« PreviousContinue »
he bequeathed his whole estate, heritable and his whole estate. The income of the special moveable, to his mother in liferent and to a fund fell short of the annuity. In these circousin in fee. In the will there was no speci- cumstances it was held (1) that from the fication of particular properties, and the lands capital of the settlor's estate the special fund of X were not referred to. In these circum- must be augmented by such an amount as would stances the admission already mentioned pro- make the income of the augmented fund equal ceeded on the view that, as Mrs Wallnutt to the annuity payable to the Countess, and already had, under her marriage contract, a (2) that the settlor's executors must realise his specific liferent of the lands of X, it was not reversionary interest in that fund, expectant legally possible for her to take any further on the death of the Countess, in order that she benefit in those lands under her son's will by should, as testamentary life tenant, receive virtue of the universal liferent of his estate for the remainder of her life the income to be thereby conferred on her. This question must derived from the investment of the price. have been closely considered, for the contrary Stewart v. Stewart's Trs., 1898, 36 S.L.R. 625. view would, as we understand it, have been This is the only known Scottish decision conclusive against the Crown on the question directly in point. It was a decision by Lord of what was the first succession under Kincairney, who marshalled the English Major Wallnutt's will. The case proceeded authorities and such Scottish dicta or indicaon the assumption that the cousin's succession tions of authority as exist on the subject, to the fee was the first succession, and the and added : “I am not aware that there is whole contest was whether it ” in 1900 either principle or practice with us which on the death of the testator, which was the date can be said to be opposed to the rule thus of the cousin's “entitlement," or not until established in England.” Stewart's case, as
, 1910 when Mrs Wallnutt the liferentrix died, Lord Kincairney noted, very closely resembled which was the date of the cousin's coming Harrington v. Atherton in its circumstances. into possession. This whole discussion would Mr James Stewart at his death owned only have been obviated if it had been considered one asset, namely, a vested reversionary right that Mrs Wallnutt took a benefit under her to the estate of his brother John, which estate son's will, for that would then have been the under John's will was burdened with an annuity first succession, and if it had any legal existence of £250 to Mr James Stewart's widow, and it of course arose on the testator's death in that annuity exhausted the income of Mr 1900, and therefore before the Finance (1909–10) John Stewart's estate. Under Mr and Mrs Act, 1910.
James Stewart's marriage contract Mr James There may have been indications of intention Stewart had provided to his widow a liferent or other specialties sufficient to put this case of his whole estate. The following quotation in a peculiar position, but it has certainly been from Lord Kincairney's opinion shews the understood up till now that the general rule is position, and is otherwise helpful : " the that the mere fact that A already possesses pursuer (Mrs James Stewart) claimis (1) under an existing title a liferent interest or an the annuity of £250 out of the income and annuity or other interest, which exhausts the capital of John's estate, and (2) the liferent of income of a particular estate or fund, is not James' interest in John's estate. It seems a of itself a reason why B, or even A, may not questionable and rather startling claim at take, under a different title, what may, in a first sight, but after consideration of the popular though inaccurate sense, be described English authorities which were quoted in as a second concurrent liferent in the same support of it I have come to think that it is estate or fund. The illustrations in reported founded on equity”;
and the pursuer's cases are mostly to be found in England, but double liferent claim was sustained by his authority to the same effect is not lacking in lordship. The decision fell to be worked out Scotland. Again, there is no intention on the by (1) Mr John Stewart's testamentary trustees present occasion to discuss the whole conception continuing to hold his estate and paying to and situation, and it may suffice to mention Mrs James Stewart the annuity of £250 ; and briefly two English cases and one Scottish case. (2) Mr James Stewart's marriage trustees
Countess of Harrington v. Sir W. Atherton, selling Mr James Stewart's vested rever 2 De Gex, Jones & Smith, 352. The sionary right in his brother's estate, holding Countess had a right under her marriage settle the price as being the capital of Mr James ment to an annuity from a particular fund, Stewart's whole estate as at the date of his and in the event of the income being insufficient death, and paying to Mrs James Stewart the the settlor covenanted to augment the capital income of the investment of that price in of that fund so that the income should be implement of her marriage contract liferent. equal to the annuity. Then by his will he Rowlls v. Bebb,  2 Ch. 107. The bequeathed to the Countess a life interest in testator bequeathed to his sister a life interest
in his estate. His estate embraced or consisted And again, in Darling v. Darling, 10th of a reversionary interest expectant on the March 1889, XXV. Rettie 747 at p. 750 : death of the sister herself, she being already “I wish, however, to add that I should be entitled to a life interest in the fund on a sorry if our judgment on this point separate title. The sister claimed that she had were misconstrued as giving any sanction two separate cumulative titles and rights, to the idea that it was not the duty of namely (1) the prior life interest in the fund the committee, as it is certainly the duty entirely apart from her brother's will, and (2) of a body of trustees, to adopt adequate the life interest under the brother's will, which means for convening all the members, must be given effect to by his executors selling especially persons who are likely to be his reversionary interest in the fund expectant dissentients from the prevailing policy, on her own death, holding the price as the or the policy of the promoters of the capital of his estate, and paying to her the meeting. It seems to me that the case income to be derived from the price; and this of Wyse is a very important one, as double claim by the sister was sustained.
shewing that no action ought to be
taken by a mere majority of trustees MESSRS KEYDEN, STRANG & Co., 186 West acting at their own hand without conGeorge Street, Glasgow, intimate that they sultation with the minority, or have removed to 40 St Vincent Place, Glasgow. persons who are expected to form
the minority. The duty of trustees
and of the committee is to act colLetter to the Editor.
lectively, and to adopt the proper and necessary
of promoting 21 GOLDEN SQUARE,
collective and unanimous action, which ABERDEEN, 16th June 1924.
is by conference and reasoning.' Dear Sir,
And again at p. 751 :
It was indispensable that those trustees The article you published in your issue of
who were members of the committee the 14th current under this heading is, it is should be apprised of the meeting, and submitted, hardly of universal application. that their presence should be procured In this the Trust Act of 1921 is quoted to the by those who were resolved to take effect that all trusts shall be held to include action against them.” (section 3 C):
Both these cases appear to warrant the A provision that a majority of the trustees limited application which the Bank of England
accepting and surviving shall be a place on the Trust Act.--Yours faithfully, quorum.”
W. O. DUNCAN. In this article it is inferred that the signature of a majority of the trustees is effective without DECISIONS IN THE ENGLISH COURTS. reference to their co-trustees.
Precious v. Reedie. In this connection there are two opinions of the Lord President of the First Division of the LANDLORD AND TENANT-MONTHLY TENANCY Court of Session, which do not seem to have -NOTICE TO QUIT---REASONABLE TIME-PROPER since been adversely commented upon.
TERMINATION OF NOTICE.— The appellant was In Wyse against Abbott, 19th July 1881, the tenant of a shop in Commercial Street, VIII. Rettie 983 at p. 984 :
Scarborough, on a monthly tenancy, beginning * No two trustees can do a trust act without on the first of the month. On 5th September
consultation with their co-trustee. It 1923 he received from his landlord a notice, is of the essence of the duty of a body dated 1st September 1923, in the following of trustees that they should meet and terms: “I hereby give you one month's exchange views on the trust affairs. notice to quit 5 Commercial Street as I require The trustees were bound to see that the house for occupation. The County Court Mr Wyse had notice of their intention judge held that this notice was good for the to nominate co-trustees, and an oppor- end of the next ensuing month of the tenancy, tunity of stating his views. Their viz. 31st October 1923. Held that in a monthly excuse was that he had been disagreeable, tenancy the notice must correspond in length and had refused to sign a deed of transfer. with the period of the tenancy, and must That rendered it more imperative that terminate on the day of the month on which he should have an opportunity of the tenancy began, and that, accordingly, in stating his views. The omission of the present case a proper notice to quit had not notice, and the want of consultation, are been given.-K.B. Div. (Bailhache and Sankey enough to make the appointment illegal.” JJ.). - 14th April 1924.
REDEMPTION OF CASUALTIES AND
stantially of casualties which are not LEASEHOLD SUBJECTS.
comprised within the scope of this Act,
it shall be competent for the Court, by The writer desires to focus the attention of Act of Sederunt, to provide for the the profession on a point connected with the redemption and extinction of such rights administration of the Feudal Casualties (Scot- on terms seeming to the Court to be land) Act, 1914.
just and equitable on the analogy of the The Act provides that the casualties incident provisions of this Act, and such Act of to any feu created prior to the commencement
Sederunt shall have the same force and of the Act (1st January 1915) shall be redeem
effect as if it were embodied in this able at the instance of either the superior or the Act." proprietor of such feu at any time within the period of fifteen years from and after such Where landlords had no desire to grant feus commencement. In the Act it is provided of portions of their estates it was their that:
custom to grant leases for periods of 999 Superior” shall include the creditor in a and, in addition, for payment of a year's
years for payment of a certain tack-duty, ground annual; and
tack-duty for the first year's possession of shall include the right of such creditor.
every legal heir and one year's real value of Feu » shall include lands subject to a the subjects for the first year's possession of
ground annual created either before or every assignee. Indeed, the clauses in long after the first day of October 1874.
leases were adapted from those appearing in Feu-duty" shall include ground annual.
feu-charters or feu-contracts, and long leases “ Casualties shall include duplicands and
are substantially feus. other multiples of feu-duties and grassums and other sums payable at intervals of from the yearly tack-duty, seem to be “ rights
The pecuniary obligations of the tenant, apart more than one year in connection with of the nature substantially of casualties
referred to in section 23 of the Act, and for Agents are now familiar with the working which the landlord should receive compensation. of the Act, and the redemption of casualties The question accordingly arises whether the payable in respect of feudal subjects and of profession should not now seek the Act of those held under the burden of ground annuals Sederunt contemplated by the section referred is proceeding a pace. On the expiry of the
in order that landlords may not run the risk said period of fifteen years all casualties and of losing compensation on the redemption of claims for compensation will be held to be such rights. extinguished and discharged, and if superiors On the one hand, it may be argued that if desire to preserve their rights as regards feus, the Act does not in precise terms deal with the etc., which have not been dealt with, the follow- redemption and extinction of "rights of the ing points must be kept in view, viz. :
nature substantially of casualties payable
in respect of leasehold subjects, and no Act 1. Notice in terms of the Act must be given of Sederunt is obtained, then the terms of the to the feuars and others.
lease will merely continue in operation, and the 2. Judicial proceedings for the recovery or pecuniary stipulations therein will continue
redemption of any casualties, or the to receive effect until the Court of Session fixing or recovering of compensation provides for the redemption of such rights by therefor, must be instituted prior to the Act of Sederunt. On the other hand, as such expiry of the said period.
Act of Sederunt is to have the same force and 3. A notice of such proceedings in the form effect as if it were embodied in the Feudal
provided by the Act or in similar form Casualties Act, and as all casualties and claims must be registered in the Register of for compensation under the Feudal Casualties Inhibitions and Adjudications in the Act will be held to be extinguished and discourse of the year immediately following charged on 1st January 1930 (unless superiors the expiry of the said period.
prior thereto take the steps which have been If these points are observed, a further period Act of Sederunt is obtained before 1st January
adverted to), it may be contended that if no of five years is allowed within which to carry 1930 all rights of the nature substantially of out the purpose of the Act.
casualties will also be held to be then exThe penultimate section reads as follows :
tinguished and discharged. “XXIII. Acts of Sederunt.If it shall Whichever contention may be the proper
appear to the Court of Session that there interpretation of section 23, it would certainly exist any rights of the nature sub- seem, having in view that the trend of the times
is to free lands from the burdens at present their acquittal on the merits, and, in the meanaffecting them, to be a wise precaution for the time, the answer is in the affirmative. That law societies to take the necessary steps towards decision is based on the following grounds : obtaining an Act of Sederunt, bringing within that the indemnity is assumed to be one of the scope of the Feudal Casualties Act the the terms upon which the auditors were em
rights of the nature substantially of ployed and gave their services; that the casualties which it is thought landlords auditors' breaches of duty did not amount to have under long leases.
W. Y wilful neglect or default; that what they did
or omitted to do was in good faith, induced by
a mistaken belief as to what their duty was ; PROFESSIONAL MEN AND INDEMNITY that section 215 of the Act does not override CLAUSES.
the specific indemnity in the articles of associa
tion, and that such an indemnity is not illegal This subject is brought into prominence by either under statute or at common law. that part of the decision in the City Equitable On the present occasion the intention is case which gives exoneration to the company's not to discuss the general policy of wide auditors. The decision is based entirely on the indemnities in favour of directors and managingindemnity clause in the articles of association. directors of companies and debenture trustees. The clause is too long to quote, but it contains These are all paid officials, and, except the the following:
managing-director, their means of knowledge
are somewhat limited. There will be general The directors, auditors, secretary, and other officers for the time being of the company shall agreement that it would never do to give them be indemnified out of the assets of the company an indemnity against anything which is of from and against all actions, charges, losses, damages, such a character as to infer liability under and expenses which they shall or may incur or criminal law. We are not aware that that has sustain by reason of any act done or omitted in or ever been attempted, and, if it were attempted, about the execution of their duty or supposed duty it would no doubt be ineffectual. But short of in their respective offices, except such, if any, as they that, it is very arguable whether such officers shall incur or sustain by or through their own wilful ought not to have the widest possible protection, neglect or default.
The position of professional men employed It will be observed that this clause refers to as such is, however, very different. In the auditors”; describes them as officers of the case of companies this applies to members of company; assumes that they have incurred different professions, including accountants, liability in the execution of their duties ; and, whether acting as auditors or otherwise, nevertheless, or rather because of that liability, surveyors, and solicitors. In the City Equitcontracts to give them indemnity out of the able case the specific indemnity expressly funds of the company. In this particular embraced auditors, and that is common enough. case the judge held that the auditors had In comments in the public press on that case committed breaches of duty and were negligent it has been assumed, or inferred, that it is not in specific respects, notwithstanding that, unusual to have solicitors of companies prospeaking generally, his lordship was satisfied tected in like manner, either by express referthat they had displayed great skill, care, and ence in the clause, or as being covered under industry. But for the indemnity clause they "other officers.'
other officers." This last would surely never would accordingly have been dealt with under hold, for it is difficult to see how a solicitor of section 215 of the Companies Act, 1908, and a company, or different solicitors acting for the amount of their liability would have been the same company, could pass muster as assessed, and an order for payment would have officers.” It is unusual and improper to
" been made against them. That section does have solicitors employed except by, and during not specifically refer to auditors, the words the pleasure of, the directors. Nor is the being“ director, manager, liquidator, or any present writer aware that there is any general officer of the company. There are authorities practice of specifying solicitors in those indemto the effect that the auditor is an officer of nity clauses. If there is, it certainly appears the company, though that may be open to to be most objectionable. It does not seem challenge in a higher court. That question, possible to suggest any reason why the solicitors however, would affect procedure only, and at of, say, a property-owning company should be most would mean that the auditor must be protected any more than the various tradesmen reached by other machinery than a summary employed by the company, through its directors, application under section 215. The sub- to erect and repair the buildings. Auditors are,
| stantial question was whether the indemnity no doubt, so far in a different position in respect clause in the articles of association, expressly that they are not appointed by the directors referring to auditors, was sufficient to lead to and are not dismissible by the directors; but
even in their case, and even assuming that they directors. The claim of the trustees to full are correctly described as officers of the com- indemnity is all the stronger in respect that they pany, they are employed in their strictly pro- are unpaid. The common feeling and the fessional capacity, and there is absolutely no general experience have been that indemnity difference in the character of the services clauses inserted in wills and marriage contracts which they render to a business before it is an fail of effect because of the limited language incorporated company and the services which employed, and it seems regrettable that those they render after that formal change takes clauses should not be framed on bolder and place. Besides, in the case of auditors, the more thorough-going lines, for which, indeed, stock exchange may have something to say. published forms are available to hand. But we For these reasons we gravely question the are in the judgment of our readers when we propriety of any rule which recognises, as valid, say that no one ever heard of those clauses indemnities of this kind in favour of professional being expressed to cover the professional emmen employed as such. Indeed, the position ployees of the trustees. It would hardly be is paradoxical. In the case of an ordinary human nature to find a solicitor inserting an partnership there is no reason why the partners indemnity in favour of any professional emshould not make, in advance, such special ployees without including himself, and any arrangement as they please by way of indem- attempt to include himself and his professional nity to professional employees, but, in point of successors would be viewed with the utmost fact, such a thing is unheard of in partnership disfavour, certainly on the Bench, and we
It comes into vogue only in the case believe also in the profession. It would probably of companies, when different considerations fail of legal effect if for no other reason than that make it distinctly obnoxious.
it would probably be held that there was a There are two further considerations, one of burden on the solicitor to prove that he had finance and the other of legal technicality. It specially drawn the attention of the testator is said, forsooth, that the indemnity is a term of or settlor to the language of the clause and had the employment of the professional men, but fully explained its effect. But there is one we do not believe that it will be seriously respect in which indemnities are regularly stated that, in fixing an auditor's remuneration, made-or at least expressed—to cover factors the existence or non-existence, or the greater and law agents, and that is in the ordinary or lesser scope, of an indemnity clause bas clauses of exoneration and relief or indemnity ever been weighed, or has ever made a differ-contained in deeds of discharge when winding ence of one guinea in the audit fee; or that in up trust estates. By those clauses, according the alleged cases of solicitors’ indemnity, the to use and wont form, the beneficiaries are existence of the indemnity has ever been made to discharge and indemnify, not only the allowed to curtail any full and proper scale trustees, but also the factors and law agents charge. Then it does occur to one as rather in the trust, though we cannot say that we surprising that, especially in England, em- ever saw those clauses extended to auditors or ployees, or at least employees who are not other professional employees. A reference to
officers,” are allowed to found upon clause books of English styles has failed to show any in the articles of association to which, in their corresponding practice on the other side of capacity of employees, they are certainly not the Border. It is difficult to state the legal parties, and in which they are not even named. basis on which the beneficiaries can be comBut even in Scotland we shall not believe till pelled to extend those legal clauses beyond the we see it that such a clause, referring to, say, trustees themselves. The beneficiaries are deal“employees of all sorts," would ever protect a ing only with the trustees, and not with the plumber, and we are by no means sure that solicitors, and throughout the period of the à law agent would find himself in any better trust administration there never has been any case. The extreme of absurdity would be legal relationship between the beneficiaries and reached when, on ex post facto information, the the solicitors. The demand for a discharge and indemnity was pleaded by an employee, whether indemnity in favour of the solicitors can, thereprofessional, commercial, or industrial, to whom fore, be made only by the trustees, and it the existence of any indemnity clause was appears clear that they have neither title nor unknown when he accepted instructions and interest to make that demand. Indeed, one did the work.
would have been disposed to think that it In this matter of the propriety of indemnities might be better to let sleeping dogs lie, for, if the distinction above suggested between direc- the legal position has to be brutally stated, it tors on the one hand, and professional em- would appear to be very much the other way ployees on the other hand, is more or less about, and that liabilities, if any, known or reproduced in the case of ordinary testamentary unknown, incurred by the solicitors are assets of and family trusts, substituting trustees for the trust estate, vested in the trustees, and of