Scottish Court of Session Decisions

The late Mr George Gaywood made a trust-settlement, under which the defender, Anthony M'Keand, and Robert Hastie, father of the other defender, were accepting trustees. One of the purposes of the trust was as follows:—“That my said trustees shall, within twelve months after my death, lay out and invest, in proper heritable security, the sum of £600 sterling, and take the rights thereof in favour of Janet Smith (the pursuer), wife of William Mayne, writer in Glasgow, in liferent, for her liferent use allenarly, and exclusive of the jus mariti and right of administration of her said husband, or of any future husband, and to the children (the other pursuers) that may be procreated of her body, either in her present, or in any future marriage into which she may enter in fee.”

The trust-deed contained the following declaration:—“Declaring always, that my said trustees shall not be liable for omissions, or neglect of management, nor singuli in solidum, but only each for his own actual intromissions; nor for any factor to be named by them, provided he be reputed solvent at the time of his appointment.”

Gaywood died in the beginning of 1825, and Mayne was appointed by the trustees to act as their agent in the ordinary business of the trust. In November 1825, Mayne bought a property in Glasgow for a price of £1820. Of this price, £1200 was made a real burden on the subjects in favour of the seller Pirrie. At the same time, on the suggestion of Mr and Mrs Mayne, the trustees advanced in loan to the former, his wife's provision of L600, to be invested on the security of the property just purchased; and Mrs Mayne, alongst with her husband, granted to the trustees a discharge in the following terms:—“I, Janet Smith, wife of William Mayne, writer in Glasgow, considering that the deceased George Gaywood, hat manufacturer in Glasgow, by trust-disposition and deed of settlement, executed by him, dated the 2d day of June, 1823, recorded in the books of Council and Session at Edinburgh, the 15th day of February, 1825, assigned and conveyed to Robert Hastie and Anthony M'Keand, both merchants in Glasgow, and Anthony Wigham, merchant there, but who declined to accept, his whole property, heritable, moveable, and appointed his said trustees, within twelve months after his death, to lay out and invest on proper heritable security, the sum of £600 sterling, and take the rights thereof in favour of me, the said Janet Smith, in liferent, for my liferent use allenarly, and exclusive of the jus mariti, and right of administration of my said husband, or of any future husband, and to the children that might be procreated of my body, either in my present or in any future marriage into which I might enter, in fee; and seeing, that of the date hereof, the said Robert Hastie and Anthony M'Keand have, at my request, and with my entire approbation, laid out and invested the said sum of £600 sterling on heritable security, by lending the same to William Mayne before named and designed, and that the said William Mayne has, of the date hereof, executed in favour of me, the said Janet Smith, in liferent, and of the children which I may have, in fee, an heritable bond and disposition in security, over subjects in the Old Wynd of Glasgow, purchased by him from Robert Pirrie, exactly in terms of the said trust-disposition and deed of settlement: Therefore, I, the said Janet Smith, with the special advice and consent of the said William Mayne, my husband, for his interest, do hereby exoner, acquit, and forever discharge, the said Robert Hastie and Anthony M'Keand, of the said sum of £600 sterling so invested by them; and hereby grant, acknowledge, and declare, the purposes of the said trust-disposition and settlement, in so far as regards the said sum, to have been fulfilled by them, precisely in terms thereof, and oblige myself, my heirs and successors, to warrant this discharge at all hands, and against all mortals as law will.”

About the same time, Mayne granted an heritable bond for the £600 in favour of the pursuers, upon which no infeftment was taken till the 13th February, 1826. In November, 1825, however, he had granted to one Cairns an heritable bond over the same property for £450, on which infeftment was immediately taken. The property was, shortly afterwards, exposed to sale by Pirrie in virtue of his bond in security of the purchase money, and brought a price of £1680; but this being insufficient even to pay the preferable debts of Pirrie and Cairns, nothing was left to satisfy the provisions of Mrs Mayne and her children, who thereupon raised an action of reduction of the above discharge, with the view of subjecting the trustees in payment of their provision. The chief ground of reduction was the illegality and invalidity of the discharge in the circumstances under which it was granted by the one party and accepted by the other. The defenders maintained—1. That the property upon which the investment was made afforded, at the date of the advance, a sufficient security. 2. That supposing the trustees had made an effectual investment of the money, and the debtor had subsequently paid it up, and it had come into Mrs Mayne's hands, a discharge for it might then have been validly granted; but Mrs Mayne, with concurrence of her husband, had an equally good title to grant the discharge before the investment was made. 3. That the trustees were no more answerable for the fraud of Mayne than they would have been for the fraud of a common factor; and, separatim that Mrs Mayne was personally barred from challenging the discharge.

The Lord Ordinary repelled the defences, and decerned in terms of the conclusions of the libel, issuing, at the same time, the note subjoined. ^*

The trustees reclaimed.

Lord Justice-Clerk.—I at first thought there might be some ground for a distinction between the right of the children and that of the wife, as affected by the discharge, but there has been here such an utter neglect on the part of the trustees of all their ordinary duties, that there is no room for the distinction. The testator intended them to be guardians equally of the wife and the children, and directed them to invest the provision on proper, which must mean effectual heritable, security; and, if they accepted the trust, they were bound to follow out his will. In the present case, having neglected to see infeftment taken, it was the same as if they had relied upon a promise of heritable security, or upon a mere personal bond. Had Mrs Mayne granted her consent to the discharge after infeftment had been taken on the bond, then, the transaction being completed in terms of the trust-deed, her discharge might have been good.