Scottish Court of Session Decisions

The late William Davidson of Newhall died in December 1860 leaving a trust-disposition and settlement dated 21st May 1860, whereby he conveyed certain lands to trustees named therein. The truster provided, third, that the trustees should “make payment of a free yearly annuity of twenty pounds sterling to each of my two half-brothers, George Davidson, now or lately residing at Oyne, Pitcaple, and James Davidson, Dudwick, Ellon, if alive at the time of my death; declaring these two annuities to be also payable out of the revenue of my said estates, and during the lifetime of the respective annuitants: … Fifth, That the trustees should hold the said estates, and apply the free yearly revenue arising from the same, or such portion thereof as may be necessary, as after mentioned, for the benefit of the lawful descendants of my father, the deceased Alexander Davidson, I hereby direct and appoint my said trustees to apply the said revenue for preserving the aged and infirm among the descendants of my said father from want, or from the necessity of applying for public relief, and for obtaining for the young among the said descendants, both boys and girls, such a good, sound, plain, and useful education as will enable them to earn a livelihood for themselves—it being my desire that their religious education shall be carefully attended to, and that they shall be brought up in the principles of the Free Church of Scotland, with power also to my said trustees to maintain the young among the said descendants, either in family with their parents or otherwise, while at their education, and also during such time as they or any of them may be apprenticed by my said trustees to business, which my said trustees are hereby empowered to do; and I hereby declare that my said trustees shall not be entitled to apply any sum beyond twenty pounds sterling per annum for the benefit or relief of any one, either young or old, of said descendants, and that only while, in the judgment of my said trustees, he or she stands in need of it, in supplement of his or her own exertions.” The sixth purpose provided that in the event, which happened, of the free yearly revenue being more than sufficient for the foregoing purposes, the trustees were directed to accumulate and invest the yearly surplus until an opportunity should arise of purchasing land, which they were directed to do as soon as possible. The seventh purpose directed the trustees, after the expiry of the legal period during which the revenue could be accumulated, to divide the free yearly surplus into four equal parts which were to be paid to his brother and three of his sisters and their families per stirpes.

The estate had largely increased since 1860. The capital of the trust amounted to about £20,000, and for 1889 yielded a nett annual revenue of £580. For the year ending 30th June 1889 the expenditure under the fifth purpose was £195, 8s. 4d. With the exception of the annuity of £20 per annum to meet the annuity due to George Davidson, the other brother James Davidson having died, the whole of the nett revenue was now available for the fifth and main purpose of the trust-deed.

It was admitted that the trustees with the exception of one of their number had a direct personal interest in the surplus revenue under the seventh purpose of the trust-deed.

Upon the 11th December 1889 a petition was presented by Mrs Davidson or Ritchie and her children, and also by George Davidson, the truster's half-brother.

The petitioners stated that Mrs Ritchie was a granddaughter of the truster's father, and that her five children between the ages of 11 years and 4 months belonged to the class for whose benefit, maintenance, and education the trustees were appointed to apply the free revenue. She had no means of her own, and the wages of her husband, who was a cooper by trade, averaged no more than 18s. a-week when he was in employment, but from the nature of his work he was often out of employment for months at a time. He was desirous that his children should obtain an education of the character referred to by the truster. An application was made to the trustees in August 1888, and after inquiry the trustees agreed to give a sum of £3 to date and an allowance at the rate of £2 per month until further notice. That income was paid up to 15th April 1889, but on 17th July 1889 the trustees intimated that it would be discontinued for the future. After some further correspondence the trustees on 9th October 1889 agreed to a monthly allowance of £1, 13s. 4d., to run as from 12th September preceding. It was averred that this allowance was entirely inadequate to the wants of the children. Ritchie had been out of work for six weeks, and his earnings for the first eight months of the year were only £24.

Page: 532↓

In reducing the allowance and in refusing to allow anything for the period between 17th July and 12th September 1888 the trustees had not been acting reasonably in the discharge of their powers. The petitioners therefore craved the Court to fix the allowance to be made to the Ritchies at £24 per annum.

The other petitioner, George Davidson, was the half-brother of the truster mentioned in the third purpose of the trust. He now averred that he was seventy-eight years of age, that on account of his increasing age and infirmities he found this sum, which was his only means of support, to be inadequate to supply his necessary wants. He had applied to the trustees for an allowance under the fifth purpose, but they had refused the application. In doing so they were acting contrary to the spirit and directions of the truster in his fifth purpose. He therefore craved the Court to order him a further allowance of £10 per annum.

The trustees lodged answers, in which they stated that they had endeavoured to carry out the purposes of the trust, and had made what they considered adequate allowances in each case. Ritchie was out of work when they agreed to pay £24 per annum, and they had discovered that from 17th July to 12th September, during which the annuity was discontinued, Ritchie was earning wages of from 25s. to 30s. per week. In fixing the reduced allowance they had in view the recent abolition of school fees under the fifth standard, and the allowance was substantially equivalent to that formerly given.

With reference to the petitioner George Davidson, his application was refused upon the ground that he had not shown a necessity for any further allowance than the annuity of £20, and that he was already provided for by the trust-deed. In point of fact £20 a-year was sufficient for his maintenance. It was specially declared in the trust-deed that the trustees should not be entitled to apply any sum beyond £20 per annum for the benefit or relief of any one of the descendants of the truster's father, either old or young. His claim was thus excluded.

When the petition first came before the Court counsel for the petitioners made certain statements as to the circumstances of the cases which were not in the petition, and which the trustees stated had never been put before them. After the adjournment to enable these statements to be specifically put before the trustees for their consideration, counsel for the trustees stated that they were willing to pay the rate of aliment of £1,13s. 4d. to the Ritchie family, and also to provide school books for the use of the eldest child, who was reported by her masters to be a promising pupil, and who was qualifying for a pupil teacher. With regard to George Davidson, while they could not increase his allowance, they were willing to pay for medicines and medical attendance for him.

Counsel for the petitioners argued—The sum given to the Ritchies ought to be £24 as formerly. The father was often out of work and extra expenses caused by the children growing up made it as necessary as before, although school fees had been abolished. An education to enable them to earn their livelihood did not mean merely the first five standards. There was a very large surplus yearly, and the trustees ought to exercise a liberal discretion. Although George Davidson got £20 under the third purpose he might still be a legatee under the fifth purpose, as one of the injunctions was to give such allowances as would keep the aged beneficiaries from seeking parochial relief.

The respondents argued—The allowances to be given was a matter entirely within the discretion of the trustees; they had made inquiry into the matter and considered the allowances they gave sufficient, and the Court would not interfere with their discretion. George Davidson had an allowance of £20 under the third purpose. The fifth purpose of the deed expressly stated that no beneficiary could get more than £20, so the trustees were barred from giving any more. Besides, the trustees had satisfied themselves that that sum was sufficient to keep him comfortably.

At advising—