1031. Responsibility of Trustees.-Trustees may be liable either as trustees or as individuals.

1032. As trustees they are liable to the extent of the trustfunds for the faithful execution of the trust, and for the fulfilment of obligations undertaken by themselves or their factor. As individuals, they are liable when, under cover of their character of trustees, they occasion damage to a third party, resist or culpably neglect the performance of their duty, or exceed their powers. (Bell's Prin. 1999, 2000; Menzies, p. 684.)

1033. Trustees cannot be auctores in rem suam; they cannot buy or borrow from the estate, or in short have any commercial dealings with it with a view to their own pecuniary advantage. (Bell's Prin. 1998, 13.)

1034. As trust is not only a gratuitous and troublesome, but too often also a thankless office, trust-deeds generally contain, as an inducement to accept, a clause freeing the trustees from liability for omissions, and limiting their responsibility to their own actual intromissions. But difficulties not unfrequently arise as to the distinction between intromissions and omissions; and it may be stated as a general rule, that where negligence possesses the positively culpable character which the law has attempted to define as culpa lata, the exempting clause will not protect the trustee. (Menzies, 684, and cases cited; Bell's Prin. 2000.)

1035. Power to resign.-With the same object, it is now usual to insert in family trust-deeds a clause empowering the trustees to resign, and the validity of such a clause has been sustained by the Court. (Gilmour v. Gilmour's Trustees, Feb. 7, 1852.)

1036. With reference to trusts constituted and liabilities incurred subsequent to 6th August 1861, the stat. 24 and 25 Vict. e. 84 provides that "all trusts constituted by virtue of any deed or local Act of Parliament, under which gratuitous trustees are

nominated, shall be held to include the following provisions, unless the contrary be expressed,-that is to say, power to any trustee so nominated to resign the office of trustee; power to such trustee, if there be only one, or to the trustees so nominated, or a quorum of them, to assume new trustees, a provision that a majority of the trustees accepting and surviving shall be a quorum, and a provision that each such trustee shall only be liable for his own acts and intromissions, and shall not be liable for the acts and intromissions of co-trustees, and shall not be liable for omissions." (Sec. 2.) The Act does not extend to trustees appointed under the contracts of trading companies. (Sec. 3.)

1037. The privilege of resigning the office of gratuitous trustee, which is conferred by 24 and 25 Vict. c. 84, sec. 1, and 26 and 27 Vict. c. 115, sec. 1, is farther extended by 30 and 31 Vict. c. 97, sec. 10. It provides-That no trustee to whom any legacy, or bequest, or annuity is expressly given on condition of his accepting the office of trustee, shall be entitled to resign, unless otherwise provided by the terms of the trust-deed: (sec. 1) that when a trustee who resigns, or the representatives of a trustee who has died, cannot obtain a discharge from the remaining trustees, and when the beneficiaries are unable, from absence, incapacity, or otherwise, to grant a discharge, the Court may on petition, after such intimation and inquiry as may be thought necessary, grant such discharge, and if considered reasonable, direct the expenses of the application to be paid out of the trustestate (sec. 9) that (1) a trustee entitled to resign may do so by minute entered in the sederunt book signed by himself and the other trustee or trustees acting at the time;-(2) or by signing a minute of resignation in the form of the Schedule A annexed to the Act, or to the like effect, and registering the same in the books of Council and Session,-but he shall in this case be bound to intimate the same to his co-trustee or trustees, and the resignation shall take effect from and after the expiry of one calendar month after the last date of the intimation; but if

the trustee or trustees to whom it is given is not within Scotland, the resignation shall not take effect until after the expiry of three months from its date; and where the residence of any trustee to whom intimation requires to be made is not known, the same shall be given in the usual form, and shall take effect after the expiry of six months -(3) a trustee who is at the time the sole acting trustee cannot resign until, with consent of the beneficiaries, of full age, and capable of acting at the time, he has assumed new trustees, who shall have declared their acceptance of the trust, or the Court have, on his application, after due intimation, appointed new trustees or a judicial factor; (4) any trustee who is either retiring or has retired shall be bound to grant, at the expense of the trust, all deeds necessary to divest himself of the trust-property or convey it to the acting trustees or judicial factor. According to these Acts, a gratuitous trustee is entitled to resign; and a gratuitous trustee is one who receives no pecuniary or valuable consideration for performing the duties of trustee, and who, apart from his acceptance of the office, is under no special obligation to act. In this definition are included gratuitous trustees who are appointed or hold office ex officio.

1038. It is provided by 30 and 31 Vict. c. 97, sec. 2, that trustees shall in all cases where the same are not at variance with the terms and purposes of the trust, have power—(1) To appoint factors and law-agents, and to pay them a suitable remuneration. (2) To discharge trustees who have resigned, and the representatives of trustees who have died. (3) To grant leases of 21 years' duration of agricultural subjects, and 31 years' duration of minerals, and to remove tenants. (4) To uplift, discharge, and assign debts due to the trust-estate. (5) To compromise, or to submit and refer all claims connected with the trust-estate. (6) To grant all necessary deeds for carrying into effect the powers vested in them. (7) To pay the debts due by the truster or affecting the trust-estate, without

requiring constitution, where they are satisfied that they are proper debts of the trust. It is enacted by the same Act (sec. 3) that the Court may, on the application of the trustees, if they are satisfied that the same is expedient for the execution of the trust, or all the beneficiaries, without the authority of the Court, if of full age and capable of acting, grant to the trustees power-(1) To sell the trust-estate, or any part of it. (2) To grant feus or long leases of the estate, or any part of it. (3) To borrow money on the security of the estate, or any part of it. (4) To excamb any part of the trust-estate which is heritable.

1039. [The Act of 1867 applies solely to trusts in which the trustees act gratuitously. (Mackenzie, 1872, 10 M. 749.) It does not apply to an English trust possessing heritable property in Scotland. (Brockie, 1875, 2 R. 923.)]

BOOK II.

OF THE RELATIONS BETWEEN INDEPENDENT MEMBERS OF THE COMMUNITY.

1040. The subject of trusts and trustees, belonging partly to the arrangements of the family, and partly to those between persons connected by no other ties than those of a common country, forms, as it were, a connecting link between what may be regarded as the two great natural divisions of Private Law. In passing from the contract of marriage, and its consequences in the domestic relations and the law of succession, to such contracts as sale, letting and hiring, insurance, partnership, agency and the like, we finally quit the family and its laws, and enter upon the arrangements by which intercourse is carried on between independent members of civilised communities.

1041. To the whole of this vast department, when regarded as exclusive of the relations of the citizen to the governing power, and using the words in a very comprehensive sense, the name of Mercantile Law may not inappropriately be given.

1042. From the extensive connection which they enjoyed with the Continent, the lawyers and merchants of Scotland become early acquainted with those commercial arrangements which the Lombards, and other trading communities of Italy and Spain in the south, and the members of the Hanseatic League (Innes's Scotland in the Middle Ages, pp. 151, 152, 164, and 170) in the north of Europe, had based on the principles which the Roman jurisprudence had borrowed from the maritime system of the Rhodians and other trading nations of antiquity. To this cause is to be ascribed the fact that the usages of trade were extensively known, and that down to the