Salaman v Rosslyn's Trustees
| Jurisdiction | Scotland |
| Judgment Date | 21 December 1900 |
| Docket Number | No. 48. |
| Date | 21 December 1900 |
| Court | Court of Session |
Lord Pearson, Lord Justice-Clerk, Lord young, Lord Trayner, Lord Moncreiff.
Trust—Trust-deed granted by solvent proprietor to prevent dilapidation of family estates—Bankruptcy—Voluntary Trust-deed—Supervening Bankruptcy.—
In 1893 a Scotch Earl, on the narrative that he had contracted large debts, and that V, his father-in-law, had agreed to lend him £40,000 in order to pay off certain unsecured debts, on the express condition that he should grant a trust-disposition of his whole estates for the purposes after written, and that he had agreed to do so, disponed to himself, his father-in-law, and another person, his whole heritable and moveable estates acquisita et acquirenda, with power to sell, in trust for the following purposes:—(1) For payment of the £40,000 advanced, and of future advances; (2) for payment of debts then due by the granter; (3)for such alimentary payments as the trustees should see fit to make to the granter and his family; (4) on the granter's death to convey the residue to the granter's widow and children, subject to his appointment, and failing appointment, to the child succeeding to the title. The trust was declared to be irrevocable by the granter unless with the consent and concurrence of the trustees, but it was declared that with such consent and concurrence it might be brought to an end, and the residue reconveyed to the Earl subject to the debts and liabilities then affecting it.
The trustees at once entered into possession, and recorded the disposition in the Register of Sasines.
In 1898, the Earl having, on his own petition, been adjudicated bankrupt in England, a trustee in bankruptcy was appointed upon his estates.
The trustee in bankruptcy then sued the trustees under the trust-disposition (1) for declarator that the estates comprehended in the trust-disposition had vested in the pursuer; (2) for decree ordaining the defenders to denude in his favour to such extent at least as would enable the pursuer to meet the liabilities of the bankrupt out of the estates; and (3) for an accounting by the defenders.
The trustees in their defences stated that all the unsecured debts incurred prior to the date of the trust-deed had been paid out of V's advances.
Held (aff. judgment of Lord Pearson) that the trust-disposition had in hoc statu been superseded by the bankruptcy, that the trustees were bound to denude of the estate and effects, subject to any valid securities over the estate and effects, and on satisfaction of such rights of lien or indemnity as they might have, in favour of the trustee in bankruptcy, and that they were bound to count and reckon with him for their intromissions,—diss. Lord Young, who held (1) that the trustee being solvent when he granted the disposition, was entitled to divest himself absolutely of his estates, and create a trust for behoof of his family, and had effectually done so to the exclusion of claims by future creditors, but that the disposition of acquirenda was invalid; and (2) that V had right, as matter of contract, to have the trust executed by the trustees according to the law of Scotland till its termination.
Averments which held not relevant to support a conclusion for reduction of the trust-disposition.
The Earl of Rosslyn in September 1890 succeeded to the title and estates pertaining to the Earldom of Rosslyn. In July of the same year he had married the daughter of Robert Charles De Grey Vyner of Fairfield House, York.
On 25th July 1893 he executed a disposition of his whole heritable and moveable estates then belonging to him or which he might acquire during his life in favour of himself and his father-in-law, Mr Vyner, and Mr Bennett, solicitor in London, in trust for certain purposes after mentioned. The disposition was recorded in the Register of Sasines on 3d August 1893, and subsequently the trustees entered into the possession and management of the estates. Mr Bennett having resigned in September 1896, was succeeded by Mr Cullimore, solicitor in Chester; and in 1898 Lord Alwyne Compton was assumed into the trust.
In the autumn of 1897 Lord Rosslyn filed a petition in bankruptcy in London, the receiving order in which was pronounced on 11th November 1897. The adjudication in bankruptcy followed on 8th June 1898, on which date Frederick Seymour Salaman was ‘duly appointed and approved as trustee of the property of the Earl of Rosslyn’ under the Bankruptcy Acts, 1883 and 1890.
On 30th December 1898, Mr Salaman, as trustee in the bankruptcy, raised the present action in the Court of Session against the trustees acting under the trust-disposition, concluding (1) for reduction of the trust-disposition, ‘at least to the extent to which said pretended disposition exists or is pleaded as a bar to the satisfaction of the pursuer's rights in or claims to the property and estate of the’ Earl; (2) whether decree of reduction was granted or not, for declarator ‘that the means and estates, heritable and moveable, conveyed by the said pretended disposition are now, so far as unaffected by valid securities, vested in the pursuer as trustee foresaid, unencumbered by any trust in the person of the defenders created by said pretended disposition’; (3) for decree ordaining the defenders ‘to denude and divest themselves of the said means and estate, and to convey the same to the pursuer’‘to such extent at least as may be necessary to enable him to pay the just creditors of the’ Earl of Rosslyn; (4) for an accounting by the defenders of their intromissions with the trust-estate, and for payment of the true balance in their hands to the pursuer, ‘or at least of so much thereof as may be required to satisfy the claims of the just creditors of the’ Earl, or failing such accounting, for payment of £10,000, which should in that case be held to be the true balance, or at anyrate of such sum as might be required to satisfy the creditors; (5) and alternatively to the foregoing conclusions, for payment of £10,000, or such sum as might be required to satisfy the claims of the just creditors of Lord Rosslyn.
The trust-disposition was in the following terms:—‘I, the Right Honourable James Francis Harry St Clair Erskine, Earl of Rosslyn, considering that I have contracted debts and liabilities to a large amount, part of which is secured over my landed estates of Ravens-craig, Dysart, Roslin, Tyrie, and others, in the counties of Fife and Edinburgh, and upon other assets and funds belonging to me, and part of which is unsecured; and that in order to pay off certain unsecured debts I arranged to borrow a sum of £40,000, less or more, from Robert Charles De Grey Vyner, of Fairfield, in the county of York, Esquire, my father-in-law, who agreed to lend the same to me upon my granting in his favour a bond and assignation and disposition in security, or bonds and assignations and dispositions in security, over my said landed estates and certain policies of insurance on my life and other funds and assets, and upon the express condition that I should also grant a trust-disposition in manner and for the purposes underwritten, which I have agreed to do; and further, considering that the said Robert Charles De Grey Vyner has already advanced to me sums amounting to upwards of £16,000 to account of the said sum of £40,000, and that I have at or previous to the date hereof granted and delivered to him a bond and disposition and assignation in security for the said sum of £16,000, and that he agreed to advance to the trustees under these presents, for the purposes of the trust hereby created, such further sums as may be necessary for the payment of my debts, but not exceeding (along with the said sum of £16,000 already advanced), the said sum of £40,000 in all, unless the said Robert Charles De Grey Vyner shall be willing to make advances to the trustees in excess of that sum,—upon the said trustees, with or without my concurrence, granting in his favour a bond or bonds and dispositions and assignations in security for the sums so to be advanced: Therefore, in pursuance of the said arrangement, I do hereby dispone, convey, assign, transfer, and make over to and in favour of the said Robert Charles De Grey Vyner, Rowland Nevitt Bennett, Esquire, of Number 2 New Square, Lincoln's Inn, London, solicitor, and myself, the said Earl of Rosslyn, and to such other person or persons as may be appointed or assumed by the said trustees or by the survivors and survivor of them, or by the trustees or trustee acting for the time under these presents, and to the acceptors and survivors, and acceptor and survivor of the persons before named or to be named and assumed as aforesaid, as trustees or trustee for executing the trust hereby created (hereinafter designed as “the trustees”)—the majority of the said trustees, while there shall be more than two, being always a quorum, and to the assignees of the trustees or trustee, All and Whole’ the lands and estates of … and his whole other heritable property wherever situated then belonging to him, or which might thereafter be acquired by him; as also his whole moveable estate of whatever kind then belonging or which might be acquired by him during his life. ‘And I bind myself and my foresaids, when required, to deliver to the trustees all such portions of the personal or moveable means, property, and effects hereby conveyed as cannot be transferred otherwise: Which conveyance before written, and all or any conveyances or deeds to be hereafter executed by me, are hereby granted, or to be granted, subject to all debts at present secured thereon or upon any part or parts thereof, and subject to all arrangements or agreements made between me and creditors holding securities: But declaring always that these presents, and any further deed or deeds to be granted by me in pursuance of the foregoing obligation, and the whole lands and others, and estate, property, and effects hereby...
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Kenneth Wilson Pattulo V. Elizabeth Jane Mcareavey
...ranking. Mr Graham referred me to the following authorities: Thomson v Tough's Trustee (1880) 7 R 1035; Salaman v Rosslyn's Trustees (1900) 3 F 298; Mess V Hay (1898) 1 F (HL) 22; Miln's Judicial Factor v Spence's Trustees 1927 SLT 425; McBryde, Bankruptcy (2nd edition) para 20-75; Goudy, T......