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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Clark (Crumpton's Curator Bonis) v. Accountant of Court [1886] ScotLR 24_38 (12 November 1886) URL: http://www.bailii.org/scot/cases/ScotCS/1886/24SLR0038.html Cite as: [1886] SLR 24_38, [1886] ScotLR 24_38 |
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Page: 38↓
Held that a curator bonis may, in virtue of the Trusts Amendment Act 1884, invest the ward's money in the stock of Colonial Governments approved by the Court of Session, not with standing that the Bank of England, at which such stocks are transferable, declines to take cognisance of trusts, and that therefore the stocks must be registered in name of the curator as an individual.
By section 2 of the Trusts (Scotland) Amendment Act 1884, trustee shall include … judicial factor, and (section 3) trustees may, unless specially prohibited by the constitution and terms of the trust, invest the trust-funds in, inter alia, the purchase of “East India stock, and stocks or other public funds of the Government of any Colony of the United Kingdom approved of by the Court of Session, and also bonds or documents of debt of any such Government approved as aforesaid, provided such stocks, bonds, or others are not payable to the bearer.”
On the petition of Mrs Agnes Crumpton, residing at 10 Jeffrey's Road, Clapham, London, Thomas Bennet Clark, C.A., Edinburgh, was in May 1884 appointed curator bonis to William Thomas Crumpton, who was of unsound mind and an inmate of the Crichton Royal Institution, Dumfries.
On 26th June 1885 the curator made the following investment of a portion of the trust-funds, viz., £700 4 per cent. stock of the Government of Queensland, and on 15th July following he purchased £800 inscribed 4 per cent. stock of the Government of New Zealand. The investments were made, according to the statement in Mr Bennet Clark's accounts, in respect of the powers conferred by the Trusts (Scotland) Amendment
Page: 39↓
Act 1884, as interpreted in Orr ( Maclean's Trustee), December 20, 1884, 12 R. 529. When the factorial accounts for the period from June 1884 to July 1885 were submitted for approval to the Accountant of Court, he raised several objections to these investments with the view of getting the authority of the Court to guide him on the present occasion and for the future. He accordingly prepared a report to the Lord Ordinary setting forth the practical difficulties which appeared to him to arise in connection with this class of investments for funds under the charge of judicial factors.
The Accountant pointed out (1) that in England and the Colonies trusts were not recognised, and such purchases of Colonial Government stock must be registered in the name either of the ward, which was not available when a transfer had to be accepted, as a minor or lunatic cannot sign a transfer, or of the factor, as in the case before him, in which the vouchers were two receipts by the sellers in favour of “Thomas Bennet Clark” and a certificate by the chief accountant of the Bank of England, dated 27th April 1886, that the sums of £700 and £800 above mentioned stood in the name of Mr Bennet Clark. On those receipts Mr Bennet Clark had written a declaration that the stock in the certificate was held as curator bonis for William Thomas Crumpton. These stocks thus being registered in the factor's name were entirely under his control. The Accountant then pointed out complications which might arise if the factor died or became bankrupt.
The Accountant stated that apart from the special objections he thought the investments were eligible in themselves.
The Lord Ordinary ( Trayner) reported the case to the First Division.
On 15th July 1886 a minute was lodged by the Accountant of Court, in obedience to the orders of the Court, containing information obtained from the chief accountant of the Bank of England specially relating to the transfer of stocks. The most important statement which it contained was as follows:—“The Bank of England declines to take cognisance of trusts, and therefore stock held by a curator for his ward can only be registered in the name of the curator as an individual.”
At advising—
When the annual accounts of the factory were presented to the Accountant of Court it occurred to him that an important question was raised by these investments, and he accordingly reported the point to the Lord Ordinary, who thereupon reported the matter to us. We have conferred with the other Judges, and I have now to state the result of our deliberations. The Accountant states in his note to the Lord Ordinary that these two investments were made by the authority of the “Trusts (Scotland) Amendment Act 1884,” and he refers to the case of Orr ( Maclean's Trustee), decided by my brother Lord Adam in December 1884. Now, section 2 of that Act thus defines “trust” and “trustee.” “Trust” is to “mean and include any trust constituted by any deed or other writing, or by private or local Act of Parliament, or by resolution of any corporate or public or ecclesiastical body, and the appointment of any tutor, curator, or judical factor by deed, decree, or otherwise.” “‘Trustee’ is to include … curator, while ‘judicial factor’ shall mean any person judicially appointed … upon the estate of a person incapable of managing his own affairs … and curator bonis.” Now, this is the case of a curator bonis, and it falls therefore under the definition of a trustee, and accordingly what we have to deal with here are the actings of a trustee in a trust-estate. Is the curator then entitled, under the provisions of section 3, to make these investments? Now, section 3 provides that trustees may, unless forbidden by the constitution or terms of the trust, invest the trust-funds in a variety of enumerated investments, and in art. 7 of that section “East India stocks, or other public funds of the Government of any Colony of the United Kingdom approved by the Court of Session … provided such stocks … are not payable to bearer.” Now, this is a purchase of stock, and it falls under number 7 of the enumerated investments which may be made with trust-funds.
The investments in the present case are public funds of Colonial Governments, and if “approved by the Court of Session” they certainly fall within the class of securities which may be purchased with trust-funds. It is not suggested that this is a bad investment, or that there is anything doubtful about the security, and so it may be assumed that this is an investment which has been made with the approval of the Court of Session.
But the Accountant has suggested a number of difficulties in connection with these investments, and the objections which he has stated are applicable to many other investments of trust-funds than those which are here enumerated. The chief objection arises from the Bank of England refusing to recognise trusts, and from their consenting to take the names of individuals only, and that without any qualification whatever.
If we give effect to these objections, then not only would the whole class of investments provided for by the Trusts Act of 1884 be rendered of no avail for trust-funds, but the Court would not be able to give effect to the purchase of stock of the Bank of England or consols, or any of the public stock of the United Kingdom. Such a result would be in direct opposition to the whole scheme and object of the Trusts Act of 1884, and it would practically render it null.
That appears to me to be quite a sufficient ground for the disposal of the present question, and I do not consider it necessary to consider in detail the various difficulties raised by the Accountant's report. What we have to do is to follow as closely as possible the provisions of the Act of Parliament.
Page: 40↓
The Court remitted to the Accountant to sustain the investments.
Counsel for Curator Bonis— G. W. Burnet. Agents— Millar, Robson, & Innes, S.S.C.
Counsel for Accountant of Court— Moncreiff. Agents— Mackenzie, Innes, & Logan, W. S.
