Gordon's Trustees v. Young and Others [1910] ScotLR 323 (20 January 1910)

Gordon's Trustees v. Young and Others [1910] ScotLR 323 (20 January 1910)

The Young family, having pledged their property as security but not being personally bound in the bond, were secondary cautioners only. As the principal obligation was discharged by payment from Thow, the security was extinguished, and Thow's trustee had no right to claim relief against the trust estate. No agreement to the contrary was proved, and the assignation from the bank did not alter the substantive rights of the parties.

Citation
[1910] ScotLR 323
Parties
Pursuers and Real Raisers: Charles Duff Young, Cove, Kincardineshire, and others, testamentary trustees of the late Robert Gordon; Defenders (beneficiaries Under the Trust): C.D. Young (individual), surviving children of the late John Young, and representatives of Mrs Ann Young or Gray; Claimant (thow's Trustee, Reclaimer): James Brown Nicol, architect, Aberdeen, testamentary trustee of the late George Thow; Defender: Arthur Fyfe Mortimer, ship chandler, Aberdeen
Jurisdiction
Scotland
Judgment Date
20 January 1910
Procedural Posture
Multiplepoinding / Inner House, First Division, Reclaiming Motion After Proof and Interlocutor by Lord Ordinary
Outcome
Claim repelled; interlocutor of Lord Ordinary adhered to; Thow's trustee not entitled to relief against the trust estate beyond the principal debtor's share.
Legal Topics
Cautioner (surety), Relief Between Sureties, Primary and Secondary Cautioners, Cash Credit Bond, Assignation of Security, Parole Evidence
Trusts and Estates Suretyship Banking Law Cautioner (surety) Relief Between Sureties Primary and Secondary Cautioners Cash Credit Bond Assignation of Security +1 more

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Parties

Charles Duff Young, Cove, Kincardineshire, and others, testamentary trustees of the late Robert Gordon

Pursuers and Real Raisers

C.D. Young (individual), surviving children of the late John Young, and representatives of Mrs Ann Young or Gray

Defenders (beneficiaries Under the Trust)

James Brown Nicol, architect, Aberdeen, testamentary trustee of the late George Thow

Claimant (thow's Trustee, Reclaimer)

Arthur Fyfe Mortimer, ship chandler, Aberdeen

Defender

Procedural Posture

Multiplepoinding / Inner House, First Division, Reclaiming Motion After Proof and Interlocutor by Lord Ordinary

Legal Issues

  1. 1 Whether a cautioner (surety) who pays the debt is entitled to relief against trust estate property pledged by non-personally bound parties as security for the debt.
  2. 2 Whether parole evidence is admissible to prove the relationship and agreement between co-obligants and security owners inter se.
  3. 3 Whether the assignation of the bank's rights to the cautioner alters the substantive rights to the security.

Ratio Decidendi

The Young family, having pledged their property as security but not being personally bound in the bond, were secondary cautioners only. As the principal obligation was discharged by payment from Thow, the security was extinguished, and Thow's trustee had no right to claim relief against the trust estate. No agreement to the contrary was proved, and the assignation from the bank did not alter the substantive rights of the parties.

Court Disposition

Claim repelled; interlocutor of Lord Ordinary adhered to; Thow's trustee not entitled to relief against the trust estate beyond the principal debtor's share.

Orders

  • Claimant Nicol (Thow's trustee) ranked and preferred to one-fifth share of the fund in medio (the share of Charles Duff Young) only.
  • Young family members (other than C.D. Young) ranked and preferred to the balance of the fund.