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Held that the assumption of new trustees by two out of three acting trustees, without notice thereof given to the third, and without
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his knowledge, is incompetent, and the assumption is void.
This was a petition presented by Mr G. B. M. Wyse, who designed himself as the only accepting and surviving trustee of Mrs Elizabeth Cranfield or Abbott, for appointment of a judicial factor on the trust-estate of Mrs Abbott.
Mrs Abbott died on 23d August 1876 leaving a general disposition and deed of settlement, by which she appointed her two sons Dr Richard Theophilus Abbott, and William John Cranfield Abbott, merchant in Leith, and her two sons-in-law, the petitioner Mr Wyse and Mr Herdman, to be the trustees and executors of her will. Mr Cranfield Abbott, Dr Abbott, and the petitioner Mr Wyse acted as trustees and executors, but Mr Cranfield Abbott resigned the office of trustee and executor on March 7, 1881, and Dr Abbott died on April 11, 1881, thus leaving the petitioner Mr Wyse as sole remaining trustee and executor.
Mr Cranfield Abbott was placed on the list of contributories of the City of Glasgow Bank, and assigned to the liquidators of the said bank his individual interest in his mother's settlement, and on July 1, 1881, the liquidators of that bank raised an action of declarator of their rights against Mrs Abbott's trustees.
Mr Wyse thereafter presented this petition, and averred that about May 12, 1881, a document prepared by the agents of the trust had been subscribed by Dr Abbott along with Mr Cranfield Abbott, purporting to assume as trustees under the late Mrs Eliza Abbott's settlements two additional trustees; and these were, Mrs Elizabeth Fraser Watson or Abbott, residing in Edinburgh, wife of the said William John Cranfield Abbott, and Mr Robert Macdonald, Solicitor before the Supreme Courts, Leith, the personal law agent of Mr Cranfield Abbott, and a partner of the firm who for about two years past had been the law agents in Mrs Eliza Abbott's trust. This deed of assumption was executed, he alleged, behind his back, and without either his knowledge or consent.
The petitioner prayed the Court “to find that the said Mrs Elizabeth Fraser Watson or Abbott and the said Robert Macdonald are not and never have been trustees or executors of the said Mrs Eliza Cranfield or Abbott, or otherwise to remove them from these offices; and further and in any event, to nominate and appoint such person as your Lordships may think proper to be judicial factor upon the trust-estates, heritable and moveable, of the said deceased Mrs Eliza Cranfield or Abbott, and to administer the trusts created by her fore-said testamentary writings, as in room of the testamentary trustees and executors nominated by her as aforesaid, with the usual powers.”
The petition was served upon the alleged assumed trustees and Mr Cranfield Abbott, and answers were lodged for Mrs Abbott and Mr Macdonald. They stated, inter alia—“Mr Cranfield Abbott and Dr Abbott did not consult the petitioner regarding this deed of assumption, nor did they consider themselves bound to do so, as he had refused to act with them as a trustee in the ordinary way, or to have any communication regarding trust matters except through a firm of law agents unconnected with the trust. … The respondents, the assumed trustees, respectfully refer to the Act 24 and 25 Vict. cap. 84, sec. 1, and 30 and 31 Vict. cap. 97, sec. 11, by which statutes power of assumption of new trustees is conferred upon a quorum. They respectfully submit that the powers thereby conferred have been validly exercised in the present instance, and that there have not been alleged, nor do there exist, any grounds for removing the assumed trustees, or subjecting the estate to the expense of a judicial factory. They are now, and have all along been, ready and willing to act in a cordial and friendly manner with the petitioner in the management of the trust; any difficulties that have hitherto arisen in the trust management have been due to the unfortunate ill-feeling which apparently exists in the mind of the petitioner towards Mr Cranfield Abbott.” The respondents accordingly submitted that the prayer of the petition ought to be refused.
At advising—
The question we have to decide is, whether this is a good nomination? I can have no doubt that it is bad. No two trustees can do a trust act without consultation with their co-trustee. They are bound to see that their co-trustee has notice of their intention to nominate trustees, and has an opportunity of stating his views upon the subject. It is of the essence of such a body that they should meet and exchange views on all trust questions. The excuse they make is that Mr Wyse had been disagreeable, and had refused to sign a transfer of bank stock. But that very disagreement rendered it all the more imperative that Mr Wyse should have an opportunity of stating his views, and the omission of notice is enough to make the appointment of new trustees ineffectual.
The case of Reid v. Maxwell, 14 D. 449, cited by the petitioner's counsel, may with advantage be quoted as of universal application:—“At advising it was observed by some of their Lordships that in the administration of a trust, and especially in the exercise of so important a power as that of assuming new trustees, it is essential that the utmost fairness and openness should be observed among the trustees to each other, that ample time and opportunity for deliberation should be afforded, and that if any concealment or underhand dealing or any misleading or deception in order to carry a measure by surprise should appear, the Court, as a Court of equity, would be entitled and bound to control and restrain trustees in such abuse of their powers.” This seems directly applicable to
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The Lords pronounced this interlocutor:—
“Find that the respondents have not been validly assumed as trustees under the trust — disposition and settlement of the deceased Mrs E. Cranfield or Abbott; nominate and appoint Mr Robert Cameron Cowan, C.A., to be judicial factor on the estate of the said deceased Mrs E. Cranfield or Abbott, with the usual powers, he finding caution before extract; and decern,” &c.
Counsel for Petitioner— Robertson—Darling. Agents— H. B. & F. J. Dewar, W.S.
Counsel for Respondents— Jameson. Agent— J. H. Jameson, W.S.