Scottish Court of Session Decisions

Mr John Marshall, coal merchant, Leith, executed a trust-disposition and settlement by which he disponed his whole estate to trustees for the purposes therein mentioned. He requested and authorised them to carry on for the benefit of the family the business of John Marshall & Company at Borrowstounness, with power, however, to wind up the business or sell their shares as they should see fit. The truster further conferred on the trustees power to continue to hold his investments as at his death or reinvest the same, to lease, sell, or dispose of all or any part of the trust-estate, all as therein specified.

By a codicil the truster provided—“ Second, As I consider that the value of property in Borrowstounness will improve. I direct and appoint my trustees to hold and retain the property known as Kinglass Brewery, belonging to me, and not to sell or dispose of the same before the youngest of my sons by my present marriage attains twenty-one years of age.”

Mr Marshall died on 1st January 1879, survived by nine children, and the trust was managed up to the present time by the

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original trustees and one who was assumed in 1891.

Mr Marshall's trustees presented a petition craving the Court for power to sell Kinglass Brewery. At the date when the petition was presented all the truster's children had attained majority with the exception of the youngest, who would attain that age in February 1898.

The petitioners averred that the trust-estate was in a very embarrassed condition, the present estimated value being about £4000, while there were bonds and other debts over it to the amount of £4500.

They averred further—“In order to protect the estate and pay off the debts, it is necessary to realise the heritable property, including the property known as Kinglass Brewery. It is considered there is no chance of its improving in value, and the present would be a good time to sell. Had the said Andrew Pratt Marshall been of age, the petitioners would, under their powers under the trust-deed, have at once disposed of it, but owing to the terms of the codicil referred to, special powers are required to enable them to do so.”

There was no opposition to the petition.

The Lord Ordinary ( Stormonth Darling) reported the petition to the First Division.

“ Note.—My difficulty in granting the prayer of this petition arises from the express terms of the prohibition against selling. In several of the reported cases under section 3 of the Trusts Act a distinction has been drawn between a positive direction not to sell (as in Hay's Trustees, June 13, 1873, 11 Macph. 694) and a destination from which it could be inferred that sale was not in the testator's mind (as in Weir's Trustees, June 13, 1877, 4 R. 876). Cases of the former class have been held not to fall within the statute, because however great the expediency of selling might be, it was impossible to affirm that the power asked was ‘not inconsistent with the intention’ of the trust.

In Whyte's Factor v. Whyte, Jan. 10, 1891, 18 R. 376, this view prevailed, because certain heads were excepted from the general power of sale. In Sutherland's Trustees, however, July 20, 1892, 29 S.L.R. 903, where there was a somewhat similar exception, the Court granted power of sale, in order to preserve the trust-estate against the diligence of creditors.

The circumstances of the present case as stated in the petition have a strong resemblance to those in Sutherland's case, and much may depend on the precise extent to which the trustees are being pressed by creditors. I have thought it better not, at my own hand, to incur the expense of a remit to a man of business, but I have asked the petitioners to be prepared with exact information on this head.

It is to be observed that the prohibition here expires in February 1898, so that unless creditors are very urgent, the trustees could accomplish their purpose in little more than a year without any authority from the Court. This circumstance was founded on by counsel as diminishing the force of the prohibition, but it may be replied that the prohibition while it lasts is couched in as strong terms as could well be used. It is not merely that this particular property is excepted from a general power of sale (as in Whyte and Sutherland), but that the trustees are directed ‘not to sell or dispose of the same‘ before the majority of the testator's youngest son.”

The chief part of petitioners' argument is sufficiently indicated in the Lord Ordinary's note. He further argued that the codicil was merely for administrative purposes, and did not indicate the main design of the trust, and that accordingly a prohibition contained in it was not so binding as one in the trust-deed itself.

At advising—