Scottish Court of Session Decisions

Sequel of the case mentioned ante, XII., 692, which see. The investigation there ordered having been made, the Lord Ordinary pronounced the following interlocutor, the findings in which fully embody the whole facts so ascertained: “Finds, that, on the transference of certain heritable bonds by James Hamilton to the late Thomas Wright, to the extent of £4000, the late Mr Robert Hamilton bound himself, by a separate obligation in January 1811, not that James Hamilton, but that he (R. H.) should himself pay the interest thereof, ‘yearly and termly, at the shop of the said Thomas Wright, in Stirling:’ finds, that, in 1815, the said James Hamilton executed a trust-deed for behoof of his creditors, to which Robert Hamilton afterwards acceded, and that he was aware that the estate was subsequently managed by the creditors and their successive trustees: finds, that the said Thomas Wright was himself elected, and acted as such trustee from 1818 till his death in 1824; and during this time paid to himself the interest of his £4000 out of the rents of the trust-estate in his management: finds, that Robert Strachan, W. S,, was law-agent for the said trustee and creditors during the time when the said Thomas Wright was trustee, and that he (Strachan) was also appointed one of the private trustees of the said Thomas Wright by his deed of settlement, and after his death accepted and acted in that capacity, and also as law-agent at Edinburgh for the other trustees of Thomas Wright, the pursuers of this action: finds, that after the death of the said Thomas Wright, no other trustee was appointed or elected by the creditors of James Hamilton, and that it does not appear that any formal or written authority was ever granted to the said Robert Strachan to collect or receive the rents of the trust-estate: but, finds, that such rents were in point of fact received by the said Robert Strachan, and that it was known to the creditors that they were to a certain extent in his hands finds, that, on the death of Thomas Wright, the said Robert Strachan, of his own authority, called a meeting of the committee of James Hamilton's creditors, on 2d July 1824, and stated to them that he had directed M'Rae, the resident factor on the estate, to continue collecting the rents, and to transmit his accounts, &c., and that the meeting ‘approved of what Mr Strachan had done in this respect:’ finds, that Strachan called another meeting on the 4th September 1824, in order, as he then stated, that ‘they should give him directions as to the future proceedings under the trust;’ and that this meeting did direct him ‘to continue to attend to the interests of the trust, and to correspond with Mr M'Rae, the factor appointed to receive the rents of the estate:’ finds, that, at a general meeting of the said creditors, on 10th November 1824, M'Rae's appointment as factor is again confirmed, and Strachan is ‘directed to continue to correspond with him respecting his intromissions, and to report,’ and generally ‘to attend to the interests of the trust, and from time to time to convene meetings of the committee for their instructions:’ finds, that Strachan did accordingly call diverse such meetings in that and the following year, at all which he seems to have performed the substantial functions of a trustee, by giving in reports or memoranda as to the state of the trust-affairs, and of his correspondence with the factors and others concerned, and by making suggestions, and requiring instructions from the creditors: finds, that, in particular, in a memorandum entered by him in the minute-book of the 25th October 1825, he states, among many other things, that it will be necessary to provide for relieving the representatives of the late trustee (i.e. Thomas Wright's trustees, the pursuers of this action, of whom he himself was one), from a claim for bygone stipends, at the instance of the Rev. Dr M'Leay, ‘by whom arrestments had been used, both in his (Strachan's) hands, and those of M'Rae the factor; and that the balance of rents previously remitted to Mr Strachan, after deducting the expenses of management, were affected by those arrestments, and so could not be applied in payment of the interest of the heritable debts, as was formerly proposed;’ and that, in the same memorandum, he makes several other propositions, in name and for behoof of Wright's Trustees, the present pursuers: finds, that after the month of February 1826, no minutes of the creditors are entered in their minute-book, but that it appears from the correspondence of Mr Strachan with Mr Robert Hamilton and his agent, and with the agent at Stirling for Wright's Trustees, as well as from the deposition of the witnesses examined, that he continued, up to the period of his death in 1831, to conduct the affairs of the trust for the behoof of the creditors in general, and also of the trustees of Thomas Wright, as such creditors: finds, that Strachan appears to have had a regular account-current in his books, entitled, ‘Creditors of James Hamilton, Esq. of Kames, with Robert Strachan, W. S., as factor over Kames;’ and that, in this account, he charges himself with various remittances of rents from M'Rae, to the amount of £2662, between November 1824 and November 1830; and that this account, when balanced after his death in spring 1831, shows a balance due to the creditors of £1897, 5s. 4d. of which no part has been recovered, or, on account of his insolvency, is not thought recoverable: finds, that though there is no appearance of this account having been rendered to the creditors in Strachan's lifetime, it is to be inferred, both from the entries in the minute-books already mentioned, from the correspondence (showing a constant intercourse with the principal creditors and their agents), and from the terms of the credit-side of the account itself, and the numerous charges for business therein contained, that the creditors, as a body, were aware that these rents had been received by Strachan, as their agent, and with their sanction and acquiescence: finds, that this knowledge and acquiescence must be presumed as to the trustees of Thomas Wright, pursuers of this action, even more strongly than as to the other creditors, both in respect that Strachan was himself one of those trustees, and is proved to have suggested many things on their account to the creditors, because he was in constant correspondence with the managing trustee at Stirling with regard to their claims upon those creditors, and because he appears from the account to have actually paid out of the rents in his hands about £270, to the executors of that Dr M'Leay, by whom he says, in one of bis reports, that he and his brother trustees were distressed, and the rents laid under arrestment: finds, that the pursuers are not now entitled to found on the peculiar terms in which Mr Robert Hamilton's obligation is conceived (binding himself unconditionally to pay the interests at the shop of Thomas Wright, in Stirling), in respect that, at the time that obligation was granted, the estate and funds were in the hands of James Hamilton, the principal debtor, and accessible to his claims of relief; and that, after these were made over, with his knowledge and consent, to trustees, the interests were, for a period of eight or nine years, properly paid over, without his interference, by the trustees, from the rents in their hands, they being, after his accession to the trust, trustees for Robert Hamilton, in so far as regarded his claim of relief, as well as for the pursuers and other creditors, for their payment: finds, that though no trustee was formally elected after the death of Thomas Wright, in 1824, the trust was still recognised by the creditors and their committees as subsisting, and the functions of trustee were substantially performed by Strachan, acting under their orders and instructions: finds, that the continued non-payment of the pursuer's interests cannot be ascribed to the arrestments said to have been laid in Strachan's hands by M'Leay, in 1825, both because various large sums of rents appear to have been received in subsequent years, which could not be affected by those arrestments (and there is no trace of any other being used), and because the debt of M'Leay, the arresting creditor, appears to have been afterwards paid: finds, that the balance of £1897, 5s. 4d. must be held to have been left and lost in the hands of Strachan, by and through the negligence of the creditors of James Hamilton, including the trustees of Thomas Wright, the pursuers of this action, who had peculiar access to know the state of Strachan's intromissions; and that, though Robert Hamilton was also an acceding party to the trust, this did not deprive him of his privileges as a cautioner in any question with creditors, to whom he was only liable subsidiarie; and, therefore, and on the whole matter, finds, that the pursuers are bound to give credit to the defenders in the present action, for such share of the sum of £1897, 5s. 4d., in the hands of Robert Strachan, at the time of his death, as would have been awarded to the said pursuers, if the said sum had been recovered, and divided among the creditors of James Hamilton, according to their respective rights and preferences; and, before further answer, appoints the case to be enrolled, that the parties may be prepared to say in what manner the amount of this share may be best ascertained, and whether there is room for any interim decree.”

His Lordship, at the same time, added the subjoined note. ^*