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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Gibson v. Caddall's Trustees [1895] ScotLR 32_668 (11 July 1895)
URL: http://www.bailii.org/scot/cases/ScotCS/1895/32SLR0668.html
Cite as: [1895] SLR 32_668, [1895] ScotLR 32_668
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SCOTTISH_SLR_Court_of_Session
Page: 668↓
Court of Session Inner House First Division.
[
v.
Facts:
Trustees who were fiars of a heritable estate, the fences of which the life—renter was bound to keep up, finding said fences in disrepair, entered upon the lands without his consent and cut them down. The Liferenter thereupon raised an action against them in the sheriff court for £100 as damages. The Sheriff found that, although the trustees had acted illegally, they had done so in bona fideand in the interests of the estate, assessed the damages at £5, and found the trustees liable in one-half of the expenses. Heldthat the trustees were not personally liable for these expenses, but were entitled to recoup themselves out of the trust funds.
Facts:
Trustees were bound under an agreement to pay to the liferenter of the trust-estate “the whole free annual income.” Held (rev. judgment of Lord Wellwood) that this did not include a duplicand of feu-duty, which was payable only once in nineteen years.
Case of Lamont-Campbell v. Carter—Campbell, January 19, 1895, 22 R. 260, distinguished.
Butter's Church, Glenapp, Ayrshire, with manse and offices, was erected in 1850 upon lands disponed to trustees by the late Mrs Isabella Butter or Caddall, who also left funds in their hands, for, inter alia, the building of said church and manse, the income of the balance to be paid annually as stipend to the incumbent for the time being. In 1857 the Rev. Henry Gibson was appointed incumbent, and in 1858 Mrs Caddall's trustees conveyed to him for his incumbency the lands belonging to them, reserving the growing timber and the plantations on said lands, and bound themselves and their successors in office to pay him as stipend the interest of £2700 yearly. In 1869 a sinking fund, which had been instituted in 1850 to meet the expense of keeping in repair, amounted to £500, and the trustees, thinking that sum sufficient for the purposes of the fund, entered into an agreement with Mr Gibson to give him, in addition to the income from the said £2700, the balance of the free income of the estate, he undertaking to keep up the manse, offices, and fencing.
In 1877 certain questions arose between Mr Gibson and the trustees as to the proper repair of the glebe fences, and the trustees, being of opinion that they had not been properly cut, without Mr Gibson's consent sent a hedger on to the lands, who cut them down. Thereupon Mr Gibson raised an action in the Sheriff Court at Ayr against the trustees, to have them interdicted from cutting the hedges, and ordained to pay him £100 damages for their unwarranted interference. The Sheriff-Substitute, after a proof, granted interdict, gave decree for £5 in name of damages, and found the trustees jointly and severally liable in expenses, subject to modification. This interlocutor was affirmed by the Sheriff, who modified the expenses due to the pursuer to one-half, and in his note added that, from the evidence before him, he had no doubt whatever that the defenders had acted throughout in perfect good faith for the benefit of the property, the fee of which they held in trust, but that they were wrong in law in proceeding to do that which, although right and proper in itself, should not have been done without consent or order of law. The trustees paid the damages and expenses in which they were found liable out of the sinking fund.
In 1885 Caddall's trustees entered into a new arrangement with Mr Gibson, by which it was agreed (1) that the arrangement of 1869 should be cancelled; (2) that certain sums should be expended upon the church, manse, offices, fences, &c., out of the sinking fund; (3) that in future the upkeep of these should be under the exclusive control and management of the trustees; (4) that the sinking fund should by degrees be brought up again to the sum at which it then stood; and (5) that as soon as that was done the incumbent should “as hitherto enjoy the whole free annual income from said trust-estate, including said sinking fund.”
Butter's Church had been erected into a parish church quoad sacra in 1873, and a sum of £2500 had been paid by the then Caddall trustees to the Endowment Committee of the Church of Scotland to secure an annual stipend to the minister. A deed
Page: 669↓
of appointment and declaration of trust had also been granted by the said Endowment Committee, dated 25th and 30th April, and registered in the Register of Sasines of the barony and regality of Glasgow, 2nd May 1874, in which it was declared that a portion of all and whole certain parts of the lands on the estate of Kelvinside, from which subjects feu-duties amounting to £894, 4s. 5d. were payable to the said Committee, were held by the said Committee to the extent of £100, 14s., together with the casualties of superiority, in trust (1) for payment out of said feu-duties of £100, 14s. of the annual sum of £100 to the minister for the time being of Butter's Church, in the parish of Glenapp, at two terms in the year, Whitsunday and Martinmas; and (2) for payment to Caddall's trustees of the sum of £100 sterling every 19th year, commencing at Whitsunday 1893, in full of all casualties of superiority. The said duplication of feu—duty was paid to Caddall's trustees on 6th June 1893, by which date the sinking fund had been restored to the amount at which it stood in 1885. In June 1894 the Rev. Henry Gibson raised an action against (1) the Rev. Fergus John Williamson, the only surviving one of Mrs Caddall's trustees acting in 1877, and (2) the existing trustees, for the purpose, first, of having Mr Williamson ordained to repay the amount, being the loss of income sustained by the pursuer taken from the sinking fund in 1877 to meet the damages and expenses fonnd due in the Sheriff Court by the then trustees; and secondly, to have the trustees ordained to make payment of the sum of £100, being payment of the duplicand of feu-duty received by them on 6th June 1893.
The pursuer pleaded—“(1) The first defender being individually liable in payment of the said damages and expenses found due by him and others to the pursuer, and incurred in the said action in the Sheriff Court, and having illegally paid the same out of trust funds, to the prejudice of the pursuer, decree should be granted in terms of the petitory conclusion against the first defender. (5) The duplication of feu-duty of £100, being income of the trust, and being payable to the pursuer under the agreement of 1885, the pursuer is entitled to decree therefor as craved.”
The defenders pleaded—“(2) The pursuer's claims in respect of said expenses are barred by mora, et separatim by the agreement made between him and the trustees in 1885. (3) The trustees, in litigating said action, having acted in bona fide, and for the protection of the trust-estate, they were entitled to make payment of said expenses out of the trust funds. (6) The £100 of duplicand not being annual income in the sense of the deed of agreement, the pursuer is not entitled to demand same from the defenders.”
Upon 13th February 1895 the
“Note.—I heard parties in this case in the Procedure Roll on 7th November last. but I delayed giving judgment, although I was prepared to do so, because I was told that efforts were being made to settle the case, and I have no doubt that counsel on both sides have done their best to do so. They have failed, however, and I must now dispose of the case, but as much time has elapsed, I do not propose to give a detailed opinion.
As to the first sum sued for, I am of opinion that, apart from other objections, the pursuer is barred by delay, it being clear that distinct substantial prejudice to the defender Mr Williamson has been caused by the delay. The last sum claimed is £100, being a duplication of feu-duty paid to the defenders second called in the summons on 6th June 1893. With some hesitation, I am of opinion that the pursuer is entitled to this sum, and accordingly I give him decree for it.”
The pursuer reclaimed, and argued—(1) The trustees were found personally liable, and had no right to recoup themselves out of the trust funds. They might have been acting in bona fide, but that did not justify them committing a legal wrong or not paying for the consequences of having done so. They were only entitled to use trust funds for ordinary trust administration purposes. They had improperly opposed a valid claim made against them, and were personally liable in damages and expenses— Kay v. Wilson's Trustees, May 6, 1850, 12 D. 845. (2) He was not barred by mora. There was no proof of mora; indeed, the minutes of the trust would show he had all these years been trying to get redress without litigation. (3) The Lord Ordinary was right as to the duplicand. It was to be treated as part of the income for the year, looking to the recent case of Lamont - Campbell v. Carter-Campbell, January 19, 1895, 22 R. 260.
Argued for the defenders—(1) Even if the pursuer's averments were relevant, it was too late after eighteen years to institute a proof. (2) Although trustees were found liable in expenses, it did not necessarily follow they were not entitled to recoup themselves out of the trust funds if such existed. It might be their duty to litigate in the interests of the trust. Here they had successfully resisted a claim for £100 to the extent of saving £95. Their bona fides had been fully recognised by the Sheriff. It could not therefore be said that they had acted recklessly or without any justification— Andrews v. Ewart's Trustees,May 27, 1885, 12 R. 1001. (3) The duplicand did not fall into the category of “annual income," and therefore the pursuer had no claim to it under the agreement of 1885— Ewing v. Ewing, March 20, 1872, 10 Macph. 678. The Lamont-Campbell case was not in
Page: 670↓
At advising—
Lord President—As the pursuer's record does not contain any admission of the facts upon which the Lord Ordinary considers him barred by delay, I do not deem this a safe ground of judgment. That record, however, does disclose an inherent defect in the ground of action. The action seeks to make the defenders personally liable for the costs incurred by Caddall's trustees in an action in which those trustees were called by the present pursuer, the decree sought being for payment of £100, and the decree obtained being for £5. Now, it is not said by the pursuer that the present defenders acted unreasonably or recklessly or otherwise than in accordance with their duty when they defended this action. Unless then, it were the law that, as in a question with beneficiaries, trustees are personally liable in the costs of every action relating to the trust estate which they defend unsuccessfully, or rather with only partial success, the pursuer's case must fail.
On the second question in the action I have come to be of opinion that the pursuer has no legal right to the duplication of feu—duty. In the first place, it is clear that the declaration of trust executed by the Endowment Trustees of the Church of Scotland in 1874 does not directly give to the pursuer any such right. It remains to be seen whether the trustees who, under the deed which I have mentioned, are to receive those casualties, are bound to pay them over to the pursuer; and this depends upon the agreement of 1885, which defines the rights of the pursuer as between him and Caddall's trustees. Now, under that agreement, what the pursuer is to get from the trustees is the whole free annual income from the trust-estate. Unless this duplication of feu-duty is, in the sense of the agreement, “free annual income,” his case fails. Well, it is of course true that this money did come in in one particular year; but then the same may be said of every sum whatever that is paid, whether once for all or recurrently. And when regard is had to the fact that this £100 falls in only once in nineteen years, I do not think that it can be regarded as annual income. I think the moneys included in that phrase are those payments which, or the like of which, come in each year. I say “or the like of which,” because, if this trust were fortunate enough to have so large a number of superiorities that each year a duplication of £100 fell in, then I do not doubt that the pursuer would be entitled to what he asks; and this was very much one of the points that arose in Mrs Carter-Campbell'scase. Unfortunately, there is no such affluence in the Caddall trust, and on the question before us I am unable to affirm that this £100 is part of the free annual income from that trust-estate.
I am therefore for recalling the Lord Ordinary's interlocutor, and assoilzieing the defenders from the whole conclusions of the action.
Of course there are cases where trustees may be acting really in their own interests, and may be litigating without having any good grounds for doing so. But such case's are exceptional, and there is no allegation here that the trustees did more than defend the trust against a claim for £100, which proved extravagant, because the pursuer was only awarded £5.
On the second point, if we were here in a question as to the adjustment of the agreement, there might be much to be said in favour of Mr Gibson's contention, that the whole proceeds of the investment, including casualties, belongs to the incumbent under the destination in the original trust. But then it is made matter of arrangement that a certain sum should be invested in feu—duties under a deed of trust, under which Mr Gibson is only entitled to the yearly income of the trust-estate. It may well be that the parties saw that there would always be expense in connection with the mortification, and that it was desirable to have a sum like a casualty coming in once in twenty years available to meet the demands of the trust. There was, however, no special provision to this effect, and we must determine the point according to the fair meaning of the agreement contained in the deed. I agree with your Lordship that a casualty is not annual income. It may be income in a certain sense. In some cases it may be difficult to determine what is income under a gift or bequest of income. Here, where the right of Mr Gibson is to annual income, I cannot see how he can claim a sum only coming in at intervals of twenty years.
Page: 671↓
It appears from these circumstances that there was a question between the pursuer and the trustees, which was a fair question for discussion, and they were therefore entitled, and indeed called on, to make some answer to the pursuer's demand for interdict, and for a large sum in name of damages, which it might have fallen upon the trust to pay. The trustees, as representing the trust, were justified in entering appearance, and although they were wrong in their views, I think the expense incurred is a good charge against the trust estate, in whose interest it was incurred.
On the second point, I agree that the casualty payable once in nineteen years is not annual income, and cannot be handed over to the incumbent for the time being, but belongs to the trust-estate in which he and future incumbents have an interest.
The Court recalled the interlocutor reclaimed against, assoilzied the defenders from the whole conclusions of the action, and found them entitled to expenses.
Counsel for the Pursuer— Jameson—F. T. Cooper. Agent— R. Ainslie Brown, S.S.C.
Counsel for the Defenders— Vary Campbell—Salvesen. Agents— Adair & Fenwick, S.S.C.