No. 34. Nov. 30, 1875. Murray were originally employed by Mr and Mrs Catton as individuals, "From time to time Messrs Murray, Beith, and Murray made indefinite payments to Mr and Mrs Catton, amounting, previous to 4th July 1871, when the charger's claim became known, to £2257, 3s. 11d.; and the question is, from what funds shall these payments be held to have been made. On the face of the payments they are indefinite, and they may have been made to Mrs Catton or her husband, either as individuals, as beneficiaries under Hugh Mackenzie's trust, or as beneficiaries under the marriage-contract, or in two or more of these characters combined. It is not necessary to distinguish between Mr and Mrs Catton as individuals. Mr Catton acted throughout for his wife." The Lord Ordinary found "that the complainer, as trustee acting under the settlement of the deceased Hugh Mackenzie of Dundonell, is not in possession of any trust-estate to answer the debt charged for, and that there are no grounds by reason of improper payments by him or otherwise for subjecting him in personal liability: Therefore suspends the charge," &c. The respondents reclaimed. On the defence, in so far as depending on bona fide payment to beneficiaries, the following observations were made by LORD GIFFORD.-I think it is quite fixed in law, and the rule is in entire conformity with the plainest equity, that a trustee or trustee and executor, after reasonable time has elapsed and after reasonable inquiry has been made, is entitled and is in safety to pay away the free trust or executry funds in his hands, either to legatees for pecuniary or specific legacies, or to residuary legatees, or ultimate beneficiaries, provided he does so in bona fide and without knowledge that there are outstanding claims due by the estate, and that he will not be liable in repayment or in double payment to creditors whose claims were not intimated and not known at the time when such bona fide payment was made. The case of Stewart v. Evans' is a strong example of the application of this rule, for there the trustee was held free and justified in having parted with the estate June 9, 1871, 9 Macph. p. 810. 1 although he knew of the claim, because he believed it to be effectually discharged No. 34. by a deed which, however, was afterwards found to be null in law. It seems to Nov. 30, 1875. follow a fortiori that the trustee would have been free if he had never known of Beith v. Mackenzie. the claim at all. The principle is recognised in other cases, and indeed on no other footing would a trustee ever be safe to wind up a trust and part with the trust-funds until perhaps the lapse of forty years-the long prescription. After six months, and in a question with creditors, the trustee or executor may pay in bona fide primo venienti, that is, he may pay off in full the creditors who have appeared, without being answerable to creditors who may afterwards turn up; and so after six months, and after due and reasonable inquiry, he will be quite in safety to pay the free residue to legatees or beneficiaries, and if after that creditors for the first time come forward, they must look for payment not to the trustee who has honestly and in good faith handed over the funds to the beneficiaries, but only to the beneficiaries or legatees who have actually received the funds themselves. (His Lordship then referred to the accounting as in the narrative quoted above) -Now, in reference to all these indefinite payments, and to other payments in a similar position, which appear in the combined or general current account, the suspender, Mr Beith, after the present question arose, claimed right to remodel the accounts and to impute these indefinite payments as payments out of Hugh Mackenzie's trust-estate, none of them or few of them being admitted to be payments out of the marriage-contract trust-funds or payments on the individual credit of Mr and Mrs Catton. In this way, in the account of charge and discharge now founded on by Mr Beith, he shews a very large balance-upwards of £3000due by Hugh Mackenzie's trust, while, on the other hand, there is a sum nearly of the same amount due by the firm to the marriage-contract trustees. Now, I am of opinion that no such remodelling of the accounts is now permissible. The suspender cannot now impute payments which at the time were indefinite to one account more than to another. These indefinite payments must now be imputed and their incidence and legal effect must be determined in terms of law and in conformity with legal rules, and not according to the will or choice of the complainer or his firm. In particular, I am of opinion that the suspender cannot now be allowed to say, "I made these indefinite payments to Mr and Mrs Catton solely as beneficiaries under Hugh Mackenzie's trust, while at the same time I was retaining and accumulating for their behoof the whole income which was arising under the marriage-contract trust, to which income Mrs Catton was undoubtedly from time to time entitled." This is the practical result of the suspender's claim to remodel the accounts, and I think the claim and its results are quite inadmissible. On the other hand, it seems to me equally clear that the respondents are not entitled to insist that these indefinite payments must have been made solely on account of the marriage-contract funds, the result of which would be to make Messrs Murray, Beith, and Murray advance, as on marriage-contract trust-account, sums greatly larger than they ever received on that account, and this in order to make them debtors under Hugh Mackenzie's trust. The equitable rule seems to be that where a cashier or trustee holds two different funds for the same beneficiary and makes indefinite payments to the beneficiary without fixing at the time from which fund the payments come, then these indefinite payments must, whenever occasion arises, be equitably apportioned between the two trusts, if the trustee or cashier held funds belonging to Nov. 30, 1875. No. 34. both, or must be held to have been made from that fund or trust of which the cashier or trustee at the time had a balance in his hands, and not from any other trust of which at the time the cashier or trustee had no balance in his hands from which the payment could be made. In short, the trustee or cashier shall not be held to advance or lend to the beneficiary so long as he has any funds in his hands belonging to the beneficiary and from which the payment might be made. In other words, a trustee intromitting with two funds, and making indefinite payments to the common beneficiary of both, shall always be held to make these payments from funds in his hands, and not in expectation of getting funds on another account which he has not yet received. No. 35. Dec. 2, 1875. Lord Advocate v. Brown. 1ST DIVISION. M. LORD JUSTICE-CLERK.-This is the opinion of the Court. LORD NEAVES was absent. THE COURT adhered. MURRAY, BEITH, & MURRAY, W.S.-A. P. PURVES, W.S.-SKENE, Webster, & THE LORD ADVOCATE, Pursuer.- Sol.-Gen. Watson-J. P. B. Robertson. Process-Relevancy-Industrial Schools Act, 1866 (29 and 30 Vict. c. 118), secs. 14, 35, 38.-The 38th section of the Industrial Schools Act enacts that where a child sent to an industrial school under the Act is chargeable to any parish the parochial board and inspector of the poor "shall . . . be liable to repay to the Commissioners of Her Majesty's Treasury all expenses incurred in maintaining him.” A boy, chargeable to a parish, having been committed to an industrial school under a warrant ex facie regular, the Lord Advocate raised an action against the inspector for the expenses of his maintenance. Held that it was not a relevant defence for the inspector to plead that the proceedings before the magistrate were irregular, and that the warrant had been illegally granted. THIS was an action by the Lord Advocate against the inspector of poor Ld. Curriehill. for Liff and Benvie, concluding for declarator that the defender was "liable for the expense of maintaining, at a rate not exceeding five shillings sterling per week, James Mackay, presently detained in the Dundee Industrial Schools, from the date of his commitment to said schools, under warrant dated 8th May 1871, until he be discharged therefrom, all in terms of the Industrial Schools Act, 1866." There were also conclusions for payment of £31, 10s. already incurred, and for relief for the future. It was not disputed that James Mackay was committed under an order in these terms :- Burgh of Dundee.-Be it remembered that on the 8th day of May 1871, in pursuance of the Industrial Schools Act, 1866, I, one of the Magistrates of the said burgh of Dundee, do order that James Mackay, now or lately residing in Perth Road, Dundee, apparently of the age of eleven years (whose religious persuasion appears to me, after inquiry, to be Protestant), being a child subject to the provisions of section 14th of the said Act, be sent to the Dundee Industrial School, and that he be detained there until he attain the age of fifteen years.-GEORGE T. GRAHAM, Magistrate."* * The 14th section of the Act 29 and 30 Vict. c. 118, is in these terms :"Any person may bring before two Justices, or a Magistrate, any child appar Lord Advocate v. Brown. The pursuer pleaded (as the record was amended in the Inner-House); No. 35. -3. The said James Mackay having been within the meaning of sections 35 and 38* of the statute libelled, sent to, and detained in a certified indus- Dec. 2, 1875. trial school, the pursuer is entitled, whether the warrant for the said. James Mackay's detention be valid or invalid, to recover from the defender the sums contributed by the Commissioners of Her Majesty's Treasury towards his custody and maintenance. 4. No relevant defence having been stated to the present action, the pursuer is entitled to decree, with expenses. The defender, besides disputing the chargeability of the boy, and the correctness of the rate and amount of the expense, averred that the procedure was irregular in several respects, and stated, inter alia, the following pleas-1. The declaratory conclusions of the action are incompetent, and the petitory conclusion being dependent on the declaratory, the action should be dismissed. 2. The order of detention here founded on cannot support the claim here attempted to be enforced against the defender's board, in respect that-(1) The provisions alike of the common law and of the Summary Procedure Act, as condescended on, were not respected or conformed to; (2) there was no good instance in the applicant, and no qualifications in the boy asked to be detained; (3) the order was ultra vires of the Magistrate who pronounced it; (4) it was granted without evidence of necessary grounds; (5) it does not state which of the alternative facts set out in the 14th section of the Act was found proved; and (6) is, as regards the defender and his board, res inter alios acta. 3. The Magistrate acted illegally in not sending the said James Mackay to a poorhouse, as allowed by the 19th section, with a view to inquiries being made as to his antecedents. 4. The order was illegal, in respect that the defender was not called as a party to the proceedings before the Magistrate. The Lord Ordinary repelled the defender's first plea, and appointed the case to be enrolled for further procedure. The defender having then raised a reduction of the order of committal, the Lord Ordinary, on 18th June 1875, pronounced this interlocutor:-"In respect of the dependence of an action at the instance of the present defender against the present pursuer for reduction of the Magistrate's order referred to in the present action, sists further procedure in hoc statu: Grants to the pursuer leave to reclaim." The pursuer reclaimed. At advising, LORD PRESIDENT.-In this action the Lord Advocate concludes for declarator against the inspector of poor of Liff and Benvie, that the defender, as representing the parochial board of the said parish, "is liable for the expense of maintaining, at a rate not exceeding 5s. sterling per week, James Mackay, presently ently under the age of fourteen years, that comes within any of the following descriptions, namely: That is found begging or receiving alms (whether actually or under the pretext of selling or offering for sale anything), or being in any street or public place for the purpose of so begging or receiving alms: That is found wandering and not having any home or settled place of abode, or proper guardianship, or visible means of subsistence: That is found destitute, either being an orphan, or having a surviving parent who is undergoing penal servitude or imprisonment: That frequents the company of reputed thieves; the Justices or Magistrates before whom a child is brought, as coming within one of these descriptions, if satisfied on inquiry of that fact, and that it is expedient to deal with him under this Act, may order him to be sent to a certified industrial school." No. 35. detained in the Dundee Industrial Schools, from the date of his commitment to said schools under warrant dated 8th May 1871 until he be discharged thereDec. 2, 1875. Lord Advocate from, all in terms of the Industrial Schools Act, 1866," and farther for payment v. Brown. of £31, 10s. as the amount of his maintenance till 17th January 1874. It appears that the boy, when about eleven years of age, was sent to the Dundee Industrial School on the 8th of May 1871, as being within the provisions of the 14th section of the Industrial Schools Act, and the warrant for his committal was admittedly ex facie regular. It specifies his age, states that he is subject to the provisions of the 14th section, and orders that he is to be detained until he attains the age of fifteen years. All that is precisely in terms of the schedule of the statute, and one of the clauses of the statute provides that when an order of commitment is made in terms of that schedule it shall be deemed sufficient. The boy has been educated at the school, and recently, although he has not been discharged, he has been allowed to work out of doors, and must now have attained the age of fifteen. The authority for the Treasury advancing money for the support of children committed to industrial schools is contained in the 35th section of the statute, which is as follows:-"The Commissioners of Her Majesty's Treasury may from time to time contribute, out of money provided by Parliament for the purpose, such sums as the Secretary of State from time to time thinks fit to recommend towards the custody and maintenance of children detained in certified industrial schools, provided that such contribution shall not exceed 2s. per head per week for children detained on the application of their parents, step parents, or guardians." Then the 38th section provides that "where a child sent to a certified industrial school under this Act is, at the time of his being so sent, or within three months then last past, has been chargeable to any parish, the parochial board and inspector of the poor of the parish of the settlement of such child, if the settlement of the child is in any parish in Scotland, shall, as long as he continues so chargeable, be liable to repay to the Commissioners of Her Majesty's Treasury all expenses incurred in maintaining him at school under this Act, to an amount not exceeding five shillings per week." On that section this action is laid, and there is no dispute that Liff and Benvie was the parish of the boy's settlement if he was chargeable at the time, and has continued to be so during the period in which the money has been expended. There may be a question whether he was chargeable during the whole of that time, but there can be no question that he was chargeable at the time when he was sent to the school, because his father was dead, and he lived with his mother who was in receipt of parochial relief, chiefly on account of her being burdened with several children. The case is so far perfectly clear. All the conditions of the statute are fulfilled. We have the facts that the boy was sent to the school by a magistrate under a formal and ex facie valid order, that money was advanced by the Treasury, that the parochial board who are called as defenders are the parochial board of the boy's parish of settlement, and that he was chargeable. But a number of defences have been stated, founded on objections to the validity of the warrant, but none of them appearing on the face of it. Now, I think the school directors on receiving the warrant, when they found that it appeared to be all correct, were entitled to act upon it, and, in like manner, the Treasury, finding that the boy was in the school under a warrant ex facie |