circumstances in which they were built, and the conditions under which they have been apparently held.1 Professor Bell says, on the authority of some cases in the last century, "In trusts for family purposes, or economical arrangements, the trustees are, like the truster himself, entitled to pay off debts, &c. as they are demanded. When judicially called upon to pay a debt, they are not safe preferably to answer a similar demand without having funds to pay both. When called on by creditors, though extra-judicially, if there be a manifest shortcoming, they are not safe to pay without a multiplepoinding."2

Responsibility. The office of trustees is gratuitous, and hence, though there are not many decisions bearing on the point, it is held that they are entitled to employ factors and other persons necessary for the fulfilment of the labours of the trust, remunerating them from the trust-funds. The general expenses incurred bonâ fide in the furtherance of the trust, even in circumstances where perhaps it might be shown that the management might have been more economical, are payable out of the trust-funds. In the ordinary case, the trustees are by the deed declared not to be liable for cmissions, or singly for their collective acts, but each for his own intromissions. This exemptive clause will protect them from responsibility for the persons employed even when a diligent supervision might have prevented damage to the estate.3 But it appears that even when there is no such clause the trustees will not be responsible for the defalcations of apparently respectable and responsible officers appointed by them, or the failure of apparently respectable banks of deposit of the trust-funds. It is a general rule that trustees must account for the funds put into their hands, either refunding them, or explaining how they have been exhausted; and thus, either themselves, or by the employment of proper persons, they must make arrangements for accounts of charge and discharge being kept where the nature and extent of the fund render such an arrangement necessary. Where a party has a specific beneficial right under the trust, and the trustees are unable to account to him for the funds at their disposal, they are personally liable to him. Although not, as above stated, personally responsible for the defalcations of persons in their

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1 Davidson v. Aikman, M. 14584.- B. P. 1998.-3 Traquair's Trustees v. Cheape, 16th February 1835. Home v. Pringle, 30th November 1837.Thomson v. Campbell, 16th February 1838.-5 Gourlay v. Dumbreck, M. 16192.- Hamilton's Creditors v. Hamilton's Trustees, M. 16201. Anderson v. Small, 12th February 1833. Cruickshank v. Cruickshank, App. 24th April 1845. 4 Bell, 179.

employment, though by vigilance the loss might have been avoided, yet they are responsible for gross negligence, especially for allowing the funds to be irregularly uplifted and employed. So where one of a set of trustees was directed by others to uplift funds, without receiving any regular appointment, and all the trustees signed the acknowledgments of receipt of the money, and, there being no meeting for eight years, while the trustee appointed to uplift the funds became bankrupt, they were found to be all personally liable. If the trustees perform acts distinctly out of the limits of the trust, they will be personally responsible for the pecuniary loss so occasioned. It may be presumed that salaried trustees would be subjected to the same responsibility as hired agents or factors; but the distribution of a small sum, not on a scale sufficient to remunerate the labours of the trust, was found not to create such responsibility.3 The same case is one of several which show that it is not incompetent for the trustees to appoint one of their number the hired factor or agent of the trust.

Litigation. Considerable latitude is allowed to trustees in litigating at the expense of the trust-fund. They are indeed bound to support the trust and the application of the fund to its purposes, and they are too often placed in a position in which they must either appear in the courts of law, or abandon these objects. The dubious character of the trust-deed, and the necessity of having their own powers and duties more clearly defined, frequently lead trustees into courts of law. In either of these classes of cases, though the decision be against them, if it do not appear that their proceedings are rash, vexatious, or unreasonable, the expenses decreed against them will fall on the trust-fund, and they will not be personally liable for them. It has sometimes been acted upon indeed as a general principle, that when the litigation tends to develop the end and scope of the trust, the expenses of all parties to the action are allowed out of the trust-estate. În a late case where an opponent's expenses were not allowed from the trust-fund, Lord Cockburn observed, "It is a very common conception, that all parties attacking a trust-fund are to get their expenses out of it. I hold that they must do so at their own risk.” 6

1 Seton v. Dawson, 18th December 1841.- Pollexfen v. Stewart, 9th December 1841.-3 Home v. Pringle, 30th November 1837.- Dickson v. Bonar's Trustees, 20th November 1829. Kirkland v. Crichton, 3d February 1842; but see Raeburn v. Dawson, 14th June 1831.5 Robertson v. Allan, 7th March 1832.—6 Allan v. Fleming, 20th June 1845.

Personally profiting.-When any one of their own body is benefited by the management to the detriment of the trustestate, or those interested in it, there will be a rigid exaction of responsibility, not only against the trustee who obtains the benefit, but against the others who have countenanced the transaction; so it was found where a preference was given to a creditor to whom one of the trustees was executor, and the fund became insufficient to pay another creditor.1 The trustees must avoid any attempt personally to profit by the operation of the trust. They must give the trust the benefit of any discounts or deductions that may be made in the payment of trust-debts, or any other relief that may be given in transactions connected with the estate; "they are bound," as it is usually said, "to communicate cases;" and they must not acquire rights which may come into competition with claims to be made in favour of the estate.2 To prevent all questions as to the fairness of their conduct, it is a general rule that trustees cannot purchase any part of the trust-estate. By the last bankrupt act, the trustee in a sequestration is statutorily disqualified from purchasing.4

The Court of Session has authority over trusts and trustees, not only judicially when any ground of action arises, but ministerially in the shape of control and direction. In the decisions, a distinction has to be taken between those powers which the court find that the trustees possess, and the special powers which the court may, in its discretion, bestow on them. Thus, where a party conveyed estates to trustees, with power to sell a portion to pay debts, and to entail another portion, the former being insufficient for payment of the debts, the court found that it had power to authorize them to sell" either the whole or a part" of the remainder.5 Trustees are removeable by the court, on a case being made out against them, either with regard to their general conduct and character, or with reference to the special circumstances. Bankruptcy, especially in the case of a single trustee, has generally been considered a good ground of removal. The manner in which provision is made for conducting the objects of a trust when there are no trustees has been considered above.

Young v. Johnston's Trustees, 15th June 1841.-2 Forsyth, 113. Rae v. Glass, M. 16170. Wright v. Wright, M. 16193. Maxwell v. Maxwell, M. 16166. Sinclair v. Maxwell, M. 16186. Ogilvie v. Lyon, M. 16200. Crawford v. Hepburn, M. 16208.-B. C. ii. 376. Hamilton v. Wright, App. 2d August 1842. 1 Bell, 574.-2 & 3 Vict. c. 41, § 99.-5 Erskine's Trustees v. Wemyss, 13th May 1829.-6 M'Dowal v. M'Dowal, M. 16210, Towart, 14th May 1823. Smith, 15th May 1832.

CHAPTER II.

ARBITRATION.

SECT. 1.-Submission.

ARBITRATION is a contract by which, in reference to some specific matter which is or may be in dispute between parties, they become bound to submit to the judgment of an Arbiter or Arbiters. A person may be bound in reference to Arbitration in two manners:-1st, The dispute may not yet have arisen; but, in contemplation of its arising, he may have become bound to refer it to arbitration. 2d, A valid Submission may have been entered into, setting forth the matter in dispute, and binding the parties to abide by the award. The decisions make little distinction between an actual Submission and an obligation to submit. The latter is a usual clause in contracts of Copartnership, and is not unfrequent in contracts for the performance of work, leases, &c. It will be readily understood that in an actual Submission the person who is made Arbiter must be clearly indicated by name and description; but it is very important to keep in view that an obligation to submit is not binding unless the arbiter be named, and alive. Thus, not only an obligation to refer matters in dispute to "impartial persons, mutually chosen," or to persons of skill," but also an obligation to refer to the person who shall hold any particular office for the time being, is ineffective.1

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Agreements to refer to arbitration disputes which have arisen, or may arise, must not however be confounded with agreements to have the value of any commodity, or the sum to be paid by any party, where no dispute is contemplated, fixed in a particular manner. This is not an arbitration of a dispute, but the completion of a bargain. So where a tenant bound himself to cede possession at a certain time, on being allowed such compensation for a farther term as should be "fixed by men to be mutually chosen for that purpose," the landlord having resumed possession, it was found that the tenant was bound to adopt the method of fixing the compen

Magistrates of Edinburgh v. Milne; affirmed on appeal, 15th February 1770. Iv. Er. 1015. Buchanan v. Muirhead, M. 14593.

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sation so set forth. There is a species of reference which partakes partly of ordinary arbitration, and partly of the character of a mere arrangement for fixing the criterion of what shall be given in the way of payment, work, or otherwise, by a party to the contract. Thus, in the building of a house, in the laying down of a railway, &c., a contractor comes under an obligation to complete the work to the satisfaction of an architect or engineer, who may be in the employment of the other party. The few decisions bearing reference to such engagements show that they are strictly interpreted as binding on those who undertake them.2

A Submission falls by the death of any of the parties to it. A period may be fixed within which the award must be made. It is not unusual for the submission to contain a blank for filling up such a date, e. g. that the arbiters must come to a determination before the day of next to come. By practice, such a submission is held to last for a year.3 If there is no limitation express, or thus implied, the Submission lasts till it prescribes by the lapse of forty years.* According to the principles of the civilians, an arbiter who had once accepted was bound, as a party to a contract, to hear parties and decide; and this principle was formerly enforced in Scotland by the insertion in the Submission of a Clause of Registration to compel the arbiters by letters of horning to perform their functions. It is much questioned if this would now be held law. In a case where one of two arbiters resigned, the court, "without entering into the question, Whether a sole arbiter is bound to decide?" would not in this case exact performance.6

Oversman. It is usual, where more than one arbiter is appointed, to provide for their choosing an Umpire or Oversman in case they cannot agree, or to name a person who is to be Umpire. In the former case the arbiters may choose the umpire before they proceed to business. But "If in either case the oversman shall pronounce a decree before the arbiters have differed in opinion, the decree is null; for the power of determination is in the first place given to the arbiters: it is only upon their disagreeing that it is transferred to the oversman; and the decreet arbitral

1 Smith v. Duff, 28th February 1843. See Munro v. Mackenzie, 18th December 1823. Dixon v. Campbell, 25th June 1830.- Phipps v. Edinburgh and Glasgow Railway, 11th March 1843. Chapman & Son v. Edinburgh Prison Board, 16th July 1844.-3 E. iv. 3, 29.- Fleming v. Wilson, 7th July 1827. Halket v. Elgin, 16th December 1826.-5 E. iv. 3, 30. Cairncross v. Hunter, M. 632.- White v. Fergus, M. 633.—7 Brysson v. Mitchell, 10th June 1823.

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