Scottish Court of Session Decisions

In March 1909 a Special Case was presented by (1) James Naismith and others, the trustees acting under the trust-disposition, dated 22nd January 1892, and codicil, dated 21st April 1893, of the late James Naismith of Coatshill, Blantyre, who died on 19th September 1900, first parties; (2) the said James Naismith, who was the testator's only son, and who was unmarried, second party; (3) Mrs Mary Jane Thomson Naismith or Cleland, widow, who was the only other child of the testator, third party; and (4) William Cleland, the third party's son, and the said James Naismith and others, the trustees acting under the antenuptial marriage-contract of her other child Mrs Cleland or Brown, fourth parties.

The trust-disposition and settlement, after sundry bequests, directed the trustees—“ In the Sixth place, To hold, apply, pay, and convey the whole residue, remainder, and reversion of my said estate and effects, heritable and moveable, real and personal, to my son the said James Naismith, in liferent for his liferent alimentary use allenarly, and to and for behoof of his children equally among them in fee, and that upon their respectively attaining the age of twenty-one years, and on the death of my said son, whichever event shall last happen, which is hereby declared to be the period of vesting of the provisions in their favour in this place, and that under the declarations hereinafter written; and failing my said son leaving children, or in the event of all of them and their issue dying before the said period of vesting of the provisions in their favour in this place, then to and for behoof of my daughter the said Mary Jane Thomson Naismith or Cleland, in liferent for her liferent alimentary use allenarly, and to and for behoof of her children equally among them in fee, and that upon their respectively attaining the age of twenty-one years and on the death of my said daughter, whichever event shall last happen, which, coupled with the above failure, is hereby declared to be the period of vesting of the provisions in their favour in this place.”

The settlement also contained this provision:—“And to enable my trustees to carry out the purposes of these presents, there are hereby conferred on them all requisite powers, and particularly (but without prejudice to said generality) power … to sell and dispose of the trust estate hereby conveyed, heritable and moveable, real and personal, or any part thereof.”

The codicil directed the trustees, in addition to certain bequests in favour of his daughter Mrs Mary Jane Thomson Naismith or Cleland, contained in the settlement, “to make payment to my said daughter, in the event of her surviving me, and only so long as she lives thereafter, of one-half part or share of the net amounts of the annual rents or lordships that may be payable to my trustees under: ( First) Offer by William Baird and Company, iron and coal masters, One hundred and sixty-eight West George Street, Glasgow, dated the eleventh day of April in the year Eighteen hundred and ninety-two, to take in lease from me certain minerals within the lands and estate of Coatshill, and acceptance thereof by me, dated the said eleventh day of April Eighteen hundred and ninety-two; and ( Second) Offer by Robert Addie & Sons, iron and coalmasters, Langloan Iron Works, Coatbridge, dated the seventeenth day of May in the year Eighteen hundred and ninety-two, to take in lease from me certain minerals within part of the lands of South Whitelaw Park, lying within the parish of Bothwell, and acceptance thereof by me, dated the

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twenty-fourth day in the year Eighteen hundred and ninety-two, or under any leases that may in virtue of the said offers and acceptances be entered into between the said William Baird & Company and me or my trustees, or between the said Robert Addie & Sons and me or my trustees.”

The Special Case set forth:—“4. Following upon the offer by Messrs William Baird & Company, alease, which is dated 12th and 27th September 1894, was entered into between the truster and them. Under that lease, which is for thirty-five years, with breaks in the option of the tenant every five years, the minerals therein leased were being worked at the date of the truster's death, and have been and are still being worked. No formal lease has yet followed upon the informal offer by Messrs Robert Addie & Sons, which is for thirty-one years, with breaks in the option of the tenants every five years; nor have the minerals so let yet been worked. Messrs Addie & Sons have duly paid the fixed rent since 1892, and have not taken advantage of any of the three breaks which have been available to them since said date. The lordships in Messrs William Baird & Company's lease, and the fixed rent payable by Messrs Robert Addie & Sons under the let to them, were received by the truster, and treated by him as part of his income up to his death in 1900, and since then the lordships and rents have been paid by his trustees in terms of his said settlement and codicil, one-half to his son James Naismith, and the other half to his daughter Mrs Cleland. The said lordships and rents form more than one-half the income of the trust estate.

5. The trustees have received an offer from Messrs William Baird & Company, Ltd., for a lease of the minerals in the Laighlands Grass Park, Bothwell, extending to about ten acres or thereby, part of the trust estate, and after certain negotiations the trustees have provisionally arranged with Messrs Baird & Company, Ltd., for a lease to the latter of the same for twenty-five and a-half years, from Martinmas last 1908, with a break in the tenants' option every three years from Whitsunday next, the fixed rent stipulated to be paid being £30 per annum, or in the landlords' option certain royalties, and also a way-leave of one penny per ton on all minerals carried through from other mineral fields belonging or let to said tenants.

6. The truster's lands of Coatshill are in the parish of Blantyre, to the south of the river Clyde, while his remaining lands are in the parish of Bothwell, to the north of the river Clyde. Both Coatshill and the lands in Bothwell consist partly of feued and partly of unfeued lands. The minerals in Coatshill are worked by the tenants Messrs William Baird and Company, Ltd., from their Bothwell Castle colliery pits, Nos. 3 and 4, on the south side of the river, and the minerals under Laighlands Grass Park are proposed to be worked by them from pits Nos. 1 and 2 of their Bothwell Park Colliery. The lands of Laighlands Grass Park are discontiguous from the other lands of the truster, the nearest portion of his other lands being rather less than half a mile distant therefrom. The lands of South Whitelaw Park, the minerals in which are let to Messrs Robert Addie & Sons, the lands of Laighlands Grass Park, the minerals in which it is proposed to let to Messrs William Baird & Company, Ltd., and the said lands of Coatshill, are, however, all part of the same mineral field. The whole district is a mining one, and practically the whole minerals therein have been worked or are being worked.

7. The first parties are satisfied that it will be advantageous to the trust and in accordance with judicious administration thereof to enter into the proposed lease of the minerals in the lands of Laighlands Grass Park, as owing to the small area of said park the minerals could not be properly worked by themselves as a separate field but would require to be worked in conjunction with and from pits on an adjoining mineral field, and they consider that if this lease be not entered into such a favourable opportunity for the working of these minerals may not readily occur again. The minerals in said area are bounded entirely by the mineral fields of Messrs William Baird & Company, Limited, except (1) for a short distance on the west, where they are bounded by minerals belonging to various proprietors, which are under residential property, and are not in course of being worked; and (2) on the south-east, where they are bounded by a portion of the mineral field let to the Bent Colliery Company, Limited. There is, however, a fault or dislocation of the strata which prevents the minerals in Laighlands grass park from being worked from the south-east side.

8. Questions have arisen as to the powers of the first parties to grant the proposed lease, and as to whether, in the event of such a lease being granted, the rent, lordships, and wayleave payable thereunder will fall to be paid to the liferenter the second party, or the contingent liferenter the third party, or to be held, at any rate so far as the rent and royalties are concerned, for the ultimate fiars. The first, second, and third parties maintain that the first parties are entitled to enter into the proposed lease; while the fourth parties on the other hand maintain that it is not competent for them to do so. Further, in the event of it being held that the first parties are entitled to enter into the proposed lease, the second and third parties maintain that the fixed rents, lordships, and wayleaves arising therefrom fall to be paid to the liferenter, while the fourth parties maintain that the said rents, lordships, and wayleaves, or at all events the said rents and lordships, fall to be accumulated and held by the first parties for the benefit of the ultimate fiars, and only the interest thereof paid to the liferenter. A further question also arises in regard to the lordships that may be paid under the said lease entered into by the truster of the minerals in the lands of South Whitelaw Park. The second and third parties maintain that in the event of Messrs Robert

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Addie & Sons working the minerals in the lands of South Whitelaw park leased to them by the truster, and the lordships payable therefor being in excess of the fixed rent, the liferenter will be entitled to payment of said one-half of the lordships in excess of the fixed rent in addition to one-half of the fixed rent. The fourth parties on the other hand maintain that the one-half of these lordships in excess of the fixed rent will fall to be accumulated and held by the first parties for the benefit of the ultimate fiars, and that the liferenter will be entitled to only the interest thereon.” The questions for the opinion of the Court were:—“(1) Are the first parties entitled, in the circumstances before set forth, to enter into the proposed lease of the minerals in the lands of Laighlands Grass Park? (2) In the event of the first question being answered in the affirmative, do ( a) the rent and lordships, and ( b) the wayleave arising under said lease, or any of these, fall to be accumulated and held by the first parties for the benefit of the ultimate fiars, and only the interest that may be earned thereon paid to the liferenter under the sixth purpose of the said trust-disposition and settlement? or (3) Do ( a) said rent and lordships, and ( b) said way-leave, or any of these, fall to be paid to the liferenter? (4) In the event of the minerals under the lands of South White-law Park, at present let to Messrs Robert Addie & Sons, being worked, and the lordships payable therefor being in excess of the fixed rent, does one-half of the said lordships in excess of the fixed rent fall to be accumulated and held by the first parties for the benefit of the ultimate fiars, and only the interest that may be earned thereon paid to the liferenter under the sixth purpose of said trust-disposition and settlement? or, (5) Does one-half of whole said lordships, though in excess of said fixed rent, fall to be paid to the liferenter?” Argued for the first, second, and third parties—(1) The trustees were entitled to grant the proposed lease. The settlement conferred on them all requisite powers, and in particular power to sell the estate. That included power to grant a lease and certainly a mineral lease, which was really more of the nature of a sale of a portion of the land— per Lord Cairns in Gowans v. Christie, February 14, 1873, 11 Macph. (H.L.) 1, at p. 12, 10 S.L.R. 318, at p. 319, approved per Lord Watson in Campbell v. Wardlaw, July 6, 1882, 10 R. (H.L.165, at p.68, 20 S.L.R. 748, at p. 751. Further, trustees had certainly power to grant a lease of minerals which had been worked in the lifetime of the testator, and that applied to the proposed lease of a part of the same mineral field as had been worked before the testator's death. (2) The rents and lordships under the proposed lease would fall to be paid to the liferenter. It was no doubt true that as a general rule the rents of minerals not opened in the testator's lifetime were to be treated as capital— Ranken v. Ranken's Trustees, 1908 S.C. 3, 45 S.L.R. 10, but if the lease were of minerals in the same field as minerals leased or opened in the testator's lifetime the proceeds would fall to be paid to the liferenter— Nugent v. Nugent's Trustees, November 20, 1899, 2 F. (H.L.) 21, 37 S.L.R. 618; Dick's Trustees v. Robertson, June 28, 1901, 3 F. 1021, 38 S.L.R. 744. In any event the wayleave was payable to the liferenter. (3) In the event of the minerals in South Whitelaw Park being worked under the lease granted by the testator, the lordships would be payable to the liferenter. There was no distinction between lordship and fixed rent, per Lord Ardwall in Ranken v. Ranken's Trustees, cit., and the fixed rent was undoubtedly payable to the liferenter.

Argued for the fourth parties—(1) The trustees had no power to grant the proposed lease. The settlement conferred no such power, and it could not be implied— Campbell v. Wardlaw, cit. per Lord Blackburn, Lord Watson. (2) If the lease could be granted, the rent and lordships would belong to the fiar— Campbell v. Wardlaw, cit., Ranken v. Ranken's Trustees cit. The minerals in the proposed lease could not be regarded as opened. They were situated in lands quite discontiguous from the testator's other lands. In the case of Nugent v. Nugent's Trustees the lease was of minerals which had formerly been worked. (3) It was not disputed that lordships payable under the lease of South Whitelaw Park would be payable to the liferenter.