Scottish Court of Session Decisions

Lord President—In this case of Alexander Mitchell the entry in the register stands as follows:—“Alexander Mitchell, residing at Auchinclutha, Hamilton; Mrs Katherine M'Lannahan or Waters, widow of the deceased Andrew Waters, who resided at Belville, Edinburgh; and James Maclaine Waters, residing at Belville aforesaid, John Perks M'Lannahan Waters, George Thomas Brown Waters, and Mary M'Kinlay Waters, children of the deceased, and all residing at Belville, original and assumed executors of the deceased, confirmed as such, conform to confirmation in their favour by the Commissariat of Edinburgh, dated 12th July 1875.” And this entry in the register stands down to this moment undisturbed and unrecalled. But the petitioner Alexander Mitchell became desirous of resigning his office as trustee, and he proceeded, under the Trust Act, 24 and 25 vict. cap. 84, to make a minute in the sederunt book of the trust on l6th October 1878, by which he resigned, in terms of the statute, his office of trustee and executor, and all the other trustees, including among them the beneficiaries, signed this minute in token of their acquiescence in the resignation. He thereafter, on 17th October, the following day, caused to be delivered to the secretary of the City of Glasgow Bank a certified copy of the minute of resignation, and requested that in pursuance thereof his name should be removed from the stock ledger or register of members of the said bank, and it is made a matter of admission that it was the practice of the bank on receiving notice of the resignation of a trustee or executor to make an entry to that effect by a note in the stock ledger at the place where the name of the person resigning was entered. But the directors declined either to make the alteration upon the register, which was the first proposal made by the petitioner, or to make a note on the register of the resignation which had been intimated.

I am desirous in this case of not expressing any opinion as to what might be the effect of a resignation by a trustee or executor, and the intimation of that resignation to the bank directors, and the entry upon the register of such a kind as is mentioned in that admission which I have just read, where the bank is carrying on a business, and nothing has occurred in the nature of an advance towards liquidation; but in the present case the circumstances are very different from these. I need not recapitulate them, because I have already had occasion to express my views on them in the case of Nelson Mitchell, which we have disposed of, and it appears to me, in accordance with the judgment we pronounced in Nelson Mitchell's case, that it was impossible for the directors to go upon the admission of the beneficiaries made on the 17th October. I take it for granted, in disposing of this petition, that, if the resignation and its intimation had been made while the bank was in a state of solvency and carrying on business, this notice upon the register, which is said to have been made in practice, would have been sufficient to discharge this petitioner of liability; but it is just because that might have been its effect, and is, as contended by the petitioner, to be its effect, that I think it was altogether out of the question for the directors to take that step.

It is to be observed that it is not the mere intimation of the resignation that is subsequent to the declaration of insolvency, but it is the resignation itself; and I think no effect can be given to what is done by a partner of this company after the declaration of insolvency to free himself from his liabilities. That is the simple ground on which I proceed in refusing this petition.

Lord Deas—I am entirely of the same opinion. The doors of the bank were shut on the 2d October, and on 5th October there was a declaration by the dirctors to which allusion has been made, and which, as we have already held in Nelson Mitchell's case, prevented anything being done after that. The principle upon which we proceeded in that case applies to the case of resignation. Not only was the register allowed to stand as it was down to 17th October, but until 17th October there was no resignation. I cannot see how it is possible, consistent with the judgment we have pronounced in the other case, to say that resignation is to take effect, and that the petitioner's name can be removed from the register.

Lord Mure—I think this case is substantially ruled by the decision in Nelson Mitchell's case. We have held in that case that, at all events after the 5th of October, when intimation was made that the company of which this gentleman is a shareholder was utterly insolvent, the register of shareholders could not be altered by the directors, and it was impossible for the petitioner here by executing a resignation to have himself put in a better position than he stood in at that date. When the circular was issued he stood registered and liable as a trustee.

It is admitted that his resignation was accepted by his co-trustees, and is a good one; but then his resignation was effected at a time when no act of his could take him out of the position he then stood in, and he, having been a shareholder of the company, was bound to have known that on the 5th of October the company was insolvent, and unable to carry on its business any longer.

I think it right to say that I desire to reserve my opinion as to what may be the decision in any case that may come before the Court wherein a trustee has resigned and his resignation has been accepted by his co-trustees at an earlier date in October than that at which the bank was known to be insolvent. It is said by the parties that no note of the managers of the bank is necessary if the resignation of a trustee is a good one and other parties are left to represent the trust-estate. I give no opinion on that point either.

Lord Shand—In the case of Nelson Mitchell I

Page: 167↓