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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Molleson (Whyte's Judicial Factor) v. Whyte [1890] ScotLR 28_78 (7 November 1890)
URL: http://www.bailii.org/scot/cases/ScotCS/1890/28SLR0078.html
Cite as: [1890] ScotLR 28_78, [1890] SLR 28_78
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SCOTTISH_SLR_Court_of_Session
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Court of Session Inner House First Division.
[
v.
Facts:
Section 3 of the Trusts Act 1867 makes it competent for the Court of Session to grant authority to the trustees under any trust-deed to sell the trust-estate or any part of it “on being satisfied that the same is expedient for the execution of the trust, and not inconsistent with the intention thereof.” By the Trusts Act 1884 (47 and 48 Vict. cap. 63), sec. 2, it is provided that in construing the Act of 1867 “trustee” shall include tutor, curator, and judicial factor.
A testator conveyed his whole estate, heritable and moveable, to trustees for certain purposes, empowering them to sell the same (with the exception of the lands of B. and M.)
A judicial factor having been appointed on the trust-estate in place of the trustees, presented a petition for power to sell the lands of B. and M. Held that the power of sale craved was inconsistent with the intention of the trust, in respect that the testator, in granting a power of sale to his trustees, had specially excepted the lands of B. and M., and petition refused.
George Whyte of Meethill, Aberdeenshire, died in 1869. He left a trust-disposition and settlement by which he provided the liferent of his estates to his widow, legacies of
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£1000 to each of his daughters, and the residue of his estate to his son George Whyte. He directed that on his wife's death the legacies should be paid, or, at the option of his trustees, secured over the heritable estate, and he recommended his trustees (if there should not be personal estate sufficient to pay the legacies) to secure them rather than sell the heritage. He conferred on his trustees a power of sale in these terms—“I hereby empower my said trustees … to intromit with the whole trust-estate and effects hereby conveyed, heritable and moveable, real or personal, or any part thereof, … and to sell and dispose of the same (with the exception of the said lands of Meethill and Burnhaven) by public roup or private bargain, in any manner and subject to any conditions they may think fit.” … The truster was survived by his widow, who died in 1887, his son George Whyte, and three daughters, Phillis, Mary Logan, and Fanny.
On 16th July 1885, on the petition of Phillis Whyte, with consent of George Whyte, the trust-estate was sequestrated, and Mr Molleson, C.A., was appointed judicial factor thereon.
The present petition was presented in July 1889 by Mr Molleson, with consent of the truster's three daughters, and also of certain heritable creditors on the trust-estate, for authority to make up a title to and sell the lands of Meethill and Burnhaven. He averred that the rental was insufficient to pay the interest of the debt, that many of the houses were going to decay, that he had no funds to pay for the necessary repairs, and that the heritable creditors were pressing for payment of their debts.
George Whyte lodged answers in which he objected to the power craved being granted, on the ground, inter alia, that it was inconsistent with the purposes of the trust. He also lodged a minute for recal of the factory, but a consideration of the questions raised under that minute is not material to the present case.
Section 3 of the Trusts Act 1867 (30 and 31 Vict. cap. 97), provides—“It shall be competent to the Court of Session, on the petition of the trustees under any trust-deed, to grant authority to the trustees to do any of the following acts, on being satisfied that the same is expedient for the execution of the trust, and not inconsistent with the intention thereof—1. To sell the trust-estate or any part of it.”
On 29th May 1890 the Lord Ordinary ( Kincairney) in the petition for special powers, remitted to Mr Beattie to inquire into the value of the properties of Meethill and Burnhaven, and to report quam primum.
“With regard to the petition of the factor for warrant to make up a title, and authority to sell, I have felt great difficulty. It seems difficult to affirm that a sale of Meethill and Burnhaven is consistent with the intention of the truster; and I would have thought it very doubtful whether such a power could be granted were it not for the fact that a power to sell part of Burnhaven has been granted already under the authority of the Inner House, and as the judicial factor is of opinion that a sale is necessary, and as the judgment of the Inner House absolutely precludes the view that the terms of the trust prevent such a sale, I think I have no course but to direct inquiries by a remit to a practical man with a view to consider as to the expediency of a sale. I may add that if it were quite clear that a sale would effect no more than payment of the heritable creditors I would he very much indisposed to interfere. But there seems reason to hope that there may be some balance for the beneficiaries.
Having in view what is said as to the present dilapidated condition of the property, I have made the remit in terms more specific than usual, my object being to ascertain whether a sale of the property in its present condition might not lead to loss which could be avoided. Mr Whyte will have the opportunity of assisting the reporter in his inquiries, and submitting to him any views about the property which he may think of consequence.”
George Whyte reclaimed, and argued—The power of sale craved was inconsistent with the intention of the trust, as the lands of Meethill and Burnhaven were expressly excepted when the power of sale was given in the trust-deed. The petition should therefore be refused — Trusts Act 1867, sec. 3.
Argued for the truster's three daughters and the heritable creditors—To discover the “intention of the trust” it was necessary to look at the whole scope of the trust-deed. The main purpose of the truster was that the provisions made by him in favour of his children should be paid. That could not be done unless the power of sale asked for was granted. The granting of that power of sale was, therefore, not inconsistent with the intention of the trust—Trusts Act 1867, sec. 3; Weir's Trustees, June 13, 1877. 4 R. 876; Downie, &c., June 10, 1879, 6 R. 1013.
At advising—
The clause in the trust-deed conferring a power of sale on the trustees is as follows:—“To sell and dispose of the same (with the exception of the said lands of Meethill and Burnhaven) by public roup or private bargain in any manner or subject to any conditions they may think fit.” The answer of Mr Whvte to the application is, that this clause of the trust-deed amounts to an express prohibition of selling the lands of Meethill and Burnhaven, and as the clause stands I am disposed to agree to that construction. When a power is given with an exception, it appears to me that the exception amounts to a prohibition of the exercise of the power otherwise given, and if
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On the second point, I entirely agree with your Lordship that where, as here, trustees are given a power to sell the whole heritable estate falling under the trust, with the exception of certain lands, it is the same as if they were expressly prohibited from selling the lands to which the exception applies, and in face of the provision of the trust-deed with which we have to do giving the trustees power to sell the whole heritable estate with the exception of the lands of Meethill and Burnhaven, I cannot come to the conclusion that it is not against the intention of the trust that a sale of these lands should take place.
I would only like to add with respect to the fact that a sale of part of these lands has already been authorised, that that was quite a different matter from the present, because that part of the lands was purchased by the Admiralty Commissioners, who had compulsory powers under the Land Clauses Act, which entitles parties otherwise disqualified to part with their lands where the purchaser has such powers.
I think also that the distinction pointed out by Lord Adam between the sale here proposed and the sale to the Admiralty Commissioners is very material, because the Lord Ordinary appears to have supposed that where your Lordships authorised a sale on the previous occasion you construed the trust-deed in a different sense from that in which you have now construed it, and which the Lord Ordinary himself would be inclined to adopt. I think his Lordship has failed to observe that the sale to the Admiralty Commissioners was a sale in the exercise of compulsory powers, and therefore not a sale presented to the Court as a sale in the execution of the trust or depending upon the intention of the truster, but a sale forced upon the factor. It was therefore quite unnecessary and irrelevant to consider whether on a sound construction of the trust-deed the sale to the Admiralty was a course which the Court would have recognised. The only question before the Court was, whether in carrying out the sale the price should be fixed by private agreement, arbitration, or jury trial.
The Court recalled the Lord Ordinary's interlocutor, so far as the remit to Mr Beattie was concerned, and refused the petition for special powers.
Counsel for the Petitioner and Reclaimer— Sym. Agents— Mackenzie, Innes, & Logan, W.S.
Counsel for Misses Phillis, Mary Logan, and Fanny Whyte— Younger. Agents— J. & J. Ross, W.S.
Counsel for the Heritable Creditors— Macfarlane. Agents— Welsh & Forbes, S.S.C.
Counsel for George Whyte— Party. Agent— Party.