Scottish Court of Session Decisions

This was a petition for the removal of a trustee appointed under a marriage-contract, for sequestration of the trust-estate, and appointment of a judicial factor thereon. John Kerr, manufacturer, Glasgow, and Margaret Bruce Dick, May-bole, entered into an antenuptial contract of marriage, dated 1st July 1850. By this contract there was, inter alia, made over to Henry Kerr, William Bruce Dick, the respondent (Mrs Kerr's brother), and William Gilmour, who did not accept office, as trustees, two policies of insurance on John Kerr's life, each for £499, 19s. The proceeds of the policies were to be used, first, to secure to the widow the provisions contained in the marriage-contract, and second, for behoof of the children of the marriage.

John Kerr was a partner of More & Kerr, Clyde Rivet Works. He died on 8th June 1856, and was survived by his widow and four children. The present petition was at the instance of the marriage-contract trustees of Mrs Gilchrist, one of these children. At the time of his death his interest in the firm, according to a state made up by his partner, was £1290. The marriage-contract trustees uplifted the amount of the policies, amounting with bonus additions to £1074, 3s. The petitioners averred that the trustees in breach of their duty invested the funds in their hands in the rivet business formerly belonging to More & Kerr, but of which Mr Dick had become a partner, and which was carried on under the name of More & Dick, and subsequently of W. B. Dick & Co.; that from time to time down to 1875 various payments were made to Mrs Kerr in name of profits realised by the said business, and also in repayment of capital invested for her behoof, but that after 1875 no payments were made; and that Mrs Kerr's provision under the marriage-contract had never been met. They further alleged that William Dick, though often asked, had declined to give any explanation as to his intromissions with the trust-funds.

Of children of the marriage of Mr and Mrs Kerr other than Mrs Gilchrist, two had gone into business and bad failed, and had not been retrocessed in their estates. The fourth, a daughter, had died.

William Bruce Dick, the surviving trustee, lodged answers. He explained that during the life of Henry Kerr the business of the trust had been conducted by him. He denied that he had refused any necessary explanations. He explained that the estimate of the value of John Kerr's interest in the firm of More & Kerr at £1290, made by Mr More, was much overstated, and that the business, which was conducted for a short time after John Kerr's death under Henry Kerr's supervision, was then making no profit; that though applied to to become a partner of More & Kerr for the purpose of supporting the family he had declined to do so at the time in consequence of his own business engagements, but had afterwards given up his own business, and entered into the new firm of More & Dick to continue the rivet business of More & Kerr, he himself also conducting a separate oil business; that at Mrs Kerr's credit in the new firm was £500, which had not formed part of the marriage-contract fund. He further set forth that the rivet business was sold in 1869, and that thereafter he assumed Mrs Kerr as his partner in his oil business for the purpose of giving her a better interest for herself and family, but she put no

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capital into this partnership, which subsisted till 1875, and during the period from 1869 to 1875 she drew sums of from £200 to £500 per annum out of the business. He expressed his willingness to assume new trustees, but submitted that the petitioner's averments were irrelevant to support the prayer for his removal. He submitted that his sister and her family had received far greater benefits than in any view he was bound as trustee to make good to them.

At the hearing of the case the petitioner argued that the trustee should be removed—(1) Because he had mixed up the marriage-contract funds with other funds; (2) because he had misappropriated the funds by applying them in a business, which was an illegal manner of application of trust-funds.

It appeared from an account lodged by the respondent that the executry and trust funds had never been separated.