Scottish Court of Session Decisions

This action was brought by George Frederick Colt, Esq., late of the 23d Regiment of Foot, now residing at Gartsherrie Cottage, Coatbridge, eldest surviving son of the late John Hamilton Colt of Gartsherrie, against the trustees of his father, to have it found that they are bound, in terms of his father's trust-settlement, to denude of the trust, and convey to him the whole estates so far as unsold, on his satisfying the debts of the truster, and granting them a discharge. The question, which turned on the construction of the trust-deed, was fully explained in the following interlocutor and note of the Lord Ordinary ( Ormidale):—

“ Edinburgh, 28 th January 1868.—The Lord Ordinary having heard counsel for the parties, and considered the argument and proceedings—Finds that the late John Hamilton Colt, by his trust-disposition and settlement, left in trust his whole means and estate, heritable and moveable, for the purposes therein mentioned, and in particular for payment of his debts, the expenses of the trust management, of an annuity to his widow, and of certain provisions to his younger children; and declared that upon payment and extinction of his debts, and of the provisions and others constituted by his trust-disposition and settlement, his trustees should be bound to denude of the trust, and should dispone and convey his whole estates, so far as then remaining unsold, and the whole residue and remainder of the trust-estate, whether heritable or moveable, in favour of his eldest surviving son, whom failing, his other sons and daughters as therein mentioned; but subject to the declaration that the trustees should not denude in favour of the person entitled so to succeed to the residue of the trust-estate till he or she should have attained the age of twenty-five years: Finds that the pursuer was and is the eldest surviving son of the truster; that he is now upwards of twenty-five years of age; and that he states, in the 13th article of his revised

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condescendence, that he has intimated to the defenders, the acting trustees under his father's trust-disposition and settlement, that ‘he is ready and willing, and that he has repeatedly offered, and hereby offers, to pay or satisfy the whole of the debts, obligations, or liabities above mentioned in article 11, being the only debts, obligations, or liabilities of any kind affecting the trust-estate, or prestable by the defenders as trustees foresaid; to obtain and deliver to said defenders valid discharges or deeds of acquittance of the same in their favour; as also to grant and deliver to the said defenders, as trustees foresaid, a valid and sufficient discharge in their favour of their whole actings and intromissions as such trustees: Finds, in those circumstances, that on the pursuer making such payment and satisfaction and delivery to the defenders, in accordance with and in due implement of the trust purposes, as set out in the foresaid trust-disposition and settlement, the defenders, the trustees acting under the same, will be bound to denude and dispone, and convey in favour of the pursuer the whole residue and remainder of the trust-estate: Quoad ultra, and before pronouncing further, or in terms of any of the conclusions of the summons, appoints the case to be enrolled, that parties may be heard as to the application of this interlocutor, and in particular as to the manner in which the pursuer is to pay and satisfy the debts and provisions in question previous to the defender's denuding of the trust, and disponing and conveying the residue of the trust-estate in his favour.”

“ Note.—On a consideration of Mr Colt's trust-disposition and settlement in all its clauses, and especially keeping in view that, as regards the residue, his sons and daughters are called to succeed to it in a certain order, with survivorship and a destination over, the Lord Ordinary is not prepared to hold that the pursuer's right vested a morte testatoris, and this was scarcely contended for by the pursuer. Nevertheless, and assuming that there was no vesting a morte testatoris, the Lord Ordinary thinks the pursuer may be in a position to insist that the residue of the trust-estate in question should now be made over to him.

Being past twenty-five years of age, the pursuer would now be clearly entitled to the residue, upon payment and extinction of the truster's debts, obligations, provisions and others, which are made the primary, and in that sense the preferable objects of the trust. He has accordingly offered to pay and satisfy these debts, obligations, provisions and others, by which the Lord Ordinary understands that payment or satisfaction is to be made in fair and reasonable accordance with and implement of the trust-deed. But in case of any misapprehension, and consequent embarrassment afterwards in regard to this matter, the Lord Ordinary has thought it better in the meantime not to pronounce decree in favour of the pursuer in terms of any of the conclusions of the summons. There appear to be about £35,000 of debts and provisions, besides the widow's annuity, still to be satisfied out of the trust-estate, before the pursuer can in any view be entitled to have the residue made over to him; and the defenders contended that the debts must be actually ‘paid and extinguished,’ and that funds sufficient for securing payment and satisfaction of the widow's annuity and the provisions of the younger children should be realised by the trustees themselves from the proceeds of the personal estate, and the rents and annual produce of the heritable estate, and in no other way, before they could be called on to denude of the residue in favour of the pursuer. They did not, however, contend that the trust must necessarily be kept up, and that they could not be called upon, or were not bound, to denude of the residue so long as the widow's annuity and the younger children's provisions were not literally extinguished by the death of the former, and the attainment of twenty-five years of age of the latter, and in regard to the truster's daughters, by their marriage or death. That, indeed, would be an unreasonable and unnatural view to entertain of the meaning and intention of the truster, for if given effect to it might, and probably would considering the manner in which the truster has dealt with the provisions to his daughters, prevent any one succeeding to and obtaining the enjoyment of the residue till not only the pursuer, but all the truster's other sons and his daughters, should be dead and gone. Accordingly, the defenders did not press any such view, but restricted themselves in argument, as their defence on record is restricted by their first two pleas in law, to contending that they are bound to hold the residue of the trust-estate till all the debts and obligations still remaining due have been paid and extinguished out of the rents and annual produce thereof, and in no other way.

But the Lord Ordinary has been unable to sustain this contention of the defenders. The truster may, he thinks, be held as having intended, and his intention is the regula regulans, that the right of his eldest surviving son and heir to obtain possession of the residue should be suspended till the preferable debts and obligations should have been satisfied; but he cannot think that the truster meant that this should be done only out of the rents and annual produce of his estate and in no other way. Just suppose that the creditors in right of the debts and obligations were to give them up and discharge them; or suppose that the pursuer, having otherwise acquired or succeeded to means sufficient to pay them off, and that he was to pay and satisfy them out of such means, it could not on any plausible or sound principle be maintained that he was not entitled to have the residue made over to him on the grounds that the funds for such payment and satisfaction must arise exclusively from the annual rents and produce of the trust-estate. It will be observed, indeed, that the provision or declaration in the trust-disposition and settlement, in regard to the preferable debts and obligations being paid or satisfied out of the rents and annual produce of the truster's estate, is made not as a condition of the trustees denuding of the residue in favour of the pursuer, but rather as a reason or bar against their selling the heritable or landed estate, unless in their judgment that should be considered necessary or ‘highly expedient.’

A great many cases were cited in the argument addressed to the Lord Ordinary, and, among others, Watt and Others v. Greenfield's Trustees, 18th February 1825, 3 Sh. 544; Stainton v. Stainton's Trustees, 25th January 1850, 12 D. 571; Reinsford v. Maxwell, 6th February 1852, 14 D. 450; and Pretty and Others v. Newbigging and Stewart, 2d March 1854, 16 D. 667. Although the circumstances of these cases were different in each and in all of them from the present, it is thought that the principles recognised and given effect to in them by the Court are sufficient, so far as authority is necessary, to support the interlocutor of the Lord Ordinary so far as it goes. They shew, he thinks,

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that while the intention and will of a testator must be given effect to, that may be done in a substantial and reasonable way, although not in the strict literal sense of the language used by him. Whether the pursuer is prepared, and will be able so to comply with the findings in the prefixed interlocutor, as to entitle him to decree as concluded for by him, remains to be afterwards considered; and, in particular, it remains for future consideration what will be payment and satisfaction of the widow's annuity and younger children's provisions, sufficient to entitle the pursuer to an effective judgment. The Lord Ordinary understood the pursuer's counsel to say that all the debts of the truster, as well as such of the provisions in favour of his younger children as are due and payable, would be actually paid and discharged; and that the widow's annuity, and such of the provisions to the younger children as are not yet due and payable, as, for example, the provisions to unmarried daughters, would be amply met and satisfied in due and reasonable accordance with the truster's directions regarding them.”

The defenders reclaimed.