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William FOREMAN Home and Another, Appellants.

1840: Jan. 28. 31.

1841: June 22.

John PRINGLE and Others, Represen

tatives of the deceased WILLIAM
PRINGLE; and John HUNTER and Respondents.
Others, Representatives of the de-
ceased JAMES HUNTER - - - -

Et e Contra.

Trust. Duties and Liabilities of Trustees.

Costs. Practice.

Estates in Scotland were conveyed by trust-disposition to three

trustees, to collect and apply the rents as therein mentioned, with
1001. a year for their trouble, besides all the necessary expenses
of managing the estates; and with power to appoint and remove
factors, pay their salaries, and settle their accounts annually; and,
within six months after clearance with the factors, to get their
own accounts approved by an accountant, whose approbation
would be a discharge to them; each being liable only for his own
actual intromissions, and no farther liable for the factors than that
they should be reputed responsible at the time of their appoint-
ment. The trustees appointed one of themselves to be factor,
with a salary, and he, though of undoubted responsibility at that
time, afterwards retained large balances at the annual settle-
ments of accounts; whereon one of the trustees, who was cashier,
urged him to pay up; but the balances against him increasing,
both trustees, after failing in their exertions to obtain payment,
revoked his appointment as factor, and he became bankrupt, owing
a large debt to the trust-estate. Held by the Lords (affirming
decrees of the Court of Session in Scotland in an action raised by
the first heir of entail, to whom the trustees were bound to account
for their management):

Ist, That the appointment of one of the trustees to be factor was not of itself such a breach of trust as subjected the other trustees to all the consequences resulting from it.

2dly, That there was not such gross negligence, in the two trus. tees permitting the factor to retain balances, as to subject them to liability for the ultimate balance due from him to the trust.

estate. The appointment, by trustees, of one of their number to be factor to

the trust-estates, would not of itself make them liable for his defaults; but by so making him their agent they would be liable for his defaults as agent, and not as co-trustee, in the same way that they would be liable for the defaults of any other person whom they might appoint to the office. The principle of the rule is the same in Scotland as in England.

The mere fact of trustees allowing balances to remain against their 1840.

factor at the annual settlement of his accounts, where it is impos sible to include his whole receipts and payments for the year, is Home not a breach of trust, or such culpable negligence as would make

. them liable for the ultimate balances due from him to the trust :


and Secus, if they assented to his contrivances to retain larger balances

HUNTER, than were necessary for the management of the trust. A trustee does not, by being cashier to the trust-estate, incur any

additional liability in respect of its management beyond what he

was subject to as trustee. The rule of the Courts in England preventing trustees from having

any office with profit under the trust, or any remuneration for their trouble, beyond what the trust-deed allows them, is so beneficial,

that a different rule ought not to be sanctioned in Scotland. (Quære, whether the contrary practice there is not assumed, rather :

than decided, to be legal.) A Court of Appeal will not entertain an appeal for costs alone. (Quære, whether if a decree be appealed from on the merits, it is

not competent for the Respondent to present a cross-appeal on the

question of costs.) Where Respondents have different defences, the House will hear

two counsel for one on the whole case, and two for the other on the points wherein their defences differ.

THE question in these appeals arose upon settlements executed by George Home, Esq. of Wedderburn, who by a trust-disposition, dated the 16th of July 1816, conveyed his estates, real and personal, including his estates of Billie and Paxton, situate in Berwickshire, to David Renton, William Pringle, and John Renton, and such persons as he or they might assume. These trustees were empowered to act in succession in the order in which they were named; to enter vassals, grant tacks, and remove tenants; also “ to name and remove factors from time to time, with such powers, and liable to such diligences, as they should think proper;" and“ to give such salaries to the factors, and gratifications to any other persons employed in reļation to the premises, as the said trustee or trustees shall think expedient at the time; and to settle accounts annually with the said factors, and upon





payment of what shall be found due, to exoner and discharge them of their intromissions and management; and within six months after each clearance with the factors, the said D. Renton, W. Pringle, and J. Renton, or other trustee or trustees acting in the order above mentioned for the time, shall make up the accounts of his or their intromissions during the period of the factor's accounts, and get the same examined and approved of by an accountant of character in Edinburgh; and if the account is approved of by the said accountant, such approbation is hereby declared to operate as a full exoneration of the said trustee or trustees for their whole management during the currency of said account." And it was farther provided, that the said D. Renton, &c. or other trustee or trustees named or to be named, “ shall no ways be obliged to do diligence otherwise than as he or they shall think fit; nor shall he or they be liable for omissions, but only for each of them for himself, and his own actual and personal intromissions; nor shall they be farther liable for their factors than that they shall be habit and repute responsible at the time of entering upon their office."

The purposes of the trusts were for payment of the truster's debts, of all public burdens affecting the said estates, and of the interest of all debts of the truster, “and of all necessary charges and expenses to be disbursed by the said trustees or their factors in executing this trust-right; which charges and expenses are to be taken on the honest word of the acting trustee or trustees for the time, and not to be subject to challenge on any account or pretext whatever; and for payment of such salaries and gratifications as the said trustees shall give to factors, lawyers, arbiters, or others, who shall be employed

18.40. Hair



and Hunter.

with relation to the management of this present trust, and of the yearly sum of 100l. sterling as a gratification to the acting trustee or trustees for their trouble in the management; it being hereby declared that in case there be at any time more than one acting trustee, the said yearly sum of 1001. sterling shall be equally divided among the said acting trustees.” The last purpose of the trust was for applying the free residue of the rents of the estates in payment and extinction of the whole remaining debts due by the truster. And on fulfilment of the whole purposes, the trustees were to denude and convey over the estates to the heirs of entail, nominated in a separate deed, and to render an account of their intromissions and management.

A deed of nomination of heirs was executed of the same date with the trust-disposition, but was afterwards superseded by another deed of nomination executed in favour of the Appellant. A supplementary trust-deed was executed on the 16th of August 1819, recalling the nomination of trustees in the deed of 1816, and conveying the estates of the truster" to and in favour of William Molle, the said William Pringle, and James Hunter, and to the survivor or survivors of them, who shall accept," and declaring that “ a majority of my said trustees, accepting and surviving, shall at all times form a quorum for executing the purposes of the said trust; and that the said W. Molle, W. Pringle, and J. Hunter, as trustees foresaid, shall have the same powers, and be subject to the same declarations, conditions, provisions and reservations, as if named and appointed as such in græmio of the foresaid trustright, to which this supplementary trust-deed has an express relation, excepting in so far as altered by these presents.”

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On the death of Mr. Home in January 1820, the trustees accepted the trust, and proposed to hold a meeting in Edinburgh, on the 17th of March. The meeting took place on that day, and was attended by Molle and Pringle, and by the Appellant, who was the first heir of entail under the trust-disposition. He was accompanied by Mr. John Wauchope, W.S., as his legal adviser. Hunter, the other trustee, intended to be present also, but he was led by a note from the Appellant to believe that the meeting would not be held on that day.

From the terms of the settlements the Appellant was entitled to the profits of the estate of Paxton; and at this meeting he proposed that he himself should be appointed factor over the other trust-estate of Billie, the rents of which formed the principal trust-fund for payment of the truster's debts and legacies. It appeared to the trustees present that such an arrangement would be inconsistent with the views of their constituent; and on a view of their own situation and duties, they declined to accede to the proposal. The minute of the meeting expresses that “the trustees hereby appoint Mr. Pringle to be their cashier; Mr. Molle to be factor; Messrs. Molle, Turnbull & Brown, writers to the signet, to be agents in Edinburgh; and Mr. Hunter to be agent before the sheriff, commissary, and other courts in Berwickshire: and they directed a factory to be made out in favour of Mr. Molle.Mr. Pringle was depute-clerk of Session in Edinburgh; Mr. Hunter was a writer in Dunse, Berwickshire; and Mr. Molle was the first member of the said firm of Molle, Turnbull & Brown, and he was then reputed to be a man possessed of considerable property and credit. The Appellant was a practising attorney in the town of Berwick-upon-Tweed, and had the

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