MARSHALL I 
 
 KDC 
 
 460 
 
 .A84x 
 
 1922 
 
 THE LIABILITIES OF 
 TRUSTEES. 
 
 INAUGURAL ADDRESS 
 
 TO THE 
 
 SCOTS LAW SOCIETY, EDINBURGH, 
 
 BY THE 
 
 HON. LORD ASHMORE, 
 
 6th NOVEMBER, 1922. 
 
 EDINBURGH AND GLASGOW: 
 
 WILLIAM HODGE & COMPANY, LIMITED. 
 
 1922. 
 
OlorttpU Ham irlinnl ICtbrary 
 
 JMaraljaU lEquttg QloUwttOtt 
 
 (Sift of 
 
 iE- 3(- iiataljaU. 5I.ffi.'l. 1394 
 
[Reprinted from Thb Scottish Law Rsvikw, December, 1922]. "^ 
 
 CORNELL UNIVERSITY LIBRARY 
 
 3 1924 084 224 413 
 
 THE LIABILITIES OF TRUSTEES. 
 
 LoED Scott Dickson, shortly before his death, gratified the 
 members of the Scots Law Society by agreeing to their request 
 that he should deliver the inaugural address on this occasion. 
 Alas ! that was not to be. He died in harness, looking back 
 on a splendid record of personal achievement and public ser- 
 vice, and looking forward, with interest, to fulfilling whatever 
 demands the future might make upon him. Well ! I think 
 that is the end he would have wished for himself. For us 
 there remain memories of his life and work that should prove 
 helpful and stimulating. We who knew him think of him 
 now as if he were calling us away from the easy downward 
 road of indolence and self-indulgence and pointing us to the 
 steep mountain road of strenuous effort and high endeavour— 
 the road which he himself took — winding uphill all the way, 
 even to the very end. We recall the modesty and simplicity 
 which characterised him — in spite of all his attainments and 
 successes — the kindliness and sweetness of disposition which 
 he invariably showed throughout the long years of strain and 
 stress of forensic and political conflict — and the courage which 
 enabled him to carry on, pleasantly and in good spirit, what- 
 ever difficulties and disappointments he had encountered by 
 the way. Ah ! gentlemen, these are pleasant memories ; they 
 are the rich legacy left by a good man in which all of us may 
 share. 
 
 The passing, last year, of a new Trustee Act explains the 
 choice which I have made of the subject-matter of my address. 
 The Act referred to— The Trusts (Scotland) Act, 1921— con- 
 solidates and amends the law relating to trusts in this country. 
 Both the consolidation and the amending were certainly re- 
 quired and had been long delayed. In 1868 Lord Westbury 
 when giving judgment in a Scottish appeal to the House of 
 Lords expressed the opinion that the doctrine of trusts rests 
 on the same principles in Scotland and England and ought to 
 be developed to the same extent in both systems of jurispru- 
 dence (Fleming v. Howden, 1868, 1 Sc. & D. App. 372 at pp. 
 381-2). The equal development which Lord Westbury regarded 
 as appropriate in theory has not been realised in practice. 
 
 A consolidating Act applicable . to the Trust Acts relating 
 to England was carried through as far back as 1893, and Eng- 
 
[ 2 ] 
 
 land has generally led the way in new legislation for the pur- 
 pose of relieving trustees from personal liability. So far as 
 consolidation is concerned, however, the new Act undoubtedly 
 now provides for Scotland a most convenient compendium of 
 the varied legislation relating to trusts and trustees which 
 previously was embodied in different statutes over a period 
 of 60 years, Moreover, the new Act also makes amendments 
 on and additions to the former legislation which are welcome. 
 Nevertheless, even now, Scotland and England have not been 
 put altogether on the same footing in the matter of freeing 
 trustees from legal risks and responsibilities. 
 
 My object to-night accordingly is twofold: — In the first 
 place I wish to explain how far the new legislation of 1921 
 is calculated to lessen the liabilities to which trustees were 
 subjected prior to the passing of the Act; and, in the second 
 place, I wish to call attention to certain disadvantages from 
 which Scottish trustees, as compared with English trustees, 
 have suffered in the past and from which they still continue 
 to suffer. 
 
 I begin with the provision contained in sec. 17 of the 
 Act of 1921 empowering a single trustee or any one or more 
 of a body of trustees to apply to the Court for an order on 
 the Accountant of Court to superintend the administration of 
 the trust, so far as regards the investment of the trust funds 
 and the distribution thereof among the creditors and bene- 
 ficiaries. According to the procedure previously in force under 
 sec. 18 of the Judicial Factors Act of 1889 it was necessary 
 that at least a quorum of the trustees should concur in making 
 the application to the Court for the superintendence order 
 (Coulson, 1920, S.C. 322) ; and the change introduced by the 
 new Act may add to the utility of the provision. If the order 
 contemplated by the Act is granted by the Court the Account- 
 ant is directed to examine and audit annually the accounts 
 of the trustees and at any time, if he thinks fit, he can report 
 to the Court upon any question that may arise in the adminis- 
 tration of the estate and obtain directions from the Court 
 thereanent. 
 
 In 1895 the Society of Writers to the Signet, in represent- 
 ing against the passing of the Public Trustee Bills then before 
 Parliament, considered that the right conferred on trustees 
 by sec. 18 of the Act of 1889 of securing the superintendence 
 of the Accountant of Court would prove useful to Scottish 
 trustees. The following passage in the report by the Com- 
 mittee on Bills of the Society describes the favourable opinion 
 which they had formed of the power to obtain supervision and 
 protection:— "In Scotland "—so reads the report— "the 
 
[ 3 ] 
 
 " position of private trustees has been greatly ameliorated by 
 " the provision of sec. 18 of the Judicial Factors Act of 1889 
 " under which they may obtain from the Court of Session an 
 " order on the Accountant of Court to superintend the admin- 
 " istration of the estate so far as regards the investment and 
 " distribution of the funds." 
 
 Then in the following year (1896) Lord President Robert- 
 son, commenting on the Act of 1889j said that it enabled the 
 trustees acting under any private trust to obtain immunity for 
 their acts on the important articles of investment and distri- 
 bution {Earl of Stairs Trustees, 1896, 23 E. 1070) ; and, re- 
 ferring to a statement by Counsel to the effect that sec. 18 
 had been sparingly made use of, the Lord President remarked 
 that the explanation must be either that trustees were not so 
 timid of the responsibilities of administration as complaints of 
 recent years had persuaded the Legislature or that they had 
 not been informed of the remedy provided. " I am not aware," 
 his Lordship added, " of any reason in regard to expense or 
 " otherwise which should deter honest administrators of a 
 " trust from coming under the supervision of the Accountant 
 " of Court and thereby obtaining protection from that respon- 
 " sibility about investments which has frightened so many men 
 " away from the office of trustee." 
 
 The legislative effort of 1889, which the Society of Writers 
 to the Signet and Lord President Robertson regarded as being 
 important to Scottish trustees, has proved almost a complete 
 failure. Thirty-three years have gone by and now in 1922 it 
 must be confessed that the statutory provision of 1889, if 
 known to trustees or their advisers, has been and still is almost 
 completely ignored by them. The other day I examined the 
 register kept at the office of the Accountant of Court and found 
 that since 1889 the provision has been taken advantage of by 
 only 41 trusts. That trustees and their advisers have not oftener 
 sought to obtain immunity in this way may, I think, be 
 explained to some extent at least by the original requirement 
 that a quorum of the trustees must concur in the application ; 
 by the fact that the application must be made in the Court 
 of Session and by the absence of any Act of Sederunt or 
 definite rules of any kind which would enable trustees and 
 their advisers to appreciate fully the conditions and conse- 
 quences of committing the trust to the Accountant's super- 
 vision. Fortunately the new Act of 1921, like the original 
 Act of 1889, empowers the Court of Session to pass Acts of 
 Sederunt for carrying into effect the purposes of the Act, but 
 any extension to the Sheriff Court of the power of committing 
 a trust to official superintendence as regards investment and 
 
[ 4, ] 
 
 distribution and any consequent development of the duties 
 of tlie Accountant of Court would apparently require to be 
 made by Act of Parliament. 
 
 I proceed now to refer to what I regard as the most im- 
 portant of the new provisions of the Act of 1921 — I mean the 
 power conferred on the Court by sec. 32 to relieve trustees 
 from personal liability. The section reads as follows: — "If 
 " it appears to the Court that a trustee is or may be personally 
 " liable for any breach of trust whether the transaction alleged 
 " to be a breach of trust occurred before or after the passing 
 " of this Act, but has acted honestly and reasonably and ought 
 " fairly to be excused for the breach of trust then the Court 
 " may relieve the trustee either wholly or partly from personal 
 " liability for the same." How much equitable jurisdiction 
 of some tind was required in Scotland is known best to those 
 who are familiar with the series of trustee cases which have 
 induced the judges who had to administer the law to remark 
 on its harshness, which have led members of the legal pro- 
 fession to regard the judicial judgments as being hard on 
 trustees and which without doubt must have produced in the 
 minds of the unfortunate litigants themselves a rankling sense 
 of injustice. 
 
 But while the statutory introduction into Scottish law of 
 the power of dispensation will no doubt provide practical 
 means of alleviating the strictness of the law as hitherto ad- 
 ministered it does seem to ofEend against principle. The con- 
 dition precedent of the right to the statutory relief is that 
 there has been a breach of trust ; but if a breach of trust has 
 been committed and if loss results, it seems inequitable that 
 there should be no remedy at law. While therefore the relief 
 given to trustees from liability in the circumstances set forth 
 in the statute is wholly satisfactory, the method of giving it 
 cannot be regarded as well chosen. 
 
 Since August, 1921, when the new Act came into operation, 
 I know of no reported case in Scotland in which the right to 
 relief has been considered; but in England, in which country 
 the Court has had power to relieve trustees since 1896, there 
 have been several decisions some granting and some refusing 
 relief. I must, therefore, resort to English cases to illustrate 
 the practical working of the dispensing power, and, in the 
 first place, I select a case in which the Court, acting under 
 the analogous provision in the Act of 1896, relieved the trustees 
 of liability— the case of Perrins v. Bellamy in 1898, 2 Ch. 521, 
 1899, 1 Ch. 797 — one of the earliest cases on the subject. In 
 that case the trustees had committed a breach of trust by sell- 
 ing leaseholds which they had no power to realise and thereby 
 
[ 5 ] 
 
 diminishing the income available to the liferentrix. The 
 Court held that the trustees had brought themselves within the 
 provisions of the Act and accordingly relieved them from per- 
 sonal liability. As showing the importance attached to what 
 was then a new judicial power I shall quote some passages 
 from the opinions of two of the distinguished Lord Justices 
 who gave judgment in the Court of Appeal. Lord Justice 
 Lindley, after referring to the provision in the English Act 
 of 1896 as "that extremely beneficial enactment," said — 
 " Before 1896 the plaintiff, the liferentrix, would have suc- 
 " ceeded in making these unfortunate trustees liable for the 
 " loss of income under the decisions then applicable to trustees 
 a very hard state of the law and one which shocked one's 
 " sense of humanity and fairness." Lord Justice Bigby also 
 contrasted the position of trustees before and after the Act of 
 1896 — "I remember well," said his Lordship, "in my early 
 days cases in which there having been inadvertent breaches 
 of trust involving no moral blame the consequences were 
 " visited upon the trustees . . . and it shocked one's 
 " conscience. Now all that has been altered." 
 
 I shall take now a case in which the English Court refused 
 to relieve the trustees. In Shaw v. Cates (1909, 1 Ch. 389) 
 the beneficiaries were suing the trustees to make good the loss 
 sustained on a trust investment of £4400. The loan had been 
 made by the trustees on the security of freehold house pro- 
 perty and, before agreeing to make the advance, the trustees 
 had obtained a valuation. The same solicitors, however, acted 
 both for the trustees and the borrower and the valuer had been 
 suggested by the borrower and was employed by the solicitors 
 although their letter instructing the valuer bore to be written 
 by them on behalf of their clients the trustees. Now in the 
 English statute as in the Scottish statute it is enacted that no 
 trustee lending money on property is to be chargeable with 
 breach of duty by reason of the insufficiency of the security 
 provided he conforms to certain conditions prescribed in the 
 statute, one of these being that in making the loan the trustees 
 should have acted on a report made by a competent valuer 
 " instructed and employed independently of any owner of the 
 " property." In defence to the action it was pleaded for the 
 trustees that, assuming that there had been a breach of trust 
 on their part, they had acted honestly and reasonably and 
 ought fairly to be excused. Mr. Justice Parker, however, 
 held that they had not acted reasonably and were not entitled 
 to the statutory relief. Moreover, in more than one case in 
 England the rule has been laid down that where the breach 
 of trust consists in investing the trust funds upon insufficient 
 
[ 6 ] 
 
 security the requirements of the statute law as to obtaining 
 an independent valuation and as to observing the prescribed 
 proportion of two-thirds of the value of the security constitutes 
 a prima facie standard by which reasonable conduct is to be 
 judged. 
 
 I have indicated, very imperfectly no doubt, but as fully 
 as the time permits, the nature and extent and the limitations 
 of the dispensing power which the Legislature has conferred 
 on the Court with the view of alleviating the position of 
 trustees. I must go on now to refer to advantages which are 
 at present possessed by trustees in England, but which have 
 not been extended to trustees in Scotland, and to disadvantages 
 from which Scottish trustees have suffered and still continue 
 to suffer. 
 
 In the first place English trustees, in cases of doubt as to 
 what course they ought to adopt, can safeguard themselves 
 by taking out what is called an originating summons and in 
 that way they obtain judicial guidance on any particular 
 question arising in the administration of the trust. More- 
 over, the procedure referred to is simple and summary and 
 inexpensive and the trustees may be allowed expenses as be- 
 tween agent and client out of the trust estate. Consider what 
 an advantage and what a comfort this would prove to men 
 and women who are desirous of doing their duty as trustees 
 but feel doubt as to how they ought to act and would like 
 to be kept safe. They may have accepted office with no legal 
 training and perhaps only a limited business experience and 
 they may have no proper appreciation of the nature and degree 
 of the care and diligence which the law expects of them or 
 of the particular risks and liabilities to which the law sub- 
 jects them from start to finish. 
 
 Now in Scotland the Court will not administer a trust and 
 will not advise trustees on their administration. In the words 
 of Lord President Inglis trustees are not entitled to come to 
 the Court for advice as to how they ought to exercise their 
 powers. They must exercise their own discretion and if they 
 do so rightly they wUl be safe {Berwick, 1874, 2 E. 92; 
 NoUes Trustees, 1912, S.C. 1230; Dunbar's Trustees, 1915, 
 S.C. 860). Yes, but the anxiety of the trustees is that although 
 they do what they think best it may afterwards be held that 
 they had exercised their discretion wrongly and accordingly 
 what trustees desire is judicial advice which will keep them 
 safe. In many of the cases in which trustees have been held 
 liable for breach of trust it appears that they had not expressly 
 asked the advice of the trust solicitors and that no guidance 
 or advice had been volunteered by the trust solicitors ; while, 
 
[ 7 ] 
 
 in some cases, the trust solicitor had himself been personally 
 implicated in the loss of the trust funds which the Court held 
 the trustees liable to make good. Indeed trustees, if un- 
 familiar with the decisions of the Court, may perhaps, not 
 unnaturally, consider that the trust solicitor, especially if he 
 had acted for the truster in his lifetime, can be relied on 
 spontaneously, on his own initiative, to advise the trustees and 
 to keep them right — ^to see, for example as regards invest- 
 ments, that when the trust funds are lent through them the 
 security is a proper trust security — to take care that the valuer 
 is instructed independently of the borrower — to warn the 
 trustees against yielding to the importunities of a liferenter 
 and making speculative or hazardous loans to secure a high 
 rate of interest — to advise that the trust funds, so far as not 
 duly invested, must be kept pending investment in bank in 
 name of the trustees or otherwise safe and under their own 
 control; and, as regards the distribution of the estate, to ex- 
 plain that before the trustees pay any of the beneficiaries pro- 
 vision must be made not only for payment of all the ordinary 
 creditors but also for meeting the legal claims of the husband 
 or wife and the children of the truster; and, generally, as 
 regards all the varied details of trust administration, to stand 
 by the trustees and to help them with all the professional skill 
 and experience he possesses and with all the care and caution 
 which have been developed in him by the teaching of the Law 
 Courts and the lessons of business life. 
 
 I have said that trustees may be under the belief that they 
 will be looked after and safeguarded by the trust solicitors 
 in such ways as I have been specifying; and to the credit of 
 the legal profession it has been found that in the vast majority 
 — the overwhelming majority — of trusts the solicitors employed 
 by the trustees do most faithfully and efficiently, on their own 
 initiative, keep the trustees on safe and prudent lines in every 
 branch and as regards every detail of the varied trust adminis- 
 tration. Nevertheless every now and then the exceptional case 
 does occur and when it does and the trustees, being without 
 proper advice and guidance, inadvertently commit some breach 
 of trust the trustees themselves must suffer. Thus it has 
 been held, as regards the investment of the trust funds, that 
 the trust solicitor has no legal obligation to volunteer advice 
 to the trustees as to the sufficiency of the security; and that 
 (apart from special circumstances) his only duty is that of a 
 conveyancer, i.e., to see that the title offered by the borrower 
 is a good one and that from a conveyancing point of view the 
 security is duly constituted {Raes v. Meek, 1888, 15 E. 1049, 
 
[ 8 ] 
 
 16 E. (H.L.) 27; Currors v. Walker's Trustees, 1889, 16 B,. 
 355 ; Gleland v. Brownlie, Watson, & Beckett, 1892, 20 R. 152)- 
 
 In order to illustrate the risks whicli trustees in Scotland 
 must run under the existing conditions I will, in the first 
 place, mention (without entering into any details of the cir- 
 cumstances) some of the cases in which trustees have heen 
 held responsihle. Trustees were held personally liable for 
 money left in the hands of the trust solicitor who was himself 
 one of the trustees [Seton v. Dawson, 1841, 4 D. 80). 
 
 Trustees were held bound, before dividing the estate in 
 accordance with the truster's directions, to make provision for 
 meeting a claim of legitim which would emerge if the truster's 
 son reprobated the will {Buik, 1854, 17 D. 44). 
 
 Trustees who had been expressly authorised by the truster 
 to continue to hold certain investments were held liable for 
 loss on investments so retained by them in respect that they 
 had failed to take means to satisfy themselves that these in- 
 vestments were reasonably safe and continued to be safe 
 {Thomson's Trustees, 1890, 18 R. 24; Scott's Trustees, 1895, 
 23 R., at p. 59; Boyd's Trustees, 1908, S.C. 1147; Hender- 
 son's Trustees, 1900, 2 F. 1245). 
 
 " Trustees," said Lord President Inglis, " are just as little 
 " entitled to continue the truster's imprudence as to commit 
 " it themselves " {Browrdie, 1879, 6 R., p. 1236). 
 
 The Court has laid it down that it is the duty of trustees 
 to press for payment of debts outstanding and failing payment 
 within a reasonable time to enforce payment by taking legal 
 proceedings — unless indeed they have a well-founded belief 
 that such proceedings would prove fruitless — moreover, the 
 burden of proving the grounds of such belief lies on the trustees 
 {Forman v. Burns, 1853, 15 D. 362 ; In re Brogden, 1888, 38 
 Ch. 546). 
 
 Trustees who had not thought that the truster's business 
 had any realisable goodwill were held liable 10 years after the 
 truster's death for not having sold the goodwill {Donald v. 
 Hodgart, 1893, 21 R. 246). 
 
 I have mentioned these decisions, as I explained I would, 
 without any details as to the circumstances but, as I think 
 it important to give some fuller and clearer indication of the 
 grounds on which it has been thought that trustees in Scot- 
 land are subjected to unreasonable risks, I will now narrate, 
 as concisely as possible, the material facts in two well-known 
 cases. 
 
 I take first the case of Wyman v. Paterson, 1900, 2 F. 
 (H.L.) 37. The general nature and result of the decision by 
 the House of Lords in that case, stated in a sentence, was 
 
[ 9 ] 
 
 that trustees are bound to keep the trust funds invested or 
 placed in their own names so that they cannot be uplifted 
 without the authority of the trustees. The circumstances were 
 as follows : — ^A bond for ^3000 held by the trustees was paid 
 up in July, 1887. The money was received by the law agent 
 of the trustees, and was retained by him with a view to its 
 re-investment. Between July and December, although no 
 regular meeting was held, two of the trustees called more than 
 once at the agent's office to ask what progress was being made 
 in the way of securing a new investment. The agent's reply 
 was " that he was making inquiries, but had not heard of any 
 " investment that he felt justified in recommending." At a 
 regular meeting of the trustees held on 19th December, the 
 agent reported that he had not yet been successful in finding 
 another investment. One of the trustees then remarked, " The 
 "money will be on deposit receipt?" The agent said 
 "Yes." " Will you be good enough to produce the deposit 
 " receipt ?" asked the trustee. The agent went to the speak- 
 ing tube and then said to the trustee, " My cashier is out, 
 " and he has the deposit receipt, but we will send it round and 
 " show it to the trustees." (I have taken these details as to 
 what passed at the meetings from the print of the evidence 
 in the Session Papers.) Two days later (viz., on 21st Decem- 
 ber) the agent sent a clerk to the trustees with a deposit re- 
 ceipt for £3000 for inspection. This receipt, however, bore 
 date 20th December — the day after the meeting — and was in 
 name of the agent for behoof of the trustees. The trustees 
 did not notice the date of the deposit receipt. What they were 
 struck by, and what they disapproved of, was that the receipt 
 was in the agent's name, and they sent him word to have it 
 put in their own names. On 23rd December one of the trustees 
 called at the agent's office to see if the trustees' instructions 
 had been carried out, but was told that owing to a serious 
 accident, the agent had been unable to attend to business. 
 Between 23rd December and 18th January this trustee called 
 repeatedly at the agent's office, but was met on each occasion 
 with the explanation that the agent was still too ill to attend 
 to business. On 18th January the agent cashed the deposit 
 receipt, and appropriated the proceeds to his own use. Prior 
 to that date the trustees had no doubt of the agent's solvency 
 or integrity. The trust settlement bore an express clause of 
 immunity, empowering the trustees to appoint a factor, and 
 declaring that they should not be liable for his intromissions, 
 " ISTeither shall they be liable for any agent, who, in trans- 
 " acting the business of this trust, shall receive any part of 
 "my estate into his hands." 
 
[ 10 ] 
 
 Now, let us see how tlie trustees were dealt witt by the 
 Court. In an action of damages brought by a beneficiary 
 against them, the Lord Ordinary (Lord Low) assoilzied them, 
 and the First Division unanimously adhered ; but on an appeal 
 to the House of Lords the decision of the Lord Ordinary and 
 the Inner House was reversed, and the trustees were found 
 liable. Lord Morris dissented, and in doing so made a strong 
 protest — " In my opinion," he said, " on the facts of the case, 
 " a decision against the trustees would be a draconic decision, 
 " and would be an additional terror to any honest and solvent 
 " person acting as a trustee." 
 
 I take now as my second example the case of the Heritable 
 Securities Investment Association v. Millar's Trustees, 1893, 
 20 E. 675, to show how strictly the law enforces the rule that 
 trustees must settle all debts of which they have knowledge 
 before they make any payments to the legatees or beneficiaries. 
 The Heritable Association held personal bonds by the deceased 
 for £75,000, secured by an absolute conveyance of valuable 
 heritable property. Shortly after the deceased's death part 
 of the property was sold, and the Heritable Association, on 
 receiving a payment to account of £25,000, disburdened the 
 part sold, and left the balance of their loan, viz., £50,000 
 outstanding secured by the remainder of the property, which 
 at that time was considered sufficient for the purpose. Things 
 remained in this position for seven or eight years after the 
 death of the testator, by which time the subjects retained in 
 security had greatly deteriorated in value. Six or seven years 
 later, that is to say about fifteen years after the death of the 
 testator, the Heritable Association raised an action against the 
 trustees for payment of trust funds, amounting to over £11,000, 
 which they alleged had been improperly paid by the trustees 
 out of the income to the truster's widow and family as bene- 
 ficiaries. 
 
 The Lord Ordinary (Lord Wellwood) assoilzied the trustees 
 from the claim. He held, as the result of the evidence, that 
 it had been proved that the payments out of income to the 
 widow and children had been made by the trustees in the 
 honest belief that the trust estate was solvent, and that the 
 debt due to the Association was sufficiently provided for. But 
 the First Division of the Court of Session by a majority re- 
 versed Lord Wellwood's decision. Lord M'Laren dissented 
 from the judgment of the Division on the broad ground that 
 there was no personal obligation on the trustees for the debts 
 due by the deceased to his creditors, that the obligation of 
 the trustees was merely to make the deceased's estate forth- 
 coming in a due course of administration, and that in the case 
 
[ 11 ] 
 
 under consideration that obligation had been duly fulfilled. 
 Let me now give the ipsissima verba of the judge, whose name 
 will ever be associated witli the Scottish law relating to wills 
 and trusts. Here are the concluding sentences of his opinion — 
 " I may say with the greatest deference and respect, and 
 ' I do think that the rule which your lordships are laying 
 ' down is one that will operate with the most cruel hardships 
 ' and injustice to families, because it means this, that 
 * wherever there are outstanding obligations — and nothing is 
 ' more common in trust management, where the testator was 
 ' a merchant or manufacturer, than outstanding obligations — 
 ' the whole estate, heritable and moveable, is to be laid under 
 ' an interdict, and not one penny can be paid to the family 
 ' of the testator, because possibly at some future period in- 
 ' vestments which appeared ample may fail, and the creditors 
 ' will hold the trustees responsible. I am quite sure that if 
 ' I had been consulted at the bar in such a case as this, I 
 ' would, without a moment's hesitation, have advised the trus- 
 ' tees not only that it was permissible but that it was their 
 ' positive duty to make these payments to the beneficiaries. 
 ' I should have so acted myself as a trustee, and I may say 
 ' that I am not sure that I would not do so again if the occasion 
 ' should occur." 
 
 With regard to the various cases to which I have been 
 referring the following comments and queries suggest them- 
 selves. No doubt if trustees got to know of these cases or 
 other cases like them their eyes might be opened to what the 
 law expects of them. But under existing conditions how is 
 the trustee, who is not a lawyer, to get to know what the Court 
 from time to come has laid down regarding the duties of 
 trustees? How, for example, is he to obtain the benefit of 
 the object-lessons afforded by the decisions? And yet when 
 the question of his alleged breach of trust, or negligence, is 
 being tried, he may not escape liability by proving that he 
 did resolutely mean, and did anxiously try to do his duty, if 
 at the same time he has to admit that he did not know the 
 duty and that he failed to perform it. 
 
 In view of cases and decisions of the kind to which I have 
 been referring it is not surprising that again and again over 
 a long period of years the want of some means of safeguarding 
 trustees has been adversely commented on. In 1890 Lord 
 President Inglis, in the course of giving his opinion in^an 
 action against a trustee, spoke as follows: — "Tour lordships 
 " are well aware how little sympathy I have with the rule 
 " now established by judgment of the House of Lords that 
 
[ 12 ] 
 
 " the law requires of a gratuitous trustee the same degree of 
 " diligence that a man of ordinary prudence would exercise 
 " in the management of his own affairs. As a definition of 
 " duty I think the rule is vague and inadequate and in its 
 " application it has been found to be often severe and unjust. 
 " For this evil I hope some legislative remedy will be found " 
 {Carruthers v. Cairns, 1890, 17 E. 769, at p. 780). 
 
 In 1895 that great lawyer and judge. Lord Watson, when 
 giving evidence in an inquiry before a Select Committee on 
 the Administration of Trusts, expressed a clear opinion that 
 the Courts in Scotland ought to give more assistance to trustees 
 in the course of their administration than it was possible for 
 those trustees to obtain under the law and practice then exist- 
 ing, and he added that it would be a great advantage to trus- 
 tees in Scotland to have the right to approachjthe Court to the 
 same extent as was enjoyed by an English trustee {Report- 
 Trusts Administration, 1895, p. 162). 
 
 Then in 1918 Lord Skerrington referred to the position of 
 Scottish trustees as follows: — " It has been said and the say- 
 " ing correctly represents the law of Scotland that the Court 
 " will not advise trustees. If trustees possess a power, how- 
 " ever difficult and delicate may be its exercise, however serious 
 " the responsibility which they may incur, by either exercising 
 "it or refusing to exercise it, the Court will not lift a finger 
 "to help them; it declines to advise them. I should have 
 " thought," added his Lordship, " that a primary purpose 
 "of a Supreme Court of Equity was to assist trustees and 
 " beneficiaries in circumstances of difficulty by aiding them in 
 " the exercise of powers which already belong to them in cir- 
 " cumstances where such assistance was desirable " {Hall's 
 Trustees v. M'Arthur, 1918, S.C. 646, at p. 654). 
 
 These are weighty opinions ; and they go far because of 
 their intrinsic importance to demonstrate the necessity for 
 some radical change in the comparatively unsatisfactorily 
 conditions under which trustees in this country must discharge 
 their administrative duties. 
 
 I think that I have now sufficiently indicated the difficulties 
 in which trustees may be placed in the course of their adminis- 
 tration of a Scottish trust — difficulties which in England can 
 be solved with ease and economy by securing judicial advice 
 and guidance under an originating summons. So far as re- 
 gards this matter, however, the Act of 1921 leaves Scottish 
 law and procedure as they were. 
 
 Another means of safeguarding trustees has been provided 
 in England under the Judicial Trustees Act of 1896 and the 
 
[ 13 ] 
 
 relative Judicial Trustee Rules of 1897. The statute provides 
 for the appointment of judicial trustees on the application of 
 a truster or intending truster or of any trustee or any bene- 
 ficiary; and as regards the trustees any fit or proper person 
 suggested in the application may be appointed or if the Court 
 is not satisfied of the fitness of the person suggested then an 
 official of the Court may be appointed. The judicial trustee, 
 if not an official of Court, must give security unless the Court 
 dispenses with it; but any premium payable by a judicial 
 trustee to guarantee his intromissions may be paid out of the 
 trust estate if the Court so directs. The whole procedure is 
 of the simplest kind. The application is by originating sum- 
 mons in the Chancery Division or by petition in the County 
 Court as regards trusts not exceeding £500 in value. The 
 judicial trustee may at any time request the Court to give him 
 directions as to the trust administration by letter addressed 
 to the officer of Court without any further formality and the 
 Court may give directions by letter signed by the officer also 
 informally. The trust funds, so far as not invested, are kept 
 in bank and the deeds and documents are retained in the 
 custody of the judicial trustee. The trust accounts are made 
 up and audited annually. The judicial trustee may resign 
 office and the management of the judicial trustee may be dis- 
 continued by the Court on the application of any one interested. 
 This procedure of judicial trustee administration was a new 
 departure in English law in 1896 and it was undoubtedly 
 suggested and founded on the Scottish system of administra- 
 tion by judicial factors. As has been indicated, however, by 
 the details which I have given, the English judicial trustee 
 administration represents developments of the judicial factors 
 administration which at least in certain respects might, as I 
 think, be advantageously adopted and applied in Scotland. 
 
 I have been calling attention to what I regard as defects 
 in one small part of our system of law. I realise, however, 
 that the development of the system towards perfection repre- 
 sents a gradual process of evolution which never ends. The 
 development is slow; it waits on the formation of opinion on 
 the part of the legal profession and from time to time, by 
 reason of the force and concentration of that opinion, some 
 definite advance is at last realised. To-night I am addressing, 
 and hoping to interest, a tribunal of youth. Amongst its 
 members how many will have the spirit to do their bit, con- 
 sistently and courageously, towards making the law of Scot- 
 land give ever fuller expression to the eternal principles of 
 justice and fairness? One more thought: I am an old Presi- 
 
[ 14 ] 
 
 dent of the Scots Law Society; I have pleasant recollections 
 of my associations with it ; and I am glad to speak to the men 
 who are now carrying on its traditions. What should be my 
 wish for them ? This, I think : that when they come to my age 
 they may be able to feel and say truthfully and gratefully, 
 what I myself am thinking and saying now — " Sweet is the 
 " memory of past labours !" 
 
wmm 
 
 i