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Cite as: [1838] CS 16_1273c

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SCOTTISH_Court_of_Session_Shaw

Page: 1273↓

016SS1273c

Hay

v.

Morrison
No. 261.

Court of Session

1st Division

July 7 1838

Lord Mackenzie, Lord Corehouse, Lord President.

Alexander Hay, Petitioner.— Counsel:
Anderson. Mrs Jane Hay or Morrison and Husband, Respondents.— Counsel:
D. F. Hope— Russell.

Subject_Trust—Inhibition—Arrestment.— Headnote:

Within three months after the death of a testator, one of the beneficiaries under his trust-settlement, raised an action of count and reckoning against the trustee named under the settlement, who was in the regular course of discharging his trust-duties by realizing the trust-estate; the beneficiary immediately used inhibition and arrestment on the dependence, to affect the whole trust-estate; Held, under a petition by the trustee for recal of the diligence without caution, that the petition should be granted, in respect that no delay had occurred,—that no fault had been committed by the trustee,—that his solvency was not disputed,—and that he was stopped by the diligence, while in the course of performing his duties as trustee, and carrying into effect the purposes of the trust. —Observed, that a bill of suspension and interdict would have been the appropriate remedy, and not inhibition, if a remedy had been required.

Facts:

The late James Hay, assistant-clerk of Session, died in February, 1838, leaving one son, Alexander Hay of Hardengreen, W.S., and two daughters, Jane, wife of John Morrison, assistant-clerk of Session, and Marion, wife of the Reverend Peter Chalmers, of Dunfermline. By his trust-settlement, James Hay conveyed his whole property, heritable and moveable, to Alexander Hay, whom failing, to Mrs Jane Hay or Morrison and Mrs Marion Hay or Chalmers. The trust-purposes were, after paying debts and legacies, to convey the heritable estate, so far as not disposed of, and to divide the residue of the moveable estate, in equal shares, among Alexander Hay, and his two sisters. The deed contained full powers of sale. At a meeting, which was held soon after the death of James Hay, it was agreed by these three parties (the sisters acting with consent of their husbands) that Alexander Hay should dispose of the heritage, which consisted of house-property in Edinburgh and Portobello, and should realize the other funds, consisting chiefly of heritable securities, as soon as convenient. Hay sold two of the houses at a price amounting to £1290, the price to be payable at Whitsunday, 1838, and entry to the purchasers to be then given. He also called up a heritable bond for £4000 at the same time. On May 11, 1838, at which period Hay had not recovered above £60 of the trust-estate, an action of count and reckoning was served on him, at the instance of Mrs Jane Hay or Morrison and her husband, and on the same day arrestments on the dependence were used in the hands of the debtor in the heritable security. On the following day, letters of inhibition were executed against Alexander Hay, inhibiting him “as heir in general, disponee in trust, or otherwise as representing the said deceased James Hay, your father, that you in noways uplift and discharge, sell, alienate, wadset, dispone, resign, renounce, dilapidate, nor put away any heritable bonds and dispositions in security, lands, teinds, heritages, &c. pertaining and belonging as heir in general, disponee in trust, or otherwise as representing the said James Hay, your father.”

On the same day, Morrison wrote to Hay, that as he (Hay) had intimated, in conversation, a resolution not to divide the funds realized until after the issue of a submission to which the deceased had been a party, it was proper to resort to legal measures, unless Hay would agree to consign the funds when realized, in the joint names of the parties interested. Hay returned no answer to this letter, but, on May 21, he presented a petition to have the arrestments and inhibition recalled without caution. He alleged that he never intended any undue delay in dividing the trust-funds, and that the true cause why the diligence against him had been used was, that Morrison was indebted to the deceased, and that he (Hay) had found it necessary to object to the state of debt rendered by Morrison as being unsatisfactory. That allegation was denied by Morrison.

In these circumstances, Hay pleaded, that the diligence had been used wantonly and nimiously, as no delay whatever had occurred on his part in following out the trust, and none was intended, nor was any fault, of any kind, imputed to him. If proceedings, such as those complained of, were to be permitted at the instance of any residuary legatee, against the person selected by the deceased for administering his estate, it would both defeat the course of management intended by the deceased to be confided to his trustee, and would occasion so much trouble and embarrassment as would discourage any trustee from acting. The whole diligence should, therefore, be simply recalled without caution; especially as the Legislature had recently shown a decided disposition to give to executors-nominate every facility in the administration of the estate of the deceased, by enacting that no caution should be required from them; an enactment which would be wholly frustrated, if the present proceedings were sanctioned by the Court. ¹ The petitioner also stated that he was in possession of an unencumbered estate in land, worth £1000 per annum, and that his solvency was above all suspicion.

_________________ Footnote _________________

¹ Dykes, Feb. 4, 1830 (ante, VIII. 439).

Mrs Jane Morrison or Hay, and her husband, in their answers, did not dispute the statement as to the solvency of the petitioner, but contended that if he delayed the division of the trust-funds, his solvency would be exposed to the risk of change and vicissitude, against which they were entitled to secure themselves. They were undoubtedly creditors of the petitioner for their share of the trust-estate, and as such, were entitled to use diligence for the security of their claim, which diligence the Court should not recal except on caution. ² Such diligence was not used nimiously, especially as it was limited to the trust-estate, and was not framed to affect any other estate of the petitioner. As to the provision of the legislature respecting executors-nominate, it did not affect the present question, as it merely related to executry, whereas the funds chiefly concerned in this question were the proceeds of heritage. It sufficiently appeared from the letter of Morrison, to which no answer was returned by Hay, that an undue delay in the division of the trust-funds was contemplated by Hay, and the respondents were entitled to protect their interests by the steps which they had used.

_________________ Footnote _________________

² M'Leay, July 8, 1826 (ante, IV. 812; or new ed. 819)—Neilson, March 10, 1824 (ante, II. 787; or new ed. 651)—Hunter, May 27, 1825 (ante, IV. 40; or new ed. 42)—Gordon, March 8, 1827. (ante, V. 544; or new ed. 511)—Elliot and others, July 4, 1833 (ante, XI. 879)—Lord Glenlyon, June 24, 1834 (ante, XII. 787).

Lord Mackenzie.—I do not feel much doubt in disposing of this case. I think the diligence must be recalled without caution. The purposes of the trust were to realise and divide the trust-estate. The petitioner was selected by the testator to carry these purposes into effect. He accepted the trust, and was in the regular course of carrying it on, when one of the beneficiaries under the trust, suspecting some bad intention or other, though it is not very plain what he did suspect, or why, chose to take the course, not of presenting a bill of suspension and interdict, but of raising an action of count and reckoning, and instantly, at his own hand, using arrestments and inhibition on the dependence. If this course of proceeding were to be sanctioned, any party whatsoever, who had an interest under a trust, might, at pleasure, stop the whole management of the trust. But I do not think it can be sanctioned. If the respondents have any just cause of suspicion or complaint, they can present a bill of suspension and interdict, under which their rights will receive protection, consistently with the due administration of the trust. The diligence of inhibition is not an apt remedy, in its own nature, to serve the purpose to which the respondents have applied it. If a debtor will not pay his debt, the creditor may use inhibition against him, and prevent alienations by him; but I do not think it competent for one party interested under a trust to inhibit the trustee, and stop the whole trust-management, merely because he entertains some suspicion as to the conduct of the trustee.

Lord Corehouse.—I entirely concur. The petitioner was selected as trustee by the testator, and the purposes of the trust were to realise and divide the trust-estate. The testator died as recently as the month of February last. The petitioner proceeded, in the discharge of his trust-duties, to sell heritage, and call up a heritable bond, but before he could either grant a title to the purchaser, or uplift and discharge the contents of the bond, the respondents came forward, and within three months of the testator's death, raised their action of count and reckoning, and used inhibition on the dependence. What was the pretence for this? They could not allege that any delay had occurred. They merely stated, that in conversation the petitioner had intimated an intention of not dividing the funds when they should be realised, and it is denied by the petitioner that he intended to postpone such division. The petitioner is the party trusted by the testator in the first instance, and there is no ground for presuming that he will not exercise his trust-powers with due discretion. Had he been vergens ad inopiam, the case would have been different. But he is confessedly the owner of unencumbered lands worth £1000 per annum, so that, in all the circumstances, I consider the use of this diligence to be as nimious as I ever saw in any instance. If the petitioner shall be guilty of any improper conduct as trustee, the courts are open to give redress. But while nothing of that kind has occurred, the proceedings of the respondents have been quite unwarrantable. If such proceedings were allowed, there is no testamentary trust under which the hands of the trustee might not, in the space of three months, be tied up by any of the legatees; and that too at a time when the legislature has provided that no testator-nominate shall be bound to find caution. It would be tantamount to permitting a legatee, at pleasure, to impose caution, in circumstances the most analogous to those in which the legislature has expressly declared that caution need not be found. I am decidedly of opinion that the petition should be granted.

Lord President.—I am of the same opinion. The use of inhibition in this case, was preposterous. It just went to tie up the hands of the trustee selected by the testator, from doing those very things which had been confided to him, and which he was in the course of performing. It went to prevent him from realising the estate which it was his duty, as trustee, to realise.

The Court then granted the petition, and found the respondents liable in expenses.

Solicitors: Tawse and Bonar, W.S— A Morrison, W.S.—Agents.

SS 16 SS 1273 1838