Assets Co., Ltd v. Bain's Trustees [1904] ScotLR 41_517 (28 May 1904)

Assets Co., Ltd v. Bain's Trustees [1904] ScotLR 41_517 (28 May 1904)

The pursuers are entitled to decree of reduction if it is established that Bain's statements were untrue in fact (per majority), or untrue to his knowledge and belief (per Lord Kinnear), and that concealment of assets occurred. However, the trustees, having distributed the estate and been discharged, are functi officio and cannot be made personally liable; any operative decree must be directed against the beneficiaries. The plea of mora is not sufficient to bar inquiry at this stage, and proof of the pursuers' averments is allowed.

Citation
[1904] ScotLR 41_517
Parties
Pursuer: Assets Company, Limited; Defender: William Bain's Trustees (including William Bain and others); Defender: Certain beneficiaries under William Bain's settlement
Jurisdiction
Scotland
Judgment Date
28 May 1904
Procedural Posture
Civil / Appeal and Proof Before Answer
Outcome
Interlocutor of Lord Ordinary recalled; proof before answer allowed on specific averments of concealment; trustees assoilzied (absolved) after proof; action against beneficiaries remains open.
Legal Topics
Reduction of Discharge, Fraudulent Concealment, Trustee Liability, Mora (delay), Competency of Actions Against Discharged Trustees, Constitution of Claims Against Trust Estate
Trusts and Estates Contract Law Company Law Banking Law Civil Procedure Reduction of Discharge Fraudulent Concealment Trustee Liability +3 more

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Parties

Assets Company, Limited

Pursuer

William Bain's Trustees (including William Bain and others)

Defender

Certain beneficiaries under William Bain's settlement

Defender

Procedural Posture

Civil / Appeal and Proof Before Answer

Legal Issues

  1. 1 Is an action competent against trustees after the trust estate has been distributed and trustees discharged?
  2. 2 Does fraudulent concealment or misrepresentation by a contributory justify reduction of a discharge and compromise agreement?
  3. 3 Is proof of fraud necessary to reduce a discharge based on untrue statements?

Ratio Decidendi

The pursuers are entitled to decree of reduction if it is established that Bain's statements were untrue in fact (per majority), or untrue to his knowledge and belief (per Lord Kinnear), and that concealment of assets occurred. However, the trustees, having distributed the estate and been discharged, are functi officio and cannot be made personally liable; any operative decree must be directed against the beneficiaries. The plea of mora is not sufficient to bar inquiry at this stage, and proof of the pursuers' averments is allowed.

Court Disposition

Interlocutor of Lord Ordinary recalled; proof before answer allowed on specific averments of concealment; trustees assoilzied (absolved) after proof; action against beneficiaries remains open.

Orders

  • Proof before answer allowed on concealment of promissory notes and reversionary interest.
  • Trustees assoilzied (absolved) from liability after proof.