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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Browne's Trustee v. Anderson [1901] ScotLR 39_226 (07 December 1901)
URL: http://www.bailii.org/scot/cases/ScotCS/1901/39SLR0226.html
Cite as: [1901] SLR 39_226, [1901] ScotLR 39_226
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SCOTTISH_SLR_Court_of_Session
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Court of Session Inner House Second Division.
[
v.
Assignation — Intimation of Assignation — Intimation of Assignation to Law-Agent of Trust
Facts:
In April 1888 A, for onerous causes, assigned to B a spes successionis which he had in the estate of his late father, which was then in the possession of A himself and another as testamentary trustees. The assignation was intimated to the law-agents of the trust, and was acknowledged by them, but it was not acknowledged by the trustees themselves. In 1892 A's co-trustee died, and he became sole trustee. In June 1888 A was sequestrated. In 1897 the spes successionis in question became a right of property in A. In a competition between the assignee under the assignation of April 1888 and the trustee in A's sequestration, who maintained that the assignation was not effectual as against him, because it had not been sufficiently intimated— held that the claim of the assignee was preferable, in respect that intimation or its equivalent had at latest been effectually operated when A became sole trustee in 1892, at which date the subject of the assignation, being merely a spes successionis had not passed to the trustee in the sequestration.
Opinion ( per Lord Justice-Clerk and Lord Moncreiff) that as a general rule an assignation of rights in a trust estate is sufficiently intimated to trustees by intimation to their law-agents—Lord Trayner reserving his opinion on this question, but observing that it is difficult prima facie to see why, if intimation of an assignation to a factor managing an estate is sufficient as intimation to his principal, intimation to the law-agents of a trust should not be held sufficient as intimation to the trustees for whom they act.
By assignation dated 11th April 1888 Robert Bennett Browne, marine insurance broker, Glasgow, assigned to Henry David Anderson and Colin Dunlop Donald, and the survivor of them, as trustees for certain purposes, his whole right and interest, present, future, or contingent, in the estate of his father the deceased James Browne under his trust-disposition and settlement dated 25th January 1842. This included a spes successionis to a share of the residue of James Browne's estate which was held by Robert Bennett Browne and Duncan C. Brown, who was also in business in Glasgow, as trustees under the settlement, in trust for the truster's daughter Isabella for her liferent allenarly and her issue in fee, and failing such issue for the survivors of the truster's children.
On 20th April the assignation was sent by the assignees' agents to Messrs Andersons & Pattison, writers in Glasgow, as agents for James Browne's trustees, with a request that they should “get an acknowledgment of intimation by Mr James Browne's trustees endorsed thereon, and thereafter return it to us.” They also enclosed a copy of the assignation for the trustees' use. The deed was returned on 24th April, having endorsed thereon an acknowledgment in the following terms:—“ Glasgow, 20 th April 1888.—As agents for the trustees of the deceased James Browne, insurance broker in Glasgow, we acknowledge to have received of this date intimation of the foregoing assignation.— Andersons & Pattison, Agents for Mr Browne's trustees.” The assignation and docquet were entered by the agents in the sederunt-book of the trust prior to the next ensuing meeting of the trustees.
In May 1888 Robert Bennett Browne stopped payment, and his estates were sequestrated on 28th June, Andrew Simpson M'Clelland, C.A., Glasgow, being appointed trustee.
In August 1892 Duncan C. Brown died and Robert Bennett Browne became the sole trustee on his father James Browne's trust estate. He remained sole trustee till
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October, when he assumed Andrew Macewan, accountant, Glasgow, as a trustee. On 8th December 1897 Miss Isabella Browne died unmarried, and the only survivor of the truster James Browne's children at that date being Robert Bennett Browne, he then became entitled to the fee of the share which had been liferented by Isabella Browne.
Thereafter Robert Bennett Browne and Andrew Macewan, as trustees on James Browne's estate, raised an action of multiplepoinding for the purpose of deciding, inter alia, to whom the fee of the above share was to be paid. The fee of this share constituted four-fifths of the fund in medio.
Claims were lodged (1) by Henry David Anderson, who claimed the share as the survivor of the two assignees in the assignation of 11th April 1888; and (2) by Andrew Simpson M'Clelland as trustee on the sequestrated estate of Robert Bennett Browne, who claimed the share as an asset of the bankrupt which had passed by his sequestration to his creditors.
The claimant M'Clelland pleaded, inter alia—“(2) The said assignation not having been intimated to the trustees of the late James Browne, is void and of no effect in competition with the claimant.”
Proof was led.
On 26th June 1901 the Lord Ordinary (
Pearson ) sustained the second plea-in-law for the claimant Andrew Simpson M'Clelland, trustee on the sequestrated estates of Robert Bennett Browne, and ranked and preferred him to four-fifths of the fund in medio.Opinion.—“The fund in medio in this multiplepoinding was the share of the estate of the late James Browne, which was liferented by his daughter Isabella. Robert Bennett Browne has already been found entitled to four-fifths of that share on the death of Isabella without issue, which happened in 1897.
In and prior to 1888 Mr R. B. Browne carried on business in Glasgow as an insurance broker and underwriter, but in May of that year he stopped payment, and his estates were sequestrated on 28th June. His interest in the fund in medio is now claimed (1) by Mr M'Clelland, C.A., the trustee in his sequestration, and (2) by Mr Henry Anderson as surviving trustee, under an assignation dated 11th April 1888, whereby Mr R. B. Browne assigned to trustees his whole interest in the estate of his father. The trust purposes were expressed in a relative agreement dated 18th to 21st April 1888, whereby certain friends of Mr R. B. Browne undertook to provide him with a cash-credit of £6000 for use in his business, he undertaking to assign to trustees for them, inter alia, his interest in his father's estate in security.
The first question raised is, whether the assignation in security was duly intimated to the trustees of the late James Browne. The trustee in bankruptcy maintains that it was not, and that the assignation is therefore of no effect in competition with his own title as trustee in the sequestration of R. B. Browne.
The facts on which this question depends are these:—In 1888 the trustees of the late James Browne were his son Mr R. B. Browne and his son-in-law Mr Duncan Brown. The assignation in security being executed by Mr R. B. Browne on 11th April, was on 20th April sent by the assignees' agents to Messrs Andersons & Pattison, writers in Glasgow, as agents for James Browne's trustees, with a request that they should ‘get an acknowledgment of intimation by Mr James Browne's trustees endorsed thereon, and thereafter return it to us.’ They also enclosed a copy of the assignation for the trustees' use. The deed was returned on 24th April, having endorsed thereon an acknowledgment in the following terms:— Glasgow, 20 th April 1888.—As agents for the trustees of the deceased James Browne, insurance broker in Glasgow, we acknowledge to have received of this date intimation of the foregoing assignation— Andersons & Pattison, Agents for Mr Browne's trustees.’
It is urged, in the first place, that this is in itself sufficient without the assignation being brought to the knowledge of the trustees at all. It is true that Messrs Andersons & Pattison were the trustees' law-agents, and in that capacity managed the business of the trust in the usual way. But they had no express authority to accept such intimations on behalf of the trustees, nor are there any circumstances in the case from which such authority can be inferred. The trustees were both business men residing in or near Glasgow, and attending meetings in the agents' office from time to time, and in such circumstances I know of no authority for holding that intimation to the law-agents as for the trustees is enough.
It is said to have been brought to the knowledge of the trustees by the assignation and docquet having been entered in the sederunt-book of the trust. This was done prior to the next ensuing meeting of trustees, and the suggestion is that the trustees must be held to have known the contents of the sederunt-book, and that they would see the engrossment of the deed with the agents' acknowledgment at the next meeting which they attended. This is not proved and can hardly be presumed, but even were it otherwise, the next ensuing meeting did not take place until after the sequestration.
The next contention is founded on the specialty that R. B. Browne, one of the two trustees to whom the assignation should have been intimated, was himself the granter of it. This may, I think, be taken as equivalent to intimation to him, and the question is, whether intimation to one of two trustees is sufficient to divest the cedent. That the relations between the trustees themselves may be such as to render this sufficient is conceded. This is illustrated by the case of Jamieson, 14 R. 644, where one of two trustees being ill, intimation to the other trustee was sustained as sufficient, he being practically the sole acting trustee, and having the
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trust funds in his hands. That case was decided on its special circumstances, and does not affirm that intimation to one of two trustees is in ordinary circumstances sufficient. That proposition would have afforded a clear and simple ground of decision in that case if the Court had been prepared to affirm it in general terms. Here neither of the trustees was in any exceptional position as regards the trust fund or its management. And as I can see no difference in principle, so far as divestiture is concerned, between the case of one or two trustees, and one of three or more, the contention comes to this, that where one of a body of trustees happens to grant an assignation of a fund held by the trustees no further step is required to invest the assignee in the right. In the present case there is this further specialty, that four years afterwards R. B. Browne's co-trustee died, and that R. B. Browne (the cedent) was the sole trustee of James Browne from August 1892 until October, when he assumed a colleague. It is contended that in August 1892, by the death of the co-trustee, the intimation became complete, even assuming it had previously been ineffectual. But even if the death could be supposed to have this result, which I think it could not, the sequestration had intervened.
I therefore hold that the exclusive plea stated for the trustee in bankruptcy must be sustained, unless the trustee is barred from stating it. [ His Lordship then referred to questions not dealt with in this report.] But it is unnecessary to enter into this question, as I am prepared to sustain the trustee's second plea-in-law and to rank him in terms of his claim.”
The claimant H. D. Anderson reclaimed, and argued—The assignation had been sufficiently intimated to the trustees of James Browne. (1) It had been intimated to the recognised agents of the trust. The object of intimation was that anyone who was asked to take an assignation of the same securities or effects might be able to find out that a prior assignation had been made. This he would do by going to the agents of the trust. Intimation to the agents had been held to be an effective notification to the trustees— Earl of Aberdeen v. Earl of March, April 9, 1730, 1 Paton's App. 44; Rickards v. Gledstanes, 1862, 31 L.J., Ch. 142; Willis v. Greenhill, 1861, 31 L.J., Ch. 1. (2) Where there were two trustees, intimation to one trustee was good intimation to them both—Stair, iii. 1, 10; Erskine's Institutes, iii. 5, 5; Jameson v. Sharp, March 18, 1887, 14 R. 643, 24 S.L.R. 453. Now, here there had been good intimation to one of the trustees at the date of the assignation, because the assignor was one of the trustees, and that was sufficient intimation— Creditors of Lord Ballenden v. Countess of Dalhousie, March 28, 1707, M. 865; Turnbull v. Stewart, June 12, 1751, M. 868; Miller v. Learmonth, May 17, 1870, Paterson's H.L. Appeals, 1777, 42 S.J. 418; Paul v. Boyd's Trustees, May 22, 1835, 13 S. 818. (3) On the death of Duncan C. Browne in 1892 Robert Bennett Browne became the sole trustee, and he being the assignor, had then sufficient intimation of the assignation, in terms of the cases last quoted. In these three separate ways the assignation had been intimated to the trustees, and his claim should be sustained.
Argued for the claimant Andrew Simpson M'Clelland—There had been no intimation of the assignation to James Browne's trustees. (1) As a general rule intimation to a law-agent was not sufficient intimation to his employer—Bell's Lectures on Conveyancing, 318. In the case of a corporation or limited company intimation to an official might be sufficient, but there was no authority in Scotland that an intimation to a law-agent of a trust was equivalent to intimation to the trustees. The case of a factor was different from that of a law-agent. It was a question of fact whether or not intimation to a factor was sufficient. If the factor had control of the funds, intimation to him would possibly be good. But intimation to a law-agent was quite another matter. Such intimation had never been held to be sufficient in Scotland. (2) Intimation to one trustee was not sufficient intimation to all the trustees— Hill v. Lindsay, February 7, 1846, 8 D. 472; Watt's Trustees v. Pinkney, December 21, 1853, 16 D. 279, opinion of L. P. M'Neill, 286. Trustees were not correi debendi, so the references to Stair and Erskine had no bearing on the present case. (3) A bad intimation could not be made good by the death of one of the trustees. The Lord Ordinary's interlocutor should therefore be affirmed.
At advising—
The intimation was made on 20th April 1888, and the sequestration of Robert Bennett Browne took place on 28th June of the same year. At the time of the assignation he had only a spes successionis, as it was only by his surviving a sister that he could take anything. In fact nothing came to him till 1897.
On the question of intimation the followingare the facts—(1) Robert Bennett Browne was himself a trustee; (2) the intimation was made to the truster's law-agents, and acknowledged by them; (3) it was at once engrossed by them in the sederunt book of the trust; and (4) in 1892 the only other trustee died, and thus Robert Bennett Browne, the granter, became the sole trustee.
If it were necessary to decide this case upon the question whether intimation to the trustees through their agents was sufficient, I would be inclined to hold that it
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But it is unnecessary, in the view I take of another of the points in the case, to give a positive decision on that question. For I am of opinion that there was sufficient intimation to the trustees on other grounds. There were meetings of trustees of later date than the time when the engrossing in the sederunt-book took place, and particularly in 1890, and it is to be presumed that the trustees knew the contents of their own sederunt—book. But further, even if they did not, one trustee did not require formal intimation. He was himself the granter. Whether his being in the position of having intimation by being the granter is sufficient to constitute the assignation an intimated assignation to the trust or not, when the event occurred by which he became the sole trustee, it is difficult to see how it could be held that the trust was without intimation of the assignation. Now, that event occurred five years before any right emerged to the assignor. In these circumstances it appears to me not to be possible to hold that this was not an intimated assignation, and that when the right emerged the trustee in Robert Bennett Browne's sequestration could carry off the subject of the assignation to the defeat of the interests of onerous assignees to whom the spes successionis had been made over nearly ten years before.
Such being my view of the question as regards intimation, it is unnecessary to consider the question of bar as against the trustee in bankruptcy. I would move your Lordships to recal the interlocutor of the Lord Ordinary, and to repel the claim for the trustee on the sequestrated estate of Robert Bennett Browne.
From what I have said it is plain that at the date of his sequestration Robert had only an expectancy in regard to Isabella's share. Such a right, it is now well settled, does not pass by sequestration to the bankrupt's trustee or creditors. But when the expectancy became a vested right of property in Robert by Isabella's death in December 1897 it would pass to the trustee as an asset of the bankrupt if there was no preferable right existing to exclude the trustee's claim. It cannot be doubted that the assignation in favour of Mr Anderson formed such a preferable right if that assignation was perfected by intimation. And the question before us really turns on this, Was that assignation duly intimated? If it was, Mr Anderson must prevail in the competition. Now, the assignation (so far as it need here be considered) was an assignation of a spes successionis to a fund in the hands of Mr James Browne's trustees, and to them accordingly intimation of the assignation had to be made. In point of fact, intimation of the assignation was made about a week after the date of its execution to the law-agents for Mr James Browne's trustees, who were advising the trustees in the administration of the trust affairs. It is maintained by the claimant M'Clelland that said intimation was ineffectual. Whether that is so or not is a matter upon which I give no opinion, because I do not think it necessary to the decision of the question before us, remarking only that it is difficult prima facie to see why if intimation of an assignation to a factor managing an estate is sufficient as intimation to his principal (which has been held) intimation to the law-agents of a trust should not be held sufficient as intimation to the trustees for whom they act. It is unnecessary, however, as I have said, to give any decision on this point. In 1892, five years before Robert's expectancy became a right of property, Robert was the sole surviving and acting trustee under his father's settlement. He was the granter of the assignation, and therefore in 1892, as sole trustee, had knowledge that such an assignation existed. The only purpose of intimation is that the holder of the thing or fund assigned should be made aware of the existence of the assignation, and by such knowledge charged with the duty of
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At the date of the assignation Andersons & Pattison, writers, Glasgow, were agents for the trustees of James Browne, and continued to act as such for many years afterwards. They took a general management of the trust affairs. Mr J. P. Anderson describes their duties thus—“The factors drew the income and paid it to the liferenters, but whenever it came to any dealing with capital, that was brought under our firm's charge—any matter of investment. It was committed to us to advise the trustees about investments. Capital transactions went through our office; otherwise our management of the business of the trust was law-agency.”
Mr W. P. Anderson says:—“Our firm did everything except the collection of the income and the handing it over to the liferenters.”
The assignation was intimated by M'Grigor, Donald, & Company to Andersons & Pattison by letter dated 20th April 1888; and it was returned by the latter with an acknowledgment of intimation by them as agents for James Browne's trustees; and M'Grigor, Donald, & Company paid Andersons & Pattison their fees in connection with the matter. The assignation and acknowledgment of intimation endorsed thereon is printed.
The question is whether the assignation was sufficiently intimated to the trustees of James Browne. On more than one ground I am of opinion that it was.
(1) I think it was within the province of the agents of the trust to accept intimation of an assignation. J. P. Anderson says—“It was quite a common thing for law-agents to accept intimation such as this without any communication to the trustees. I say that generally. I do not refer to this trust, but to the practice at that time in our office and in other offices also.” There is no evidence to the contrary, and so far as my experience goes the practice is correctly described.
(2) But it is unnecessary to rest our judgment on this ground, because Duncan Campbell Brown died in 1892 and Robert Bennett Browne then became sole trustee. At that time Robert Bennett Browne's interest in his father's trust was only a spes successionis, and therefore, not being property, it had not passed to his trustee under the vesting clause of the Act, and he was at full liberty to deal with it.— Trappes v. Meredith, 10 Macph. 38, 9 S.L.R. 29; Reid v. Morrison, 20 R. 510, 30 S.L.R.477; and Grant v. Green's Trustee, 38 S.L.R. 733.
Now, Robert Bennett Browne being the assigner, no intimation to him or acknowledgment by him was required; and therefore when his right became absolute in 1897, which was the earliest date at which his trustee could have acquired it, it had already passed to his assignee, and the assignee's right was complete.
I am therefore of opinion that there was here sufficient intimation, and that the Lord Ordinary has taken too narrow a view of the matter.
The Court recalled the interlocutor of the Lord Ordinary, repelled the claim of
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Counsel for the Claimant and Reclaimer H. D. Anderson— W. Campbell, K.C.— Younger. Agents— Bell & Bannerman, W.S.
Counsel for the Claimant and Respondent A. S. M'Clelland— H. Johnston, K.C.— Lead better. Agents— Forrester &Davidson, W.S.
Solicitors: Agents for the Pursuers and Real Raisers— Campbell & Smith, S.S.C.