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United Kingdom House of Lords Decisions
You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> His Grace Hugh, Duke of Northumberland and Others, Trustees for behoof of the Right Honourable James, Lord Glenlyon, deceased v. Sir J. A. B. M. Mc Gregor, Curator Bonis to his Grace John, Duke of Atholl [1846] UKHL 5_Bell_396 (28 August 1846)
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Cite as: [1846] UKHL 5_Bell_396
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SCOTTISH_HoL_JURY_COURT
Page: 396↓
(1846) 5 Bell 396
CASES DECIDED IN THE HOUSE OF LORDS, ON APPEAL FROM THE COURTS OF SCOTLAND. 1846.
No. 19
v.
[
Heard
Subject_Entail. — Faculty. —
A power given by an entail to the heirs to provide their younger children in three years' free rent of the lands is not well executed by a bond for payment to trustees of the amount of the rents, with directions to pay the interest only to the children, and to invest the capital in the purchase of lands to be entailed upon a series of heirs, including the children and their children.
Subject_Ibid. — Ibid. —
A bond of provision executed under, but not in conformity with, a power in an entail will not be validated by a power given by the bond to the trustees in whose favour it was granted, so to modify the bond as that it should conform to the power.
Subject_Ibid. — Ibid. —
A power reserved by an entail to the heirs under it cannot be delegated, but must be executed by the heirs themselves.
By the original entail (1766) of the lands of Tullibardine, part of the possessions of the Dukes of Atholl, power was given to the heirs of entail to make provisions for their widows and younger children by a clause in these terms:—
“Excepting and reserving from the said prohibitive, irritant and resolutive clauses, full power to the heirs and members of entail above mentioned, in possession for the time, to grant lifetime infeftments to their wives and husbands, and to the wives and husbands of their presumptive heirs upon their respective marriages, the said liferents being always by way of locality only, and in lieu of their terce and courtesy, from which they are hereby excluded, and each liferent not exceeding a third
Page: 397↓
part of the said lands and estates, and pertinents thereof aforesaid, so far as the same are free and unaffected for the time with former liferents and real debts that may or shall then affect the same; and also excepting and reserving power and liberty to the heirs and members of entail above mentioned in possession for the time, to provide their younger or other children beside the heir, to three years' free rent of the said lands and estates, so far as the same are free and unaffected for the time with any liferents and real debts that may or shall then affect the same.”
On the 18th October, 1824, John, Duke of Atholl executed an entail of his fee-simple lands of Dunkeld, &c., in favour of a series of heirs materially different from that in the Tullibardine entail. In this entail James, Lord Glenlyon, his grace's second son, was the institute, with a substitution, to the heirs male of his body.
On the same day on which he executed this entail, the duke executed a trust bond of provision, which after reciting the entail of 1766 and the power given by it, continued thus:—
“And further, considering sundry weighty considerations, it is my intention to grant to my second son, the Right Honourable James, Lord Glenlyon, in the event of my decease, provisions to the full amount of the three years' rents of the entailed estates contained in the said deeds of entail, and at present in my possession as aforesaid; and which free rents I compute to be at present about 8000 l. sterling per annum, after deduction of the foresaid locality to the said duchess, my spouse, and will, I expect, rise to a sum considerably higher in a few years hence, and which provisions I consider it most expedient and for the advantage of the said James, Lord Glenlyon, to make payable to trustees for his behoof as after mentioned.”
By this bond the granter bound himself to pay to the appellants, as trustees for the purposes therein mentioned, 24,000 l., or such sum more or less as three years'
Page: 398↓
The purposes of the trust were declared in the following terms:—But declaring that these presents are granted to the “said trustees in trust always for the use and behoof of my said son, James, Lord Glenlyon, and his heirs, in manner after mentioned, viz., in the first place, the said trustees are hereby empowered to pay over to the said Lord Glenlyon, during the subsistence of this trust, the annualrent accruing on the principal sums aforesaid, and that half-yearly or quarterly, and at such terms as they shall judge roost expedient; but expressly declaring that it shall not be in the power of the said James, Lord Glenlyon, to assign or convey either the said interest or annual produce of this provision, or the principal sums themselves hereby provided, and that the same, or any part thereof, shall not be arrestable or attachable by any creditor of the said Lord Glenlyon, or affectable by diligence for his debts or deeds of any kind. In the second place, the said trustees shall invest the said principal sums hereby provided in the purchase of lands or other subjects in the county of Perth, and entail the same
Page: 399↓
After the death of the granter of the bond, which took place in 1830, the appellants, the trustees, drew the rents, and paid over the interest of the amount to Lord Glenlyon, who accepted the interest without objection, and in a conveyance of his estate to trustees for his creditors, excepted the bond as if beyond his controul by objection or otherwise. These payments were continued to Lord Glenlyon until his death, which occurred in 1837.
In 1839 the respondent brought an action against the appellants and Lord Glenlyon, the son of the grantee in the bond of provision, concluding for reduction of the bond, upon the ground that it was ultra vires of the granter; that it was not a valid exercise of the faculty given by the deed of entail, inasmuch
Page: 400↓
The only issue taken by the appellants in defence was that the bond was intra vires of the duke.
The Lord Ordinary ordered minutes of debate, which were reported by him to the Court. The Court directed the papers to be laid before the consulted Judges for their opinions. The Judges were divided in opinion in regard to the validity of the bond. The majority held, “1st. That the late Duke of Atholl had only power, under the entail of Tullibardine, to burden the future heirs of entail with three years' rents of the entailed estate, according to the free rental thereof at the period of his death, and that his grace had no right to appoint the capital of such provision to be raised out of the rents payable to the present duke on his succession. 2nd. That the bond under reduction can only be sustained to the effect of entitling the trustees to claim from the present duke the interest of the provision authorized to be paid to the late Lord Glenlyon; but that, quoad ultra, no effectual burden was created on the entailed estate.”
The Court, on the 20th May, 1840, pronounced the following interlocutor:—
“Having considered the minutes of debate, opinions of the consulted Judges, and whole cause, they, in terms of the opinions of the whole Judges, find, that the bond sought to be reduced is not valid and effectual, except to the extent of the annual rents provided therein to be paid to the
Page: 401↓
late Lord Glenlyon during his lifetime, in so far as the said annualrents do not exceed the interests payable on a capital sum equal to three years' free rents of the entailed estates, and with this qualification and exception, decern and declare in terms of the libel.”
The appeal was against this interlocutor.
Mr. Turner and Mr. Anderson for the Appellants.—The clause in the entail under which the provision was granted, is not to be construed strictly. In all statutory provisions made by heirs of entail under the 5th Geo. IV., cap. 87, which is a statute in derogation of the restraining clauses in entails, the statute is construed strictly, and the provision must be given in the precise mode, and be confined to the extent specified by the statute. But where the provision is made by an heir of entail under a power given by the entail itself, the power is entitled to a liberal construction. The heir of entail is in the eye of law proprietor in fee-simple, except in so far as the entail upon the strictest construction fetters his powers. The presumption is in favour of liberty and against restraint.
The power here takes three years' rents out of the fetters of the entail. To this extent it gives the heirs the full powers which they would have had but for the fetters, and it does not impose any condition upon them as to the manner in which they are to dispose of the rents thus set free.
Although the form of the bond was a trust, and not a direct gift, the substantial benefit was given to Lord Glenlyon; so that even if the power be construed as not giving an absolute power to the heir over the money set free from the entail, but a power limited by its exercise being for the benefit of his children,—that was here observed. The form of a trust was adopted, because of the son's circumstances at the time of the provision, which circumstances continued up to the time of the son's death. But for the interposition of the trust, any
Page: 402↓
In another view, a gift to A and his children is not the less a provision for A, that his children are introduced; it is still for his benefit. It is, in fact, an absolute gift to him. The restrictions upon the provision were for the benefit of Lord Glenlyon himself, if the state of his circumstances be taken into account,—and they cannot be excluded.
If his lordship, instead of being insolvent, had been imbecile, a form of execution, which should have guarded him from the effects of his condition, would surely have been a good execution of the power; and why not one which protected him, or rather the provision, from the effects of his insolvency? Unless the trust be a good mode of effecting the provision, there was no way in which the duke could have exercised the power for his son's benefit, that would have saved the provision from going to the son's creditors.
The provision was in substance a gift to Lord Glenlyon in liferent, and his children in fee; but power was vested in the trustees to have changed this, had his lordship's circumstances altered, and even to have paid over the money to him, without investment at all. The fullest discretion was given to the trustees, in this as in every respect. Even, however, viewing the provsion as a gift to him in liferent, and his children in fee, it would still be within the power; for a power to provide children will include grandchildren. Smollett, in note to Wemyss v. Traill, 23 Nov. 1810.
Although the trustees were directed to invest the money in the purchase of lands to be entailed on the same series of heirs as in the entail of the Dunkeld estates, yet that direction is immediately qualified by a discretion given to the trustees, if
Page: 403↓
Moreover, in case the bond should not be within the power in the entail, the trustees are specially authorized, and indeed enjoined, so to modify the provision as to make it conform to the power; so that the bond may be good so far, though void as to the direction to entail, if that direction was in truth ultra vires.
But further, Lord Glenlyon, the party interested, homologated the bond, by accepting the provision given by it. If he, the party interested, did so, it is jus tertii of the respondent to object to its validity.
The propriety or expediency of interposing the trust in the way in which it was done, however reasonable, or dictated by the circumstances, will not answer the objection to its legality.
But even admitting that the circumstances of Lord Glenlyon
Page: 404↓
No doubt the trustees are authorized, if the measure of entailing should be deemed improper or inexpedient, to adopt another investment; but of the necessity for this, the entire judgment is placed in them,—that is, they are not to modify the granter's own words so as to make the effect of the bond consistent with his intentions, but so as to make it consistent with the legal effect of the entail, of which they are constituted judges.
Elsewhere power is given to the trustees, in case the provision should be contrary to the entail, “to restrict and modify,”—not to modify only. These words, taken in connexion with what precede, have reference not to the mode or form of the provision, but its amount, as being within or exceeding that allowed by the entail. Accordingly, there follows an injunction, not upon the trustees only, but also upon Lord Glenlyon, to make the modification and restriction.
However this may be, a power to be exercised by one person cannot be delegated to another. It was not competent, therefore, for the duke to devolve upon the trustees the discretion of fixing how far the provision was within the power given—the impropriety or expediency of the investment—or the extent of the provision. If the money were once paid over to the trustees, what control can the heir have over them, that they will exercise the discretion given them, as to the mode of investment, so as to make it within the terms of the entail, and that
Page: 405↓
If the bond has not been executed according to the form and extent allowed by the entail, it does not constitute a charge upon the lands, and the heir in possession is entitled to be relieved from it. And with regard to homologation by Lord Glenlyon, he was, by his position, incapable of it. The duke had power, but was not under any obligation, to make the provision for him. Had Lord Glenlyon been disposed, therefore, there was no right in him by which he could have challenged the provision. If he could not in any view quarrel it, he was incapable of homologating it.
Page: 406↓
Now the power given was to charge the estate with a sum of money, in order to provide for younger children. It would not, I conceive, be a valid execution of such a power to do this, for the purpose of applying the money in the purchase of land to be entailed upon a particular series of heirs, which, though including children, extended also to other and more remote relations. The provision was to be for the benefit, that is, the exclusive benefit, of the younger children. And, indeed; upon this point, although differing from the majority of his brethren in the general conclusion, one of the learned Judges in the Court of Session, (Lord Medwyn,) observes that he had no doubt that the Duke of Atholl did what he had no legal title to do, when he authorized his trustees to invest this provision in land, and entail it on a series of heirs; because this was not within the terms of the permissive clause.
But then there is a power given to the trustees to modify any of the provisions of the bond. This is relied upon by the appellants. It is to this effect, viz., that “if the provisions hereby granted are or shall be contrary to the powers conferred by the said deed of entail, the same shall be restricted and modified so as to be in strict conformity thereto, and the trustees and Lord Glenlyon are enjoined to restrict and modify the same accordingly.” Under this clause it is supposed that the trustees could apply the sum secured by the bond as they might think proper, for the benefit of Lord Glenlyon's children. But the power reserved by the deed of entail was to be exercised by the heir of entail for the time being. It was in its nature discretionary to be exercised in favour of younger children, as he might think fit; and I concur, therefore, in opinion with those among the learned Judges who consider that the power could not be delegated or transferred. A power which is to be exercised in favour of others according to the discretion of the person in whom it is vested, cannot, by the law of this part of the island, be delegated or transferred.
Page: 407↓
The decisions upon this subject are collected in Sir Edward Sugden's valuable Treatise on Powers. After referring to them, he observes that this is a settled point: v. ii. p. 214, 7th edit. The principle is of universal application; and no decision or dictum to the contrary has been referred to from the law of Scotland.
It is said that a permissive clause of this kind in a deed of entail is to be construed liberally; that the subject over which the power is to be exercised may be considered as taken out of the entail, and may therefore be disposed of according to the will of the heir of entail. But admitting that the clause is to receive a liberal interpretation, still the charge can only be made for purposes which, upon a fair interpretation, come within the power. Here the power was to provide for younger children. The heir of entail might have executed that power in favour of those children, distributing the money among them in any proportions he might have thought proper. He gave the interest of the fund, and that only, to Lord Glenlyon. The principal was left to be applied by the trustees in the purchase of land, and in settling it in a manner not within the power, or, if that could not properly be done, in the exercise of a discretion which the law will not sanction.
I may further observe, that the authority thus attempted to be given to the trustees never was exercised nor any step taken for that purpose, during Lord Glenlyon's lifetime, or, indeed, at any subsequent period. It cannot now be exercised as a provision for him; nor can it, I conceive, be apportioned among the children by the trustees, as the Duke of Atholl could not confer such an authority upon them.
With respect to the reliance placed upon the acquiescence of Lord Glenlyon, the answer given by two of the learned Judges of the Court of Session is, I think, conclusive. He had no authority to do otherwise: he had no right whatever to object, and his acquiescence is therefore wholly immaterial.
I submit, therefore, to your lordships, that the judgment of the Court below ought to be affirmed.
Page: 408↓
It is ordered and adjudged, That the said petition and appeal be, and is hereby, dismissed this House; and that the said interlocutor, therein complained of, be, and the same is hereby affirmed. And it is further ordered, That the appellants do pay, or cause to be paid, to the said respondent, the costs incurred in respect of the said appeal, the amount thereof to be certified by the clerk assistant. And it is also further ordered, That unless the costs certified as aforesaid shall be paid to the party entitled to the same, within one calendar month from the date of the certificate thereof, the cause shall be, and is hereby remitted back to the Court of Session in Scotland, or to the Lord Ordinary officiating on the bills during the vacation, to issue such summary process or diligence for the recovery of such costs as shall be lawful and neccssary.