Scottish Court of Session Decisions

The congregation of St Jude's Episcopal Church, Glasgow, is a separate and independent one, and the church and grounds connected therewith are vested in certain trustees by disposition granted in 1863. By the constitution of the church, which is set forth in a declaration of trust by the trustees, it is, inter alia, declared —“ Fourth, the vestry shall consist of the incumbent, who shall be ex officia chairman of all meetings of the vestry, two vestrymen appointed by him, two by the congregation, and two by the trustees. The vestrymen shall be elected for two years …. Sixth, the whole temporal affairs of the church shall be under the control and management of the vestry, who shall be bound to appoint a treasurer, and the whole revenues of the church arising from seat rents, collections, or otherwise,

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except the offertory at the communion-table, which shall be at the disposal of the incumbent for the poor of the congregation, shall be under their control and management.” The Thirteenth article provided that the trustees to hold the church property should be G. J. Doddrell, J. C. Wakefield, and A. Monro, who should be entitled to resign, and in the event of a vacancy by resignation or death, the place of such party should be filled up by the vestry. This article also nominated the first vestry. “ Fifteenth, the treasurer to be appointed by the vestry shall keep accurate accounts of the receipts and expenditure of said church, and shall annually, before the said meeting of said congregation, prepare an abstract thereof and submit it to the trustees, who shall examine the same, and certify the same as correct if they shall so find it, and the vestry shall cause the same, with the trustees' report thereon, to be printed and copies thereof placed in each pew along with the said notice calling the said annual meeting. Seventeenth … none of the trustees or vestrymen shall be under any personal liability for any act done in their respective capacities.”

Mr J. C. Bousfield, one of the defenders of this action, was treasurer of the congregation from 1863 to 1871. Mr G. J. Doddrell was treasurer from 1871 to 1879, when a Mr Todd became treasurer.

One of the original vestrymen was Mr G. J. Doddrell, who was greatly interested in mission and school operations in Cowcaddens district, Glasgow. In 1861 he acquired a piece of ground there, on which he built a school, which he allowed to be in a great measure used by St Jude's congregation for school and mission purposes, but the management of which remained by his desire quite apart from that of the church. In 1869 the firm of Murdoch & Doddrell, of which Mr G. J. Doddrell was a partner, and the partners thereof, were sequestrated, and as all connected with St Jude's were anxious that the work should be carried on, Mr Edward Doddrell, brother of Mr G. J. Doddrell, entered into a minute of agreement, dated 25th and 30th October 1869, with Mr Anderson, the trustee on the sequestrated estate, by which he agreed to purchase the school and premises thereto belonging for £800. On the preceding 29th September it had been carried at a meeting of the vestry of St Jude's that the school “be obtained for St Jude's at a cost not exceeding £800, in the name of Messrs Lowndes and Cochrane” (two of the vestrymen) as trustees, and that its work be continued, and on 14th October a resolution had been carried at a meeting of the vestry and trustees that the school be obtained “in the names of the trustees and present vestry of the church out of the funds at present invested by the church trustees.” On the same day, at a subsequent meeting, a like resolution was carried—the price to be £800, and the title to be “in name of the parties who hold the church, and that a rent equal to 5 per cent. on the price and expenses, after providing for repairs, should be charged to the school fund, and paid over annually to the church treasurer.” Thereafter (with the consent of Edward Doddrell) the trustee on the estate of Murdoch & Doddrell and of G. J. Doddrell disponed the school at the price of £800 to Alexander Monro, J. C. Wake-field, C. H. Bousfield, R.S. Lowndes, and Alexander Cochrane, and the survivors or survivor, and their or his assignees and disponees. The disposition was thereafter registered in name of these gentlemen. Messrs Bousfield, Lowndes, and Cochrane were then vestrymen; Messrs Monro and Wakefield trustees. The church property (consisting of stocks in railway companies) which it was intended under the resolution of 14th October to sell in order to pay the price was not then sold inconsequence of the state of the market, but a credit was opened with a bank, and the school purchased out of funds so acquired. Thereafter a rent equal to 5 per cent. on £800 was annually charged against the school fund in favour of the church funds. In subsequent minutes of the vestry, accounts for repairs and cleaning of the school were authorised to be paid, and arrangements were made for letting a room in it for certain weekly meetings, In the end of 1873 the vestry took the subject of the continuance of the school into consideration with regard to the new arrangements for public education under the Education Act of 1872. At a meeting of trustees and vestry of 4th November 1873 the question of selling or letting the school to the Glasgow School Board came up, and it was agreed that it be sold if the Board would buy it. It was also agreed that any sum remaining over after repaying the church the amount (£800) advanced for its acquisition, and the sum of £263 paid off by the church, “should be disposed of according to the advice of Mr G. J. Doddrell.” This sum of £263 had been paid to Mr Bousfield, the former treasurer, to clear off a balance due to him at the time he retired from the office of treasurer and became a trustee.

Thereafter the school was sold for £2510 to the School Board, the disposition, which was dated April and May 1874, being granted by the gentlemen above named (except Mr Monro, who had died), in whose names the title still stood. The price was paid by the School Board to Mr Hodge, the law-agent for G. J. Doddrell, treasurer of the church, and he (Mr Hodge) paid it over to G. J. Doddrell. The church-books, which he kept as treasurer, showed of the date immediately thereafter a payment to him of £800 and of £263, and he applied both these sums to the church purposes as above resolved on. No further reference to interest on the £800 appeared. The whole price of the school was at first paid into the bank account of the church, but the balance, after the deduction of the two sums of £800 and £236 just mentioned, was a few days afterwards withdrawn and paid into G. J. Doddrell's own bank account, and never appeared in any of the church accounts.

In July 1879 G. J. Doddrell (who had been again bankrupt in 1876 as a partner of the Port-Dundas Sugar Company) resigned the treasurer-ship, and soon after he left Scotland and settled in Portugal. He had not accounted to the church for the £1450, the balance of the price of the school after payment of the sums of £800 and £263 above — mentioned, and declined to do so. By a minute of the trustees and vestry in August 1875 it had been resolved, that he having given no account of how that balance had been disposed of, he should give such account to the trustee and vestry. In 1876 it had been resolved at a meeting of the trustees and vestry, that in order to obtain control of this sum in the interest of the church, the gentlemen in whom the title had stood, and who had conveyed to the School Board, should be requested to take such

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steps as they thought best to secure the money for the church. No such steps had been taken before G. J. Doddrell left Scotland, by which time he had expended the balance as his own funds.

In 1882 this action was raised by the Rev. W. Williams and others, the incumbent, and the whole members of vestry resident in Scotland and acting (except Mr Lowndes, who was a defender), as a majority of the vestry, and as representing the whole male seat-holders being communicants who had held seats for one year and were of full age, conform to a minute of meeting of seat-holders held to consider the question. The defenders called were Messrs Wakefield, Bousfield, Lowndes, and Cochrane, of whom the two former were, at the date of the conveyance to the School Board, trustees of the church, and were still trustees, while the two latter were vestrymen at the date mentioned, and continued to be so, Mr Cochrane till 1876 and Mr Lowndes up till the date of this action. The pursuers concluded —(1) for declarator that the price of the school (£2510, with £31, 7s. 2d. of interest to the date of the payment of that price) paid by the School Board of Glasgow “belonged to the congregation of St Jude's Church, and were received by the defenders on account of the said congregation and as trustees for their behoof;” (2) for count and reckoning by the defenders for that price; (3) whether count and reckoning were made or not, the pursuers concluded for payment of £2548, 7s. 2d., as the balance of the defenders' intromissions.

The pursuers averred —“(Cond. 4) The defenders were bound to account to the said vestry of St Jude's for said sums so received by them. They have failed to do so. By minute of 4th November 1873 the vestry resolved that the said sum of £2510 should be applied, as it is believed was done, in the first place, to repayment to the church of the sum of £800, obtained by the sale of stock belonging to the church, and, in the second place, to repayment to the treasurer of the church of the sum of £263, 4s., being part of a sum owing to him on his accounts as treasurer. The balance of the said sum of £2510, after deducting the two sums just mentioned, was not handed over to the church by the defenders, and they have failed to account for the same, as well as for the additional sum of £38, 7s. 2d. …It is denied that the money received from the School Board was paid to Mr George J. Doddrell…. But if the money was received by Mr Doddrell the defenders were not entitled to entrust it to him. As treasurer of the vestry he had no right to receive or hold the said funds. At all events, the defenders were not entitled to allow them to remain in his hands unaccounted for. His annual accounts contain no entry of the sum in question. Under the 15th article of the constitution of the church these accounts fell to be submitted to the trustees in order to be examined and certified by them. The defenders, who are trustees, either failed altogether to examine the said accounts, or they passed the same knowing that they were incorrect. Further, it is explained that Mr Doddrell was sequestrated in 1869. He subsequently joined the Port Due das Sugar Company, and again was bankrupt in or about 1876.”

They pleaded —“(1) The money in question being the property of the said congregation, and falling to be administered by the pursuers, as the vestry thereof, the pursuers are entitled to decree of declarator as craved. (2) The defenders having received the said money but not having accounted therefor, are bound to count and reckon with the pursuers as concluded for.”

Separate defences were lodged for (1) the defenders Wakefield and Bousfield, and (2) Lowndes and Cochrane.

The former defenders averred —“The sale to the School Board was reported by Mr Lowndes and Mr G. J. Doddrell to the quarterly meeting of the vestry on 8th January 1874. The disposition was handed to Mr G. J. Doddrell after signature, and he, in the knowledge of all concerned, undertook the settlement of the transaction. Explained that these defenders did not receive or intromit with any part of the price, which, as was well known to the pursuers and to all concerned, was received, not by the defenders, but by Mr G. J. Doddrell. Mr G. J. Doddrell at that time held the office of treasurer, and he either received and retained the money in that capacity, or was authorised by all concerned to do so. The question as to the application of the balance of the price, which was the subject of much discussion, lay over, and at a meeting of the trustees and the vestry, held on 2d August 1875, a discussion took place (as the minute bears) ‘respecting the disposal of the balance of the money resulting from the sale of Dobbie's Loan School, at present in the hands of Mr G. J. Doddrell.’ The said balance remained in the hands of Mr George J. Doddrell, as treasurer of the vestry, in the knowledge and with the concurrence of all concerned, including the pursuers, and was still in his hands when he resigned the treasurership on or about 10th July 1879, as was well known to the pursuers. Mr George J. Doddrell, as treasurer, was appointed by and was and is responsible to the vestry, and not to the defenders. He is at the present time engaged in his business of sugar-refining in Portugal, and residing there, and if he has not accounted for the sum which he received, it is believed to be because he maintained that he is not bound to pay it over, or at least to pay it to the pursuers.”

They pleaded —“(2) No title to sue. (3) The pursuers' averments are not relevant or sufficient to support the conclusions of the action. (4) These defenders having had no intromissions with the fund in question, are not liable to account. (5) The money in question having been received and retained by the treasurer under authority of the vestry, and with their knowledge and assent, and having been repeatedly acknowledged by them as being left in their treasurer's hands, the defenders are not liable therefor; and separatim, the pursuers are barred from insisting in this action. (6) The defenders not being responsible for the treasurer's intromissions, and the sum, if irrevocable, having become so through delay and negligence on the part of the pursuers and their constituents, the defenders should be assoilzied with expenses.”

Lowndes and Cochrane pleaded —“(2) The pursuers having no right or title to insist in this action, or to call on the defenders to account, the defenders should be assoilzied. (3) The pursuers' statements are irrelevant. (4) The defenders never having received the money in question, they should be assoilzied. (5) The said money

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having been duly accounted for, the present action is unnecessary, and in any event the defenders not being responsible for Mr G. J. Doddrell, the defenders should be assoilzied.”

A proof was led by which the facts above narrated were established.

The Lord Ordinary ( Kinnear) decerned against the defenders for the sum of £1458, 3s. 5d. sterling.

Opinion. —In this action the pursuers seek to make the defenders personally responsible for the balance of a sum of £2510, which they received as the price of a school-house and mission-house which they had held as trustees for the congregation of St Jude's, and which they sold in 1874 to the School Board of Glasgow. The ground of liability alleged is, that while two sums of £800 and £263, 4s. have been properly applied for the purposes of the congregation, the balance was improperly allowed by the trustees to remain in the hands of Mr Doddrell, a former treasurer of the vestry, who has appropriated the money, and who has now left the country.

There are two grounds on which liability is resisted —(1) It is maintained on behalf of all the defenders that the pursuers have no title to sue, because after the sum of £800 had been accounted for, the balance did not belong to the vestry or congregation of St Jude's. This plea is in my opinion untenable. The school-house was purchased in 1869 from the trustee on the sequestrated estate of Murdoch & Doddrell by the trustees and vestry of St Jude's, the price was paid out of the general funds of the church, and the subjects were conveyed by the trustee to the four defenders and the late Mr Alexander Monro. The disposition is ex facie absolute, but it is not disputed that the disponees were not the absolute owners, but held in trust, and there can be no question that they held as trustees for the congregation or vestry of St Jude's.

The subjects were sold in 1874 for a price greatly beyond what had been paid for them in 1869, but it is not maintained that the surplus belongs to the former owners from whom the vestry of St Jude's had bought, and as they had bought out-and-out, and acquired the absolute property of the subjects, it is plain that the whole price belonged to them, and that they alone have the benefit of the increased value of their property from whatever cause it may have arisen. It is said that in the accounts of the vestry the purchase-money of £800 is treated as a loan upon which interest is charged, but that is a matter of book-keeping which is perfectly consistent with the pursuers' contention, and indicates nothing more than that in the administration of their affairs they thought it proper or convenient that a special account should be kept for this particular fund. The minutes show that the trustees and vestry were of opinion that the money they had gained by the sale ought to be applied, not for the general purposes of the church, but for some special purpose analogous to that for which the school-house was originally purchased. No special appropriation, however, has yet been determined upon, and whether it should still be made appears to me to be a question for the congregation or its administrators, which can in no way affect the right of the latter to recover the money from their own trustees unless they have already accounted for it, or are otherwise relieved from liability to account.

“(2) The remaining question is, whether the defenders are liable to make good the loss which, according to the pursuers' contention, has arisen through their negligence. It is not in my opinion necessary to consider a question which has been contested by the defenders inter se, viz. —Whether the duty of holding or securing such a fund as that in question lay upon the vestry or trustees under the constitution? I am of opinion that all of the defenders who held the property and received the price have charged themselves as trustees, with the purchase-money which they so received, and are liable to account for it. It appears that they allowed it to be received by Mr Doddrell, and that he paid it into a bank account kept in his own name, that the two sums of £800 and £263, 4s. were applied as already mentioned, and that on the 23d May 1874 the balance of £1458, 3s. 5d. was drawn out by Doddrell, and is still unaccounted for. It is clear from the evidence of the defenders, and from the minutes of the trustees and vestry, that this sum was not left in Mr Doddrell's hands on the footing that he had any personal right or interest in the money, but solely as treasurer of the church, and because of their confidence in him, and especially in the minutes of 2d August 1875 and 10th April 1876, at the first of which all the defenders were present, and at the second all but Mr Lowndes, they distinctly recognised the duty incumbent upon them of requiring him to account. It appears from the first of these minutes that they thought he should be consulted as to the mode in which the sum should be applied, but merely as their adviser in that matter, for they ‘resolved that any sum remaining over after repaying the church the amount advanced for the acquisition of the school, and the sum of £263, 4s. paid to the late treasurer, should be disposed of according to the advice of Mr Doddrell,’ and upon that resolution the minute proceeds, ‘and no account having been hitherto rendered as to how the balance had been disposed of, that Mr Doddrell be requested to give the trustees and vestry an account of the same.’ Again, on the 10th of April 1876 the yre-solved that the gentlemen ‘to whom the conveyance was originally made, and who signed the conveyance to the School Board, be requested to take such steps as they think best to secure the money for the church.’ Nothing was done, or nothing effectual, for the purpose of carrying out these resolutions, but they distinctly recognise the position which the pursuers now maintain, that the money was held for the church, and that these gentlemen were charged with the duty of securing it.

I am therefore forced, however reluctantly, to the conclusion that the defenders, as trustees of this fund, permitted it to remain in the hands of their treasurer without taking any step whatever to secure it for the trust-estate, that in so doing they neglected the duty which they had undertaken; that as the consequence of their neglect the money has been lost to the trust-estate, and that they are personally responsible to make good the loss. The case is undoubtedly one of hardship, for these gentleman were gratuitous trustees, and their error arose only from exuberant confidence in a co-trustee upon whose good faith they had no doubt great reason to

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rely. But the case falls in my opinion within the rule which was explained and applied in the recent case of Gordon's Trustees v. Gordon, March 18, 1882 [ 19 Scot. Law Rep. 549], and there appears to me no alternative but to pronounce a similar judgment.”

The defenders reclaimed.

Argued for Wakefield and Bousfield —(1) The funds derived from the sale of the premises were in no way the property of St Jude's Church. After the mission-house and school-house were acquired by the congregation of St Jude's, they were to be conducted just as they were before G. J. Doddrell's bankruptcy, and were simply held in trust for the price advanced for the building, and entirely independent of St Jude's. The pursuers then were not entitled to get at these funds and place them in the coffers of St Jude's. (2) But assuming that the funds did belong to St Jude's Church, the proper person under its constitution to receive them was the treasurer The defenders had made payment to this treasurer, and this amounted to payment to the vestry. (3) This was an action against all the trustees for money lost. There was no proof of loss at all, inasmuch as G. J. Doddrell admitted he got the money. He should have been sued as the treasurer into whose hands it had come.

The defenders Lowndes and Cochrane adopted the argument for the other defenders, arguing further that under the constitution of the church the duty of auditing the accounts was laid on the trustees alone, and therefore that they in the capacity of vestrymen were in no way liable.

The pursuers replied—The minutes of meeting of the vestry, and of the trustees and vestry jointly, clearly showed that these funds were held for the Church of St Jude's, and that the defenders were charged with the duty of securing them. They allowed them to remain in the treasurer's hands without taking any steps to recover them to the trust-estate, and therefore they were personally liable for the loss occasioned by this neglect of the duty — Gordon's Trustees v. Gordon, cited by the Lord Ordinary.

At the close of the debate the pursuers' counsel craved leave to amend the record by substituting for the latter portion of the 4th article of the condescendence, as quoted above, an additional article (condescendence 5), to the following effect: —“In reference to the answers for the defenders Wakefield and Bousfield, and to the statement of facts for the defenders Lowndes and Cochrane, the following averments are made: —At the date of the said conveyance to the School Board Messrs Wakefield and Bousfield were trustees of St Jude's, and they have since continued to act in that capacity, while Messrs Lowndes and Cochrane were members of the vestry, and continued to be so—Mr Cochrane till 18th February 1876, and Mr Lowndes till the month of October 1882. The receipt for the price of the school granted to the School Board is referred to. If the money was received by Mr Doddrell the defenders were not under the constitution of the church entitled to entrust it to him. As treasurer of the vestry he had not, under the constitution of the church, right to receive or hold the said funds. At all events, the defenders were not entitled to allow them to remain in his hands unaccounted for. His annual accounts contained no entry of the sum in question. Under the 15th article of the constitution of the church these accounts fell to be submitted to the trustees in order to be examined and certified by them. The defenders, who are trustees, either failed altogether to examine the said accounts, or they passed the same knowing that they were incorrect. Further, the whole defenders were, either as trustees or vestrymen, in a fiduciary position towards the congregation, and they all knew, or ought to have known, that the money in question was in the hands of Mr Doddrell; but although the matter was more than once in the years 1875 and 1876 specially brought under their notice they failed to take any steps to recover the money or to bring Mr Doddrell to account. Further, it is explained that Mr Doddrell was sequestrated in 1869. He subsequently joined the Port Dundas Sugar Company, and again was bankrupt in or about 1876.” The pursuers also proposed an additional plea-in-law, as follows —“(4) In any view, the defenders Bousfield and Wakefield are liable to account for the said funds in respect that they failed to exercise any supervision over the treasurer of the vestry, or to take any steps for recovery of the said funds.”

At advising —