Scottish Court of Session Decisions

This was an action at the instance of Duncan Stewart, shipmaster, Leith, with consent of Wallace & Pennell, Writers to the Signet, Leith, and the individual partners of that firm, against Roderick Forbes, solicitor, Edinburgh, and Janet Cairns Welsh or Daily, widow of John Cameron Daily, shipmaster, Leith, and John Lawson, 188 Dalkeith Road, Edinburgh.

The pursuer sought decree against the defender Forbes for the sum of £64, 14s. 8d., being the amount of expenses decerned for in a suspension in which Forbes was cautioner for the suspender.

The late Mr Daily, having been charged to make payment of the sum of £100 and interest due under a bill drawn by the pursuer and accepted by Daily, brought a suspension of the charge. The Lord Ordinary passed the note on caution. Thereafter, Mr Daily having died on 27th July 1895, the defender Mrs Daily, who had been nominated with others as trustee and executrix to her husband by his trust-disposition and settlement, craved leave to be sisted as a suspender in her character of one of his representatives, and the Lord Ordinary, by interlocutor dated 6th September 1895, sisted Mrs Daily “as trustee of the deceased John Cameron Daily, her husband,” and appointed her to find caution as trustee foresaid.

In compliance with this interlocutor the defender Forbes became cautioner for Mrs Daily as trustee.

The bond of caution, dated 21st September 1895, was in the following terms:—“I, Roderick Forbes, solicitor, 22 Castle Street, Edinburgh, bind and oblige myself and

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my heirs, executors, and successors, as cautioners and surety acted in the books of Council and Session for Mrs Janet Cairns Welsh or Daily, residing in Gladstone Place, Leith, widow of John Cameron Daily, sometime of No. 24 Bernard Street, Leith, now deceased, trustee acting under the trust-disposition and settlement of the said John Cameron Daily, that she shall, as trustee foresaid, pay to Duncan Stewart, designed in the note of suspension after mentioned as shipmaster, Gladstone Place, Leith, but presently resident abroad, and Messieurs Wallace and Pennell, Writers to the Signet, Leith, his agents, for any interest they may have—respondents, or to any other person to whom she shall be ordained to make payment, of the sum of £100 sterling, and the legal interest thereof since due and till paid, contained in and due by a bill dated the 9th day of January 1895 years, drawn by the said Duncan Stewart upon and accepted by the said John Cameron Daily, and payable four months after date, in full in the event of there being a sufficiency of trust-funds, or rateably along with the other creditors of the said John Cameron Daily in the event of the estate proving insufficient to pay his creditors in full; but declaring that this limitation of the obligation shall be without prejudice to any preference which the respondents may have already secured in a note of suspension between the said parties presented on the 4th day of July 1895 years, and that in case it shall be found by the Lords of Council and Session that she ought so to do, after discussing the passed note of suspension, and also that payment shall be made of whatever sum the said Lords shall modify in name of damages and expenses in case of wrongous suspending.—Consenting to the registration hereof in the books of Council and Session, that letters of horning and all other execution may pass upon a decreet to be interponed hereto in common form,” &c.

On 26th November 1895 the Lord Ordinary ( Low) pronounced the following interlocutor, which was not reclaimed against—“Repels the reasons of suspension: Finds the letters and charge orderly proceeded, and decerns: Finds the complainer Mrs Janet Cairns Welsh or Daily, as trustee of John Cameron Daily her husband, the original complainer, liable to the respondents in expenses: Allows an account,” &c.

On 7th January 1896 the Lord Ordinary pronounced the following interlocutor—“Approves of the Auditor's report on the respondent's account of expenses, and decerns against the complainer for £64, 14s. 8d. sterling, the taxed amount thereof.”

On 6th April 1896 the pursuer brought the present action, in which he set forth the facts above narrated, and averred that payment of the expenses decerned for in the suspension had repeatedly been demanded from Mrs Daily and Roderick Forbes, but that payment had been refused or delayed.

The defenders averred—“(Answer 5) Reference is made to the decree in the said suspension, which, both as regards the principal sum and the expenses, was against Mrs Daily in her capacity of trustee only, and explained that there has been no decerniture against her personally. The sisting of herself in the suspension as trustee of her deceased husband was done in bona fide, and her doing so formed no ground for subjecting her in personal liability for expenses. Explained further, that when she was so sisted as a suspender, Mrs Daily was in possession, as trustee foresaid, of a portion of the deceased's estate, consisting of his household furniture, valued at £75, and his stock, plant, and machinery, valued at £500. The estates of the deceased were sequestrated by the Lord Ordinary on the bills on 3rd December 1895 upon the pursuer's petition, and the trustee in the sequestration, Mr D. H. Huie, C.A., has taken possession of the stock, plant, and machinery, which were in possession of Mrs Daily as trustee at the date of the said sequestration. He also claims the deceased's household furniture, and has presented a petition to the Sheriff of the Lothians and Peebles at Edinburgh against the defender Mrs Daily for delivery of the deceased's household furniture in her possession. She is willing and has offered to deliver over the said furniture, or to pay the value thereof, on being relieved of the claim sued for in the present action, and of the deceased's funeral expenses, or other payments made or obligations undertaken by her as trustee foresaid, but her offer has been declined.” …

The pursuer pleaded—“(1) The defender Roderick Forbes being bound in terms of his bond of caution to make payment to the pursuer of the sum sued for, decree should be pronounced therefor, with expenses. (2) The averments of the defender are irrelevant.”

The defenders pleaded—“(2) The decerniture for expenses being against the defender Mrs Daily in her capacity of trustee only, the pursuer is not entitled to a personal decree, either against her or her cautioner. (4) The defender Mrs Daily having ceded, and being willing to cede, possession of the trust-estate intact as she entered upon it, the defenders are entitled to absolvitor, with expenses,”

On 19th March 1897 the Lord Ordinary ( Low) pronounced the following interlocutor:—“Repels the defences, and decerns against the defenders conform to the conclusions of the summons: Finds the pursuer entitled to expenses; allows an account,” &c.

Opinion.—“The interlocutor in the suspension finds Mrs Daily, as trustee of John Cameron Daily, ‘her husband, the original complainer, liable to the respondent in expenses.’ I am inclined to think that the words which I have quoted are only descriptive and explanatory of how Mrs Daily became liable in expenses in a suspension which was brought by her husband John Cameron Daily.

Assuming, however, that the rule laid down in the case of Craig v. Hogg ( 24 R. p. 6) applies, and that the words in the

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interlocutor, ‘as trustee,’ limit Mrs Daily's liability to the extent of the trust-estate, I do not think that it forms a good defence to the cautioner.

In the bond of caution there is a distinction between the obligation to pay the principal sum contained in the bill which was under suspension, and interest thereon, and the obligation undertaken for the expenses and damages in case of wrongous suspending. The obligation in regard to the principal sum is that Mrs Daily shall, as trustee foresaid, pay to Duncan Stewart, designed in the note of suspension as “shipmaster, Gladstone Place, Leith, but presently resident abroad,” the sum of £100 sterling, and the legal interest thereof since due and till paid in full in the event of there being a sufficiency of trust-funds, or rateably along with the other creditors of the said John Cameron Daily in the event of his estate proving insufficient to pay his creditors in full.’ The obligation as regards the principal sum, therefore, is simply that the estate shall be forthcoming.

But as regards expenses and damages it is different. The cautioner binds himself ‘that payment shall be made of whatever sum the said Lords shall modify in name of damages and expenses in case of wrongous suspending.’

There is no limitation of liability there. The cautioner binds himself to see the sum which shall be modified as expenses paid. That sum is the amount of the account as taxed. I shall therefore give decree in terms of the conclusion of the summons.”

The defenders reclaimed, and argued—The cautioner was only bound for Mrs Daily “as trustee.” Mrs Daily was only found liable in expenses “as trustee.” When a judicial factor or trustee was found liable in expenses as judicial factor or trustee he was not personally liable— Craig v. Hogg, October 17, 1896, 24 R. 6. A cautioner was not liable for more than his principal—Ersk. Inst. iii. 3, 64; Jackson v. M'lver, July 6, 1875, 2 R. 882. If this cautioner paid these expenses, and demanded an assignation, he could only get an assignation against his principal as trustee. The cautioner was therefore only liable in the event of his principal improperly failing to make the trust-estate forthcoming to meet the expenses.

Argued for the pursuer and respondent—Mrs Daily was liable personally for the expenses found due in the suspension. This case was distinguished from Craig v. Hogg, cit. That was a case with regard to a judicial factor. A judicial factor was in a different position from a trustee and executor, for he was an officer of court, whereas a trustee and executor was not. In that case the judicial factor was brought into Court as defender, and he was sued “as judicial factor.” Litiscontestation therefore took place upon the condition that he should be liable only as such. It was conceded in Craig v. Hogg, cit., that trustees, whether testamentary or for creditors, were liable personally for expenses. See report, p. 9. In the present case the deceased having raised a suspension, his trustee and executrix was sisted at her own request. (2) Apart from this, however, and whether Mrs Daily was personally liable or not, the cautioner was liable for the whole expenses. A cautioner might be liable for more than his principal, as, e.g., the case of cautioners for minors acting without their curators, or for married women, or the case of natural obligations—Stair's Inst. i. 17, 10; Erskine's Inst. iii. 3, 64. The position of a cautioner in a suspension was different from that of a cautioner in an obligation. He was not introduced at the instance of the charger but of the Court, and the general rules as to a cautioner's obligations did not apply, as for example, with regard to the right of discussion—Ersk. Inst. iii. 3, 72. See also Simpson v. Fleming, February 3, 1860, 22 D. 679. The law and the Court demanded a cautioner as a condition of execution being sisted, so that there might be an assurance of the expenses being paid “in case of wrongous suspension.” The whole object of having such a cautioner would be defeated unless he were bound absolutely to pay the expenses found due, whatever the position of his principal might be. (3) On the terms of the bond the cautioner was bound for the whole expenses whatever might be the principal's liability. He bound himself simpliciter that payment of the expenses should be made, and he was not now asked to do more than discharge that obligation.