No. 2. conveyance. They were just as binding on the railway company before the conveyance as after it. Whatever force they have is derived solely from Mar. 20, 1901. the railway statutes and the decreet-arbitral. The conveyance merely pur-Duke of Fife ports to repeat what is contained in the award. If there be any error or v. Great North slip in the repetition, or if the words seem to have some different meaning Railway Co. when found in the conveyance, the error or slip must be corrected, or the matter put right, by referring to the decreet-arbitral. preserve Now, the decreet-arbitral is, I think, perfectly clear. It finds that the sums assessed as purchase-money and compensation are in full satisfaction of all claims competent to the landowner against the railway company, but at the same time, by way of precaution, it notices that there are certain obligations still incumbent upon the company, and that those obligations, so far at anyrate as they have to be considered for the purposes of the present case, are obligations falling upon the company under the Railway Clauses Consolidation Act. The first of those obligations is the obligation the effective drainage of the pursuer's land "so far as the same may be interfered with by the construction of the works." Instead of importing an obligation of indefinite duration involving an indefinite liability, the declaration in question is, in my opinion, merely a recognition of an existing liability cast upon the company by section 60 of the Railway Clauses Act, but limited and controlled by section 65. By section 60 the company became bound to make, for the accommodation of adjoining owners, all such culverts, drains, and other passages as would be "sufficient at all times to convey the water as clearly from the lands lying near or affected by the railway as before the making of the railway, or as nearly so as may be," and such works, it is to be observed, are to be made "from time to time as the works proceed." What is that but an obligation to "preserve the effective drainage of the land so far as the same may be interfered with by the construction of the works"? Perhaps it would have been better to have kept to the language of the Act. cannot see the slightest difference in meaning and effect between the two expressions. And in each case the provision must be read in connection with the limitation of liability prescribed by the statute which the Court below has unfortunately ignored. But for my part I The next part of the declaration provides for the maintenance of the accommodation works when made; and then there is a reference to the Railway Clauses Consolidation (Scotland) Act, 1845, which in the decreetarbitral plainly applies to the obligation to preserve effective drainage as well as to the obligation to maintain the accommodation works. The parallel clause in the conveyance is somewhat elliptical, and taken by itself perhaps somewhat obscure, but it must, I think, be read by the light of the decreet-arbitral, and it must, I think, have the same meaning as the original provision from which it purports to be copied. I am therefore of opinion that the conveyance does not impose upon the railway company any such obligation as that to which the First Division of the Court of Session have found them liable, and I am of opinion that the interlocutors appealed from ought to be reversed, and the action dismissed, with costs both here and below. of Scotland No. 2. Mar. 20, 1901. Duke of Fife v. Great North of Scotland LORD MORRIS.-I am of the same opinion, and I can add nothing to the reasons which have been given by my noble and learned friend on the Woolsack, and my noble and learned friend opposite, Lord Macnaghten. LORD SHAND.-I am also of opinion that the interlocutors appealed from Railway Co. should be reversed, and the judgment of the Lord Ordinary restored, and I concur in the opinions of my noble and learned friends the Lord Chancellor and Lord Macnaghten. It is, in my opinion, taking much too narrow a view of the case to take the disposition of 1859, and what, indeed, I regard as a part only of a clause in that deed, as decisive of the questions between the parties. The decreetarbitral, which is the basis of the disposition, and which is therein fully referred to, and the Railway Clauses Act, must also be looked at and be regarded as settling the rights of the parties. It was, indeed, in giving effect to the decreet-arbitral that the disposition itself was, as that deed bears, granted; and it is clear that section 65 of the Railway Clauses Act of 1845 applies, and is by the decreet-arbitral expressly made to apply, to the case. The result is that the company is not bound, after the prescribed period, which elapsed many years ago, to execute the drainage works which have been demanded. The reference to the decreet-arbitral in the disposition itself in my opinion makes it clear that the whole clause as to the drainage of the lands "in so far as the same may be interfered with by the railway works," and the keeping up of the accommodation works there enumerated which the disposition itself contains, is one and the same continuous clause, and gives effect only to sections 60 and 65 of the Railway Clauses Act of 1845 with the limitation as to time which the statute prescribes in imposing the obligation of maintenance on the railway company. That limitation as to time is sufficient to exclude the present action, which therefore entirely fails. LORD BRAMPTON.-Having heard the judgment delivered by the Lord Chancellor, and having availed myself of the opportunity afforded me to read and carefully consider the judgment which my noble and learned friend Lord Macnaghten has just read, I desire only to express my entire concurrence in the views they have announced. I have nothing to add, feeling that those noble and learned Lords have in far better language than I have at my command embodied the opinion I had also formed for myself. ORDERED that the judgment appealed from be reversed, and that DYSON & Co.-GORDON, FALCONER, & FAIRWEATHER, W.S.- No. 3. May 7, 1901. Patrick. ALEXANDER DAWSON SMITH (Defender), Appellant.-Sol.-Gen. Dickson JOSEPH PATRICK AND ANOTHER (Smith's Trustees) (Pursuers), Trust-Power to lend to firm.-Held that a power given by a testator to lend part of his funds to a firm of which he was a partner applied only to the firm as existing at the date of his death, and did not authorise the trustees to continue the loan to the firm after a partner had retired. Smith v. Trustee-Breach of Trust-Partnership-Transfer of assets and liabilities No. 3. to new firm-Novation.-In December 1893 a partner in a large engineering business died, leaving a settlement in which he authorised his trustees to May 7, 1901. allow his share of the capital in the business "to remain as a loan" to the Patrick. firm, so long as his trustees considered it reasonably safe to do so. His trustees were A and B, two of the three surviving partners, and his widow. The testator's widow died in April 1894. The deceased's capital, ascertained to amount to £19,000, was allowed to remain in the business, which was carried on by the surviving partners, A, B, and C. On 23d December 1895 C retired from the firm, in terms of an agreement by which he received £9000, the other two partners A and B taking over the whole assets of the firm, and binding themselves to "pay and so relieve C of all the obligations due by the firm," and to exhibit to him discharges thereof. The trustees were not parties to this agreement, and no payment was made to the trust. On 3d November 1896 A and B, as the surviving trustees of the testator, executed a deed, which, after narrating the agreement, set forth that the granters as trustees foresaid had accepted the new firm and its partners in lieu of the dissolved firm, and discharged the dissolved firm, and C as a partner thereof and as an individual, of all sums due to the trust. On 3d December 1896 the new firm and the individual partners granted a trust-deed for behoof of their creditors. A and B thereafter assumed D and E as trustees of the testator, and subsequently resigned office. D and E as trustees acceded to the trust for creditors and drew a dividend. D and E as trustees then raised an action against C concluding for payment of the balance of the loan, the summons containing also a conclusion for reduction of the discharge. Held (aff. judgment of the First Division) that the discharge granted by A and B as trustees in favour of the defender was entirely gratuitous and sine causa, and was invalid and ineffectual to discharge the defender of his liability for the loan. Held further that the pursuers, by acceding to the trust for the creditors of the new firm, were not barred from claiming payment of the debt from the defender as a partner of the old firm. THIS action was raised in April 1898 by Joseph Patrick and Robert Ld. Chancellor Howie, the trustees of the deceased Alexander Smith junior, engineer, (Halsbury). Glasgow, against Alexander Dawson Smith, concluding for reduction Lord Davey. of a deed of discharge, dated 3d November 1896, granted by the pur- Ld. Brampton. suers' predecessors in office, William Smith and Hugh Osborne Smith, Ld. Robertson. whereby they, as trustees of Alexander Smith, discharged the dissolved firm of A. & W. Smith & Company, and the defender, Alexander Dawson Smith, as a partner and as an individual, of a debt due by them to Alexander Smith junior, or to his trustees. The discharge was challenged on the grounds-(1) That it was granted by Alexander Smith's trustees without any consideration to the estate; and (2) because, being gratuitous, it was obtained by fraud and collusion on the part of the defender and the granters, William Smith and Hugh Osborne Smith. The sum concluded for was £10,702, 2s. 6d., which was a balance of a debt to the trust-estate, which amounted to £19,857, 17s. 9d. The discharge proceeded on the narrative that before 23d December 1895 the granters, William Smith and Hugh Osborne Smith, were partners in business with the defender, Alexander Dawson Smith, under the firm of A. & W. Smith & Company; that the firm and partners were indebted to Alexander Smith's trustees (being William Smith and Hugh Osborne Smith); that at that date the firm was No. 3. May 7, 1901. dissolved by the retiral of the defender; and that William Smith and Hugh Osborne Smith, as the continuing partners, undertook to relieve the defender, the retiring partner, of all the obligations due by the dissolved firm. The deed then proceeded, "and that we, as trustees foresaid, have accepted, as we do hereby accept, the present firm of A. & W. Smith & Company, engineers, Glasgow, of which we, the said William Smith and Hugh Osborne Smith, are the sole partners, as debtors in lieu of the said dissolved firm and partners." The following circumstances were disclosed in a proof:-The firm of A. & W. Smith & Company carried on business as engineers at the Eglinton Engine Works, Glasgow. On 7th December 1893 Alexander Smith junior died, after which the business was carried on by the remaining partners, William Smith, Hugh Osborne Smith, and the defender Alexander Dawson Smith, until 23d December 1895, when the defender retired. By the trust-deed of Alexander Smith junior he nominated his wife and William Smith and Hugh Osborne Smith as his trustees. He was survived by his widow, who died in April 1894, and by one child, Herbert, the sole beneficiary. With regard to the testator's interest in the firm, he specially authorised his trustees to allow his share of the capital to remain as a loan to the firm, should the partners be willing to retain it as a loan, so long as his trustees should think it safe to allow it to remain; and he further declared that his trustees should not be liable for allowing my share of the capital in the firm of A. & W. Smith & Company to remain as a loan so long as they think proper, nor for any loss that may arise therefrom, seeing it is my desire that my share should remain in the firm." The amount of the interest of Alexander Smith junior was allowed to remain in the firm. It was ascertained to be £19,857, 17s. 9d. In January 1894 the defender visited Australia, and did not return until May 1895. During the defender's absence some pieces of business had been done which ultimately turned out badly; and, in particular, there was one relating to the supply of machinery to a sugar plantation, called the Bronte Estate, in Trinidad. Before the defender retired it had resulted in a debt to the firm of above £8000 insufficiently secured. The defender's partners entertained the idea that the firm should take over the whole sugar plantation and work it. The defender was strongly opposed to this project, considering it foreign to the legitimate business of the company. On 30th September 1895 William Smith and Hugh Osborne Smith gave notice to the defender that the partnership would be dissolved as on 31st March 1896. This they had power to do under the contract. But there was a question whether, under the contract, they were entitled to buy out the defender and keep the business, or whether, as the defender believed, he was entitled to keep the business and pay out his partners. He endeavoured to raise capital for this purpose, but found himself unable to carry it out, partly because the other partners were, in a trust capacity, proprietors of the business premises. The result was that the defender retired on terms expressed in a minute of agreement, dated 23d December 1895, between the other partners and him. It narrated that it had been arranged to dissolve the firm, and it provided (1) that the dissolution should be at the date of the deed, and that the defender should be as free to carry on the business of an engineer as if he had not been a partner, but should not be entitled to represent himself as successor in business of A. & No. 3. W. Smith & Company; (2) that the defender should be paid £9000; (3) that the parties should sign a notice of dissolution, which should be advertised and circulated among all the parties from whom the May 7, 1901. Smith v. firm had received credit; (4) that William Smith and Hugh Osborne Patrick. Smith should "pay and so free and relieve the said Alexander Dawson Smith of all the obligations due by the said firm of A. & W. Smith & Company," and exhibit discharges thereof, and that William Smith and Hugh Osborne Smith should be entitled to the whole assets. The notice referred to in the agreement, which was advertised and sent to, inter alia, the trustees, was to the effect that the firm was dissolved of mutual consent, and that William Smith and Hugh Osborne Smith would continue the business for their own behoof, and would collect all debts and discharge all liabilities. The agreement was between the partners only. The trustees were not parties to it. The defender did not think it necessary to get a formal discharge, and the matter was delayed. His agent, Mr Cook, however, thought it necessary, and pressed for it. It was not, however, obtained till 3d November 1896, when William Smith and Hugh Osborne Smith signed the discharge against the strong remonstrance of their agent. A month after this it was found that the firm was in financial difficulties which it could not overcome, and the firm and partners granted a trust-deed for behoof of their creditors in favour of Mr M'Clintock, C.A., whose examination disclosed an apparent deficit of above £13,000. In December 1896 the pursuers, Joseph Patrick and Robert Howie, were assumed as trustees of the deceased Alexander Smith, and the former trustees, William Smith and Hugh Osborne Smith, resigned office. The trustees acceded to the trust for creditors, and they claimed, and received, a dividend. The sum sued for was the amount of the original debt, deducting the dividend. The pursuers pleaded;-(2) The said discharge being entirely gratuitous and sine causa, and having been granted by the said William Smith and Hugh Osborne Smith as trustees foresaid, and obtained by the said defender, without any consideration having been received or given therefor, is invalid and ineffectual to discharge the defender of his liability for said loan. (3) The said discharge being entirely gratuitous and sine causa, et separatim, having been obtained by fraud and collusion on the part of the defender and the said William Smith and Hugh Osborne Smith, it ought to be reduced as concluded for. The defender pleaded;-(4) The said discharge being valid and effectual, and not liable to challenge on any of the grounds libelled, the defender should be assoilzied. (5) The pursuers are barred by their actings since said discharge was granted from maintaining the conclusions of the summons. (6) It being impossible to effect restitutio in integrum, the conclusions for reduction should be refused. The Lord Ordinary (Kincairney), on 5th January 1899, pronounced this interlocutor:-"Finds that it is not proved that the discharge sought to be reduced was granted without consideration, or was obtained by fraud and collusion on the part of the defender, and of William Smith and Hugh Osborne Smith, the trustees at the date of said discharge of Alexander Smith junior: Therefore assoilzies the defender from the whole conclusions of the summons, and decerns," &c.* The ground of the Lord Ordinary's judgment appears from the follow b |