Scottish Court of Session Decisions

This was an action by Sir Maurice Duff Gordon of Fyvie, Aberdeenshire, against the trustees of the deceased Charles Gordon of Fyvie, in which the pursuer sought to have it found and declared that a trust created by Charles Gordon had lapsed, and that the trustees were bound to make over to him the entire trust-estate as heir-at-law.

In 1849 Charles Gordon of Fyvie was heir of entail in possession of the entailed estates of Fyvie in Aberdeenshire, and Maryculter in Kincardineshire, under an entail executed in 1811 by the Honourable General William Gordon of Fyvie.

In that year, 1849, Charles Gordon desired under the powers of the Entail Amendment Act 1848 (11 and 12 Vict. cap. 36), to disentail Maryculter. He, as heir in possession, entered into a contract in October 1849 with his three sons, the three next heirs then entitled to succeed, and whose consents were necessary to the disentail, on the narrative that he had applied, with their consents, for authority to disentail Maryculter, whereby he agreed that on the proposed disentail of Maryculter being carried through he or the heir who might be in possession of the entailed estate at the time of the completing of the disentail should immediately convey the said lands and estate to trustees with certain powers as to management, and particularly with power to sell, and for the purposes of (1) payment of the expenses of the trust; (2) that the capital of the price obtained from the sale of the disentailed lands should be laid out in paying the capital of the debts affecting the entailed estate, if any there might be, but not in payment of provisions to wives, etc., these being payable out of the rents; “( Third) The said price or prices shall be applied in the purchase of land lying as nearly contiguous as can be got to the lands and estate of Fyvie, and judged to be a valuable addition to the entailed estate, and the said lands, when purchased, shall be conveyed by the said trustees to the heir of entail in possession of the estate of Fyvie at the time, and to the heirs succeeding to the said entailed estate, with and under the whole provisions and conditions of the foresaid deed of entail by the said Honourable General William Gordon of Fyvie, and which lands so to be acquired by the said trustees shall be purchased by them at the sight and with the approbation of the heir of entail in possession of the entailed estate of Fyvie for the time, or of the factor or manager appointed by him; ( Fourth) Until a proper opportunity for investing the said price or prices in the purchase of land as aforesaid, the said trustees shall invest the same, or such part thereof as may not at the time be laid out in the purchase of land, upon such security as may appear to them to be adequate and sufficient at the time, and which investment shall be made in their own names, and they shall be entitled to uplift the sums so invested, and to re-invest the same as they may think proper.”…

In fulfilment of this arrangement a trust-disposition was executed in January 1850 by Charles Gordon, proceeding on the narrative that he had entered into the contract of 1849 with his three sons, that the disentail had been executed, that the approval of the Court to the procedure was forthwith expected, and that the steps necessary for completing the disentail would forthwith be carried through, so as to vest the lands of Maryculter in his person in fee-simple. He accordingly conveyed and made over to trustees, for the purposes of the contract of 1849, the lands and estate of Maryculter.

The trustees accepted office and completed their title to the disentailed lands of Maryculter. No suitable lands contiguous to the estate of Fyvie having been secured by the trustees, Maryculter remained unsold, and the income was paid by the trustees to the heir in possession of Fyvie. At the date of this case the trustees were P. H. Chalmers and Sir Maurice Duff Gordon (the pursuer himself).

In 1884 the pursuer of the present action, who was a grandson of a younger brother of the said Charles Gordon, succeeded, as heir of entail, to the estate of Fyvie. In April of the same year he executed an instrument of disentail of the lands of Fyvie, which was recorded in the Register of Entails under the authority of the Court on 8th May 1884.

In October 1884 the present action was raised by Sir Maurice Duff Gordon against the surviving assumed trustees under the trust-disposition of Charles Gordon, and also against the three heirs called to succeed under the aforementioned entail of 1811, in their order next after himself.

The pursuer sought by the conclusions of his summons to have it found and declared that the trust created by Charles Gordon's trust-deed of 1850, had, as regarded the 2d and 3d purposes, lapsed and become inoperative, and that the defenders, the trustees thereunder, were bound to denude thereof in his favour, and make over the trust-estate to him. Alternatively he sought declarator—“( First), that the trust-estate conveyed by and held under the said trust-disposition and relative deeds of assumption is held by the said Patrick Henderson Chambers and Sir Maurice Duff Gordon, as

Page: 674↓

trustees foresaid, in trust for the purpose of selling the same, or so much thereof as may be necessary, and out of the capital of the price or prices obtained therefrom, of paying off the capital of the debts which affected the lands and estate of Fyvie and others in the county of Aberdeen, at the date of the disentail thereof on the 8th day of May 1884, other than the provisions to wives and children, which in terms of the entail of the said lands and estate of Fyvie and others must be paid out of the rents or other annual income; and the said Patrick Henderson Chalmers and Sir Maurice Duff Gordon, as trustees foresaid, ought and should be decerned and ordained, by decree foresaid, forthwith, or in due course of realisation, to sell the said trust-estate, or so much thereof as may be necessary for that purpose, and either to pay off the capital of the said debts or to make payment to the pursuer of the sum of £23,000 sterling, or such other sum, less or more, as shall be ascertained in the course of the process to follow hereon to be the amount of the debts affecting the said lands and estate of Fyvie and others falling within the second purpose of the said trust; and ( Secondly), It ought and should be found and declared that quoad ultra the said trust-estate is held by the said Patrick Henderson Chalmers and Sir Maurice Duff Gordon, as trustees foresaid, in trust for the pursuer and his heirs and assignees, or otherwise, in trust for the pursuer and the series of heirs who would have succeeded after him to the said lands and estate of Fyvie, under the disposition and deed of entail thereof granted by the deceased Honourable General William Gordon of Fyvie, dated 30th April, and recorded in the Register of Tailzies 12th June, and in the Books of Council and Session 12th September, all in the year 1811.”

He maintained that the trust erected by Charles Gordon had come to an end, and alternatively, if it should be held that it still continued, that the trustees held in trust for him, and at all events did so to the extent necessary to pay off the debt secured on Fyvie at the date when it was disentailed.

He averred that the debt affecting Fyvie at the time it was disentailed amounted to £19,088, 9s. 2d., also that Fyvie was the leading family estate, the rental being £8000, while that of Maryculter was £1200.

He pleaded—“(1) The second and third purposes of the said trust having become inoperative through the disentail of Fyvie, and none of the defenders having any right or interest to insist on the exact fulfilment of the trust, the pursuer, as heir-at-law of the truster, and also as the person who would have been heir in possession of Fyvie under the entail thereof, is entitled to have decree of declarator and denuding in terms of the first alternative conclusions. (2) Alternatively, if the trust falls to be carried out according to its terms, the pursuer, as proprietor of the formerly entailed estate of Fyvie, and creditor in the obligation incumbent on the trustees under the second purpose, is entitled to have the Fyvie debt paid off or provided for in terms of the conclusions thereanent, and on a sound construction of the trust-deed he is, in the event which has happened, entitled to decree in terms of one or other of the remaining conclusions.”

The trustees lodged defences stating that they occupied a neutral position, and would execute the trust of 1850 as the Court might ordain.

They pleaded that all parties were not called, in respect that though the pursuer had called the three heirs next after him in the entail he had not called the other substitutes, and a supplementary summons calling them was raised.

The three next heirs (to two of whom, as being in minority, Mr J. P. Bannerman, W.S., was appointed curator ad litem) stated—“The second purpose of the trust to which the payment of the price of Maryculter is to be applied has failed by reason of the disentail of Fyvie on 19th April 1884. The third purpose of the said trust has now come into operation, and the trustees now hold Maryculter in trust to sell the same and purchase lands to be entailed on the heirs called in the destination of the Fyvie and Maryculter entail of 1811. The trustees are bound to proceed in the execution of the said trust, using their discretion in carrying out the sale of Maryculter and the purchase and entail of other lands, unless the pursuer shall now proceed with an application to the Court to acquire the lands in fee-simple under the Rutherfurd and subsequent Entail Statutes.

They pleaded—“(1) The estate of Fyvie having been disentailed, the second purpose of the trust-deed of 1850 has failed, and the trustees are not entitled to apply any part of the price of Maryculter, when sold, in disburdening the fee-simple estate of Fyvie. (2) The third purpose of the trust-deed of 1850 having come into operation, the trustees are bound to apply the price of Maryculter, when sold, in the purchase of lands to be entailed on the heirs called in the destination of the Fyvie and Maryculter Entail of 1811, and meantime to hold the Maryculter estate for these heirs.”

On 21st November 1885 the Lord Ordinary repelled the pleas-in-law for the pursuer, and assoilzied the defenders.

“ Note.—The pursuer brings this action in two characters, that of heir-at-law of Charles Gordon, the granter of the trust-disposition, and that of proprietor in fee-simple of the disentailed estate of Fyvie. The first conclusion of the summons is maintainable solely in the character of heir-at-law. For under this conclusion the pursuer seeks to have it declared that the trust created by Charles Gordon's trust-disposition of 1850 has become inoperative in all its purposes except the first (which relates to the payment of expenses), and has lapsed, and that the trustees are bound to make over the entire trust-estate to him as heir-at-law. The pursuer's contention on this head appears to me to be quite untenable.

The second purpose has failed by reason of the disentail of Fyvie, but the third is in my opinion still subsisting and effective. If the trust-disposition had been purely gratuitous I should still have thought that it subsisted, notwithstanding the disentail of Fyvie, for the benefit of the persons who would have been entitled to succeed to that estate under the destination of 1811. For although this specific purpose of the trust cannot now be achieved in the precise form and manner prescribed, there remains the general purpose which is still perfectly attainable and effectual, viz.—the settlement of the estate of Maryculter, or its proceeds, for the benefit of the heirs of entail of Fyvie. But the trust-disposition was not gratuitous, but was made in performance of an agreement

Page: 675↓

between Charles Gordon, the granter of the deed, who was then heir in possession under William Gordon's entail of 1811, and his three sons, who were the heirs next entitled to succeed in their order to the entailed estate.’ By this agreement the estate of Maryculter, which till then had been held along with Fyvie under the entail 1811, was disentailed and conveyed to trustees for the purpose of clearing off debt affecting the entailed estate, and secondly for the purpose of selling Maryculter and buying lands in the neighbourhood of Fyvie, to be added to that estate, and held along with it under the conditions of the entail. There can be no question as to the position of Charles Gordon under this trust-deed. As the Lord President explains in the case of L. Fincastle v. Dunmore, 3 R. 345, he was no longer fee-simple proprietor. He had divested himself of that character, and he was beneficiary under this trust, and institute in the deed of entail to be executed by the trustees when they had sold’ Maryculter and acquired other lands. He was thus in the position, as the pursuer is now in the position, contemplated by the 27th section of the Entail Amendment Act. The pursuer is entitled to demand a conveyance of the trust-estate, provided he complies with the conditions of the Entail Amendment Act; but he cannot obtain such a conveyance upon any other terms. For the heirs under the entail of Fyvie have a jus quæsitum under the trust-deed, and there can be no question as to the nature of their right. It is just the right of a series of heirs entitled to succeed in their order under a tailzied destination. For the trust-estate is, by virtue of the 27th section of the Rutherfurd Act, to all intents and purposes an entailed estate, subject to disentail, upon the same conditions as if a formal deed of entail had been executed of the date it bears. The interests of the heirs who are entitled to succeed to the pursuer may therefore be determined by a disentail in a proper application to the Court for that purpose, but in no other way. The notion that by disentailing Fyvie, the pursuer has extinguished the right of the heirs of entail in Maryculter, which he has not disentailed, appears to me to be extravagant. The same considerations are sufficient for the disposal of the alternative conclusions. The pursuer cannot, in my opinion, have the trust-estate applied in paying debts affecting his estate of Fyvie, because Fyvie has been disentailed, and in that condition of matters to pay off the debts on Fyvie would not be to execute but to defeat the trust by giving to the pursuer for his own exclusive benefit an estate in which he was intended to have only the interest of an heir of entail. The decree which is asked would simply give the pursuer the benefit of a disentail without his being required to satisfy the conditions upon which a disentail may be obtained. It is said that if the action fails the result will be to give the heirs an interest in the trust-estate which was not contemplated by the trust-deed, or by the agreement on which it followed, since it was not intended that they should have any higher right in Maryculter than the existing entail gave them in Fyvie. But their interest in each estate is precisely the same so long as both entails subsist. If the conditions upon which the two estates are disentailable by an heir in the position of the pursuer are different, that arises from the operation of the Entail Amendment Act.

It was impossible to make a trust for entailing land in 1850 which should not be subject as regards disentailing to the conditions applicable to entails dated after 1848.

The second alternative of the last conclusion of the summons expresses accurately the general purpose for which the trustees now hold the estate; but as this part of the conclusion is dependent upon the first part, it is unnecessary to qualify the absolvitor.“

The pursuer reclaimed, and argued that he was entitled to succeed under the first conclusion of the summons, and to have the debts of Fyvie cleared off. It was clear that the second and third purposes of the trust-disposition had failed, and it was no objection to what the pursuer was here asking that he himself had disentailed the lands which he wished to clear from debt. The trust had lapsed— Love's Trustees v. Love, Dec. 19, 1879, 7 R. 410, 24 D. 1191. Having failed in its second purpose, there was clearly no existing trust, and the estate of Maryculter resulted to the pursuer as heir-at-law of the truster. The truster's purpose was to benefit the estate of Fyvie by payment of debts, and by adding to the estate. It was not to confer a benefit on any specific legatee. All through the trust-deed this could be seen to be its essential purpose. But the truster overlooked the fact that Fyvie could be disentailed, though the trust-deed in 1850 made a new entail as regards Maryculter, which could not be disentailed as Fyvie could be. If, however, the trust-deed and the agreement on which it proceeded failed, then the pursuer must be heir of entail under the old (1811) entail of Maryculter. But again, if it were considered that the trust-disposition alone failed, while the agreement embodied in the contract of 1849 remained in force, then the pursuer was fee-simple proprietor of Maryculter, subject only to the agreement. That agreement was satisfied by the trust-deed. The parties took the risk of the trust-deed failing to defend the agreement. If it had failed to do so nothing more could be enforced under the agreement. Either you cut down the trust-deed and then the pursuer succeeded as heir-at-law of the truster Charles Gordon, or you put all parties into the position that existed before 1849 by cutting down both the agreement and trust-deed of 1849, and then the pursuer succeeded as heir of entail of Maryculter under the old entail of 1811. Even assuming that the general scheme of the trust had failed, still if the Court were of opinion that so far as possible the purposes of the trust-deed ought to be carried out, then the debt on Fyvie must be paid. If it were decided that Maryculter must be re-entailed on the heirs named in the Fyvie entail, then by the same reasoning debt on Fyvie must be paid. The estate of Fyvie had a jus crediti over the trust estate of Maryculter. The arguments against this purpose ( i.e., the payment of Fyvie debts) still subsisting all told against any of the purposes of the trust subsisting. According to the Lord Ordinary, the pursuer the day before the disentail of Fyvie in 1884 could have had the debts on that estate paid and then disentailed it, but now after the disentail he could not ask the trustees to pay those debts. Was he to forfeit

Page: 676↓

£23,000 merely owing to the procedure he had adopted;—(4th section of Rutherfurd Act.) If it were argued that the only debts to be paid by the trustees were those due in 1850, the answer was that this would not be in accord with the main purpose of the trust-deed, which is the benefit of Fyvie. The trust-deed met the events which happened and satisfied the principle of Lord Stair's case—(Lord Stair's case, 5 Shaw 449, and 2 W. & S. 414, 614) Gordon v. Gordon's Trustees, March 2, 1866, 4 Macph. 501.

Replied for respondents—In interpreting the clause containing the third purpose of the trust-deed the Court must look at the contract contained in the trust-disposition and agreement. When there was no specific time fixed for the implement of the trust, then the result was that the Court must consider a year to be the time within which the trust must be implemented. Hence the Court must suppose Maryculter sold in 1851, and a new estate then re-entailed on the same series of heirs as those named in the 1811 entail. The above referred to case of Stair, and such cases, went upon the intention of the truster. In the case of Dickson's Tutors v. Scott, November 2, 1853, 16 D. 1, accumulation was ordered by a deed, and the Court decided that such accumulation should go on for one year. In 1851, one year after the trust-deed, and for nine years later, there were no debts upon Fyvie, and therefore the second purpose of the trust-deed failed, and the third purpose came into force. The 3d purpose was in force, though some of its clauses could not be fulfilled. These clauses were not essential, and the third purpose must stand— Lord Lonsdale v. Countess of Berchtoldt, 3 Kay and Johnstone 185; and Gordon v. Gordon's Trustees, above referred to. In 1850 a new entail of Maryculter was directed, and the date of the trust-deed must be considered as the date of new entail— Graham v. Stewart, March 15, 1852, 15 D. 558, and 5 M'Queen 295— Balgowan case. Further, Lord Fincastle v. Lord Dunmore, January 14, 1876, 3 R. 345. The main object of the trust-deed was to strengthen the estate of Fyvie for the benefit of a certain series of heirs. The pursuer could not take the advantage of the second purpose of the trust-deed, i.e., the payment of debts upon Fyvie, for that would be for his benefit alone as an individual, since Fyvie had been disentailed, and this would defeat the true purpose of the trust-deed, which was not to benefit one individual but a series of heirs.