Sim and Others v. Fergusson and Others (Muir's Trustees) [1906] ScotLR 43_795 (19 July 1906)

Sim and Others v. Fergusson and Others (Muir's Trustees) [1906] ScotLR 43_795 (19 July 1906)

The trustees acted within their powers by investing trust funds in deposit-receipts of colonial banks, as 'personal security' in the trust deed includes security based on personal obligation of the borrower. There was no breach of trust as the investments were not shown to be improvident or negligent, and the banks were in good credit at the time of investment.

Citation
[1906] ScotLR 43_795
Parties
Pursuer: Alexander Sim and Others; Defender: David Scott Fergusson and Others (Muir's Trustees)
Jurisdiction
Scotland
Judgment Date
19 July 1906
Procedural Posture
Civil (trusts) / Reclaiming Motion (appeal) From Lord Ordinary's Interlocutor
Outcome
Reclaiming note refused; interlocutor of Lord Ordinary adhered to.
Legal Topics
Trustee Powers, Investment of Trust Funds, Personal Security, Breach of Trust, Liability of Trustees
Trusts and Estates Banking and Finance Trustee Powers Investment of Trust Funds Personal Security Breach of Trust Liability of Trustees

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Parties

Alexander Sim and Others

Pursuer

David Scott Fergusson and Others (Muir's Trustees)

Defender

Procedural Posture

Civil (trusts) / Reclaiming Motion (appeal) From Lord Ordinary's Interlocutor

Legal Issues

  1. 1 Whether trustees investing trust funds in deposit-receipts of colonial banks acted within their powers under a clause authorising investment on 'heritable or good personal security'.
  2. 2 Whether 'personal security' includes mere personal obligation of the borrower (i.e., the bank) or requires security over property.

Ratio Decidendi

The trustees acted within their powers by investing trust funds in deposit-receipts of colonial banks, as 'personal security' in the trust deed includes security based on personal obligation of the borrower. There was no breach of trust as the investments were not shown to be improvident or negligent, and the banks were in good credit at the time of investment.

Court Disposition

Reclaiming note refused; interlocutor of Lord Ordinary adhered to.

Orders

  • Refused the reclaiming note (appeal).
  • Adhered to the Lord Ordinary's interlocutor repelling the pursuers' objection and pleas-in-law.