Scottish Court of Session Decisions

William Schulze and Mrs Mary Schulze, his wife, the assumed trustees acting under the trust-disposition and settlement of the late Hugh Lees, raised an action against John Sanderson Dun and others, the beneficiaries of the late John Dun, concluding for payment by the defenders jointly and severally, or to the extent to which each of them was lucratus from the estate of the late John Dun, of the sum of £1040, with compound interest from 31st May 1870, being the alleged loss sustained by the trust estate through the negligence or breach of trust of the said John Dun while trustee thereon.

The following narrative is taken from the opinion of the Lord Ordinary ( Mackenzie)—“The testamentary trust of Hugh Lees, a solicitor in Galashiels, contained provisions for his widow and children, and conferred a right on his son Richard to purchase his dwelling-house in Abbotsford Road on attaining the age of twenty-five. The price was to be fixed by valuation, subject' to a certain deduction, the son being put under an obligation, if he bought, of finding a suitable house for his mother and unmarried sisters, if they did not live with him. The truster died in 1858. His eldest son Richard intimated to the trustees sometime before attaining the age of twenty-five, which he did on 20th May 1870, that he wished to avail himself of this provision in his favour. The acting trustees at that date were Mrs Lees, the widow, Mr George Lees, Mr Robert Lees, Mr William Sanderson, and Mr John Dun. A meeting of the trustees was held on 26th April 1870, at which Mr Dun was not present. The trustees gave instructions that a valuation should be obtained of the house, and directed that thereafter a conveyance should be prepared in favour of Mr Richard Lees. The trustees further directed ‘that the agents proceed to prepare states of their intromissions and of the funds of the estate for submission to a meeting of the trustees, preparatory to the period of division.’

“The agent who had been appointed by the trustees was Mr Stewart, the partner of the truster. When Richard Lees attained the age of twenty-one he had been assumed as a partner by Mr Stewart. Though never appointed as such, the firm thereafter acted as agents in the trust, and Richard Lees was regarded by trustees and beneficiaries alike as the agent who looked after the trust affairs.

He was in 1870 engaged to be married to a lady in England, and he proposed to convey the Abbotsford Road house to the marriage-contract trustees. The English solicitors of the lady requested Messrs Fyfe, Miller, & Fyfe, S.S.C., Edinburgh, to attend to her interests. A valuation was got, and the price to be paid after allowing the deduction was £1040. On 25th May 1870 Richard Lees wrote to Mr Miller, S.S.C., asking him to get the draft disposition he enclosed extended, as he could not get a stamp of the necessary amount in Galashiels. Mr Miller had the deed extended on plain paper, and returned it saying they could get the stamp impressed afterwards. On 28th May 1870 Richard Lees wrote to the two trustees resident in Galashiels and got them to sign the conveyance. His mother had signed it on the 26th both as trustee and as a consenter. The present pursuer Mrs Schulze, a daughter, also signed as a consenter. On 28th May Richard Lees wrote the following letter to John Dun, who then resided at Eskbank—‘Will you oblige me by signing the enclosed conveyance by my father's trustees in my favour of the property in Abbotsford Road, and by sending it in the enclosed envelope to Messrs Fyfe, Miller, & Fyfe. I am in course of preparing states, &c., to be laid before a meeting of the trustees preparatory to a winding-up of the trust, but this is a deed that I require to have executed sooner.’ Mr Dun signed the deed on the 31st. It does not appear what he did with it after signing, and from a letter Richard Lees wrote on 31st May 1870 to Mr Miller it is possible the former went to Eskbank and got it from Mr Dun. Mr Sanderson did not sign it. The disposition was recorded on 2nd June 1870, the

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warrant for registration being signed by Richard Lees. Thereafter the house was conveyed by Richard Lees to his marriage-contract trustees, who were infeft.

The disposition bore that the price (which was therein erroneously stated to be £1060 instead of £1040) had been ‘instantly paid.’ Certain cross entries were made in Richard Lees' books at a much later date, but in point of fact the price was never paid or accounted for by Richard Lees to his father's testamentary trustees.

Richard Lees died insolvent in November 1902. Mrs Hugh Lees, his mother, died on 27th April 1902. Mr John Dun died on 22nd October 1887. Mr George Lees had died in 1879, Mr William Sanderson in 1880, and Mr Robert Lees in 1883. Mr and Mrs Schulze (the present pursuers) were assumed as trustees by an informal deed on 16th August, and by a formal deed on 25th November 1887.

In these circumstances the pursuers sue John Dun's representatives for payment of £1040, the price of the house, with compound interest since 31st May 1870.”

The settlement provided, inter alia—“ Fifth, In the event of my wife surviving me, and being alive when our oldest child attains the age of twenty-five years complete, and not having entered into a second marriage, my trustees shall … provide and make payment to her so long as she remains a widow such free yearly annuity as my estate may appear to them to be able to afford … Declaring that neither trustees, tutors, nor curators shall be liable in any way excepting only for his own actual intromissions with the funds of my estate.”

The defenders pleaded, inter alia—“(4) The pursuers are barred by mora, taciturnity, and acquiescence from insisting in the present action. (5) Separatim—Esto that the principal sum sued for was lost through the negligence of the trustees, the pursuers, or one or more of them, being parties to such negligence, are barred from insisting in the present proceedings. (7) The said John Dun not having himself intromitted with the said sum of £1040, the defenders are not liable to account therefor in respect of the immunity clause contained in the trust-disposition and settlement of the said deceased Hugh Lees. (10) Further, and in any event, the defenders are not liable in interest on the sum sued for prior to 27th April 1902 in respect that the interest prior to that date was applied to the purposes of the trust.”

On 22nd July, after a proof, the import of which sufficiently appears from his Lordship's opinion and the opinion of Lord Salvesen infra, the Lord Ordinary ( Mackenzie) sustained the fourth plea-in-law for the defenders and assoilzied them.

Opinion.—[ After the narrative above quoted]—“It appears to me that if the trustees and the representatives of those who had died had been sued within a reasonable time after the assumption of the present pursuers to make good the price to the trust estate, there would have been liability. In the first place, the disposition was delivered without getting payment of the price, or setting against the price part of the residue to which Richard Lees was entitled. In the next place, from the date of the meeting on 26th April 1870 the trustees did nothing, so far as appears, to see whether the price had been paid by Richard Lees or not, until 14th December 1887. This is the date of the next minute of meeting of the trustees. There were present at that meeting Mrs Hugh Lees and Mr and Mrs Schulze.

There was thus a failure on the part of Mr Dun to supervise the affairs of the trust. This would have involved a liability on his part. The assumed trustees could have sued him whenever the facts came to their knowledge. If they delayed to do so after they knew, and if their delay was to the prejudice of the defenders, the question is whether they are not now barred from insisting in the action.

The legal principles applicable to such a case as the present appear to me to be stated in the case of the Assets Co., 6 F. 676. Lord Kyllachy, at p. 685, pointed out that a pursuer who has a cause of action ‘must bring his action within a reasonable time—at all events, must do so if delay is fitted to prejudice his opponent's position. The defence thus arising may be variously described. It may come under the head of mora or under the head of bar.’ The Lord President (Kinross) said, at p. 705, it appeared to him that ‘the plea of mora cannot be successfully maintained merely on account of the lapse of time, but that the person stating it must also be able to show that his position has been materially altered, or that he has been materially prejudiced, by the delay alleged … where, coupled with lapse of time, there have been actings or conduct fitted to mislead, or to alter the position of the other party to the worse, the plea of mora may be sustained. But in order to lead to such a plea receiving effect, there must, in my judgment, have been excessive or unreasonable delay in asserting a known right, coupled with a material alteration of circumstances to the detriment of the other party.’ Lord Trayner, at p. 740, says that delay per se, short of prescription, does not bar a pursuer's claim; that to avail a defender the delay must be in prosecuting a claim known to the pursuer to exist; and that the delay must have been prejudicial to the defender in depriving him of evidence. It was natural in the Assets case to refer only to prejudice by loss of evidence, as the claim could only have been made against one party. Where, as here, the claim might have been made against a party who had a right of relief, it is obvious that prejudice would arise if through the delay the benefit of the right of recourse has been lost.

On the assumption that Mr Dun and his representatives could have been made liable if an action had been brought in time, the question is whether the pursuers, who are trustees, can now maintain the action in face of the pleas of mora or personal bar. The defence may also be

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stated by saying that the facts involve an election on the part of the trustees to accept Richard Lees alone as the debtor to the trust. This, however, seems to me to impose an undue onus on the defenders. The defence is really founded on mora or bar. It is necessary to observe that the pursuers who remain in the case are trustees, not beneficiaries. Though Mrs Schulze is also a beneficiary, she sues as a trustee. The result of sustaining the defence would not necessarily mean loss to the trust estate. If Mr and Mrs Schulze knew in 1887, when they were assumed as trustees, all the facts necessary to found a claim against Mr Dun or his representives—if through their delay they are now barred from insisting in that claim—the result may be that it is they (the pursuers and not the defenders) who are the proper parties to restore the money to the trust estate.

I think the facts establish that Mr and Mrs Schulze knew, at or shortly after the date of their assumption, the facts necessary to enable them to sue the previous trustees, including Mr Dun, for the price of the Abbotsford Road house. The disposition had been recorded in 1870 in the Register of Sasines. As pointed out by the Lord President in his opinion in the action against Richard Lees' marriage-contract trustees, knowledge of the contents of the disposition must therefore be imputed to them. It is not, however, necessary to found upon that, because it is evident from the terms of the correspondence which passed in 1886 and 1887 between Richard Lees and his mother and Mr Schulze that Mrs Lees and Mr and Mrs Schulze were then made aware that Richard Lees had got a disposition of the Abbotsford Road house, and that he had made it over to his marriage-contract trustees. In his letter of 4th October 1886 to his mother Richard Lees calls it his house. On 14th October 1886 he writes that he had to send to Bristol for the extract of his father's will and the conveyance by the trustees to him of the Abbotsford Road property, which he says he acquired in May 1870 for £1060. At this time Mrs Lees was living in family with her daughter Mrs Schulze and her husband. Looking to the terms of the correspondence, it is impossible to believe that both the pursuers were not quite well aware at that time of the disposition of the house. On 26th October 1886 Mrs Lees pressed her son for a statement of her affairs. It appears from the letter of 1st November that both the will and the disposition had been sent by Richard Lees to his mother. The undated letter from Mr Schulze to Richard Lees states that ‘the deed’ is returned (this must, I think, refer to the disposition), and he is asked what about providing a house for his mother. This is significant of the extent of Mr Schulze's knowledge, because under Hugh Lees' will the obligation on Richard Lees to provide a house for his mother only emerged if and when he took advantage of the clause in the will entitling him to acquire the Abbotsford Road house for himself. In his letter of 26th November Richard Lees, answering a question that had been put, informs his mother that the reason why the extract of his father's will is with the Bristol solicitors is that it forms part of the titles to the property in Abbotsford Road which belongs to his marriage-contract trustees. I believe that Mr Schulze as well as his wife at the time knew the facts contained in these letters.

On 14th September 1887 Mr Schulze wrote pressing Richard Lees for trust accounts, which he says must be made up not later than within eight days. On 26th October Mr Schulze consulted Mr Thornton, solicitor, Dundee, how he is to compel Richard Lees to render accounts. In that letter he refers to the fact that Richard Lees availed himself, the very day he became twenty-five years of age, of the advantage he had under his father's will of acquiring the dwelling-house. Mr Schulze in the witness-box could give no satisfactory explanation of how he had got this information. How untrustworthy the account of the pursuers is of this matter is shown by their statements on record. Cond. 5—‘Mrs Hugh Lees and Miss Mary Lees had no knowledge that the transaction had ever been completed. They did not know the purport of the said disposition. and continued in the belief, until the death of Richard Lees, that the house belonged to the Hugh Lees' trust.’ Answer to Stat. 7—‘Mrs Hugh Lees, until her death in April 1902, and the pursuers until immediately prior to the raising of the said action against the marriage-contract trustees, believed that the said property had never been alienated from the Hugh Lees' trust.’ These statements are entirely negatived by the evidence.

Mr Schulze thereafter consulted Mr Prosser, W. S. In his letter of 10th November 1887 he says that until lately he did not know that Richard Lees had acquired the dwelling-house under the will. Notwithstanding this, in the first letter he wrote to John Dun making a claim, on 5th December 1905, he says that down to the end of 1902 he considered the house belonged to Hugh Lees' trust. Not only did he know in 1887 that Richard Lees had acquired the house, but he also knew that the house had subsequently been made over, as Mr Schulze puts it in his letter to Mr Prosser of 10th December 1887, to Richard Lees' wife by his marriage-contract. His opinion, further, was, as expressed in the same letter, that Richard Lees had not paid for it, and this opinion was shared by Mrs Lees.

He now admits that the trust accounts which were rendered in 1888 prove that Richard Lees never paid the price. He further admits that he knew when he got these accounts that the trust funds were uninvested. Down to 1889 he was making repeated efforts to get Richard Lees to account. There was then a cessation of his attempts down to 1902.

There can be no doubt that the reason why during all those years Mr Schulze acquiesced in the state of matters was

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because his co-trustee Mrs Lees would not allow her son to be sued. Immediately upon her death an action was launched. This was not proceeded with, as Richard Lees became bankrupt and died. Mr and Mrs Schulze then brought an unsuccessful action against Richard Lees' marriage-contract trustees. No claim was intimated against Dun's trustees until 1905, and the present action was not raised until 1909. It is therefore established in this case that there was, to quote again the opinion of the Lord President in the Assets case, an ‘excessive or unreasonable delay in asserting a known right.’

The next question is whether this delay prejudiced the position of the present defenders. I am of opinion that it did. The assumed trustees neither sued Richard Lees nor did they intimate to Dun's representatives that there was a claim against them. If liability had been established against Dun's representatives in 1887, or at any time down to 1902, they would have had recourse against Richard Lees. The pursuers say that they could not have recovered from Richard Lees. The onus is upon them to show this. He was outwardly solvent for fifteen years after 1887. During that period he was carrying on what is described as a good business as a solicitor in Galashiels with an average annual professional income of £1484, which in the year preceding his death rose to £2800. His life was insured for considerable amounts, and down to 1896 the policies had not been assigned in security of loans. Mr Rutherford, who knew him well, gave evidence that he had not the least doubt, if the claim had been pressed against him, the trust estate would have been vindicated. In confirmation of this view it is proved that a claim for £500 was made and met in 1900, and a sum of £1000 was found by Richard Lees in July 1902 to meet a claim by a body of trustees. The evidence of the other witnesses for the defence corroborates the view expressed by Mr Rutherford. By the end of 1902 Richard Lees had become insolvent and died. There was by that time a material alteration of circumstances to the detriment of the defenders. In these circumstances the elements necessary to sustain a plea of mora or personal bar are, to my mind, present in this case.

The pursuers attempt, however, to avoid the plea of mora and personal bar by averring that there are grounds for holding there was special negligence on the part of Mr Dun. They say he was the last trustee to sign the disposition, and that it was he who delivered it without seeing that the price was paid. These acts, according to Mr Schulze, were only discovered by him in the course of the action against Richard Lees' marriage-contract trustees. As regards the delivery by Mr Dun, I do not think it is proved that he did deliver the disposition to Messrs Fyfe, Miller, & Fyfe. The letter written by Richard Lees on 31st May 1870 leaves this in doubt. Even if Mr Dun did, the purpose was that the deed might be properly stamped. It was Richard Lees who put on the warrant for registration, and it does not seem of importance whether the deed passed through the hands of Messrs Fyfe, Miller, & Fyfe or not. It is said that Mr Dun was the last trustee to sign. In the view I take this is not material to the issue; if it is, then it could have been ascertained by Mr and Mrs Schulze in 1887. The disposition had been recorded. The fact is that the incident of Mr Dun having been the last to sign does not affect his liability. What does affect it is the fact that the disposition was delivered without getting payment of the price, and also the failure to supervise the trust thereafter. It was suggested that there was no need to intimate to Dun, because he knew what he had done in 1870. He did not, however, know that advantage had been taken of this by Richard Lees to defraud the trust. Mr Dun died in 1887, and his trust was wound up by 1898. His son, who was examined as a witness, did not even know that his father had been one of Hugh Lees' trustees. One argument which was urged on behalf of the pursuers has a certain amount of force, viz., that there were no trust funds in 1887, and that Mr Schulze was not bound to vindicate the trust estate at his own expense. This made it all the more necessary that Dun's representatives should get notice of the claim. They would then have been in a position to judge whether proceedings should have been taken against Richard Lees.

There are circumstances in the case which make it by no means certain that Mr Dun would have withheld the disposition from Richard Lees even if he had been told that there was not to be an immediate settlement of the price. Both the minute of 26th April 1870, and the letter of 28th May 1870, already referred to, indicated that states were being prepared with a view to winding up the trust. Richard Lees was entitled to one-third of the residue of his father's estate, or about £1700. I do not think the pursuers have proved that by 1870 he had got payment of more than £500. I cannot regard the earlier payments as having been made to account of his share of residue. The trustees could not have debited him with these payments unless they had first come to the conclusion that the annual produce of the trust estate paid to the widow under the second purpose of the settlement was inadequate for the maintenance, education, and upbringing of the children. There is no evidence they ever did so. These judgments were not so treated in the accounts. Mr Dun could therefore have pleaded in justification of what he did in 1870 that sufficient residue belonging to Richard remained in the trustees' hands to set off against the price of the house. Another point is that it appears, from the opinion of Mr (afterwards Lord) Shand, given in 1870, that Richard Lees had a claim against the trustees for £1908, profits of the law business which had been credited to the trust, but which should have been credited to him. It was contended on behalf of the

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defenders that it was not proved that Mr Dun knew of the existence of this claim. After such a lapse of time, however, it cannot be assumed in favour of the pursuers that he did not know of it. I do not think it necessary to go into the merits of the claim, and mention it merely as an element which might have affected Mr Dun in delivering the deed.

It appears to me that there is no separate ground of action against defenders founded on any special negligence on Mr Dun's part. His negligence was the same as that of the other trustees, and consisted in allowing Richard Lees to get the disposition and then not taking steps to see that the price was paid or accounted for. This ground of liability, for the reasons already stated, is met by the defenders' plea of mora or personal bar.

I am of opinion that the defenders' fourth plea-in-law should be sustained, and that they should be assoilzied with expenses.”

The pursuers reclaimed, and argued—The conduct of the trustees in delivering the disposition without getting payment of the price, and without taking any further steps for seventeen years to get payment or to ascertain whether the price had been accounted for, undoubtedly subjected them in liability for the loss thereby caused to the trust estate. The indemnity clause was no protection, for in granting and delivering a disposition which contained an acknowledgment of payment of the price the trustees were intromitting— Thomson v. Christie, 1852, 1 Macq. 236, at pp. 241, 242; Seton v. Dawson, December 18, 1841, 4 D. 310; Wyman or Ferguson v. Paterson, March 13, 1900, 2 F. (H.L.), 37, 37 S.L.R. 635, per Lord Davey, at p. 46, p. 640. In an action to enforce that liability it was not necessary to call all the trustees or their representatives— Allen v. M'Combie's Trustees, 1909 S.C. 710, 46 S.L.R. 485. The plea of mora and taciturnity could not be sustained, for there was no room in this case for the application of the doctrine of mora or personal bar. The liability of one trustee to make good the loss caused to the trust estate by his intromissions could not be extinguished by anything in the conduct of his successors in office. The present pursuers could not have granted a gratuitous discharge to the defenders' author— Smith v. Patrick, May 7, 1901, 3 F. (H.L.) 14, 38 S.L.R. 613—and therefore nothing that the pursuers had done or had failed to do could effect an implied discharge. If the pursuers themselves had been guilty of negligence they might thereby be involved in liability to the beneficiaries, but that question could not be determined in this process, where the pursuers sued as trustees and for behoof of the beneficiaries. Whatever their liability to the beneficiaries, the pursuers were entitled to recover from their predecessors loss caused by the intromissions of the latter— Ogilvie v. Boswell, May 22, 1850, 12 D. 940. It made no difference that Mrs Schulze was one of the beneficiaries, because she was here suing as trustee, not as beneficiary. The case of Raes v. Meek, August 8, 1889, 16 R. (H.L.) 31, 27 S.L.R. 8, was no authority for the view that Mrs Schulze's rights as a beneficiary could be considered in an action which she sued as trustee. In any event, there was nothing in the conduct of the pursuers to subject them in liability, because they never got possession of the trust estate, and were therefore protected by the indemnity clause. But even if a plea of bar or mora could be founded on actings of the pursuers, the facts of the case would not support it. The pursuers were here suing for a debt, for the acknowledgment of receipt in the disposition made Mr Dun simply a debtor to the trust— Seton v. Dawson, cit., Wyman or Ferguson v. Paterson, cit.—and therefore mere delay in raising action would not found the plea of mora— Bain v. Assets Company, June 4, 1905, 7 F. (H.L.) 105, 42 S.L.R. 835, 6 F. 692, 41 S.L.R. 517—there must be something in the circumstances to raise a presumption of payment— Gourlay v. Wright, June 23, 1864, 2 Macph. 1284. Here it was admitted that the debt had never been paid. Further, to avail the defenders here the plea of mora or of personal bar must be founded on a breach of duty owed to Mr Dun or the defenders, but the pursuers owed no such duty. Besides, Mr Dun was sufficiently reminded in 1887 of his liability by the proceedings in connection with the assumption of the pursuers. There was no known claim here, for the pursuers were not aware of their rights as against Mr Dun's representatives until after the action against Richard Lees. It might be that they were aware in 1887, or could have then ascertained facts inferring Mr Dun's liability, but that was not enough. There must be actual knowledge— Allan v. Allan's Trustees, June 24, 1851, 13 D. 1220. Further, the delay in raising the action had involved no prejudice to the defenders. There was no loss of evidence, for parole evidence qualifying the acknowledgment in the disposition would be incompetent, and there was no loss of recourse against Richard Lees, because Mr Dun could have sued him when he was trustee and after be ceased to be, because being debtor to the trust he could have sued on his right of relief. In any event Richard Lees could not have paid anything after 1889. The defenders were thus liable for the principal sum, and they were also liable for interest from the day the disposition was granted. The annuity paid to Mrs Lees could not be held to include the interest on the sum sued for, for the trust funds other than the sum sued for in the hands of Richard Lees were sufficient to yield annually the sum paid to Mrs Lees. The interest ought to be compound interest, for only thus could the trust be placed in the position it would have been in but for the negligence of the trustees.

Argued for the defenders (respondents)— Prima facie there was no negligence in handing the disposition to the partner of the agent of the trust without actually receiving the money. At that time Richard

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Lees was a beneficiary as well as a creditor of the trust, and he was not a debtor on a true accounting until six months after the delivery of the disposition. It might be that the trustees were in fault in subsequently allowing Richard Lees to get possession of other parts of the estate, but that was not the case made on record. But if the trustees were negligent in parting with the disposition without getting payment, then the pursuers should have called the representatives of all the trustees. Though doubtless a beneficiary might select one of a body of negligent trustees and sue him— Croskery v. Gilmour's Trustees, March 18, 1890, 17 R. 697, 27 S.L.R. 490; Palmer v. Wick and Pulteneytown Steam Shipping Company, Limited, June 5, 1894, 21 R. (H.L.) 39, 31 S.L.R. 937, per Lord Watson at p. 43, p. 939—that privilege would not be extended to a trustee whose own negligence had contributed to the loss. In any event the conduct of the pursuers since they were assumed into the trust provided a complete answer to the present action. The pursuers could be compelled by the beneficiaries to account for their predecessor's intromissions as well as their own— Pearson v. Houston's Trustees, January 29, 1868, 6 Macph. 286; Sommerville's Trustees v. Wedmess, December 8, 1854, 17 D. 151. It followed that the pursuers could demand an accounting from their predecessors and could discharge them. Therefore a discharge might be inferred from their actings, and the defenders could found thereon a plea of mora or of personal bar. At all events the plea could be stated against Mrs Schulze, and receive effect quoad her interest in the estate as beneficiary. No doubt she sued only as trustee, but the Court could nevertheless deal with her rights as beneficiary— Raes v. Meek, ( cit.). On the facts the pursuers were barred by mora and by their own negligence as trustees, for their unreasonable delay in prosecuting a known claim had resulted in prejudice to the defenders— Bain v. Assets Company ( cit.), per L. P. Kinross, Lord Kyllachy, in 6 F. at pp. 705, 685, 41 S.L.R., at pp. 531, 521. The trustees were in possession in 1889 of all the facts inferring liability against Mr Dun, and they were not entitled to say that they did not know of their claims. In a question with a trustee at all events, who owed a duty to the trust, knowledge of facts which put him on his inquiry was enough. There was also clearly prejudice to the defenders. There was or there might be loss of evidence in consequence of the pursuers' delay. It was impossible now to know all the circumstances, and there might have been a complete answer to the claim, e.g., there might have been an arrangement to which the beneficiaries were parties under which Richard Lees was to keep the price of the house in satisfaction of his share of the estate or his claims on it as creditor, for the trustees had unusually wide powers. The Court would not presume against a trustee that he had no answer to the claim had it been brought timeously, and the delay in the circumstances would found a plea of mora— Bain v. Assets Company ( cit.); Rocca v. Catto's Trustees, November 2, 1876, 4 R. 70, 14 S.L.R. 40, per L.J.-C. Moncreiff; Buchner v. Jopp's Trustees, June 16, 1887, 14 R. 1006, 24 S.L.R. 680, per L. J. C. Moncreiff, at p. 1024, p. 689. The defenders had suffered prejudice also in the loss of relief against Richard Lees, who had he been pressed could have found the money. If Mr Dun were to be regarded as a debtor to the trust, then mora would be a good answer if the circumstances raised a presumption of payment or abandonment or discharge— Cunningham v. Boswell, May 29, 1868, 6 Macph. 890, 5 S.L.R. 559; Gourlay v. Wright ( cit.); Moncrieff v. Waugh, January 11, 1859, 21 D. 216. The circumstances here founded a presumption that the pursuers had decided to accept Richard Lees as their sole debtor and thereby to discharge Mr Dun. The case of Allan v. Allan's Trustees ( cit.) was distinguishable, for there the plea of mora was stated by an executor who had the money in his hands to meet the claim. Further, the pursuers themselves were undoubtedly negligent in failing to take proceedings against Richard Lees, and the indemnity clause would not avail them— Knox v. Macleinnon, August 7, 1888, 15 R. (H.L.) 83, 25 S.L.R. 752, per Lord Watson at p. 86, p. 753. That negligence was the proximate cause of the loss, and the defenders were thereby discharged. If, on the other hand, the negligence of the pursuers did not discharge the defenders as in a question with the beneficiaries, then the result was that the pursuers were liable primarily and the defenders only subsidiarily after discussion of the pursuers. The present action therefore could not be maintained, as it was of the nature of a claim of relief made before payment by the claimant. The rights of the beneficiaries against the defenders could be reserved if necessary, for they could in the circumstances sue the defenders— Watt v. Rogers' Trustees, July 18, 1890, 17 R. 1201, 27 S.L.R. 904. In any event no interest could be allowed for the period prior to the death of Mrs Lees, for she had received during her lifetime an annuity which must have included interest on the sum sued for.

At advising—