The object and wish and intention of the said George Stiell, according to the just and true construction of his said trust-disposition and settlement, having been to afford gratuitous education to poor children of the parish of Tranent, and failing such children, of the adjoining parishes above named, for ever, the trust-funds ought to have been and to be applied to that purpose, and the pursuers should have decree in terms of the first declaratory conclusion of the summons. (2) The various changes and alterations made by the defenders on the constitution, management, and administration of the hospital and school being at variance with the wish and intention of the said George Stiell, were and are illegal and ultra of the defenders. (4) In respect the said institution is not being administered and managed in accordance with the will and intention of the said George Stiell, the Court ought to adjust and approve of a scheme or constitution for the future administration and management of the said institution, as concluded for.

The defenders, inter alia, pleaded—“(1) No title or interest to sue. (5) The defenders having acted in regard to the recent alleged changes in accordance with the powers conferred upon them by the will of the founder and trust-disposition and conveyance following thereupon, they should be assoilzied from the declaratory conclusions of the action.”

The Lord Ordinary repelled the preliminary pleas of the defenders, and further allowed the parties a proof of their averments.

The defenders reclaimed, and upon 5th February 1875 the First Division of the Court recalled the Lord Ordinary's interlocutor in so far as it allowed a proof; quoad ultra refused the reclaiming note, and remitted to Mr Kinnear, advocate, “to examine the minute-books, books of accounts, and all other books and writings connected with the administration by the defenders of the charity, and to receive the explanations and suggestions of both parties, and to report whether the administration of the defenders has been in conformity with the provisions of the founder's trust-disposition and settlement, dated 27th January 1808, or in what respects, if any, the defenders have departed from or acted contrary to the provisions of the said deed; and appoint the defenders to exhibit to the reporter the whole books and other writings above specified, reserving in the meantime all questions of expenses.”

In Mr Kinnear's report the history of the administration and conduct of the charity was detailed. It appeared that it was in 1870 that it first occurred to the trustees to make any material change in the management. They then drew up amended regulations and a prospectus with a view to carrying out the new system, both of which were brought under notice of the Court by the reporter. The facts bearing upon the proposed changes were commented upon at length, but are sufficiently set forth in the opinions delivered by the Court.

Authorities— Manchester School case, May 13, 1867, 1 Law Rep., Equity 55, 2 Law Rep., Ch. Apps. 497; Attorney-General v. Hartley, 2 Jac. and Walk. Ch. Reps. 353; Latymer's Charity, Jan. 16, 1869, 7 Law Rep., Equity cases, 353; Attorney-General v. Dean and Canons of Christ Church, Jac. Ch. Reps.; Harrow School case, 17 Vesey 491.

At advising—