Scottish Court of Session Decisions

Terms of a docquet which held to import a direct personal guarantee of relief against an agent subscribing it.

The late Robert Russell, sometime farmer at Tailabout and Thomaston, in the county of Fife, died on or about the 11th February 1868. By trust-disposition and settlement with relative codicils, executed by him some time prior to his death, he appointed James Elder and others his trustees, and directed them, after payment of his debts and fulfilment of other trust purposes, to divide his

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estate among his four sisters—Margaret Russell or Elder, wife of the said James Elder; Agnes Russell or Cook, wife of Thomas Cook, shipmaster; Catherine Russell, and Christina Russell. By the non-acceptance and death of some of the trustees, Elder came to be in November 1865 the sole surviving accepting trustee under the said settlement. In that month Elder obtained a cash-credit with the National Bank of Scotland to the extent of £600, in which the pursuer and the said Thomas Cook were, along with Elder, the obligants. The account was to be kept in Elder's name, and operated upon only by him. In the month of December following, Elder assumed the pursuer and Cook as trustees to act along with him in the management of said trust, but Elder continued to be the only trustee who took any active management of the trust affairs until his death, which happened in June 1866. At that date there was a balance due to the bank under the foresaid cash-credit of upwards of £500. The present action was raised by the pursuer (who resigned his office of trustee on 3d August 1867) against the four sisters of the truster above named, as the sole beneficiaries under said trust-settlement, the said Margaret Russell or Elder, as representing her husband (under his settlement), the said Thomas Cook as sole surviving trustee of Robert Russell, and against William Morrison, writer in Cupar, to have it found and declared inter alia (1) that the said cash-credit bond had been granted to the parties thereto in their capacity of trustees of Robert Russell; (2) that the whole transactions which took place with the bank under said bond were for behoof of Russell's trust-estate, and that the balance due under the same was a debt due by said trust-estate, and not by the granters of the said bond, and that the pursuer was not liable in payment of any part of said balance; (3) that, whether so declared or not, the said four sisters of the truster should, as next-of-kin of the truster, and the sole parties beneficially interested in said trust-estate, be decerned to free and relieve the pursuer of all liability under said bond; and (4) failing their so relieving the pursuer, they should be decerned to make payment of the balance due under the said bond to the pursuer, in order that he might pay the same, and thus extinguish his liability to the bank. The pursuer also concluded for relief against the defender Morrison, on the ground of an alleged obligation granted by him, afterwards noticed. It appears that after Elder's death the pursuer became desirous of being relieved of his liability under the said bond of credit; and in consequence, with a view to forward that object, the following minute was signed by the four female defenders:—

“Cupar, 1st August 1867.—Mr William Bayne, farmer, Foodie.—Sir,—In consequence of your desire to be relieved from your liability under a cash bond of credit granted by the National Bank of Scotland to the now deceased James Elder, baker, St Catherine Street, Cupar, on which you and Thomas Cook, sea captain, Tayport, are the cautioners, and which bank credit became imperative [ meaning thereby inoperative] on the death of the said James Elder, we have obtained the consent of the bank that no proceedings will be adopted against you under said bond till 1st October next, when it is expected the said Thomas Cook will have returned to this country, when a new bond will be granted, and you relieved from the obligation; and in order that you may not suffer loss under the said cash bond, we hereby bind and oblige ourselves to free and relieve you from any loss you may sustain under said bond. This obligation to be binding only till you are relieved from said obligation, and on condition of your now resigning the office of trustee under our late brother Robert Russell's trust-deed of settlement and deed of assumption, by the said James Elder, dated the 7th day of December 1865, assuming you and the said Thomas Cook as trustees to act with him under said trust-deed.—We are, Sir, yours faithfully (signed) Margaret Elder, Agnes Cook, Christina Russell, Catherine Russell.

At the date of the said letter Thomas Cook, husband of the defender Agnes Cook, was absent at sea, and in consequence there was some difficulty in carrying out the relief proposed to be granted to the pursuer. Thereupon the defender Morrison appended to the foresaid letter of obligation the following docquet:—

“As the parties to the foregoing obligation have requested me to act in the place of Mr Bayne in managing and taking charge of the farms of Tail-about and Thomaston, I shall make arrangements to have the foregoing obligation carried into effect, and Mr Bayne relieved from his cautionary obligation, by the 1st October next.— Wm. Morrison.”

The parties being dissatisfied with Bayne's management of the trust, he resigned on 3d August 1867, having received from the beneficiaries the following letter:—“Sir,—Having satisfied ourselves as to your intromissions in the management of the farms of Tailabout and Thomaston during the time you have acted as a trustee under our late brother's trust-deed and settlement to the 3d current, when you resigned, we hereby discharge you of your intromissions. Yours truly, (Signed) Margaret Elder, Agnes Cook, Christina Russell, Catherine Russell.

Mr Bayne, however, not having been relieved of said obligation to the bank, raised the present action, and after a proof, the Lord Ordinary ( Jerviswoode) pronounced the following interlocutor:—“The Lord Ordinary having heard counsel, and considered the debate, with the proof, productions, and whole process, including the joint minute, No. 340, Refuses the motion of the pursuer to open up the sealed packet, No. 69 of process: Finds that the bond of cash credit for the sum of £600, to which the first four conclusions of the summons have reference, and which was granted by the said deceased James Elder, baker, Thomas Cook, and the pursuer, was so granted by the parties as trustees on the trust-estate of the deceased Robert Russell, who was tenant and farmer in the farm of Tailabout, as stated on the record, and who died on or about the 11th February 1858: Finds that the object and purpose for which the said bond was granted was that the sum to which it related might be applied towards the purposes of the said trust-estate, including those connected with the farm of Tailabout above mentioned: Finds that, subsequent to the death of the said James Elder, which took place on or about the 19th June 1866, the pursuer became desirous to be relieved of his liability under the said bond of credit, and that in consequence, and with a view to forward that object, the letter, dated Cupar, 1st August 1867, and which is signed by the four female defenders, as set forth in the 7th article of the condescendence, was granted to the pursuer: Finds that, at the date of the said

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letter (1st August 1867), the said Thomas Cook, husband of the defender Agnes Cook, was absent at sea in the course of his employment as a seaman, and that, in consequence of this, some difficulty arose in carrying out in an effectual form the relief proposed to be granted to the pursuer: Finds that the defender Morrison thereupon, or shortly thereafter, wrote the document appended to the foresaid letter of obligation in the terms which are set forth in the said 7th article of the condescendence: Finds that, according to the true intent and meaning of the said document, the defender, the granter thereof, did not thereby undertake any direct personal obligation to the pursuer to relieve him of the cautionary obligation under which he was liable, but undertook merely to make arrangements under and in the course of his management of the farms therein mentioned with a view to that object, by the 1st October then next, at or previous to which date it was in the expectation of parties that the said Thomas Cook might have returned from sea: Finds, separatim that the defender Mrs Cook acted during the absence of her husband the defender Thomas Cook, on his behalf, and as prœposita in his affairs; and with reference to the preceding several findings, finds, declares, and decerns in terms of the first four conclusions of the summons, as against the defenders Mr and Mrs Cook: Assoilzies the defender Morrison from the conclusons of the action; and supersedes consideration of the remaining conclusions in hoc statu: Finds the pursuer entitled to his expenses, so far as hitherto incurred, as against the said defender Mrs Cook, and against the defender Thomas Cook, her husband, for his interest; and finds the pursuer liable to the defender Morrison in expenses: Appoints accounts to be given in, and remits the same when lodged to the Auditor to tax and report.

Both the pursuers and Cook reclaimed.

Gifford and Trayner, for Mr and Mrs Cook, argued—That the interlocutor, so far as concerned these reclaimers, was ill founded. It had not been proved the cash credit bond was granted for trust purposes, and it certainly was not granted by the granters as trustees, for the pursuer and Cook were not assumed as trustees after the bond was executed. The bond bore to be granted by them as individuals, and the application of the funds obtained under it for behoof of the trust was not proved. But, granting that the debt due to the bank was a trust debt, the beneficiaries were not bound to relieve the pursuer, as they had not been benefitted by the trust estate, which was not even sufficient to meet its debts. The defender Thomas Cook was not liable under the obligation of 1st August 1867, founded on by pursuer, because it was not granted nor authorised nor homologated by him, and his wife who signed it could not bind him without express authority to do so, which she had not. It did not even bind Mrs Cook, who as a married woman was incapable of binding herself without her husband's consent. Lastly, that Thomas Cook as a cobligant in the bond, was willing to bear his proportion of the debt due under the same, but was not liable in relief to any greater extent.

Dean Of Faculty (Gordon) and J. Campbell Smith, for pursuer—The debt of which the pursuer claims to be relieved was a trust debt, and the defender Thomas Cook, as sole surviving trustee, was bound to relieve the pursuer as concluded for. of the trust-estate was insufficient to pay its debts, this arose from the defenders' mismanagement.

Besides, the obligation of 1st August 1867 was never in terms repudiated by him, and he must be presumed to have been aware of its existence, although the proof did not show that it had been expressly communicated to him. As to the defender Morrison, the pursuer contended that the interlocutor of the Lord Ordinary should be recalled, as Morrison's obligation was in effect that he would see done what the beneficiaries had engaged to do. That obligation had been followed by res interventus, as on the faith of it the pursuer had resigned his office as trustee.

Solicitor-General (Clark) And Black, for Morrison—The addition made by this defender to the obligation by the beneficiaries was not an obligation binding him in performance of what the beneficiaries had engaged to do, but merely that he would make arrangements for carrying out the agreement come to between the beneficiaries and the pursuer. The terms of the defender's letter were to be strictly construed, and it did not bear the construction put upon it by the pursuer. The defender Morrison had done all he could to have the agreement carried into effect, and it was through no fault of his that this had not been done. If Morrison had meant to undertake the obligation now contended for by the pursuer, he would have signed the letter which the beneficiaries granted, but as he had granted a separate letter or writing, it was to be presumed that he was granting an obligation of a different kind from that which the beneficiaries undertook.

At advising—