Gibson's Trustees
| Jurisdiction | Scotland |
| Judgment Date | 15 December 1932 |
| Date | 15 December 1932 |
| Docket Number | No. 22. |
| Court | Court of Session (Inner House - First Division) |
1ST DIVISION.
with three consulted Judges.
TrustAdministrationCharitable TrustApproval of new schemeNobile officiumInvestment of trust fundsProvision in trust-deed directing investment in land in FifeApplication to nobile officium for enlarged powersCase of strong expediency.
TrustAdministrationInvestment of trust fundsStatutory powers of investmentPowers available "unless specially prohibited by the terms of the trust"Effect of implied prohibitionTrusts (Scotland) Act, 1921 (11 and 12 Geo. V. Cap. 58), sec. 10.
The Trusts (Scotland) Act, 1921, by sec. 10, enacts that "trustees under any trust may, unless specially prohibited by the constitution or terms of the trust, invest the trust funds" in certain specified forms of trust securities.
A truster, by deed of mortification, conveyed to his trustees the lands and estate of Duloch in Fife, together with the residue of his estate, and directed them to lay out a sum, not exceeding 4000, in establishing a hospital for aged, sick, and infirm poor in St Andrews. He further directed that his trustees should, "after erecting, completing, and furnishing the said Hospital invest the residue and remainder, if any, of the estate and effects in the purchase of land in the County of Fife," and hold the same, along with the lands and estate above referred to, in all time coming for behoof of the hospital and its inmates.
After erecting the hospital, and conducting it for years in accordance with the truster's directions, the trustees applied to the Court for approval of a new scheme for the administration of the endowment, and craved power to sell the estate of Duloch, and also power to invest the trust-estate, including the proceeds of such sale, either in the manner specified in the deed or in securities authorised by sec. 10 of the Act of 1921. It appeared that the revenue from the estate of Duloch was a diminishing one; that suitable land in Fife was difficult to obtain; and, in any event, that this form of investment was neither expedient nor remunerative nor regular in its return. The application was made to the Court in the exercise of its nobile officium and also of the power to authorise a sale conferred by sec. 5 of the Act of 1921.
The First Division were prepared to grant power of sale as craved in virtue of sec. 5, but, in view of the further crave for enlarged powers of investment, appointed the cause to be argued before a Court of seven judges.
Held, in a Court of seven judges (the Lord Presidentreserving his opinion), that the trustees already enjoyed the powers of investment craved; per the Lord Justice-Clerk, Lord Anderson, and Lord Sands, in respect that the clause in the deed restricting the trustees' powers of investment contemplated only original and not supervening investments, and did not have the effect of restricting the investments now contemplated; and per Lord Hunter and Lord Morison (opinion to the same effect by Lord Anderson, opinions contra by the Lord President and Lord Blackburn), in respect that, as it was only by implication that the terms of the trust-deed involved a restriction to investment in lands in Fife, other forms of investment were not "specially prohibited" within the meaning of sec. 10 of the Act of 1921, and, accordingly, that the effect of that section was to confer on the trustees the powers craved.
Held further by Lord Blackburn (opinions to the same effect by the majority, diss. the Lord President) that, in any event, the case of strong expediency for granting the enlarged powers of investment craved disclosed by the circumstances was sufficient to warrant the granting of those powers under the nobile officium.
Scott's Hospital Trustees, 1913 S. C. 289, andM'Crie's Trustees, 1927 S. C. 556, commented on.
Authorities reviewed.
William Norman Boase Provost of the City of St Andrews, and others, the trustees ex officiis acting under the trust-disposition and deed of settlement and deed of mortification of the late William Gibson of Duloch, dated 21st January 1860, and registered in the Books of Council and Session on 5th November 1862, presented a petition for approval of a new scheme for the administration of the endowment under their charge, in which they also craved (1) for power to sell certain heritage forming part of the trust-estate, and (2) for power to invest the trust funds, including the proceeds of sale of the heritage, "either in the manner prescribed by the Truster in the said Deed of Mortification, or in any manner authorised by Section 10 of the Act of 11 and 12 Geo. V., ch. 58." The petition was originally presented only to the nobile officium of the Court, but was afterwards amended at the bar of the First Division so as to proceed also under section 5 of the Trusts (Scotland) Act, 1921,1 which enables the Court to confer on trustees power to sell trust-estate notwithstanding that such a sale is contrary to the terms of the trust-deed.
On the petition appearing in the Single Bills of the First Division on 25th May 1932, the Court remitted to T. B. Simpson, advocate, to report upon the circumstances and procedure, and upon the proposed scheme. On 30th June 1932 the reporter reported generally in favour of the scheme.
The following were the material facts as disclosed by the report:By his trust-disposition and deed of settlement and deed of mortification, upon the narrative that he entertained a great regard for the City of St Andrews, his native place, and that he was desirous of increasing the comforts, and to some extent supplying the wants and necessities, of the aged, sick, and infirm poor of the City and Parish of St Andrews, by founding and endowing there a hospital or charitable institution, the truster conveyed to the petitioners' predecessors in title as trustees the general residue of his estate (with certain exceptions) and also the lands and estate of Duloch, Sunnybank and others, and several other heritable subjects described in the deed, for the purposes therein set forth. By the fourth purpose of the deed the truster directed his trustees, upon the decease of the survivor of himself and his wife without issue, to lay out a sum of money not exceeding 4000 in building and erecting on a specified site, and in finishing and fitting up and furnishing, a hospital or charitable institution for the reception, aliment, and maintenance of such a number of the aged, sick, and infirm poor of the City of St Andrews and Parishes of St Andrews and St Leonards, natives of the city or of the said parishes, as, in the opinion of his trustees, the free annual proceeds of the remainder of his estate would properly and adequately maintain and clothe, with a preference to such persons as had lived industrious and sober lives, under the declaration that, if any persons admitted as inmates should cease to reside in the hospital, they should immediately cease to enjoy any of its benefits.
By the eighth purpose the trusterin the event of his trustees deeming it expedient, with a view to obtaining sufficient funds for erecting, completing, and furnishing the hospital, to sell, inter alia, the mansion-house of Duloch, with the offices, gardens, policies, and shrubberies thereto attached, and the home farm of Duloch, or any part or parts thereofempowered the trustees to sell all or any of these subjects by public roup.
By the eleventh purpose the truster directed as follows:"The Trustees hereby appointed shall, after erecting, completing, and furnishing the said Hospital invest the residue and remainder, if any, of the estate and effects conveyed by said separate Trust-Disposition and Deed of Settlement in the purchase of land in the County of Fife, and shall hold the same, together with the lands and others specially above conveyed, in trust, under these presents, in all time coming, for behoof of the said Hospital, and shall, after
said Hospital has been erected and completed, apply the free annual rents and profits of the whole lands and others so to be held in trust by them as aforesaid, (under deduction of the expenses of keeping said Hospital, and grounds adjoining thereto, in proper repair, and of the foresaid Premiums of Insurance, and of all other expenses attending the execution of the purposes of these presents), in maintaining and clothing the aged, sick and infirm poor, who may from time to time be admitted into the said Hospital."By the last purpose the truster, on the erection and completion of the hospital, mortified and appropriated the same as a hospital and charitable institution for relief of the aged, sick, and infirm poor already described, and appointed his trustees governors of the hospital.
The truster died in 1862 survived by his wife, who herself died without issue in 1869. Upon her death the hospital was duly erected and completed; and, from 1884 onwards, it was carried on in accordance with the truster's directions.
It appeared that, latterly, the improvement in social services and other causes had tended to reduce the number of suitable candidates for admission to the hospital, and the scheme proposed by the trustees was designed to widen the conditions of admission to the hospital, and, in other ways, to increase its usefulness and render its administration more economical and efficient.
With regard to the powers of sale and investment craved, the petitioners averred:"(15) In common with the proprietors of similar estates, the petitioners have, in recent years, found it increasingly difficult to let the mansion-house of Duloch, which is situated near Inverkeithing in Fife. The mansion-house, which is a modern building in a good situation, contains four public-rooms, eight bedrooms, two dressing-rooms, two bathrooms, cloakroom, and ample kitchen and servants' accommodation; electric light and central heating are installed, and there are good flower and kitchen gardens, with greenhouses, vinery, &c. The policies are extensive. The shootings over...
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