Scottish Court of Session Decisions

Page: 219↓

The Clyde Navigation Consolidation Act 1858 (21 and 22 Vict. cap. cxlix), sec. 61, is quoted infra.

The Companies Clauses Act 1863 (26 and 27 Vict. cap. 118) enacts—Section 23—“Debenture stock, with the interest thereon, shall be a charge upon the undertaking of the company prior to all shares or stock of the company, and shall be transmissible and transferable in the same manner and according to the same regulations and provisions as other stock of the company, and shall in all other respects have the incidents of personal estate.”

Samuel Maxwell and others, the trustees acting under the trust-disposition and settlement of Mrs Janet Drysdale or Robertson, Dunfermline, first parties; Captain Robert Maxwell, 2/73 Malabar Infantry, India, and others, the residuary legatees under the testator's trust-disposition and settlement, second parties; and Robert Robertson Forrester, solicitor, Broxburn, as trustee and executor acting under the general disposition and settlement of the deceased James Robertson, retired station-master, who resided at Gray's Mill Farm, Slateford, Midlothian, third party, presented a Special Case for the opinion and judgment of the Court.

The Case stated—“1. The deceased Mrs Janet Drysdale or Robertson, who resided at Plane Tree House, Torrie, Dunfermline (hereinafter referred to as the truster), died on 9th June 1920 survived by her husband, the now deceased James Robertson, retired stationmaster, who resided at Gray's Mill Farm, Slateford, Midlothian.… 2.… The said trust-disposition and settlement contained no provisions in favour of the truster's husband, the said James Robertson.… 3. The said James Robertson died on 21st April 1921 leaving a trust-disposition and settlement dated 1st, and registered in the Books of Council and Session 26th April 1921, by which he appointed Robert Robertson Forrester, solicitor, Broxburn, to be his sole trustee, executor, and administrator, and assigned, disponed, and bequeathed to him the whole heritable and moveable estate wherever situated which should belong to him or over which he might have power of disposal in trust for the purposes therein specified.… 4. The first parties gave up an inventory of the personal estate of the truster, and were duly confirmed as executors foresaid conform to testament testamentar in their favour dated 14th October 1920. The amount of the personal estate as given up in said inventory after deducting debts and funeral expenses is £8733. 5. The following bond and debenture stock form part of the truster's estate, viz.—( a) Bond for £1500 dated 7th March 1893 by the trustees for the Clyde Navigation in favour of the truster (then Miss Janet Drysdale), repayable 15th May 1900, bearing interest at the rate of 3 1 2 per cent. per annum, subsequently increased to 5 per cent., payable half-yearly. The bond was renewed from time to time, and by the last minute of renewal, dated 2nd October 1917, the principal sum is repayable on 11th November 1922. By the Clyde Navigation Consolidation Act 1858, section 61, it is provided that ‘All bonds to be granted by the Trustees and all monies to be advanced and lent on the security of the rates, works, lands, and properties of the Trustees, shall be moveable or personal estate and transmissible as such, and shall not be of the nature of heritable or real estate.’ … ( d) £410 North British Railway Company 3 per cent. debenture stock. ( e) £200 Caledonian Railway Company 4 per cent. debenture stock. With regard to these last two mentioned stocks, the security for repayment of the principal sums is the whole undertakings of the respective companies, comprising heritable and moveable subjects. Interest on the stock is payable half-yearly, but there is no fixed date when the stock is redeemable. … 6. The third party, as representing the said James Robertson, has claimed jus relicti out of the estate of the truster, and in connection with said claim questions have arisen as to whether the various securities above mentioned are heritable as regards the rights of the husband of the truster, and accordingly do not fall to be taken into account in the computation of the jus relicti, or whether they are moveable as regards said rights and fall to be taken into account, and it has been found necessary to have these questions judicially determined. 7. The first parties do not think it necessary to submit any contention. 8. The second parties contend that the various investments above referred to are heritable as regards the rights of the husband of the truster, and are not subject to jus relicti. 9. The third party contends that the various securities above mentioned are move-able as regards the rights of the husband of the truster, and as such fall to be taken into account in the computation of jus relicti, payable to the third party as representing said husband the now deceased James Robertson.”

The following question of law was submitted for the opinion and judgment of the Court—“Do the following items of the truster's estate, or any and which of them, fall to be taken into account in the computation of the jus relicti payable to the third party as representing the deceased James Robertson:—( a) The said bond by the Trustees of the Clyde Navigation … ( d) The said £410 North British Railway Company 3 per cent. debenture stock; and ( e) The said £200 Caledonian Railway Company 4 per cent. debenture stock?”

Argued for the second parties— Jus relicti was not payable out of bonds with clauses of annual interest, for such bonds remained heritable quoad the rights of husband and wife—Act 1661, c. 32; Ersk. Inst. ii, 9, 10. Stewart's Trustees v. Battcock, 1914 S.C. 179, 51 S.L.R. 183 (where cited as Stewart's Trustees v. Stewart), was a binding authority. In that case, although the stocks were expressly declared to be personal estate, it was held that that was not sufficient to alter the law. The provision in section 23 of the Companies Clauses Act 1863 (26 and 27 Vict. cap. 118) that debenture stock should “have the incidents of personal estate,” effected no more than this, that

Page: 220↓

these bonds were to be transmissible like moveable estate, and it ought not to be construed as cancelling the provisions of the Act of 1661. Stewart's Trustees v. Battcock had been followed in Boss's Trustees, 1916, 2 S.L.T. p. 31, and by Lord Ashmore in M'Wiggan's Trustees v. M'Wiggan, supra, p. 215. In regard to the railway debentures the case of Breatcliff v. Bransby's Trustees, 14 R. 307, 24 S.L.R. 233, was in point as an authority for the proposition that a railway mortgage was a real security in which trustees under a deed which authorised investment on real security were entitled to invest trust funds. So far as the Clyde Trust bond was concerned, the presumption was that a private Act of Parliament did not any more than a private deed alter the general law except in so far as it expressly declared such an alteration to be therein effected; and therefore it must not be presumed to alter the law of succession.

Argued for the third party—The Clyde Trust bond was not ruled by the Act of 1661, c. 32. The Clyde Trust Act was self-contained and decided the point in issue, for it expressly declared that bonds granted by the Trustees were to be moveable or personal estate—Clyde Navigation Consolidation Act 1858 (22 and 23 Vict. cap. 149.) The railway debentures were subject to the provisions of section 23 of the Companies Clauses Act 1863, which enacted that they were to be transmissible like other stock of the company and were to have the incidents of personal estate. All these securities had had the character of personal estate stamped upon them by the statutes in virtue of which they had been created, or to which they were subject, and could not therefore fall within the scope of the Act of 1661. They must therefore be treated as moveable quoad jus relicti.

At advising—