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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Davidson v. Macrae and Others [1893] ScotLR 30_411 (4 February 1893)
URL: http://www.bailii.org/scot/cases/ScotCS/1893/30SLR0411.html
Cite as: [1893] SLR 30_411, [1893] ScotLR 30_411
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SCOTTISH_SLR_Court_of_Session
Page: 411↓
Court of Session Inner House First Division.
v.
Facts:
A testatrix conveyed her whole estate in trust to two persons named and the acceptor or survivor as trustees, and directed that the residue of her estate should be paid by the trustees “to such charitable or religious purposes, and in such proportions, as they or the acceptor or survivor of them may think proper, according to their or his discretion.” The two trustees named having died leaving part of the residue undisposed of, a judicial factor was appointed on the trust-estate.
Held that the discretionary power given to the trustees named by the testatrix was personal to them, and could not be exercised by the judicial factor; that as regarded the undistributed portion of the residue the bequest had failed, and that the same fell to be divided among the next-of-kin of the testatrix.
Helen Robbie died on 28th July 1870 leaving a testament whereby she conveyed her whole estate “to James Webster Barnett,
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writer in Dundee, and George Bell Brand, bank agent in Kirriemuir, and to the acceptor or survivor of them,” as trustees for the purposes therein mentioned, and she appointed said trustees or the acceptor or survivor to be her sole executors. The trust purposes were as follows—(1) for payment of all the truster's just and lawful debts, deathbed and funeral expenses, and the expenses of the trust; (2) for payment and delivery, on the expiry of six months after the testator's decease, of certain pecuniary and specific legacies, as specified in the said testament, and with regard to the disposal of the residue of her means and estate, she ordained “the same to be paid by my said executors to such charitable or religious purposes, and in such proportions as they or the acceptor or survivor of them may think proper, according to their or his discretion.”
After the death of the testatrix the trustees named accepted office and entered upon the administration of the trust-estate, paid the truster's debts and funeral expenses, and delivered and paid the specific and pecuniary legacies bequeathed by the testament. They also intromitted partially with the residue of the truster's estate, and made payment out of the income and capital of the residue to the Scottish Evangelistic Society for the services of an agent in Kirriemuir, and kindred objects. They also made payments for such purposes as the support of a colporteur, and of a Biblewoman, and distributed small sums among poor people in Kirriemuir. The trustees died without assuming new trustees into the trust, Mr Barnett, the last survivor, dying in 1890. In 1892 James Davidson was appointed judicial factor upon the trust-estate, which amounted to about £700.
Questions having arisen as to the disposal of this sum, the present case was submitted by (1) the judicial factor, and (2) the next-of-kin of the deceased, in order to obtain the opinion of the Court upon the following questions—“(1) Can the discretionary powers committed to her trustees for the distribution of the estate of the deceased Helen Robbie be exercised by the first party, either subject to the supervision of the Court under a scheme to be prepared and submitted by him, or otherwise? or (2) Does the trust-estate under the first party's management fall to be administered and distributed by him amongst the next-of-kin of the deceased as in intestacy?
Argued for the first party—There was here no such uncertainty as to render the bequest void. The action of the trustees had sufficiently defined and declared the intention of the testatrix, and the locality to be benefited— Hill v. Burns, April 14, 1826, 2 W. & S. 80; Crichton v. Crichton's Trustees, May 12, 1826, 4 S. 553; Black's Trustees v. Miller, February 23, 1836, 14 S. 555; Murdoch v. Magistrates of Glasgow, November 30, 1827, 6 S. 186; Presbytery of Deer v. Bruce, January 20, 1865, 3 Macph. 402; Jarman on Wills, 243. The intention of the testatrix being sufficiently ascertained the Court would find means to give it effect— Presbytery of Deer v. Bruce; Macandrew, Petitioner, supra. The judicial factor should accordingly be authorised to apply the residue to such charitable purposes as he might think proper, or a scheme should be prepared and submitted to the Court for approval.
Argued for the second parties—The trust had failed, as there was no means of ascertaining now what objects the testatrix desired to benefit. The doctrine of approximation did not apply, because there was no object or class of objects specified to which to approximate. The testatrix had chosen certain persons as her trustees, and conferred upon them the power of selecting the religious and charitable objects to which her bounty should be applied. There was a clear delectus personæ, and the discretionary power conferred upon the trustees was personal to them, and the Court would not authorise a judicial factor to exercise it—M'Laren on Trusts, i. 16; Ireland v. Glass, May 18, 1833, 11 S. 626; Dick v. Ferguson, 1758, M. 7446; Merchants’ Company, &c. v. Magistrates of Edinburgh, 1765, M. 7488; Simson, &c., Petitioners, January 27, 1883, 10 R. 540, per Lord President, 544, and per Lord Shand, 546; Hill, &c. v. Thomson, October 30, 1874, 2 R. 68. The English authorities showed that the Court of Chancery had repeatedly refused to appoint new trustees to exercise a discretionary power of this kind—Tudor on Charitable Trusts, 123–4; Boyle on Charities, 237; Hibbard v. Lambe, 1756; Ambler's Reports, 309; Attorney-General v. Fletcher, 1835, 5 L.J. Ch. 75; Felan v. Russell, 1842, 4 Irish Equity Reports, 701. Discretionary powers to be exercised in the course of administrating a trust, the objects of which were ascertained were to be distinguished from a discretionary power such as was here given of selecting the objects of a testator's bounty— Magistrates of Dundee, &c. v. Morris, February 8, 1861, 23 D. 493. The English law appeared to differ from the Scots in one respect, because by it the sovereign had power as parens patrice to administer charitable trusts which had failed. In Scots law no such power was conferred upon either the sovereign or the Court, and therefore where a trust failed the trust-estate fell to be divided among the next-of-kin as intestate estate.
At advising—
The two executors-nominate accepted the trust, paid the debts and legacies, and made some payments out of residue for charitable
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The claim of the next-of-kin is maintained on the ground that the bequest is ineffectual by reason of uncertainty. It is a familiar proposition that a legacy to be effectual must be expressed in such terms as to define the objects as well as the subject of the gift, and this is not to be regarded as a technical rule of construction, but rather as the expression of a logical necessity. There can be no effectual gift unless what is essential to the notion of a gift be set forth in the will or codicil. There is, however, this peculiarity in the case of gifts for charitable purposes, that a gift for charity implies a selection of objects from time to time. Accordingly, a gift for charitable purposes is sufficiently definite as regards the objects of the gift if the testator either provides for the payment of the legacy to an existing institution, or directs the establishment of an administrative body for carrying into effect the charitable purpose, or gives a power of selection to one or more trustees, adding where necessary powers of assumption, or other means of continuing the trust for the necessary period. The first case presents no difficulty. As to the second case, the numerous existing endowments applicable to education attest the recognition in our land from an early period of the principle that a testator may constitute a charitable endowment by merely defining the purpose of his bounty, and giving directions to his executors or disponees to carry out his purpose by framing a scheme of administration, including where necessary the establishment of a permanent body of trustees or managers for administering the trust fund.
The present case comes under the third head. It is a bequest of residue for charitable and religious purposes to be selected by the trustees of the will. It is not surprising that the testatrix should have made no provision for continuing the trust after the death of her trust-disponees, because the estate is of very moderate amount, and it is most probable that the testatrix meant that the fund should be divided once for all within a short period after her death. This, however, has not been done. The accepting trustees died after having made a partial distribution. A judicial factor was appointed for the management of what remains of the residue, and the question is whether the Court, through the factor, can undertake the distribution of this small sum of money amongst local charities and local religious institutions.
If I am right in defining this bequest as a bequest to charitable and religious purposes to be selected by the trust-disponees, it follows that the legacy fails by their death. The appointment of a trustee or hœres fiduciarius with a power of selection was essential to the existence of the bequest, because in the absence of such a grant of a power of selection the legacy would fail for uncertainty. The power might have been given to persons in succession; or the first acceptor or body of accepting trustees might have been empowered to name successors in the trust. In such a case the elected or assumed trustees derive their authority to select the objects of the charity from the testator, and in principle their position is not distinguishable from that of the original trustees. But if we empower our factor to distribute the residue amongst charities his authority comes from the Court, because it is quite certain that under this will no power of selecting objects of charity is given to a nominee of the Court of Session, or indeed to anyone excepting the persons nominated by the testatrix herself.
There may be cases where a testator has provided for the delegation of a power of selecting objects, and where from supervening circumstances the delegation cannot be carried out in the manner provided in the will. If it appears plainly that a testator did not mean to confine the selection of objects to persons nominated by himself, but only to take measures for ensuring that the selection of objects of his charity should be entrusted to competent persons possessed of the necessary local knowledge, I do not say that it would not be within the powers of the Court to supply a vacancy in such a trust.
But in such cases I think that our jurisdiction would be best exercised by appointing new trustees, and if need be, approving of a scheme, as was done in the case of the Alexander Mortification, August 3, 1881, 8 R. (H. of L.) 140, and in other cases. The difference between this kind of jurisdiction and that which we are desired to exercise is not merely formal. Trustees appointed by the Court, if they accept the office, must administer the trust on their own responsibility, and they are liable to be called to account by the heir, or by persons having a recognised interest. But a judicial factor is the agent of the Court, and responsible only for carrying out the instructions of the Court. Now, I must say that I think it is outside the powers and duties of a court of justice that it should undertake the administration of a charity through a factor judicially appointed, and this consideration, I think, is an insuperable obstacle to the proposed administration of this bequest.
It is a significant circumstance that no precedent can be found for the proposed judicial administration. The nearest cases to the present are cases of family trusts, where, after the failure of the trustees originally appointed, the Court has been asked to authorise assumed trustees or a judicial factor to exercise a discretionary power to the effect of giving an increase of interest to a beneficiary. Now, when the individual to be benefited is pointed out by name, and the discretion conferred on the trustees is merely a discretion to increase the income of the beneficiary, or to make over the
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In the next case— Hill, 2 R. 68—the truster bequeathed a share of residue to the children of her daughter, and empowered another daughter, her sole trustee, to apportion this fund. The trust-deed did not contain a power of assumption, and the decision was that the power of apportionment was personal to the original trustee, and could not be exercised by the acting trustees, who seem to have come into office under the provisions of the Trusts Act. Lord Moncreiff in his opinion draws this distinction. He says—“Where there is a manifest delectus personæ and intention to entrust such a power (as here) to a particular person, the Court might hesitate to transfer the power to another…. Where a discretionary power is conferred upon ordinary trustees not implying delectus personæ, the Court might more readily confer these powers on new trustees.”
Lastly, there is the case of Simpson, 10 R. 540, where a trust was constituted in favour of trustees named, with powers of assumption in the usual form, and in relation to the gift of an annuity to one of the beneficiaries it was provided that the trustees should have the power of advancing the whole or any part of the capital, it was held that this was a power given to trustees for the time being, and accordingly an application at the instance of a judicial factor for authority to make an advance of capital for the purchase of an annuity for life for the beneficiary was sustained, and the authority granted. The Lord President was careful to point out that the frame of the trust was such as to exclude the supposition of delectus personæ in relation to the original trustees.
It appears to me that these decisions are distinctly adverse to the view that a power of selecting charitable and religious purposes to which an executry estate is to be applied can be exercised by a nominee of the Court. My opinion is that as regards the undistributed part of this estate the trust has failed, and that the second parties, who are admitted by the judicial factor to be the next-of-kin of the testator Miss Helen Robbie, are entititled to the sum in dispute.
In this view, the first question falls to be answered in the negative, and the second question to be answered in the affirmative.
Counsel for the First Party— Crabb Watt. Agents— Reid & Guild, W.S.
Counsel for the Second Parties— C. S. Dickson— Grainger Stewart. Agent— A. Stewart Gray, W.S.