The Farmers’ Mart Ltd v Milne: HL 16 Jul 1914

A firm of live-stock salesmen, agents, auctioneers, appraisers, and land-surveyors, agreed with their manager that he should be entitled, with their consent, to accept any appointment as factor, or trustee on, or other office involving the management of any estate, the fees so earned by him to be pooled with any fees or commissions earned by them for any sales or valuations in connection with such estates and the proceeds divided, one-half to him and one-half to them, ‘provided always that before any such division shall take place there shall, out of said proceeds, be paid to’ the firm ‘the balance of any debt remaining due to them from such estate, after giving credit for all sums received or falling to be received on account of such debt. . . ‘
In an action by the firm against the manager, who had left their service, calling for an accounting of the fees earned by him as factor or trustee, in particular as trustee under a certain trust-deed for behoof of creditors, held that the agreement was a pactum illicitum, as impinging on the equal distribution of assets amongst creditors in bankruptcy, and action dismissed.


Lord Dunedin, Lord Atkinson, and Lord Shaw


[1914] UKHL 729, 51 SLR 729






Updated: 26 April 2022; Ref: scu.620725