Buchanan and Spouse v. Glasgow University Court and Others [1908] ScotLR 49 (03 November 1908)

Buchanan and Spouse v. Glasgow University Court and Others [1908] ScotLR 49 (03 November 1908)

The trustees had express power to borrow and the trust deed contained an immunity clause absolving lenders from inquiry into the application of funds. There was no relevant averment of fraud or knowledge on the part of the University Court. The lender's only duty was to check the existence of the power to borrow, not the purpose or application of the funds. The pursuers failed to state a relevant case against the University Court.

Citation
[1908] ScotLR 49
Parties
Pursuers: John M'Gregor Buchanan and his wife; Defenders: Glasgow University Court; Defenders: Trustees under James Buchanan's trust-disposition and settlement
Jurisdiction
Scotland
Judgment Date
03 November 1908
Procedural Posture
Civil / Appeal (reclaiming Motion) From Lord Ordinary's Allowance of Proof Before Answer
Outcome
Defenders (University Court) assoilzied; interlocutor of Lord Ordinary recalled; pursuers' averments not relevant to support the second conclusion.
Legal Topics
Trustee Powers, Borrowing by Trustees, Lender's Duty of Inquiry, Ultra Vires Acts, Priority of Trust Beneficiaries, Liability of Lenders, Immunity Clauses in Trusts
Trusts and Estates Property Law Trustee Powers Borrowing by Trustees Lender's Duty of Inquiry Ultra Vires Acts Priority of Trust Beneficiaries Liability of Lenders +1 more

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Parties

John M'Gregor Buchanan and his wife

Pursuers

Glasgow University Court

Defenders

Trustees under James Buchanan's trust-disposition and settlement

Defenders

Procedural Posture

Civil / Appeal (reclaiming Motion) From Lord Ordinary's Allowance of Proof Before Answer

Legal Issues

  1. 1 Whether trustees had power to borrow on security of trust estate for purposes not specified in the trust
  2. 2 Whether lender (University Court) had a duty to inquire into the application of borrowed funds
  3. 3 Whether the bond and disposition in security should be postponed to the annuity or reduced pro tanto

Ratio Decidendi

The trustees had express power to borrow and the trust deed contained an immunity clause absolving lenders from inquiry into the application of funds. There was no relevant averment of fraud or knowledge on the part of the University Court. The lender's only duty was to check the existence of the power to borrow, not the purpose or application of the funds. The pursuers failed to state a relevant case against the University Court.

Court Disposition

Defenders (University Court) assoilzied; interlocutor of Lord Ordinary recalled; pursuers' averments not relevant to support the second conclusion.

Orders

  • Interlocutor of Lord Ordinary recalled
  • Defenders (University Court) assoilzied (absolved)