Scottish Court of Session Decisions

Alexander Morrison, residing at Dunesslin, St Andrews, pursuer, brought an action against the School Board of the Burgh of St Andrews, defenders, in which the conclusions were for a decree of declarator (first) that the trust purposes contained in a disposition of certain heritable subjects situated in South Street, St Andrews, and instrument of sasine following thereon, “whereby the said subjects were disponed in trust for the use and behoof of the Infant School of St Andrews, and with a view to maintain and perpetuate the Madras system of mutual instruction and moral discipline there, but on failure of that school, or on the discontinuance of that system of education therein [ then to certain persons, whom failing] then for the use and behoof of the Very Reverend Andrew Bell, Doctor of Divinity, sometime Master of Sherburn Hospital, Durham, and Prebendary of Westminster, and of his heirs and successors whomsoever, have now come to an end, except in so far as the destination-over to the heirs and successors of the said Andrew Bell is concerned; (second) that the destination-over of the said subjects as contained in the foresaid disposition and instrument of sasine in favour of the said Andrew Bell and of his heirs and successors whomsoever, was not affected, evacuated, qualified, or discharged by clause twenty-three of the scheme for the administration and management of the Madras College, St Andrews, made by the Commissioners under the provisions of the Educational Endowments (Scotland) Act 1882, dated third May Eighteen hundred and

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eighty-eight, and that the said destination-over in favour of the said Andrew Bell and his heirs and successors whomsoever still subsists and is of good force and effect; (third) that the said subjects situate in South Street, St Andrews, and described as aforesaid, belong heritably in property to the heirs and successors of the said Andrew Bell, and in particular to the extent of one-fourth thereof to the pursuer in virtue of his rights and titles as one of the heirs-portioners of the said deceased Andrew Bell;” and for a decree ordaining the defenders to denude of the said subjects and to convey them to the pursuer and the other heirs-portioners of the said Dr Bell.

The following narrative of the facts is taken from the opinion of the Lord Ordinary ( infra)—“In this action the pursuer as one of the heirs of the late Dr Bell, who died about the year 1832, seeks to vindicate for the benefit of those heirs certain property situated in South Street, St Andrews, now vested in the defenders the School Board of St Andrews.

Upon 10th May 1831 Andrew Bousie, writer in St Andrews, trustee on the sequestrated estate of Archibald Wallace, in consideration of the sum of £530 paid to him by the late Dr Bell, disponed the subjects in question to the then Provost of St Andrews and others therein named, and to their respective successors in office or assignees, as trustees for the purposes therein defined. The title of the said trustees was duly completed by recording an instrument of sasine in their favour dated 21st May 1831.

In terms of the trust so created the subjects were conveyed ‘for the use and behoof of the Infant School of St Andrews, and with a view to maintain and perpetuate the Madras system of mutual instruction and moral discipline there, but on failure of that school, or on the discontinuance of that system of education therein, then to and for the use and for behoof of the Provost and Magistrates, Town Council, and ministers of the Established Church for the time being of Cupar in Fife, and the clergymen of the Episcopal Chapel there, for similar purposes, and their respective successors in office, and on failure of them, or on the discontinuance of that system there, then for the use and behoof of the said Dr Andrew Bell himself and of his heirs and successors whomsoever.’

The Madras system of education, also known as the mutual or monitorial system, is a system by which the more advanced pupils in schools are employed in the instruction of younger pupils. It is admitted by both parties to this action that this system of education has for many years been in abeyance, and is no longer in operation in the Infant School of St Andrews or in any school or institution in the burgh of Cupar. The Provost and Magistrates of Cupar, &c., were called for their interest, but they have not lodged defences. According to the averments of the defenders, the infant school was transferred to Market Street, St Andrews, about the year 1844, and has for a number of years past been known as the West Infant School. From an excerpt from a minute of the defenders' Board it appears that in 1874 the infant school was, with the consent of the Board of Education, transferred from the trustees of the school to the defenders. As regards the endowment which forms the subject of the present litigation, the trustees of the infant school seem to have resolved to authorise ‘the School Board to receive the rent of said house and garden, and to apply same towards the support of the infant school in St Andrews on condition that the School Board shall maintain the property in good repair to the satisfaction of the trustees, and defray the usual rates and taxes connected with the property, and the cost of fire insurance.’ The gift was accepted by the defenders upon these terms.

Upon 3rd May 1888 a scheme of the Commissioners under the Educational Endowments (Scotland) Act 1882, relating to the Madras College, St Andrews, received the approval of the Crown by Order in Council. The endowment of the infant school had nothing to do with the Madras College.”

The scheme, inter alia, provided:—Clause 23—“The house in South Street, St Andrews, presently held under disposition to William Haig and others for the use and behoof of the infant school, St Andrews, under disposition dated 10th May 1831 and instrument of sasine in favour of the said William Haig and others, recorded in the Burgh Register of Sasines at St Andrews, 21st May 1831, shall be transferred to and vested in the Burgh School Board of St Andrews without the necessity of any new conveyance or instrument.” Clause 47—“It shall be in the power of the Court of Session to alter the provisions of this scheme upon application made to them, with consent of the Scotch Education Department, by the governing body or any party interested, provided that such alteration shall not be contrary to anything contained in the Educational Endowments (Scotland) Act 1882.”

The pursuer averred, inter alia—“(Cond. 6) The pursuer has made inquiry but has failed to ascertain how the said clause, which relates to the subjects presently in dispute, came to be inserted in the said scheme for the administration and management of the Madras College, St Andrews. The trust created by the disposition of 1831 did not relate in any way to the Madras College, St Andrews, and the heritable subjects conveyed by the said disposition have never been used in connection with, nor the income therefrom applied to the use of, the Madras College either before or since the date of said scheme. No intimation of the intention to deal with the said subjects in South Street was made to the pursuer or to any of the heirs and successors of the said Andrew Bell, or to the then trustees, and so far as these subjects are concerned no scheme was framed by the Educational Commissioners for altering the conditions and provisions relating to the said subjects as defined in the disposition and instrument of sasine above narrated. The statutes mentioned and the Order in Council are referred to for their terms. Quoad ultra the statements in answer are denied.”

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The defenders averred, inter alia—“(Ans. 6) The said scheme and the said disposition are referred to for their terms. Denied that the conditions and provisions relating to the subjects in question contained in the disposition and instrument of sasine referred to were not altered by the said scheme. Quoad ultra not known and not admitted. The said conditions and provisions were abrogated by the said scheme, which was framed by the Educational Endowments Commissioners in accordance with the provisions of the Educational Endowments (Scotland) Act 1882, and submitted to the Scotch Education Department, by whom it was approved after the statutory procedure in regard to intimation and publication had been followed, in pursuance of the said Act, and after full opportunity of stating objections or making representations had been given to all parties claiming to be interested in or affected by its clauses. No objections were lodged against the scheme by anyone. The scheme was duly approved by an Order in Council of Her Majesty Queen Victoria. The trust purposes of the said disposition, in so far as they provided for maintaining and perpetuating the Madras system of education, had ceased to be capable of being fulfilled for many years prior to the promulgation of the said scheme. No school board since 1872 could adopt the Madras system consistently with the Education Code administered under the Education (Scotland) Act 1872 and amending Acts. The pursuer was residing in St Andrews or its vicinity in 1888.”

The defenders pleaded, inter alia—“(1) The action being incompetent, in respect that the pursuer is attempting by its means to alter the provisions of the scheme founded upon without adopting the procedure provided for in the said scheme, the defenders are entitled to have the action dismissed. (2) The scheme in question having been approved by an Order in Council, the present action is excluded by force of the 35th section of the Educational Endowments (Scotland) Act 1882, and the same ought to be dismissed. (6) Upon a sound construction of clause 23 of the scheme in question, and of the 32nd section of the said Act of 1882; the trust purposes contained in the disposition founded upon of the heritable subjects described in the summons must be deemed to have been abrogated, and the destination-over contained in the said disposition must be deemed to have been evacuated as from the date of the Order in Council approving of the said scheme, and the defenders are accordingly entitled to decree of absolvitor from the whole conclusions of the summons. (7) Alternatively, upon a sound construction of the said scheme and of the said section, the defenders, being trustees of the said heritable subjects for the purposes of the infant school under their management, without any obligation upon them to maintain the said Madras system, are entitled to absolvitor.”

On 19th November 1913 the Lord Ordinary ( Hunter) granted decree of declarator in terms of the first three conclusions of the summons, and quoad ultra continued the cause and granted leave to reclaim.

Opinion.—“[ After the narrative, supra]—In the argument submitted to me by the defenders' counsel reliance was placed upon two defences as entitling his clients to absolvitor— first, that the primary purpose of the trust was the benefit of the infant school of St Andrews, and not the maintenance and perpetuation of the Madras system of education, and, second, that the statutory conveyance to the defenders in 1888 precluded any claim being now made by a beneficiary founding on the terms of the original destination.

As regards the first of these defences, it does not appear to me to be possible to give effect to the defenders' contention. The express language of the trust makes it clear that on the discontinuance of the system of education favoured by the truster at St Andrews and Cupar the property should revert to himself and his heirs and successors.

The second defence is attended with much more difficulty. Section 32 of the Educational Endowments (Scotland) Act 1882 provides—‘…[ quotes, v. sup. in rubric]…’ That Act was passed ‘to extend the usefulness of educational endowments in Scotland, and to carry out more fully than is done at present the spirit of the founders’ intentions, and so far as may be to make an adequate portion of such endowments available for affording to boys and girls of promise opportunities for obtaining higher education of the kind best suited to aid their advancement in life.’ Elaborate provision is made in the Act for the preparation of a draft scheme, the steps to be taken to ensure its approval, the powers of the governing body entrusted with the administration of the revenues of the endowment, and the procedure to be adopted by them in the course of such administration. There is nothing in the Act to lead me to suppose that a conveyance of funds or property to a school board in relief of rates sanctioned by the Commissioners would constitute such a scheme as is contemplated by the statute. No doubt the school board would have to administer the subject of the conveyance in accordance with their statutory powers, and a study of such powers would enable those interested to know what was proposed with regard to many, if not all, of the matters which by the Act of 1882 must be provided for; but the statutory provisions appear to me to contemplate express and not implied schemes. On a careful study of the scheme relating to Madras College I think that the conveyance to the defenders in section 23 although in the scheme is not of the scheme. The provisions which one expects to find in a statutory scheme under the Act of 1882 are all to be found in the scheme, but they affect the endowment which is known as Madras College and not the subjects conveyed to the defenders. I do not think, therefore, that the defenders can succeed in virtue of the provisions of section 32 of the 1882 Act. They maintain, however, that in any event they have got a statutory conveyance

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to the subject, and the validity of this conveyance was not challenged by the pursuer. His position is that the statutory conveyance under section 23 of the scheme, assuming it to be valid—and I pronounce no opinion upon that question—was granted under burden of the trust created by the original conveyance of 1831, or alternatively, that the destination-over contained in that deed has neither been evacuated nor discharged. I have come to be of opinion that the pursuer's contention is well founded. It is not maintained that the conveyance to the defenders was to them absolutely. I think that it merely avoided the necessity of a separate deed, and had the effect of vesting the defenders in the subjects to the same extent and effect as they were vested in the special body of trustees appointed to administer the trust in terms of the original conveyance. There is an express reference in section 23 of the scheme of 1888 to the disposition of 1831, and nothing to indicate that the terms of the original trust were being altered, or the rights that might emerge to beneficiaries in the events contemplated by the truster were being impaired. The defenders say that ‘No school board since 1872 could adopt the Madras system consistently with the education code administered under the Education (Scotland) Act 1872 and amending Acts.’ This circumstance does not appear to me to avail the defenders. By section 47 of the Education (Scotland) Act 1872 (35 and 36 Vict. cap. 62) it is provided—‘Every school board shall be at liberty to receive any property or funds which may from time to time be conveyed, bequeathed, or gifted to such board for behoof of any school or schools under the management thereof, whether generally or for the promotion of any particular branch or branches of education or instruction, or for increasing the income of any teacher; and it shall be the duty of the board to administer such property, funds, or money according to the wishes and intentions of the donors, and in such manner as to raise the standard of education, and otherwise increase the educational efficiency of the school or schools intended to be benefited.’ That section imposes an obligation upon a school board receiving a gift to respect the wishes of the donor, and I do not see that the obligation is affected by the fact that the gift is obtained from the trustees of the original donor. The defenders knew that the property which they were receiving was being administered under a trust, and ought either to have satisfied themselves that they were in a position to implement the trust or to have refused the gift. If the reasoning in the previous part of my opinion be sound, they did not improve their position by getting a simple statutory title instead of making up a title in the ordinary way. Their obligation to administer the trust by which the property was affected remained undischarged.

The defenders maintained that the pursuer could only get redress against the existing state of matters by going to Parliament or by getting the scheme of 1888 amended either by an application to the Commissioners under the 1882 Act or by petition to the Court of Session. I think that the pursuer's answer to this is sound. His action is brought to have the effect of section 23 of the scheme of 1888 determined in the light of the provisions of the Act of 1882, and no question of his having lost his rights under the conveyance of 1831 arises.

I shall therefore pronounce an interlocutor giving effect to the first three conclusions of the summons, which are declaratory, and grant leave to reclaim. Meantime I cannot deal with the conclusion for a conveyance until the heirs of the late Dr Bell have made up a title.”

The defenders reclaimed, and argued—Clause 23 of the Madras College scheme contained a separate scheme for the administration of the Infant School Endowment. It was not necessary that the scheme should specify its purposes, since the body who were to administer it, viz., the School Board, were a statutory body with statutory powers and duties. The scheme vested the property of the endowment in the School Board and gave the School Board one or other of two rights. It either gave the School Board (1) the right to administer the endowment in accordance with the original trust purposes, so far as these were not inconsistent with school board administration, or else it gave the School Board (2) an unqualified right to administer the endowment, except in so far as the right was controlled by the provisions of the School Board Acts. But either of these rights excluded the claim of the pursuer. The Educational Endowments (Scotland) Act 1882 (45 and 46 Vict. cap. 59), sec. 32, abrogated the provisions of the trust in so far as these were inconsistent with the scheme, and accordingly it abrogated the destination-over to the pursuer. A statutory title such as that conferred by the scheme was the highest form of title— Blackwood v. London Chartered Bank of Australia, 1874, L.R., 5 P.C. 92, per Lord Selborne, L.C., at 110. If a mistake had been made, the Legislature alone could correct it— Labrador Company v. The Queen, [1893] A C 104. In the present case it was not said that the statutory requirements had not been complied with in framing the scheme, as was said in Metcalfe v. Cox, April 8, 1895, 22 R. (H.L.) 13, 33 S.L.R. 405. An Act of Parliament might by implication take away private rights without compensation— Musselburgh Real Estate Company v. Magistrates of Musselburgh, July 31, 1905, 7 F. (H.L.) 113. Section 5 gave the Commissioners wide powers in framing schemes— Donaldson's Hospital v. Commissioners on Educational, Endowments, October 31, 1885, 13 R. 101, 23 S.L.R. 70; Ferguson Bequest Fund v. Commissioners on Educational Endowments, March 15, 1887, 14 R. 624, per Lord Mure at 631, 24 S.L.R. 441—and the Order in Council applying the scheme was conclusive evidence of its scope—section 35. Moreover, if the bequest had failed, it could not benefit the pursuer, because in that case it must be held to have lapsed— Burgess' Trustees v. Crawford, 1912 SC 387, 49 S.L.R. 294. The School Board were admittedly

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applying the income of the endowment in relief of the rates, but the endowment was an endowment for primary education, and therefore it was sua natura an endowment in relief of the rates. Such an endowment was not invalid— Trustees of Anderson Female School, 1911 S.C. 1035, 48 S.L.R. 839. A statutory title such as was conferred on the School Board by the scheme could not be reduced, nor could the scheme be altered except in the way provided by clause 47. But the declarator sought by the pursuer really involved an alteration of the scheme, and it was incompetent to alter a scheme by an action of declarator—section 35. Commissioners for Special Purposes of Income Tax v. Pemsel, [1891] AC 531, per Lord Hals—bury, L.C., at 543, was referred to in support of a contention by the reclaimers that it was competent to refer to the preamble of an Act of Parliament in order to assist in its interpretation.

Argued for the respondent—The pursuer was not impugning the validity of the scheme or seeking to alter it. He merely proposed to construe it. The scheme fell to be construed under the Educational Endowments (Scotland) Act 1882, which defined its limits. The transference to the School Board by clause 23 was a transference in trust. The clause vested the property of the trust in the School Board without affecting the trust purposes. The clause itself contained no trust purposes. The Education Code made no provision for the administration of endowments, except administration in accordance with the wishes of the donor. Moreover, the trust said to be implied was really a trust for the relief of the rates, and that was an extremely improbable sort of trust and one which the Court would not approve of— Governors of Jonathan Anderson Trust March 12, 1896, 23 R. 592, 33 S.L.R. 430. The pursuer's rights could only be taken away expressly or by necessary implication. There was a presumption against an Act of Parliament's taking away individual rights, especially in a case like the present where the pursuer's rights were founded on a written instrument—Maxwell, Interpretation of Statutes, 5th ed. p. 461; Mansfield v. Mansfield, 1889, 43 Ch. D. 12, per Bowen, L.J., at 17; Western Counties Railway Company v. Windsor and Annapolis Railway Company, 1882, 7 A.C. 178; Wells v. London, Tilbury, and Southend Railway Company, 1876, 5 Ch. D. 126; Morris v. Mellin, 1827, 6 B. and C. 446; Walsh v. Secretary of State for India, 1863, 10 H.L. 367, per Lord Chelmsford at 400.

At advising—