Scottish Court of Session Decisions

By a feu-contract executed in February 1896 Mr David Johnston, writer, Glasgow, disponed to Mr Hugh Livingstone, Glasgow, and Mr William Brown Alexander, Bridge of Weir, a certain plot of ground situated at Langside, Glasgow, together with the buildings thereon, known as 17 Millbrae Crescent.

The disposition bore to be “to and in favour of the said Hugh Livingstone and William Brown Alexander and the survivor of them, and the heir of the survivor, as trustees and in trust for behoof of the said Hugh Livingstone and William Brown Alexander and their respective heirs and assignees whomsoever, each to the extent of one-half pro indiviso, heritably and irredeemably.… Declaring that the said Hugh Livingstone and William Brown Alexander and the survivor of them, and the heir of the survivor, as trustees and trustee foresaid, shall have full power, without the consent of any person whatever, to sell and dispose of the said plot or area of ground above disponed, or any part thereof, by public roup or private bargain, with or without advertisement, and at

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such price or prices as they or he may think proper, and to borrow money on the security of the said plot or area of ground, or any part thereof, and for these purposes or any of them to grant all necessary or requisite deeds or writings containing a clause of absolute warrandice, and that purchasers and lenders, and all other parties paying or lending money to or otherwise transacting with the said trustees or trustee shall have no concern with or right to inquire into the application of the money so paid or lent, but shall be sufficiently exonerated by the receipt of the said trustees or trustee therefor.”

In 1898 William Brown Alexander conveyed in favour of Messrs James and John Allan, provision merchants, Glasgow, “my one-half pro indiviso” of the subjects above described, “and my whole right, title, and interest therein.”

A petition was presented by Messrs Allan craving the Court to appoint a judicial factor to manage the estate for behoof of all concerned.

The petitioners averred that they were heritable proprietors of one-half pro indiviso of the subjects, that Hugh Livingstone had for some time hack managed the property and uplifted the rents, and that being dissatisfied with his management they had requested him to concur in the appointment of a neutral person to manage the property, but that he had declined to do so.

In a minute lodged subsequently, the petitioners specified certain instances of alleged mismanagement by the respondent previous to the date of Mr Alexander's disposition to themselves, owing to which they averred the respondent had for-feited the confidence of his co-trustee Mr Alexander, and that the latter, so far as he had any right or interest, declined to confide the management of the property any longer to the respondent, there thus being a deadlock in the management of the trust.

The petitioners accordingly moved to have Mr Alexander sisted as a party, and to amend their petition by praying alternatively for sequestration of the trust-estate.

Answers were lodged by the respondent to the petition as originally presented, and to the minute.

The respondent averred that the subjects were purchased by Mr Alexander and himself, and the existing tenement of houses erected, in pursuance of a joint adventure, and that Mr Alexander was indebted to him in a considerable sum of money on the adjustment of the accounts of the joint adventure under a decree arbitral, his interest in the estate not exceeding £95; that accordingly the respondent's interest in the trust-estate was much larger than that of Mr Alexander, or of the petitioners as his assignees, and that the assignation had been granted gratuitously immediately after the decree-arbitral, with the object of defeating his claims as a creditor. The respondent stated that he was willing either to concur in a sale under the powers of the trust or to raise an action for division and sale, and maintained that the appointment of a judicial factor was vexatious and unnecessary.

The Lord Ordinary ( Pearson) on 6th July 1898 pronounced an interlocutor, whereby he refused the prayer of the petition, and dismissed the petition.

Opinion.—“This is a petition for the appointment of a judicial factor on house property in Glasgow.

“ As originally framed, it bore to be presented by the proprietors of one pro indiviso half of the subjects, on the ground that the proprietor of the other half, who had for some time been managing the property, was mismanaging it, and that he refused to concur with them in appointing a neutral manager.

It appears that the title rests upon a recorded feu-contract dated in February 1896, taken in favour of the respondent and William Alexander and the survivor, and the heir of the survivor, as trustees for behoof of themselves and their respective heirs and assignees, each to the extent of one-half pro indiviso,

It is thereby declared that the trustees shall have full power, without the consent of any person whatever, to sell the subjects by public roup or private bargain at such price as they might think proper, and to borrow money on the security of the subjects, and the purchasers and lenders should have no concern with the application of the money.

On 23rd April 1898 Alexander conveyed his pro indiviso half to the petitioners by a disposition ex facie absolute, but truly in security. But the formal title remains in the persons of the trustees. It is alleged by the respondent, but not admitted, that the relation of himself and Alexander was truly that of joint-adventurers in a building speculation upon the subjects feued, and that Alexander is indebted to him in a considerable sum of money on the adjustment of the accounts of the joint-adventure under a decree-arbitral.

The petitioners now move to have Alexander sisted as a party, and also to amend their petition by praying alternatively for sequestration of the trust-estate. This is with a view to raising the alternative case of a trust in the persons of the respondent and Alexander which has come to a deadlock, and from which those beneficially interested should be relieved by the appointment of a judicial factor. A minute has been lodged for the original petitioners and for Alexander, setting forth the averments on which this view is based.

In my view whatever view is taken of the true relation of the parties the petition fails.

On the one hand, it is said that the Court should interfere as in a dispute between two pro indiviso proprietors who have failed to agree as to the management, and one of whom is accused by the other of mismanagement. The cases relied on by the petitioners on this head were Mackintosh, 11 D. 1029, and Bailey, 22 D. 1105. I do not think either case is in point. The former was the case of pro indiviso liferent rights, where there was no room for

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the ordinary remedy of division and sale. In the latter case the Court proceeded on the special circumstances, one of which was that the applicants had already obtained a decree of division and sale, and that the sale was being obstructed by the respondent. I can discover no reason why the parties here, regarded as proprietors pro indiviso, should not betake themselves to their ordinary remedies. The respondent expresses his willingness to facilitate this course.

Nor do I think that the petitioners' case is improved by introducing the trustee Alexander, and thus creating the appearance of a trust that has come to a deadlock. Assuming that a new petitioner may competently be sisted, I observe—(1) that the trust is a purely formal one; and (2) that the respondent, the other trustee, expresses himself as willing to concur in a sale under the powers of the trust. It is, in my opinion, clear that the cases relied on, such as Stewart (19 R. 1009), where the Court have extricated an unworkable trust by the appointment of a factor, have no application here.

If the respondent is correct in saying that the relation between him and Alexander is truly that of joint-adventurers, that might be a good answer to the original petitioners. But Alexander might be entitled to ask the Court to interfere between him and his copartner by the appointment of a factor on the copartnery estate. This, however, is not within the scope or theory of the petition, either as originally brought or as offered to be amended; and moreover, even if it were, I think that no case is disclosed which should warrant the intervention of the Court on that ground.

I therefore refuse the petition with expenses.”

The petitioners reclaimed.

In the course of the argument in the Inner House counsel for the petitioners stated that they were willing to assent to a sale of the property, but that the present date was not suitable for effecting it.

Counsel for the respondent repeated an offer which they had made in the Outer House to acquiesce in the appointment of a neutral person to collect the rents till the sale should be effected, pay necessary expenses, and place the balance in the bank in the joint names of the parties.

Argued for reclaimers—The Lord Ordinary had stated that the proper remedy was an action of division and sale, but it was not expedient for a sale to be effected just now, and meantime the rents were not being collected—those due at Whitsunday had not been collected—so it was necessary for the Court to interfere in order to protect the property— Bailey v. Scott, May 24, 1860, 22 D. 1105. In that case the petitioner had obtained a decree in an action of division and sale, and yet was held entitled to the appointment of a judicial factor pending the sale. Accordingly, if this was regarded as a case of pro indiviso ownership, the course proposed was quite an ordinary one. If, on the other hand, it were held that a trust had been constituted, then there was a deadlock between the trustees, and the petitioners were accordingly entitled to ask for the appointment of a judicial factor— Stewart v. Morrison, July 14, 1892, 19 R. 1009. It was clear from the terms of the titles that the relation between the original parties was not that of joint-adventure as maintained by the respondent— Dunn v. Pratt, January 25, 1S98, 25 R. 461.

Argued for respondent—Either party was willing to bring the question to an end by authorising a sale, and the only duty which a judicial factor would have to discharge was the collection of rents pending the sale, which the respondent's offer provided for. Accordingly, there was no need for a judicial appointment, such as was made in Bailey v. Scott. In point of fact the original disponees were not in the position of pro indiviso proprietors, their relation being that of joint-adventure. Accordingly, the petitioners had no title to interfere with the administration of the trust, their only right being to the share due to Alexander at the close of the adventure.