Scottish Court of Session Decisions

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Cite as: [1881] SLR 19_258, [1881] ScotLR 19_258

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SCOTTISH_SLR_Court_of_Session

Page: 258↓

Court of Session Inner House First Division.

Saturday, December 17. 1881.

19 SLR 258

Sawers

v.

Penney (Sawers' Trustee).

( Ante, vol. xviii. p. 706.)

Subject_1Bankrupt
Subject_2Trustee
Subject_3Removal of Testamentary Trustee from Office on Grounds of Bankruptcy and Mismanagement
Subject_4Judicial Factor.
Facts:

S. was sole acting trustee under a trust-disposition and settlement on a property of which he was also liferenter under the same deed. He became bankrupt, and executed under decree of the Sheriff a disposition omnium bonorum in favour of P. as trustee for behoof of his creditors. P. then petitioned the Court to remove S. from his office of trustee on the ground of mismanagement, averring that S.'s only available asset was his liferent interest in the said trust property. The Court granted the prayer in absence, and appointed P. judicial factor on the trust-estate. S. immediately thereafter brought a petition for recal of this appointment and the reinstatement of himself as trustee. The Court, after a remit to a man of skill, who reported that the estate had been mismanaged by S., and on production of vouched claims by the creditors of S., both as an individual and as trustee, who signified their approval of P.'s appointment as judicial factor, refused the petition for recal.

Headnote:

The Court having remitted to Mr Dickson of Saughton Mains to inquire into the actual condition of the estate in question, on which the petitioner was, under his uncle's settlement, sole acting trustee, and also liferenter—Mr Dickson lodged a full report, concluding with an expression of opinion that the estate had been “most injudiciously and injuriously managed” by the petitioner as trustee.

The respondent as judicial factor having thereafter intimated the petition to the creditors of the trust-estate and of Mr Sawers' individual estate, and convened meetings of these creditors, all of whom signed a minute expressing approval of the factor's actings, and a desire that his appointment should continue—produced the said minutes, and also the claims of the various creditors, vouched in some cases by affidavits, in others by decrees of Court, and amounting as against the trust-estate to about £968, and against Mr Sawers as an individual to about £778.

The respondent submitted that the petition should be refused, and his appointment as judicial factor continued, in respect of Mr Dickson's report, of the approval of the creditors, and of the state of debt as evidenced by the claims produced. The bankruptcy of the petitioner and his mismanagement of the estate were sufficient grounds for his removal—See M'Laren on Wills, vol. ii. pp. 445, 599, and cases there cited.

Judgment:

At advising—

Lord President—Mr Peter Russell Sawers was appointed one of the trustees under the trust-disposition and settlement of his uncle, the late Mr Peter Sawers, and in consequence of the death of most of the other trustees, and the insanity of one of them, he came to be the only

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acting trustee under that deed. But unfortunately his own affairs were in an embarrassed condition, and on 20th May 1881 he was made notour bankrupt, and ordained by the Sheriff of Midlothian to execute a disposition omnium bonorum, the trustee in whose favour that deed was executed being Mr J. C. Penney. In these circumstances Mr Penney found that Mr Sawers' only available asset was a liferent interest of his uncle's estate, and the only chance of his creditors being paid was that this interest should be made available. There being difficulties in the way of doing that, Mr Penney presented a petition to this Court on 2d June 1881 setting out the facts of the case, and averring that “the management of the estate has been such as to materially diminish the annual income derivable therefrom, and should such management continue there is every chance of the estate going entirely to waste.” It therefore became a matter of deep interest to the personal creditors of Mr Sawers that the trust-estate should be put under a better system of management, and so Mr Penney, in this view, applied to have Mr Sawers removed from his office of trustee and a judicial factor appointed in his stead. That petition was duly served on Mr Sawers, who did not lodge answers, and the prayer was granted in absence. Thereafter Mr Sawers presented the petition which is now under consideration, and answers to it were lodged for Mr Penney. As there was a conflict between the parties on matters of fact, your Lordships made a remit to Mr Dickson, who reported on the condition of the estate. The result of his report is to show that Mr Penney's averments as to mismanagement are true, and that Mr Sawers' action since he has been sole trustee has been such as is calculated to bring the estate to ruin. His state of indebtedness has also been made out, as well as is possible in a summary application of this kind, by the production of vouched claims by the creditors on his individual estate and on the trust property. We do not, of course, at present determine that these claims are all well founded, or that they may not be subject to deduction; but we have before us claims to the extent of about £778 against Mr Sawers as an individual, and about £968 against him as trustee; and in these circumstances I think it is very clear that Mr Sawers is not qualified to continue the management of the trust-estate, and that Mr Penney, who is already trustee on his private estate, should be continued in his appointment as judicial factor on the trust-estate as well. I am therefore for refusing the petition.

Lord Mure concurred.

Lord Shand—I am of the same opinion. Mr Sawers' interest as liferenter here has become entirely subordinated to the interests of the creditors on the trust-estate and of his own personal creditors.

Lord Deas was absent.

The Lords refused the prayer of the petition.

Counsel:

Counsel for the Petitioner—Party. Agent— Andrew Clark, S.S.C.

Counsel for Respondent— Dundas. Agents— Dundas & Wilson, C. S.
1881