2. SCANLAN. entitled to certain estates in the County of Limerick; that is to FITZGIBBON say, to the lands of Gortnacrehy, which he held for three lives, with a covenant for perpetual renewal; the lands of Ballylin, which he held for one life; the lands of Ballymacrory, which he held for two lives; and the lands of Duckstown, which alone were in question in this appeal, and which he held for the remainder of a term of 31 years. The fortune of Elizabeth, the wife, consisted of a sum or portion of 2,100l., to which she was entitled under the will of her deceased father Thomas Fitzgibbon. By marriage articles dated 21st May, 1773, M. Lane Scanlan, in consideration of his marriage and his wife's portion, for the purpose of securing a jointure for his wife, and making a provision for the issue of the marriage, covenanted with Standish Grady and Gibbon Fitzgibbon, (trustees,) that he would, within "the space of six months after the date of the said articles, grant, settle, and assure the lands of Gortnacrehy, with the appurtenances, to the use of him the said Matthew Lane Scanlan for his life, with remainder (subject to a jointure of 150l. a year for the said Elizabeth Scanlan, his wife, during her life, if she should happen to survive her husband, in bar of dower) to the first and other sons of the said marriage in the usual course of family settlements, &c. and that he would, within twelve months from the date of the said articles, secure a sum of 2,000l., to be paid within twelve months from his decease, and as for the portions and provisions of the younger children of the said marriage who should be living at the time of his decease: and the said Matthew Lane Scanlan thereby further covenanted with the said Standish Grady and Gibbon Fitzgibbon, their executors and administrators, that he would pay all rents and arrears of rents that then were, or that thereafter should become due out of the lands of Gortnacrehy, Ballymacrory, Ballylin, and Duckstown, and every of them; and also pay off and discharge all debts and incumbrances that then did or thereafter should affect the said lands, or any of them; and that he would, at a certain time in each year, for eight years, pay to them the said trustees a sum of 200l., to raise a fund for the purpose of paying off a sum of 1,500l. and interest, the [ *263 ] v. SCANLAN. FITZGIBBON portion of Hayes Scanlan, the brother of the said Matthew Lane Scanlan, which was a charge on the said premises: and that he the said Matthew Lane Scanlan would, from time to time, during his life, renew the several leases of the said lands which were renewable: and it was by the said articles further declared and agreed, that all and every new lease or leases thereafter to be taken of the said lands and premises, or any part thereof, should, from time to time, remain, continue, and be, to, for, and upon the several trusts therein-before declared of and concerning the said premises respectively." [ *264 ] Scanlan neglected to pay the annuity of 2001. and to secure the 2,000l. for the younger children, and Gibbon Fitzgibbon (surviving trustee) in 1776 *entered into the possession or receipt of the rents and profits of the lands of Gortnacrehy, Ballylin, and Duckstown, and continued in such possession till 1780, when the lease of the lands of Duckstown expired. These lands being advertised in the public papers to be let, Fitzgibbon made a proposal to the agent of Lord Courtnay the proprietor to take a renewal of the lease on his own account, stating at the same time, "that he would not have it understood, that he meant by taking the farm in question to become a trustee for Mr. Scanlan." The proposal was accepted, and, Fitzgibbon having died intestate in August, 1781, or 1782, a lease for 31 years was, in pursuance of the proposal, executed to his widow and administratrix. Matthew Lane Scanlan died in 1793, leaving two sons and two daughters, having by his will directed that of the 2,000l. portion, 1,000l. should go to his younger son the respondent, and 1,0001. to his daughters between them. The eldest son died in 1795, unmarried, and without issue. The respondent and his sisters, on the 18th May, 1799, exhibited their bill in Chancery against the widow and legal personal representative of the deceased Fitzgibbon, and against two other defendants, Bourke and Bouchier, who were tenants of he lands of Ballymacrory, under leases or agreements for leases alleged to have been unduly obtained from Matthew Lane Scanlan in his life-time, stating the matters before mentioned, and praying (among other things), that the leases to Bourke and SCANLAN. Boucher might be set aside, and (in substance) that the leases FITZGIBBON both of the lands of Ballymacrory, and *Duckstown, might be rendered available for payment of the 2,000l. portion, there being (as was alleged) no other fund for that purpose. The defendant Barbara Fitzgibbon, by her answer, insisted that the deceased, Gibbon Fitzgibbon, had become lessee of the lands of Duckstown for his own use and benefit, and not as trustee for Matthew Lane Scanlan; and the said Barbara having died intestate before any further proceedings, the suit was revived against the appellant, who became representative both of Barbara and Gibbon Fitzgibbon, and also against the respondent's sisters, who had refused to proceed further as plaintiffs. Issue having been joined and witnesses examined, the cause was heard before Lord Chancellor PONSONBY, who on the 20th June, 1806, [decreed in favour of the plaintiff]. The decree was affirmed on a re-hearing on the 2nd February, 1807, with this variation, "that the plaintiff should indemnify the defendant against the covenants in the renewed lease," and the appellant was ordered to pay the costs of the re-hearing. From this decree the appellant appealed to the House of Lords. Sir S. Romilly and Mr. Raithby for appellants; Sir A. Piggott and Mr. Roupell for respondent. ELDON, L.C.: After stating the particular circumstances in the case which rendered the renewed lease a trust for Matthew Lane Scanlan, he said that this was a trust upon another ground. Where a trustee held a lease for the benefit of a cestui que trust, and made use of the influence which his situation enabled him to exercise to get a new lease, courts of equity had said that he should hold it for the benefit of the cestui que trust; and to such a length had this doctrine been carried that where a trustee procured a new lease where it was perfectly clear that the lessor would never have renewed for the benefit of the cestui que trust, the rule was still adhered to that the trustee must hold it for the cestui que trust. But then it was said that he was not a trustee of the lease. Now, under the effect of this covenant the moment R.R.-VOL. XIV. F [ *265] [266] [269] V. SCANLAN. FITZGIBBON he entered on the lands he did so to hold them for the purpose of paying out of the rents and profits the annuity of 2001. &c. If there was anything beyond what was necessary for that purpose, it remained in his hands for the benefit of Matthew Lane Scanlan. He was bound to have given up the possession when these sums were paid, or to have admitted that the surplus was received by him in right of Scanlan. In equity therefore he ought to be held a trustee, and to be considered as having renewed for the benefit of the cestui que trust. It was doubtful whether he himself had not acknowledged that he was a trustee. There was a caution too in the proceedings for the renewal, which afforded some reason to believe that this was not a case where the lessor would have refused to renew for the benefit of the cestui que trust, and at any rate the new lease must be held for his benefit. [ *270 ] Then if he were to be considered a trustee, it was fairly enough objected that he ought only to account for the advantages which he had actually received, and some directions ought to be given to settle that point. In regard to the matter of costs, although an appeal would not be received merely on the subject of costs, yet it did not follow but the article of costs might be taken into consideration when there was an appeal respecting other matters. And it would be proper in this case to relieve the appellant from the costs of that part of the suit in which he had no concern. Lord REDESDALE concurred with the Chancellor in every particular. SCOTLAND.-APPEAL FROM THE COURT OF SESSION. SMITH AND OTHERS v. GOVERNOR AND COM- (1 Dow, App. Cas. 272-298.) Knowledge and concealment by a bank of facts tending to a strong suspicion of their agent being engaged in a course of misconduct, are relevant facts to be proved in evidence in a proceeding to set aside a security bond obtained by the bank to cover the agent's default. THE appellants had bound themselves in a bond of cautionry (suretyship) to the Bank of Scotland, for one Paterson, the Bank agent at Thurso. Paterson having mismanaged the affairs of the Bank, and become bankrupt, the respondents proceeded to enforce the bond. The appellants resisted payment, presented a bill of suspension against a threatened charge, and raised an action of reduction of the bond, [on the ground of fraud; and also on certain grounds of informality in the execution of the bond. The Court below had pronounced in favour of the respondent in both proceedings.] The fraud alleged by the appellants consisted in this, that at the time the Bank Company took the bond in question, they were aware of, or had strong reason to suspect, the misconduct and insolvency of Paterson. The circumstances which the appellants offered to prove, (but of which the proof was rejected by the Court below), in order to make out this proposition were chiefly these: 1st, That an officer of the Bank having been suddenly sent to Thurso, in September, 1803, for the purpose of inspecting the Bank transactions, was for four days baffled in his attempts to be permitted to examine Mr. Paterson's accounts, during which time Paterson was borrowing money, &c., &c., in order to make a show of regularity, and that in point of fact, a suspicion of the truth was at that time conveyed to the Bank. The respondents were called upon in the Court below, to produce a *report which † Cited and followed in judgment of the Court of Queen's Bench in Phillips v. Foxall (1872) L. R. 7 Q. B. 666, 672, 41 L. J. Q. B. 293, 27 L. 1813. June 9. ELDON, L.C. [272] [273 [ *274 ] |