Scottish Court of Session Decisions

Lord Young—I cannot avoid coming to the conclusion that the Lord Ordinary has fallen into error in the view he has taken of this case. It is an action of count, reckoning, and payment against Mr Pearson, a solicitor in Kirkcaldy, as trustee under the testamentary trust of Mr and Mrs Greig. Mr Pearson defends the action, and he says that he has already sufficiently accounted, and that he is not indebted to the pursuer; and we have been informed that the real question in this accounting turns upon the point whether the defender is personally liable for having made certain investments of trust money on heritable securities which have turned out badly. Before this action was raised, but, as we were informed very properly by Mr M'Lennan, without the knowledge of the pursuer, Mr Pearson had executed a voluntary trust-deed with a view to the judicious management of his affairs and payment of his debts. The pursuer now puts in a plea that as the defender is insolvent, and has divested himself of his whole estate, he is not entitled to defend the action without finding caution. On this plea being brought under his notice, the Lord Ordinary ordered intimation to be made to the trustee, and as the trustee declined—and very properly declined—to have anything to do with the case, the Lord Ordinary pronounced the interlocutor ordering the pursuer to find caution for expenses. It was here, I think, the Lord Ordinary was in error. In my opinion Mr Pearson is absolutely entitled to defend himself without finding caution. The trust is a voluntary trust, although it would not have affected my opinion if this had been a trust on a bankrupt estate. No trust-estate in which the defender acted as trustee and executor would have been affected by his sequestration any more than by his voluntary trust; it would have remained in his hands, and he would have been responsible to the beneficiaries for it, and neither the trustee upon a voluntary trust executed by him nor the trustee in his sequestration could with any propriety have interfered. I therefore think that the Lord Ordinary's view was erroneous, and I would propose to your Lordship that we should recal the Lord Ordinary's interlocutor appointing the pursuer to find caution, and also the subsequent interlocutor decerning him to pay £250, and remit the case to the Lord Ordinary to proceed.

Lord Lee—There are two questions to be considered in a case like the present. The first is, whether the defender has so completely divested himself of his estate as to have no title to defend the action? But the question of his title to defend the action is not raised in this case, but only the question whether he should find caution before he can be allowed to do so. There may certainly be cases in which the defender might be called upon to find caution, but the general rule as to caution which applies to pursuers in actions does not apply to the case of defenders. There is no better illustration of this than the well known case of Stephen v. Skinner, May 31, 1860, 22 D. 1122, where Stephen was seeking to suspend a charge. In the present case no ground has been shown to us why the defender should be made to find caution as a condition of defending the action.

Lord Justice-Clerk—I quite agree in the judgment of your Lordships, and only wish to add that if this doctrine of making the defender in an action find caution be carried to its legitimate limit it would amount to intolerable hardship. If we were to affirm that principle it would amount to this, that where an action of any kind is brought against a bankrupt or person under a voluntary trust, he would be compelled to find caution or else submit to decree being given against him for any amount that might be asked. I therefore concur in the judgment proposed.

Lord Rutherfurd Clark was absent.

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