Hastie's Judicial Factor v Morham's Executors
| Jurisdiction | Scotland |
| Judgment Date | 16 May 1951 |
| Docket Number | No. 69. |
| Date | 16 May 1951 |
| Court | Court of Session (Inner House - First Division) |
1ST DIVISION.
Lord Strachan.
PrescriptionLong negative prescriptionTrustLiability of trustees to accountDeceased trusteeResigned trusteeWhether liability extinguished by long negative prescriptionEffect of discharge by assumed trustees in favour of resigning trusteeTrusts (Scotland) Act, 1921 (11 and 12 Geo. V, cap. 58), sec. 4 (1) (g).
A judicial factor, appointed in 1948 upon a trust estate which had come into the hands of trustees on the death of the truster in 1910, brought an action of count, reckoning and payment against the trustees whom he had superseded and against the representatives of former trustees. One of the latter had died in 1922 while still acting as a trustee; and another, who had resigned office in 1928, had obtained a discharge from the new trustees whom he had then assumed in his place. The representatives of these two former trustees pleaded that their liability to account for the intromissions of their respective authors had been extinguished by the long negative prescription. The representatives of the second pleaded further that they were protected by the discharge.
Held (rev. judgment of Lord Strachan) that these defenders' liability to account had not been extinguished by the operation of the long negative prescription, but that, in the case of the trustee who had resigned, no order for accounts could be pronounced unless the discharge in his favour was first reduced.
Per the Lord President:"I think it requires to be stressed that the only issue immediately in controversy is liability to account and not liability to pay."
ExpensesTaxationObjections to Auditor's reportNecessity for note of objectionsTime for lodging noteRules of Court, 1948, Rule 359.
The Rules of Court, 1948, provide:Rule 359. "All parties to a cause shall be entitled to state objections to the report of the Auditor on the taxation of an account of expenses. The objections shall be by note, shall be stated shortly without entering into argument, and shall be lodged within seven days of the date of the Auditor's report on the account. "
Defenders who had attended the taxation of a pursuer's account of expenses, and who had stated objections thereto, omitted by error to lodge a note of objections within the seven days allowed by the Rule. When the case was enrolled for approval of the Auditor's report, they moved alternatively that a note of objections should be allowed to be received late or that the objections should be allowed to be stated verbally.
Held, on a report by the Lord Ordinary to the Inner House, that both branches of the defenders' motion should be refused.
On 25th January 1950 John Smith Wells, judicial factor on the trust estate of the late John Hastie, brought an action of count, reckoning and payment for the respective intromissions of each of the persons who had acted as trustee between the date of death of the testator, 28th September 1910, and his own appointment as judicial factor on 2nd January 1948. The first and second defenders were the representatives of the two original trustees appointed by the testator, namely, John Boyd Morham, who died, while still a trustee, on 11th December 1922, and John Swan Mercer, who resigned the office of trustee on 17th May 1928, and who died on 7th October 1947. The latter, as sole surviving trustee, had, at the time of his resignation, obtained a discharge from, inter alios, the new trustees whom he had assumed to act in his place. The seventh defenders were the trustees in office at the date of the judicial factor's appointment.
The first defenders' sixth plea in law (added by amendment) and the second defenders' fourth plea in law were each in these terms:"The claim now made against these defenders having prescribed by virtue of the long negative prescription, they should be assoilzied from the conclusions of the summons."
On 7th August 1950, after a Procedure Roll discussion, the Lord Ordinary (Strachan) pronounced an interlocutor whereby he, inter alia,sustained this plea in law for the first and second defenders and dismissed the action, so far as laid against them.
LORD PRESIDENT (Cooper).If the pursuer's averments are well founded, a situation of extreme gravity is disclosed in this case. A trust, which, so far as appears, could and should have been wound up in or about 1911 or 1912, has been continued in operation under a succession of trustees for a period of about forty years without any proper accounts being kept, and in the end of the day the trust assets unaccounted for are estimated in the conclusion of this summons at a sum of 80,000.
In the end of 1947, on the suggestion of the presently acting trustees, the beneficiaries applied for the sequestration of the trust estate and the appointment of a judicial factor. That was done on 2nd January...
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