Scottish Court of Session Decisions

The Trusts (Scotland) Act 1861 (24 and 25 Vict. cap. 84), section 1, enacts—“All trusts constituted by any deed or local Act of Parliament under which gratuitous trustees are nominated shall be held to include the following provisions, unless the contrary be expressed; that is to say power to such trustee, if there be only one, or to the trustees so nominated, or a quorum of them, to assume new trustees; a provision that the majority of the trustees accepting and surviving shall be a quorum”

The Trusts (Scotland) Act 1867 (30 and 31 Vict. cap. 97), which proceeds on the preamble-“Whereas by the Acts 24 and 25 Vict. cap. 84, and 26 and 27 Vict. cap. 115, certain powers are conferred on gratuitous trustees in Scotland, and it is expedient that greater facilities should be given for the administration of trust-estates in Scotland, … .” in section 1 enacts—“In the construction of this Act, and of the said recited Acts, the words ‘trusts and trust-deeds’ shall be

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held to mean and include all trusts constituted by virtue of any deed or by private or local Act of Parliament; and the words ‘gratuitous trustees’ in the sense of this Act, and of the said recited Acts, shall mean and include all trustees who are not entitled as such to remuneration for their services, in addition to any benefit they may be entitled to under the trust, or who hold the office ex officio, and shall extend to and include all trustees, whether original or assumed, who are entitled to receive any legacy, or annuity, or bequest under the trust”

The Trusts (Scotland) Amendment Act 1884 (47 and 48 Vict. cap. 63), which in the preamble recites, inter alia, the Acts 24 and 25 Vict. cap. 84, and 30 and 31 Vict. cap. 97, enacts:—Section 1—“This Act may be cited as the Trusts (Scotland) Amendment Act 1884, and the said Acts and this Act may be cited as the Trusts (Scotland) Acts 1861 to 1884, and shall be read and construed together.” Section 2—“In the construction of the said recited Acts, and of this Act, ‘trust’ shall mean and include any trust constituted by any deed or other writing, or by private or local Act of Parliament, or by resolution of any corporation or public or ecclesiastical body, and the appointment of any tutor, curator, or judicial factor by deed, decree, or otherwise”

Archibald Clark, grazier, Perth, whose affairs had become embarrassed, granted, on 18th May 1906, a trust-deed for behoof of creditors in favour of Thomas Logan and William S. Davidson, both solicitors in Perth. The trust-deed contained no survivorship clause. Davidson died on 29th October 1906. On 4th December 1906 Logan, the surviving trustee, with the consent and concurrence of Clark, raised an action against Peter M'Rostie, farmer, then residing in Comrie, for payment of £80, 14s. alleged to be due to Clark.

The defender pleaded—“(1) No title to sue.”

On 7th March 1907 the Sheriff-Substitute ( Sym) sustained the defender's first plea-in-law and dismissed the action, and on appeal the Sheriff ( Johnston), on 10th April 1907, affirmed his Substitute's interlocutor.

Note.—“I reach with reluctance the same conclusion as the Sheriff-Substitute upon the case at common law. The dicta in the case of Dawson v. Stirton, 2 Macph. 196, have been quoted for forty years as establishing the proposition that a nomination of trustees in a trust deed for creditors is joint, and that the appointment falls when one of the trustees fails, and I think that these dicta are binding in the Sheriff Court. There is force in the pursuer's contention that if the powers to assume new trustees and act by a quorum contained in sec. 1 of the Trusts Act of 1861 be read into this trust deed this displaces the rule, because the rule being based upon presumed intention the conferring of such powers may reasonably be held to shift the presumption as being indicative that it was not regarded as vital that the trust should be administered by both the two trustees named and by nobody else. I doubt, however, whether it is warrantable in the Sheriff Court to treat a well-established rule of law as displaced by such an implication. Further, it is doubtful whether sec. 1 of the Act of 1861 applies to such a trust as the present. The matter has been treated as an open one by more than one commentator. It seems to stand thus—the Act of 1867 deals with trusts generally without specifying that its application is limited to trusts where the trustees act gratuitously. In the case of Mackenzie, 10 Macph. 749, it was held (apparently with some difficulty) that the Act is so limited owing to its relationship to the Act of 1861. The Act of 1884 defines trusts for the purposes of the Trusts Acts generally, and it makes the word ‘trustee’ to include certain officers who do not act gratuitously. It provides, further, that the Trusts Acts 1861 to 1884 are to be read as one Act. Now in the case of the Royal Bank, 20 R. 741, it was held that this is sufficient to get rid of the inferential limitation to gratuitous trusts in the Act of 1867 when that Act speaks of trustees and trusts without qualification. But section 1 of the Act of 1861 deals specifically with ‘trusts under which gratuitous trustees are nominated.’ It is not clear that reading into the Act of 1861 the definition of a trust in the Act of 1884, it becomes necessary to read the words ‘under which gratuitous trustees are nominated’ out of the Act of 1861. The question is a narrow one, which might be decided either way without obvious error.

“The present case stands thus. There is a judgment of the Sheriff-Substitute, the affirmance of which enables the pursuer to take the case to the Court of Session without the expense of further procedure, and does not deprive the interest which he represents of another remedy if he does not think fit to take that course. On the other hand, a reversal of the Sheriff-Substitute's judgment infers (1) the disturbance of a hitherto recognised rule of law upon the strength of inferential deductions from statutory provisions not framed with any direct reference to that rule; (2) the decision in pursuer's favour of what has hitherto been regarded as a narrow question of statutory construction as to the intended application of the Act of 1861; (3) the probability of further procedure and a proof in the Sheriff Court which may be rendered nugatory by a decision of the Court of Session that the pursuer has no title to sue.

In these circumstances I conceive it to be my duty to affirm the Sheriff-Substitute's interlocutor, not being clearly satisfied that the result at which he has arrived is erroneous in law.”

The pursuer appealed, and argued—The pursuer had a good title to sue. The dictum in Dawson v. Stirton, December 4, 1863, 2 Macph. 196, that the nomination of trustees in trust-deeds for creditors was joint, had been displaced by the Trust Acts. These Acts, if read together as provided for by the Trust Act of 1884 (47 and 48 Vict. c. 63), applied, under the definition of “trust” in section 2 of that Act, both to gratuitous and

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non-gratuitous trusts. That being so, a surviving trustee in a non-gratuitous trust had by implication under the Trusts Act 1861 (24 and 25 Vict. c. 81), sec. 1, a good title to sue. The Act of 1884 was applicable both to gratuitous and non-gratuitous trusts, and the limitation of the powers conferred by the 1861 Act to gratuitous trusts which had been read into the Act of 1867 (30 and 31 Vict. c. 97) in the case of Mackenzie, May 28, 1872, 10 Macph. 749, 9 S.L.R. 478, was not to be read into the Act of 1884, as it was inconsistent with the Act and their being read together as one Act. Apart from statute the pursuer had a good title at common law to sue on the ground of survivorship.

Argued for respondent—(The Court asking argument on the statutes only)—The judgment of the Sheriffs was right. The case of Mackenzie ( cit. sup.) had limited the Act of 1867 to gratuitous trustees. Accordingly, neither under the Act of 1867 nor that of 1861 had this surviving trustee a good title to sue. The Act of 1884 had not altered this. Esto that in the case of the Royal Bank of Scotland, May 31, 1893, 20 R. 741, 30 S.L.R. 675, the Court took the view that with regard to the matter with which it was dealing, the Act of 1867 was no longer limited to gratuitous trustees; that case was dealing with a totally different matter from the present.