Scottish Court of Session Decisions

The Educational Endowments Act 1882 provides, section 13—“In framing schemes the Commissioners shall save or shall make due compensation for the vested interests of individuals holding any office, place, employment, pension, compensation allowance, bursary, or emolument under or arising out of the educational or other endowment at the date of the passing of this Act, and shall provide that no funds now applied in terms of the founders’ directions to free elementary education shall be diverted to any other purpose, except to the extent to which such funds are manifestly in excess of the requirements for the purpose of free elementary education of the localities to which they belong. ‘Elementary education’ shall mean such education as may be given in the State-aided schools of Scotland pursuant to the provisions of the Education (Scotland) Act 1872, and in terms of the minutes of the Scotch Education Department in force for the time being with respect to the administration of the Parliamentary grant for public education.” Section 15 provides—“In framing schemes it shall be the duty of the Commissioners, with respect alike to the constitution of the governing body and to educational provisions, to have regard to the spirit of founders' intentions, and in every scheme which abolishes or modifies any privileges or educational advantages to which a particular class of persons is entitled, whether as inhabitants of a particular area or as belonging to a particular class in life or otherwise, they shall have regard to the educational interests of such class of persons: Provided always, that where the founder of any educational endowment has expressly provided for the education of children belonging to the poorer classes, either generally or within a particular area, or otherwise for their benefit, such endowment for such education or otherwise for their benefit shall continue, so far as requisite, to be applied for the benefit of such children.” And section 30 provides—“If the governing body of any endowment to which a scheme relates, or any person or body corporate directly affected by such scheme, feel aggrieved by the scheme on the ground of the scheme being one which is not within the scope of, or made in conformity with this Act, …. such governing body, person, or body corporate may, within one month after the first publication of the scheme or amended scheme, submit a Case to the Court of Session, to which the Commissioners shall, and any others directly interested may be parties, for the opinion of the said Court on the question or questions therein stated; and if the Court is of opinion that the scheme is contrary to law on any of the grounds in this section mentioned, the Scotch Education Department shall not approve thereof, but they may, if they think fit, remit the same to the Commissioners with a declaration as hereinbefore provided. Subject to the provisions of the immediately succeeding section, a Case submitted under this section shall be framed, lodged, amended, heard, and otherwise dealt with in the same manner, as nearly as may be, as a Special Case presented in terms of the sixty—third section of the Court of Session Act 1868.”

This was a Case presented to the Court of Session under section 30 of the Educational Endowments (Scotland) Act of 1822, in which the Court was asked to determine whether a scheme proposed by the Commissioners appointed under the said Act for administering a trust left by the late William Forrest of Meadowside, was, in the particulars set forth in the Case, not within the scope of, or made in conformity with, the said Act, and was contrary to law. The truster died on the 23d May 1860, leaving a trust-disposition and deed of mortification executed on 6th March 1858, which proceeded on the narrative that he was desirous “of promoting, providing, and supplying the means of a common elementary education to a limited number of poor or destitute children, or labourers' or workmen's children, who may be in hazard of not receiving an elementary education, and assisting a few young men who might be in want of means for obtaining a more advanced education.” The trustees and governing body of the mortification were the Sheriff-Substitute of Lanarkshire at Airdrie, the minister of the parish of New Monkland, the minister of the quoad sacra parish of Clarkston, the minister of the West Church at Airdrie, and the Provost of Airdrie ex officiis.

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By the first purpose of the deed £150 was to be set aside yearly to aid in promoting the education of 150 destitute children, or such children as required aid to acquire an elementary education, 100 of whom it was provided were to have been born or to have resided three years within the bounds of the burgh of Airdrie, and the remaining 50 were to have been born or to have resided three years within the parish of Clarkston. This sum of £150 was burdened with several liferents. The only other clause of the trust-deed which requires to be referred to for the purposes of this case was the fifth, being the clause of residue, by which the truster provided that should the residue amount to a sum of more than £30 sterling yearly, it was to be laid out and applied in the education of “an additional number of children as aforesaid, who may be in danger of not receiving a common or elementary education.”

The annual income derived from the trust—estate had averaged for the four years preceding the present case £495 or thereby of permanent income, and in addition there was a fluctuating revenue of about £206 or thereby derived from the interest obtained from the price of minerals which were being worked, from which source about £1000 had been funded.

When the trust came into operation £69 only was applicable for its educational purposes, but in 1874 an additional sum of £30 became available, and since that date £66 per annum had been devoted to the elementary education of children in Airdrie, and £33 for the like purpose in Clarkston. This sum of £99 was the whole amount applied for the purposes of free elementary education under the trust-deed. The amount of the annuities still outstanding was at the date of this case £81, and this with the £99 made up the sum of £180 provided by the first and fifth purposes of the trust-deed.

The Commissioners appointed under the Educational Endowments Act framed a scheme for the administration of Forrest's Trust, and submitted it to the Scotch Education Department in terms of the Act.

The scheme contained, inter alia, the following provisions:—(23) That the governors, after paying the necessary expenses of management and burdens and taxes affecting the endowment, should (a) set aside free income to the extent of £150 for the educational purposes thereafter detailed, out of which sum the existing annuities were to be met; and (e) that any surplus of revenue was to be devoted along with the £150 to the educational purposes detailed in the scheme. “The governors shall apply the sum of £100 yearly in paying, in whole or in part, as they may think fit, the fees of scholars, with books and stationery, at public or State-aided schools in the burgh of Airdrie and in the parish of Clarkston, in the proportion of two-thirds in the burgh of Airdrie and one-third in the parish of Clarkston, for elementary education as defined in the Educational Endowments (Scotland) Act 1882. The free scholars shall be children whose parents or guardians, not being in receipt of parochial re lief, are in such circumstances as to require aid for providing elementary education, and are persons who in the opinion of the governors ought not to be required to apply to the parochial board for such aid.” One-third of the children were to be children under ten, and the other two—thirds children over ten, the latter to be selected by competitive examination. Then followed certain provisions as to the payment of school fees in the case of children under and over ten years of age.” 24. The governors, after satisfying the provisions of the immediately preceding section, shall apply two-thirds of the remaining funds … in establishing school bursaries, to be called the Forrest School Bursaries, each of the yearly value of not less than £5 nor more than £10. These bursaries shall be awarded by competitive examination, in the proportion of two-thirds in the burgh of Airdrie and one-third in the parish of Clarkston, among children attending the public or State-aided schools in the burgh of Airdrie and parish of Clarkston who have passed the fifth standard of the Scotch Code, or such standard as may from time to time be fixed by the Scotch Education Department, pursuant to the Education (Scotland) Acts, as that entitling children to total exemption from the obligation to attend school, and whose parents are in such circumstances as to require aid for giving their children a higher education; these bursaries shall be tenable for two years at public or State-aided schools in which efficient instruction is given in the higher branches.” “25. The governors shall apply the remaining third of the said funds in founding bursaries, to be called the Forrest Bursaries, each of the yearly value of not less than £10 nor more than £15. These bursaries shall be awarded by competitive examination among pupils attending public or State-aided schools in the burgh of Airdrie and parish of Clarkston whose age at the date of the competition shall not exceed fourteen years; they shall be tenable for such period, not exceeding three years, as the governors may determine, at such schools for higher education or technical instruction as they may approve.”

The present Case was presented under section 30 of the Educational Endowments Act 1882 by the School Board of Airdrie, the School Board of Clarkston, and the Provost, Town Council, and Magistrates of Airdrie, who were the parties of the first part, against the Commissioners appointed and acting under the Educational Endowments Act of 1882, who were the parties of the second part.

The first parties averred that they were bodies corporate directly affected by the said scheme, and that they felt aggrieved because the scheme was not within the scope of, or made in conformity with, sections 13 and 15 of the Act. They contended that the proposed division of the sums provided by the first and fifth purposes of the trust for the furtherance of elementary education was a violation of the express directions of the truster, and was not warranted by the statute; and in the second place, that the proposed division was contrary to section 13, in respect that it was in effect a division of funds now applied in terms of the founder's directions to free elementary education, which funds were not in excess of the requirements of the localities for that purpose—that the amounts to be expended on elementary education should not be reduced below £180 per annum, and that the scheme had not regard to the spirit of the founder's intentions, and was otherwise contrary

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to the provisions of the 15th section.

The Commissioners, although they became parties to the present Case, took objection to the title of the first parties to submit the Case to the Court, as not being the governing body of the endowment in question, and as not being bodies corporate directly affected by the said scheme. This objection was met by the governing body sisting themselves during the hearing of the cause as parties to the Case.

Argued for the second parties—On the question of title, school boards could not in any sense be called bodies corporate affected by the proposed alterations, and therefore they had no locus standi under section 30. They could not plead that they bad in any way suffered by the scheme, and have no title to present this Case apart from the governing body. There was no question of law in the Case, only one of expediency. 2d. On the merits, the proposed scheme was not antagonistic to Sections 13 and 15 of the statute, and the sum provided under it for free elementary education was more than the amount at present devoted to it. The proper meaning of the words in section 13, “no funds now applied,” is no funds when the Act came into operation. The Commissioners had a discretionary power to alter the particular directions of the founder so long as they do not alter the spirit of his intentions. The changes here proposed were within the scope of the Act.

Argued for the first parties—On the question of title, the objectors had a good title to interfere, and this was acknowledged by the Commissioners, in so far as a member of each of the objecting school boards was among the members proposed for the new governing board. The words “directly affected” were equivalent to “had a title to call to account” in law apart from the statute. For a somewhat similar case see Merchant Company of Edinburgh v. Heriot's Hospital, M. 5750. 2 d. On the merits, the proposed scheme was virtually a breach of trust; the money was being diverted by it from the poorer classes of Airdrie—see Magistrates of Dundee v. Morris, 23 D. 493. The scheme was not in conformity with the Act, in respect that it contravened sections 13 and 15, and the Commissioners were acting ultra vires in the alterations they proposed to effect. The meaning of the truster was that his whole funds, less the annuities and bursaries, were to be directed to elementary education. Under the scheme the birth and residential qualifications dropped out, and mere attendance at school was to take its place. No doubt the statute gave the trustees a very ample discretion, but as they had exceeded that discretion the objectors were entitled to use the statutory remedy.

At advising—