Scottish Court of Session Decisions

In 1865 Edmund Paterson Balfour Hay succeeded to the estate of Carpow, and to the estates of Mugdrum, Leys, and Randerston, while he was still in minority. These estates were managed by his mother until he attained majority in January 1869, and subsequently until her death on 6th September 1873. Messrs Wilson & Dunlop, W.S. Edinburgh, were the family law-agents. In order to provide for the term of Martinmas next after Mrs Paterson's death, Mr Hay's brother, Mr Peter Hay Paterson and Messrs Wilson and Dunlop, ultroneously undertook the management of the estate.

On 18th October 1873 Mr Hay executed a trust-deed in favour of three trustees, Mr Peter Hay Paterson, Sir William Dunbar of Mochrum, Bart., and Lord Elibank. This deed was never acted upon, Sir William and Lord Elibank both refusing to accept. Accordingly Mr Paterson, with the approval of his sister and other relatives, gratuitously assumed the office of guardian or curator to his brother, and continued to act in that capacity, managing the estates, with Messrs Wilson & Dunlop as the family factors and law-agents, down to 6th July 1875, when Sir William Dunbar was appointed curator bonis to Mr Hay.

On 10th March 1879 Messrs Wilson Dunlop executed a trust-deed for behoof of creditors in favour of George Todd Chiene, C.A., Edinburgh.

Sir William Dunbar raised this action of count and reckoning against Mr Chiene, as such trustee, to ascertain and recover the balance which he alleged was due to him on the intromissions of Messrs Wilson & Dunlop with the rents and estates of his ward. He averred that from 1873 to 1875 Messrs Wilson & Dunlop had without authority, and on their own responsibility, intromitted with the rents and income of Mr Hay's estate to an amount exceeding £15,000, and that they had not accounted therefor; that a large part had not been expended for behoof of the ward Or his estate, which the pursuer estimated at £5000; that an account was opened in Mr Paterson's name with the Commercial Bank of Scotland at Newburgh on 6th November 1873, into which Mr Wilson or Messrs Wilson & Dunlop paid certain rents uplifted by them; that Mr Paterson from time to time drew sums out of this account, and for a considerable portion of these, the pursuer averred, he had failed to account to the pursuer or to establish that they were applied in rem versum of Mr Hay. The pursuer further averred that Mr Wilson had no legal warrant or authority to pay these sums to Mr Paterson's credit, and that he was fully aware that Mr Paterson had no legal title to intromit with the funds, or manage Mr Hay's estates.

The defender replied that Messrs Wilson &

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Dunlop “were appointed by Mr Paterson factors and law-agents, and acted as such (as they had formerly done during Mrs Paterson's life) down to the pursuer's appointment in 1875;” that they had uplifted the rents of the estates under Mr Paterson's charge, and paid the same into the Commercial Bank, and did not even retain sufficient income to defray their professional accounts and factors' fees, which amounted to £320, 2s. 1d. for the period in question, for which they had raised an action against the pursuer on 17th April 1884. He averred that “the rents and other income were applied in and exhausted by payment of interest on the securities over the estates, public burdens, maintenance of the ward's establishment, and ordinary expenses.”

The pursuer pleaded—“(1) The defender is bound to hold just count and reckoning with the pursuer for the intromissions of Messrs Wilson & Dunlop, and of Mr Wilson and Mr Dunlop, with the estate of Mr Hay, and income thereof. (4) The defender's authors were not exonered of their intromissions by payments to Mr Paterson.”

The defender pleaded—“(1) Messrs Wilson & Dunlop having already accounted for their intromissions to Mr Paterson, by whom they were employed, are not liable to account to the pursuer. (2) There being no balance due upon Messrs Wilson & Dunlop's intromissions, the pursuer is not entitled to any payment or ranking. (5) Any claim which the pursuer may have had against Wilson & Dunlop has in the circumstances stated been extinguished.”

The Lord Ordinary ( Kinnear) remitted to Mr James Haldane, C.A., to examine into the state of intromissions.

In his report Mr Haldane stated that he had given the defender credit for their business accounts and fees. “The pursuer admits these subject to taxation, and reserving the objection to a portion of them, that Messrs Wilson & Dunlop, having acted without legal title, are not entitled to remuneration, but he objects to the sum sued for in the counter-action being placed to the credit of the defender in the present accounting.”

The Lord Ordinary ( Kinnear) on 14th July 1887 repelled, inter alia, the pursuer's objection in regard to the business charges; approved of the report, subject to taxation of the business accounts and factors' fees, as these should be taxed by the Auditor, to whom he remitted them for that purpose.

“ Note.—The first question for consideration is, whether Wilson & Dunlop are to be treated as pro-curators, so as to render them liable for omissions, and therefore for rents drawn directly by Mr Peter Paterson from the tenants of Mugdrum House and others, and to debar them from claiming remuneration for their professional services.

“I am unable to assent to the pursuer's argument upon this point. I think Mr Wilson and his firm did not assume the character of curators, but acted in the totally different character of factors and agents. They had held that position under the ward and his mother, and continued to hold it after Mr Peter Paterson had assumed the position of a pro-curator. The evidence shows that they were aware or ought to have been aware of the defective title of Mr Peter Paterson, and they cannot therefore discharge themselves of their intromissions with the rents by a proof of payments to him, except in so far as the moneys paid to him were applied for the benefit of the ward or his estate. But they are not liable for his intromissions with moneys which did not pass through their hands, and I think they are entitled to set off against the pursuer's claims in this action the sums which may be shown to be due to them for professional services of which the estate has had the benefit. I can have no doubt that Mr Wilson acted throughout in good faith, and in the interest as he believed of the ward. I see no good ground for holding that he thrust himself into a position in which he must be held in law to have acted gratuitously.”

The pursuer reclaimed, and argued with regard to the question of remuneration—Under the circumstances Messrs Wilson & Dunlop were to be looked on as pro-curators. They acted without any proper authority, and they were therefore not entitled to claim remuneration for their professional services— Fulton v. Fulton and Others, March 21, 1864, 2 Macph. 893; Begg on Law-Agents, pp. 323 to 329; Mitchell v. Barness, July 20, 1878, 5 R. 1124.

The defender replied—That though Messrs Wilson & Dunlop had no direct authority from Mr Hay to act for him, they had for years acted as the family law-agents, and not unnaturally continued to give their advice to Mr Paterson, who came forward at a critical period, and, with the consent of all interested in Mr Hay's estate, administered the estate. They were clearly entitled to their law charges and factors' fees.

At advising—