Scottish Court of Session Decisions

This was an action at the instance of John William Bruce, property agent, 161 Hope Street, Glasgow, against Andrew Stewart, writer, 116 West Regent Street, Glasgow, in which the pursuer concluded for decree ordaining the defender to implement his part of a certain missive of sale of two tenements with courts attached and offices thereon, forming Nos. 73 to 83 inclusive of Hopehill Road, Glasgow, or alternatively for payment of damages for breach of contract.

The pursuer averred that by missive of sale dated 14th February 1899 entered into between the pursuer and the defender, the defender agreed to buy and the pursuer agreed to sell the two tenements in question for the sum of £3300, and that although desired and required to implement his part of these missives the defender refused or delayed to do so.

The defender pleaded, inter alia—“(2) The pursuer never having tendered a valid marketable title to the subjects, the defender is entitled to absolvitor.”

In support of this plea the defender averred that the title submitted to him by the pursuer for examination was radically defective in various respects. In particular, he objected (1) to a certain contract of excambion, under which the pursuer's author acquired 109 6 9 square yards of the subjects contained in the missives; (2) to an extract decree of declarator of irritancy and removing part of the title to 839 1 9 square yards of said subjects; and (3) to an extract-decree of declarator of irritancy part of the title to 109 6 9 square yards of said subjects.

The objection stated to the contract of excambion, which was dated and recorded in 1894, was that it was entered into between the testamentary trustees of John Anderson Mathieson and the testamentary trustees of Miss Henrietta Scott, and that neither of these sets of trustees had power to excamb conferred upon them by the settlements under which they acted, or had obtained power to excamb from the Court.

The extract-decree first above mentioned was obtained under a contract of ground-annual at the instance of John Anderson Mathieson against Charles Simson Romanes, C.A., Edinburgh, trustee on the sequestrated estates of William Sillars and John Sillars, dated and extracted in December 1891, and recorded in January 1892. The objection to it was based, inter alia, upon the facts (1) that service upon the said William Sillars and John Sillars was made edictally, while ex facie of the decree itself their addresses were stated to be unknown, with the result that if they were within the jurisdiction of the Court the service was invalid; and (2) that the decree was pronounced in absence, and could be reduced or set aside at any time within twenty years of its date, there having been no appearance entered to defend the action.

The extract-decree second above mentioned was obtained under a contract of ground—annual at the instance of the trustees of Miss Henrietta Scott against Thomas Jackson, C.A., Glasgow, trustee on the sequestrated estates therein mentioned, and was dated May and extracted and recorded June 1893. This decree was objected to, inter alia, upon similar grounds to those stated above with regard to the decree first above mentioned.

In the contract of excambion the 109 6 9 square yards referred to were disponed by Miss Henrietta Scott's testamentary trustees to John Anderson Mathieson's testamentary trustees. In terms of Miss Scott's settlement her testamentary trustees had

power to sell the heritable property belonging to the estate, and that either by public roup or private bargain. They were not given power to purchase heritable property. In terms of John Anderson Mathieson's settlement his testamentary trustees had power (1) to sell heritable property by private bargain or public roup, and (2) to invest the trust funds in the purchase of heritable property in Great Britain.

The Trusts (Scotland) Act 1867 (30 and 31 Vict. c. 97), sec. 3, enacts as follows:—“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. 2. To grant feus or long leases of the heritable estate or any part of it. 3. To borrow money on the security of the trust-estate or any part of it. 4. To excamb any part of the trust-estate which is heritable.” …

On 11th January 1900 the Lord Ordinary ( Kyllachy), after hearing counsel in the procedure roll, assoilzied the defender from the conclusions of the action, and found him entitled to expenses.

The pursuer reclaimed, and argued—A power conferred upon trustees to sell heritage included by implication a power to excamb. Excambing was simply selling for land instead of for cash. Trustees who had power to sell were not necessarily restricted to selling for cash. It was true that in the Trusts (Scotland) Act 1867, section 3, power to sell and power to excamb were mentioned separately, but the statute only contemplated the case of trustees who had neither power to sell nor power to excamb. These provisions did not apply to the case of trustees who had power to sell. Mathieson's trustees had power to sell and power to buy. It was clear that they would have been entitled to sell one piece of land and to buy another piece of the same value. That was in substance and effect what they did here. By excambing instead of selling and buying they only adopted a shorthand method of attaining the same result. If this view were sound then the title to the piece of ground now in question was unexceptionable. It was in effect bought by Mathieson's trustees, who had power to buy, from Scott's trustees, who had power sell. No objection could be taken to what was in effect the sale by Mathieson's trustees of the piece of ground conveyed in exchange to Scott's trustees, because Mathieson's trustees had power to sell. The fact that Scott's trustees had no power to buy could not affect the validity of the transaction in so far as Mathieson's trustees' title to the piece of ground now in question was concerned. The objection to the title based upon the alleged invalidity of the contract of excambion was not an objection to the ex facie validity of a deed. It proceeded upon the ground that the contract was ultra vires. Such an objection should not be sustained where it appeared that the granters could have attained exactly the same result quite competently by transacting in a slightly different form. But even if the title was objectionable upon this ground as it stood, it could be remedied by Scott's trustees granting a disposition as upon a sale for a price and a discharge for the sum stated as such price. (2) As regards the decrees of irritancy all that was possible was done. All persons were personally served whose whereabouts were known. In each case the trustee had been personally served, and service upon the trustee was all that was required. In practice almost all such decrees were obtained in absence, and if the fact that the decree might still be reduced rendered the title unmarketable, then practically every title which contained a decree of declarator of irritancy and removing was bad. If this contention were upheld by the Court doubt would be cast upon a great number of titles in all parts of the country which had been hitherto regarded as perfectly good.

Argued for the defender—The defender was entitled to a marketable title, and the title tendered was not marketable. (1) The excambion was invalid, because neither of the sets of trustees who were parties to it had power to excamb. A power of sale did not include a power to excamb. The Trusts (Scotland) Act 1867, section 3, made a clear distinction between power to sell, power to feu, and power to excamb. It was idle to say that Mathieson's trustees had power to sell and to buy. What took place here was not sale or purchase. The title could not be cured by obtaining deeds designed not to record the real nature of the transaction between the parties, but to conceal it by means of pretended sales and discharges which never in fact took place. Even if the cross sale theory was sound the title was not good, for one of the parties had no power to buy. (2) The decrees of irritancy were essential links in the title, and they were objectionable. Even assuming that there had been sufficient personal service, the decrees being decrees of declarator, and therefore decrees in which a charge was not competent, were reducible at any time within twenty years—a period which had not yet elapsed in either case—Court of Session (Scotland) Act 1868 (31 and 32 Vict. cap. 100), sec. 24. A title which contained such decrees as necessary links in the progress was not marketable.

At advising—