United Kingdom House of Lords Decisions

The minutes of the meeting bore, that the factor and cashier's accounts, up to 31st December, 1829, had been audited by the accountant; and that “he had completed his view of the progress of the trust, from its commencement to 31st December last; which the meeting desire the agents to communicate to Mr W. F. Home, the heir of entail, for his information.”

On the 27th September, 1830, Pringle wrote Hunter thus:—

“Dear Sir, — I yesterday had yours of the 24th. I can assure you, that the circumstance of the balance due by Mr Molle, the factor on the Billie trust-estate, is fully as distressing a circumstance to me, as it can possibly be to you. Neither that balance, nor a former one, I mean as it stood some time ago, and which amounted to about L.2000, I think, escaped my observation, when directed to it. I urged Mr Molle again and again, and pressed it upon him, in the strongest manner, by letter, to have it paid up. Before I say any thing farther, I may lay before you a note of the sums I received from Mr Molle, annis 1828, 1829, and 1830, so far as it is come. This I do from my note-book, which I have with me; and though I cannot positively vouch the accuracy of it, not having my books before me, it would appear to stand thus:—

Sums received in 1828,	L.3613 14 0
Do. Do. 1829,	6706 2 0
Do. Do. 1830, as at September,	4339 18 0

In the payments 1829, L.1500 was paid on 13th March, that year. I had previously stated the necessity of paying up the balance of L.2000, or thereabout, in the factor's hands, and the above payment

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was made, I believe, (though not distinctly stated to be so,) toward reduction of the above-mentioned balance. I own that I was a good deal pleased that o this was done, from whatever quarter it was procured; in consequence thereof, there remained some hundred pounds to be accounted for; and I hoped and flattered myself, that this sum also would not be long being made furthcoming, as by far the greatest part of the debt had been got rid of; and that, after what I had said upon the subject, and expressed myself in no ambiguous terms, matters would thereafter go on in their proper channel. In this, however, I have been disappointed; and notwithstanding my repeated remonstrances to have the balance, which I vexatiously saw again increasing, paid up many months ago, I found I was quite unable to effect it, notwithstanding many promises that it should be so. I am most sorry to state, that the sums constituting the present balance of L. 1684, due by the factor to the trust-estate, have been most unguardedly applied to purposes altogether foreign to what they should have been. Upon this there cannot remain a doubt. At same time, I must say, that I entertain as little doubt, that when Mr Molle did so, upon different occasions, he just took the readiest, whether it belonged to one or another, or was part of his own funds; and if it was not, he just satisfied himself, that out of these funds, when they came round, he would be able to return and restore what had been most inconsiderately and rashly misapplied. Unfortunately, however, that day has not yet arrived. I do not, in the smallest degree, justify his conduct; on the contrary, it has my most decided disapprobation; and I told him that nothing could possibly vindicate or excuse it. Unquestionably

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a factor has no right or title to retain any considerable sum in his hands, no more than to answer exigencies, say L. 150, or L.200 he has a paid and certain stipulated allowance for his factory trouble, and he has nothing farther to demand. All monies, therefore, received by him ought to be handed over to the trustees' cashier, and by him applied for the benefit of the trust estate, in the best possible manner. Having got this length, I find that I must endeavour to contract what I have farther to say within pretty narrow bounds. I do not see any necessity in our transmitting a joint letter to Mr Molle upon the subject before me; my idea is, that you may write him yourself as a trustee, and state to him, that after hearing what was expressed by me at the meeting on Tuesday last, and after examining the accountant's report, and taking into full consideration the large balance ascertained to be due by him, it appeared to be indispensably incumbent upon him, in his capacity of factor, to pay up that balance, with interest, since December, 1829; and in order to make it more easy and convenient for him, that you had no objection that he pay it by two instalments, Martinmas and Candlemas next; L.600 at the first of these terms, (as being only six weeks from this time,) and the remainder at the other term; and that unless this was done, and the first instalment made good, satisfactory security behoved to be required for the sum then falling due, and for the subsequent instalment, with interest till payment; and should this not be obtained, and as matters could not be allowed to go on longer in the way that they have been with regard to the factor's payments, some other mode must necessarily be adopted, to render the management more efficient,

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and the rents more regularly and punctually paid by the factor, upon their coming into his hands. If you incline to adopt those ideas I have thrown out, let me know, or say what else may, in your opinion, be thought proper to be done. I have a great personal regard for Mr Molle; and it distresses me much to think that the measures which I have now proposed, or something similar, may be thought necessary; but, in the circumstances in which I am placed, I must put out of the question my own personal feelings and sentiments of regard, when these interfere with, or come into competition with, my duties in society. In addition to what I mentioned, I would also strongly recommend, (as I stated at the meeting,) that it be made a point that the factor should, at the end of every three months, render to the cashier a particular note of the sums he has received within that period, also of his disbursements, and forthwith pay over what balance is in his hands, with the exception of L.150, or so, to answer contingent demands; and that he should lodge a note immediately of the precise sums so received and delivered since December, 1829, when the balance duo by him was struck, and that what sums may appear to be due in the intervening period should be added to that balance, and included in the first instalment to be exacted at Martinmas, or divided betwixt it and the other; and that the afterstates should commence from the 1st of October, and go on progressively every three months. The state of each (year's) arrears due by each tenant should, as you observe, be also regularly handed alongst with the other. I intended to have despatched this on the day of its date, but I was out of town in course of the forenoon, and had not time to complete it in

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course of the evening. I leave this on Thursday, and go to Knowsouth, the Sheriff's residence, where I shall remain till Sunday, when I intend being in Jedburgh, and to remain there till the week following, say 14th proximo, when I mean to make my departure for Edinburgh. Post town for Knowsouth, ‘Jed-burgh.’

P.S.—I need hardly say, that what I have stated must be received by you in perfect secrecy, and communicated to no individual whatever; of course the letter not left exposed to inspection, it being a most vexatious and distressful matter. Of course, you will be upon your guard not to make it to be understood by Mr Molle that I have taken any part whatever in what you may write. I must also beg leave to put you in mind, that nothing be started in any other quarter, which shall be construed as interference in any respect in the management, except in reference to the sale of lands, (which, I suspect, is one of the questions at present, as a partial sale would do no good.) The trustees must stand aloof from this, and be directed by their own judgment; and I shall ever, while connected with the trust, protest against any interference whatever.”

On 1st October, 1830, Hunter wrote Pringle:—

“Dear Sir, — I was duly favoured with your most particular letter of the 27th ultimo. I have since addressed a letter to Mr Molle, a double of which I annex. He ought, beyond a doubt, immediately to pay over the balance of L.1634 against him in December last. The system has continued too long, from motives of delicacy and feeling. I hold it to be a complete breach of faith, and an evident misapplication of the trust-funds, to withhold payment for

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one day; and there must be considerable funds in his hands at the present period, independent of this balance. However strong our regard may be for Mr Molle, we have a duty to perform here, for the satisfaction of conscience, and the protection of character, as well as for those more directly interested. To propose to him to receive payment by instalments, would be a virtual declaration of our impression of inability on his part, which I do not wish even to insinuate; and, moreover, a direct charge of mal-appropriation of the trust-funds, the bare supposition of which would never warrant us in continuing him in that office, without security for intromissions; as the funds belonging to the trust, in the hands of any of the trustees, or their agents, ought never to be diverted to any other purpose, but should be tangible on demand. I hope he will at once see the necessity of remitting immediate payment to you, and of furnishing a correct state of his receipts and disbursements, to the date of our last meeting. If, however, I do not hear within ten or fourteen days from you, that this has been complied with, some other plan must be adopted; while I will, though very reluctantly, conclude that a certain unpleasant surmise is not altogether without the shadow of foundation. This solely for your own eye.

P.S. —I really do submit, that in a trust-business such as this, the factor should be called upon to find security for his intromissions, &c.”

The letter written by Hunter to Molle, referred to in the foregoing letter, was in these terms:—

“Dear Sir,—It is with some degree of reluctance and painful feeling that I advert to the subject which last engaged the attention of the Billie trustees at their

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recent meeting. But, after giving it every consideration, and examining the reports by the accountant, I cannot avoid concurring with Mr Pringle in the impropriety of so large a balance being due by the factor, and of the necessity of its being immediately paid over to the cashier. The case of Mr Ainslie, to which you referred, where wealthy estates are under his management, is totally different, and the circumstance of being charged four per cent interest, I cannot regard as any sufficient reason for so enormous a balance being due. I am sure this must be fully apparent to yourself. With the exception of what I mentioned to the meeting, of the hint I got on the subject, the two reports, or views of the accomptant, contained the first positive intimation I had; and I would have been pleased, when the matter was talked of, had you readily given the cashier an order on your account for the balance against you in December last, being L.1634. I shall be most happy to learn that you have, ere now, done this. But I have nevertheless deemed it my duty to apprize you of my written sentiments, in a matter so essentially important to the trust. The other verbal recommendations of the meeting, as to furnishing Mr Pringle with a state of the rents realized at that date, and of those in arrear, and to quarterly render a state of accounts in future, you will no doubt give attention to, and pardon my anxiety and candour; for I shall never hesitate to express my sentiments in the trust, as I have hitherto done, whoever may be concerned, and however disagreeable, in some instances, this may be to me.”

On the 16th October, 1830, Pringle and Hunter wrote Molle a joint letter, in these terms:—

“Dear Sir,

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—At the general meeting of the trustees on the Billie estates, held at Dunse a few weeks ago, it was noticed, amongst other things, that our auditor of accounts had, in the state of the trust-affairs lately made up by him, and laid before us, reported that there was no less a balance than L.1634 due by you, as the factor to the trust-estate, as on 31st December last, and which has never yet been paid up. You were some time ago apprised (and that repeatedly) of the necessity there was that this sum should be put into the cashier's hands for the benefit of the trust; and it was hoped that this would have been complied with before the meeting took place; but the urgent recommendations which were given were not attended to, and matters remain at this moment as they did in December last. Upon the matter being stated at the meeting, you remarked that it was a pretty general practice for factors being permitted to retain, from time to time, considerable sums in their hands; and as an instance of this, you mentioned the case of Mr Ainslie, Lord Douglas' factor, who you understood was allowed to do so; and besides, that four per cent interest was charged against you by the auditor, so that, in fact, the trust-estate did not sustain any loss. But in reference to the first of these, it may be answered, that Lord Douglas' factor was in the use of receiving large sums from his Lordship's estates, which perhaps were not needed for immediate use; that the constituent was himself the proprietor, and was entitled to do with his own as he chose; that he might grant this indulgence from personal favour to the factor; besides, that there were no debts or encumbrances to provide against. Be this, however, as it may, the trustees are most decidedly of opinion, that

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a factor ought not to be permitted to retain sums to any extent in his hands at any one time, but pay them over to whoever is authorized, or has right to receive them from him. Trustees have very serious and solemn duties to perform,, upon their acceptance of the trust; they themselves are not the proprietors, but hold the estates intrusted to them for behoof of numerous and large creditors, (as is the case here,) and also for behoof of the legitimate proprietor, whose interest they are bound to attend to, to the best of their power. With regard to the case of interest, which was stated as meant to shew that no loss has accrued to the trustees from withholding the monies, the trustees possess no funds which can be allowed to lie at interest, (with the exception of the bank deposits from time to time;) and instead of any thing like a loan bearing interest, (which the balance before mentioned had the appearance of, while it remains in your hands,) it is most incumbent on the trustees to apply whatever funds are tangible, or ought to be so, towards the extinction of the very heavy debt affecting the trust-estate.

One of us (Mr Hunter) lately transmitted a letter to the other, mentioning, that at the end of last month, he had wrote you upon the subject of the balance in your hands, as appearing from the report, and of the necessity there was of this being paid up; that it was also most necessary to render to the cashier a state of the rents received by you since rendering your last accounts, and not yet accounted for; and likewise, that you should quarterly put the cashier in possession of a state of your accounts at the time. To the contents of this letter, he complained that he had received no answer whatever; and, therefore, he

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urged the indispensable necessity there was of our meeting, in order to consider as to what it would be right and expedient to do in regard to this very vexatious affair. We accordingly did agree to meet this day for the above purpose; and after having deliberately considered the state of matters, and viewed them in all their bearings, we have come to the following conclusions:—1st, That you should forthwith pay up the balance of L.1634 ascertained to be in your hands, with interest at four per cent from December last. 2d, That you hand over to the cashier an exact account of your receipts and expenditure in relation to the trust affairs and management since December to this date, and settle what balance may appear to be due thereupon. 3d, That you also, in future, render to the cashier, at the end of every three months, a statement of accounts, shewing the sums then in your hands, and pay over the same, with the exception of what may be considered absolutely necessary to be retained for periodical and occasional advances; that statement to be accompanied also with a correct note of what arrears may be due by the tenants on the estates, or any of them. And lastly, That you should find proper security for all your intromissions during the subsistence of your factory. The rendering a state of your accounts quarterly, also the propriety of granting security as above, have been before now signified by Mr Brown, the auditor, as a proper thing which any factor should be obliged to do.

If there is any other satisfactory mode which you can propose for extricating matters, and putting them henceforth upon a more desirable footing, and which we can consistently approve of, we will certainly pay

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that attention to it which it may deserve; but it must be such as will be efficient, and will, with certainty, accomplish the purpose, which, in the character of trustees, and acting, as we are bound to do, for the benefit and advantage of the trust-estate committed to our charge and management, we have in view to promote to the best of our power.

We request your answer to this in the course of a few days, and you will be so good as transmit a duplicate of it to each of us.”

On the 23d October, 1830, Pringle and Hunter complained to Molle of not having received any answer to their letter of the 16th. And on the 29th of October, Pringle wrote Hunter:—

“Dear Sir, — Before I despatched on Saturday last our joint letter to Mr Molle, I received one from him, of date the 20th, saying that he had received ours of the 16th, (from Kelso;) that he proposed being in Edinburgh in a fortnight, when he would advise with his friends on the subject, and write me. Of this letter, he mentions having sent a duplicate to you. Before sealing our letter, I addressed a postscript to him, that this was treating the trustees in a very extraordinary manner; that I held his letter as a mere nothing; and that it only confirmed me more and more in what we must now absolutely do. The eight days which we gave for the performance of what we required of him, will expire to-morrow. I am quite satisfied that things are now come to that point when decisive steps must positively be taken. It has occurred to me that one necessary mode to be adopted is forthwith to raise an action of count and reckoning against him, in one respect, for the purpose of immediately obtaining letters of inhibition

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upon the dependence, so as to strike against future contractions; and concluding against him, 1st, For the ascertained balance of L.1634; and, 2d, For count and reckoning on account of his whole intromissions, and libelling for payment of a random sum on that account, in the meantime; but more must be done. The factory must most undoubtedly immediately be recalled. There is a little difficulty in accomplishing it, so as that it may be done as quietly as possible, as we have so many tenants to do with. In the view of the summons and consequent inhibition, I mentioned it to Mr George Turnbull, W.S. who has been all along acquainted with the business, and I find he has no objection to undertake raising the action. It has also occurred, that if we can get Mr Molle to resign at once, without absolutely certifying him that we have absolutely recalled his powers of factory, it would be the best and most agreeable mode of accomplishing our object; and in that case, he himself might notify to the tenants, or such as it may be necessary to do so to, at the time of his having determined to sign a resignation of his factory, and of his having actually done so; and in that view, and in order to expedite matters, I think it advisable that Mr Turnbull, who has been long in habits of intimacy with him, and formerly connected with him in business, should go out in the Union Coach to-morrow, call upon Mr Molle at Netherbyres, explain to him the reason of his coming out, and endeavour to prevail with him forthwith to subscribe a letter of resignation, which may save a good deal of trouble. As to the notifications which may be necessary to be given to the several tenants, Mr Turnbull, returning by Dunse, will inform you of the result of his application.

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Should it so happen, however, (though I hardly think it will,) that Mr Molle refuse to comply with what is required of him, then we must address another joint letter to him, explicitly recalling his powers under the factory, and declaring it at an end. And upon the supposition that this may be necessary, I beg leave to enclose you a letter signed by me, and to be also signed by you, and addressed to Mr Molle, to the above effect; and upon this, intimation must be made to the tenants as quietly and delicately as possible, so as to be an interdict in the meantime against their making any payments. I have, in like manner, enclosed an authority, under both your and my hands, for adopting the mode which may seem most proper and suitable for the purpose.

“I am most dreadfully teazed with this business, what with thinking, writing, and copying, there is no rest. Since writing the above, I have received another letter from Mr Molle, of yesterday's date, as follows:—

“The letter by you and Mr Hunter, dated 23d inst. has distressed me much, and I would have come to town immediately on receipt of it, but I had made some previous engagements on business, which has prevented me. I shall, however, be in town on Wednesday or Thursday next, when I shall make a payment, and enter on the consideration of future arrangements.”

This is perplexing in the extreme. What payment, or to what extent he means to make the same, I know not. Still I think it right that Mr Turnbull go out, so as that matters may not be slackened, and he may produce some decided favourable effect upon him; and in place of enclosing the letter before mentioned by us for Mr Molle, and the other, respecting the

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intimation to the tenants, I will deliver them to him to be put into your hands, and after seeing Mr Turnbull, and hearing what may have passed betwixt him and Mr Molle, you will be enabled to judge whether the steps alluded to should be forthwith taken, or not; or whether you may delay them till your coming here and meeting with him; or whether, if Mr T. may inform you that he is disinclined at present to resign, you may consider it proper to despatch to him our joint letter of revocation of the factory. It would, no doubt, be extremely distressing to break him down, if the interest of our trust did not positively demand without delay, the adopting of the most compulsory measures.

As you are to be in town against Tuesday, I wish you would take breakfast with me on the morning of that day, at half-past nine or ten.

P.S.—Upon second thoughts, I think it as well to enclose you the letter and intimation, which you will keep till you see Mr Turnbull, and have some conversation with him.”

Turnbull accordingly went to Molle's house, as suggested in Pringle's letter; and on the 30th of October, he procured, and sent to Hunter, Molle's resignation of the factory in his favour.

From this time Molle ceased to have any intromission with the trust-estate, and on the 30th of November, 1830, he resigned the office of trustee. Molle's accounts were then put into the hands of Brown the accountant to be audited, and according to his report, the balance owing from Molle to the trust-estate, at the date of his renouncing the factory, on 30th October, 1830, was L.3775, Is. 11d.

From the correspondence admitted as evidence, it

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