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BY ARTHUH UNDERHILL, M.A., LLD., OF Lincoln's inn, and the chancery bar, barrister-at-law, Author of "A Treatise on the Settled Land Acts" "A Manual of Chancery Procedure^ "A Summary of the Law of Torts," ttc, and sometime Assistant Examiner in the Law of lieal and Personal Property in the Inns of Court, and Lecturer on Equity to the Licorporated Law Society of the United Kingdom. FOURTH EDITION ENLARGED AND REVISED. LONDON : BUTTEEWOETHS, 7, FLEET STEEET, "jEnto ^ubIisT)fis to tl)c (!5uccn's most excellent JltajestB. DUBLIN : HODGES, FIGGIS & CO., GRAFTON STREET. CALCUTTA : THACKER, SPINK & CO. MELBOURNE : G. ROBERTSON & CO. MANCHESTER : MEREDITH, RAY & LITTLER. EDINBURGH : T. & T. CLARK ; BELL & BRADFUTB. 1894 T Urn -ilr LONDON : PEINTED BY C. F, EOWOETH, GEEAT NEW STEEET, FETTEE LANE, E.O. TO THE RIGHT HONOURABLE HARDIXGE STANLEY BAllON HAISBUM, SOMETIME LORD HIGH CHANCELLOR OF GREAT BRITAIN, %\i\% 1 BY HIS LORDSHIPS PEKMISSIOK MOST RESPECTFULLY DEDICATED. 77//63 PREFACE. In writing this Manual, it has been my desire to pro- duce a book bearing the same relation to Mr. Lewin's elaborate treatise as Mr. Hawkins' work on the Con- struction of Wills bears to that of Mr. Jarman. That I have satisfied that desire I cannot truly say, for " Hawkins on Wills " is a model treatise ; and, in spite of much care and labour, I am conscious that my efforts leave much to be desired. Still my object has been to produce a work like his, of a really practical, but at the same time concise, character. The law libraries are rich in great works of reference, the store-houses, so to speak, of the law ; but such works are, in a great measure, merely classified collections of "that codeless myriad, that wilderness of single in- stances," from which it requires many years of study and experience to extract general principles. That this is so was vigorously expressed by the late lamented Sir James Fitzjames Stephen in the preface to his Digest of the Law of Evidence, where he said : " It becomes obvious, that if a lawyer is to have anything better than a familiarity with indexes, he must gain his knowledge VIU PREFACE. in some other way than from existing books on the subject. No doubt such knowledge is to be gained. Experience gives by degrees, in favourable cases, a com- prehensive acquaintance with the principles of the law with which a j)ractitioner is conversant. He gets to see that it is shorter and simpler than it looks^ and to under- stand that the innumerable cases, which at first sight appear to constitute the law, are really no more than illustrations of a comparatively small number of prin- ciples." That great lawyer, the late Sir George Jessel, also pointed out that "the only use of authorities or decided oases is the establishment of some principle which the judge can follow out in deciding the case before him" («). Now, in this work I have endeavoured to extract and formulate the 2^>'^nc>p^cs of the law of Private Trusts and Trustees, and, by way of example, have quoted or referred to all the important modern decisions, and a fair collection of the more ancient ones. Thus the reader is enabled to see, at a glance, the law (i. e. the principle) governing any particular point, and then he is further presented with a series of decided cases which illustrate and explain the application of that principle. I have chosen modern cases in preference to ancient ones, because, as has been truly said, " it must not be {a) L. R., 13 Cli. D. 712. PREFACE. IX forgotten that the rules of Courts of Equity are not, like the rules of the Common Law, supposed to have been established from time immemorial. It is perfectly well knowTi that they have been established from time to time — altered, improved and refined from time to time. The doctrines are progressive, refined and improved; and if we want to know w//at the rules of Equity are^ we must look rather to the more modern than the more ancient cases" {h). The present Edition has been very considerably en- larged by the addition of all the important decisions since April, 1888 (the date of the third Edition), by greatly amj)lifying the important chapter on the Duties of Trustees, and by numerous references to the recently enacted Trustee Act, 1893. I have also inserted most of the more important sections of this Act verbatim, accompanied by notes, so that the reader may have before him the very words of the Act itself. For the reasons above stated, it is hoped (and perhaps in this fourth Edition it may be added, believed) that this will prove a useful work to practitioners in both branches of the Legal Profession. But, in addition to practitioners, there is the large class of students. I do not expect that they will be (i) Per Sir Geo. Jessel, M.R., in Re Eallett, Knatchbullx. Salleti, L. K., 13 Ch. D. at p. 710. X PREFACE. able to remember all tlie illustrative cases; but I am sure that the fact of these being somewhat numerous will not render the work less useful to them, but will rather tend to elucidate any difficulties which they might feel in the application of the principles which those cases exemplify. A person of ordinary industry and capacity may easily master the 81 Articles of this work, and may, without great effort, remember the main facts of such of the illustrative cases as are specially named in the body of the text, and are what may be called " leading ; " and when he has done so I feel no doubt that he will possess such a knowledge of the principles upon which the court acts with regard to Private Trusts, as will enable him, to pass his exa- mination without difficulty, and also to answer all such questions as occur in the every-day experience of a general practitioner. Lastly, I have to thank my friend and late pupil, Mr. William Arnold Jolly, B.A., of Lincoln's Inn, Barrister-at-Law, for his assistance in the passage of this book through the press. ARTHUR UNDERBILL. 5, New Squaee, Lincoln's Inn, W.C. May, 1894. ( xi ) TABLE OF CONTENTS. PAGE Preface --------- vii Table of Contents -------xi Table of Cases cited ------- xix DIVISION I.— PRELIMINARY DEFINITIONS. Art. 1. Definitions of Trust, Trustee, Trust Property, Bene- ficiary, and Breach, of Trust - - - - 1 ,, 2. Definitions of Legal and Equitable Estates - - 8 ,, 3. Definitions of Declared (or Express) and Construc- tive Trusts -------12 ,, 4. Definitions of Simple and Special Trusts, and Passive, Bare and Active Trustees - - - 15 DIVISION II.— DECLARED OR EXPRESS TRUSTS. Chapter I. — Introduction. Art. 5. Analysis of a Declared Trust - - - - 18 Xll TABLE OF CONTENTS. Chapter II. — Matters essential to the prima facie Validity of a Declared Trust. PAGE Art. 6. Language evincing an intention to create a Trust - 21 ,, 7. Illusory Trusts -------43 ,, 8. How far Valuable Consideration necessary to bind Settlor or bis Eepresentatives - - - - 47 ,, 9. What Proj)erty capable of being made tbe subject of a Trust -------70 ,, 10. The Legality of tbe expressed object of tbe Trust - 76 „ 11. Necessity, or otherwise, of Writing in certain cases - 91 Chapter III. — Validity of Declared Trusts in relation to latent matters. Art. 12. Who may be a Settlor - - - - - 102 ,, 13. Who may be a Beneficiary - - - - - 106 ,, 14. When Voidable, for failure of Consideration, Mis- take, or Fraud ------ 109 ,, 15. When Void as against Settlor's Creditors under 13th Eliz. c. 5 - - - - - - - 123 ,, 16. When Void under Bankruptcy Act - - - 141 , , 17. When Void as against subsequent Piu'chasers from Settlor - - - ^ - - - - 146 Chapter IV. — Construction of Declared Trusts. Art. 18. Executed Trusts construed strictly, and Executory liberally -------- 154 TABLE OF CONTENTS. Xlll DIVISION III.— CONSTRUCTIVE TRUSTS. Chapter I. — Introduction. PAOE Art. 20. Analysis of Constructive Trusts - - - - 169 Chapter II. — Eesulting Trusts. Art. 21. Where Equitable Interest not wholly disposed of - 171 ,, 22. Where Trusts declared are Illegal - - - 178 ,, 23. Where Purchase made in another's Name - - 184 ,, 24. To whom Property results ----- 194 Chapter III. — Constructive Trusts which are NOT Resulting. Art. 25. Constructive Trusts of Profits made by Fiduciary Persons -------- 204 ,, 26. Constructive Trusts where Equitable and Legal Estates are not vested in one Person - - 208 DIVISION IV.— THE ADMINISTRATION OF A TRUST. Chapter I. — Preliminary. Art. 27. Disclaimer of a Trust - - - - -217 ,, 28. Acceptance of a Trust _ - _ _ _ 221 XIY TABLE OF CONTENTS. Chapter II. — The Estate of the Trustee, and ITS Incidents. PAGE Art. 29. Where the Trustee takes any Estate - - - 224 ,, 30. The Quantity of Estate taken by the Trustee of Lands --------229 ,, 31. Bankruptcy of the Trustee - _ - - _ 242 ,, 32. The Incidents of the Trustee's Estate at Law - 243 ,, 33. Eailure of Beneficiaries ----- 246 Chapter III. — The Trustee's Duties. Art. 34. Duty of Trustee on acceptance of Trust - - 250 ,, 35. Duty of Trustee to obey the Directions of the Settlement ------- 252 ,, 36. Duty of Trustee to act impartially between the Beneficiaries ------- 258 ,, 37. Duty of Trustee to sell Wasting and Eeversionary Property - 266 ,, 38. Duty of Trustee, as between Tenant for Life and Eemaindermen, in relation to Wasting and Ee- versionary Property pending Sale - - - 274 ,, 39. Duty of Trustee in relation to the payment of Outgoings out of Corpus and Income respec- tively --------287 ,, 40. Duty of Trustee to exercise reasonable Care - 301 ,, 41. Duty of Trustee in relation to iuvestment of Trust Funds --------320 „ 42. Duty of Trustee to see that he pays Trust Moneys to the right Persons ----- 348 ,, 43. Duty of Trustee not to delegate his Duties or Powers -------- 353 TABLE OF CONTENTS. XV PAGE Art. 44. Duty of Trustees to act jointly where more thau one _ - _ 380 ,, 45. Duty of Trustee not to set up y«s ferift - - 388 „ 46. Duty of Trustee to act gratuitously - - - 391 ,, 47. Duty of Trustee not to traffic with or otherwise profit by the Trust Property - - - _ 396 „ 48. Duty of Trustee to be ready with his Accounts - 410 Chapter IV. — The Powers of the Trustee. Art. 49. General Powers of Trustees - - - - 416 ,, 50. Power of Trustees in relation to the conduct of Sales --------428 ,, 51. Power of Trustees to give Eeceipts - - - 434 ,, 52. Power of Trustees to compound and settle Disputes 437 ,, 53. Power of Trustees to allow Maintenance to Infants 440 ,, 54. Power of Trustees to pay to Attorney appointed by Beneficiary ------ 444 ,, 55. Suspension of the Trustees' Powers by Adminis- tration Action __--__ 445 Chapter V. — The Powers of the Beneficiaries. Art. 56. Power of the Beneficiaries in a Simple Trust - 449 ,, 57. Power of the Beneficiaries collectively in a Special Trust --------450 „ 58. Power of one of several Beneficiaries in a Special Trust -------- 457 xvi table of contents. Chapter YI. — The Death, Retirement, or Eemoval OF A Trustee, and the effect thereof in relation to the Office of Trustee. PAGE Art. 59. Survivorship of the Office ----- 463 ,, 60. Devolution of the Office and Estate on Death of Survivor ------- 465 ,, 61. Eetirement or Removal from the Office - - 474 ,, 62. Appointment of new Trustees - - - - 477 ,, 63. Vesting of Trust Property in new Trustees - - 498 ,, 64. Severance of Trust on appointment of new Trus- tees _--_---_ 511 Chapter VII. — The Eights of Trustees. Art. 65. Eight to Eeimhursement and Indemnity - - 513 ,, 66. Eight to Discharge - - - - - - 525 ,, 67. Eight to take Direction of a Judge - - - 527 ,, 68. Eight to pay Trust Funds into Court under certain Circumstances - - - - - - 529 ,, 69. Eight under certain Circumstances to have the Trust administered by the Court - - - 535 DIVISION v.— THE CONSEaUENCES OF A BREACH OF TRUST. Chapter I. — The Liability of the'Trustees. Art. 70. Measure of the Trustee's Eesponsibility - - 542 ,, 71. Liability, Joint and Several _ - - - 552 TABLE OF CONTENTS. XVll PAGE Art. 72. No Set-off allowed, of Gain on one Breacli against Loss on another --____ 554 ,, 73. Property acquired out of Trust Property becomes liable to the Trust - - - - - -557 ,, 74. Any Beneficiary may compel Performance of neg- lected Duty, or prevent Commission of Breach - 567 ,, 75. Fraudulent Breach of Trust a Crime - - - 570 Chapter II. — Protection accorded to Trustees. Art. 76. Protection against Breaches of Trust by co-Trus- tees --_-____ 572 ,, 77. Concurrence of or release by Beneficiaries - - 575 ,, 78. Statute of Limitations and Laches _ _ _ 58O ,, 79. Trustees generally entitled to contribution inter se, but may be entitled to be indemnified by co- Trustee or Beneficiary who instigated Breach - 592 Chapter III. — Liability of Third Parties and Beneficiaries. Art. 80. Liability of Third Parties and Beneficiaries who are Parties to a Breach of Trust - - - 601 ,, 81. Following Trust Property into the Hands of Third Parties --------612 U.- ( ^x ) TABLE OF CASES CITED. PAGE Abeeaman Ironworks v. Wickens 213 Aberdeen Rail. Co. v. Blackie 207 Town V. Aberdeen University 396, 403 Abraham v. Abraham , 33 Acklaud r. Lutley, 8 L. J. Q. B. 164 230, 236, 242 Ackroyd v. Smithson 172, 174, 195, 196 Acton V. Woodgate 44 Adames r. Hallett 139 Adams, Re 441, 442, 444, 475, 481, 489 V. Clifton 353 V. Kensington Vestry, 32 W. R. 883 ... .23, 27, 33, 34 AddUngton v. Cann 92, 182 Agar V. George, 24 W. R. 696 ; 34 L. T. 487 68 Akerman, Re, Akerman v. Akerman, 61 L. J. Ch. 34 ; 65 L. T. 194 ; 40 W. R. 12 607, 609, 611 Alcock V. Sloper c 271 Alexander v. Duke of Wellington 75 Alford, Re, Hunt v. Parry 426, 442 AUan, Re, Havelock v. Havelock, 29 W. R. 859 ; 44 L. T. 168 426 • V. Backhouse 289 Allcard v. Skinner, 36 "W. R. 251 110, 112, 118, 122 AUen V. Bewsey, 37 L. T. 688 71, 75, 76, 79 V. Jackson, 24 W. R. 306 ; 45 L. J. Ch. 310 ; 33 L. T. 713 77, 87 ■ V. Seckham, 48 L. J. Ch. 611 622 Allhusen v. Whittell, 36 L. J. Ch. 929 ; 16 L. T. 695 ... . 290 Aisbury, Re, Sugden v. Alsbury , 262 Alton V. Harrison, 17 "W. R. 1034 ; 20 L. T. 1001 136 Ahvyn, Re 83 Ambler, Re 483 Ames, Re, Ames v. Taylor, 32 W. R. 287 393 V. Parkinson 322 Ancketill, Re 286 Anderson v. Elsworth 109 Andrewes, Re, 26 W. R. 572 ; 38 L. T. 137 143 Andrews v. Weall 288 b2 XX TABLE OF CASES CITED. PAGE Angibau, Re 48 Anon 314, 670, 613 Anstis, Re, Chefrwynd v. Morgan 48, 49 Antrobus v. Smith 48, 63 Arbuthnot v. Norton 75 Armitage, Re, Armitage v. Armitage 263 Armstrong v. Reeves 91 ■ V. Timperon 61 Arnold v. Gamer 212 • V. Woodbams, 42 L. J. Ch. 578; 28 L. T. 351 ; 21 W. R. 694 450, 576 Amould V. Grinstead 328 Asbby V. Blackwell 349 Astley V. MUler 212 Aston, Re 479 Att-Gen. v. Alford, 19 Jur. N. S. 361 ; 24 L. T. 265; 3 W. R. 200 542, 548 V. Aspinal 105 V. Dangars 591 V. Downing 70 V. (Lady) 70 V. Gore 449 V. Gower 612 V. HaU 36 V. Lomas 202 V. Murdoch 522 ■ V. Owen 424 V. Sands 76 V. Scott 361 • V. Stephens 70 V. Wilson 552 Austen, Re 495 Austin V. Austin, 25 W. R. 346 ; 46 L. J. Ch. 92 ; 36 L. T. 96 417 V. Taylor 154, 155, 156 Aveline v. Melhuish, 12 W. R. 1020; 10 Jur. N". S. 788. . 575 Aveling v. Knipe 186 Avery v. Griffin, 18 L. T. 849 497 Ayerstv. Jenkins, 21 W. R. 878 ; 29 L. T. 126.. 178, 179, 182 AyliflP V. Murray 391 Aylwin's Trusts, Re, 21 W. R. 864 ; 28 L. T. 865 460 B. Backhouse v. Backhouse 70 Bacon, Re, Grissell v. Leathes, 62 L. J. Ch. 247 ; 68 L. T. 155 ; 41 W. R. 478 290 Badderley v. Badderley, 26 "W. R. 850 ; 38 L. T. 906. . 61, 66 BagnaU v. Carlton, 36 L. T. 750 207 V. Spencer .... 236 TABLE OF CASES CITED. XXI PAOB Bahin v. Hughes, 55 L. J. Ch. 472 ; 54 L. T. 188 . .497, 592, 694 Bailey v. Gould 318 Baiiibrigge v. Brown, 29 W. R. 782 ; 50 L. J. Ch. 522 ; 44 L. T. 705 120 Baker v. Monk 114 V. Peck 404 V. White, 44 L. J. Ch. 651; 23 W. R. 670; 33 L. T. 347 226, 228 Baldwin v. Bannister 212 Balfour v. Welland 4:!6 Banner v. Bcrridge, 29 W. R. 844 ; 50 L. J. Ch. 630 ; 44 L. T. 680 583 Barber, Re, Burgess v. Vinicome, 34 W. R. 395 ; 54 L. T. 375 609 Bardswell r. Bai'dswell 40 Baring, Re, Jeune v. Baring 287, 293 Barker, Ex parte, 28 W. R. 522 ; 42 L. T. 411 558 , Re, 24 W. R. 264 ; 45 L. J. Ch. 52 475, 481 , Buxton V. Campbell 583 V. Greenwood, 8 L. J. Ex. 5 225 — — - V. Peile, 13 W. R. 573 ; 12 L. T. 50 476, 539 Barling v. Bishop 125 Barlow v. Grant 426 Barnes v. Addy 317, 604 • V. Wood, 17 W. R. 1080 617 Bamett v. Sheffield 610 Barney, Re, Barney v. Barney 601 , 604 Barrack v. McCullock, 5 W. R. 38 ; 2G L. J. Ch. 105 ; 28 L. T. 218 123 Barratt v. Hartley, 14 W. R. 684 ; 14 L. T. 474 ; 12 Jur. N. S. 426 392, 395 V. Wyatt 350 Barrett, Re, Whitaker v. Barrett, 59 L. J. Ch. 218 ; 38 W. R. 57 448 Barrow r. Wadkin, 5 W. R. 695 ; 3 Jur. N. S. 679 107 Barrs v. Fewke 173 Barry, Ex parte, 22 W. R. 205 242 Bartlett v. PickersgiU 185, 186 Bartley r. Bartley 362 Barton, Re 258 r. Briscoe 453 Basham, Re, Hannay v. Basham , 523 Bassett r. Nosworthy, Finch, 102 612 Bastard r. Proby 161 Bate V. Hooper 610 Bateley v. Windle 173 Bateraan r. Davis 255 V. Hotckin 7-) Batho, Re, 58 L. J. Ch. 32 ; 59 L. T. 882 490, 50G, 507 Bathurst, Re 478 TC-xn TABLE Ot CASES CITED. PAGE Batstone v. Salter 187 Beale v. Symonds 247 Beattier. Curzon, 17 W. R. 132; 38 L. J. Ch. 161 ; 20 L. T. 61 535 Beauclerc, Re 532 V. Ashbunihain 329 Beaufoy, Re 273 Beaumont v. Salisbury (Marquis) 230, 233 Beck V. Kantorowiez 207 Beckford v. Beckford 185, 194 ■ V. Wade 583, 588 Beckley v. Newland 73 Bective v. Hodgson 198 Beddoe, Re, Downes v. Cottam 523 Beddoes v. Pugh 389, 391 Bedford (Duke) v. Abercom (Marquis) 159 • V. Coke 178 Beecber v. Major 193 Begbie v. Crook 218 Behrens, Re 529 Belcbier, Ex parte 353, 363, 366, 373, 377 BeU, Re. Lake v. Bell 589 V. Bamett 206 V. Cureton 44 V. Turner 523 Bellamy and Metropolitan Board, Re, 31 W. R. 900 ; 48 L. T. 801 353, 368, 369 Bellasis, Re, 19 W. R. 699 ; 24 L. T. 466 61, 164 Belliss, Re, 25 W. R. 456 ; 46 L. J. Ch. 353 ; 36 L. T. 644 470 Benbow v. Townsend 92 Bence, Re, Smith v. Bence 76 V. GUpin, 16 W. R. 705 ; 37 L. J. Ex. 36 ; 17 L. T. 655 221 Bendyahe, Re, 5 W. R. 816 425, 533 Beningfield r. Baxter 402 Benn v. Dixon 268 Bennet v. Bennet 191, 194 Bennett, Ex parte 397, 405 V. CoUey » 568 V. Davis 69, 244 V. Gas Light and Coke Co., 52 L. J. Ch. 98 ; 48 L. T. 156 399 ■ V. Wyndham 353, 514 Bennison, Re, Cutler v. Boyd 256 Bentham v. Haincourt 211 Benyon v. Nettlefold 184 Berkeley (Earl), Re 299 Berkley, Re, Berkley v. Berkley 497 Berry v. Berry, 47 L. J. Ch. 182 ; 26 W. R. 327 236 TABLE OF CASES CITED. XS.ni PAQB Berry v. Gibbons, 21 "W. R. 754 ; 29 L. T. 88 446 Bcthell V. Abraham, 22 W. R. 179 ; 43 L. J. Ch. 180 ; 29 L. T. 715 327, 329, 446 Bevau, Re 81 Biddulph V. Williams 172 Biggs V. Peacock 455 Bignold, Re, 26 L. T. 176; 41 L. J. Ch. 235 ; 21 W. R. 345 475, 481, 482, 485, 489 BUUngsley v. Critchett 426 BUlsou V. Crofts, 21 W. R. 504 ; 42 L. J. Ch. 531 ....83, 460 Bindley v. Mulloney, 17 W. R. 510 ; 20 L. T. 263 86 Bingham v. Clanmorris 218 Binuey v. Ince HaU Co 380, 383 Birch r. Blagrave 179, 181, 187 f. Wade 31 Birchall, Re, Bu-chall v. Ashton, 37 W. R. 387 ; 60 L. T. 369 218, 220 Bkd, Re, 21 W. R. 725; 28 L. T. 658 230, 367, 369 , Pitman r. Pitman 203 i\ Maybury 42 Birks V. Micklethwaite, 34 L. J. Ch. 362 ; 10 Jur. N. S. 302 518, 591 Birt r. Birt 559 Bishop, Ex parte, 21 W. R. 716 ; 28 L. T. 862 142, 145 Bizzey v. Flight 53, 57 Blackburn v. Stables 161 Blacklow v. Laws < 257 Bladwell v. Edwards 77, 84 Blagrave v. Blagrave, 4 Ex. 550 ; 19 L. J. Ex. 414 . .234, 242 Blagrove v. Handcoek 163 Blake, Re, Jones v. Blake 417, 421, 482, 535, 537 V. Power 114 Blakeley Co., Re, 16 W. R. 633; 37 L. J. Ch. 418; 18 L. T. 132 613 Blaker v. Anscombe 229 Bland v. Bland 36 Blandy v. De Burgh 49 Bleazard v. Whalley, 2 W. R. 608 424 Blount V. O'Connor 327 Blue V. Marshall 308 BlundeU, Re, BlundeU v. Blundell 517, 554, 604, 612 Blyth V. Fladgate 553, 592, 601, 605 Bodmin (Lady) v. Vanderbendy 612 Boldero v. L. & West. Discount Co., 28 W. R. 154 ; 42 L. T. 57 136 BoUand, Ex parte, 22 W. R. 152; 43 L. J. Bk. 16; 29 L. T. 545 132 Bond, Re, Cole v. Hawes, 46 L. J. Ch. 488 ; 25 W. R. 95.. 32, 39 V. Walford 109, 113 Bone V. Poland 186, 190 5X1V TABLE OF CASES CITED.. PAGE Booth r. Turle, 21 W. R. 721 101, 213 Bostock V. Floyer, 14 W. R. 120 ; 35 L. J. Ch. 23 ; 13 L. T. 489; llJur. N. S. 962 350, 367, 369 Boston Co. V. Ansell, 59 L. T. 345 20S Bosworth, Re, Martin v. Lambe 411, 415 Bouch, Re, Sproule v. Bouch, 36 W. R. 193 .... 258, 261, 262 Boughton V. James 82 Bourke, Re 508 Boursot V. Savage, 35 L. J. Ch. 627 ; 14 W. R. 565 ; 14 L. T. 299 612, 619 Bowden, Re, Andrew v. Cooper, 59 L. J. Ch. 815 ; 39 W. R. 219 685 Bowes ?;. E. L. W. Co 417, 424 V. Strathmore (Earl) 425 Bowles V. Stewart 576 Boyd, Re, 28 W. R. 233 ; 42 L. J. Ch. 506 342 V. Boyd, 15 W. R. 107 ; 16 L. T. 660 427 Boyes, Re, Boyes v. CaiTitt 92, 96, 174 Boyle, Re 404 Brackenbury v. Brackenbury 178, 182 Bradford Bank v. Briggs, 35 W.R. 521 ; 56 L. J. Ch. 364 ; 56 L. T. 62 383, 616 Bradley v. Riches, 26 W. R. 910 ; 38 L. T. 810 619 Brail, Re, Ex parte Norton 146 Brandon v. Robinson 77, 84, 460 Braybrooke v. Inskip , 470 Breedon v. Breedon 436 Breeds, Re, 24 W. R. 200 ; 45 L. J. Ch. 191 427 Brentwood Co., Re, 25 W. R. 481 ; 46 L. J. Ch. 554 ; 36 L. T. 343 210 Bretton v. Mockett, 26 W. R. 850 ; 47 L. J. Ch. 754 ... . 37 V. Wolvern, 29 W. R. 777 ; 50 L. J. Ch. 906. . . .62, 67 Brewer v. Swirles, 2 W. R. 339 ; 23 L. J. Ch. 542 577 Brice v. Stokes 301, 354, 383, 385, 675 Brewster v. Angell 159 Bridge, Re 529 • V. Brown 424 Bridgeraan v. Gill 601, 604 Brier, Re, Brier v. Evison 356, 374, 379 Briggs, Re, and Spicer, 64 L. T. 187; 60 L. J. Ch. 514 146 V. Jones 149 ■ V. Massey, 30 W. R. 325; 51 L. J. Ch. 447; 46 L. T. 354 545 V. Penney 32, 92 Bright V. Legerton 582, 583 V. North 417, 422 Brinton v. Lulham 205, 399 Brogden, Re, Billing v. Brogden, 59 L. T. 650 304, 308, 311, 439, 497 TABLE OF CASES CITED. XXV PAGE Brooke v. Haynes 222 Brooker v. Pearson 83 Brougham (Lord) v. Poulett 288 Brown, Re, Brown v. Brown 327, 453 , Dixon r. Brown 611 ■ r. Brown, 17 W. R. 98; 38 L. J. Ch. 153; 19 L. T. 694 114 r. Burdett, 31 W. E. 854 ; 48 L. T. 753 89 V. Casamajor 42 I'. Be Tastet 395 r. GeUatly, 15 W. R. 1188 275, 277, 280, 281 '•. mggs 22 ■ r. Howe 449 V. Litton 392, 395 ■ v. Maunsell 597 V. Sibley 470 r. Smith 417 V. Whiteway 238 Browne v. Collins 262 Bruimidg-e v. Brumridge , 573 Bryant, Re Add. Ixviii , and Barningham 257 Brydges v. Brydges 154 Bubb V. Padwick, 28 W. R. 382 ; 49 L. J. Ch. 128 ; 41 L. T. 116 , 452 Buchanan v. Hamilton 475 Buckeridge v. Glass, 10 L. J. Ch. 134 221, 575 Buckland v. Pocknell 210 Buckmaster v. Buckmaster, 35 "W. R. 438 ; 56 L. T. 795 ; 56 L. J. Ch. 379 103 Bucknill r. Morris 327 Budge V. Gummon, 20 W. R. 1022 ; 42 L. J. Ch. 22 ; 27 L. T. 666 343 Bullock, Re, Good v. Lickorish, 60 L. J. Ch. 341; 64 L. T. 736; 39 W. R. 472 461 v. Bullock 301 Bulmer v. Hunter 134 Bulwer v. Astley 290 Burdick v. Garrard, 18 W. R. 387 ; 39 L. J. Ch. 369 .... 543, 548, 589 Burdon v. Burdon 395 Bui'ges V. Lamb 259 Burgess r. Wheate, 1 Ed. 177 76, 246 Buriiaby v. Griffin , 158 Burnett v. Mann 104 Buruie v. Getting 327 Buron r. Husband 72 Burrage, Re, Burrage v. Bumingham 421 Burrough v. Philcox 22, 30, 31 Burrows v. Walls, 3 W. R. 327 ; 25 L. T. 18 410, 576 XXVI TABLE OF CASES CITED. PAGE Burton, Re, Bank «. Heavens 441, 443 V. Hastings , 158 Burtt, Ee 472 Bush V. Allen 230, 235 Butler V. Butler, 26 W. E. 85 ; 47 L. J. Ch. 77 ; 37 L. T. 518 400, 592, 596 V. Compton, 17 W. E. 24 ; 38 L. J. Ch. 35 ; 19 L. T. 274 577 Buttanshawi;. Martin, 33 L. T. 300 ; 5 Jur. N. S. 647.-453, 458 Butterworth, Ee 131, 621 Buxton V. Buxton 303, 315 Byam v. Byam, 3 W. E. 95 ; 24 L. J. Ch. 209 ; 19 Jur. 79 362 Byles, Ee 84 Byrne v. Norcott 522 0. Cabburn, Ee 535 Cadell V. Palmer, 1 CI. & Fiu. 372 77, 79 Cadett V. Earl, 46 L. J. Ch. 798 328 Cadogan v. Essex (Lord) 329 Cafe V. Bent 271 Calvin's case 106, 107 Cambridge v. Eouse 81 Camden (Marq.) v. Murray 421 Cameron, Ee 227 ■ ■ , Cameron v. Cameron 401 and WeUs, Ee, 36 W. E. 5 52 Camoys (Lord) v. Best 480 Campbell v. Bainbridge 523 V. Walker 403, 409 Candler v. Tillett 384 Cann v. Cann 317, 378 Cardross, Ee, 26 W. E. 389 ; 47 L. J. Ch. 327 ; 38 L. T. 778 493 Carew v. Cooper 75 Carlyon, Ee 529 V. Truscott, 44 L. J. Ch. 180 ; 32 L. T. 50 ; 23 W. E. 302 236, 257 Carpenter, Ee 489 Carr, Ee, Carr v. Carr 383 Carrick v. Errington 181 Carson v. Sloane ,. 608 Carter, Ee 277 ■ V. Carter, 27 L. J. Ch. 74 ; 30 L. T. 349 ; 4 Jur. N. S. 63 627 V. Seabright 514 Cartwright, Ee, Avis v. Newman 295 V. Cartwright 76 TAULE OF CASES CITED. XXVU PAaE Castle r. Castle 42 Caswell V. Sheen , 504 Cater, Re 527 Cave z;. Cave, 49 L. J. Ch. 656; 43L. T. 158.. H, 149,614, 619 Cawthorne, Re 532 Chadwick v. Heatley 525 Challen v. Shippam 378 Chambers v. Chambers 158 • V. Goldwin 392 V. Howell 409 V. Mmchiu 353, 386 Chaucellor v. Brown 270 Chappie, Re, Newton v. Chappie, 33 W. R. 235 ; 51 L. T. 748 393 Charles v. Jones 518 Chasten, Re 452 Chennell, Re, Jones v. Chennell 342, 518 Chertsey Market, Re 359 Chesterfield (Earl), Re 275, 285 V. Jansen , 576 Child v. Child 328 Childers v. Childers, 5 W. R. 586 ; 26 L. J. Ch. 743. .179, 182 Chippendale, Ex parte 514 Chi'istie v. G-osKng' 160 P. Ovington, 24 W. R. 204 468 Christ's Hosjiital c. Grainger 79 Churcher v. Martin, 37 W. R. 682 ; 61 L. T. 113 588 Clare v. Clare 523 Clark i'. Girdwood, 26 W. R. 90; 47 L. J. Ch. 116; 37 L. T. 614 109 • V. Malpas 114 V. Swaile 406 Clarke, Re, Coombe v. Carter, 36 C. D. 348 30, 73 V. Franklin 201 V. Wright, 30 L. J. Ex. 115 ; 4 L. T. 21 ; 9 W.R. 571 52 Clegg V. Edmonston, 27 L. T. 117 ; 3 Jur. N. S. 299 591 V. Fish wick 206 Clements, Re 442 Clergy Orphan Corporation, Re 322 Clint, Re 132 Clive i>. Carew, 7 W. R. 433 ; 33 L. T. 161 600 Cloiigh V. Bond, 8 L. J. Ch. 51 353, 382, 386 V. Dixon 384, 465 Clowes r. Hilliard, 25 W. R. 224 ; 46 L. J. Ch. 271 .... 567 Coard v. Holdemess 173 Coates and Parsons, Re, 35 W. R. 375 ; 56 L. J. Ch. 242 ; 56 L. T. 16 480 Cochrane v. Moore 64 Cock V. GoodfeUow 327, 330 XXVIU TABLE OF CASES CITED. PAGB Cockburn v. Edwards 407 V. Peile, 9 W. E. 725 ; 30 L. J. Ch. 575 ; 4 L. T. 571 339 Cockcroft V. Sutclitfe 522 Cockerill v. Cholmeley 575 Cocksedge v. Cocksedge 76 Cogan V. Dnffield, 24 W. R. 905 ; 45 L. J. Ch. 307 ; 34 L. T. 593 155, 164 V. Stephens 195, 198, 200 Colchester v. Lowton 104 Cole IK Muddle 610 Coleman, Re, Henry v. Strong 453, 461 Colemore v. Tindall 229, 232 Coles V. Trecothick 397, 406 Colgan, Re 426 Collier v. McBean 157, 627 V. Walters, 22 W. R. 209 ; 43 L. J. Ch. 216 ; 29 L. T. 868 238 CoUins, Re, Collins v. CoUins, 55 L. J. Ch. 672 ; 55 L. T. 21 ; 34 W. R. 650 441 • r. Collins 210, 271, 426 Columbine v. Penhall 125, 134 CoUyer v. Dudley 387 V. Isaacs 68, 72, 73, 143, 146 Colyear v. Lady Mulgrave 48, 56 Combs, Re 509 Consterdine v. Consterdine, 31 L. J. Ch. 807 ; 10 W. R. 727 382, 385 Conway v. Fenton, 58 L. J. Ch. 282 ; 59 L. T. 928 ; 37 W. R. 156 296, 297 Conyngham v. Conyngham 222 Cooke, Ex parte, 46 L. J. Bk. 52 ; 25 "W. R. 171 ; 35 L. T. 649 559 ■ , Re, 25W. R. 218; 46 L. J. Bk. 34; 35L. T. 715. 464 V. Addison, 17 W. R. 480 ; 38 L. J. Ch. 322 ; 20 L. T. 212 558, 565 r. Crawford, 11 L. J. Ch. 406 47-3 V. Fuller 453 • V. Hutchinson 172, 174 . V. La Motto 109 Cookson V. Lee 403 ■ V. Reay 455 Coombes v. Brookes 489 Cooper, Re , 365 and Allen, Re, 25 W. R. 301 ; 46 L. J. Ch. 133 ; 35 L. T. 890 312, 314, 379, 429, 431, 457 V. Kynock, 20 W. R. 503; 41 L. J. Ch. 299; 26 L. T. 566 229, 232 V. Macdonald, 26 W. R. 377 ; 47 L. J. Ch. 373 ; 38L. T. 195 461 TABLE or CASES CITED. XXIX PAGE Cooper V. Todd 5 1 2 Coppard, Re 81 Coppring v. Cooke 211 Cordall's case 230, 236 Cordwell v. Mackrill, Amb. 515 ; 2 Ed. 344 616 Cormell v. Keith, 24 W. E,. 633 ; 45 L. J. Ch. 689 ; 35 L. T. 29 68 Comthwaite v. Frith 45 Corsellis, Re, Lawton v. Elwes, 55 L. J. Ch. 675 . 393, 394, 400 Costabadie v. Costabadie 418 Costello V. O'Rourke 260 Cotham v. West 418, 426 Cothay v. Sydenham 349 Cottam V. E. C. Rail. Co 387 Cottington v. Fletcher 178 Cottou, Re, 24 W. R. 243 ; 45 L. J. Ch. 201 ; 33 L. T. 720 427, 440 and London School Board, Re, 30 W. R. 610 ; 51 L. J. Ch. 514 ; 46 L. T. 813 449, 455 Coulson, Re 532 Courtier, Re, Colef? v. Coiirtier, 35 W. R. 85 ; 56 L. J. Ch. 350 ; 55 L. T. 574 287, 296, 319, 419, 421 Coutts V. Ackworth, 17 W. R. 1121 ; 38 L. J. Ch. 694 . 110, 112 Coventry r. Coventry 476 Cowel r. Gatcombe 353 Co win V. Gravell 411 Cowley (Earl) r. Wellesley 299 Cowman r. Harrison 37, 40 Cowper V. Stoneham 552, 553, 603, 604 Cox V. Page 21 Crabb v. Crabb 116, 187 Cradock v. Piper 394 Craven v. Brady, 17 W. R. 505 ; 38 L. J. Ch. 345 77 i\ Craddock 254 Creaton r. Creaton, 5 W. R. 125 ; 26 L. J. Ch. 266 ; 2 Jur. N. S. 1223 228 Cresswell v. Dewell 575 Crockett r. Crockett 42 Croome, Re 172 V. Croome , 175, 177, 178 Cropton V. Davies , . . , , 236 Crosby v. Church 600 Cross, Re, Harston v. Tennison, 30 "W. R. 376 ; 51 L. J. Ch. 645 ; 45 L. T. 777 590 Crossley r. Elsworthy 139 Crouch r. Credit Foncier, 21 W. R. 946 613 Crowe, Re, 28 W. R. 885 490, 507 Cudden v. Cudden 290 CuU, Re, 23 W. R. 850 ; 44 L. J. Ch. 664 ; 32 L. T. 853 351, 522, 531, 533 ,XXX TABLE OF CASES CITED. PAGE Cunard, Ee, 27 W. R. 164; 40 L. T. 52 ...495, 512 CunUffe V. Brancker, 46 L. J. Ch. 148 ; 35 L. T. 678 235 Cunningham Ee, and Fray ling, 60 L. J. Ch. 591 ; 64 L. T. 558 ; 39 W. E. 469 468 i\ Foot, 3 App. Cas. 974 22, 172 Curnick v. Tucker 34 Currant v. Jago 185, 194 Currie, Ee , 509 V. Nind 147 Curteis, Ee, 41 L. J. Ch. 631 ; 26 L. T. 863 185, 188 V. Wormald, 27 W. E. 419; 40 L. T. 108.... 195, 197, 199, 200 Curtis, Ee 495 V. Perry 178 V. Price 230, 233 Cusack V. Cusack 158 Custance v. Ciuininghame 175 Cutler V. Boyd 348 D. D'Adhemar v. Bertrand 487 Dale, Ex parte, 27 W. E. 815 ; 48 L. J. Ch. 600; 40 L. T. 712 561 Dalgleish, Ee, 25 W. E. 122 ; 35 L. T. 829 490, 507 D'Almaine v. Moseley 173 Dance v. Goldingham, 21 W. E. 761 ; 29 L. T. 166; 42 . L. J. Ch. 777 313,434, 567, 570 Dangar, Ee, 37 W. E. 651 ; 58 L. J. Ch. 315 ; 60 L. T. 491 606 Daniel v. Warren 271 Daniell, Ee, 24 W. E. 227 ; 45 L. J. Ch. 105 ; 34 L. T. 308 109 Darville v. Terry 136 Daubeney v. Cockbum 124 Davenport v. Bishopp 48, 49 Davies, Ex parte 299 • , Ee 529 to Jones and Evans 227 V. Davies, 18 W. E. 634 ; 39 L. J. Ch. 343 ; 22 L. T. 505 110, 121, 158 V. Hodgson, 6 W. E. 355 ; 27 L. J. Ch. 449 ; 31 L. T. 49 350, 479, 493 V. Otty , 179, 180, 194 V. Westcombe 259 Davis, Ee 487 ■ , Evans v. Moore 583 • , Muckalt «;. Davis 517 r. Angel 567 V. Duke of Marlborough 74 TABLE OF CASES CITED. XXXI PAGE Dawson, Re, Bowen v. Churcliill 465 V. Clark 173, 572 V. Prince, 6 W. E. 171 ; 27 L. J. Ch, 169 ; 30 L. T. 237 623 r. Small, 22 W. R. 514 ; 43 L. J. Ch. 406 ; 30 L. T. 252 107 Dean, Re, Cooper-Dean v. Stevens, 60 L. T. 813 . .89, 90, 91, 107 V. McDowel, 26 W. R. 486 ; 47 L. J. Ch. 537 ; 38 L. T. 862 206 De Beauvoir v. De Beauvoir 203 De la Warr (Earl), Re 288, 299 De Bussche v. Alt 404 De Mistre v. West 52 Dent r. Bennett 109 V. Dent 296, 297 De Sayres v. De Sayres 503 De Tessier, Re, De Tessier v. De Tessier 296 Detmold, Re, Detmold v. Detmold 84, 132 De Visme, Re, 12 W. R. 140 ; 33 L. J. Ch. 332 ; 9 L. T. 668 191 Dewar v. Brooke 369 Dewhirst, Re, 35 W. R. 147 ; 55 L. T. 427 ; 55 L. J. Ch. 842 490, 507, 509 De Witt V. Palin, 20 W. R. 858 ; 26 L. T. 825 418, 426 Dibbs V. Goran 610 Dick, Re, Lopes v. Hume-Dick, 60 L. J. Ch. 177; 64 L. T. 32 322, 334 Dickinson v. Player 327 Dickson, Re, Hill v. Grant 427, 441 Diggles, Re, Gregory v. Edmondson 23, 28, 35 Dimes v. Scott 284, 554, 556 Dipple V. Corles, 1 W. R. 47 ; 22 L. J. Ch. 15 21, 48 Dix V. Burford 573 Dixon V. Brown, 32 C. D. 597 11 V. Dixon, 27 W. R. 282 ; 48 L. J. Ch. 592 ; 40 L. T. 208 601, 603 V. Gayfere 210, 455 V. Olmius 214 Dobson V. Land 212, 318 Docksey v. Docksey 172 Docwra, Re 468 Dod V. Dod 159 Dodds ». Hills 627 V. Take 514, 520 Dodkin v. Brunt 49, 487 Doe V. Barthropp 237 V. Biggs o 225, 226 V.Bolton, 3 Per. & D. 135 225, 229, 237 V. Bottriell 147 V. Cafe 234 XXXll TABLE OF CASES CITED. PAGE Doe V. Davies, 10 L. J. Q. B. 169 242 ■ V. Edlin, 5 L. J. K. B. 137 229, 237 V. Ewart, 7 L. J. Q. B. 177 229, 236 V. Field 228, 237 V. Godwin 463 V. Harris, 16 L. J. Ex. 190 218, 221 V. Homfray, 1 N. & P. 401 230 V. Maiming 148, 153 V. Mores 147 V. Nichols, 1 L. J. K. B. 124 230 . v. Routledge 153 V. Eusham 148, 151 V. Simpson 230, 236, 242 — V. Willan 236 Doering v. Doering, 37 W. R. 796 ; 58 L. J. Ch. 553 ... . 602, 609, 613 Dolphin r. Aylward 147 Donaldsonv.Donaldson, 24'W. R. 1137; 34 L. T. 900. .57, 102 Doody, Re, Fisher v. Doody, 62 L. J. Ch. 14 ; 67 L. T. 650 ; 41 W. R. 49 393 Dorin «;. Dorin, 23 W. R. 570 84 Douglas, Re, Obert v. Barron 107 ■ V. Andrews 426 ■ V. Archbut, 6 W. R. 306 ; 31 L. T. 4 ; 47 L. J. Ch. 291 391 Dove V. Everard 223 Dover v. Buck 404 Downes v. Bullock 610 Do-miing, Re 99 Dowse V. Gorton 516, 529 Doyle V. Blake 218, 301, 353 Drake v. Trefusis 296 Drayson v. Pocock 362 Drew V. Martin, 12 W. R. 547 ; 33 L. J. Ch. 367 ; 10 L. T. 291 52, 185 Drinkwater v. Coombe 212 Driver, Re 483, 491 Drosier v. Brereton 341, 343 Dubois, Ex parte 245 Dubosc, Ex parte 61 Dumas, Ex parte 559, 561 Dungannon v. Smith 80 Dunn V. Flood, 32 W. R. 197 ; 49 L. T. 670 313, 434 Dunnage r. White 173 Dutton V. Thompson Ill, 521 Dyer v. Dyer 184, 185 Dyke v. Rendall 210 TABLE OF CASES CITED. XXXIU E. PAOE Eady v. Watson 300 East, Re, 42 L. J. Ch. 480 481, 482 Easton v. Landor, 62 L. J. Ch. 64 ; 67 L. T. 833 622 Eastwood V. Clarke 446 Eaton V. Daines Add. Ixviii t^. Watts, 16 L. T. 311 39 Eaves v. Hickson, 10 W. R. 29 ; 5 L. T. 598 ; 7 Jiir. N. S. 1297 349, 353, 601, 604 E. C. R. Co. V. Hawkes 315 Ebrand v. Dancer 184, 194 Eddel, Re 236 Edmonds v. Peaks 377 Edwards v. Dewar, 54 L. J. Ch. 1049 ; 53 L. T. 422 .... 520 V. Fashion 186 V. Harben 129 V. Jones 57 V. Merrick 40! V. Warder 5s2 Egbert v. Butler 385, 602 Eglin v. Sanderson 412 Egmont (Earl) v. Smith, 46 L. J. Ch. 356 209, 320, 409 Eland v. Eland, 1 B. 235 ; 4 M. & C. 429 436 Elcock V. Mapp 173 Elliott, Re, 21 W. R. 455; 42 L. J. Ch. 289.... 531, 534, 535 V. Merryman 435, 436 Ellis, Re, 22 W. R. 448 ; 43 L. J. Ch. 444 458, 529 V. Barker 260 Ellison, Re 219 V. Ellison, 6 V. 656 48 Elmore, Re 299 Elton V. Elton 159 Elve V. Boyton, 60 L. J. Ch. 383 ; 64 L. T. 482 328 Emma Silver Mining Co. r. Grant, 40 L. T. 804 .... 207 Emmet, Re, Emmet r. Emmet, 29 W. R. 464 ; 50 L. J. Ch. 341 ; 44 L. T. 173 54b, 548 Equitable Society v. Fuller 299 Ernest v. CroysdUl 558 Essery t'. Cowland 109, 112, 177 Evans, Re 288, 300, 516 • V. Bicknell 245 V. Carrington, 30 L. J. Ch. 364 ; 4 L. T. 65 114 ■ v. Coventry 569 V. Edmonds 114 V. Jackson 424 V. John 223 Everett r. Prythergch 570 Everitt v. Everitt, 18 W. R. 1020 ; 23 L. T. 136 ... . 110, 112 Evers v. Challis 76, 81 Evroy v. Nicholas 493 U. T. C XXXIV TABLE OF CASES CITED. PAGE Eykin, Re 185 Eyre v. Dolphin 206 V. Shaftesbury (Countess) 463 Eyston, Ex parte 460 Eyton, Re, Bartlett v. Charles, 59 L. J. Ch. 733 ; 63 L. T. 336 ; 39 W. R. 135 623 Ezort V. Lister 605 F. Fanshawe v. Welsby 109, 114 Farhall v. FarhaU, 20 W. R. 157 ; 41 L. J. Ch. 146 ; 25 L. T. 685 245 Farmer v. Deane 397, 409 Farrant v. Blanchford, 11 W. R. 178 ; 32 L. J. Ch. 107 ; 7 L. T. C07 577, 590 Farrar v. Farrar, Ltd 404 Fawcett v. Whitehouse 207 Fearnside v. Flint 583 Featherstone v. West 592, 595 Featherstonhaugh v. Fenwick 206 Feistel v. St. John's College 75 Fellows, Re 299 V. Mitchell, 2 Vern. 516 ; 1 P. W. 82 383 Fenwick v. Clarke, 10 W. R. 636 ; 31 L. J. Ch. 728 ; 6 L. T. 593 264, 377. 610 Ferris v. MuUins 210 Festing v. Allen 235 Field V. Donoughmore 45 V. Field Add. Ixviii V. Hopkins 393 Finden v. Stephens , 46 Finney, Re 470 Firmin v. Pulham 522 Fish, Re, Bennett v. Bennett 394 V. KUen 496 Fisk V. Att.-Gen.,15 W. R. 1200 107 Fitch V. Webber 197 Fitzgerald, Re 44 Fitzpatrick v. Wary 42-i Flanagan v. G. W. Rail. Co 207 Fletcher v. Ashburner 203 r. Fletcher 567 V. Green 387, 552, 557, 577, 594 Flower and Met. Board, Re, 32 W. R. 1011 . . . .353, 372, 380, 381, 383 Floyer v. Banks 77, 84, 213 V. Bostock 376 TAULE OF CA>ES CITED. XXXV PAGE Foley V. Barry , "U V. Burnell 5G7, 568 V. Hill 589 V. Wortner 464 Foligno, Re 534, 535 Forbes v. Peacock 436 Ford, Ee, Gilbert v. GUbert 48 Forrest?'. Forrest, 11 L. T. 763; 34 L. J. Ch. 428; 11 Jut. N. S. 311 185 Forshaw v. Higginson, 5 "W. R. 424 ; 26 L. J. Ch. 342 ; 29 L. T. 43 ; 3 Jur. N. S. 476 308, 476, 535 Forster v. Abraham 494 Fortescue r. Burnett 57 Foster and Lister, Re, 25 W. R. 553 ; 46 L. J. Ch. 480 ; 36 L. T. 582 152 Re, Lloyd v. Carr 286, 489 V. Dauber, 8 W. R. 646 218 V. Elsley, 30 W. R. 596 ; 51 L. J. Ch. 275 45, 46 V. Hale 91, 93 Fountain v. Pellet 287, 292 Fowler, Re 479, 490 , Fowler v. Odell, 29 W. R. 891 ; 44 L. T. 99 296, 319, 423 V. Fowler 107 Fowkes V. Pascoe 188 Fox «>. Buckley, 25 W. R. 107 U, 602, 611 V. Fox 40 V. Hawkes, 28 W. R. 656 ; 49 L. J. Ch. 579 ; 42 L. T. 622 66 V. Mackreth, 2 Cox, 320 397 Francis v. Francis 329, 387, 405 Fraser v. Murdoch 265, 357, 513, 515 Freeman, Re 395, 495 V. Pope, 18 W. R. 906 ; 39 L. J. Ch. 689 ; 23 L. T. 14 124, 137, 140 Frame v. Clement, 44 L. T. 398 232 French v. Hobson 575 Frith V. Cameron 296 V. Cartland, 14 W. R. 493 ; 34 L. J. Ch. 301 ; 12 L. T. 175 243, 557, 559, 625 Frost, Re, Frost v. Frost ',...;.. 81 Fry, Re 114 1). Tapson, 33 W. R. 113 ; 64 L. J. Ch. 224 ; 51 L. T. 326 315, 343, 353, 360, 551 Fryer, Re, 5 W. R. 552 ; 26 L. J. Ch. 398 ; 3 Jur. N. S. 485 354, 383 Fulham, Re 299 FuUer v. Knight 602, 608 Fumeaux v. Rucker 443 XXXVl TABLE OF CASES CITED. G. PAGK Gadd, Re, Eastwood v. Clarke, 31 W. R. 417 ; 52 L. J. Ch. 396 ; 48 L. T. 395 482 Gaffee, Re 453, 468 Gainsborough (Lord) v. "Watcombe Terra Cotta Co., 53 L. T. 117 417, 646 Gale V. Gale, 25 W. R. 772 ; 36 L. T. 690 48, 49, 52 Gardiner, Re, 35 W. R. 28 ; 55 L. T. 261 ; 55 L. J. Ch. 714 479, 489, 490 Gardner, Re 490, 503, 507 Garland, Ex parte 245, 517 Gamer v. Moore, 3 W. R. 497 446 Games v. Applin, 55 L. J. Cb. 303 ; 54 L. T. 141 ; 34 W. R. 127 493 Garnett, Re, Gandy v. Macauley 529, 576 Gamham v. Skipper, 55 L. J. Ch. 263 ; 53 L. T. 940 . . . . 11 Garrard v. Laiiderdale, 2 Sim. 1 ; 2 R. & M. 451 44 Garrett v. Wilkinson 191 Garrod, Re, 34 W. R. 157 ; 54 L. T. 251 488 Gascoigne v. Thwing 172 Gaskell v. Chambers 207 Gasquoine, Re Add. Ixviii Gee V. Liddell 60 General Estates Co., Re, 16 W. R. 919; 18 L. T. 894.. 613, 626 Gent V. Harrison 428 George, Re, 37 L. T. 204 427, 441 V. Howard 175 V. Milbank 124 German Mining Co., Re 613 Gibbins v. Taylor 594 Gibbs V. Glamis , 44 V. Rumsey 173, 181 Gibson v. Jeyes 397, 407 V. Lord Montford 236 Gilbert v. Overton 56, 102 Giles, Re 531, 536, 540 Gilroy r. Stephen, 30 W. R. 755 ; 46 L. T. 761 317, 546 Gisborne r. Gisborne, 25 W. R. 516 ; 46 L. J. Ch. 556 ; 36 L. T. 564 269, 417, 418, 425, 446 Gladden v. Stoneman 670 Glenny and Hartley, Re, 32 W. R. 457 ; 53 L. J. Ch. 417 ; 50 L. T. 79 480 Glenorchy (Lord) v. BosviUe 155, 157 Glover v. Monckton, 3 L. J. C. P. 189 242 r. Strothoff 76 Godden, Re, Teague v. Fox 276, 286 Godfrey, Re. Godfrey v. Faulkner 313, 509 • V. Poole, 58 L. T. 685 ; 37 W. R. 357 126 Goiolphin v. Godolphin 497 TABLE OF CASES CITED. XXXVll PAGE Goldsworthy v. Knight 380 Gompertz v. Keiisit 387, 519 Goodeuough v. Tremamoudo 271 Goodier v. JoIidhou 81 Goodson V. Ellison 535 Goodwin, Re, 22 W. R. 619 ; 43 L. J. Ch. 258 85 Gordon, Re, Gordon r. Roberts, 46 L. J. Ch. 794 ; 37 L. T. 627 219 Gosling V. Gosling 452 Gongh r. Biilt 31 r. Etty 522 r. Smith 380, 382 Gould, Re 142 ■ r. Robertson 45 Gow r. Forster 295 Gowan, Re, Gowan v. Gowan 164, 166 r. White 175 Grant r. Grant 66 Graves v. Dolphin 77, 83, 84 Gray, Ex parte, 4 D. & C. 778 ; 2 M. & A. 283 245 r. Siggur, 29 W. R. 13 ; 49 L. J. Ch. 819 269, 278 Graybourn r. Clarkson, 17 W. R. 716 ; 18 L. T. 495 316 Great I^uxembourg Rail. Co. v. Magnay 207 Greaves r. Simpson 157 Green, Ex parte 244, 418, 426 r. Carlill, 46 L. J. Ch. 477 69 r. Marsden, I W. R. 511 32, 34 r. Paterson, 54 L. T. 738 ; 34 W. R. 724 55 r. Spicer 83, 84, 460 V. Wynn, 17 W. R. 385 ; 38 L. J. Ch. 220 ; 20 L. T. 131 176 Greenway v. Greenway 203 Greenwood, Re 503 ■ V. Wakeford 476 Gregory r. Gregory 354 V. Henderson 227 Gregson, Re, 50 L. J. Ch. 286; 35 W. R. 286. .475, 483, 491, 506 Grenfell r. Dean, «&c. of Windsor 73 GrenviUe-Murray r. Clarendon (Earl), 18 W. R. 124; 39 L. J. Ch. 221 ; 21 L. T. 448 46 Gresley v. Mousley, 31 L. J. Ch. 537 ; 8 Jur. N. S. 320. . 591 Gricr r. Grier 159 Grieveson v. Kirsopp 22 Griffin, Ex parte 380, 386 ■ V. Brady 622 Griffith r. Buckle 158 V. Ricketts 45 . V. Vere, 9 Ves. 127 77, 82 Griffiths V. Hughes, 66 L. T. 760 ; 40 W. R. 524. .592, 598, 599 r. Porter 350 XXXVIU TABLE OF CASES CITED. PAGE Gunnell v. Whitear, 18 W. R. 883 ; 22 L. T. 645 633 Gurney, Ee, Mason v. Mercer, 68 L. T. 287; 41 W. E. 443 687 Guthrie v. Walrond 442 H. H.'s Estate, Ee, 24 W. E. 317 ; 45 L. J. Ch. 749 570 Habergham v. Vincent 92 Haddesley v. Adams, 27 L. T. 148 235 Hadley, Ee 485 Haigh V. Kaye, 20 W. E. 597 ; 41 L. J. Ch. 567 ; 26 L. T. 675 91, 178 Hale V. Sheldrake 543, 548 Hales V. Cox 163 V. Saloon Omnibus Co 136 Hahfax v. Joint Stock Bank v. Gledhill 124, 136 HaU, Ee 482 . V. Bromley 505 v. Hall, 21 W. E. 373 ; 42 L. J. Ch. 444 ; 28 L. T. 383 , Ill, 117 V. May, 5 W. E. 869 473 HaUett, Ee, KnatchbuU v. Hallett, 28 W. E. 321 ; 49 L. J. Ch. 61 ; 41 L. T. 723 ... . 243, 557, 559, 561 V. HaUett, 28 W. E. 321 ; 49 L. J. Ch. 61 ; 41 L. T. 723 611 Hallows V. Lloyd, 58 L. J. Ch. 105 ; 59 L. T. 603 ; 37 W. E. 12 250, 252, 352 Hamilton v. MoUoy 151 Hanbury v. Kirkland 369, 385 Hancock v. Smith 564 Hancox v. Spittle 502 Handcock, Ee 80 Harbin v. Darby, 8 W. E. 512 ; 2 L. T. 531 393 ' V. Masterman 452 Harcoiort v. Seymour 455 Hardaker v. Moorhouse 482 Hardcastle, Ex parte, 29 W. E. 615 ; 44 L. T. 525 566 Harden v. Parsons 384 Harding v. Glyn, 1 Atk. 469 32 V. Harding, 34 W. E. 775 48, 57 Hardwicke v. Mynd 359, 360 Hardy v. Eeeves 616 Harford, Ee 479 Harman v. Eichards 125, 136 Harris v. Harris, 7 Jur. N. S. 955 327, 330, 610 ■ V. Tubbs 149, 151 Harrison, Ee, 20 L. T. 123 475, 481, 485 t). Forth 612 TABLE OF CASES CITEU. XXXIX PAGE Hart V. Mkldlehurst 158 Harton v. Harton 227, 238 Harvey, Re, Peek v. Savory 76 V. Oliver 251, 521 Harwood v. Tooke 73 Hastie v. Hastie, 24 W. R. 564 ; 34 L. T. 747 68 Hawkins v. G-ardiner 92 V. Kemp 360 V. Luscombe , 238 Hawksworth, Re 497 Haycock, Re, 24 W. R. 291 ; 45 L. J. Ch. 247 531 Hayes v. Ivingdome 174 Hayter, Re 412 Head, Re, and Macdonald 257 Headiugtou, Re, 27 L. J. Ch. 175 532 Heardson v. Williamson 230, 236, 242 Heartley v. Nicliolson 62 Heasman v. Pearce 79 Hemming v. Neil 352 Hemmings, Re 531, 536 Henderson v. M'lver 364 V. Rothschild 44 Hengler, Re, Frowde v. Hengler, 62 L. J. Ch. 383 ; 68 L. T. 84 ; 41 W. R. 491 294, 529 Henriquez v. Bensusan 44 Henry r. Armstrong, 44 L. T. 918 50, 111, 117 Hepworth -v. Hepworth, 19 W. R. 46 ; 40 L. J. Ch. Ill ; 23 L. T. 388 190 Hetherington, Re 512 Hewitt, Re 502 Hibbert r. Hibbert 46 V. Cooke 296, 297 Hickley v. Hickley, 24 W. R. 604 ; 45 L. J. Ch. 401 ; 34 L. T. 441 407 Higginbottom, Re, 62 L. J. Ch. 74 ; 67 L. T. 190 478 V. Hobne 84, 132, 134 Higgins V. Hill 73 Highway v. Banner 158 HUl, Re 495 r. Bishop of London 171 Hilliard r. Pulford 350, 412, 610 Hillman, Re 151 Hindmarsh v. Southgate, 8 W. R. 203 ; 1 L. T. 475 .... 493 Hinton v. Hinton 244 Hinves v. Hinves 267 Hirst V. Hirst 539 Hitchens ik Congreve 207 Hoare v. Osborne, 14 W. R. 383 ; 14 L. T. 9 ; 35 L. J. Ch. 345 90 Hobbs t'. Wayet 514, 515 TABLE OF CASES CITED. PAOB Hobday v. Peters 317 Hoblyn v. Hoblyn, 60 L. T. 499 ; 38 W. E. 12 120 Hodge V. Att.-Gen 496 Hodgson, Ex parte 84, 132 Hoghton V. Hoghton 109, 1 17 Holden, Re 520 Holland, Re 509 Holloway v. RadclifEe 455 Holmes r. Dring 328 Hood V. Oglander, 34 L. J. Ch. 528 84, 460 Hope V. D'Hedomdlle, 62 L. J. Cb. 589 ; 68 L. T. 51 6.. 281, 284 Hopgoodi'. Parkin, 18 W. R. 908; 22 L. T. 772.... 347, 365, 367 Hopkins, Re 262 Hopper V. Conyers, 14 W. R. 628 ; 12 Jur. N. S. 328 . . 558, 566 • • V. Smart 609 Hora V. Hora 42 Horlock V. Horlock 458 Home, Ex parte 134 ■ V. Barton 158 Hockin, Re, 46 L. J. Ch. 274 ; 35 L. T. 935 ; 25 W. R. 779 527, 535 Hotchkys, Re, Freke v. Calmady, 34 W. R. 569 ; 55 L. J. Ch. 545; 55L. T. 110 287, 296, 297, 319 Household, Re 296 Houston V. Hughes 228 Hovey v. Blakeman 384 Howe V. Dartmouth (Earl) 267, 268, 273, 276, 330 Howel V. Howel 158 Howorth, Re, 21 W. R. 449 ; 42 L. J. Ch. 316 ; 28 L. T. 54 418, 426 Hughes, Ex parte 405 V. Coles 583 V. Empson 316 V. Kearney 210 ■ -v. Key 387, 519 «;. Williams 211 V. Wills 575 Hughes-Hallett v. Ind. M. Gold Mines Co., 52 L. J. Ch. 418 ; 48 L. T. 107 ; 31 W. R. 285 516 Huguenin v. Basely 109, 112, 118 Hulkes, Re, Powell v. Hulkes, 35 W. R. 794 348, 545 Humberstou v. Humberston 155, 163 Hume V. Richardson, 10 W. R. 558; 31 L. J. Ch. 713 ; 6 L. T. 624 ; 8 Jur. N. S. 686 231 Humphries, Re, 62 L. J. Ch. 498 ; 41 W. R. 519 ; 68 L. T. 729 441 Hunt V. Bateman 589 Hunt-Foulston v. Furber, 24 W. R. 756 454 TABLE OF CASES CITED. xli PAQK Hunter r. Atkliis 112 r. Bulluck, 20 W. E,. 460; 41 L. J. Ch. G37 ; 2G L. T. 349 107 Hiu-st, Re, Addison v. Topp 251, 264, 301, 306, 330 r. Hurst 391 Hutchings, Re 32 Hutchins v. Lee 174 Hutchinson and Tennant, Re, 26 W. R. 904 ; 39 L. T. 86 2S, 38, 39 r, Stephens 489, 503 Huxtable, Ex parte, 24 W. R. 686 ; 45 L. J. Bkcy. 59 ; 34 L. T. G08 144 Hylton V. Hylton 112 Ibbetson v. Elam ■ 262 Imperial Land Co. of Marseilles, Re, 46 L. J. Ch. 235 . , 396 Ingle r. Partridge 315, 343 Ingram, Re, 11 W. R. 980 339 Inwood V. Twyne 417 Irby, Re 532 r. Irby 610 Irons r. Smallpiece 64 Isaac r. Wall 212 Irvine v. Sullivan, 17 W. R. 1083 172 J. Jackson, Re, Jackson v. Talbot 297, 428 V. Welsh 206 Jacob V. Lucas 464 Jacubs V. Rylance, 43 L. J. Ch. 280 602, 609 Jago r. Jago 223 James, Ex parte 398, 399, 402, 514 r. Couchman 113 V. Deaue 205, 206 V. Frearson 218, 221 «'. May 615 Jarratt «'. AJdon, 18 W. R. 511; 39 L. J. Ch. 349; 22 L. T. 192 121 Jeffrey, Re, Burt v. Arnold, 60 L. J. Ch. 470 ; 64 L. T. 622 427, 441, 443 Jeffries v. Jeffries 53 Jenkins v. Kemish , 147 Jervis r. Wolf erstan , , 513 xlii TABLE OF CASES CITED. PAGE Jervoise, Ke 624 ■ V. Northumberland (Duke of) 154, 156 ■ V. Silk 426 Jesse V. Lloyd 428 Jessop v. Watson 202 Job V. Job 316 Jobson V. Palmer 302, 316 Jodrell i\ Jodrell 86 Johns V. James, 39 L. T. 54 ; 26 W. R. 821 44 Johnson, He 329, 516, 517 V. Fesemeyer 407 V. Kennett 436 • i^. Newton 377 • V. Telford 518 Johnston v. Johnston 110, 122 V. Rowlands 33 Johnstone v. Baber 257 Jones V. Foxall 543, 647 V. Goodchnd 247 V. Hiofgins, 14 W. R. 448 ; 35 L. J. Ch. 403 ; 14 L. T. 126 577, 690 V. Jones 289 V. Langton 158 ■ V. Lewis 316 V. Locke, 14 W. R. 149 ; 13 L. T. 514 ; 35 L. J. Ch. 117 62, 64 i\ Morgan , 156 V. Powell 446 V. Searle 317, 548 . V. Smith 621 V. Thomas 612 Joseph V. Lyons 72, 143, 146 Josselyn v. Josselyn 452 Joy V. Campbell 384, 386 Joyce V. De Moleyns 624 Judkin, Re 427, 441 K. Kavanagh, Re 327 Kaye v. Powell 449 Kekewich v. Manning, 21 L. J. Ch. 577 57, 62, 102 Kemp V. Burn 411 Kempson v. Ashbee, 23 W. R. 38 ; 44 L. J. Ch. 348 ; 20 L. T. 71 120 Kendal v. Granger 174 Kenrick v. Beauclerc (Lord) 227 TABLE OF CASES CITED. xliu TAOF. Kent V. Riley, 20 "W. R. 852 ; 41 L. J. Ch. 569 140 Kershaw, Re, "Whitaker v. Kershaw, 60 L. J. Ch. 9 ; 63 L. T. 203 515 Kevan v. Crauford, 26 W. R. 49 ; 46 L. J. Ch. 729 ; 37 L. T. 332 124 Kilbce r. Sneyd 353 Kilpin V. Kilpin 96, 194 Kimber v. Barber, 21 W. R. 651 ; 27 L. T. 626 208 King, Re , 99, 174 , Re, Sevvell v. King 65 V. Bellord 493 V. Denison , 171, 175, 178 V. King, 27 L. J. Ch. 29 ; 6 W. R. 85 ; 30 L. T. 177 532, 533 V. MuUins 525, 527 Kingdon v. Castleman 311, 317 Kinloch v. Secretary of State for India, 30 W. R. 845 .... 46 Kirkham v. Booth 250 Kirman v. Daniel 45 Knight, Re, 33 L. T. 54 ; 5 Jur. N. S. 326 .... 301, 485, 518, 534, 535 V. Bowyer 71 V. Brown 83 V. Knight 21, 40 V. Majoribanks, 2 M. & G. 10 403, 409 r. Plymouth (Earl) 378 Knott, Re, Bax r. Pahuer 514, 523 Knowles v. Scott 208 Knox V. Gye, 42 L. J. Ch. 284 209, 409 Kronheim v. Johnson, 26 W. R. 142 ; 47 L. J. Ch. 132 ; 37 L. T. 751 92 L. Lacey, Ex parte 396 Lake v. Gibson, 1 Eq. Ca. Ab. 290 186 Lambe, Re 479 V. Eames, 40L. J. Ch. 447; 23L.T. 175; 19W.R. 659 27, 38 Lambert v. Peyton 158 Lamotte, Re 502 Lane, Re, 3 W. R. 134 532 V. Debenham, 1 W. R. 465 464 V. Dighton 558 Langford v. Angel 470 ■ V. Gascoigne 353, 386 V. Mahoney 518 Langham v. Sandford , 172, 173 xliv TABLE OF CASES CITED. PAOE Langmead, Re 436 Langston v. Oliphant 329 Lashmar, Re, Moody v. Penfold, 60 L. J. Ch. 143 ; 64 L. T. 333 226, 246 Lavender v. Blackstone 147 V. Stanton 436 Law i;. Law 179 Lawson v. Copeland 310, 535 Leach v. Leach 185, 575 Leake, Re 531, 536 Lechmere v. La vie 36, 39 Lee V. Brown 417, 427 V. Lee, 25 W. R. 225 ; 46 L. J. Ch. 81 ; 36 L. T. 138 49,68 V. Sankey, 21 W. R. 286 ; 27 L. T. 809. .382, 383, 601, 605 V. Young 334 Leedham v. Chawner, 32 L. T. 221 257, 514, 524 Lees V. Sanderson 384 Le Hunt p. Webster, 9 W. R. 918 319 Leigh V. Leigh, 55 L. T. 634 ; 35 W. R. 121 342 Leinster (Duke of), Re 293 Le Lievre v. Gould 127 Lemann, Re, 31 W. R. 520 ; 52 L. J. Ch. 560 ; 48 L. T. 389 475, 487 Le Marchant v. Le Marchant, 22 W. R. 839 34 Leon, Re 479 Leonard v. Sussex (Lord) 162 Lepine, Re Add. Ixviii LesUe, Re, 24 "W. R. 546 ; 45 L. J. Ch. 668 ; 34 L. T. 239 299, 425 V. Baillie 349, 351 Le Touche v. Lucan (Earl) 44 Lewis, Ex parte 429, 434, 554 V. Madocks 68 V. Nobbs, 47 L. J. Ch. 662; 26 W. R. 631 ..251,317, 382, 385, 387 V. Trask 523 Ley V. Ley 290 Lidiard, Re, 28 W. R. 574 ; 49 L. J. Ch. 373 ; 42 L. T. 621 495 Life Association of Scotland v. Siddal, 9 W. R. 541 ; 4 L. T. N. S. 311 ; 7 Jur. N. S. 785 575 Lightbody, Re 495 Lingard v. Bromley 591, 593 Linquate v. Ledger 114 Linyee, Re 453 Lister v. Hodgson, 15 W. R. 547 121 • & Co. V. Stubbs 208 Little V. Neil 31 Livesey v. Livesey 610 TAllLE OF CASES CITED. xlv PAGE Lloyd V. Banks 619 r. Lloyd, 17 W. R. 702; 38 L. J. Ch. 458 ; 20 L. T. 898 77, 87, 107, 173, 244 Loch V. Bayley 455 Lock V. Bagley 165 Lockhartv. Reilly, 4 W. R. 438; 27 L. T. 49.. 315, 321, 341, 592, 594 Locking- r. Parker, 42 L. J. Ch. 35; 27 L. T. 635; 21 W. R. 113 588 Lofthouse, Re 419 London, &c. Co. r. Duggan 612, 619 London & S. W. Rail. Co. v. Gonun 79 London Joint Stock Bank v. Simmons 62G Long V. Ovenden 442 Longley r. Longley, 20 W. R. 227 ; 41 L. J. Ch. 168 ; 25 L. T. 736 173 Longuet V. Hockley , . . . 300 Lord r. Biinn 362 Love, Re, Hill v. Spurgeon 518 Low V. Bouverie, 60 L. J. 594 ; 65 L. T. 533 414 • r. Peers 77 Lowndes, Re 144 Lowry p. Fulton, 8 L. J. Ch. 314 22:i Lucau (Earl of), Re, Hardinge v. Cobden 57 Luddy's Trustee v. Peard 408 Luke r. South Kensington Hotel Co., 27 W. R. 514 ; 48 L. J. Ch. 361 ; 40 L. T. 638 359, 380 Lupton V. White 558 Lu,«h, Re, 38 L. J. Ch. 650 ; 21 L. T. 376 ; 17 W. R. 974 576, 580 Lyddon v. Ellison, 2 W. R. 690 163 Lynn r. Beaver 172 Lysaght v. Edwards, 24 W. R. 778 ; 45 L. J. Ch. 554 ; 34 L. T. 787 470 Lyse V. Kingdom 562 Lyster r. BuiToughs 68 M. Maberley v. Turton 417, 426 Macdonald v. Irvine, 26 W. R. 381 ; 38 L. T. 155 ; 47 L. J. Ch. 494 267, 273 Mackay r. Douglas, 20 W. R. 652 ; 41 L. J. Ch. 539 ; 26 L. T. 721 132 Mackenzie's Trusts, Re 336 Mackie v. Herbertson 52 Mackreth v. Symmons 210, 612, 616 Maclean, Re 633 xlvi TABLE OF CASES CITED. FAOB Macnamara v. Carey 311 V. Jones 517 McCormick v. Grogan, 17 W. R. 961 41, 91, 99, 214 McCuUock V. McCullock, 1 N. R. 535 32 McDonnell v. White 582, 583, 590 McEwen v. Crombie 623 McFadden v. Jenkins, 1 Ha. 4G1 ; 1 Ph. 153 92, 96 McGachen v. Dew 602 McKinnon v. Stewart 44 M'Queen r. Farquhar 612 Maddocks v. Wren 211 Magrath v. Morehead 455 Maguire v. Scully 158 Mahon v. Stanhope 258 Mainwaring, Re, Crawford r. Forshaw, 65 L. T. 32 ; 37 W. R. 684 362 Malcolm v. O'Callaghan 524 Manchester R. Infirmary i\ Att. -Gen 336 Mangles v. Dixon 613 Manning, Re 502 Mansel v. Norton 292 Mansell v. Mansell 623 Mansfield v. Shaw , 570 Marker v. Marker 576 Marler v. Tommas, 22 W. R. 25 ; 43 L. J. Ch. 73 54, 64 Mamer, Re 288, 300 Marples v. Bambridge 77 Marsh, Ex parte 242 i\ Hunter 545 Marshall v. Crowther 287, 290 t'. Crutwell 190 r. Gingell, 31 W. R. 63 ; 51 L. J. Ch. 818 ; 47 L. T. 159 228, 235, 236 V. Sladden 522 Martin, Re 489, 509 Martin v. Laverton, 18 W. R. 561 ; 39 L. J. Ch. 166 ; 22 L. T. 700 470 V. Martin 76 Martins r. JoIifEe 612 Martyn, Re 479 Mason, Re, Mason v. Mason 82, 489, 504 Massey v. Banner 301 V. Gahan 285 Massingbird, Re, Clark v. Trelawney 256, 321, 342, 547 Mathison v. Clark 212 Matthew J'. Northern Assurance Co., 47 L. J. Ch. 562; 38 L. T. 468 531 Matthews v. Brise 378 V. Feaver 123 Matthias v. Matthias, 32 L. T. 25 ; 4 Jur. N. S. 780 .... 514 TABLE OF CASES CITED. xlvii TAQB May r. Taylor 243 Medlaucl Re, Eland v. Modland 307 Medlock, Re, Ruffle r. Medlock 442 Meincrtzhag-en r. Davis 478 Mcnnard /'. Welford 481 Mercer, Ex parte, 54 L. T. 720 126, 128, 140 Meredith r. Heneage, 1 Sim. 542 ; 10 Pr. 230 33 Menywcatber v. Jones 76 Metcalfe, Re 533 r. Pulvertoft 153 Metliam r. Duke of Devon 84 Meyer v. Simonsen 283 Michell, Re, 36 L. T. 915 ; 35 W. R. (Dig.) 251 49 Michells r. Corbett 424 Middleton v. Dodswell 667 V. Pollock, 25 W. R. 94 ; 46 L. J. Ch. 39 ; 35 L. T. 608 92, 136, 566 r. Spicer 246 Mill V. Hill 206 Millar v. Priddon 478 Millard v. Eyre 475 Miller v. Huddleston 293 V. Miller, 20 W. R. 324 ; 41 L. J. Ch. 291 . . . .270, 277 V. Race 561 Milligan v. MitcheU 570 MUls, Re 469, 504 V. Osborne 328 Milner v. Harewood (Lord) 121 Milroy v. Lord, 35 L. J. Ch. 798 ; 6 L. T. 875 ; 8 Jur. N. S. 808 48, 65 Minors v. Battison, 35 L. T. 1 446 Mitchell V. Homf ray 119 Mitchelson v. Piper 446 Mitford V. Reynolds 90 Mockett V. Mockett, 20 W. R. 860 , 36 Moggridge v. Thackwell 70 Molton V. Camroux 105 Montefiore v. Brown, 4 Jur. N. S. 1201 44 V. Guedalla • 339 Montford (Lord) r. Cadogan (Lord) 221, 575, 597 Moore, Re, McAlpine v. Moore 487, 492 V. Froud 392 V. More 300 V. Knight 589, 606 V. Roche 28 Moravian Society, Re, 6 W. R. 851 475, 481 More V. Mahon 612 Morgan, Ex parte 470 , Re, Pillgrem r. Pillgrera, 30 W. R. 223 ; 50 L. J. Ch. 834 ; 45 L. T. 183 205, 624 xlviii TABLE OF CASES CITED. PAGE Morgan r. Chetwynd, 54 L. T. 742 ; 34 W. K. 483 55 ■ V. Elford, 25 W. R. 136 601 V. Hardy 73 r. MaUcson, 18 W. R. 1125 ; 39 L. J. Ch. 493 ; 22 L. T. 595 61 V. Stephens 605 i>. Swansea Local Board, 27 W. R. 283 468 Morice v. Bishop of Durham 174 Morland v. Cook 622 Morley, Re 470 V. Loughnan, 62 L. J. 515; 68 L. T. 619.. 109, 112, 118 V. Morley, 5 D. M. & G 212 V. Reynoldson 77 Morrin v. Mori-in 28 Morris v. Livie 610 Morrison r. Morrison . . . •. 513 Morse r. Royal 397 Mortimer v. Ireland, 11 L. J. Ch. 416 471 Mortlock V. Buller 258 Morton and Hallett, Re 472, 473 Moseley, Re, 18 W. R. 126 ; 21 L. T. 384 532 Moss, Ex parte 210 , Re 512 Motz V. Morreau 121 Moyle V. Moyle 252, 317, 378 Mucklow v. Fuller 222, 573 Muffet, Re, Jones v. Mason 290 Mulin V. Blagrave 349 Munch V. Cockerell 381 Murch V. Russel 575 Murphy v. Doyle 327 Mussourie Bank r. Raynor, 46 L. T. 633 23, 28, 37 Mutlow V. Bigg, 22 W. R. 469 ; 45 L. J. Ch. 282 583 Mutual Prov. Soc. v. Macmillan 63 Mycock V. Beatson, 28 W. R. 319 ; 49 L. J. Ch. 127 ; 42 L. T. 141 213 N. Nail V. Punter 575, 577 Nandick v. "Wilkes 158 Nanney v. Williams 115 Nash, Re, 29 W. R. 294 509 V. Allen 165, 166, 227 V. Coates 235 r. Preston 244 National Finance Co., Re, 18 L. T. 895 ; 16 W. R. 994. . 515 TABLE OF CASES CITED. xlix PAGE National Permanent Building Society 336 Naylor v. Amitt 424 Nealo I'. Davis, 2 W. R. 358 388, 389, 391 Needhara, Re 223 Neil, Re, Hemming v. Neil 461 Neil V. Morley 105 Neligan v. Roche 391 Nelson v. Bridport , 71, 76 Nettlefold, Re 448 Neville v. Fortescue 271 New r. Jones 364, 392 New Zealand, &c. Co., Re, 62 L. J. Ch. 262; 68 L. T. 593 506 Newman v. Nevnnan 407 Newsome v. Flowers 388 Newstead v. Searles * 53 Newton r. Askew 410, 412 ■ • r. Newton, 17 W. R. 238 ; 19 L. T. 588 ; 38 L. J. Ch. 145 624 Nicholson t'. Field 483 V. Knowles 391 V. Tuttin 45 Nicldsson r. CockhiU 421 Nightingale r. Lawson 287 Noard v. Backhouse 567 Noel r. Jeavon 244 Norcutt r. Dodd 123 Norfolk's (Duke of) case, 6 Ch. Ca. 5 ; 1 Vem. 164 76 Norris, Re 480, 494, 552 ■ V. Wright 315, 321, 341 North V. Crompton 172 Northage, Re, Ellis t'. Barfield 2G1 , 362 Northern Counties Ass. Co. v. Whipp 11, 149 Norton v. Johnstone 2S7, 291 V. Pritchard 319 Nunneley v. Nunneley 410 O. Occleston r. Fullalove, 22 W. R. 305 ; 43 L. J. Ch. 297 ; 29 L. T. 785 84, 85 Ogle, Ex parte, 21 W. R. 938 438, 543 Oldham v. Oldham, 15 W. R. 300 ; 36 L. J. Ch. 205 .... 460 OUve, Re, Olive v. Westerman, 56 L. J. Ch. 75 ; 55 L. T. 583 343 Oliver V. Court 314, 359, 360 V. Ohver 165 Onslow V. Wallis 247 U. — T. d 1 TABLE OF CASES CITED. PAGE Ord V. Noel 314 V. White 613 Orrett v. Corser 310 O'Rorke v. Bolingbroke, 26 W. E,. 239 114 Osborne and Rowlett, Re, 28 W. R. 365 ; 49 L. J. Ch. 310; 38 L. T. 195 471, 472 Osg-ood V. Strode 49 Osmond v. Fitzroy 109 Ottley V. Gilby 411, 412, 415 Outbwaite, Re 334 Owen V. Delamere, 21 W. R. 218 ; 42 L. J. Ch. 232; 27 L. T. 647 245 Owens, Re 304, 309, 438 Packman and Moss, Re, 24 W. R. 170 ; 45 L. J. Ch. 54 ; 34 L. T. 100 470 Paddon v. Richardson, 26 L. T. 33 ; 19 Jur. 1192 ... . 218, 315 Page, Re, Jones v. Morgan, 62 L. J. Ch. 592; 41 W. R. 357 410, 411, 586 Paine, Re 494 Paliaret v. Carew, 11 W. R. 449; 8 L. T. 139; 9 Jur. N. S. 426 319, 475, 522 Palk, Re 594 Palmer v. Simmons, 2 W. R. 313 40 V. Young 206 TapUlon v. Voice 162 Parker, Re 465, Add. Ixviii «;. Bolton 162 ■ ■ V. Brook V , 616 V. Calcraft 211 V. Carter 151 Parkhurst v. Smith 232 Pamall v. Pamall, 26 W. R. 851 36 Parrott, Re, Walter v. Parrott 158, 164, 166, 495 V. Sweetland 210 Parsons, Re, Stockley v. Parsons 104 Pass V. Dundas, 29 W. R. 332 ; 43 L. T. 665 574 JPaterson v. Paterson 505 Patman v. Harland, 29 W. R. 207 ; 50 L. J. Ch. 642 ; 44 L. T. 728 621 Patrick, Re, BiUs v. Tatham 54, 58 V. Simpson, 59 L. J. Q. B. 7 ; 61 L. T. 686 ... . 588 Patten v. Edmonton Guardians, 31 W. R. 785 ; 52 L. J. Ch. 787; 48 L. T. 870 557, 560 Patterson v. Woolen 522 Paul V. Compton , , 31 TABLE OF CASES CllED. li FAGB Paul V. Paul, 30 W. R. 801 55 Paulott V. Att.-Gen 76, 496 Pawson V. Brown, 28 W. R. 652 ; 49 L. J. Ch. 193 ; 41 L. T. 339 184 Payne, Re, Kibble v. Payne 206, 400 v. Evans 411 Peacock, Re 507 • V. Colling 485 ■ V. Monk 108, 451 Peard v. Kekewich 163 Pearks v. Moseley , 80 Pearse v. Green 410 Pearson, Re, 25 W. R. 126 ; 35 L. T. 68. .83, 84, 125, 132, 367 V. Amicable Ass. Co., 7 W. R. 629 57 Pease, Ex parte 242 Pechel V. Fowler 314, 570 Pemberton v. Gill 600 Pennell v. Deffell, 1 W. R. 499 558 Perry, Re 222 V. Merritt, 22 W. R. 600 ; 43 L. J. Ch. 608 37 Peters v. Lewes and E. Grinstead Rail. Co 456 Peterson v. Peterson 610 Pethybridge v. Burrows 65 Petre v. Petre, 1 W. R. 362 ; 2 L. T. 136 583, 588 Phelps, Re, 54 L. T. 480 475, 487 Phillips, Re 103, 509 V. James, 13 W. R. 934 158 V. MulKngs, 20 W. R. 129 ; 41 L. J. Ch. 211 . . 109, 110, 116 V. Phillips 612 Phipps V. Lovegrove 252 Piekard v. Anderson, 26 L. T. 725 329 Pickering v. Pickering 267 V. Stamford 591 Piercy v. Roberts 83 Pilcher v. Rawlins, 41 L. J. Ch. 485 ; 20 W. R. 281 ; 25 L. T. 921 612, 615 Pilling, Re 503 Pine V. Cooper 293 Pitt V. Pelham 70 Platamore v. Staple 179 Playfair v. Cooper 290 Plowright V. Lambert 403 Poad V. Watson, 3 W. R. 488 ; 25 L. J. Q. B. 396 ; 2 Jur. N. S. 1135 ' 239 Pocock V. Beddington 328 Pole V. Pole 190, 206 Poole V. Pass 299 Pooley V. Quilter, 6 W. R. 402 ; 27 L. J. Ch. 374 ; 31 L. T. 64 ; 4 Jur. N. S. 345 405 d2 lii TABLE OF CASES CITED. FAOB Porter, Re, Coulson v. Capper 460 V. Baddeley 268, 272 Postlethwaite, Ee, Postlethwaite v. Hickman, 60 L. T. 514; 37 W. R. 200 404 Potts V. Britton, 19 W. R. 651 ; 24 L. T. 409 328 Powell V. Hulkes 350 V. London and Prov. Bank 625 V. Matthews 504 V. Price i 158 Pratt, Re, 55 L. T. 613 499 • V. Sladden 173 Prevost V. Clarke 31 Price V. Berrington 105 — — V. Blakemore , , 666 V. Jenkins, 26 W. R. 427 ; 37 L. T. 51 ; 46 L. J. Ch. 85 151 V. Price 543 Prichard v. Ames 69 Pride v. Bubb, 20 W. R. 220 ; 41 L. J. Ch. 105 ; 25 L. T. 890 451 V. Fooks 523 Priest V. Uppleby, 61 L. T. 146 ; 38 W. R. 159 344 Priestman v. Tindall 592 Prime v. Savell 597 Proctor V. Robinson, 15 W. R. 138 ; 15 L. T. 431 86 Prodgers v. Langham 147 Pryce v. Bury, 2 W. R. 87, 216 ; 22 L. T. 324 210 Pryor, Re 383 Pugh, Re 328 Pumphrey, Re, "Worcester, &c. Bg. Co. v. Blick..521, 558, 563 Pybus V. Smith 458 Pye, Ex parte, 18 Ves. 140 ; 2 W. & T. L. Ca. 356 61 R. Raby v. Ridehalgh, 3 W. R. 344 ; 25 L. T. 19 ; 19 Jur. 363 259, 323, 597, 599 Rackstraw, Re, 33 W. R. 559 503 Radcliffe, Re, European Ass. Co. v. Radcliffe 448 Raikes v. Eaikes 493 Ramskill v. Edwards, 34 W. R. 96 ; 53 L. T. 949 593 Randall v. Errington 397 Ranelagh (Lord), Re 206, 399 Rathbone, Re, 45 L. J. Ch. 531 ; 24 W. R. 566 490, 507 Redington v. Redington 190, 212 Redman v. Rymer 517, 619 Reece River Co. v. Atwell, 17 W. R. 601 ; 20 L. T. 163. . 125, 130 TABLE OF CASES CITED. liii PAGE Reeves v. Baker 33 Reg. V. Stapletou 245 V. Sterry 245 Eeliden r. Wesley 378 Reid V. Reid 104, 451 Revel V. Watkinson 290 Reyuell v. Spry, 1 D. M. & G. 6G0 179 Reynolds v. Godlee 199 Richards, Re 532 , Re, Shenstone v. Brock 48 V. Delbridge, '22 W. R. 584 ; 43 L. J. Ch. 459. .48, 62 Richardson v. Richardson, 15 W. R. 690 ; 36 L. J. Ch. 653 61 Richerson, Re, Scales r. Heyhoe, 61 L. J. Ch. 202 ; 66 L. T. 174 195, 202 Rickard v. Robson 107 Ricketts r. Ricketts 598, 599, 600 Rider v. Kidder 123, 185 Ridler, Re, 31 "W. R. 93 ; 52 L. J. Ch. 343 ; 48 L. T. 396. . 134, 151 Rigden v. Vallier 186 Rigley, Re 90 Riughani v. Lee 211 Ritson V. Stordy 107 Roberts, Re, L. R. 4 Ch. App. 561 : 17 W. R. 718 ; 38 L. J. Ch. 488 393, 533 Robinson v. Lowater, 2 W. R. 181 ; 23 L. T. 17 ; 18 Jur. 363 436 v. Pett 212, 217, 391 V. Preston 186 V. Robinson 307, 316, 322, 545 Robson V. Flight, 13 W. R. 393 ; 34 L. J. Ch. 226, 311 ; 12L. T. 725; 11 Jur. N. S. 147 49, 70, 360 Rochford v. Hackman 444 Rodbard r. Cooke, 36 L. T. 504 385 Rogers v. Rogers 177 Rolfe V. Gregory, 13 W. R. 355 ; 34 L. J. Ch. 274 ; 12 L. T. 162 601, 603 Rollfe V. Budder 69 Romford Canal Co., Re 626 Roots V. Williamson 63 Roper Curcon v. Roper Curzon, 19 W. R. 519 ; 24 L. T. 406 427 Rose V. Bartlett 465 V. Watson 213 Rosher v. Williams, 23 W. R. 561 ; 44 L. J. Ch. 419 ; 32 L. T. 387 151 Rowbothani v. Dunnett, 26 W. R. 529 ; 47 L. J. Ch. 449; 38 L. T. 278 182 Rowland v. Morgan 536 v. Witherden 369, 376 Rowley r. Adams 310 llT TABLE OF CASES CITED. FAQB Koyds V. Boyds 344 Boyle, Re 529 Rudkin v. Dolman 92, 174 Rushworth's case 206 Russell, Ex parte, 30 W. R. 584; 51 L. J. Ch. 521 ; 46 L. T. 113 131,132 V. Russell 210 Ryall V. Ryall, cited Amb. 412 185 t>. Roll 561 Ryder «;. Bickerton 329, 410, 597 S. Sackville "West v. Holmesdale, 39 L. J. Ch. 605 155, 160 SaflFron-Walden v. Rayner, 28 W. R. 681 ; 49 L. J, Ch. 465 ; 43 L. T. 3 619 Salusbury v. Denton 31 SaUoway v. Strawbridge, 3 "W. R. 335 ; 24 L. J. Ch. 393. . 473 Salmon, Re, Priest v. Uppleby 552 Salter v. Cavanagh 583, 588 Salway v. Salway , , 359 Sampson and Wall, Re 103 Sanders v. Miller 288 Sandford v. Keech 205, 399 Sarley v. Clockmakers' Co 70 Saunders v. Dehen 147, 627 •^ V. Vantier , 452 Saunderson, Re 83 SavUe V. Cooper, 56 L. T. 907 512 Sawyer v. Sawyer , 597, 599 Sayre v. Hughes, 16 W. R. 662; 37 L. J. Ch. 401 ; 18 L. T. 347 192 Scales V. Baker, 8 W. R. 287 ; 2 L. T. 659 558 Schrieber v. Dinkel 152 Scott V. Beecher , 567 V. Surman 561 Scrivener v. Smith , 300 Sculthorpe v. Burgess 174 • V. Tipper, 20 W. R. 276 ; 41 L. J. Ch. 266 ; 26L. T. 119 316 Seagram V. Knight, 15 W. R. 1152; 36 L. J. Ch. 918; 17 L. T. 47 417, 424, 428 . V. Tick, 29 W. R. 784 ; 50 L. J. Ch. 572 ; 44 L. T. 800 583 Seagrave v. Seagrave 115 Selby V. Wood 288 Sellack v. Harris 99 TABLE OF CASES CITED. Iv PAGE Sewell, Re, 19 W. R. 220 ; 40 L. J. Ch. 135 ; 23 L. T. 835 271 V. King-, 28 "W. R. 344 57 Shafto, Re 483 V. Adams , 72 Shallcross v. Wright 197 Shapland v. Smith 225 Sharp, Re, Rickett v. Sharp, 62 L. T. 677 ; 60 L. J. Ch. 38 328 V. Foy, 17 w/R/65Vi9'L!T.*54i'.*.','.*,*.V.V.'576, 580 Sharpe v. St. Saveur, 20 W. R. 269 ; 41 L. J. Ch. 576 ; 26L. T. 142 106, 107, 108 Sharpies v. Adams, 11 W. R. 450 627 Shaw V. Foster, 20 W. R. 907 ; 42 L. J. Ch. 49 209 v. Lawless 46 t). Weigh 236 Sheffield (Lord) v. London Joint Stock Bank , 626 Sheldon, Re, Nixon v. Sheldon 274, 278, 280 Shelmerdine, Re 488 Shepherd v. Mouls 545 Sheppard, Re 485, 508 Sherwood, Re 391 Shewin v. Vanderhorst 446 Shield, Re, Pethybridge v. Burrow 62 Shore v. Shore 287, 293 Shurmer v. Sedgwick, 31 W. R. 844 ; 49 L. T. 156 152 Sidmouth v. Sidmouth 190 Sigger V. Evans 45 Sisson V. Shaw 417, 426 Skeats v. Allen 479 V. Evans, 61 L. T. 500 479 Sleeman v. Wilson, 20 W. R. 109 ; 25 L. T. 408 590 Smallwood v. Rutter 536 Smethurst v. Hastings, 33 W. R. 406 ; 52 L. T. 567 .... 321, 342, 343 Smirthwaite, Re 487 Smith, Re 288, 300, 444 , Champ V. Marshallsay 65 V. Bolden 522 V. Cherrill, 15 W. R. 919 ; 16 L. T. 517 138 V. Cooke, 60 L. J. Ch. 607 ; 65 L. T. 1 ; 40 W. R. 67 44, 176 V. Cremer 413 V. Matthews, 30 L. J. Ch. 445 ; 9 W. R. 644 ; 4 L. T. 266 94 V. Smith 80, 228, 496, 497 V. Wheeler , 449 Snowdon v. Dales 77, 83, 84, 460 Soar V. Ashwell 606 V. Foster, 6 W. R. 265 ; 4 Jur. N. S. 406 185 Ivi TABLE OF CASES CITED. PAGE Societe Gcnerale v. Walker, 34 "W. E. 662 ; 55 L. J. Q. B. 569 ; 54 L. T. 389 63, 616 Somerset, Re, Somerset v. Poulett (Lord), G2 L. J. Ch. 720 ; 68 L. T. 613 343, 345, 488, 587, 592, 599 Southampton (Lord) v. Hertford (Lord) 79 Sowarsby v. Lacey 436 Speight V. Gaunt, 32 W. R. 435 ; 53 L. J. Ch. 419. .301, 302, 347, 353, 355, 363, 367, 368, 373 Spence v. Spence , 228 Spencer r. Topham, 28 L. T. 56 407 Spenser v. Slater, 27 W. R. 134 ; 48 L. J. Q. B. 204 ; 39 L. T. 424 136 Spini V. Lewis 174 Spirrett v. Willows, 14 W. R. 941 ; 34 L. J. Ch. 365 ; 11 L. T. 720 125, 130 Sporle V. Burnaby 349 Spring V. Pride 398 Springett v. Dashwood, 3 L. T. 542 ; 7 Jur. N. S. 93. . .. 410, 412 V. Jennings, 19 W. R. 575 ; 40 L. J. Ch. 348 ; 24 L. T. 643 182 Spurgeon v. Collier 623 St. .John V. St. John 179 St. Paul V. Dudley • • • • 212 Stacey «-. Elph, 2 L. J. Ch. 50 218, 219, 223, 405 Staekhouse v. Bumston 577 Stafford V. Fiddon 317, 542, 546 V. Stafford 576 Stamford (Earl) v. Hobart 155 Standing v. Bowring, 55 L. J. Ch. 218 ; 54 L. T. 191 ; 34 W. R. 204 185, 187, 188 Standon v. Bullock 147 Stanley v. Coulthurst 165 V. Lennard 154, 155 V. Stanley, 26 W. R. 310 ; 47 L. J. Ch. 256 ; 37 L. T. 777 450, 576, 578, 580, 597, 602 Stanniar v. Evans 45 Stead V. MeUor, 25 W. R. 508 ; 36 L. T. 498 32, 39, 40 Steen, Re, Steen v. Peebles 423 Stevens v. Robertson 255 Stewart v. Sanderson, 18 W. R. 278 ; 39 L. J. Ch. 337 ; 22 L. T. 10 329 Stickney v. Sewell 343, 387, 405 Stikeman v. Dawson 493 Stock r. McAvoy, 21 W. R. 521 ; 42 L. J. Ch. 230 ; 27 L. T. 441 190 Stocken v. Dawes 395 Stokes, Re, 20 W. R. 396; 41 L. J. Ch. 290; 26 L. T. 181 , 476, 535 Stokoe V. Cowan 123 TABLE OF CASES CITED. Ivii PAGE Stone V. Lidderdale 75 Stoner v. Cirwau 1 58 Stott r. Milne 288, 299, 302, 422, 514 Straker v. Wilson 2G2 Strange v. Fooks 575 Streatfield v. Streatfield 158 Stretton v. Ashmall, 3 W. R. 4 ; 24 L. J. Ch. 277 343 Strickland v. Aldridge 91, 99 V. Symons 45, 517 Strong V. Strong 125 Stuart V. Norton 3G1 r. Stuart 259 Stubbs V. Sargou, 2 Ke. 255 ; 3 M. & 0. 507 172, 174 Styles V. Guy, 19 L. J. Ch. 185 328, 385 Sunter r. G. W. Ry. Co 257 Surtees r. Sxu'tees 1 08 Sutton, Re, 27 W. R. 529 ; 48 L. J. Ch. 350 , 531 r. Jones 405 V. Wilder, 19 W. R. 1021; 41 L. J. Ch. 30; 25 L. T. 292 , 350 Swaffield v. Nelson 321, 341 Swain, Re, Swain v. Bringeman 586 Swale V. Swale , 382 Swan, Re 425, 435 Sweetapple r. Bindon 159 Swinnock v. De Crispe 418, 427 Sykes r. Sykes, 20 W. R. 90 ; 41 L. J. Ch. 25 ; 25 L. T. 560 77, 84 Symes v. Hughes, 39 L. J. Ch. 304 ; 22 L. T. 462 . . 179, 184, 194 Synnot r. Simpson 44 Tabori;. Brooks, 48 L. J. Ch. 130; 39 L. T. 528.... 269, 417, 419 Tailby v. Official Receiver 73 Tait V. Lathbery 159 Talbot v. Marshfield 410 ■ r. O'SuUivan 42 • r. Radnor (Earl) 349, 535 (Eiirl) V. Scott 567, 568 Tallatii-e, Re 481, 494 Tanqueray, Willaume, and Landau, Re, 30 W. R. 801 ; 61 L. J. Ch. 434 ; 46 L. T. 542 226, 236 Tappenden v. Walsh 69 Tarleton r. Hornby 591 Iviii TABLE OF CASES CITED. PAGE Tasker v. Small 48 Tatam v. Williams 591 Tatef. Williamson, 15 W. E,. 321; 15 L. T. 549.... 112, 120, 409 Taylor v. BlacUock, 34 W. E. 175 ; 55 L. J. Ch. 99 . . . . 11 V. Cartwright, 20 W. E,. 603 ; 41 L. J. Ch. 529 ; 26 L. T. 571 577 V. Chester , 178 ■ V. Clark 284 ■ «;. Coenen, 34 L. T. 18 139 V. Haygarth 246 V. Meades, 13 W. E. 394 ; 34 L. J. Ch. 203.. 104, 108, 451 — V. Plumer 557, 559 V. Tabrum 429 V. Taylor 197 Teasdale v. Braithwaite, 46 L. J. Ch. 725 ; 36 L. T. 601 ; 25 W. E. 546 152 Tebbs V. Carpenter 310 Teissier, Ee, Teissier v. Teissier, 02 L. J. Ch. 552 ; 68 L. T. 275 296 Tempest, Ee 492 V. Camoys (Lord), 31 W. E. 326 ; 51 L. J. Ch. 785 ; 48 L. T. 13 70, 420, 421 Tennant v. Trenchard, 38 L. J. Ch. 169 ; 20 L. T. 856 . . 397 Thatcher, Ee 426 Thellusson v. Woodford 81 Thomas, Ee, Wood v. Thomas, 60 L. J. Ch. 781 ; 65 L. T. 142 274, 278 V. Kelby 73 Thompson v. Clive , 412 V. Eastwood 582, 583 V. Finch, 25 L. J. Ch. 681 ; 27 L. T. 330 . .385, 592, 694 V. Fisher 162, 163 V. Shakespeare, 8 W. E. 265 ; 29 L. J. Ch. 276 ; 2 L. T. 479 107 v. Simpson 616 • V. Thomas 84 ■y. Webster 127 Thomson v. Clydesdale Bank 565 Thornborough v. Baker 211 Thorndike v. Hunt, 7 W. E. 246; 28 L. J. Ch. 417; 32 L. T. 34G 623 Thorpe, Ee, Vipont r. Eadcliffe, 60 L. J. Ch. 529 ; 64 L. T. 554 205, 399 V. Owen, 2 W. E. 208 ; 23 L. J. Ch. 286 61 Thursby v. Thursby, 23 W. E. 500 ; 44 L. J. Ch. 289 ; 32 L. T. 187 270, 277 Tibbets i: Tibbets 31 TABLE OF CASES CITED. lix PAOB Tickner v. Old, 22 W. R. 871 ; 31 L. T. 29 268, 272 Tidd V. Lister 468 Tieniey v. Wood, 3 W. R. 577 ; 23 L. T. 266 92 Tillott, Re, Lee v. Wilson, 61 L. J. Ch. 38 ; 65 L. T. 781 410, 413 Titley v. Wolstenholme 473 Todd, Ex parte, 56 L. J. Q. B. 431 ; 35 W. R. 676 .... 142 V. Moorhouse 213, 292 V. Studholrae 605 ToUer v. Atwood, 20 L. J. Q. B. 40 238 Tooke V. Hollingworth 659 Topham v. Sj)encer 208 Toutt, Re 479, 509 Townley v. Sherborne 380, 382, 383 Townscnd v. Barber 384 Townson v. Harrison, 59 L. J. Cb. 169 ; 38 W. R. 2'J5 ; 61 L. T. 762 291 • V. Tickell 218 Trafford v. Boehm 597 V. Machonochie, 57 L. J. Ch. 936 ; 59 L. T. 681 ; 37 W. R. 83 86 Tregonwell v. Sydenham 174, 178, 181 Trevor v. Trevor 158, 162 TrowoU V. Shenton 148, 150 Trutch V. Lamprell 386 Tucker v. Bennett 120 . V. Burron, 11 Jur. N. S. 525 185, 194 V. Horneman 536 Tullett V. Armstrong 450, 453, 458 Tunbridge v. Cane 186 Turcan, Re, 40 C. D. 5 30 Turners. Collins, 20 W. R. 305; 41 L. J. Ch. 558; 25 L.T. 779 121 V. Corney , 363 V. Maule, 15 Jur. 761 481, 482 V. Sargent 164 Turnley, Re 299 Turton v. Benson 613, 625 Tweddle v. Atkinson 49, 52 Tweedale v. Tweedale, 26 W. R. 457 ; 47 L. J. Ch. 530 ; 38L. T. 151 22, 31 Tweedie, Re, and Miles 455 Twynne's case 129 Tyarst'. Alsop, 61 L. T. 8 ; 37 W. R. 339 109, 119 Tyler, Re, Tyler V. Tyler 90 V. Tyler 579, 598 Tyrwhitt v. Tyrwhitt 212 IX TABLE OF CASES CITED. U. TA.j^ 7. Precatory trusts. — With regard to precatory words, it is often a matter of difficulty to decide whether a trust is created or not. A testator bequeaths property to A., and states, either that he "hopes and doubts not" {])), "entreats" (q), "recommends" (r), " desires " (s), "requests" {f), (?i) Salushury v. Denton, 3 K. & J. 529 ; Little v. Neil, 10 W. E. 592 ; Gough v. Bult, 16 Sim. 323. (o) Tweedah v. Tiveedale, 1 C. D. 633 ; but it seems very doubtful whether the reasoning of the rule in Burrough v. PJiilcox, applies. (2^) Paul v. Cumpton, 8 Ves. 380. \q) Prevost v. Clark, 2 Mad. 458. (r) Tibhits v. Tihhits, 19 Ves. 657. Is) Birch v. Wade, 3 V. & B. 198. {t) Foley V. Barry, 2 M. & K. 138; and see also Ee 32 DECLARED TRUSTS. or " well knows" {u), that it will be applied for the benefit of B. In such cases, according to the older authorities, a trust would be created in favour of B., unless the property, or the mode of its application for B.'s benefit, were ambiguously or insufficiently stated, or unless a discretion were given to A. whether he should or should not apply it for B.'s benefit, or unless it were expressed to be given to A. " absolutely," or were accom- panied by words to that effect. But, even formerly, where there were other inconsistent expressions, the precatory words would not be construed as imperative. Thus, in Green v. Mars- den (.r), a testator gave certain shares of freehold and leasehold houses to his wife, for her sole use and benefit, begging and requesting that at her death she would give and bequeath the same in such shares as she should think proper, and unto such members of her own family as she should think most deserving of the same. He also gave her all his moneys in the funds, and all the money he might be entitled to, for her sole use and benefit (y), begging and requesting that at her Eutchings, W. N. 1887, p. 217, where Kay, J., held that where real estate was devised to a female, accorapanied by an expression of the testator's "wish and request" that she should not sell it, the female was during cover- ture restrained from anticipation. (m) Briggs v. Penny, 3 M. & G. 546 ; but see Stead v. Mellor, 5 C. D. 225. And as to precatory trusts generally, see notes to Harding v. Olyn, 2 W. & T. L. 0. 946. {x) 1 Dr. 646 ; and see Webh v. Wools, 2 Sim. N. S. 267 ; Re Bond, Cole v. Howes, 4 C. D. 238. {y) See also McOulloch v. McGulloch, 11 W. E. 504; INTENTION TO CREATE A TRUST. 33 death she would give and bequeath what should he remaining, in such shares as she should think proper, unto such members of her own and his family as she should think most deserving. It was held, that both as to the freeholds and lease- holds, and also the money, there was no trust created, but the wife took absolutely. The Yice- Chancellor said : " lie gives it her for her sole use ; that does not mean her separate use in the technical sense, but it means that she should have the absolute use and enjoyment, — that the pro- perty should be for the benefit of her, and of no other person than her .... In the bequest of the specific portion, he uses the words ' which shall be remaining at her death.' What does that mean ? What it means is this, — the widow is to have it for her own sole use and benefit, that she may do as she pleases mth it, that she may spend it, or give it away, or bequeath it ; but he ex- presses his wish, not imperatively, but desiring that jt, u.^^, she may know his wish, as to what she should do <^ *^j;|^ with what remains." ^"^ "^^ 8. A similar decision was given by the Court of Appeal, in the recent case of Re Adams and The Kensington Vedry {z) . There a testator gave all his real and personal estate unto and to the absolute use of his wife, her heirs, executors, Johnston T. Rowlands, 2 De Gex & S. 356 ; Meredith v. Heneage, 1 Sim. 542 ; Wood v. Cox, 2 M. & C. 684 ; Wthh V. Wools, 2 Sim. N. S. 267; Abraham v. Abraham, 1 Euss. 599 ; Beeves v. Baher, 18 B. 372. (2) 27 0. D. 394. IJ. — T. D 34 DECLARED TRUSTS. administrators and assigns, in full conjBdence tliat she would do what was right as to the disposal thereof, between his children, either in her lifetime or by will after her decease. It was held that, under these words, the widow took an absolute interest in the property, unfettered by any trust in favour of the children. This case virtually overrules the decisions of V.-O. Hall in Cuniick V. Tucker (a), and Y.-O. Malins in Le Marchant v. Le Marchant (b). In all tliree cases the precatory words were practically identical, and the only distinction between them is, that in He Adams and The Kensington Vestry the gift to the widow was expressed to be for her " absolute use," whereas in the two other cases it was for her " sole use and benefit." This difference no doubt opens the way for the argument, that due force might be given to the words " sole use and benefit," by construing them as equivalent to " separate use "; whereas no such restrictive meaning can be attached to the expression " absolute use," and that consequently Re Adams and The Kensington Vestry does not neces- sarily overrule Curnick v. Tucker and Le Marchant V. Le Marchant. It would seem, however, that this distinction (which is inconsistent with Green V. Marsden {sup.) ) is too refined, having regard to the declaration of the Lords Justices, that the doctrine of precatory trusts was not to be extended, and that, in the words of Lindley, L. J., " bene- (a) 11 Eq. 320. (&) 18 Eq. 414. INTENTION TO CREATE A TRUST. 35 ficiaries are not to be made trustees, unless intended to be so by the testator." 9. The leaning against precatory trusts has been since emphasized in the more recent case of Re Biggies, Gregory v. Edmoiuhon (e). In that case a testatrix gave all her property to her daughter, her heirs and assigns, followed by these words : " And it is my desire that she allows to A. Gr. an annuity of 25/. during her life, and that A. Gr. shall, if she desire it, have the use of such portions of my household furniture as may not be required by my daughter." The daughter and her husband were appointed executors. On these facts, it was held by the Court of Appeal that no trust to pay the annuity was imposed upon the daughter, but that there was only a request to the daughter not binding upon her in law. At first sight this case would appear to overrule the whole doctrine of precatory trusts, but, on reading the judgments of the learned Lords Justices, it will be seen that they carefully gave reasons for their decision, which are not inconsistent with precatory words being still construed as imperative. The Lord Justice Fry said : '• According to the ordinary meaning of the English language this only ex- presses a desire, and does not import a trust or charge. Moreover, the expression 'that she ailous' implies a certain amount of discretion in the daughter. Now", consider the inconvenience of (c) 39 C. D. 253. d2 36 DECLARED TRUSTS. ■what we are asked to decide, that there is a pre- catory trust affecting the whole property ; that the whole property is held in trust to pay 251. a year to Anne Gregory for her life. No fund is directed to be set apart, so if there be a trust it is a trust affecting the whole property. If so, the residuary legatee could not sell a bedstead or give away a ring without committing a breach of trust. This is a monstrous result, and we ought not so to decide unless we are forced to it by the authorities, and I do not think that any case goes to that length. . . . The later cases have established the reasonable rule that the court is to consider in each particular case what was the testator's in- tention. Construing this will according to the ordinary use of the English language, I think that the testatrix did not mean to tie up her whole property during the life of Anne Grregory, but to give it absolutely to her daughter, trusting to her affection and honour to make such allowance to Anne Gregory as she mentioned in her will" (d). 10. Uncertainty. — Another circumstance which I will negative the fiduciary character of words, even directly importing trust, is, where they do not refer to the whole or some definite proportion of the property. Thus, in Parnall v. Parnall (e) a [d) See also Mod-eft v. Mockett, 14 Eq. 49 ; and Wilson v. Bell, 4 Ch. App. 581. (e) 9 C. D. 96 ; and see also for other instances of the absence of a definite subject-matter, Att.-Gen. v. Hall, Fitzf^ib. 314 ; Lechmere v. Lavie, 2 M. & K. 197 ; Bland V. Bland, 2 Cox, 349 ; Wynne v. Hawkins, 1 Bro. 0. 0. INTENTION TO CREATE A TRUST. 37 testator gave to liis wife the whole of his real and personal property for her sole use and benefit, and continued : " It is my wish that ichatever pro- pertij my wife may possess at her death be equally divided between my children." It was contended that these latter words constituted a trust in favour of the children ; but Vice- Chancellor Malins held that no trust was created, and that the widow took absolutely. His lordship said : " In this case there is no precatory trust, for there is not a definite gift over as there was in Le Ma)xhant v. Le Marchant, and there is no obligation here for the widow to possess anything at her death. In order to create a trust which can be carried into execution, there must he a definite subject-matter. . Here the widow has a right to spend the whole of the property, and so there can be no trust affect- ing it." 11. The later case of Mussoorie Bank v. Ray~\ k<-^<~^Mcf^ ic nor [f) both exemplifies the modern tendency i ■?''•' -r-'-)' • ' against construing precatory words as trusts, and' ^.i^^ n^ f-^^ also the rule as to uncertainty. There, a testator • ' •cr^j^*^'- gave to his widow the whole of his real and ^L l^^Ju:^:*.,- f personal estate, " feeling confident that she will t. .■ r f-^- "-- ^i act justly to our children in dividing the same when no longer required by her." It was held by the Judicial Committee of the Privy Council, that the widow took an absolute interest, and that 179 ; Perry v. Merritt, 18 Eq. 152 ; Cowman v. Harrison, 10 Ha. 234 ; Mussoorie Bank v. Raynor, 7 App. Cas. 321 ; and Bretton v. Mockett, 9 C. D. 95. (/) 7 App. Cas. 321. 38 DECLARED TRUSTS. the doctrine of precatory trusts did not apply. Sir A. Hobhouse, in delivering judgment, said : — " Tlieir lordships are of opinion that the current of decisions, now prevalent for many years in the Court of Chancery, shows that the doctrine of precatory trusts is not to be extended ; and it is sufficient for that purpose to refer to the judgments given by Lord Justice James in the case of Lamhe V. Fames, and by Sir George Jessel in the case of Me Hutchinson and Tennant .... Now these rules are clear, with respect to the doctrine of pre- catory trusts, that the words of gift used by the testator must be such that the court finds them to be imperative on the first taker of the property, and that the subject of the gift over must be well- defined and certain. If there is uncertainty as to the amount or nature of the property that is given over, two difficulties at once arise. There is not only difficulty in the execution of the trust, because the court does not know on what property to lay its hands, but the uncertainty in the subject of the gift has a reflex action upon the previous words, and throws doubt upon the intention of the testator, and seems to show that he could not pos- sibly have intended his words of confidence, hope, or whatever they may be — his appeal to the con- science of the first taker — to be imperative words. In this case nothing is given over to the children of the testator, except by an expression of con- fidence in his wife that she will deal justly in dividing the property among them, and that she will do it when the property is no longer required INTENTION TO CREATE A TRUST. 39 by her. If tlie testator had given to his children such property as was not required by his wife, or if he had given over his property if it was not required by his wife, the gift over would, accord- ing to a very well-known and well-established class of cases, have been void, because of the uncertainty. It would have been void, not merely because the words of the gift over were precatory only, but it would have been void notwithstanding that the most direct and precise ivords of gift over might be used"(^). 12. The case of Lechmere v. Lavie (h) further exemplifies the principle that precatory words are not to be construed as imperative apart from the context, and also the rule as to certainty in relation to the property. There a testatrix said in her will, " I hope none of my children will accuse me of partiality in having left the largest share of my property to my two eldest daughters, my sole motive for which is to enable them to keep house so long as they remain single ; but in case of their marrying, I have divided it amongst all my chil- dren. If they die single, of course they will leave what they hare amongst their brothers and sisters, or their children.'^ The eldest of the two daughters died, leaving all her property to the second. The {(/) See also Ee Hutchinson and Tennant, 8 C. D. 540; and Re Bond, Cule v. Haivcs, 4 C. D. 238 ; where the words were rather raore imperative, but the decision was the same. (A) 2 M. & K. 197 ; and see also Eaton v. Watts, 4 Eq. 151 ; Stead v. Mellor, 5 C. D. 225. 40 DECLARED TRUSTS. second died, leaving her property otherwise than in accordance with her mother's will. Upon this state of facts, Sir J, Leach, M. E,., said: "I con- sider the words of this codicil as words expressing the expectation of the testatrix, but not as words of recommendation, or as intended to create an obliga- tion upon the two eldest daughters. The words apply, not simply to the property given by the testatrix, but to all property which the daughters might happen to possess at their deaths, leaving what she gives by her will at their disposition during their lives, and extending to property which might never have belonged to her, and ivanting altogether certainty of amount T 13. So in the leading case of Knight v. Knight (i), the words were : "I trust to the liberality of my successors to reward any others of my old servants and tenants according to their deserts, and to their justice in continuing the estates in the male succes- sion according to the will of the founder of the family, my grandfather." Lord Langdale, M. E,., held that these words were not sufficiently impera- tive, and that the subject intended to be affected, and the interest intended to be enjoyed by the objects, were not sufficiently defined to create trusts, either in favour of the servants and tenants, or of the male line (/). (t) 3 B, 148 ; and see also Stead v. MeUor, 5 C. D. 225. (./) For instances of trusts lield void for uncertainty as to the property, see Bards well v. JJardsioell, 9 Sim. 319; Winch Y. Brutton, 14 Sim. 379; Fox v. Fox, 27 B. 301; Palmer v. Simraonds, 2 Dr. 221 ; Cowman v. Harrison, 10 Ha. 234. IXTENTION TO CREATE A TRUST. 41 14. In McConuick v. Grogan (k), C. made a will leaving the whole of his property to Gr., whom he also appointed his executor. When about to die, C. sent for Gr., and, in a private interview, told him of the will, and on G.'s asking whether that was right, said he would not have it otherwise. 0. then told Gr. where the will was to be found, and that with it would be found a letter. This was all that was known to have passed between the parties. The letter named a great many persons to whom C. wished sums of money to be given, and annuities to be paid, but it contained several expressions as to Gr. carrying into effect the inten- tions of the testator as he "might think best," and also this sentence : — " I do not wish you to act strictly on the foregoing instructions, but leave it entirely to your own good judgment to do as you think I would if living, and as the parties are deserving ; and as it is not my wish that you should say anything about this document, there cannot be any fault found with you by any of the parties, should you not act in strict accordance with it." Gr. paid the money to some of the per- sons mentioned in the letter, but not to others, who accordingly sued him ; but it was held that there was no trust created binding on Gr. (/). 15. A legacy is given to a father " the better to {k) 4 H. L. 82. (l) Apart from the du'ection not being sufficiently im- perative, it ■would seem that it was void as a trust, under the principle as to testamentary trusts enunciated in Art. 9, infra. M>.'^ 42 DECLARED TRUSTS. enable Hm to bring up liis eliildren." No trust is thereby created, for such words are not imperative, but only explanatory of the donor's motive (m). But where, on the other hand, there is a bequest of income to A,, "that he may use it for the benefit of himself, and the maintenance and edu- cation of his children," it has been held that a trust was intended to be imposed upon A. to maintain and educate his children {n) . It is, how- ever, submitted that, having regard to the manifest tendency of recent decisions against construing such expressions as imperative, no trust would now be created by these words. Obs. — In order to obviate any confusion in the reader's mind, it is desirable at this place to draw attention to the fact that he must carefully distin- guish between cases in which (as in the foregoing) it has been held that the precatory words are not imperative and raise no trusts at all, and cases in which the words actually used, or the surrounding circumstances, make it clear that, although the donor has not sufficiently specified the property, the objects, and the way it shall go, yet he never meant the donee to take the entire beneficial interest. In such cases, which are treated of in Division III., a constructive trust is created in favour of the donor or his representatives. Cases (to) Broiun v. Casamajor, 4 Yes. 498. {n) Woods V. Woods, 1 M. & 0. 401 ; Crockett v. Crockett, 2 Ph. 553 ; and Talhot v. O'SuUivan, 6 L. E., Ir. 302 ; and see Bird v. Maylery, 33 B. 351 ; Hora v. Hora, 33 B. 88; Castle V. Castle, 1 De G-. & J. 352. OF ILLUSORY TRUSTS. 43 of precatory words must also be carefully distin- guished from those constructive trusts which arise out of the fraud of those to whom a settlor com- municates a disposition which he has formally made in their favour, but at the same time tells them that he has a purpose to answer, which he has not expressed in the formal instrument, and which he depends upon them to carry into effect, and to which they assent. Art. 7 .—Of Illusonj Trusts. Where persons are, by the form of the settlement, apparently beneficiaries, j but the object of the settlor, as I gathered from the whole settlement, does not appear to have been to create a trust for tlieir henefif^ they cannot call upon the trustee to carry out the settlement in their favour. Illust. — 1. Thus, where a person who is in- debted, makes provision for payment of his debts, by vesting property in trustees upon trust to pay them, but does so behind the backs of the creditors and without communicating with them, the trustees do not become trustees for the creditors. The arrangement is one supposed to be made by the debtor for his own convenience only. It is as if he had j)ut a sum of money into the hands of an fr/c- 44 DECLARED TRUSTS. agent with directions to apply it in paying certain specified debts. In such a ease there is no privity between the agent and the creditor (o), and the trust is revocable by the settlor at any time before the money is paid to the creditor. The case is, however, different where the creditor is a party to the arrangement ; the presumption then is, that the deed was intended to create a trust in his favour, which he therefore is entitled to call on the trustee to execute {p). And so, even though he be not made a party, if the debtor has given him notice of the existence of the deed, and has expressly or impliedly told him that he may look to the trust property for payment of his demand, the creditor may become a cestui que trust (q) if he has been thereby induced to exercise forbear- ance in respect of his claims which he would not otherwise have exercised (/•) ; or if he has assented to the deed and has actively (and not merely passively) acquiesced in it, or acted under its pro- visions and complied with its terms, and the other (o) Walwyn v. Coutts, 3 Sim. 14 ; Garrard v. Lauder- dale, 3 Sim. 1 ; Acton v. IVoodgute, 2 My. & K. 495 ; Bell v. Cureton, ibid. 511; Oibhs v. Olamis, 11 Sim. 584; Eenriquez v. Bensusan, 20 W. E. 350 ; Johns v. James, 8 C. D. 744 ; Henderson v. Rothschild, 33 C. D. 459. But see Re Fitzgerald, 37 C. D. 18, deciding contra as to trusts for creditors after settlor's death. [p) Mackinnony. Stewart, 1 Sim. N. S. 88; Le Touche V. Earl of Lucan, 7 C. & F. 672; Mvntefiore v. Brown, 7 H. L. C. 241 ; and see Smith v. Coohe, (1891) App. Cas. 297. {q) Lord Cran-worth in Sijnnot v. Simpson, 5 H. L, 0. 241. (r) Per Sir John Leach in Acton y, Woodgate, supra. OF ILLUSORY TRUSTS. 45 side has expressed no dissatisfaction, but not otherwise (s). 2. So, where there was an assignment of pro- perty to trustees upon trust to pay all costs, charges and expenses of the deed, and other incidental charges and expenses of the trust, and to reimburse themselves, and then to pay over the residue to third parties, it was held, that a solicitor who had prepared the deed, and had acted as solicitor to the trustees, was not a beneficiary. It was not that the trust did not provide for the costs, or that they were not to be paid, but simply that the solicitor was not a beneficiary under the trust for the payment of them ; the trust might of course be enforced, but not by the solicitor (t). It is obvious that the principle also excludes from the benefit of a trust all persons who are merely auxiliary to the real object of the trust, as, for instance, auctioneers, valuers, solicitors, and other persons carrying out a sale, although the trust instrument contains a trust for payment of costs and expenses. 3. It was at one time considered, that a positive direction to the trustees of a will to employ a par- (s) Per Lord St. Leonards in Field v. Donoughmore, 1 Dru. & War. 227 ; see also Nicholson v. Tuttin, 2 K. & J. 23; Kirman v. Daniel, o Ha. 499; Griffith v. Ricketts, 7 Har. {307 ; Cornthwaite v. Frith, 4 De G. & S. 552 ; Sigger V. Fvans, 5 EU. & B. 3G7 ; Gould v. Rolertson, 4 De G. & S. 509. {t) Worral v. Harford, 8 Ves. 4 ; Foster v. Elsley, 19 C. D. 518. See also Strickland v. Symons, 26 C. D. 243 ; and Stanniar v. Evans, 34 C. D. 470, negativing tlie right of a creditor of trustees to proceed against the estate. 46 DECLARED TRUSTS. ticular person and to allow liim a salary, created a trust in his favour (ii) ; but this view can no longer be supported, the House of Lords having decided the contrary in the leading case of 8haw v. Laiv- less (x). Thus, a direction in a will appointing a particular person solicitor to the trust estate, imposes no trust or duty on the trustees of the will to continue such person as their solicitor in the management and affairs of the estate (y) . 4. The funds voted by Parliament for the public service, are not trust funds in the hands of the secretaries of state who receive them from the treasury (;;) . And even where her Majesty, by royal warrant, granted booty of war to the secretary of state for India in trust to distribute amongst the persons found entitled to share in it by the Court of Admiralty, it was held that the warrant did not operate as a declaration of trust, but merely made the secretary of state the agent of the Sovereign for the purpose of distributing the fund {a). The late Lord Justice James, in giving judgment, said: " The instrument was a warrant, and I am of opinion, although the term 'grant' is used as being the effect of the warrant, that the instru- ment is what it purports to be, a warrant. It is a direction by the Sovereign, ordering and autho- {u) Williams v. Gorhett, 8 Sim. 349 ; Hibbcrt y. Hihheri, 3 Mer. 681. (x) 5 C. & F. 129. (y) Foster v. Elsley, 19 C. D. 518; Finderi v. Stephens, 2 Ph. 142. (2) Or enville- Murray v. Clarendon {Earl), 9 Eq. 11. (a) Kinloch v. Secretary of State for India, 15 C. D. 1. VOLUNTARY TRUSTS, ETC. 47 rizing that Sovereign's servant, liaving possession of the Sovereign's money, to deal with it in a certain way, and the word ' trust ' introduced into the warrant has really no magical effect. It does not become a trust in the sense of a trust cogniz- able and enforceable in a court of law, because that word is used The secretary of state (which- ever secretary of state for the time being it is who has to deal with this matter), deals with it as the agent of the Crown, bound no doubt under his re- sponsibility to Parliament, and the moral respon- sibility which the Crown itself has undertaken from having once made this intimation of bounty, but subject to accounting to the Sovereign, and subject to accounting to Parliament in case there is any malfeasance or nonfeasance in the matter" {h). Art. 8. — Sow far Valuable Consideration necessary to hind Settlor or his Rejyresentatives. (1) The court ^dll enforce a voluntary trust, even against the settlor or his representatives, if — a. It is created by will ; or, /S. The settlor has transferred, or done all in his power to transfer, the trust property to a trustee ; or, y. The settlor has declared or im- {h) Ibid, p. 8. iJ-/ In. CO— lA-J *.<- »! ^lu *J/UA^i«.'' <^2^ 48 DECLARED TRUSTS. Jf' \;* .,-^,. r^^ U' pliedly constituted himself a trustee for the purposes of the trust (c). (2) The court will not enforce a volun- tary trust if the settlor has merely undertaken, or even covenanted, to create a trust, or otherwise manifested an incomplete intention to do so (d). (3) Even where valuable consideration has been given for an incomplete trust, it will only be enforced if some person privy to that consideration seeks to have it enforced (e). But if enforced at all, it will be enforced in favour of all the beneficiaries, and not merely of persons privy to the con- sideration. In that case the settlor, or his successors in title (other than pur- (c) Ellison V. Ellison, 1 L. C. 245 ; Milroy v. Lord, 4 De G., F. & J. 264; Richards v. Delbridge, 18 Eq. 11 ; Ex parte Pye, 18 Ves. 140; Bipple v. Corles, 11 Ha. 184; Antrohus v. Smith, 12 Ves. 39; Re Angibau, 15 C. D. 222; Re Anstis, 31 C. D. 606 ; Green v. Paterson, 32 C. D. 95 ; Re Richards, Shenstone v. Brack, 36 C. D. 541 ; Harding V. Harding, 17 Q. B. D. 442. (d) Milroy v. Lord, supra. But nevertheless, where a voluntary settlor has entered into a covenant for title under seal, the grantees will at law be entitled to recover damages for breach of the covenant; Re Ford, Gilbert v. Gilbert, 63 L. T. 557. (e) Cases cited in note (c), and Gale v. Gale, 6 C. D. 144 ; Colyear v. Lady Mulgrave, 2 Kee. 81 : Davenport v. Bishopp, 2 Y. & C. 451 ; Tasher v. Small, 3 My. & Or. 69. VOLUNTARY TRUSTS, ETC. 49 chasers for value without notice),' will be regarded as passive trustees, charf^ed with the duty of transferring the trust i)ropcrty to active trustees when ap23ointed(/). (4) Persons privy to valuable considera- tion comprise — a. The person by whom, or at whose request, it is given (//). j3. The children of a marriage, where that marriage is itself the conside- ration (h). y. Trustees for any of the fore- going (/). ^ (5) A beneficiary under a voluntary trust, or who is not privy to valuable consideration (where the trust is based on value), is called a volunteer. It is a "well-known maxim, that equity gives no assistance to volunteers ; but, like many other epigrammatic expressions, it cannot be accepted ( /") See Davenport v. Bishopp, supra; Dodhin v. Brunt, 6Eq. 580; Lee v. Lee, 4 C. D. 175; Be Micliell, 6 C. D. 618; RoUon v. FUqht, 4 De G., J. & S. 608. {g) See per Wilde, C. J., Blaiuhj v. De Burgh, 6 C. B. 634; Tweddle v. Athinson, 1 B. & S. 393. {h) See Osgood v. Strode, 2 P. W. 245; Gale v. Gale, supra. (i) See per Lindley, L. J., Be Anstis, Chetwynd v. Mor- gan, 31 C. D. 596, 606. U. — T. E 50 DECLARED TRUSTS. literally. The true rule is, that equity mil give no assistance to volunteers for the purpose of enforcing an inchoate intention to confer a bounty. Where a trust has once been completely declared, or a gift completely made, equity will enforce the trust, or uphold the gift, whether the party apply- ing for relief gave valuable consideration or not. As Mr. Justice Kay said in Henry v. Armstrong (j) , " The law is, that anybody of full age and sound mind, who has executed a voluntary deed by which he has denuded himself of his own property, is bound by his own act." And the same result follows if he has declared himself, or afforded clear evidence that he considered himself, a trustee of it in praesenti. At one time it was considered, that where a man was under the erroneous belief that he had made an actual gift of property, equity would construe that as evidence that he considered himself a trustee of it for the donee. It will, how- ever, be seen from the illustrations given below that this view can no longer be supported. For the fact that a person suj)poses that he has denuded himself of property cannot reasonably be accepted as evidence that he considered himself a trustee of it. On the contrary, it is inconsistent with any such theory ; for a man cannot at the same time believe that he has given away property, and yet that he holds it upon trust for another. In fact, the intention to confer a voluntary benefit is not sufficient ; there must be either a benefit actually {j) 18 C. D. 668. VOLUNTARY TRUSTS, ETC. 51 conferred by a legal transmutation of the tiling given from the donor to the donee, or to a trustee for the donee, or else evidence that the donor actually constituted himself a trustee of the pro- perty for the donee, which evidence is afforded either by the declarations of the donor, or from a course of conduct showing that he considered himself in the position of a trustee. With regard, however, to trusts based on valu- able consideration, equity will enforce them, at the suit of a person privy to that consideration, wherever an intention appears to create a trust, whether in the present or the future. For equity considers that to be done which ought to be done; and the settlor, having received value for the creation of a trust, will be made to carry out his bargain according to the intention of the parties, however informally that intention may have been expressed, and even although no trustee has been named. For the court will never allow a trust to fail for want of a trustee, but will, if the parties have used language sufficiently explicit to enable the court to gather their intentions, fasten the trust on the estate, and, if necessary, appoint active trustees to carry it out. Even, however, where value is given, an in- choate trust will only be enforced at the instance of a person privy thereto ; and, notwithstanding some dicta which seem to indicate a contrary view, it is believed that there is no authority for sup- posing that a person who is made party to a con- tract for a settlement, but who is not privy to the e2 52 DECLARED TRUSTS. consideration, can enforce it (i). Where, however, a person privy to the consideration seeks to enforce an executory trust, the court will enforce it not only in his favour, but in favour of all parties, volunteers included. It was, until quite recently, considered, that the children of a widow, who, on a second marriage, made or procured a settlement in their favour, became privy to the valuable consideration of the marriage, and could enforce the performance of a covenant or incompleted trust (./). Moreover, in Clarke v. Wright (A), some of the judges in the Exchequer Chamber went so far as to extend the marriage consideration to all relatives of an in- tended wife, and even to the relatives of an in- tended husband where Jte was not the settlor, on the ground that a benefit to these relatives must have formed part of the marriage bargain. It is difficult to see, however, how these persons could have been privy to the consideration, although the bargain between husband and wife was a bargain founded on value ; and by a recent decision of the Privy Council (/), Clarke v. WrigJd was expressly overruled. In giving judgment, Ijord Selborne said (speaking of the decision in Clarke v. Wright) : (i) DrewY. Marten, 2 H. & M. at p. 133; Fry, Spec. Pert', sect. 92 ; Tweddh v. Atkinson, 30 L. J., Q. B. 265 ; Chitty on Contracts (ed. 1881), p. 54. ( /) Gale V. Gale, 6 C. D. 144. (/.•) 6 H. & N. 849. {I) De Mestrer. West, (1891) App. Cas. 264 ; and see also Mackie v. Herhertson, 9 App. Cas. 303, 337, and Be Cameron and Wells, 37 C. D. 32. VOLUNTARY TRUSTS, ETC. 53 "It is apparent that the court proceeded upon the view that the case of Neiostead v. Searles (m) was an authority for the proposition that a settlement by a widow about to marry, upon her children by a former marriage, is good against a subsequent mortgagee, putting it in that general way without any reference to more special reasons. And no doubt, //' f/iaf Itad been so, it would have been diffi- cult to resist the conclusion drawn by the Court of Exchequer. . . In the Court of Exchequer Chamber their Lordships find a very great conflict of opinion among the judges, and plainly the majority of the judges would have been for reversing the judgment below if they had not taken the same view of New- stead V. Searles.^' His Lordship then proceeded to show that Ncicstead v. Searles and other cases were in reality no authorities for the proposition that the children of a icidow by her Jirst marriage fell within the marriage consideration on Iter second marriage, and on that ground expressly overruled Clarke v, Wright. It is, therefore, apprehended tliat although their Lordships did not express their dissent from the case of Gale v. Gale (n), in which that proposition was expressly affirmed by Mr. Justice Fry, they nevertheless have in effect overruled it as well as Clarke v. JFrighf. Illust. — 1. Part vested in trustees and part not. — In Jeffries v. Jeffries (o), a father voluntarily (m) 1 Atk. 2G4. (h) Su2:>ra, (o) Cr. & Ph. 138; and see also nizzeij v. FligJd, 24 "W. E. 957, read in conjunction with the remarks of 64 DECLAllED TRUSTS. conveyed freeholds to trustees upon certain trusts in favour of his daughters, and also covenanted to surrender copyholds to the use of the trustees, to be held by them upon the trusts of the settlement. The settlor afterwards died without surrendering the copyholds, having devised certain portions of both freeholds and copyholds to his wife. Upon a suit by the daughters to have the settlement enforced, it was held, that the court would carry out the settlement of the freeholds, for with respect to them the trust was executed, the title of the daughters complete, and the property actually transferred to the trustees. On the other hand, it refused to decree a surrender of the copyholds, for with respect to them, the settlor had neither declared himself a trustee, nor had he transferred them to the trustees, but had merely entered into a voluntary contract to transfer them, which, being a nudum imdum, was of no greater validity in equity than at law ( p). It will be borne in mind, that, not only was there no evidence that the settlor considered that he had constituted himself a trustee, but the fact that he assumed to deal with the property in his will was of itself strong evidence to the contrary. 2. Executed and perfected trust enforceable by volunteers. — By a marriage settlement, the wife's property was settled (after life estates in the hus- band and wife), in default of children, in trust for Lindley, L. J., in Re Patrick, Bills v. Tatham, (1891) 1 Ch. 82. (p) And see Marler v. Tommas, 17 Eq. 8. VOLUNTARY TRUSTS, ETC. 55 the wife if she should survive the husband, but in the event of the husband surviving the wife, then upon such trusts as the wife should hy icill aj^point, and, in default of appointment, in trust for her next of kin. There was no issue of the marriage, and the wife was past the age of child-bearing, and the husband and wife sought to have the capital of the trust fund paid to them, on the ground that, although the trust was based on value, the next of kin were mere volunteers. The Court of Appeal, however, refused to permit this, Jessel, M. E., saying : " The fund has been transferred to the trustees. The fact of the next of kin being volun- teers, does not enable the trustees to part with it without the consent of their cestuis que trusts. That has been the rule ever since the Court of Chancery existed." And Cotton, L. J., added : " I assume that this trust would not have been enforced if it were dill executory. But this trust is executed, and the next of kin have an interest as cestuis que trusts. It is immaterial that they are volunteers. The trust cannot be broken on that account " {q). 3. Executory trust not enforceable by volunteers. — In the recent case of Green v. Paterson{)-), it was held that Lord Justice Cotton's assumption in the case last cited, was correct, and that a covenant to settle future property contained in a settlement (g) Paul V. Paul, 20 C. D. "42. (r) 32 C. D. 95 ; and to same effect, Morgan v. Chet- tvynd, 31 0. D. 596. Semble, that every assignment of future acquired property is invalid in favour of volun- teers ; for such assignments are in reality only contracts to assign {CuUi/er v. Isaacs, 19 C. D. 342). 66 DECLARED TRUSTS. based on valuable consideration could not be en- forced by persons who were not privy to the consideration. 4. Another excellent example of the rule that a contract to create a trust, even where founded on valuable consideration, cannot be enforced by a volunteer, is afforded by the case of Cohjcar v. Lady Mulgram (,s). There, a father, who had four natural daughters and a legitimate son, entered into an agreement with the son, whereby the father covenanted to transfer the sum of 20,000^. to a trustee for the benefit of the four daughters ; and the son covenanted to pay the father's debts. The son paid some of the debts, and died before the covenant by the father was performed, having by his will left the father his sole legatee and executor. It was held, that the daughters could not force the father to perform the covenant to settle 20,000/. upon them, as, although the son gave value for the father's covenant, the daughters were not privy to that consideration. 5. Voluntary transmutation of equitable inte- rests. — In Gilbert v. Orc)ion{t), A., having an agreement for a lease, executed a voluntary settle- ment assigning all his interest in the agreement to trustees upon certain trusts. It was objected that he had not declared himself a trustee, nor intended to declare himself one, and had not conveyed the leasehold premises to the trustees ; but Vice- Chancellor Wood said : " In the inception of this (s) 2 Kee. 81. [t) 2 H. & M. 110. VOLUNTARY TRUSTS, ETC. 57 transaction, there is nothing to show that the settlor had the power of obtaining a lease, before the time when he did so, after the execution of the settlement. There is, therefore, nothing to show that the settlor did not, by the settlement, do all that it was in his power to do to pass the property." 6. In Kclxcnich v. Manning (^u), residuary per- ,, ^^ sonal estate was bequeathed to a mother for life, ^ J,^ with remainder to her daughter absolutely. The daughter, on her marriage, assigned all her interest under the will to trustees upon certain trusts, not material to be stated, with a final trust in favour - of her nieces. Although, qua the nieces, the set- tlement was voluntary, it was held that it was good, on the ground that the daughter had done all she could do to divest herself of her interest under the will. For she had a mere equitable remainder, and the only way in which she could '^^ transfer it was by assignment. If she had been the legal owner of the fund it would have been necessary for her to transfer it in the proper way in the books of the bank ; but not being the legal owner, she did all she could do to transfer it (x). 7. Debts assigned, but subsequently got in by settlor, — In Bizzey v. Flight {y), A. {inter alia) as- («) 1 De G., M. & G. 176. (a;) The chief difficulty is to determine what is a com- plete assignment and what is not. See Donaldson v. Donaldson, Kay, 711 ; Edwards v. Jones, 1 My. & Cr. 226; and Pearson v. Amicable Assurance Co., 27 B. 229; and Fortescue v. Buriiett, 3 My. & K. 36 ; Seuell v. King, 14 C. D. 179; Harding v. Harding, 17 Q. B. D. 442 ; Nanney V. Morgan, 37 C. D. 346 (equitable interest in shares); and Re Earl of Liican, Hardinge v. Cohden, 45 C. D. 470. {y) 24 W. E. 957. 58 DECLARED TRUSTS. signed certain mortgage debts to trustees upon certain trusts. The settlement, however, con- tained no transfer of the mortgage securities. A. subsequently received the money due on some of the mortgages, the trustees receiving the money due on others. It was held by Hall, Y.-C, that as the mortgaged property was not transferred to the trustees, the settlement was essentially incom- plete, and, being a voluntary settlement, was void. In a more recent case before the Court of Appeal, however (s) , in which the only difference was that the mortgage was a bill of sale of chattels, the court held that the settlement was complete and binding, and threw some doubt on the correctness of the decision in Bizznj v. Flight. It appears, however, that their lordships distinguished the two cases on the ground that a bill of sale was different to a mortgage of land, in which a transferee of the debt would be unable to give a receipt for the money unless he could re-convey the mortgaged property, whereas, on payment of a bill of sale, no re-assignment of the mortgaged chattels is required. 8, Declaration of trust implied from conduct. — A testator bequeathed 2,000/. on certain trusts, and he empowered his executor (who was also his residuary legatee) to retain the amount in his hands uninvested, he paying interest thereon at foui* per cent, per annum. After the testator's death, the executor, being satisfied that the (2) Re Patrick, Bills v. Tatham, (1891) 1 Ch. 82. VOLUNTARY TRUSTS, ETC. 59 testator intended to bequeath 3,000/. and not 2,000/., said to the legatee's father: "It shall make no difference, and I will take care that he (the legatee) shall have 1,000/. more than he is entitled to by the will." Subsequently he signed a memorandum in these words: " By the will, &c. of the late S. Gr. the said J. Gr. (the executor) pays to T. W. (the legatee), the annual sum of 120/. by two equal payments, viz., the 6th July and the 6th January in each year, being interest at four per cent, on 3,000/." He also signed a further memorandum, stating that he had told the legatee that he should make the 2,000/. up to 3,000/.; and down to his death he in fact paid interest on the 3,000/. On these facts, it was held that the exe- cutor had effectually declared himself a trustee of the additional thousand. The late Lord Eomilly, in giving judgment, said : " The distinction be- tween the cases is, that where a trust, though voluntary, is complete, the cestui que trust (although he cannot call on the court to complete a trust) may call on the court to execute one that is completed. I have, therefore, only to consider whether in this case the relation of trustee and cestui que trust exists. . . . The testator says to his son and executor, ' You may invest this or not as you please, but if you retain it, you must pay interest for it at four per cent.' Could he (the executor) after proving his father's will, and taking possession of assets amply sufficient for payment of the legacy, say he was not a trustee of that 2,000/. ? That would be impossible. . . . 60 DECLARED TRUSTS. Then wliat takes place is this : — Upon the death of the testator, his son (the executor) says, in substance, ' My father told me that he intended to bequeath the sum of 3,000/., not 2,000/., and he firmly believed that he had put 3,000/. in the will, ■whereas it was only 2,000/. ; and that being so, I intend to follow his directions.' Thereupon he signs this statement. How can I distinguish the 3,000/. from the 2,000/. ? Is he not in the same relation with respect to the 3,000/., as he would have been with regard to the 2,000/. ? If he had invested 2,000/. only, and not 3,000/., something might have been said. But suppose he had invested the 3,000/., would it not have been clear that there was a declaration of trust in respect of that 3,000/. though invested in his own name ? This paper is a clear declaration of trust of that 3,000/., and according to the permission contained in his father's will, he, instead of investing it, holds it in his own hands, and the whole fund stands in the same situation " («). 9. Again, a testatrix gave her personal estate to B. for the benefit of B.'s daughters. B. invested the produce, together with 1,000/. of his own moneys, in the funds in his own name, and after- wards treated and admitted the aggregate fund as held in trust for his daughters. On his death the fund was found mixed with like funds of his own. It was held that, under the circumstances, there was sufiicient to show that B. considered (a) Qee v. Liddell, 35 B. 621. VOLUNTARY TRUSTS, ETC. 61 himself a trustee of the 1,000/. in favour of his daughters (b) . 10. In Ej7 parte Dubosc (c) the alleged settlor wrote to an agent in Paris, authorizing him to purchase (and the agent accordingly did purchase) an annuity for the benefit of a lady whom he named; hut as the lady was married, and also deranged, the annuity was purchased in the name of the settlor. The settlor then sent the agent a power of attorney, authorizing him to transfer the annuity to the lady, which he did not do till after the settlor's death. It was nevertheless held, that the settlor had considered himself a mere trustee for the lady, and had never intended the annuity for himself, but for her, and that therefore the trust was good. 11. Imperfect gift not construed as declaration of trust. — On the other hand, although some judges have held that an instrument executed as a present assignment (but in reahty not operative as such) is equivalent to a declaration of trust (r/). {h) Thorpe v. Owen, 5 B. 224 ; and see also Armstrong v. Ti'mpero7i, W. N. 1871, p. 4. (c) 18Ves. 140 (otherwise ^03 parte P^e) ; and see also Re BeUasis, 12 Eq. 218. (rZ) In Richardson v. Richardson, 3 Eq. 686, Vice- Chancellor Wood (afterwards Lord Hatherley), and in Morgan v. Malleson, 10 Eq. 475, Lord Eomilly, and in Badderleij v. Badderlei/, 9 C. D. 113, Vice- Chancellor MaUns. The former very learned judge said: "An in- strument executed as a present and complete assignment, not being a mere covenant to assign on a futui-e day, is equivalent to a declaration of trust ; the real distinction that should be made is between an agreement to do some- thing when called upon, something distinctly expressed 62 DECLARED TRUSTS. ' the balance of authority is unmistakeably the other way, on the ground that an intention to create a trust is essential to the creation of one ; and that when a man purports to make a gift or an assignment, he cannot reasonably be supposed to have intended to declare himself a trustee — a character which assumes that he retains the pro- to be future in the instrument, and an instrument wliicli affects to pass everything, independently of the legal estate. . . . The expression used by the Lord Justice in Ki'kewich v. Manning is this : ' A declaration of trust is not confined to any express form of words, but may be indicated by the character of the instrument.' Reliance is often placed on the circumstance that the assignor has done all that he can — that there is nothing more for him to do ; and it is contended that he must, in that case only, be taken to have made a complete and effectual assign- ment. But that is not the sound doctrine on which the case rests, for if there be an actual declaration of trust, although the assignor has not done all he could do — for example, although he has not given notice to the assignee, yet the interest is held to have effectually passed as between the donor and the donee. The difference must rest on this — aye or no, has he constituted himself a trustee?^'' It will be perceived that the learned Vice-Chancellor did not dissent from or add to the recognized riile stated in Article 6. Wliere he differed from the previous autho- rities was in deciding that an instrument, purporting to be an assignment, although void as such, was nevertheless good as a declaration of trust. Tliis view has been expressly dissented from by Vice-Chancellor Bacon in Warriner v. Rogers, 16 Eq. o40, and by Sir George Jessel, M. E.., in Richards v. Delhridge, 18 Eq. 11, and by Vice-Chancellor Hall in Breton v. Wolvern, 19 C. D. 416. The decision also seems to be inconsistent with Lord Cranworth's judgment in Jones v. Loche, infra, and with Heartley v. Nicholson, 19 Eq. 233, and Re Shield, Pethy- hridge v. Burroiv, 53 L. T. 5, and it is submitted that, both on jirinciple and authority, the law as laid down by the Master of the Eolls in Richards v. Delhridge, is accurate. IMPERFECT GIFTS. 63 perty. Thus in Antrohus v. Smith (e), the alleged settlor made the following endorsement on a share held by him in a public company : "I do hereby assign to my daughter B. all my right, title and interest of and in the enclosed call, and all other calls, in the F. and C. Navigation/' The share ■was not handed over to the daughter, and the endorsement did not operate as a valid assignment of the share ; but it was attempted to enforce the assignment by contending that the endorsement operated as a valid declaration of trust. The court, however, rejected this view, the Master of the EoUs saying : " Mr. Crawfurd (the alleged settlor) was not in form declared a trustee, nor was that mode of doing what he proposed in his contemj)lation. . . . He meant a gift, and there is no case in which a party has been compelled to perfect a gift which in the mode of making it he has left imperfect." 12. Again, a settlor had children by a first wife, and one son (an infant) by a second w^ife. One day on his return from a journey, the infant's nurse said, "You have come back from Birmingham, and have not brought baby anything " ; upon which the settlor answered, " Oh ! I gave him a pair of boots, and now I will give him a handsome present." He then went upstairs and brought down a cheque which he had received for 900/., and said, " Look you here, I give this to baby ; it (e) 12 Yes. 39. Shares or stocks must be transferred according to tlie company's regulations (Societe Generate V. WaJktr, 11 App. Cas. 20; Boots y. Williamson, 38 C. D. 485 ; Mutual Frov. Socy. v. MacmiUan, 14 App. Cas. 596). 64 DECLARED TRUSTS; is for himself ; I am going to put it away for him, and will give him a great deal more with it ; it is his own, and he may do what he likes with it." He then put the cheque away. He had previously told his solicitor that he intended adding 100/. to the cheque, and investing it for the infant's benefit. A few days after the above took place, he sud- denly died, leaving the child penniless. The child's mother contended that the settlor had made a valid declaration of trust in favour of the child. Lord Cran worth, however, said (,/) : " I regret to say that I cannot bring myself to think, either on principle or authority, that there has been any gift or any valid declaration of trust. No doubt a gift may be made by any person, sui juris and compos mentis, by conveyance of real estate, or by delivery of a chattel, and there is no doubt also that, by some decisions, a parol decla- ration of trust of personalty may be perfectly valid, even when voluntary. If I give any chattel, that of course passes by delivery ; and if I say, expressly or impliedly, that I constitute myself a trustee of personalty, that is a trust executed and capable of being enforced without consideration. The cases all turn upon the ques- tion whether what has been said was a declaration of trust or an imperfect gift. In the latter case the parties would receive no aid from a court of equity if they claimed as volunteers. But when (/) Jones V. Locke, 1 Cli. App. 25; and see also Marler V. Tommas, 17 Eq. 8 ; and see, as to imperfect gifts at common law, Irons v. SmaUpiece, 2 B. & Aid. 551 ; and Cochrane v. Moore, 2d Q. B. D. 57. IMPERFECT GIFTS. 65 there has been a declaration of trust, then it will be enforced, whether there has been consideration or not." 18. So in J/Z/ro// v. Lord {g)^ Lord Justice' fu-M.^,^ Turner laid it down that, " In order to render a voluntary settlement valid and effectual, the settlor must have done everj'tliing which, accord- ing to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property, and render the settle- ment binding upon him. He may of course do this by actually transferring the property to the persons for whom he intends to provide, and the provision will then be effectual ; and it will be equally effectual if he transfers the property to a trustee for the purposes of the settlement, or de- clares that he himself holds it in trust for those purposes. But in order to render the settlement binding, one or other of these modes must (as I understand the law of this court) be resorted to, ^,, for there is no equity in this court to perfect an v*— f-*- imperfect gift." 14. An excellent example of the rule now under consideration is afforded by the modern case of Pethi/hridgc v. Burroivs (Ji). A. informed F. that he intended to give her a debenture bond for 1,000/. Shortly afterwards he signed the follow- {g) 4DeG., F. & J. 264. (li) 53 L. T. 5. This case seems to be inconsistent ■with. V.-C. Hall's decision in Ee King, SeiueUx. King, 14 C. D. 179, the authority of which is respectfully questioned. See also Vincent v. Vincent, 35 W. E. 7 ; and Re Smith, Champ V. Marshallsay, 64 L. T. 13. TJ. — T. F 66 DECLARED TRUSTS. ing memorandum : — " I wisli to communicate to my executors, that I have to-day given to F. my l,000i^. debenture bond of the S. and L. Co. But as I shall require the annual dividends to meet my necessary expenses, I retain the document in my possession for my lifetime, requesting you on my decease to hand it over to F., and communicate to the secretary of the railway company relative to the transfer of the said bond being entered in their books. Griven under my hand this 9th day of February, 1882. As witness my hand, Gr. S. P.S. — You will find the bond in my deed-box, attached to this memorandum." After the testa- tor's death, the certificate was found as stated. Held, reversing Pearson, J., that the memorandum was not equivalent to a declaration of trust, and that F. was not entitled to the bond. 15. It was at one time thought that there was an exception (or a seeming exception) to this principle in the case of husband and wife. In Grant v. Grant (?'), the Master of the EoUs said: " I apprehend the fact of the transaction taking place between husband and wife, instead of between strangers, makes no difference further than this, that in the case of a gift of chattels from one stranger to another, there must be a delivery of the chattels in order to make the gift complete, whereas in the case of husband and wife there cannot be a delivery, because, assuming they (0 34 Bea. 623 ; followed by Malins, Y.-C. , in Badderley v. Badderleij, 9 C. D. 113, and by Bacon, Y.-O., in Fox v. Mawkes, 13 C. D. 822. IMPERFECT GIFTS. 67 aro given to the wife, thej still remain in tlie legal custody of the husband." However, the more recent decision of Vice-Chancellor Hall, contra, in Breton v. Wolrcni {k), has thrown considerable doubt on the soundness of that case. There, a husband, by three letters written and signed by him and handed to his wife, gave her furniture and other articles for her sole and absolute use. It was contended on the part of the wife, that the husband had by these letters constituted him- self a trustee for the wife, because it was im- possible for the husband to make a gift of them to her, inasmuch as the legal interest would have at once revested in him jure mariti, and that there- fore there was a difference between an imperfect gift to a stranger and an attempted gift to a wife. However, the learned Vice- Chancellor in an elaborate judgment, while expressing his sorrow that he could not decide in favour of the wife, " because it is a monstrous state of the law which prevents effect being given to such gifts," found himself unable to support the gift, and pointed out that the above quotation from the judgment of the M. R. in Grant v. Grant was merely a dictum, and that in his opinion the subsequent cases of Badderlcy v. BaddcrJcy and Fox v. Ilaickcs could not be supported. The point has now lost some of its interest, from the fact that since the passing of the Married Women's Property Act, 1882, (/v) n C. D. 416. f2 tt- .^^ 68 DECLARED TRUSTS. gifts made by a husband to a wife are as valid as gifts made by one stranger to another. 16, Form immaterial where parties to valuable consideration sue. — With regard to trusts based on valuable consideration, and which are sought to be enforced by persons privy to that consideration, the following examples may serve to elucidate the doc- trine of the court. A marriage settlement contains a covenant by the intended husband that he will transfer to the trustees any property which may accrue to him in right of liis wife during the mar- riage. Upon any property so becoming vested in him, he immediately becomes a trustee of it, upon trust to transfer it to the trustees ; and until that is done he himself holds it upon the trust declared in the settlement (/) . Not only, therefore, is there an action for breach of covenant maintainable against him, but the actual property is burdened and charged with the executory trust (m), and any volunteer taking it would take it burdened with that trust ; and so would a purchaser if he had notice of the trust, as will be seen hereafter. 17. As an example of how much more equity regards the intention than the form, the case of Lee V. Lee (») may be cited. There, by an ante- nuptial agreement made in consideration of the {I) Lewis Y. MadocJxS, 8 Yes. 150; WeUesJei/\. WeJIesley, 4 M. & C. 561 ; Lijster v. Burroughs, 1 Dr. & W. 149. (??!) Lewis V. Madocl for her children who may attain twenty-one, and the issue per stirpes of such of them as shall die under age, which issue shall attain twenty-one, the whole of the limitations after the life estate of A. '? are void. For although the children must attain ~ "" ^ twenty-one within the prescribed period, the issue of deceased children may not ; and the gift being to a class as a whole, the one cannot be separated from the other {g) . Where there is a valid trust, with a gift over in certain contingencies, which is void for remoteness, the valid trust remains un- (/) Dungannon v. Smith, 12 CI. & F. 546; Smith v. Smith, 5 Ch. App. 342 ; Re Handcoch, 13 L. E. Ir. 34. {g) Pearks v. Moseley, 5 App. Cas. 714. LEGALITY OF EXPRESSED OBJECT OF THE TRUST. 81 affected (h). All remainders after a gift void for remoteness are themselves void (/) . 5. The Thellusson Act. — At common law, the power of tying up money so as to accumulate at compound interest, was co- extensive with the period for which property might he tied up under the rule against j)erpetuities ; viz., during any number of lives in being, and twenty-one years afterwards. The late Mr. Thellusson having, by his will, dn-ected his personalty to be invested in land, and the rents of the land so bought and of his other real estate to be accumulated during the lives of all his descendants living at his death (Ji) , the attention of Parliament was called to the unreasonable nature of such a power. Accordingly, by the statute 39 & 40 Geo. 3, c. 98 (commonly known as "The Thellusson Act"), the period allowed by the common law for accumulations was further restricted to the life or lives of the grantor or grantors, settlor or settlors ; or (not cotd) twenty- one years from the death of any grantor, settlor, devisor, or testator; or during the minorities of any persons who shall be living, or en ventre sa (/() Goodie)' V. Johnson, 18 C. D. 441. For otiier recen examples of the question, whether or not a trust is void for remoteness, the reader is referred to Re Bevan, 34 C. D. 716, and Re Coppard, 35 C. D. 350. (i) Cambridqe v. Rouse, 8 Ves. 24, and see Watson v. Young, 28 C. D. 436, and Re Frost, Frost v. Frost, 43 C. D. 246. But where there are two alternative contingent gifts, one too remote and the other not, if the latter con- tingency happens the gift will be good, Eiders v. Challis, 1 H. L. C. 531. But see note (q), p. 76, supra. {k) Thellusson r. Wood/ord, 11 Yes. 112. U. — T. G 82 DECLARED TRUSTS. mere, at tlie time of the deatli of tlie grantor, settlor, devisor, or testator ; or during the minori- ties of any persons who, under the instrument directing the accumulation, would for the time being, if of full age, be entitled to the income directed to be accumulated. The statute, however, does not extend to any provision for payment of debts, or for raising portions for the children of the settlor, grantor, or devisor, or of any person taking any interest under the instrument directing such accumulations ; nor to any direction as to the produce of timber upon any lands ; nor to a trust or direction for keeping property in repair (/). It might perhaps be thought that by analogy to the action of the courts with regard to trusts which transgress the common law period, a trust which endeavoured to go beyond the period allowed by the statute would be wholly void ; but this is not so. The statute is raeiely jjrohibitori/ of accumu- lations going beyond the period prescribed by it, and being in derogation of a common law right, is construed strictly ; consequently, as accumulations which exceed that period, but are within the common law period, are not contrary to public policy as defined by common law, such a trust is good pro tanto (m). If, however, the trust is to accumulate beyond the common law period, it is altogether void (n) . (0 Vine V. Baleigh, (1891) 2 Cli. 13; Be Maso7i, Mason V. Mason, (1891) 3 Ch. 467. (m) See Griffithsr. Vere, Tud. L. C. Conv. 497, and cases there noted. (??) Tud. L. C. Conv. 506, notes on Griffithsr. Vere, citing Bougliton v. James, 1 Coll. 26, and otlier cases. LEGALITY OF EXPRESSED OBJECT OF THE TRUST. 83 6. Settlements against policy of bankruptcy law. — A trust, with a proviso that the interest of the cestui que trust shall not be liable to the claims of creditors, is void so far as the proviso is concerned ; and if it can be only ascertained that the cestui que trust was intended to take a vested interest, the mode in which, or the time when, he was to reap the benefit, is immaterial, and the entire interest may either be disposed of by the act of the cestui que trust, or may enure for the benefit of his creditors under the operation of the bank- ruptcy law (o). The question generally depends upon whether, on the decease of the cestui que trust, his executors would have a right to call upon the trustees retrospectively to account for the arrears {p). Of course, however, a trust to A. until he becomes bankrupt, or aliens the pro- perty, and then over to B., is good [q) ; but a man cannot make a settlement upon himself UTiiH bank- ruptcy, and then over (r), not even by an ante- nuptial marriage settlement (where it might fairly be urged to be part of the wife's terms of the mar- riage bargain) ; for the express object of such a (o) Lew. 87. For exaraple, see Younghushand v. Gis- lorne, 1 Coll. 400; Green y. Sjncer, 1 E. & M. 395; Graves V. Dolphin, 1 Sim. 66 ; Piercij v. Roberts, 1 M. & K. 4 ; Snowdon v. Dales, 6 Sim. 524. {p) See Ee Saundersori' s Trusts, 3 K. & J. 497. [q) SeeBillsony. Crofts, 15 Eq. 314; Be Alwyn's Trusts, 16 Eq. 585, and cases therein cited. (r) Knight v. Brown, 7 Jur., N. S. 894; Brooker v. Pearson, 37 Beav. 181 ; Re Pearson, 3 C. D. 807. g2 84 DECLARED TRUSTS. trust is to clieat his creditors, whicli is, of course, an illegal purpose, and therefore void (.s). 7. Restraint on alienation. — Trusts framed with the object of preventing the barring of entails or imposing restrictions on alienation of property, are contrary to the policy of the law, and are there- fore void (t) ; with the single exception that trusts limiting the power of married women to alienate their separate property during coverture, are regarded as valid. 8. Trusts for future illegitimate children. — Where a man, by deed, creates a trust in favour of future illegitimate children (putting aside the objection as to want of certainty in the cestuis que trusts), the trust will be void, as being contrary to public policy, and conducive to immorality {u). Simi- larly, a trust hij will in favour of the future illegitimate children of another, would clearly be a direct encouragement to such other to continue his illicit intercourse after the testator's death, and would be therefore void ioc) . (s) Higqinhottom v. Holme, 19 V. 88 ; Ex parte Hodgson, ib. 208 ; Jie Pearson, 3 C. D. 807 ; but consider Re Detmold, 40 C. D. 585. [t) FJoyer v. Banles, 8 Eq. 115; Sijl^es v. Sijl-es, 13 Eq. 56 ; and as to alienation, tinoiudon v. Dales, G Sim. 524 ; Green v. Bpicer, 1 B. & M. 395 ; Graves v. Dolphin, 1 Sim. (56 ; Brandon v. Robinson, 18 Yes. 429 ; Ware v. Cann, 10 B. & C. 433 ; Hood v. Oglander, 34 B. 513. (?f) Bladwell v. Edwards, Cro. Eliz. 509 ; Moo. 430 ; and see per Mellisb, L. J., in Occleston v. Eiillalove, 9 Ch. Ap. 147 ; and Thompson v. Tho7nas, 27 L. R. Ir. 457. {x) Metham v. Duhe of Devon, 1 P. W. 529; Doriny. Darin, L. E., 7 H. L. 568; Re Byles, 1 C. D. 282. LEGALITY OF EXPBESSED OBJECT OF THE TRUST. 85 The same objection does not, however, apply to the case of a testator creating a trust by will in favour of his oxen future bastards. Thus, in Occledon v. Fallalovc (?/), a testator by his will gave a share of the proceeds of his residuary estate to his reputed children, Catherine and Edith, " and all other children which I may have, or be reputed to have, by the said M. L., now born, or hereafter to be born." This gift in favour of future-born children was held vahd ; and Lord Justice James said : "If there be any in- ducement to wTong, the law can and does deal with it. If there be a covenant for a turpis causa, the covenant is void. If there be an illicit con- dition, precedent or subsequent, to a gift, it either avoids the gift or becomes itself void. If the gift requires or implies the continuation of wrong- doing, that is in substance a condition of the gift, and falls within the rule of the condition. But how can that apply to an instrument like a wall, with reference to gifts taking effect at the death in favour of persons then in existence?" And Lord Justice Mellish said : "In the present case, the will being the will of the putative father him- self, it is impossible that it can encourage an immoral intercourse after his death. If the be- quest is to be held to be contrary to pubhc policy, it must be because it tended to promote an immoral intercourse in his lifetime. There was no evidence that M. L. knew that the will was made ; and if {y) 9 Ch. Ap. 147 ; and see also Re Goodwin, 17 Eq. 345. 86 DECLARED TRUSTS. Blie did know it, she must also have known that it could he revoked at any moment. Then, can it be said that the testator himself would he en- couraged in immorality by having the power to make a will in favour of his future children. I cannot see that he would ; or, at any rate, I think that this is too uncertain to he made a ground of decision. I am of opinion that a will no more comes into operation, for the purpose of promoting immorality or for effecting something contrary to public policy, during a testator's lifetime, than it does for any other purpose." 9. Separation deeds. — A trust to take effect upon the future separation of a husband and wife is void, as being contrary to public morals {z) ; but a trust in reference to an immediate separation, already agreed ujjou, is good and enforceable (a) . If, how- ever, the separation does not in fact take place, the trust becomes wholly void {b). The reason of all this is at once obvious, when we consider that a provision for husband or wife, to take effect upon a future separation, is a direct encoui'agement to misconduct which may eventuate in a separation ; whereas, when a separation is actually agreed on (z) Westmeathy. Westmeath, 1 Dow.jN. S. 519; Proctor V. Robinson, 35 B., and on Ap. 15 W. E. 138; and see also Trafford v. Machonochie, 39 C. D. 116, wliere a testator gave an annuity to A. so long as she might reside apart from her husband. {a) Wilson V. Wilson, 1 H. L. Cas. 538 ; 5 H. L. Cas. 40; Vansittart v. Vansittart, 2 D. & J. 249; Jodrell v. JodreU, 9 B. 45 ; and see 14 B. 397. (6) Bindley v. Mulloney, 7 Eq. 343. LEGALITY OF EXPRESSED OBJECT OF THE TRUST. 87 — when iDoth parties have decided that they will no longer remain together — there can be no en- com-agement to marital misconduct in agreeing to the distribution of their income in a particular manner and for their mutual benefit and advan- tage. 10. Trusts in general restraint of marriage. — Where property is settled in trust for a woman until she marry a man with an income of not less than 500/. a-year (c), or until she marry any per- son of a particular trade {d), and then over in trust for another, the latter trust is bad, as its object, as gathered from its probable result {e) , is to restrain marriage altogether. If, however, the trust over is to take effect only upon the first beneficiary marrying a particular person, it would be good, as it would not be in general restraint of mar- riage (/). 11. Restraint on second marriage. — So, where (g) a person, by her will, gave her residuary estate to trustees, upon trust to pay the income to her nephew and his wife (the testatrix's niece) for their joint lives and the life of the survivor, with a gift over (in the event of the nephew surviving and marrying again) in trust for the children of her said niece, and in default of such children, for (c) Sm. E. & P. Prop. 80 ; Story, 280—283. (d) Ibid. (e) Sm. R. & P. Prop. 80; and Story, 274—283; Lloi/d V. Lloyd, 2 Sim. N. S. 255. (/) Sm. R. & P. Prop. 81—107. {g) Allen v. Jackson, 1 C. D. 399. 88 DECLARED TRUSTS, the cliildren of the testatrix's sister, it was held that the gift over was good. Mellish, L. J., in delivering his judgment, said : " It has been said with respect to this rule against restraint of mar- riage, that it has no foundation on any principle, that it has nothing to do with public policy, but that it is a positive rule of law, adopted nobody can tell why ; and that, because it is a positive rule of law, adopted nobody can tell for what reason, and without any regard to public policy, therefore it is impossible to make an exception to it, and that the court can do nothing with it but carry it out, I cannot agree with that. It may be, no doubt, that in these modern times we should not for the first time establish such a rule of public policy ; but of course if a rule has been established as a rule of law, because it was thought agreeable to public policy and to the interests of the nation at the time it was established, it may be that the court cannot alter it because circumstances have altered If then there was such a rule of public policy, we are to consider how does that rule apply to second marriages ? It has never been decided that it applies to second mar- riages It appears to me very obvious that, if it is regarded as a matter of policy, there may be very essential distinctions between a first and a second marriage. At any rate there is this, that in the case of a second marriage, whether of a man or a woman, the person who makes the gift may have been influenced by his friendship towards the wife in the one case, and towards the LEGALITY OF EXPRESSED OBJECT OF THE TRUST. 89 husband in tlie otlier case. That is to say, re- garding the case of some member of the husband's family, he may make a gift to the husband for life, and then make a gift to the wife because she is the wife of that particular husband, and because he thinks it is more for the benefit of the children that the wife should have the money while the children are young, rather than that the children should have it." 12. Capricious Trusts benefiting no one. — Where property is given upon trust to do certain things obviously for the benefit of no one, the trust is, as a rule, void. Thus, where a testatrix devised a house to trustees in fee, upon trust to block up all the rooms (except four, in which she directed that a housekeeper and his wife should live) for twenty years, and subject thereto upon trust for A. in fee ; it was held that the trust for sealing up the house for twenty years was void, and that the house was undisposed of by the will for the term of twenty years from the testatrix's death (//). 13. Trusts to raise and keep in repair tombs. — Although it would seem that the court could not enforce a trust for applying money in the erection of a tomb or monument, inasmuch as there would be no cestui que trust who could set the court in motion, it has been said that such trusts are not illegal, and that trustees may safely spend the money on the prescribed object if they please (i). (A) Brown v. Burdett, 21 C. D. 667. {i) Per North, J., lie Bean, Cooper-Dean v. Stevens, 41 C. D. at p. 557. 90 DECLARED TRUSTS. The same judge added, tliat lie knew of nothing to prevent a gift of a sum of money to trustees, upon trust to apply it for the repair of such a monument, if he took care to limit the time for which the trust was to last, so as to provide for its cesser within the limits fixed by the rule against perpetuities. Where, however, a testator creates a trust for the repair of tombs or monuments, with- out limiting its continuance in accordance with such rule, it will be absolutely void for remote- ness (/c). On the other hand, a similar indefinite trust for keeping a church or churchyard in repair, would be valid, as it would be considered a charit- able trust in favour of the congregation of the church, and the rule against perpetuities does not apply to charitable trusts (/). It has also been recently decided, that a testator may make a gift to a charity conditionally upon their keeping his tomb in repair, with a gift over to another charity in the event of the tomb being allowed to fall into disrepair {ni). 14. Trusts for the benefit of dogs, horses, &c. — On the same principles a trust, limited in point of time within the rule against perpetuities, to ajoply money for keeping specified pet animals in comfort during their lives, is perfectly legal, although no person could enforce it («) . Moreover, dogs and (k) Re Vaughan, Vauglian v. Thomas, 33 C. D. 187. (?) Re Vauqhan, Vaughan v. Thomas, supra; Hoare v. Osborne, 1 Eq. 585 ; Re Rigley, 1 W. E. 342. (m) Re Tyler, Tyler v. Tyler, (1891) 3 Ch. 252. («) Re Bean, Cooper-Dean v. Stevens, supra ; and Mitford v. Reynolds, 16 Sim. 105. NECESSITY OF WRITING AND SIGNATURE. 91 horses are considered so useful to man, tliat it is settled that a charitable trust of undefined con- tinuance may be established in their favour (o) . Art. 11. — JSfecessifj/ or otherwise of Writing and Signature. (1.) A declared trust in relation to land, | or to an interest in land, is not valid, unless it is either created by will, or evidenced by some writing, signed by the settlor, showing clearly what the intended trust is, or referring to some other document which does so ^j)). The rule does not apply, however, where it would oj^erate so as to effectuate a fraud (^). Where the legal estate is vested in a trustee for, an absolute beneficial owner, the latter (o) Per North., J., Re Dean, Cooper-Bean v. Stevens, supra, at i>. 557 ; and see Armstrong t. Reeves, 25 L. E. Ir. 325. {p) Statute of Frauds, 29 Car. 2, c. 3, s. 7. Land includes not onljr freehold but also copyhold ( Withers v. Withers, Amb. 152) and leasehold hereditaments (Foster- V. Hale, 3 V. 696). {q) See per Lord Westbury in ilf ' Gormich v. Grogan, 4 H. L. 82; StricJdand v. Aldridge, 9 Y. 219; Haigh y. Eaye, 7 Ch. Ap. 469. 92 DECLARED TRUSTS. is the proj)cr iiarty to declare the trust (r). (2.) A declared trust of 2:)roperty other than land (not intended to he testa- mentary) may be made verbally (5). (3.) A declared trust of any kind of property, if intended to be testamen- tary, must be created by a duly exe- cuted and attested will or codicil («^). (4.) In the absence of fraud, a person who a23pears on the face of a will to be a beneficial devisee or legatee, can- not be subsequently converted into a trustee by a declaration of the testator not executed as a will or codicil ; nor where property is devised or be- queathed to a person as trustee can the trust be declared by a subsequent instrument other than a will or codi- cil (z<^). But in that case there is a resulting trust in favour of the testa- tor's heir or next of kin. (r) Kronheim v. Johnson, 7 C. D. 60; Tierney v. Wood, 19 B. 330; Rudkin v. Dolman, 35 L. T. 791. (s) McFadden v. Jenkins, 1 Pli. 157; Hawkins y. Gardner, 2 Sm. & G. 451 ; Benhow v. Toivnsend, 1 M. & K. 506 ; Middleton v. Pollock, 4 C. D. 49. {t) 1 Vict. c. 26, s. 9, and Stat. Frauds, s. 5. [u) Addlington v. Cann, 3 Atk. 141 ; Briggs v. Penny, 3 De G. & S. 547 ; Ite Boyes, Boyes v. Carritt, 26 C. D. 531 ; Habergham v. Vincent, 2 Ves. jun. 230. NECESSITY OF WRITING AND SIGNATURE. 93 Illust. — 1. Trust evidenced by letters. — In Foster v. Male {.r) , a gentleman named Burdon had a share in a colliery, and the suit was com- menced for the purpose of fixing a trust upon his share for the benefit of his partners in a bank, in which he was also concerned. Lord Alvanley, after commenting upon the conduct of the plain- tiffs, said : " But it is insisted that, though their names do not appear upon the lease, nor that they publicly, even by inquiry, ever busied themselves about the colliery, yet, in fact, an agreement took place that he (Burdon) should be a trustee, as to his share for them (the plaintiffs) and himself, in equal shares. They say they can make it out satisfactorily to the court and within the Statute of Frauds, and that, not by any formal declaration of trust, but by letters under his (Bui-don's) hand, and signed by him, in which they allege he admitted himself such trustee, and that, under the true meaning of the statute, it is sufficient if it appears in writing under the hand of a person having a right to declare himself a trustee, and that is a formal declaration of trust. It was contended for the defendants that there is great danger in taking a declaration of trust arising from letters loosely speaking of trusts, wliicli might or might not be actually and definitely settled between the parties with such expressions as ' our,' ' your,' &c., in- timating some intention of a trust ; that upon such grounds the court may be called upon to {x) 3 Y. 696. 94 DECLARED TKUSTS. execute a trust in a manner very different from that intended, and that it is absolutely necessary that it should be clear from the declaration what the trust is. TJiat I certainly admit. The ques- tion, therefore, is, whether sufficient appears to prove that Burdon did admit and achioivlcdge him- self a f^'i(s^6<^, C-iid u-Jicther the terms and conditions on ivhich he uris a trustee sufficiently aj^pear. I do not admit that it is ahsolutetij necessary that he should have been a trustee from the first. It is not required by the statute that a trust should be created by a writing .... bict that it shall be manifested and jjroved by writing ; plainly meaning that there should be evidence in writing, proving that there was such a trust. Therefore, unquestionably it is not necessarily to be created in writing, but it must be evidenced by writing, and then the statute is complied with. I admit that it must be proved in toto not only that there was a gift, but what that gift was." 2. Trust not sufficiently evidenced. — In Smith v. Matthews {y) the husband of one Mrs. Matthews, being a person of dissolute habits, got into diffi- culties. Thereupon, one Clark, the brother of Mrs. Matthews, entered into an arrangement with Matthews, whereby the latter conveyed to him certain real property and a certain business, in consideration of his undertaking to pay off all his (Matthews') debts. Clark entered into possession, (»/) 3 De G. F. & J. 139. NECESSITY OF WRITING AND SIGNATURE. 95 and carried on the business for the benefit of his sister and her children. There was no explicit and formal declaration of trust by Clark, but, from several letters, it appeared that Clark con- sidered that he held the property " for the benefit of Mrs. Matthews and her family " ; and by a memorandum given to the mortgagee, upon pay- ing off the mortgage on the property, it was expressly stated that the title deeds had been handed over to Clark " as the trustee of the real and personal estate of Mrs. Matthews." Clark having died intestate, the lands descended at law to Mrs. Matthews as his heir-at-law, and there- upon her husband tried to get possession of them jure mariti. In order to resist this attempt, it was contended that Clark had constituted himself a trustee for Mrs. Matthews and her children, and that the property therefore devolved, burdened with the trust. Lord Justice Turner, however, held that the trust was not expressed with suffi- cient certainty in any of the documents ; and said : " It must be manifested and proved by writing, signed as required, what the trust is ; . . . . the main reliance was placed on the memorandum ; . . . but I think it by no means improbable that, in speaking of himself as trustee in that memo- randum, Clark may have meant no more than that he considered himself a trustee with reference to the duty which he had undertaken for the pay- ment of Matthews' debts; and at all events the memorandum does not show what was the trust to which it refers, and I think, therefore, that no 96 DECLARED TRUSTS, trust in favour of Mrs. Matthews can be founded upon it." 3. Verbal trust of stock. — In Kilpin v. Kilpin (s), a person transferred stock into the name of an illegitimate daughter and her husband and their two eldest children, and by parol declaration, con- firmed by an unsigned entry in a memorandum book, declared that such investments were to be for the benefit of all his daughter's children. Held, a good declaration of trust, as the stock was merely personalty. 4. Request to debtor to hold debt in trust. — So in McFadden v. JoiL-ins (a), a creditor desired his debtor to hold the debt in trust for A. The debtor acquiesced, and paid over part of the money to A. ; and it was held that the creditor had made a valid declaration of trust, and had constituted the debtor a trustee of the debt for A. I 5. Verbal testamentary trust, void. — But where the trust is testamentary, that is to say, only in- tended to operate after death, the trust must, in the absence of fraud, be contained in a duly executed or attested will or codicil. Thus, in the recent case of He Boyes, Boyes v. Carritt {b), a testator, who died in 1882, made a will devising and bequeathing all his property to the defendant Carritt, and appointing him sole executor. Mr. Carritt, who was the solicitor of the testator and (z) 1 M. & K. 521. (a) 1 Ph. 153. {h) 26 C. D. 531 ; and see also Vincent v. Vmcent, 35 W. E. 7. NECESSITY OF WRITING AND SIGNATURE. 97 drew tlio will, gave evidence to the effect that the intention of tlie testator "vvas iJiat lie aJiouhl hold the prapert;/ as trustee for objects of the testator's bounty, who were to be afterwards indicated by him. No direction, however, on the subject was given by the testator in his lifetime, but after his death two letters were found, written by him to Mr. Carritt, and sealed up, in both of which he expressed a desire that Mr. Carritt should have 25/. to buy a trinket in memory of him, and that all the rest of the property should go to a lady named Brown. That lady gave confirmatory evidence, stating that the testator told her that he had written the two letters, and that he had written two for further security in case one should be lost ; that he also informed her where the letters were, and directed her, in case of his death, to forward them to Mr. Carritt, which she did. Under these circumstances, it hcing clear that Mr. Carritt nris a trustee, the question was whether the trust for the lady, Mrs, Brown, was valid and effectual, or whether he was a constructive trustee for the next of kin. Mr. Justice Kay, after exa- mining the authorities, came to the conclusion that, as the law stood, if a trust was not declared by a testator when his will was made, then, in order to make the trust binding, it was essential that it should be communicated to the devisee or legatee in the testator's lifetime, and that he should accept that particular trust. A devisee or legatee could not, by accepting an indefinite trust of this kind, U. T. H 98 DECLARED TRUSTS. enable a testator to make an unattested codicil. His lordship regretted that the trust should fail, but he was bound to declare, 3Ir. Carritt having admitted himself to he a trustee, that the trust was for the next of kin. The reader must, in reading" this case, bear in mind that Mr. Carritt admitted that he knew, when he prepared the will, that he was not meant to take beneficially, and therefore, of course, it would have been personal fraud on his part if he had claimed to do so. If, however, he had not known the non-beneficial nature of the bequest, the subsequent letters of the testator would not have been sufiicient to have deprived Mr. Carritt of the beneficial interest, and conse- quently neither Mrs. Brown nor the next of kin would have taken anything. Whether, however, Mr. Carritt had or had not known, when the will was made, that he was only intended to take as trustee, yet, if the testator had subsequently com- municated to him that he was not to take benefi- cially, and had either declared specific trusts of the property, or had simply said that he had not yet made up his mind upon what trusts it should be held, and if Mr. Carritt had expressly assented to act as trustee, then, as his assent would have operated to induce the testator not to alter his will, Mr. Car- ritt would have been boutid to take the property as trustee simply, and to carry out the testator's intention, as in illustration 7. 6. A testator gave his residuary real and per- sonal estate upon trust for sale, and upon further NECESSITY OF WRITING AND SIGNATURE. 99 trust to pay the proceeds to his friends A. and B. in equal shares. And he declared that he be- queathed siich proceeds "to the said A. and B., their executors, administrators and assigns, abso- lutely, in the full confidence that they would carry out his wishes in respect thereof." A. and B. survived the testator, but died before the dis- tribution of the estate. On these facts, it was held by Chitty, J., that parol evidence was in- admissible that the testator had communicated his wishes verbally to one of the two legatees, and that as (apart from such evidence) the precatory words were not sufficient to create a trust, A. and B. took the proceeds of the residue absolutely (c). 7. Fraud an exception to rule. — But where a father is induced not to make a will by statements cUa. hv^ of his heir presumptive that the latter would make suitable provision for his immediate relatives, the court considers that that is a fraud, and, notwith- ,. standing the statute, will oblige the heir to make a provision in conformity with his implied obliga- tion {d). For (as was said by Lord Westbmy, in McCormick v. Grogan (so)i and Wall, 25 ib. 482. (c) Buckmaster y. Buclcmaster, 35 C. D. 21. (d) 20 & 21 Vict. c. 57. (e) Married Women's Property Act, 18S2. 104 LATENT INVALIDITY OF DECLARED TRUSTS. by act inter vivos, or by testamentary disposition. Women married prior to that date are in the same position with regard to any property as to vi^hich their title first accrued (whether as a possessory or a reversionary title (/)) since the 31st December, 1882. With regard to other married women, they can only alienate (and therefore can only create trusts) in the following cases, viz. : — (1) where they are donees of a power of appointment {g) ; (2) where the property is settled to their separate use [Ji) without restraint on anticipation; (3) where the property is their separate property under the repealed Married Women's Property Act of 1870; (4) where the property is real estate, and their husbands join in an acknowledged deed; (5) where the property is reversionary personalty, their title to which is derived under an instrument (other than their marriage settlement) executed after the 31st of December, 1857, and their husbands join in an acknowledged deed {i). 3. Corporations.— Prior to 5 & 6 Will. 4, c. 76, municipal corporations were able to create trusts of their property {j) ; but since that act, corpo- rations included in the scJicduIe to it are them- selves made trustees of their property for jiublic (/) Married "Women's Property Act, 1882 ; and see i?eid V. Reid, 31 C. D. 402. But as to when a title does first accrue, conf. lie Parsons, Htockleij v. Parsons, 62 L. T. 929. (g) Barnett v. Mann, 1 Ves. 156. (h) Taylor v. Meads, 34 L. J., Ch. 203. {i) 20 & 21 Vict. c. 57. Ij) Colchester v. Lowton, 1 V. «S: B. 226. WHO MAY I?E A SETTLOR. 105 purposes, and consequently cannot create trusts of it (/.■). 4. Lunatics. — It is clear that a lunatic cannot create either a testamentary trust, or a trust inter vivos in favour of volunteers (/). On the other hand, where a person who is a lunatic in fact, but is not known to be so to persons privy to valuable consideration, executes a settlement for valuable consideration, it would seem that the settlement would not be set aside, either at law or in equity {»>). It must, however, be borne in mind that a lunatic is incapable of contracting a valid marriage, and that, consequently, a settlement executed by a lunatic iu consideration of an intended marriage could not be said to be a settlement based on value. I am not aware of any case where the point has arisen ; but if it did arise, it might well be argued (at all events on behalf of a woman who had gone through the ceremony of marriage with a lunatic without knowledge of his incapacity) that it would be inequitable for the court to set aside the settle- ment, as the innocent beneficiary could not be replaced in her former position, 5. Convicts. — A convict {i.e., one sentenced to death or penal servitude for treason or felony («)) {k) 5 & 6 Will. 4, c. 76, s. 94 ; Att.-Oen. v. Aspinal, 2 M. & C. 013. (/) See Neil v. Morley, 9 Ves. 478. {m) See Multon v. Camroux, 2 Exch. 487, 503; aff. 4 Exch. 17 ; and Frire v. Berrimjton, 3 M. & G. 486 ; Ndll V. Morin/, 9 Ves. 478. {n) 33 & 34 Vict. c. 23, s. 6. 106 LATENT INVALIDITY OF DECLARED TRUSTS. is incapable, uiitil the expiration of his sentence, or until his death (o), of alienating or charging his property ; and therefore he is incapable of declaring a trust of it, at all events by act inter vivos. This incapacity, however, is suspended for any period during which the convict may be at large under a ticket of leave (;.»). 6. Aliens. — By the statute 33 Yict. c. 14, aliens are placed in the same position as natural-bom subjects with regard to the acquisition and aliena- tion of property. As, however, the act is not retrospective, it would seem that aliens who acquired lands by devolution before the act are not protected, and might still be dispossessed by the crown (q). Art, 13. — TFho may he Beneficiaries. (1) Every person who is capable of holding property may lawfully be a beneficiary of it under a trust (r). (2) A trust (which is not a charitable trust (5) ) to ])erf orm certain duties which are of no benefit to any human (o) lb. ss. 7 and 8. Qucere, wlietlier tMs act would pre- vent a convict making a valid will. {p) lb. s. 30. {q) See Shdrpe v. St. Saveur, 7 Ch. App. 351 ; Calviii's case, 7 Eep. 49. (r) Lewin, 40. (s) Trusts may bo cliaritablo, altlioug'li not directly benefiting human beings; ex. gr., trusts for i^roviding a home for lost dogs, trusts for tbe protection of animals WHO MAY J5E BENEFICIARIES. 107 being, is [semhle) not enforceable (/), although it may be valid if the trustee desires to perform it, unless it trans- gresses the rule against perpetuities (a^). If the trustee docs not perform it there is a resulting trust of the unapplied property. Illust. — 1. Corporations. — A corporation can- not be cestui que trust of lands without licence under the Mortmain Acts ; for without such licence it cannot hold lands, and tlierefore cannot take through the medium of a trust. 2. Aliens. — Similarly, before the act 33 Yict. c. 14, an alien, as he could hold property against everyone except the crown, could also be a bene- ficiary of land as against everyone except the crown (r). But as he could not take a legal estate by operation of law, so likewise he could not be a beneficiary by act of law (.r) . As the above act is not retrospective, it would seem that aliens who acquired lands anterior to the passing liable to vivisection, Re Douglas, Ohert v. Barron, 35 C. D. 472 ; and trusts for repairing a dnircli or ciiui'ch.- yard, Jle Vaughan, Vaughan v. Thomas, 33 C. D. 187. {t) Richard v. Robson, 31 B. 244; Lknjd v. Lloyd, 2 Sim., N. S. 255; Thompson v. Shakespeare, Johns. 612; FoivJer v. Fowler, 33 B. 616; Fisk v. Att.-Gen., 4 Eq. 521 ; Hunter v. Bullock, 14 Eq. 45 ; Daiuson v. Small, 14 Eq. 104; and j^ier North, J., in Re Dean, 41 C. D. 556; and see jip. 89 — 91, supra. (u) Re Dean, ubi supra, at p. 557. {v) Barrow v. Wadkin, 24 B. 1 ; Ritson v. Stordy, 3 Sm. & Giff. 230; Sharpe v. St. Saveur, 7 Ch. 351. (x) Calvin's case, 7 liep. 49. 108 LATENT INVALIDITY OF DECLARED TRUSTS. of the act, are not protected by it, and tliat the crown is entitled to all lands of which they are beneficiaries [y). 3. Married women. — Although, by recent legis- lation, married women are as capable of holding property as other people, they were not, previously to 1883, in so favourable a position. At common law, the husband was entitled to all his wife's personal chattels in possession ; to the rents and profits of her freeholds during their joint lives ; to all her choses in action which he should reduce into possession during the marriage ; and to all her leaseholds. But if he did not reduce the choses in action into possession, or dispose of the leaseholds during the marriage, they reverted to the wife if she survived him. Courts of equity, however, in this instance, did not follow the law, but invented that peculiar equitable estate known as a " separate use." Property, therefore, which is settled in trust for a woman for her separate use, is freed from the jus mariti ; and with regard to it a married woman is regarded as a feme sole. She may dispose of it without her husband's con- sent, either by act inter vivos, or by will (2), unless she be by the trust restrained from antici- pation. In the latter case she cannot dispose of it at all without the sanction of the Court, which may, however, be obtained where it is clearly for her interest, on summons under sect. 39 of the Conveyancing and Law of Property Act, 1881. [y) Sharpe v. St. Saveur, supra. (z) Peacock v. Monk, 2 Ves. sen. 190; Taylor v. Heads, 34 L. J., Ch. 203. VOIDABLE FOR MISTAKE, FRAUD, ETC. 109 Art. 14. — JF/icn voidaUc for failure of considcra- fioH, mistalxC or fraud. The Court will cancel a trust at the suit of the settlor or his representatives (a), if:— a. The very object with which the trust was created has ceased to exist (Z»); or /3. The settlement was executed in ignorance or mistake as to its effect (c); or 7. Fraud or undue influence has been exercised to induce the settlor to create the trust [d) ; Provided the settlor has not (in the two latter cases) acquiesced in or acted upon the settlement after the influence has ceased, or after he has become aware of the legal effect of (a) Anderson v. FAsworth, 3 Giff. 154 ; Tyars v. Alsop, 37 W. E. 339 ; Morley v. Loughnan, (1893) 1 Ch. 736. ih) See Essery v. Cowland, 26 C. D. 191 ; Bond y. Walford, 32 C. D. 238. (c) Phillips V. MitUings, 7 Ch. App. 244; Fanshaive y. Welshy, 30 B. 343 ; and see as to mistake wliere a provi- sion for daughters was omitted by the engrossing clerk, Re Daniell, 1 C. D. 375 ; and see Clarke v. Girdwood, 7 0. D. 9. {d) Osmond v. Fitzroy, 3 P. W. 129 ; Huguenin v. Baseley, 14 V. 273; Dent v. Bennett, 4 M. & C. 277; Hoghton v. Hoghton, 15 B. 299 ; Cooke v. Lamotte, 15 B. 234. 110 LATENT INVALIDITY OF DECLARED TRUSTS. it (e) ; and that tlie status of the parties has not been irrevocably al- tered as part of the transaction (/). As stated in Article 8 (supra), -where a trust has once been perfected or declared, and does not rest in fieri, the court will enforce it against the settlor and his representatives, notwithstanding that it may have been entirely voluntary on his part. But although that is so, a trust, like a contract, will be cancelled in Equity for fraud, mistake, or itotal failure of the object for which it was created. For some years, indeed until quite recently, it was considered that, where a trust was voluntary, and the settlor invoked the aid of the court to set it aside, the onus was immediately cast on the beneficiaries of showing that all the provisions of the settlement were proper and usual, or, that if there were any unusual provisions, they were brought to the knowledge of, and were understood by, the settlor [g) ; and in particular, the absence of a power of revocation was considered to be fatal unless it could be conclusively shown that the settlor had been advised to insert one, and had deliberately elected not to do so {It). This view was, however, dissented from by the Court of (e) Davies v. Davies, 9 Eq. 468, and cases cited; Allcard V. Skinner, 36 C. D. 145. (/) Johnston v. Johnston, 52 L. T. 76. (g) PhiUijJS V. Midlrngs, supra. (h) Covtts V. Acu'orth, 8 Eq. 558; Wollaston v. Tribe, 9 Eq. 44; Everitt v. Eceritt, 10 Eq. 405. VOIDABLE FOR MISTAKE, FRAU]>, ETC. Ill Appeal in Hall v. IIall{i), and by the late Six George Jessel, M. E., in Didton v. Thompson (/i), and appears to be no longer law. In the latter case the late M. R. said : "I emphatically dis- agree with the ground on which some judges have set aside voluntary settlements, namely, that there were provisions in them which were not proper to be inserted in such settlements. It is not the province of a Court of Justice to decide on what terms or conditions a man of competent under- standing may choose to dispose of his property. If he thoroughly understands what he is about, it is not the duty of a Com"t of Justice to set aside a settlement which he chooses to execute, on the ground that it contains clauses which are not proper. No doubt if the settlement were shown to contain provisions so absurd and improvident that no reasonable person would have consented to them, or if provisions were omitted that no reason- able persons would have allowed to be omitted, that is an argument that he did not understand the settlement. But in no other way would it be a reason for setting it aside." This case, coupled with Hall V. Hall {I), Phillips v. Mullings {m), and Henry v. Armstrong {n), must be taken to have definitely overruled the previous decisions in Coutts {i) 8 Ch. App. 430. [k) 23 0. D. 278. (l) 8 Ch. App. 430. (m) 7 Ch. App. 244. (h) is C. D. G68, infra, p. 117. 112 LATENT INVALIDITY OF DECLARED TRUSTS. V. Acirorfh (o), WoUaston v. Tribe (o), and Everitt V. Everitt (o) , and to have left the onus of showing mistake, fraud, or undue influ 3nce upon the settlor in all cases, except those in which the provisions of the settlement are so absurd as to raise a pre- sumption that no sane person would liave agreed to them knowingly, and except cases in which the beneficiary occupied at the date of the settlement a fiduciary position towards the settlor, in which latter there is a strong prima facie presumption of undue influence which casts the onus of supporting the settlement on the beneficiary (p). Illust. — 1. Total failure of consideration. — In the recent case of Esser// v. Coiclard (q), by a set- tlement executed in 1877, in consideration of a then intended marriage, it was declared that a sum of stock, which had been transferred by the intended wife to trustees, should be held by them on trust for her benefit and that of the intended husband, and the issue of the intended marriage. The marriage was not solemnized, but the parties cohabited without marriage, and three children were born. In 1883 an action was brought by the father and mother of these children against the trustees to have it set aside ; and it was held that the contract to marry having been absolutely (o) Ubi supra. (p) Iliigueninv. Baseleii, 14 Y. 273; Ili/Jton v. Tlylton, 2 Y. 547; Hunter v. Atkins, 3 M. & K. 113; Tate v. Williamson, 2 Ch. App. 55 ; Allcard v. Skinner, 36 C. D. 145; Morley v. Loughnan, (1893) 1 Ch. 736; and see niustrations, infra. (?) 26 C. D. 191. VOIDABLE FOR MISTAKE, FRAUD, ETC. 113 put an end to, tho court could cancel the settle- ment. A similar decision was arrived at in the more recent case of Bo)t(i v. Wa/ford (r), Avliere an intended marriage had been simply broken off. 2. Mistake. — Although a voluntary trust will not be set aside or varied for the mere asking, yet where the settlor can show that he misunder- stood the effect of it, relief will be given to him. In the recent case of James v. CoucJiman (-s), it appeared that the plaintiff had, by a voluntary settlement (made with the object of protecting himself against extravagant habits), assigned pro- perty to trustees, iqion trust for himself for life, remainder to his wife (if any) for life, remainder to his issue, and in default of issue to his 2)aternal next of kin. Mr. Justice North, while refusing to set aside the settlement, thought that the ulti- mate limitation was unusual, and that the settlor's attention was not called to it, and that he did not understand the effect of it ; and accordingly his Lordship ordered the settlement to be rectified so as to give the settlor a power of appointment in default or failure of issue. His Lordship, how- ever, was careful to add : " The fact that a usual power was omitted here would not weigh with me in the least, if I were satisfied that the omission of such a power had been brought to the attention of the settlor, as he would then have been com- petent to judge for himself ; but it seems to me {r) 32 C. D. 238. (s) 29 C. D. 212. U. T. 114 LATENT INA'^ALIDITY OF DECLARED TRUSTS. that in the present case his attention was not called to it." 3. Where a person, apparently at the point of death, executed a voluntary settlement, of which he recollected nothing, which was never read to him, and in which a power of revoca- tion was purposely omitted by the solicitor, on the ground that he knew the variable character of the settlor, and there was also evidence that the settlor thought that he was executing the settle- ment in place of a will, it was held that the settle- ment was revocable (t) . 4. Even where there is valuable consideration given, but the settlor is infirm and ignorant, and there is reason to suppose that he did not fully \.i^; understand the transaction, it will be set aside, unless it be proved that full value was given (u). 5. Fraud. — Where a settlor has been induced by fraud to make a settlement (whether voluntary or based upon value) , it will not be enforced ; as, for instance, where a wife induces her husband to execute a deed of separation, in contemplation of a renewal of illicit intercourse {x) . Where, however, it is not in her contemplation at the time, but she (0 Fanshaive v. Wehb)/, 30 B. 243 ; Wood v. Cook, 40 0. D. 461 ; Blal-e v. Potuer, 37 W. E. 461. (m) Baker v. Mo7ik, 33 B. 719; Clark Y.Malpas, 31 B. 80; Linqiiate v. Ledger, 2 Giff. 137; and see O'Rorke v. BoUngbroke, 2 App. Cas. 814; and Be Frij, 40 0. D. 104. [x] Broivn v. Broiun, 7 Eq. 185 ; and see Evans v. Car- rington, 2 D., F. & J. 481; and Evans v. Edmonds, 13 0. B. 777. VOIDABLE FOR MISTAKE, FRAUD, ETC. 115 does in fact subsequently commit adultery, then as there was no original fraud, the subsequent adultery will not avoid the settlement (//) . 6. The case of Naniiri/ v. Williaius (z) is an- ' other instance of the action of the court where mistake or undue influence, or both combined, exist. There the settlor made an irrevocable voluntary settlement in favour of a relation who acted as his solicitor in the matter. The court considered on the evidence that the settlor believed that he had a power of revocation ; and as by his will, made subsequently, he purported to devise the settled property, it was held that he had thereby, in effect, exercised the power of revo- cation which he thought was contained in, and which ought to have been contained in, the settle- ment. And consequently the court held that the settlement was effectually cancelled. 7. Absence of power of revocation immaterial, where no mistake or fraud. — A father transferred stock into the names of his son and a banker, and told the latter to carry the dividends to the son's account. The father subsequently made a codicil to his will, ignoring the trust thus declared. The Master of the Rolls, however, said : " If the transfer is not ambiguous, but a clear and unequivocal act, I must take it on the authorities that for explana- tion there is plainly no place. If, then, it cannot be admitted to explain, still less can it be allowed {y) Seagrave v. Seagrave, 13 Ves. 443. (z) 22 B. 452. i2 116 LATENT INVALIDITY OF DECLARED TRUSTS. to qualify tlie operation of the previous act ; the transfer being held an advancement, nothing con- tained in the codicil, nor any other matter ex post facto, can ever be allowed to alter what has been abeady done" {a). 8. In Phi/Hj)s v. MuNings {h) the facts were these. A young man of improvident habits, being entitled to a sum of money, was induced bona fide, by the trustee of the money and by a solicitor, to execute a settlement. By it he assigned a j)art of the money to trustees, upon trust to invest, and to pay him during his life the income thereof as they should think fit ; and after his death upon trust for his wife and children (if any), and in default thereof, and subject thereto, upon trust for certain of his cousins. There was no power of revocation or of appointment, nor a power to nominate new trustees ; the deed, was, however, fully explained to him before its execution, and his attention called to the particular clauses. Some years afterwards he attempted to upset this deed, but the court held that it was irrevocable. Lord Hatherley said : "It is clear that anyone taking any advantage under a voluntary deed and setting it up against the donor, must show that he thoroughly understood what he was doing ; it cannot, however, be laid down that such a deed would be voidable unless it contained a power of (rt) Crahh V. Crahh, 1 M. & K. 511. [b) 7 Ch. App. 244. VOIDAUI.E FOll MISTAKE, 1-UAUD, ETC. 117 revocation" (r). In Ucnnj v. Anndrong {d) Kay, J. (whose attention does not seem to have been called to P/ii/Iips V. MuIUngs), laid down the law rather more favourably to the beneficiaries, saying : " No doubt there are to be found in the reported cases, dicta to the effect that the onus of supporting a voluntary deed rests upon those who set it up ; but I do not think that these dicta go so far as to say, that whenever a voluntary settlement is im- peached on any ground whatever, the onus is at once thrown on those who would maintain it. As I imderstand it, the law is, that anybody of full age and sound mind, who has executed a volun- tary deed by which he has denuded himself of his own property, is bound by his own act ; and if he comes to have the deed set aside — especially if he comes a long time afterwards — he must prove some substantial reason why the deed should be set aside." It is respectfully apprehended that Lord Justice Kay's dictum is quite consistent with Lord Hatherley's ; for the latter merely said that where the beneficiaries set up the deed agaiiid the donor, the onus is upon the beneficiaries; while the Lord Justice said, that where the settlor asks to hare the deed set aside, the onus is upon him. In short, the onus is, in general, upon the person seeking relief, unless the beneficiary occupied a fiduciary position towards the settlor. (c) See also Ilor/Jdoii v. II(>(jhton, 15 B. 278 ; and HaU v. HaU, 8 C. D. 329. {d) 18 C. D. 668. The authorities are by no means satisfactory as to the question of onus. 118 LATENT INVALIDITY OF DECLARED TRUSTS. ; 9. Tlndue Religious Influence. — On the otlier I hand, where a confidential relationship exists 'between the settlor and the heneficiary at the I date of the settlement, the onus is decidedly 'thrown on the beneficiary of proving affirma- tively, not only that there was no undue influence exerted, but that the settlor had independent advice, and that the settlement contains all usual and proper powers and provisions, and if there are any unusual provisions, that they were brought to the notice of and understood by the settlor. Thus, in the leading case of Huguenin v. Baae- leij (p), where a widow lady, very much under the influence of a clergyman, made a voluntary settle- ment in his favour, it was held to be invalid. As Bowen, L. J., said in a recent and most important leading case (./), " It is plain that Equity will not allow a person who exercises or enjoys a dominant religious influence over another, to benefit directly or indirectly by the gifts which the donor makes under or in consequence of such influence, unless it is shown that the donor, at the time of making the gift, was allowed full and free opportunity for counsel and advice outside — the means of con- sidering his or her worldly position, and exercising an independent will about it. This is not a limi- tation placed on the action of the donor ; it is a fetter placed on the conscience of the recipient of (e) 14 V. 273. (/) Allcard v. Skinner, 36 C. D. 145, 190; and see also Morley v. Lowjliman, (1893) 1 Ch. 736. VOIDABLE FOR MISTAKE, FKAUD, ETC. 119 the gift, and one which arises out of public policy and fair play." 10. Undue Influence by Solicitor. — On similar grounds, a gift made by a client to a solicitor, while the relation of solicitor and client exists, is voidable. And although such gift may be ratified after the relation has ceased to exist, yet, in order to establisli ratification, it must be proved to the satisfaction of the court that the donor, at the time when he was a free agent, and knew of his right to recall the gift, intentionally determined to forego that right. In the absence of such evi- dence, the gift may be avoided, not only by the donor, but by his personal representatives {g). As Cotton, L. J., said {//) : " We must find some- thing equivalent to a present gift when the influence arising from the existence of the relationship had ceased to exist : in the words of Turner, L. J., in Wright v. Vanderplank{i), there must be 'a fixed, deliberate, and unbiassed determination that the transaction should not be impeached.' In the case of a gift to a solicitor, the court looks most' carefully to see if there has been a fixed, delibe- rate, and unbiassed determination on the part of the donor that the transaction should not be impeached." 11. Undue Parental Influence. — So, where a deed {ci) Tyars v. Alsop, 37 W. E. 339. (h) lb., at p. 340. {i) 8 De G., M. & G. 133; 4 W. E. 410; and see also Mitchell V. Horn/ray, 8 Q. B. D. 587 ; 29 W. E. 558. 120 LATENT INVALIDITY OF DECLARED TRUSTS. conferring a benefit on the settlor's father is exe- cuted by a child who is not yet emancipated from his father's control ; if the deed is subsequently impeached by the child, the onus is on the father to show that the child had independent advice, and that he executed the deed with full knowledge of its contents, and with the full intention of giving the father the benefit conferred by it (k). However, where such a deed is substantially a re- settlement of family estates (as distinguished from a mere voluntary trust in favour of a parent), it is not essential that the child should have inde- pendent advice ; and the court will not inquire whether the infiuence of the father was exerted with more or less force (1). No doubt, where the father obtained a benefit under such a deed, the jealousy of the court is aroused ; yet, if, on the whole facts, the benefit is not an unfair one, the court will not set it aside (ni). These remarks, however, do not extend to the case where a father obtains a benefit under his daughter's marriage settlement. In such cases, the daughter ought to have independent advice (m). 12. Acquiescence. — Where a father induced a young son, who was still under his roof, and sub- (k) Bainhrigge v. Broiune, 18 C. D. 188 ; and see Tate v. Williamson, 2 Ch. App. 55; Kempson v. Ashbee, 10 Ch.. App. 15, and cases cited ; and Tucker v. Bennett, 38 C. D. 1. (l) Ilohhjn V. Ilohlyn. 41 C. D. 200; and see Bainhrigge V. Broiune, supra. (m) Tucker y. Bennett, supra. VOIDAHLE roil MISTAKE, FllAUD, ETC. 121 ject to his influence, to make a settlement in favour of his step-brothers and sisters, it was held, that if the son had applied promptly, the com-t woiild have set it aside. But as he had remained quiescent for some years, and had made no ob- jection to the course which he had been persuaded to follow, he was not entitled to relief. For by so doing, he had in his maturer years practically adopted and confirmed that which he had done in his early youth (;/). Nor mil the court interfere where the settlor subsequently acts under the deed, or does something which shows that he recognizes its validity; unless, indeed, he was ignorant of the effect of the settlement at the date of such recognition (o). 13. So where a lady entered a religious sister- hood, and, under circumstances Avhieh amounted to undue influence, made a voluntary settlement in favour of the sisterhood, but omitted, for more than six years after severing her connection with it, to seek to have the settlement set aside, it was held that her acquiescence barred her claim for relief. As Lindley, L. J., said : " In this parti- cular case, the plaintiff considered, when she left the sisterhood, what course she should take ; and she determined to do nothing, but to leave matters as they were. She insisted on having back her (n) Turner v. Collins, 7 Cli. 329. (o) Jarraft v. Aldon, 9 Eq. 463; Motz v. Moreaii, 13 M. P. C. 376 ; Wright v. Vanderplavl; 2 K. & J. 1 ; Milner V. Lord Harewood, 18 V. 259; Dacies y. Davies, 9 Eq. 468. As to ignorance, see Listtr y. Hodgson, 4 Eq. 30. 122 LATENT INVALIDITY OF DECLARED TRUSTS. will, but she never asked for her money until the end of five years or so after she left the sisterhood. In this state of things I can only come to the con- clusion that she deliberately chose not to attempt to avoid her gifts, but to acquiesce in them. I regard this as a question of fact, and upon the evidence I can come to no other conclusion than that which I have mentioned" (p). 14. Change of status. — An instance of the effect of change of status in preventing the settlor from procuring the cancellation of a settlement, even where its execution was induced by most serious misrepresentations, is afforded by the case of Johnsfoii V. Johnston (q). There the settlor had married a lady who represented to him that she had divorced her first husband for adultery and cruelty ; whereas, in point of fact, she herself had been divorced for adultery at his suit. The settlor, on discovering this, commenced an action to have the settlement set aside. Pearson, J., dis- missed it as being frivolous and vexatious; and the Court of Appeal confirmed his decision, on the ground that the plaintiff could not set aside the settlement and yet keep the only consideration which was given for it ; one essential condition of cancellation being (as Fry, L. J., observed) resti- tutio in infer/ rum, which was there impossible. (p) Allcard v. Skinner, 36 C. D. 145. (V) 52 L. T. 76. VOID AGAINST CREDITORS UNDER 13 ELIZ. C. 5. 123 Art. 15. — W/ioi void as againd Settlor's Creditors under 13 £/iz. c. 5 (r). (1) A settlement of liereclitaments (5), corporeal or incorporeal, or of such kinds of personal property as are cap- 1 able of being taken in execution (z'), is (independently of the bankruptcy law) (?•) In tliis article I have attemi^tcd to digest tlie effect of the statute 13 Eliz. c. 5, passed "for the avoiding of feigned, covinous, and fraudulent feoii'ments, &c., con- trived of malice, fraud, covin, colhision, or guile, to delay, hinder, or defraud creditors or others," by which it was enacted, that "all and every feoffment, gift, grant, alienation, bargain, and conveyance of lands, tenements, hereditaments, goods, chattels, or any of them, by writing or otherwise, and all and every bond, suit, judgment, and execution to and for any intent or purpose before declared and expressed, shall be deemed and taken only as against that person or persons, his or theii' heirs, successors, exe- cutors, administrators and assigns whose action, srats, debts, accounts, damages, penalties, forfeitures, heriots, mortuaries and rebels by such guileful, covinous or fi'audulent devices and practices as is aforesaid are, shall, or might be in any ways disturbed, delayed or defrauded, to be clearly and utterly void, frustrate and of none effect; any pretence, colour, feigned consideration, or any other matter or thing to the contrary notwithstanding." By the fifth section it was provided that the act should not extend to any estate or interest in lands, &c., or goods, &c. assured upon good consideration and bona fide to any person not having at the time of such assurance any notice or knowledge of such covin, fraud or collusion." (s) Copyholds formerly not included {Mattheivs v. Feaver, 1 Cox, 272), but now included by effect of 1 & 2 Vict. c. 110, s. 11. {t) Eider v. Kidder, 10 V. 360. As to what goods come under this description, see Barrack y. McOuIlock, 3 K. & J. 110; Sfokoe v. Cowan, 29 B. 637. And as to choses in action, Norcut v. Bodd, Cr. & Ph. 100; and 1 & 2 Vict, c. 110. 124 LATENT INVALIDITY OF DECLARED TRUSTS. I void as ao^ainst existln"; and future ! creditors of the settlor if it be exe- I cuted with intent to defeat or delay ; their claims. (2) Provided, nevertheless, that settle- ments otherwise void under this article, are valid in favour of persons (whether original beneficiaries or their assigns) who, bona fide and without notice of the intended fraud, have acquired their beneficial interests by giving, or being privy to, valuable consideration (^it). Considerable conflict of judicial opinion has arisen over this statute, viz., whether an intent to I defeat or delay creditors must be inferred as a : matter of law where the reasonable and probable result of the settlement was to defeat or delay, although the tribunal might be convinced that, as a matter of fact, the settlor never had any such intention. In Freeman v. Pope (,r) the late Lord Hatherley distinctly affirmed that such an intent must be inferred, saying : " The principle on which the statute of Elizabeth proceeds is this, that per- (u) George Y. MiVbanhe, 9 V. 189; Daiibeny y. Cockhnrn, 1 Mer. 638 ; and Halifax Joint Stock Bank v. Gledliill, (1891) 1 Ch. 31. And where tlie consideration for a settlement is marriage, and tlie intended wife knows nothing of the fraudulent intention, the settlement is good qiia her and her children (Kevan v. Crawford, 6 C. D. 29). {x) 5 Ch. App. 540. VOID AGAINST CREDITORS UNDER 13 ELIZ. C. 5. 125 sons must be just before they are generous, and that debts must be paid before gifts can be made. The difRculty the Vice-Chancellor seems to have felt in this case was, that if he, as a special jury- man, had been asked whether there was actually any intention on the part of the settlor in this case to defeat, hinder or delay his creditors, he should have come to the conclusion that he had no such intention. It appears to me, that this does not put the question exactly on the right ground, for it would never be left to a special jury to find whether the settlor intended to hinder, delay or defeat his creditors, without a direction from the judge that if the necessary effect of the instrument was to defeat, hinder or delay creditors, that necessary effect was to be considered as evidencing an intention to do so. . . . Of course there may be cases (of which Sj)ircft v. Willows Q/) is an example) in which there is direct and positive evidence to defraud ; . . . but it is established by the authorities, that, in the absence of any such direct proof of intention, if a person owing debts makes a settlement which subtracts from the pro- perty which is the proper fund for the payment of those debts, an amount without which the debts cannot be paid, then, since it is the necessary consequence of the settlement (supposing it effec- (y) 11 Jur. N. S. 70 ; and see also Harman v. Bichards, 10 Ha. 89; Strong v. Strong, IS B. 511; Columbine y. PenhaU, 1 Sm. & G. 228; Reese River Co. v. Ativell, 1 Eq. 347 ; Barling v. Bishoj), 29 B. 417 ; Re Pearson, 3 C. D. 807. 126 LATENT INVALIDITY OF DECLARED TRUSTS. tual) that some creditors must remain unpaid, it would be the duty of the judge to direct the jury that they must infer the intent of the settlor to have been to defeat or delay his creditors, and that the case is within the statute." And Lord Justice Giffard said : " Where the settlement is voluntary, the intent may be inferred in a variety of ways. For instance, if, after deducting the property which is the subject of the voluntary settlement, sufficient available assets are not left for the payment of the settlor's debts, the law infers intent. Again, if, at the date of the settle- ment, the person making the settlement was not in a position actually to pay his creditors, the laio would infer that he intended, by making the voluntary settlement, to defeat and delay them. . . That being so the appeal must be dis- missed." These dicta of Lord Hatherley and Lord Justice Giffard that " if the necessary effect of the instru- ment was to defeat, hinder, or delay creditors, the judge or jury must as a matter of laio infer fraudu- lent intent, can, however, no longer be accepted as correct, the Court of Appeal, in Ex ixirte Mercer (s), and the Privy Council in Godfrey v. Toole (a), having decided that the proper principle is that : " The language of the act being, that any con- veyance of property is void against creditors if it is made with intent to defeat, hinder, or delay {z) 17 Q. B. D. 290. (a) 13 App. Cas. at p. 503. VOID AGAINST CREDITORS UNDER 13 ELIZ. C, 5. 127 creditors, the court is to decide in each particular case whether, on all the circumstances, it can come to the conclusion that the intention of the settlor, in making the settlement, was to defeat, hinder, or delay his creditors" {b). The confusion which has arisen has doubtless been caused (as was recently pointed out by Lord Justice Bowen in a case not arising imder this statute (c)) by the fact that equity judges have always had to decide questions of law and fact together. " An equity judge, when he had to deal with a question of fraud, discussed his reasons for coming to the conclusion that there had been fraud ; and it very often happened, that an equity judge decided that there was fraud in a case in which gross negligence had been proved. If the case had been tried with a jury, the judge would have pointed out to them that gross negligence mi(///f amount to evidence of fraud, if it were so gross as to be incompatible with the idea of honesty ; but even gross negligence, in the absence of dishonesty, did not of itsef amount to fraud. Cases of gross negligence in which the Chancery judges decided that there had been fraud, were piled up one upon another, until at last a notion came to be entertained that it was sufficient to 2^rom gross negligence in order to establish fraud. That is not so. In all these cases fraud and dishonesty were {b) Per EJindersley, V.-C, in Thompson v. Wehster, 4 Drew. 632, adopted and approved by the Privy ConnciL in Godfrey v. Poole, supra. (c) Le Lievre v. Oould, (1893) 1 Q. B. at p. 500. 128 LATENT INVALIDITY OF DECLARED TRUSTS. the proper ratio decidendi, and gross negligencewas only one of the elements ichich the judge had to consider in making nj) his mind lohether the defendanfs conduct had been dishonesty The same view had been previously expressed by Lord Esher, M. R., in Ex parte Mercer, Re Wise (d), where his Lordship said : " No doubt, in coming to a particular conclusion as to the inten- tion in a man's mind, you should take into account the necessary result of the acts which he has done. I do not use the words ' necessary result ' metaphysically, but in their ordinary business sense ; and, of course, if there was nothing to the contrary, you would come to the conclusion that the man did intend the necessary result of his acts. But if other circumstances make you believe that the man did not intend to do that which you are asked to find that he did intend — to say that because that was the necessary result of what he did, you must find, contrary to the other evidence, that he did actually intend to do it, is to ask one to find that to be a fact which one really believes to be untrue in fact." Lord Justice Lindley in the same case added: "The language which has been used in a great many cases, that a man must in point of law be held to have intended the neces- sary consequences of his own acts, is apt to mislead, by confusing the boundary between law and fact — between consequences which can be foreseen with those which cannot." The rule, therefore, {d) 17 Q. B. D. 290. VOID AGAINST CREDITORS UNDER 13 ELIZ. C. 5. 129 according to the more recent decisions, is that of common sense, viz., that the court has to decide as a fad in each case, what, on the whole evidence, was the intention of the settlor in making the settlement, and is not obliged to infer fraudulent intent where it did not in fact exist. Illust. 1. Direct fraud. — In Twyune's case (e) Pierce was indebted to Twjnne in 400/, and to C. in 200/. C. brought an action for his debt, and, pending the result, Pierce conveyed all his goods, to the value of 300/., to Twjnne in satisfaction of his debt ; but Pierce continued in possession of them. Here the court held that there was direct evidence of an intention on the part of Pierce to hinder and delay C. ; and that although Twynne had given valuable consideration for the goods, yet he was privy to the fraud, and consequently could not avail himself of the proviso. Stress was laid upon the fact that Pierce was allowed to remain in possession of the goods, although the conveyance purported to be not a mere mortgage, but an absolute alienation. Had it been a mort- gage, of course the mere fact of the mortgagor retaining possession would have been no badge of fraud, as it is one of the usual incidents of a mortgage (./'). The main and substantial point, however, which the court decided was, that it was obvious, for divers reasons, that the conveyance was a mere fraudulent arrangement between {e) 1 Sm. Lead. Cas. 1. (/) Edivards v. Ilarlen, 2 T. E. 587. K 130 LATENT INVALIDITY OF DECLARED TRUSTS. Twynne and Pierce to slielter tlie latter from tlie just demands of his creditors, and was therefore void under the statute. 2. Direct intent to avoid anticipated judgment. — So, again, where a director of a company was sued by the company, and fearing that a judgment would be given against him, made a voluntary assignment to his daughter of all his property, it was held that the fraudulent intention was mani- fest, and that the settlement was void as against the company, although they were not creditors at the time, and it did not appear that there were any creditors at the time [g). Even though the daughter was no party to the fraud, yet she was not protected, because she had not given valuable consideration. 3. Direct intent to delay future creditors. — And so, again, in SpirreU v. Willows (h), the settlor being solvent at the time, but having contracted a considerable debt which would fall due in the course of a few weeks, made a voluntary settle- ment by which he withdrew a large portion of his property from the payment of debts, after which he collected the rest of his assets and spent them in the most reckless way, thus depriving the ex- pectant creditor of the means of being paid. In that case there was clear and plain evidence of an actual intention to defeat creditors, and accordingly the settlement was set aside. (g) Reese Biver Co. v. Attwell, 7 Eq. 347. (A) 3 De G., J. & S. 293. VOID AGAINST CREDITORS UNDER 13 ELIZ. C. 5. 131 4. Again, a trader, wlio Lad for many years carried on the business of a baker and had saved mone}^, being about to purchase a grocery business which he intended to carry on in addition to the other, made a voluntary settlement of the bulk of his property for the benefit of his wife and chil- dren. He afterwards bought the grocery business and carried it on for about six months, but lost money by it. He then sold it for as much money as he had given for it, and afterwards carried on the baker's business alone until, about three years after the execution of the settlement, he filed a liquidation petition, his liabilities largely exceed- ing his assets. The debts which he owed at the date of the settlement had been all paid. On these facts, it was held that (independently of the question whether he was solvent at the date of the settlement) the settlement was void as against his creditors, on the ground that it was evidently executed with the view of putting the settlor's property out of their reach, in case he should fail in the speculation on which he was about to enter in carrying on a new business of which he knew nothing (i) . 5. And so generally " a man is not entitled to go into a hazardous business, and immediately before doing so, to settle all his property volun- tarily; the object being, 'If I succeed in business, I make a fortune for myself. If I fail, I leave («■) Ex parte Russell, Re Rutterivorth, 19 C. D. 588 ; and see also Ware v. Gardner, 7 Eq. 317. k2 132 LATENT INVALIDITY OF DECLARED TRUSTS. 'my creditors unjiaid. They will bear the loss.' That is the very thing which the statute of Eliza- beth was meant to prevent " {k). 6. Marriage settlement executed with fraudulent intent. — Most of the above examples have been cases of voluntary settlements ; but where there is an express intention to defeat creditors, and all parties to the cormderation are parties to that inten- tion, the fact that it was a settlement based on value will not render it valid against the settlor's creditors. Thus, where one, by marriage settle- ment, settles his own property on himself until bankruptcy, and then over, it is so clearly intended to defraud creditors that the wife must be assumed to have been party to that intention, and the trust over on bankruptcy will therefore, as against the general body of his creditors, be void (/). This case must, however, be carefully distinguished from that of Re Ddnwld, Detmold v. Dctmold {^ni) . There the settlor, on his marriage, settled pro- perty on himself until bankruptcy, or until he should " assign, charge, or incumber the income, or should do or suffer something icherehy the same or part thereof icould, through his act or default, or {k) Per Jessel, M.E., Ex parte Russell, supra; follow- ing Mackay v. Douglas, 14 Eq. 106. An unconscious paraphrase of Shakespear, "If, like an ill venture, it come unluckily home, I break, and you, my gentle creditors, lose." {I) Higginbottom v. Holme, 19 V. 88 ; Ex f arte Hodgson, ib. 208 ; Re Pearson, 3 C. D. 807 ; and see also Ex parte Bolland, Re Clint, 17 Eq. 115, for another instance of a settlement clearly fraudulent. (m) 40 0. D. 585. VOID AGAINST CREDITORS UNDER 13 ELIZ. C. 5. 133 by operation of hue, become vested in or payable to some other person, ^^ in which event the income was to become payable to the wife. A single creditor of the husband obtained judgment against him, and a receiver of the settled income was appointed by way of equitable execution. The settlor after- wards became bankrupt. It was, however, held, by North, J., that although, if the husband had first become bankrupt, the trust over in favour of the wife would have been invalid against the general body of creditors, yet it was valid as against a particular judgment creditor, and that having once taken effect, the subsequent bank- ruptcy of the settlor could not divest the estate, which had vested in the wife. The learned judge distinguished the case from those above cited, on the ground that a gift over on alienation by a settlor is valid, and that the effect of the receiver- ship order was involuntary alienation, taking place before the commencement of the bankruptcy. The distinction, however, is very fine, and it is, with unfeigned respect, suggested, that if (as seems clear) a gift over on banki^uptcy is void against creditors, because it eridences an intention to defeat or delaij them, so by parity of reasoning, a gift over on the settlor cltarginy his interest (?. e., to secure a debt), or suffering something {i.e., an execution), whereby the same would, by operation of law, become payable to another, equally evi- dences a dishonest intent to escape from his just liabilities. Moreover, surely the gift over on bankruptcy of itself proved an intent to defeat or delay creditors, and, the intent being proved, the 134 LATENT INVALIDITY OF DECLARED TRUSTS. statute avoids the settlement, not only against the general body of creditors, but against judgment creditors. Of course, if the wife had been a bond fide purchaser for value without notice^ no question could have arisen ; but under Higginhotiom v. Holme {n), and that class of cases, the very form of the settlement was sufficient to fix her with notice of its character. 7. Where a person married his mistress, and with the intention of defeating his creditors, and with her knowledge of that intention, settled all or a considerable part of his property upon her, the marriage consideration did not render the settlement valid as against the settlor's creditors ; for such a marriage was a mere cloak for the fraud, and the wife was jjarticejjs criminis (o). 8. Fraudulent settlement upheld in favour of bona fide parties to valuable consideration. — But, on the other hand, where a trust based on value would, as between the settlor and his creditors, be clearly void, yet it will be supported as between the creditors and persons parties to the conside- ration, where such parties are not privy to the settlor's fraudulent intentions. Thus in Kevan v. Craicford (j)), the facts were, that C. (who carried on the business of a flax spinner at S. Mills, in partnership with E,.) by a settlement made in (n) 19 V. 88. (o) IJulmer v. Hunter, 8 Eq. 4G ; and see Colomhine v. Benhall, 1 Sm. & Giif. 228. (p) 6 C. D. 29; and see JEx parte Home, 54 L. T. 301. The valuable consideration must be substantial, however, and not merely technical ; see Re Ridlcr, 22 C. D. 74. But conf. Harris v. Tiihhs, 42 C. D. 97. VOID AGAINST CREDITORS UNDER 13 ELIZ. C. 5. 135 contemplation of liis marriage, after reciting that he was indebted to his intended wife in a sum of 20,000/., covenanted to pay that sum to the trustees, upon trust that as soon as he should become owner in fee simple of S. MiUs (which he had agreed to purchase) they should advance the 20,000/. to him on mortgage of those mills. It was further declared that the trustees should stand possessed of the 20,000/. when so invested, upon trust to pay the income to the intended wife for life for her separate use, with remainder to the husband during his life or until he should become bankrupt, with remainder to the children of the marriage. The recital that C. was indebted to the intended wife in 20,000/. was quite false, and C. was at the time of the marriage in insol- vent circumstances : but the intended wife had no knowledge of his insolvent circumstances, and understood nothing about the recitals in the deed. The settlor subsequently piu-chased the S. Mills estate, and mortgaged it to the trustees for secur- ing the 20,000/., but no money actually passed. The settlor subsequently became bankrupt, and the creditors claimed that the settlement was void as against them. It was, however, held that, not- withstanding the falsity of the recitals, the settle- ment and the mortgage deed consequent thereon were valid so far as concerned the interests of the wife and children ; for the former was no party to the settlor's fraud, and gave valuable consideration (viz. marriage) for the settlement, and the latter were parties privy to that consideration. 136 LATENT INVALIDITY OF DECLARED TRUSTS. i 9. "WTiere a trust, based on value, is souglit to ! be invalidated as against a party privy to the con- Bideration, or where a voluntary trust is sought to be invalidated as against a purchaser for value from a cestui que trust, it must be conclusively shown that such party was privy and party to the fraudulent intent. For, although he may have known that the pff'ed of the assignment would be to hinder or defeat the assignor's creditors, or expectant creditors, yet if the transaction was a bona fide purchase, and not a mere collusive arrangement between the parties with the intention of causing such hindrance or delay, it will be upheld (q). It should also be observed, that the protection afforded to bona fide purchaser for value from a beneficiary under a fraudulent deed, is not confined to purchasers of legal estates or interests, but extends to purchasers of mere equit- *^ ok o(\Ui^'ii^ able interests (r). 10. Fraudulent intent presumed from surrounding circumstances. — As above stated (p. 128), in the absence of direct evidence of fraudulent intent, it may {if there he no rebutting evidence) he inferred from the fact that the necessary result of the settlement was to defeat or delay the settlor's creditors. The inference is, however, one of fact [q) See DarviUe v. Terry, 6 H. & N 807 ; Hah v. Saloon Omnibus Co., 4 Dr. 492 ; judgment in Harman v. Ricliards, 10 Ha. 89; Alton v. Harrison, 4 Ch. Ap. 622; Middleton V. Pollock, 2 C. D. 104 ; Boldero v. L. & W. Discount Co., Ex. D. 47 ; but see Spencer v. Slater, 4 Q. B. D. 104. (r) Halifax Joint Stock BankY. Gledhill, (1891) 1 Cli. 31. VOID AGAINST CREDITORS UNDER 13 ELIZ. C. 5. 137 only, and not an inference of law, and may be' rebutted if the evidence as a whole shows that no such intention existed. In Freeman v. Pope («) the circumstances, so far as they are material, were as follows : — The settlor was a clergyman, with a life income of about 1,000/. a year; but at the date of the settlement in question his creditors were pressing him, and he had to borrow from his housekeeper a sum wherewith to pay the most urgent. He handed over to her, as security, the only property he had in the world, and a policy of insurance for 1,000/. upon his own life. The security to the housekeeper exceeded in value her debt by about 200/. ; but the settlor also owed a debt of 339/. to his bankers, which was subse- quently increased at the date of the settlement to 489/. under an arrangement that he would allow his solicitor to receive part of his income, and out of it pay 100/. a year towards liquidating the 489;'., and would pay the residue into the banker's bank upon a current account. There was no bargain, however, that the bankers would not sue. Being in these circumstances, he executed a voluntary settlement of the life policy in favour of a Mrs, Pope, and having done so, was consequently in this position, that he had nothing wherewithal to pay, or to give security for the debt of 489/., except the surplus value of the f urnitui-e ; and he was clearly and completely insolvent the moment he executed the settlement. Upon these facts, a (s) 5 Cli. App. 540. See judgmeut, p. 127, siiprcu 138 LATENT INVALIDITY OF DECLARED TRUSTS. subsequent creditor instituted a suit to set aside tlie settlement ; on the ground that although there was no actual fraud, yet the effect of the settle- ment was to defraud creditors, and that as there were creditors antecedent to the settlement still unpaid, he could ask for it to be set aside. And the court held that this was so. Whether, how- ever, this case would have been decided as it was, if the court had felt itself at liberty to consider the entire evidence (according to the now estab- lished rule) is problematical ; as the court of first instance (at all events) seems to have felt, that if it had been asked whether there was actually any intention on the part of the settlor to defeat, hinder, or delay his creditors, it would have come to the conclusion that he had no such intention. 11. A lady, being indebted to the plaintiff at the time of her marriage, settled all her property (except jewels and furniture) upon certain trusts in favour of herself and her husband and issue, and in default of issue in favour of certain collateral relatives. Before the debt was paid, she and her husband died without issue ; and it was held that, qua the collateral relatives, the settlement was voluntary, and that, therefore, as between them and the plaintiff, the settlement was void (t). It is conceived, however, that in the absence of express intent to defeat or delay creditors, no such inference would now be made, the consideration being marriage, and the trans- {t) Smith V. CherriU, 4 Eq. 390. VOID AGAINST CREDITORS UNDER 13 ELIZ. C. 5. 139 action one wliicli was natui-al and usual on such an occasion. 12. Again, a trader doing business to tlie amount of 100,000/. a year, executed two voluntary settle- ments in favour of his wife, the first being two years, and the last one year before his death. By the first, he settled two policies of insurance, each for 1,000/. ; by the second he settled his furniture, worth about 1,000/. An inquiry into the state of his affairs having been directed, it was found that at the date of the first settlement his debts would have exceeded his assets by 1,293/., and at the date of the second settlement his debts were 10,726/. over his assets. A creditor whose debt was contracted after the date of the first, but heforc the date of the second settlement, commenced proceedings to set aside both settlements. It was held that, as the settlor's debts exceeded his assets when both deeds were executed, he was then in- solvent, and the deeds must be declared fraudulent and void as against the plaintiff and his other creditors ; and that the fact that all the settlor's debts in existence at the date of the first settle- ment had been subsequently paid was imma- terial («). It must be borne in mind that the settlor being dead there was no evidence forth- coming to rebut the prima facie inference of fact, otherwise it is quite conceivable that a similar {u) Taylor y. Coenen, 1 C. D. 636; and for otlier ex- amples, see Crossley v. Elsworthy, 12 Eq. 159; and Adames v. Hallttt, 6 Eq. 468. 140 LATENT INVALIDITY OF DECLARED TRUSTS. case would (in the light of more recent decisions) be decided the other way. In short, the reader is emphatically warned that none of the reported eases of implied fraudulent intent can be now relied upon as authorities, the question of intent being no longer regarded as a question of law, but as purely one of fact in each case. 13. Fraudulent intent not presumed merely from effect. — This was very well exemplified in Ex jyarte Mercer, Re Wise (x) . The facts of that case were as follows : — A master mariner was married at Hong-Kong on May 31st, 1881. In the follow- ing August an action for breach of promise of marriage was commenced against him, and the writ served upon him at Hong-Kong on October the 8th. By the same mail he heard that a legacy of 500/. had become payable to him. On the 17th October he executed a post-nuptial settle- ment of the 500/. in favour of his wife and issue, being then indebted to no one. In July, 1882, judgment in the breach of promise action went against him for 500/. ; and in November, 1884, he was adjudicated bankrupt. It was thereupon attempted to set aside the post-nuptial settlement under Lord Hatherley's dictum in Freeman v. Pope. The bankrupt, however, swore that when he made the settlement he was in no way influenced by the action having been commenced against him, which he thought would come to nothing. On this state of facts the Divisional Court and the Court of (x) n Q. B. D. 290; see also Kent v. Riley, 14 Eq. 190. VOID AGAINST CREDITORS UNDER 13 ELIZ. C. 5. 141 Appeal declined to set aside the settlement, on the ground that there was not sufficient evidence to warrant a judge or jury in finding that the settle- ment was intended to delay, hinder, or defraud creditors. Grantham, J., said : " When learned judges have said that if the necessary result of a settlement is to hinder creditors, it must be taken to have been executed with that intent, this observation must be taken as applied to the character of the particular case in which it was made. In all the cases which have been referred to, the settlor had considerable debts or liabilities, and in none of them was there the same reason for making the settlement which existed in the present case, viz., the wish to settle on the wife of the settlor, property to which he had become un- expectedly entitled after his marriage ; and it cannot be said that, with the exception of the writ having been served upon him, there was any such inducement for him to make the settlement as there was in all the other cases which have been cited "(y). Art. 16. — W7ien void under Bankruptcy Act (s). (1) Even where a settlement is valid as against creditors under the last pre- {y) And see also observations of Lord Esher, M.B,., and Lindley, L.J., in the same case, quoted supra, p. 128. (z) Bankruptcy Act, 1883, s. 47 (1). 142 LATENT INVALIDITY OF DECLARED TRUSTS. ceding article, yet (a) it will be void as against the settlor's trustee in bankruptcy or liquidation (b) under tbe following circumstances, viz. : — a. If it be voluntary, and the settlor becomes bankrupt or liquidates his affairs within two years. /3. If it be voluntary, and the settlor becomes bankrupt or liquidates his affairs after two but within ten years ; unless it can be shown that he was solvent at the date of the settlement without the aid of the property comprised in it, and that his estate or interest in such pro- perty passed to the trustee of the settlement on the execution thereof. 7. If it consists of a mere covenant or contract made in consideration of marriage, for the future settlement upon the settlor's wife or children, of any specific and ear-marked (c) (a) These provisions were limited to traders by the Bankruptcy Act, 1869, but are extended to the public generally by the Act of 1883, which is not retrospective {Ex parte Todd, 19 Q. B. D. 186). (b) The section does not apply to the winding up of deceased insolvent settlor's estates {Be Oould, 19 Q. B. D. 92). (c) Ex parte BisJiop, lie Tonnies, 8 Ch. App. 718. WHEN VOID ON SETTLOR'S UANKRUPTCY. 143 money or property wlierein he had not at the date of his marriage any estate or interest, vested or con-j tingcnt (J), (and not being money or property of or in right of his wife), unless such property or money has been actually trans- ferred or paid pursuant to such contract or covenant (e). (2) This article does not affect a settle- ment of property accrued to the settlor since marriage in right of his wife, or the trusts of a policy of assurance effected in favour of a wife or children under sect. 11 of the Married Women's Property Act, 1882. Illust. 1. Thus, a person made a voluntary settlement of an estate which was subject to a mortgage, and covenanted with the trustees that he would pay the interest on the mortgage, and, {d) See Ee Andrews, 1 C. D. 635. A formal transfer of future-acquii'ed property is, in reality, nothing more than a contract to assign it when it comes into existence, and would, it is conceived, be a contract within the meaning of this rule. (See CoUyer v. Isaacs, 19 C. D. 342 ; and Jose2:>h v. Lyons, 15 Q. B. D. 280.) (e) Bankruptcy Act, 1SS3, s. 47 (2). It would also seem that every assignment of future -acquii-ed property would be cancelled by bankruptcy before the property came into existence, inasmuch as until then, such assignments are in reality only contracts to assign. See CoUyer v. Isaacs, sup. 144 LATENT INVALIDITY OF DECLARED TRUSTS. ■wlien required, would pay off tlie principal. It subsequently, and within two years, turned out that his assets (exclusive of the estate in question) were sufficient to pay his debts other than the mortgage debt, but not sufficient to pay both, and he became bankrupt. It was held, that whether the settlement was fraudulent or not within the 13th Elizabeth it was not material to inquire, but that it clearly fell within the provisions of the Bankruptcy Act, and was therefore void (/), 2. Upon an application to set aside a post- nuptial settlement under clause /3 of this article, it appeared that, by the settlement, a life interest was reserved to the settlor himself, and that, if this life interest were taken into account, he was able to pay his debts at the date of the settlement; but that if it was not taken into account, he was insolvent. The court held that the settlor's life interest ought to be taken into account in estimat- ing his solvency, and that the settlement was valid as against his trustee in bankruptcy {g). 3. Clause 7 of the above article only applies to specific or ear-marked property ; and, therefore, where a person by his marriage settlement covenants that he will pay a sum of money to the trustees, such a covenant is perfectly valid. The intention of the act is to prevent settlements of property expected to accrue at a future time, in which the settlor has at the date of the settlement (/) Ex parte Huxtahle, Re Coniheer, 2 C. D. 54. Q) Me Lowndes, 18 Q. B. D. 677. WHEN VOID UNDER BANKRUPTCY ACT. 145 no present interest. As Mellish, L. J., put it in Ex parte Bishop, re Tomnes (//) : " The object of the legislature was to provide that specific money or property which, but for the section, would have gone to the trustees [of the settlement] exclusively, should be divided among the creditors [of the settlor]. A covenant to settle such money or property would, in equity, have bound it when it came into actual possession, and the intention was, that if the covenantor had no interest at the time, it should go to the creditors, and not to the trustees, of the settlement. If this had been a covenant that in case any property was left to the covenantor by his father or any other person, he would settle it, and the covenantor had no interest in it at the time, the covenant would be void against the trustee in bankruptcy. The word ' money' refers to something of the same nature as 'property,' namely, something sj)ecific, and does not apply to that which is a mere debt due from the settlor." Whether, in such cases, property coming to the settlor offer his discharge, would remain bound by the covenant is not free from doubt. The section in question only avoids them as against the trustee in bankruptcy, who would, of course, have no claim to property wliich only vested in the bankrupt after his discharge. It would seem, however, that the bankruptcy would, ipso facto, cancel all the debtor's contracts, including (A) 8 Ch. Ap. 721. TJ. — T. 146 LATENT INVALIDITY OF DECLARED TRUSTS. such a one as this (^) . It must also he pointed out that documents which purport to assign after- acquired property, are in reality only contracts to do so when the property comes into existence ; for " A man cannot in equity, any more than at law, assign what has no existence " {J). X' 4. Whether settlements void on bankruptcy are y^ iA^^lvT*'^ void against purchasers from beneficiaries. — The *■ '^'"j^ '^^^i. question whether a voluntary settlement, or gift, « Y" v^t^v'^ which becomes void by reason of the settlor's bank- ^ f..' ■• ""' ruptcy within two or ten years, is void in toto, so as to take away the rights of bond fide purchasers ^ \ ^ ■^'' for value from the beneficiaries or donees, is not -i^y •^ V y-\ free from doubt. Mr. Justice Stirling has decided "^v\v>>V^ that it is, and that no one can safely purchase ■'*x>^;^ from such a beneficiary until the ten years have •'^' elapsed {Iz) . On the other hand, Mr. Justice Wil- liams has decided that such bond fide purchasers lirciL are protected (/). Until the point comes before •'^' the Court of Appeal, it must be considered a •^^ doubtful one. J «A^ \tf^^t. (ilU. tXjJi-" wfl^vvvu «r*-i7-* •^ Art. 17. — When void as against subsequent Pu/rchasers from Settlor. I (1) A settlement of lands is void, as against subsequent bona fide pur- (i) See Colhjer v. Isaacs, 19 C. D. 342. (j) CoUyerr. Isaacs, supra; Josephy. Lyons, 15 Q. B. D. 280. (k) Be Briggs and Spicer, (1891) 2 Ch. 127. [l) Be Brail, ex parte Norton, (1893) 2 Q. B. 381 ; and see also Be Vansittart, ex parte Brown, ib. 377. WHEN VOID AGAINST SUBSEQUENT rURCHASER. 147 chasers for value from the settlor, if made with intent to defeat such pur- chasers (w); or if it is revocable (w). (2) Provided always, that this article in nowise prejudicially affects bona fide purchasers for value (o), Avhether bene- ficiaries under a trust based on value, but fraudulent in inception, or assigns of voluntary beneficiaries (j':>). The law on this subject, the foundation for which is the Statute 27 Eliz. c. 4, has to a large extent been revolutionized by the Voluntary Con-' veyances Act, 1893 (q). Although the statute of Elizabeth does not in any way speak of voluntary conveyances, it was for nearly 300 years held, in a long fine of decisions, that every voluntary con- veyance or settlement was impliedly fraudulent within that statute as against subsequent pur- chasers, even although no actual intention to defraud existed at the date of the settlement (to) 27 Eliz. c. 4. The -word " purcliasers " includes mortgagees and lessees {Dolphin v. Aylward, 4 H. L. 486 ; Doe V. Mores, 2 "W. Bl. 1019). As to copyholds, see Doe V. BottrieU, 5 B. & Ad. 131; CiirrieY. Nind, 1 M. & C. 17 ; and as to leaseholds, last note to Saunders v. Dehen, 2 Ver. 272. (n) 27 Eliz. c. 4 ; and see Standon v. BuUocJc, cit. 3 Eep. 82 b; Lavender v. Blachston, 3 Keb. 526; Jenkins y. Kemiss, 1 Lev. 150. (o) 27 Eliz. c. 4, s. 4. ip) Prodgers v. LangJiam, Keb. 486. Iq) 56 & 57 Vict. c. 21. l2 148 LATENT INVALIDITY OF DECLARED TRUSTS. impeached (r). This was purely judge-made law, and rested on the theory that, by selling the property afterwards for valuable consideration, the settlor so entirely repudiated the former voluntary settlement, and showed his intention to sell, as to raise against him and the beneficiaries a conclusive presumption that such intention existed tchen he made the volantary settlement, and consequently that the latter was made with intent to defeat the subsequent purchaser (.s). This principle appears to be somewhat far-fetched, and of late years has frequently been alluded to with disapprobation by learned judges, but accompanied by an intimation that nothing less than legislative interference could alter a rule which had been uniformly acted on for so long a period. At length Parliament has intervened, and by the above-mentioned Act of 1893, it is enacted that " No voluntary conveyance of any lands, tenements, or hereditaments, whether made before or after the passing of this Act, if in fact made bona fide and without any fraudulent intent, shall hereafter be deemed fraudulent or covinous within the meaning of the Act 27 Eliz. e. 4, by reason of any subsequent purchase for value, or be defeated under any of the provisions of the said Act by a conveyance made upon any such purchase, any rule of law notwithstanding." The Act does not extend to cases where the sub- sequent purchase has been made before the 29th of (r) Doe V. Manning, 9 East, 57 ; Trowell v. Shenton, 8 C. D. 318. (s) Per CampbeU, C. J., Doe v. liusham, 17 Q. B. 723. AVIIEN VOID AGAINST SUIiSEQUENT PURCHASER. 149 June, 1893; and, as many titles depend upon tlie validity of such subsequent purchases made before that date, it seems necessary to give some examples of the old law. It is also necessary to remind the reader that although, by reason of this statute, voluntary conveyances will no longer be ipso facto void as against subsequent purchasers for value, yet, under the general doctrines of equity, a volun- tary conveyance may be postponed to a subsequent purchaser for value uitliout notice if the latter should get a conveyance of the legal estate, or if the beneficiaries under the voluntary settlement have been guilty of negligence, and the settlement did not vest the legal estate in a trustee for them(/). Illust. 1. — Express intent to defraud. — In- stances of settlements framed with the express intention of defrauding subsequent purchasers are rare ; but if A. and B. were to conspire together, that A. should sell his lands to B., and that A. should retain the title deeds in order to enable him to sell the land over again to C, the con- veyance to B. would be void under the statute as against 0. 2. Power of Revocation. — So again, where there was, under a marriage settlement, a power reserved to the settlor to grant a long lease with or without rent, it was held that that was practically a power of revocation pro tanto, and that a subsequent (0 See Cave v. Cave, 15 C. D. 039 ; Bricigs v. Jones, 10 Eq. 92; Northern Ass. Hoc. v. Whipp, 26 C. D. 482; and judgment of Kekowich, J., in Harris v. Tuhhs, 42 C. D. 79. 150 LATENT INVALIDITY OF DECLARED TRUSTS. mortgagee of the settlor was entitled to the pro- perty for the period during which a lease could have been granted (u) . 3. Examples of the law prior to June, 1893. — An excellent example of the old law is afforded by the case of Trowcll v. Shenton (cp). There, an infant had written to his betrothed, promising that on coming of age he would settle seven specified houses on her. No settlement was made for fifteen years, at the expiration of which, he settled these seven and two other houses upon her, but on different trusts to those mentioned in the letter, and without in any way referring to that letter. Some few years after this, he agreed to sell three of the houses to a purchaser. In an action by the purchaser for specific performance of this agree- ment, it was held that the settlement was void as against him. For, as the settlement did not refer to any previous agreement, dealt with other pro- perty than that mentioned in the letter, and settled the property in a different way, there was no rati- fication in writing of the promise contained in that letter, and the settlement was therefore purely ]30st-nuptial and voluntary. It must, however, be pointed out that, as the invalidity of voluntary deeds as against subsequent purchasers depended entirely on an original intention presumed from the fact of the settlor^ s subsequent attempt to sell, the doctrine only applied when the settlor himself subsequently sold, and not where the subsequent {lb) Lavender v. Blackston, 3 Keb. 52G. Or) 8 C. D. 318. WHEN VOID AGAINST SUBSEQUENT PURCHASER. 151 vendor was his heir, or a second voluntary grantee of the settlor (y) . ■l^luS.S'.lX ■ Cii ' ^ -, ^<' 'u 4. However, even under the old law a very small consideration would suffice to remove a bona fide settlement from the category of voluntary settlements for the purposes of the act of Eliza- beth; far less than will suffice to support a settlement made by an insolvent as against his creditors (s). Thus it was held, in Price v. Jenkins {a), that a settlement of leaseholds to which liability to pay rent and perform covenants was attached, was, from the very nature of the property, based on value ; for the beneficiaries thereby took upon themselves the primary dis- charge of those liabilities. It is, however, humbly questioned whether the decision in Price v. Jenkins could stand if it should ever (which is now im- probable) come before the House of Lords. For, if undertaking the liability to pay rent and keep in repair, is a valuable consideration for a settle- ment or gift of leaseholds, it would seem to follow that the liability to pay rates and taxes would be a valuable consideration for a gift of freeholds, in which case no gift of real estate could ever be voluntary — a palpable rediictio ad absiirdum. It is therefore conceived that a consideration can only be considered valuable, which entails on the party {y) Per Campbell, C.J., Doe v. Rusliam, supra; and see Parker v. Garter, 4 Ha. 409. (z) See Re Midler, 22 0. D. 74 ; Hamilton v. MoUoy, 5 L. R., Ir. 339; Roshery. Williams, 20 Eq. 210; Re Hill- man, 10 0. D. 622. But see Harris v. Tabhs, 42 C. D. 79. ( a) 5 CD. 019. 152 LATENT INVALIDITY OF DECLARED TRUSTS. rendering it the liability to give or do something which is not mcrchj incidental to the ou-nershij) of the property for which the consideration is given, but something entirely beyond and apart from such incidents. Anyhow, the decision in Price v. Jenkins has no application where leaseholds are settled by way of sub-demise, as no onus is thereby imposed on the trustees {h). 5. However it was quite clear that where there was any substantial bona fide consideration, the statute did not, even under the old law, apply in the absence of express fraud. For instance, where there were mutual promises, each was considered to be a valuable consideration for the other. Thus it was settled, that if husband and wife, each of them having interests, no matter how much, or of what degree or what quality, came to an agree- ment which was afterwards embodied in a settle- ment, that was a bargain between husband and wife, which was not a transaction without valuable consideration {c) . But where property was devised to the wife for her separate use, the husband had no estate or interest in it ; and consequently, if it were settled by the husband and wife, such a settlement was not considered to be based on value, inasmuch as the husband had no rights to modify (c/). And the same principle would of course apply to property belonging to a mamed (&) Shurmer v. Sedgivick, 31 W. E. 884. (c) Teasdale v. Braithivaite, 4 0. D. 90; affirmed, 5 0. D. 630 ; Re Foster and Lister, 6 C. D. 87 ; and Schrieber V. Dinkel, 54 L. J., Ch. 241. (d) SJmrmer v. i:^ed,iincl', 24 C. D. G04. WHEN VOID AGAINST SUBSEQUENT PURCHASER. 153 woman under the Married Women's Property Act, 1882. C. Under the okl law it was repeatedly held (although modern judges expressed strong dis- approval of it), that knowledge of the existence of a voluntary settlement by a subsequent pur- chaser did not deprive him of the statutory priority {e) . However, the voluntary settlement was not cancelled unless the subsequent sale was a real bona fide alienation. Thus, where the con- sideration for the subsequent purchase was grossly inadequate, the sale might be impeached by the voluntary beneficiaries, on the ground that it was on the face of it a collusive arrangement between the settlor and the so-called purchaser for the purpose of relieving the former from the settle- ment (/). 7. The settlement was, however, void only so far as was necessary to give effect to the subse- quent transaction. For instance, in the case of property settled by a voluntary settlement, and subsequently mortgaged, the beneficiaries under the voluntary trust were entitled, subject to the mortgage ; and if unsettled estates were included in the mortgage, the beneficiaries were entitled to throw the mortgage on to the unsettled estates, if they were sufficient to answer it {g) . (e) Doe V. Maiming, 9 East, 59. (/) Doe V. Eoutledge, Cowp. 705; Metcalfe v. Pulvertoft, 1 V. & B. 184. {g) Hales Y. Cox, 32 B. 118. ( 154 ) CHAPTER lY. The Construction of Declared Trusts. . t^-CtJl u/u Art. 18. — Executed Trusts construed stricthj, and Executory liberally. (1.) A trust in which the limitations of the estate of the trustee and the bene- ficiaries are perfected and declared by the settlor is called an executed trust («). I In the construction of executed trusts, I technical terms are construed in their • legal and technical sense [h). (2.) A trust in which the limitations of the estate are not perfected and de- clared by the settlor, but only an agreement made for the subsequent creation of a trust, or certain instruc- tions or heads of settlement indicated from which the trustee is subsequently (a) See Stanley v. Lennard, 1 Eden, 95. \h) Wright v. Pearson, 1 Ed. 125; Austen v. Taylor, ibid. 367; Brydges v. Brydges, 3 Ves. jun. 125; Jervoise V. JDuke of Northumberland, 1 J. & W. 571. EXECUTED TRUSTS CONSTRUED STRICTLY, ETC. 155 to model, perfect and declare the trust (c), is called au executory trust. In the construction of executory trusts, i the court is not confined to the language used by the settlor. And where that language is im2:)roper or informal (c/), or would create an illegal trust (e), or would otherwise defeat the settlor's in- tentions (as gathered from the motives which led to the settlement, and from its general object and purpose, or from other instruments to which it refers, or from any circumstances which may have influenced the set- tlor's mind(/)), the court will not direct an executed settlement accord- ing to the strict meaning of the words used, but will order it to be made in a proper and legal manner so as best may answer the intent of the parties (^). (c) See Atisteii v. Taylur, 1 Eden, 366 ; Lord Glenorchy V. Bosville, For. 3; and Stanley v. Lennard, supra. And see per Cairns, L.C., in Sackville West v. Holmesdale, 4 H. L. 543. {d) See Earl of Stamford v. Sir John Ilohart, 3 Br. P. C. Tarl. ed. 31—33. {e) Humherston v. Humherston, 1 P. W. 332. (,/") See per Lord CheLmsford in Sackville West v. Uolmesdale, 4 H. L. 543. (g) Earl Stamford v. Sir John Hohart, supra; and see Cogan v. Duffield, 2 C. D. 44. 15G CONSTRLCTION OF DECLARED TRUSTS. Illust. — 1. Instances of executed and executory- trusts. — A father conveys freeholds to trustees upon certain trusts in favour of his daughters, and also covenants to surrender copyholds to the same trustees, to be held by them on similar trusts. Here the trust of the freeholds is an executed trust ; for the estates of the trustee and of the beneficiaries are perfect, and require nothing more to be done. The trust of the copyholds, on the other hand, is an executory trust ; for some- thing remains to be done in order to perfect the settlement, viz., that the property should be legally Tested in the trustees. 2. So, where a testator by will gives property to trustees, in trust to cause it to be settled on his daughter in strict settlement, that is an executory trust ; and so are agreements for settlements, such as marriage articles. I 3. Rule in Shelley's case, when applied. — If an estate is vested in trustees and their heirs, in trust for A. for life without impeachment of waste, with remainder to trustees to preserve contingent re- mainders, with remainder in trust for the heirs of A.'s body, the trust being an executed trust, A. (according to the rule in Shellei/'s case, which is a rule of law and not merely a construction) will be lield to take an estate tail (//). Of course, where the doctrine could not apply in law (owing to the [h) Wright v. Pearson, 1 Ed. 119; Austen v. Taylor, iibid. 361 ; Jones v. Morgan, 1 Bro. C. C. 206; Jervoise y. Duke of Northumberland, 1 J. & W. 559. EXECUTORY TRUSTS. 157 life estate being equitable and the remainder legal, or vice versa), the rule will not apply in equity {i)", nor where the w^ord " heir" is used in the sense of persona designata (/.•) ; as, for example, where the ultimate limitation is "to the person who may then be the heir of A." 4, On the other hand, in the leading case of Lord Glcnorcluj v. Bosville (/), the settlor devised real estate to trustees upon trust, upon the hap- pening of the marriage of his grand-daughter, in convey the estate to the use of her for life, with remainder to the use of her husband for life, with remainder to the issue of her body, with remain*- ders over. It was held, that though the grand- daughter would have taken an estate tail had it been an executed trust, yet as the trust was exe- cutory, it was to be executed in a more careful and accurate manner ; and that as the testator's inten- tion was to provide for the children of the marriage, that intention would be best carried out by a con- veyance to the grand-daughter for life, with re- mainder to her husband for life, with remainder to her first and other sons in tail, with remainder to her daughters. 5. And so in marriage articles, a covenant to settle estates to the use of the husband for life, with remainder to the wife for life, with remainder to their heirs male and the heirs of such heirs male. [i) Collier v. M'Bean, 34 Beav. 426. (k) Greaves v. Siiirpson, 10 Jur. N. S. 609. (?) 1 W. & T. L. C. 1. 158 CONSTRUCTION OF DECLARED TRUSTS. is always construed to mean that tlie settlement shall be so drawn as to give life estates only to the husband and wife successively {m) ; for it is not to be presumed that the parties meant to put it in the power of the husband to defeat the very object of the settlement, which is to make a provision for the issue of the marriage («). 6. Executory trusts, when construed strictly. — But where the articles show that the parties understood the distinction (as, for instance, where part of the property is limited in strict settle- ment, and part not), the trust will be construed strictly (o). 7. Powers implied in executory trusts, — It would Beem that, under a direction to settle on a woman and her children, the usual powers of maintenance and advancement ought to be inserted (7;), and also powers of sale and exchange (q). So where marriage articles provide for "powers usually (to) Trevor v. Trevor, 1 P. & W. 622 ; StreatfieU v. Btreatfield, 1 "W. & T. L. C. 333 ; Jones v. Langton, 1 Eq. C. Ab. 392; Cusach v. Cusack, 5 Bro. P. 0. Tom. ed. 116; Griffith V. Buckle, 2 Vern. 13 ; Stoner y. Curioen, 5 Sim. 268 ; Davies v. Davies, 4 Beav. 54 ; Lambert v. Peyton, 8 H. L. Cas. 1. (n) As to the meaning of "issue " in marriage articles, see Nandick y, Wilkes, Gil. Eq. Eep. 114; Burton, v. Hastings, ibid. 113; Hart v. Middlehurst, 3 Atk. 371; Maguire v. Scully, 2 Hy. 113 ; Burnahy v. Griffin, 3 Ves. 206 ; Home v. Barton, 19 Ves. 398 ; Phillips v. James, 2 D. & Sm. 404. (0) Howel V. Hoivel, 2 Ves. 358 ; Powel v. Price, 2 P. W. 535 ; Chambers v. Chambers, 2 Eq. C. Ab. 35, c. 4 ; Highway v. Banner, 1 Bro. C. C. 584. (p) Be Parrott, Walter v. Parrotf, 33 C. D. 274. (q) Wise y. Piper, 13 C. D. 848. EXECUTORY TRUSTS. 159 contained in settlements of a like nature," powers of sale, exchange, and reinvestment are autho- rized (r). So, where a settlement of personalty- contains a power to vary investments, and a covenant to settle after-acquired property on similar trusts, a settlement of after-acquired real estate should contain a power of sale, as that is analogous to a power of varying investments of personalty (.s). On the other hand, a reference to certain powers, will, it would seem, prima facie negative any others (t). A direction, in marriage articles, that upon the lady having issue, a certain estate should be strictly settled, was held not to authorize a power to provide portions for younger children (?<). 8. Construction of executory trusts in wills. — In a will it is obvious that the same presumption will not arise as in the case of marriage articles. Therefore, where a testator gave 300/. to trustees, upon trust to lay it out in the purchase of lands, and to settle such lands to the only use of M. and her children, and if M. died without issue, " the land to be divided between her brothers and sisters then living," it was held that this gave M. an estate tail (x). 9. There is, however, no difference between the (r) DuJce of Bedford v. M. of Ahercorn, 1 M. & 0. 312. (s) Elton V. Elton, 27 B. 634 ; and see Tait v. Latlibury, 1 Eq. 174. it) See Brewster v. Angell, 1 J. & W. 625. (?() Orier v. Grier, 5 H. L. 688 ; and see Dod v. Dod, Amb. 274. {x) Sweetajjjjle v. Bindon, 2 Ver. 536. 160 CONSTRUCTION OF DECLARED TRUSTS. construction to be put on an executory trust created by marriage articles, and on an executory trust created by will, except so far as the former (by its very nature) furnishes more emphatically the means of ascertaining the intention of those who created the trust {y) . In SaclanUe West v. Viscount Ilohnesdale, Lady A., by a codicil to her will, declared her intention to be, to give certain real and personal property to trustees, in trust to settle it (as near as might be), with the limitations of the barony of Buckhurst, in such manner as the trustees should consider proper, or as their counsel should advise. The barony was limited to Lady De la Warr for life, with remainder to R., her second son, and the heirs male of his body, with remainder to the third, fourth, and other sons in like manner. It was held, that the pro- perty ought not to be settled upon R. in tail like the barony, but that it ought to be limited in a course of strict settlement to R. and other younger sons of Lady De la Warr for their respective lives, with remainder to their sons successively in tail male, in the order mentioned in the patent whereby the barony was created. And Lord Chelmsford said : " The best illustration of the object and pm-pose of an instrument furnishing an intention in the case of executory trusts, is to be found in the instance of marriage articles, where, the object of the settlement being to make {y) Sackville West v. Ilolmesdale, 4 H. L. 543 ; and see also Christie v. Oosling, 1 H. L. 543. EXECUTORY TRUSTS. 161 a provision for tlio issue of the marriage, no words, however strong (which in the case of an executed trust would place the issue in the power of the father), will he allowed to prevail against the implied intention. So, as Sir W. Grant said, in Blackburn v. Stalks {z), 'in the case of a will, if it can he clearly ascertained from anything in the will that the testator did not mean to use the expressions which he has employed in their strict technical sense, the court, in decreeing such settle- ment as he has directed, will depart from his words to execute his intention.' . . . There axe cases of executory trusts in wills, where the words ' heirs of the hody ' have been made to bend to indications of intention that the estate should be strictly settled; and a direction in a will, that a settlement ' shall be made as counsel shall ad- vise,' has been held sufficient to show that the words were not intended to have their strict legal effect {(() .... It appears to me that the words of the codicil express an intention that the barony and the estates should go together to the same person, but not that the limitations of the two should be identical. . . . The word * correspond ' does not mean that the limitations are to be exactly the same, but that they are to be adapted to each other so as to carry out the testatrix's intention that the estate and title should go together. ... If the settlement were (2) 2 V. & B. 367. ((() Bastard v. Prohy, 2 Cox, 6. U. — T. M 162 CONSTRUCTION OF DECLARED TRUSTS. framed with a limitation in tlie words of the letters patent, Lord Bucklmrst would be able to defeat this intention, and, by converting bis estate tail into a fee simple, to separate the estate and the title for ever." 10. So, again, a testator bequeathed money to trustees upon trust to purchase real estate, and settle it upon A. for life without impeachment of waste, with remainder to trustees to preserve con- tingent remainders, with remainder to the heirs of A.'s body, and with a power to jointure. He also devised land to A. upon exactly similar uses. It was held, that the testator manifested an intention to give A. a life estate only ; and that conse- quently, in the case of the executory trusts, this intention should be carried out ; but that in the case of the devise, that being executed, must be construed according to the rule in Shelki/s caseih). In fact, any indication that the first taker is not to take in tail or fee is sufficient ; as, for instance, a direction that he is to be unimpeachable for waste, or that he shall not have power to bar the entail, or the like (c). 11. A devise (subject to life interest of testator's widow), upon trust to convey, assign, and assure freehold property " unto and to the use of my son T. F., and the heirs of his body lawfully issuing, (&) Papillon V. Voice, 2 P. W. 471 ; Trevor v. Trevor, 1 H. L. C. 239. (c) See Pap-iUony. Voice, supra; Leonard v. Lord Sussex, 2 Ver. 526; Thompson v. Fisher, 10 Eq. 207; Parker y. Bolton, 5 L. J., Ch. 88. EXECUTORY TRUSTS. 163 but in such manner and form, nevertheless, and subject to such limitations and restrictions, as that if T. F. shall happen to die without leaving lawful issue, then that the property may after his death descend unincumbered unto and belong to my daughter K. T., her heirs, executors, administra- tors, and assigns " : — Held, that the devise was an executory trust to be executed by a conveyance to the use of T. F. during his life, with remainder to his first and other sons and daughters as pur- chasers in tail, with remainder to R. F. in fee (d). 12. Where strict construction would make trust illegal. — A. devised lands to a corporation in trust to convey to A. for life, and afterwards, upon the death of A., to his first son for life, and then to the first son of that first son for life, with remain- der (in default of issue male of A.) to B. for life, and to his sons and their sons in like manner. Lord Cowper said, that though the attempt to create a perpetuity was vain, yet, so far as was consistent with the rules of law, the devise ought to be complied with ; and he directed that all the sons ah'eady born at the testator's death should take estates for life, with limitations to their unborn sons in tail (e). 13. Direction to settle on lady and her children. — A fund is bequeathed to trustees, upon trust to (d) Thompson v. Fisher, 10 Eq. 207. (e) Uumbertson v. Ilamhertson, 1 P. W. 332 ; Williams V. Teale, 6 Ha. 239 ; Lyddon v. Ellison, 19 B. 565 ; Peard V. Kekeivich, 15 B. 173; but see Blagrove v. Handcock, 18 Sim. 378. m2 164 CONSTRUCTION OF DECLARED TRUSTS. settle it on a lady and her children. In the absence of any indication to the contrary, the proper form of the settlement will he as follows: — A life interest to the lady for her separate use without power of anticipation (/) ; then a life interest to the husband ; then a joint power to the husband and wife to appoint among their children; and, subject thereto [scmhle) (g), a like power to the survivor (but if the wife be the survivor, the power is to extend to children by a future marriage) ; and, subject thereto, the fund should be made to go equally to such of the children of the wife as, being sons, attain twenty- one, or, being daughters, attain that age or marry ; or, in the alternative, to children equally, with gifts over in favour of others, if any of them, being sons, die under twenty-one, or, being daughters, under that age and unmarried {h). It would appear that such a settlement ought also to contain the usual powers of maintenance and advancement, and a power of appointment to the lady in default of issue, with the usual limitations to herself or next of kin in default of appoint- ment (i). (/) Re Parrott, Walter y. Parr ott, 33 C. D. 274; Turner Y. Sargent, 17 B. 515, {g) See Re Oowan, Oowan v. Goiuan, 17 C. D. 778, where, in tlie case of a fund left to a man until marriage, and then to be settled on his wife and children, such a power was given to him ; see also Re BeUasis, 12 Eq. 218. (/i) Cogan v. Duffield, 2 C. D. 44, 49, per Baggallay, L.J. ; and see Re Ooiuan, Goruan v. Oowan, supra. {i) Re Parrott, Walter v. Parrott, supra, distinguishing EXECUTORY TRUSTS. 165 14. Direction to settle upon daughters strictly. — Where a testator directed that his daughters' shares should be " settled upon themselves strictly," it was held that the income of each daughter's share should, during the joint lives of herself and husband, be paid to her for her separate and inalienable use ; and, if she died first, then her share should go as she should by will appoint, and in default of appointment, to her next of kin (exclusively of her husband) ; and if she survived, then to her absolutely (/.■). A du-ection to dridly settle real estate does not imply that the tenants for life are to be dispunishable for waste (/). 15. Direction, on a man's marriage, to settle on his wife and children. — Where a fund was be- queathed to a man until marriage, and then to be settled on his wife and eliildren, and in default of issue to revert to the testatrix's estate ; the court directed that the settlement should contain a limi- tation of the fund to the husband for life, with remainder to the wife for life, with remainder to the eliildren as the husband and wife should jointly appoint, with remainder as the survivor should by deed or will appoint (but if the husband were survivor, he was to have power to appoint amongst his children by a future marriage), with an ulti- mate remainder to all the children of the husband Oliver V. Oliver, 10 C. D. 765. See also Nash v. Allen, 42 C. D. 54, -wliere a provision for a second husband was inserted. {k) Loch V. Bagleij, 4 Eq. 122. (/) Stanley v. Coultharst, 10 Eq. 259. 166 CONSTRUCTION OF DECLARED TRUSTS. attaining twenty-one, or, in the case of daughters, marrying under that age, and in default of children the fund to fall into the testatrix's resi- duary estate {ni). 16. Departures from ordinary form. — Where, however, there are indications that the settlor contemplates a different form of settlement to the above, his wishes will have effect given to them. Thus, in the recent case of Re Parrott, Walter v. Tarrott {»), a testator had bequeathed as follows: — "To my daughter A., wife of M. W., I bequeath 10,000/., this amount to be settled upon her for her life, and to be invested for her in good securities, in the names of two or more trustees. At her death, 8,000/. of the above sum to be divided equalli/ amongst her children, and the remaining 2,000/. to be given to her husband, if living ; if deceased, then the whole amount is to be equally divided amongst her children." It was held by the Court of Appeal that, on the con- struction of the will, the settlement must be so framed as to make the contingent gift of 2,000/. to " her husband, if living," apply only to M. W., and not to any future husband (o) ; and also, so as to confine the trusts in favour of the daughter's children, to her children by him. It was further held, that the settlement ought to be framed so as (m) Re Gowan, Goiuan v. Goivnn, supra, where the form of judgment is given, showing the limitations in full. (n) 33 C. D. 274. (o) But see Nash v. Allen, 42 C. D. 54, where the decision was, on the construction of the will, contra. EXECUTORY TRUSTS. 167 to restrain tlie daughter from anticipating the income, and so as to make the fund divisible only among children who, being sons, should attain twenty-one, or, being daugliters, attain that age or marry. It was further held, that the settlement ought to contain the usual powers of maintenance and advancement, and a power of appointment by the daughter in default of children, with the usual limitations to herself or next of kin in default of appointment, but not any power of appointment among the children, as such power would be inconsistent mth the direction for equal division. 17. Separate use imported in executory trust, — As a last illustration may be quoted the case of Willis V. Kymer (p). There a testatrix had by her will, after requesting her sister Eliza to per- form her wishes as therein expressed, bequeathed various legacies to her brothers and sisters and their children, including a legacy of 3,000/. to her brother John for life, " the principal to be divided at his death between his children, John, Sophia, and Mary Ann." The testatrix subsequently made a codicil, whereby she bequeathed to Eliza " all I possess," requesting that at her death she "will leave the sums as I have directed heretofore." Eliza by her will appointed the shares of Sophia and Mary Ann to them to their separate use, and the question then arose whether she could do so ; and Sir Greorge Jessel, M. E., said, " I am of opinion that Eliza had power to attach a limitation (_p) 7 0. D. 181. 168 CONSTRUCTION OF DECLARED TRUSTS. to separate use. . . . The original will and codicil say nothing about separate use. They merely direct her to leave the money after her brother's death to his children, and nothing more. She is therefore bound not to make a different disposition. Well, she has conformed to that direction by leaving the money to the children, and, in doing so, has taken care to dispose of it in such a manner that the shares of the daughters shall, in case of their marriage, still remain for their own benefit, thus effectually carrying out her sister^ s intention. 18. Cross remainders implied. — A testator di- rected his trustees to purchase lands in the counties of N. and D., to be settled, on the death of the eldest son of J. S. without issue (which happened), to the use of every son of J. S. then living or who should be born in testator's lifetime, and the assigns of such son during his life, with remainder to trustees to preserve contingent remainders ; but to permit such son and his assigns to receive the rents during his life, and after his decease to the use of such son's first and every other son successively in tail male, and on failure of such issue, to the use of the testator's right heirs : — Held, that the younger sons of J. S. took as tenants in common for life, with remainder as to each son's share to his first and other sons in tail male, with cross remainders over {q). (q) Surtees v. Surtees, 12 Eq. 400. ( 169 ) Division III. CONSTRUCTIVE TEUSTS. Chapter I, — Introduction. Art. 20. Analysis of Constructive Trusts. Chapter II. — Eesulting Trusts. Art. 21. Where Eqititahle Interest not ivhoUy disjwsed of, ,, 22. Where Trusts declared are Illegal. ,, 23. Where Purchase made in another's Name. ,, 24. To whom Property results. Chapter III. — Constructive Trusts which are NOT Resulting. Art. 25. Constructive Trusts of Profits made ly Fiduciary Persons. ,, 26. Constructive Trusts where EquitaMe and Legal Estates are not vested in one Person. CHAPTER I. Introduction. ^^Art. 20. — Analysis of Comtructive Trusts. (1) Constructive trusts are either re- sulting trusts (in wliicli the equitable interest springs back or results to a 170 CONSTRUCTIVE TRUSTS. ' settlor or his representatives), or non- I resulting trusts. (2) Resulting trusts arise in the three I followino^ cases, viz. : — a. When a legal estate is given to another, but the equitable interest I is not, or is only partially disposed of (a). /3. When the equitable interest is dis- posed of in a manner vyhich the Isiw will not permit to be carried out(^). 7. When a j^urchase has been made in the name of some other person I than the real purchaser (c). ! (3) Constructive trusts which are not resulting arise : — a- When some person holding a fidu- ciary position has made a profit out ' of the trust iproipertj (d). (3- In all other cases where there is no express trust, but the legal and equitable estates in property are nevertheless not co-equal and united in the same individual (e). (a) Art. 20. (d) Art. 25. (Z>) Art. 22. (fi) Art. 26. (c) Art. 23. ( 171 ) 't^jI^IIU (:^-v. CHAPTER 11. Eesulting Trusts. Art. 21. Where Equitahle Interest not wholly disposed of. ,, 22. Where Trusts declared are Illegal. ,, 23. Where Purchase made in another'' s Name. ,, 24. To luhom Property results. J-O \^ '«•. Art. 21. — WJiere Equitabk Interest not loJioUy disposed of. (1) When property is given to a person, ' o- s-*- and it appears to have been the pro- o^^ (.— ' {^ bable intention of the donor («) that '^tl^'-^j^f, the donee was not to take it bene- ficially, there will be a resulting trust in favour of the donor or his repre- sentatives in the following cases, viz. : — a. If the instrument is either silent as to the way in which the beneficial interest is to be applied ; or /3. If it directs that it shall be applied for a j^articular purpose (as distin- (rt) Per Lord Hardwicke, Hill y. Bishop of London, 1 Atk. 620; Walton v. Walton, 14 V. 322; King y. Denison, 1 V. & B. 279. 172 CONSTRUCTIVE TRUSTS. RESULTING TRUST guislied from a mere subjection to such purpose (^)) which turns out to I be insufficient to exhaust the pro- ! perty ; or 7. If an express trust cannot be carried into effect (c). (2) Where the non-beneficial character of the gift appears on the face of the instrument, no evidence to the con- I trary is admissible [d). But where it is merely presumed from the general I scope of the instrument, parol evidence is (at all events in the case of gifts inter vivos) admissible, both in aid and in contradiction of the presump- tion ('otect a fraud, such an estoppel may well be regarded as against public policy. But the voluntary gift of part of his own pro- perty by one particeps criminis to another, is in itself neither fraudulent nor prohibited by law ; and the present is not the case of a man repenting of an immoral purpose before it is too late, and seeking to recall, while the object is yet unaccom- 184 CONSTRUCTIVE TRUSTS. — RESULTING TRUST, plished (r) , a gift intended as a bribe to iniquity. If public policy is opposed, as it is, to vice and immorality, it is no less true, as was said by Lord Truro in Bemjon v. Ncttlefold (.s) , that the law in sanctioning the defence of particeps criminis does so on the grounds of the public policy, — namely, that those who violate the law must not aj^ply to the law for protection." The practitioner must, however, carefully bear in mind, that where pro- perty is transferred to trustees in trust for the settlor iintil an intended marriage with his deceased wife's sister is solemnized, and then in trust for the lady and the issue of the marriage, the trust will be void, inasmuch as such a marriage cannot take place {t) . RT. 23. — Resulting Trusts where Purchase made in Another's Name. When real or personal property {u) is taken in the names of the j)urcliaser and others generall}^, or in the names of others without that of the pur- chaser, or in one name, or in several, and whether jointly or successively, (r) As in Symcs v. Hughes, supra, (s) 3 M. & G. 102. {t) Pawson V. Broivn, 13 C. D. 202. {u) Dyer v. Dyer, 2 Cox, 93 ; Ehrand v. Dancer, 2 Ch. Ca. 26 ; Wheeler v. Smith, 1 Giff. 300. f •^ WHERE PURCHASE IN ANOTHER'S NAME. 185 there is a prima facie presumption of a resulting trust in favour of the per- son who (by parol (a;) or other evi- dence) is proved to have advanced the purchase-money (f/) in the charac- / vu^ o'^*-. ter of purchaser (^). But this pre- sumption may be rebutted — a. By parol (a) or other evidence ; ^' "^^^fi'^^ si-^.^^ /3. By the fact that the person in whose ' "^^^^T^i^ ^ name the purchase was made was ]^^-,'^ the wife(/-') or child of the pur- chaser (c), or was some person to- wards whom he stood in close relationship, «;zf/ in loco parentis (f/), • or was trustee of a settlement by which the purchaser has previously settled j)roperty (£?). In any of these cases a prima facie presumption (x) 29 Car. II. c. 3, s. 8 ; BartUtt v. Pickersgill, 1 Ed. 515; Eyall v. RyaJl, 1 Atk. 59; Leach t. Leach, 10 Ves. 517. (?/) Dyer v. Dyer, supra; Wray v. Steele, 2 V. »&; B. 388. h) Bartlett v. Pickersgill, supra. (a) Rider v. Kidder, 10 Y. 360 ; Standing v. Bowring, 31 C. D. 282. (6) Be Eykin, G C. D. 115 ; Drew v. Martin, 2 H. & M. 130. (c) Soar V. Foster, 4 K. & J. 152; Bcckford v. Beck ford, Lofft, 490. {d) Beckford v. Beckford, supra ; Currant v. Jago, 1 Coll. 261; Tucker Y. Burron, 2 H. & M. 515; L'orrest V. Forrest, 13 W. E. 380. (e) Re Ciirteis, 14 Eq. 220. (U ^•- 186 CONSTRUCTIVE TRUSTS. RESULTING TRUST, t i-' ^\^^ ,^A^^+<'.v- *^< will arise that the purchaser in- tended the ostensible grantee or grantees to take absolutely. But this last presumption is also capable ; of being rebutted by evidence, or I by surrounding circumstances (/). Illust. — 1. No resulting trust where purchase- money only lent. — If one pay the purchase-money at the request of and by way of loan to the person in whose name the property is taken, there will be no resulting trust. For the lender did not advance the purchase-money as purchaser {g), but merely as a lender. 2. Where purchase-money furnished by two persons. — Where the purchase-money is advanced, partly by the person in whose name the property is taken, and partly by another, then, if they advance it in equal shares, they will (in the absence of evidence or chcumstances showing a contrary intention {h) ) take as joint tenants, because the advance being equal the interest is equal; but if in unequal shares, then a trust results to each of them, in proportion to his advance {i) . • (/) Tunhridge v. Cane, 19 W. R. 1047; Williams v. Williams, 32 B. 370. {g) Burtlett v. PichersgiU, suj)ra ; and see also Aveling v. Knipe, 19 Yes. 441. (7i) See Rohinson v. Preston, 4 K. & J. 505 ; Edioards v. Fashion, Pr. Cli. 332 ; Lake v. Gibson, 1 Eq. Ca. Ab. 290; Bone V. Polland, 24 Bea. 288. [i) Lake v. Gibson, 1 Eq. Ca. Ab. 291 ; Rigden v. Valuer, 3 Atk. 735. XStZ^^-^ v^ «-' gVW ''"■ "^^ «^^ *^^ vJW* WHERE PURCHASE IN ANOTHEr's NAME. 187 3. Advancement of Son. — In Crahh v. Crahh (/.), a father transferred a sum of stock from liis own name into the joint names of his son and of a broker, and told the latter to carry the dividends to the son's account. The father, by a codicil to his will executed subsequently, bequeathed the stock to another; but it was held that the son took absolutel}'. The Master of the Rolls said : " If the transfer is not ambig'uous, but a clear and unequivocal act, as I must take it on the autho- rities, for explanation there is no place ; if then it cannot be permitted to explain, still less can it be allowed to qualify the operation of the previous act. The transfer being held an advancement, nothing contained in the codicil, nor any other matter ex post facto, can ever be allowed to alter what had been already done." In short, a result- ing trust will not be allowed to arise, merely because a donor subsequently changes his mind and repents him of his generosity. 4. Augmentation of settled property. — Again, a sum of consols was vested in the trustees of a marriage settlement upon the usual trusts. The husband directed the bankers who received the dividends (and paid them to him as tenant for Hfe under a power of attorney from the trustees), to invest an additional sum of 2,000/. consols in the names of the same trustees, so that they might receive the dividends as before. This was done, {k) 1 M. & K. 511; and see also Birch v. Blagrave, Amb. 264 ; Standing v. Bowring, 31 C. D. 282 ; and Bat- stone y. Salter, 10 Ch. Apji. 431, where a mother trans- ferred stock into the joint names of herself, her daughter, and her son-in-law. 188 CONSTRUCTIVE TRUSTS. RESULTING TRUST, and tte husband received the income of the whole during his life. No notice of the new investment was ever given to the trustees. It was held that there was no resulting trust of the 2,000/, for the husband, but that it became subject to the trusts of the settlement as an augmentation of the trust fund (/). 5. Evidence of intention to benefit. — In the recent case of Standing v. Boicrinrj {in) the facts were as follows : — The plaintiff, a widow, in the year 1880 transferred 6,000/. consols into the joint names of herself and her godson, the defen- dant. This she did with the express intention that the defendant, in the event of his surviving her, should have the consols ; but that she herself should retain the dividends during her life. She had been previously warned that her act was irrevocable. It was held that the plaintijffi could not claim a retransfer under the doctrine of con- structive trust, the evidence clearly showing that she did not, when she made the transfer, intend to make the defendant a mere trustee for her except as to the dividends. In delivering judgment, Cotton, L. J., said: " Though the defendant was the nephew of the first husband of the plaintiff, she was not in loco parentis to him, and the rule is well settled that where there is a transfer by a person into his own name jointly with that of a person who is not his child, or his adopted (Z) Be Curteis, 14 Eq. 220. (m) 31 C. D. 282; and see also Fotukes v. Pascoe, 10 Ch. App. 343. "WHERE PURCHASE IN ANOTHER's NAME. 189 child, then there is prima facie a resulting trust for the transferor. But that is a presumption capable of being rebutted, by showing that, at the time, the transferor intended a benefit to the transferee ; and in the present case there is ample evidence that at the time of the transfer, or for some time previously, the plaintiff intended to confer a bene- fit, by this transfer, on her late husband's godson." 6. Rebutting evidence of advancement. — But a declaration made by the father at or before the date of the purchase is admissible to rebut the presumption, although it might not be good as a declaration of trust, on account of its not being reduced into writing. For, " as the trust would result to the father were it not rebutted by the sonship as a circumstance of evidence, the father may counteract that circumstance by the evidence arising from his parol declaration " (»). 7. Surrounding circumstances may also tend to rebut the presumption. Thus, a father, upon his son's marriage, gave him a considerable advance- ment, having several younger children who had no provision. He subsequently sold an estate, but 500/. only of the purchase-money being paid, he took a security for the residue in the joint names of himself and his said son. He himself, however, received the interest, and a great part of the principal without any opposition from the son, as did his executrix after his death, the son writing receipts for the interest. Under these circum- (- K.^.-^ r^^ .. . I* eO lM».c> (?i) Williams v. Williams, 32 B. 370. 190 CONSTRUCTIVK TRUSTS. — RESULTING TRUST, stances it was held that the son took nothing; the Lord Chancellor saying : *' Where a father takes an estate in the name of his son, it is to be considered as an advancement ; but that is liable to be rebutted by subsequent acts. So if the estate be taken jointly, so that the son may be entitled by survivorship, that is weaker than the former case, and still depends on circumstances. The son knew here that his name was used in the mortgage, and must have known whether it was for his own interest or only as a trustee for the father ; and instead of making any claim, his acts are very strong evidence of the latter ; nor is there any colour why the father should make him any further advancement when he had so many children unprovided for" (o). The dictum of the learned Chancellor, that the presumption may be rebutted by subsequent acts, cannot be taken to mean subsequent acts of the father, which are only admissible against, and not for, him {2^) ; but must, it is apprehended, refer only to subsequent acts of the son (and only to them when there is nothing to show that the father did actually intend to advance the son {q)) ; or to subsequent acts of the father so acquiesced in by the son as to raise the presumption that the son always knew that no benefit was intended for him. It is also to be (o) Pole V. Pole, 1 V. sen. 76; Stock v. McAvoy, 15 Eq. 55; BoneY. Polland, 24 B. 283; axidi Marshall y. Crutwell, 20 Eq. 328. (p) Reddington v. Reddincjton, 3 Eidge, 197. {q) Sidmouth v. Sidmouth, 2 B. 455 ; Hepworih v. Hep- worth, 11 Eq. 10. WHERE PURCHASE IN AXOTHEE's NAME. 191 remarked, that the fact of tlie father having pre- viously made provision for the son, would not of itself have been sufficient to rebut the usual pre- sumption, although taken together with other circumstances, it was a strong link in the chain (r) . 8. So the relationship of solicitor and client between the son and the parent has been con- sidered a circumstance that will, of itself, rebut the presumption of advancement (.s) . 9. Whether presumption of advancement by married woman. — In Re Be Visme {t) it was laid down, that where a married woman had, out of her separate estate, made a purchase in the name of her children, no presumption of advancement arose, inasmuch as a married woman was under no obligation to maintain her children. This case was followed by the late Sir Greorge Jessel, M. E., in Bennet v. Bennet[i(), where a mother was en- titled to property under the Married Women's Property Act, 1870, by which married women were made as liable as widows for the maintenance of their children. The late M. R., however, gave it as his opinion, that the presumption of intention to advance, depended, not on the liahiJity to main- tain, but on the moral obligation on the part of a father to provide a provision or fortune for a child, and that there was no such obligation recognized on the part of a mother. If that be so, the law (r) See per Lord Loughborougli, 3 Eidge, 190. (s) Garrett v. Will'inson, 2 D. tS: S. 244, sed quaere, {t) 2 De a., J. & S. 17. [u) 10 0. D. 474. 192 CONSTRUCTIVE TRUSTS. RESULTING TRUST, still remains the same, notwithstanding that the Married Women's Property Act, 1882, renders a wife as liable for the maintenance of her children as a hushand is. However, it is conceived that the point is still an open one, as Sir Greorge Jessel's judgment is admittedly in direct conflict with that of the late Y.-C. Stuart in Sai/rc v. Hughes (x); where the presumption of intention to benefit, was based by the Y.-C. rather on motive than on duty. His lordship said : — " It has been argued that a mother is not a person bound to make an advance- ment to her child, and that a widowed mother is not a person standing in such a relation to her child as to raise a presumption that in a trans- action of this kind a benefit was intended for the child. In the case of Be Be Visme it was said, that a mother does not stand in such a relationship to a child as to raise a presumption of benefit for the child. The question in that case arose on a petition in lunacy, and it seems to have been taken for granted that no presumption of benefit arises in the case of a mother. But maternal affection as a motive of bounty is perhaps the strongest of all, although the duty is not so strong as in the case of a father, inasmuch as it is the duty of a father to advance his child. That, however, is a moral obligation, and not a legal one." On the whole, it is with much diffidence conceived that if the authorities should hereafter come {x) 5 Eq. 376. This was tlie case of a widoived motlier, but the principle appears to be the same. WHERE PURCHASE IN ANOTHEr's NAME. 193 under review, the views of the late Y.-C. Stuart would be found to have as much to be said in their favour as those of the late M. E. Neither judge bases the presumption on legal obligation. Both admit that the presumption is founded on a moral presimiption of intention. But if so, surely there is as much moral presumption of an intention by a mother to benefit her offspring, as there is in the case of a father ; and if neither law nor equity imposes any obligation on a father to advance his child, it is difficult to see on what principle an equity judge should invent an imperfect obliga- tion of this kind as a foundation for a presumption of intention to benefit, while at the same time re- jecting a similar moral obligation on the part of a wealthy mother. In reason and in custom, there is assuredly as much obligation on the part of a mother who has the command of money, to benefit her children with it, as there is in the case of a father. It must in any case be borne in mind, that even if the view of Jessel, M. E.., be the correct one, yet if it be proved aliunde that the mother did in fact intend to benefit her offspring, there will be no resulting trust (y) . 10. Advancement by persons in loco parentis. — With regard to the presumption of advancement in favour of persons to whom the purchaser stands in loco parentis, it has been held that the pre- sumption arose in the case of an illegitimate (2/) Bttclier V. Major, 2 Dr. & Sm. 431. XJ. — T. O 194 CONSTRUCTIVE TRUSTS. cliild (;:), a grandchild 2vhcn the father was dead [a), and the nephew of a wife who had been practically adopted by the husband as his child {h). But it would seem that the person alleged to have been in loco parentis must have intended to put himself in the situation of the person described as the natural father of the child with reference to those parental offices and duties which consist in onaldng provision for a child. The mere fact that a grand- father took care of his daughter's illegitimate child and sent it to school, has been held to be insufficient to raise the presumption, Yice- Chan- cellor Page- Wood saying : — " I cannot put the doctrine so high as to hold that if a person educate a child to whom he is under no obligation either morally or legally, the child is therefore to be provided for at his expense" (c). Art. 24. — To ichom Property results. a. Where a resulting trust arises under an instrument inter vivos the bene- ficial interest results to the settlor himself (d). (z) Beclcford v. Beclcford, Lofft, 490 ; Kiljoin v. KiJpin, 1 M. & K. 542, sed quaere, 4 K. & J. 157. (a) Ehrand v. Dancer, 2 Ch. Ca. 26. h) Currant \. Jago, 1 Coll. Ch. 261. (c) Tucker v. Burron, 2 II. & M. 515 ; and see per Jessel, M. E., Bennet v. Benvet, 10 C. D. p. 477. {d) Symes y. Hughes, 9 Eq. 475; Davies y. Otty, 35 B. 208. fiLttLwt--,-K>^^"T/ for the purposes therein expressed ; and so far as these purposes fail, equity presumes that the testator did not intend to rob his real representa- tives of property which, but for those objects, would have been theirs, and to give such property to his personal representatives, whose only pos- sible ground of claim arises from the fact that the testator's expressed intentions have been dis- appointed (/) . 4. The question was explained with his custom- ary lucidity by the late Sir Greorge Jessel in the case of Curteis v. Wonnald (Ii). There, personal estate had been bequeathed upon trust to purchase real estate, which was to be held on trusts, some of which eventually failed. It was held, that land, purchased before the failure, resulted in favour of the testator's next of kin, and not his heir. The M.R., in giving judgment, after stating the facts, said : " The limitations took effect to a certain extent, and then, by reason of the failure of issue of the tenants for life, the ultimate limitations failed, and there became a [resulting] trust for somebody. Now for whom ? According to the doctrine of the Court of Equity, this kind of con- version is a conversion for the purposes of the will, (i) This presumption is not even rebutted by a declara- tion that the proceeds of the sale of realty are to be per- sonalty/or all purposes ; the latter words being construed as all purposes of the ivill {Shallcrossy. WrigJd, 12 B. 505; Tai/lor V. Tmjhr, 3 D., M. & G. 190; and see also Fitch v. Webber, 6 Ha. 145). {k) 10 C. D. 172. 198 CONSTRUCTIVE TRUSTS. and does not afPect tlie rights of the persons who take by law independent of the will. If, therefore, there is a trust to sell real estate for the purposes of the will, and the trust takes effect, and there is an ultimate beneficial interest undisposed of, that undisposed-of interest goes to the heir. If, on the other hand, it is a conversion of personal estate into real estate, and there is an ultimate limitation which fails of taking effect, the interest which fails results for the benefit of the persons entitled to the personal estate ; that is, the persons who take under the Statute of Distributions as next of ,^ f £ivv.t.vw ]£in (/). Their right to the residue of the personal estate is a statutory right independent of the will." 5. How the person to whom converted property results, holds it. — It is frequently an important question as to what nature property directed to be converted assumes in the hands of persons to whom it results. For instance, if, by a will, real estate be directed to be sold, and is actually sold, and the trusts as to one moiety of the proceeds fail, that moiety will of course result to the testator's heir. But the question then arises, does it become in his hands real or personal estate ? ' That is to say, in the event of his death, does it devolve on his heir or his personal representatives? At one time it was considered that there was a difference, as to this, between a resulting trust of converted realty, and a resulting trust of converted (Z) Cogan v. StepJiens, 5 L. J., Ch. 17 ; Bective v. Hodgson, 10 H. L. C. 656. TO WHOM PROPERTY RESULTS. 19^ personalty. It was thought that as to the former, where a sale of realty was necessary for carrying out the subsisting trusts of a will, that which resulted to the heir was retained by him as personalty, and on his death devolved as such. So far, that is still the law. But it was also considered that, wherever personal estate directed to be converted into land resulted to next of kin, they held it ViB personalty, although it came to them in the form of land {m) . This view was, however, scouted by Jessel, M.R., and finally overruled by the Court of Appeal, in the case of Curteis v. Wormcdd{n). The M.R. said: "Then the next question which arises is, how does the heir-at-law in the first case, or the next of kin in the second, take the undisposed-of interest. The answer is, ,,.,.-,^.. .,, he takes it as he finds it. If the heir-at-law ^A^ t« {^ becomes entitled to it in the shape of personal estate, and dies, there is no equitable reconversion as between his real and personal representatives ; and consequently his executor takes it as j)art of his personal estate. On the other hand, if the next of kin, having become entitled to a freehold estate [under a resulting trust of converted per- sonalty], dies, there is no equity to change the freehold estate into anything else on his death. It will go to the devisee of the real estate, or to the heir-at-law if he has not devised it, and will pass as real estate." And Lord Justice James, in m) Reynolds v. OodJee, Johns. 536 (overnded). n) 10 C. D. 172. 200 CONSTRUCTIVE TRUSTS. the Court of Appeal, said: "With all deference to the judgment of Lord Hatherley in Bci/nolds v. Gocllee (o), it is impossible, I think, to arrive at any other conclusion than that at which the Master of the Rolls has arrived. It was settled by Cog an v. Stephens (p), that what was the right rule as between the real and personal estates where land was directed to be sold, was also the right rule as between the two estates in the case where money was directed to be laid out in the purchase of land. , . . The same principle applies in both cases, which is this, that where you trace property into a man, there is no equity between his different classes of representatives as to altering the position in which that property is. If it is money arising from the sale of land, it remains money ; that is to say, the heir-at-law of the person who has become beneficially entitled to it as heir-at-law, has no right to have it reconverted into land. If it is land purchased under a direction to invest in land, the persons interested in the personal estate of the persons who have become entitled to it as next of kin, have no right to have it reconverted into money." 6. Immaterial that property not actually con- verted if it ought to be. — The broad statement by the late M.R. in Curtek v. Wormald (quoted in the last illustration), that the party to whom property results " takes it as he finds it," is apt to o) Ubi supra. p) 5 L. J., Ch. 17. TO WHOM PROPERTY RESULTS. 201 mislead the unwary. It would be more accurate to say that lie takes it as he ought to find it. That is to say, if the trust for conversion wliolly fails, he takes it as unconverted ; but if it only partially fails, then as the conversion dates from the death of the testator (even though it is directed to be made at a futiu'e date (r^)), he takes it as converted, and it devolves accordingly, notwith- standing that in point of fact the conversion is not, as it ought to be, carried out in accordance with the trust. Thus, a testator died in 1864, having devised his real estate upon trust for sale, and dii^ected that the proceeds should form part of his residuary estate which he settled upon certain trusts for the benefit of persons for life, with remainder in trust for a contingent class which failed. The trusts for the life tenants did not however fail. Sales of the real estate were made from time to time, in accordance with the trust, but, on the death of the last life tenant, some part of the realty still remained unsold. Of com-se the entire realty and the proceeds of that which had been sold, resulted to the testator's heir; but she had died intestate many years before, and the question arose as to whether the realty which stni remained unconverted, devolved upon the heir's heir, or upon her next of kin. It was argued that it must be taken as it was found, and that it devolved as real estate. Mr. Justice Chitty, however, decided against this contention, {-.. ^ If 1 — u ^r> t»— H 1 CHAPTER III. K-«-, (^LOfc «-«*«4 CONSTEUCTIVE TrUSTS WHICH AKE NOT Resulting. Art. 25. Constructive Trusts of Pro/its made hy Persons in Fiduciary Positions. „ 26. Constructive Trusts tuliere Equitcible and Legal Estates are not united in one Person. ^Art. 25. — Constructive Trusts of Profits made hy Persons in Fiduciary Positions. Where a person has the management of property, either as an express trustee, or as one of a succession of persons partially interested under a settle- ment, or as a guardian, or other per- son clothed with a fiduciary character, he is not permitted to gain any per- sonal profit by availing himself of his position. If he does so, he will be constructive trustee of such profit for the benefit of the j^ersons equitably entitled to the property, in respect of which such j^rofit was gained. PROFITS MADE BY FIDUCIARY PERSONS. 205 Illust. — 1. Trustee renewing lease to himself. — In the leading case of Sandford v. Kecch {a), a lessee of the profits of a market had devised the lease to a trustee for an infant. On the expiration of the lease, the trustee applied for a renewal, but the lessor would not renew, on the ground that the infant could not enter into the usual covenants. Upon this, the trustee took a lease to himself for his own benefit ; but it was decreed by Lord King, that he must hold it in trust for the infant, his lordship saying, "If a trustee, on the refusal to renew, might have a lease to himself, few trust estates would be renewed to cestuis que trust." 2. Profit made by trustee. — So where the solici- tors in an administration action presented their client, the trustee, with half of their profit costs, North, J., (while holding that in the administra- tion action he had no jurisdiction in the matter) intimated that if a separate action were brought against the trustee he would have no defence to it{b). 3. Tenant for life of leaseholds renewing to him- self. — And so also a tenant for life of leaseholds (even though they be held under a mere yearly tenancy (c) ), who claims under a settlement, can- not renew them for his own sole benefit. For he is not permitted to avail himself of his position, ! as the person in possession under the settlement. (o) Sel. Ch. Ca. 61 ; and see Be Morgan, Pillgrem v. PiUgrem, 18 C. D. 93; and i?n«io;i v. LuJham, 53 L. T. 9. ih) Re Thorpe, Vipont v. Radcliffe, (1891) 2 Ch. 360. (c) James v. Dearie, 15 V. 236. 206 CONSTRUCTIVE TRUSTS. to get a more durable term, and so to defeat tlie probable intentions of the settlor that the lease should be renewed for the benefit of all persons claiming under the settlement {d) . And even •where the lessor refuses to renew, the tenant for \ life or his assigns cannot purchase the lessor's 'interest for their own benefit, but will be con- sidered as mere trustees of it for the persons who would be entitled to the leasehold interest if it had been renewed (e) . 4. Tenant for life receiving money in relation to inheritance. — And upon similar grounds, if a tenant for life accepts money in consideration of his allowing something to be done which is pre- judicial to the trust property (as, for instance, the unopposed passage of an act of parliament sanc- tioning a railway), he will be a trustee of such money for all the persons interested under the settlement (/) . I 5. Other partial owners. — The same principle 'applies to mortgagees ( (7), joint tenants (7^) , part- |ners {i), and owners of land subject to a charge (A). (d) Eyre v. Dolphin, 2 B. & B. 290 ; Mill v. Hill, 3 H. L. C. 828 ; Yeiv v. Edwards, 1 D. & J. 598 ; Ja7nes v. Deane, supra. The reader is also referred to Ee Payne, Kibble V. Payne, 54 L. T. 840, and infra, art. 46. (e) Ee Lord Eanelagh, 26 C. D. 590. (f) Pole V. Pole, 2 Dr. & S. 420. (g) EushivortJi' s case. Free. 13. (h) Palmer v. Young, 1 Ver. 276. (i) Feather stonliaugh v. Femvick, 17 V. 311 ; Clegg V. Fislmich, 1 M. & G. 294 ; Bell v. Barnett, 21 W. E. 119; but as to partners, see Dean v. MacDoiuell, 8 C. D. 345. (t) Jackson v. Welsh, L. & G. t. Plunket, 346 ; Winslow V. Tighe, 2 B. & B. 195 ; Webb v. Lugar, 2 Y. & C. 247. * f.-rfi-' c«-^ a- Y'-t^*^ PROFITS MADE BY FIDUCIARY PERSONS. 207 6, How far directors and other agents are con- structive trustees of profits. — Directors of a com- pany cannot avail themselves of their position to enter into beneficial contracts "with the company (/) ; nor can they buy property, and then sell it to the company at an advanced price. Promoters of a company hold a fiduciary relation towards the company, and cannot be allowed to retain a secret commission received from the vendors of property which the company is formed for the purpose of purchasing (m) . Directors cannot receive commis- sions from other parties on the sale of any of the property of the company («) ; and generally they cannot deal for their own advantage with any part of the property or shares of the com- pany (o). 7. Profits made by agents. — However, notwith- standing some dicta to the contrary, it would seem that where profits are illegally made by agents, although they must give them up to their principals, they are not considered to be construc- tive trustees of the profits, so as to give the prin- cipals the right of following the profits if converted into other kinds of property. The relation appears (l) Great Luxembourg Bail. Co. v. Magnay, 25 B. 586 ; Aberdeen Itail. Co. v. Blackie, 1 Macq. 461 ; Flanagan v. G. W. Rail. Co., 19 L. T., N. S. 345. (?u) Hitchens v. Congreve, 1 R. & M. 150; Faivcett v. Whitehouse, ibid. 132 ; Beck v. Kantorowicz, 3 K. & J. 230 ; Bagnall v. Carlton, 6 C. D. 371 ; Emma Silver Mining Company v. Grant, 11 C. D. 918. {n) Gashell v. Chambers, 26 B. 360. (o) York, &c. Co. v. Hudson, 16 B. 485. 208 CONSTRUCTIVE TRUSTS. ».c*t Li- w- to be one of debtor and creditor, and not of trustee and cestui que trust {])) . 8. Solicitor buying from client, — A solicitor who purchases property from a client must, if the sale be impeached, not only show that he gave full value for it, but also that the client was actually benefited by the transaction. And persons who subsequently purchase from the solicitor with notice of the transaction are under a similar liability {q) . Art. 26. — Constructive Trusts where Equitable and Legal Estates are not united in the same Person. , In every case (not coming within the scope of any of the preceding articles) where the person in whom real or personal property is vested, has not the whole equitable interest therein, he is pro tanto a trustee for the per- sons having such equitable interest {r). [p) Lister & Co. v. Stuhbs, 45 CD. 1; and see also Bosto7i Co. V. Ansell, 39 C. D. 339 ; and Kimher v. Barher, 8 Ch. App. 56. And as to how far a liquidator of a com- pany is a trustee, as distinguished from an agent, see Knowles v. 8coU, (1891) 1 Ch. 717. ~ (q) Topham v. Spencer, 2 Jur., N. S. 865. (r) This article, doubtless, includes all those relating to constructive trusts which have preceded it; but as it would be a quite endless task to enumerate every kind of constructive trust (for they are, as has been truly said, conterminous with equity jurisprudence), I have thought GENERAL EQUITIES. 209 Illust. — 1. Relation of vendor and purchaser before completion. — Thus, where a binding con- tract is entered into between two persons for the sale of property by one to the other, theri, in the words of Lord Cairns, in Slmiv v. Foster (s), " There cannot be the slightest doubt of the rela- tion subsisting in the eye of a court of equity between the vendor and the purchaser. The vendor is a trustee of the property for the pur- chaser ; the purchaser is the real beneficial owner in the eye of a court of equity of the property ; subject only to this observation, that the vendor (whom I have called a trustee) is not a mere dor- mant trustee ; he is a trustee having a personal and substantial interest in the property, a right to protect that interest, and an active right to assert that interest if anything should be done in dero- gation of it. The relation, therefore, of trustee and cestui que trust subsists, but subsists subject to the paramount right of the vendor and trustee to protect his own interest as vendor of the property." He is, however, only trustee pro tanto, and his duties are strictly matter of contract {t) . 2. Vendor's lien after conveyance. — In the con- | verse case, where the vendor has actually conveyed the property, but the purchaser has not paid the it better to call special attention to those classes whicli are most important, and to bring all others within one sweeping general clause. (s) 5 H. L. 338 ; Earl of Egmont v. SmM, 6 C. D. 469. {t) See per Lord Westbury in Knox v. Gye, L. E., 5 H. L. 656; but see Eca-l of Egmont v. Smith, supra. U. — T. P ll~ 210 CONSTRUCTIVE TRUSTS. purcliase-money, or has only paid part of it, tlie vendor has a lien upon the property for the unpaid portion (it) ; and the purchaser will hold the estate as a trustee pro tanto, unless by his acts or declarations the vendor has plainly manifested his intention to rely not upon the estate, but upon some other security, or upon the personal credit of the individual (.r ) . A mere collateral security will not, however, suffice (;y) ; but where it appears that a bond, covenant, mortgage or annuity was itself the actual consideration — the thing bar- gained for — and not merely a collateral security for the purchase-money {z) , there will be no lien, ^\' '" and consequently no trust. 3. Equitable mortgages. — It need scarcely be pointed out that a mortgagor, in the case of an equitable mortgage, is pro tanto a trustee for the mortgagee. For even where there is no written memorandum, a deposit of title deeds is of itself evidence of an agreement for the mortgage of the property (a) ; and in accordance with the maxim, that " equity regards that as done which ought to be done," the mortgagor holds the legal estate, («) Mackreth v. Symmons, 1 Lead. Ca. 295. (x) Ibid. ly) Collins v. Collins, 31 B. 346 ; Hughes v. Kearney, 1 Sch. & L. 134. (z) 1 Lead. Ca. 317 ; Bmhland v. Pocknell, 13 Sim. 499; Parrott v. Sweetland, 3 M. & K. 655 ; Dixon v. Gayfere, 21 B. 118; Dyke v. Rendcdl, 2 D., M. & G. 209; and see Re Brentuwod Brick and Coal Co., 4 C. D. 562. (a) Russell v. Russell, 1 Lead. Ca. 674 ; Ex parte Wright, 19 V. 258 ; Pryce v. Bury, 2 Dr. 42 ; Ferris v. Mullins, 2 Sm. & Gif. 378; Ex parte Moss, 3 D. & S. 599. GENERAL EQUITIES. 211 in trust to execute a legal mortgage to the mort- gagee. 4. Devolution of mortgaged property. — Upon the death of a mortgagee, the mortgaged property (if assured to him in fee) descended at law, previous to the Yendor and Purchaser Act, 1874, to his heir; but being in reality only a security for money, it equitably belonged to his personal representatives, and the heir was, therefore, held to be a mere trustee for the administrators or executors of the mortgagee {b). 5. Mortgagee in possession. — So a mortgagee in possession is constructively a trustee of the rents and profits, and bound to apply them in a due course of administration (c). But there has been considerable conflict of opinion as to the extent of his responsibility. For instance, it has been held that he is liable even after transferring the mort- gage without the mortgagor's consent (d) ; but this decision has been questioned, and, it is respect- fully apprehended, rightly so (e). In another case, it was said that a mortgagee in possession who, after the mortgagor's death, bought up the widow's right to dower, was obliged to hold it in {h) Thornborough v. Baker, 2 Lead. Ca. 1030. But see 37 & 38 Vict. c. 78, ss. 4, 5. (c) Lew. 169 ; Cnjjpring v. CooJce, 1 Ver. 270 ; Bentham V. Haincourt, Pr. Ch. 30; Barker v. Calcraft, 6 Mad. 11 ; Hughes v. Williams, 12 V. 493 ; Haddocks v. Wren, 2 Ch, Eep. 109. {d) VenaUes v. Foijle, 1 Cli. Ca. 3. (e) Lew. 169; and consider i?in5r/ia?n v. -Z^ee, 15 Sim. 400. p2 212 CONSTRUCTIVE TRUSTS. trust for the heir, upon his paying the purchase- money (/) ; and although this case has called forth much comment {g), it is difficult to distin- guish it in principle from the class of cases treated of in the last article. 6. Limited owners paying off charge on inherit- ance or calls on shares. — Another important illus- tration of the rule now under consideration occurs when a limited owner {ex. gr. a tenant for life) pays off a specific {h) incumbrance out of his own money. In such a case (in the absence of evidence showing an intention to extinguish the incum- brance) he is held to be, in equity, in the position of a transferee of the incumbrance, notwith- standing that he took an ordinary reconveyance ; and, on his death, the remainderman holds the legal estate subject to the equitable lien or charge so created {i). On the same ground, it has been held that a tenant for life under a settlement com- prising shares in a company, has a lien on the shares for repayment, with interest, of advances made at the request of the trustees, for the purpose (/) Baldwin v. Bannister, cited in Robinson v. Pett, 3 P. W. 2ol. [g) Bobson v. Land, 8 Ha. 330 ; Arnold v. Oarner, 2 Ph. 231 ; Mathison v. Clarke, 3 Dr. 3. (h) See MorJey v. Morley, 25 L. J., Ch. 7. (?■) Redinqton v. Redington, 1 Ba. & B. 131 ; St. Paul v. Dudley, 15 V. 172 ; Brinktvater v. Coombe, 2 S. & St. 340. As to case where tenant for life of a lease for lives pur- chases the reversion and settles it, see Isaac v. Wall, 6 C. D. 706 ; and, as to evidence showing contrary inten- tion, see Astley v. Miller, 1 Sim. 298; Tyrwhitt v. Tyrwhitt, 32 B. 244. GENERAL EQUITIES. 213 of paying calls (k) . It would seem, however, that where income has been expended in improving property, the court (apart from the Improvement of Land and the Settled Land Acts) has no juris- diction to declare the esj)enditure a charge on the property (/). 7. Partnership liens. — So, again, where the plaintiff was induced by fraud of the defendant to purchase a share of his business, and to enter into partnership with him, and judgment was given for the rescission of the agreement and the dissolution of the partnership, it was held that the plaintiff was entitled, in resj^ect of the purchase-money which he had paid, to a lien on the surplus of the partnership assets after satisfying the partnership debts and liabilities ; and that, in respect of any sums which he had paid or might pay in satis- faction of partnership debts, he was entitled to stand in the place of the partnership creditors to whom he had made the payments {))/). 8. Property acquired by fraud. — Upon similar principles, a court of equity converts a party who has obtained property by fraud " into a trustee for the party who is injured by that fraud (n). But, that being a jurisdiction founded on personal fraud, it is incumbent on the court to see that a fraud, or {k) Todd V. Moorlwnse, 19 Eq. 69. {I) See Floyer v. Bankes, 8 Eq. 115. (?ji) Mycock V. Beatson, 13 C. D. 384 ; and as to sale of land obtained by fraud, see Rose v. Watson, 10 H. L. C. 672 ; and see also Aberumun Ironworks v. Wickens, 4 Ch. App. 101. {n) See Booth v. Turle, 16 Eq. 182. 214 CONSTRUCTIVE TRUSTS. malus animus, is proved by tlie clearest and most indisputable evidence ; it is impossible to supply presumption in the place of proof " (o). (o) Per Lord Westbury in McCormick v. Orogan, L. E., 4 H. L. 88. As to a person who has by fraud prevented a will being made in j^laintiff's favour, see Brxoii v. Olmius, 1 Cox, 414; and see also as to gifts made under undue influence to fiduciary persons, pp. 117 — 119, supra. ( 215 ) Division IV. THE ADMINISTEATION OF A TEUST. Chapter I. — Preliminary. Art. 27. Disclaimer of a Trust. „ 28. Acce]pta7ice of a Trust, Chapter II. — The Estate of the Trustee, AND ITS Incidents. Art. 29. Where the Trustee takes any Estate. ,, 30. The QuantiUj of Estate taken by the Trustee of Lands. „ 31. Bankruptcy of the Trustee. ,, 32. The Incidents of the Trustee's Estate at Law. ,, 33. Failure of Beneficiaries. Chapter III. — The Trustee's Duties. Art. 34. Duty of Trustee on acceptance of Trust. ,, 35. Duty of Trustee to obey the Directions of the Settlement. ,, 36. Duty of Trustee to act impartially between the Beneficiaries. ,, 37. Duty of Trustee to sell Wasting and Reversionary Property. ,, 38. Duty of Trustee, as between Tenant for Life and Remaindermen, in relation to Property which ought to be Converted. 216 THE ADMINISTRATION OF A TRUST. Art. 39. Duty of Trustee in relation to the payment of Outgoings out of Corpus and Income respectively . ,, 40. Duty of Trustee to exercise reasonable Care. ,, 41. Duty of Trustee in relation to investment of Trust Funds. ,, 42. Duty of Trustee to see that he pays Trust Moneys to the right Persons. ,, 43. Duty of Trustee not to delegate his Duties or Powers. ,, 44. Duty of Trustees to act jointly where more than one. ,, 45. Duty of Trustee not to set ftp jus tertii. ,, 46. Duty of Trustee to act Gratuitously. ,, 47. Duty of Trustee not to traffic with or otherwise profit by the Trust Property. ,, 48. Duty of Trustee to be ready tuith his Accoimts. Chapter IV. — The Powers of the Trustee. Art. 49. General Powers of Trustees. ,, 50. Power of Trustees in relation to the conduct of Sales. ,, 51. Power of Trustees to give Receipts. ,, 52. Power of Trustees to compound and settle Disputes. , , 53. Power of Trustees to allow Maintenance to Infants. ,, 54. Power of Trustees to pay to Attorney appointed by Beneficiary. „ 55. Suspension of the Trustees^ Powers by Adminis- tration Action. Chapter Y. — The Powers of the Bene- ficiaries. Art. 56. Power of the Beneficiaries in a Simple Trust. ,, 57. Poiver of the Beneficiaries collectively in a Special Trust. ,, 58. Power of one of several Beneficiaries in a Special Trust. preliminary. 217 Chapter YI. — The Death, Retirement, or Removal of a Trustee. Art. 59. Survivorship of the Office and Estate. ,, 60. Devolution of the Office and Estate on Death of Survivor. ,, 61. Retirement or Removal from the Office. ,, 62. Appointment of neiu Trustees. ,, 63. Vesting of Trust Property in new Trustees. ,, 64. Severance of Trust on appointment of new Trustees. Chapter YII. — The Eights of Trustees. Art. 65. Right to Reimbursement and Indemnity. ,, 66. Right to Discharge. ,, 67. Right to take Advice of a Judge. ,, 68. Right to pay Trust Funds into Court under certain Circumstances. ,, 69. Right under certain Circumstances to have the Trust administered by the Court. CHAPTER I. Peeliminary. Art. 27. Disclaimer of a Trust. ,, 28. Acceptance of a Trust. Art. 27. — Disclaimer of a Trust. No one is bound to accept the office of trustee («). Both the office and the estate may be disclaimed before ac- (a) Robinson v. Rett, 2 Lead. Ca. 238. \J.... A^ l<..^« 218 THE ADMINISTRATION OF A TRUST. u^ U JLCJL..U.. ceptance, eitlier by deed (i) or (save L^ p '*'*'*^ in the case of a married woman, who U'v^'^-J^ must disclaim by deed (c)) by conduct tantamount to a disclaimer (d). The disclaimer should be made within a reasonable period, having regard to the circumstances of the particular ' case(e). Illust. — 1. Consent to undertake future trust not binding. — Thus, even though a person may have agreed in the lifetime of a testator to he his executor, he is still at liberty to recede from his promise at any time before proving the will (/) . ^' 2. Methods of disclaiming. — A prudent man will, \ of course, always disclaim by deed, in order that there may be no question of the fact ; but a dis- ^ claimer by counsel at the bar, or even by conduct inconsistent with acceptance, is sufficient {g) . For instance, in Stacei/ v. JE/j^h (h), a person, named as executor and trustee under a will, did not formally renounce probate until after the death of the act- (b) Staceij v. Elph, 1 M. & K. 199. (c) 8 & 9 Vict. c. 106, s. 7. Sed quaere, since Married Women's Proj^erty Act, 1882. (d) Stacey v. Elph, supra ; Toivnson v. Tickell, 3 B. & A. 31 ; Becjbie v. Crook, 2 B. N. C. 70 ; Bingham v. Clan- morris, 2 Moll. 253 ; and Re Birchall, Birchall v. Ashton, 40 C. D. 436. (e) See Doe v. Harris, 16 M. & W. 522 ; Paddon v. Richardson, 7 D., M. & G. 563; James v. Frearson, 1 Y. & C. C. C. 370. (/) Doyle V. Blake, 2 Sell. & L. 239. (V) Fosters. Dawher, 8 W. E. 646. {h) Supra. I DISCT, AIMER OF A TRUST. 219 ing executor, nor formally disclaim the trusts of tlie will ; but he purchased a part of the real estate, and took a conveyance from the tenant for life and the heir-at-law to xchom the estate must have descended on disclaimer of the trust. It was held, under these cu'cumstances, that he had by his conduct disclaimed the office and estate of trustee under the will. Sir J. Leach, M. R., in delivering judgment, said : " In this case there is no ambiguity in the conduct of the defendant ; he never interfered with the property, except as the friend or agent of the widow; and it is plain from the confidence which the testator appears to have placed in him by his will that he was a particular friend of the family. . , . It is true he never executed a deed disclaiming the trust, but his con- duct disclaimed the trust ; in the purchase of the small real estate made by him, he took by feoff- ment from the widow and eldest son of the testa- tor, in whom the estates could only vest by the disclaimer of the trustee." 3. Deed of disclaimer not necessary. — In He EUison's Trusts {i), Sir W. Page Wood, Y.-C, expressed some doubt whether a freehold estate could be disclaimed by parol, or otherwise than by deed. His honour's attention does not appear, however, to have been called to Stacey v. ^/^jA, and in the more recent case of Re Gordon, Gordon ft (^tr^<^ V. Roberts {k), where real estate was devised to {i) 2 Jur., N. S. 262. (/.•) 6 Ch. D. 531. 220 THE ADMINISTRATION OF A TRUST. trustees upon trust to sell and to form a mixed fund consisting of the proceeds of such sale and of the testator's personal estate, and thereout to pay debts and legacies, with divers trusts over, and the trustees were also nominated executors, and renounced probate, and never acted in the trusts, it was held by Sir Greorge Jessel, M. R., that the renunciation of probate, coupled with the fact that the trustees had never assumed to act as such, was conclusive evidence of disclaimer. Lastly, in Re Birchall, Birchall v. Ashton [I), the Court of Appeal held that a trustee had by conduct disclaimed the office, and that having dis- claimed the office, he must of necessity have also disclaimed the estate. As Cotton, L. J., said, " I should be sorry that it should be thought that a trustee could disclaim the ofiice of trustee, and nevertheless take the legal estate." 4. Time for disclaimer. — No doubt a person named as trustee who means to disclaim, ought, in prudence, to execute a disclaimer, or otherwise intimate his refusal at once. There is, however, no rule as to this, and a person has been allowed to disclaim after sixteen years. On the other hand, long acquiescence may be evidence of acceptance, although, of course, not conclusive evidence {m). (0 40 C. D. 436. (m) Lewin, 9th. ed. c. 11, s. 3. ACCEPTANCE OF A TRUST. 221 ^Art. 28. — Acceptance of a Trud. A person may accept the office of trustee expressly ; or he may do so construc- tively by doing such acts as are only referable to the character of trustee or executor {n) ; or he may do so by long acquiescence. CL.;^. Illust. — 1. Express acceptance. — A trustee ex- ' ^ pressly accepts the office by executing the settle- ment {6), or by making an express declaration of his assent {jn). 2. Acceptance by acquiescence. — Permitting an action concerning the trust property to be brought in his name {q), or otherwise allowing the trust property to be dealt with in his name (r), is such an acquiescence as will be construed to be an acceptance of the office. 3. Acceptance by exercise of dominion. — So, exercising any act of ownership, such as adver- tising the property for sale, giving notice to the tenants to pay the rents to himself or an agent, or requesting the steward of a manor to enrol a deed in relation to the trust property, is sufficient to constitute acceptance of a trust {s) . {n) Spence, 918. lo) Buckeridge v. OJasse, 1 Cr. & Ph. 134. ip) Doe V. Harris, 16 M. & W. 517. \q) Montfordy. Cadogan, 17 V. 485. (r) James v. Frearson, 1 Y. & C. C. 0. 370. (s) Be7ice v. Giljnn, L. E., 3 Ex. 76. ft-l-AlA^-t^t ^ °--t c. 222 THE ADMINISTRATION OF A TRUST. 4. Acceptance by taking out probate. — So, where the office of executor is clothed with certain trusts, or where the executor is also nominated the trustee of real estate under a will, he is construed to have accepted the office of trustee if he takes out pro- bate to the will (f) . And acceptance of the trusts of a will was, prior to 1883, constructive acceptance of the office of trustee of estates, devised thereby, of which the testator was trustee {u) . 5. Acceptance by conduct. — In Conyngham v. Coiiyngham [x), one, Coleman, was appointed trustee of a will, but he never expressly accepted the appointment. One of the trusts was in re- spect of the rents of a plantation then in lease to the testator's son. Coleman acted as the agent of the son, who was also heir-at-law, and received the rents of the estate from him. It was held that, by so interfering with the trust property, be could not repudiate the trust, and say that he merely acted as the son's agent. He received the property from the person who was nominally to have remitted the rents, and it was incumbent on him, if he would not have acted as trustee, to have refused, and not to leave himself at liberty to say he acted as trustee or not. It is, however, not every interference with trust property which will be construed as an acceptance of the office of {t) Muclcloiv v. Fuller, Jac. 198; Ward v. Butler, 2 Moll. 533. iu) Re Perry, 2 Curt. 655 ; Brooke v. Haynes, 6 Eq. 25. [x) 1 Y. sen. 522. ACCEPTANCE OF A TRUST. 223 trustee ; for if such interference be plainlu (not amhiguousJij) referable to some other ground, it will not operate as an acceptance (y) ; nor will merely taking charge of a trust until a new trustee can be found, be, of itself, a constructive acceptance (s). 6. Moreover in a recent case, the joining in the legacy duty receipt for the trust fund, unaccom- panied by the active receipt of the money, was held to be of itself insufficient to fix the trustee with acceptance of the trust {a) . 7. Acceptance by long silence. — Where a trustee, with notice of the trust, has indulged in a passive acquiescence for some years, he will be presumed to have accepted it, in the absence of any satisfac- tory explanation (b). {y) Stacey v. M2^h, 1 M. & K. 195 ; Dove v. Everard, 1 E. & M. 231 ; Loivry v. Fulton, 9 Sim. 115. (z) Evans v. JoJin, 4 B. 35. But it would be highly dangerous, even if this case were now followed, which seems doubtfiil. (a) Jago v. Jago, 68 L. T. 654. (i) Wise V. Wise, 2 J. & Lat. 403 ; Ee Uniacke, 1 J. & Lat. 1 ; Ee Needliam, ibid. 34. 224 THE ADMINISTRATION OF A TRUST. CHAPTER II. The Estate of the Tkustee, and its Incidents. Aet. 29. Cases in which the Trustee takes any Estate. ,, 30. The Quantity of the Estate taken by the Trustee of Lands. ,, 31. Bankruptcy of the Trustee. ,, 32. The Incidents of the Trustee^ a Estate at Law. „ 33. Trustee's Estate on Total Failure of Beneficiaries. Art. 29. — Cases in which the Trustee takes any Estate. (1) Where the trust is a simple trust, and the trust property is of freehold tenure, then, in consequence of (or in the case of wills by analogy to) the Statute of Uses, the trustee takes no estate unless ! the property be limited to his use, or unless there be a clear intention to vest an estate in him. But where the I trust is a special trust, the statute does ! not apply, and the trustee will take a legal estate of some duration. (2) Where the trust property is of copy- hold or leasehold tenure, or is pure .•J>^ CASES IN WHICH TRUSTEE TAKES ANY ESTATE. 225 personalty, the Statute of Uses is inapplicable, and the trustee takes the legal estate, whether the trust be simple or special. (3) This article has no application where the legal estate is outstanding. Illust. — 1 . Trust to permit beneficiary to receive rents. — Thus, where the legal estate in freehold is limited to trustees, and the words used are " in trust to j)ay to " a specified person the rents and profits, there the trustees take the legal estate, because they must receive before they can make the required payments. But where the words are " in trust to permit and suffer A. B. to take the rents and profits," there the use is divested out of them and executed in the party beneficially en- titled, the purposes not requiring that the legal estate should remain in the trustees {a) . 2. Trust to permit beneficiary to receive net rents. — Where, however, the trustees are to permit and suffer the beneficiary to receive the net or clear rents and profits, the trustees take the legal estate ; it being presumed that the trustees are to take the gross rents, and after payment of outgoings, to hand over the net rents to the beneficiary {b). («) Per Parke, J., Barker v. Greenwood, 4 M. & W. 429 ; Doe d. Leicester v. Biggs, 2 Taunt. 109; I)oe v. Bolton, 11 A. & E. 188. {h) liarl-er v. Greenwood, supra; White v. Parker, 1 Bing. N. C. 573; Shapland v. Smith, 1 Bro. C. C. 75. U. T. Q 226 THE ADMINISTRATION OF A TRUST. 3. Trust to pay or permit beneficiary to receive. — Where the language is ambiguous, and may be read either as implying a simple or a special trust, it has been said that the question must be deter- mined according to the general rules of construc- tion. Thus, in Doe v. Biggs (c), it was decided that the words " to pay or permit him to receive '* would, if contained in a deed, create a special trust, inasmuch as of two inconsistent expressions in a deed the first prevails ; whereas the same words occurring in a will would create a simple trust, as a testator's last words are preferred. However, this case cannot be relied on. As Lindley, L. J., said in a recent case [d), ^^ Doe v. Biggs is one of those cases which may be classed as anomalies, and it is so known to and understood by conveyancers and real property lawyers, who take care to draw instruments accordingly. I do not think it is a sensible decision. I do not think that case could be possibly so decided now if the question arose for the first time ; and I am not disposed to extend it. On the other hand, I do not wish to shake titles ; and I shall do precisely what our predecessors have always done — leave the case where it is." Bo wen, L. J., went even further, saying, "I agree with the late Master of the Rolls that the case is not one the precedent of which is really applicable to other cases. In most cases, there is sure to he a context lohich displaces the conclusion at which the court (c) 2 Taunt. 109 ; Baher v. White, 20 Eq. 166, 171. \d) Re Lashmar, Moody v. Fenfold, (1891) 1 Ch. 258; and see Re Tanqueray, Willaume and Landau, 20 C. D. 479. CASES IN -WHICH TRUSTEE TAKES ANY ESTATE. 227 arrived in that imtancc^ The reader is therefore •warned that Doe v. Biggx. cannot be safely relied upon as a precedent. 4. Control or discretion in trustees. — So, again, where the trustees are to exercise any control or ' discretion they take some estate. Tor instance, where the beneficiary is empowered to give receipts for the rents with the approhation of the trustees (e), or the trust is for the separate use of a married woman, who consequently requires protection, the trustees take the legal estate (./) ; at all events, where the trust is created by will. But where it is created by deed, it would seem that the common law courts, not recognizing the separate estate of a feme covert, would (at all events before the Judi- catm-e Act, 1873) have held that such a trust was a simple trust, and therefore came within the Statute of Uses () Cooper V. Kynoch, 7 Ch. App. 398; Dialer v. Anscombe, 1 B. & P. N. E. 25; Venablesy. Morris, 7 T. R. 342 ; Wyhliam v. Wyltham, 18 V. 395, per Eldon ; Colmore 230 THE ADMINISTRATION OF A TRUST. tation in fee to a trustee for purposes which are confined to the life of a beneficiary, followed by a limitation to the same trustee for a term of years, the fee will be cut down to an estate pur autre vie, by reason of the inconsistency [q). /3. If the settlement is a will dated before the Wills Act, the leg,-al estate given to a trustee will be enlarged or diminished to such an estate as will enable him to perform the trusts ; and if no words of limitation are used, the estate will be limited to a definite or indefinite term of years, unless the trust requires the trustee to take the fee(r). 7. If the settlement is a will exe- cuted since the Wills Act, an indefinite devise to a trustee prima facie passes the fee simple, or other the whole V. Tyndall, 2 Y. & J. C0.3. If a sufficient estate be not given to the trustee, it is conceived tliat it would be ground for rectification (see lie Bird, 3 C. D. 214). (q) Curtis V. Price, 12 V. 89; Beaumont v. Marq. of Salisbury, 19 B. 198. (r) CordaWs case, Cro. Eliz. 316; Doe v. Sim2)so7i, 5 East, 162; AcJdandy. Lutley, 9 A. &E. 879; Heardsony. Williamson, 1 Ke. 33; Doe v. Nichols, 1 B. & C. 336; Watso7i V. Pearson, 2 Ex. 581 ; Bush v. Allen, 5 Mod. 63 ; Doe V. Homfray, 6 A. & E. 206. QUANTITY OF ESTATE TAKEN BY TRUSTEES. 231 estate of tlie testator; and if the trusts by their nature extend over an in- definite period, that presumption is irrebuttable. But if, on the face of the will, it is apparent that an estate pur autre vie would certainly enable the trustee to fulfil all the trusts, he will take that estate only, notwith- standing a limitation to him and his heirs, unless there is a clear intention expressed that he shall take the fee or some other defined estate (s). (s) Paragraph 7 of this article is intended and believed to give the effect of the 30th and 31st sections of the Wills Act, 1 Vict. c. 26. By the first of these sections it is enacted, that where any real estate (other than or not being a presentation to a church) shall be devised to any trustee or executor, such devise shall be construed to pass the fee simple, or other the whole estate or interest which the testator had power to dispose of by will, in such real estate, unless a definite term of years absolute or deter- minable, or an estate of freehold, shall be given to him expressly or by implication. The 31st section enacts.. that where any real estate shall be devised to a trustee •without any express limitation of the estate to be taken by such trustee, and the beneficial interest in such real estate, or in the surplus rents and profits thereof, shall not be given to any person for life, or shall be given for life, but the purposes of the trust may continue beyond the life of such person, such devise shall be construed to vest in such trustee the fee simple or other the whole legal estate which the testator had power to disjiose of by will, and not an estate determinable when the purposes of the trust shall be satisfied. Both these sections have been subjected to much criticism, and, strange and almost in- credible as it may appear, it is believed that the real history of the two sections is, that they were drafted as 232 THE ADMINISTRATION OF A TRUST. Illust. — 1. Gift by deed to trustees and their heirs. — In Colemore\. Tijndall [t), under a deed, lands were limited to the use of A. for life, and after his death to the use of B. and his heirs during the life of A,, to support contingent remainders, remainder to the use of C. for life, remainder to the same B. and his heirs during the life of C. to support contingent remainders, remainder to the first and other sons of C. in tail male, remainder to divers other uses, remainder to the said B. and his heirs (without saying during the life of the tenant for life) to support and preserve contingent remainders, with divers re- mainders over. The question arose whether, under the last limitation to B. and his heirs, he took the fee simple, or whether he ovAj took that which was necessary for the purpose of the trust, namely, an estate pur autre vie. But the court held that it was not a sufficient ground for restricting an estate limited hy deed to a trustee and his heirs, to an estate for life, because the estate given to the trustee seemed to be larger than was essential to its purpose. And the Lord Chief Baron, quoting from the judgment of Lord Chief Justice "Willes in TarMiurst v. Smith, said : " Though the alternative sections, but, by some carelessness, were both, allowed to remain in tlie act when passed (see per Jessel, M.E., Freme v. Clement, 18 C. D. 514). Their meaning- is by no means clear ; but it is apj^rehended that their effect is as above stated (see Lew. 217 ; Shelf ord's E. P. Stats. 432 ; 2 Jar. Wills, 321 ; Hawkins's WiUs, 30). {t) 2 T. & J. 60o ; and see also Cooper v. KynocJCy 7 Ch. App. 398 ; and Re White and Hindle, 7 C. D. 201. QUANTITY OF ESTATE TAKEN BY TRUSTEES. 233 intent of the parties be never so clear, it cannot take place contrary to the rules of law, nor can we put words in a deed which are not there, nor put a construction on the words of a deed directly contrary to the plain sense of them. But where the intent is j9fowi and manifest and the words douhtful and obscure, it is the duty of the judges to endeavour to find out such a meaning in the words as will best answer the intent of the parties." And the Lord Chief Baron also said : " As to the notion that whenever an estate is limited to a per- son professedly as a trustee, he shall, whatever terms may be used, take only the estate requisite to enable him to perform his trust, and this though of a freehold, and in a deed, I do not find it sup- joorted by any authority, nor even by any dictum." 2. Inconsistent limitations. — But even in a deed, where there are limitations which, on a strict con- struction, would be inconsistent and repugnant, the court will, by supplying obviously omitted words, endeavour to carry out the intention. Thus in Curtis v. Price (u), the facts were as follows : A deed of settlement pm-ported to con- vey freeholds to P. and J. and their heirs, to the use of M. for life ; remainder to the use of E. (the wife) during widowhood ; but if she should marry again, to the use of P. and J. and their heirs, in trust out of the rents to pay E. an annuity, and to apply the residue to the maintenance of the C-^-" (u) 12 Y. 89 ; and see Beaumont v. Marq. of SaUshurT/, 19 B. 198. 234 THE ADMINISTRATION OF A TRUST. children of M. and E. ; witli remainder, after the decease of the survivor of M. and ^., to the use of P, and J. for 1,000 years, upon divers trusts. It was held that, as the limitation of the 1,000 years' term to P. and J. was absolutely inconsistent with an intention to give them the fee, the limitation to them and their heirs must be cut down to an estate during the life of E. 3. Gift by will to trustees and their heirs. — And if the limitations stated in the first illustration had been declared by a will, whether executed before or since the Wills Act, instead of in a deed, the decision would clearly have been different. Thus, if lands are devised to trustees and their heirs, upon trust to pay the net rents to A. for life, and after A.'s death in trust for B., the trustees, notwithstanding the words of inheritance, only take an estate pur autre vie (viz., during A.'s life) ; for the active trust reposed in them ends with the life of A., and consequently the purposes of their trust do not require them to take a larger estate (x) . 4. Larger estate not implied to rectify testator's mistake. — Nor will the court imply a larger estate (where it is not necessary to carry out the definite trusts of the will), on the ground that by doing so effect would incidentally be given to the testator's intentions. Thus, if freeholds be given to A. for life, with remainder to trustees and their heirs in (x) Blagrave v. Blagrave, 4 Ex. 550 ; Watson v. Pearson, 2 Ex. 581 ; Doe v. Cafe, 7 Ex. 675. QUANTITY OF ESTATE TAKEN BY TRUSTEES. 235 trust to preserve contingent remainders, witli re- mainder to tlie heirs of A., it is obvious that if the trustees could be held to take the fee in reversion expectant on A.'s life estate, the rule in Shelley's case would be rendered inapplicable, and the ob- vious intention of the testator to give A. a mere life interest would be preserved. But notwith- standing this, the court holds that the trustees only take a contingent estate pur autre vie, that being sufficient to enable them to preserve contin- gent remainders, which alone was the object of the trust reposed in them (//). 5. Estate in trustee to preserve contingent re- mainder not implied. — On similar grounds, the cornet will not imply a larger estate in the trustees than the trust requires, merely because, if they took such larger estate, it would support a contin- gent remainder, and so prevent it from failing for want of a particular estate of freehold (s). 6. Direction to pay rents to married women. — On the other hand, where, by will, the rents of certain lands (which are not expressly devised to anyone) are directed to be paid to a married woman's separate use, by the testator's executors, there is an implied devise to the executors of such an estate in the land as will enable them to execute the trust {a), viz., an estate pur autre vie. (?/) Nash Y. Coates, 3 B. & Ad. 839; Haddesley v. Adams, 22 B. 266. (z) Cunlife v. Brancker, 3 C. D. 393, and cases there cited; Fasting v. Alien, 12 M. & W. 279; Marshall v. Gingell, 21 C. D. 790. (a) Bush v. Allen, 5 Mod. 63. 236 THE ADMINISTRATION OF A TRUST. 7. Trusts requiring a fee simple imply that estate. — So if land be devised to trustees without any ■words of limitation by a will executed since the Wills Act, and they are expressly directed to sell (h), or impliedly authorized to do so (c) (as by a direction to pay debts [d) ) , whether certainly or contingently, or are authorized to lease or to mortgage (e), or to allow maintenance to infants during a period of suspended vesting (/), or to do any other act which requires the complete control over the property {(j), the trustees will take an estate in fee simple, or other the whole estate which the testator could dispose of. With regard, however, to wills executed before the Wills Act, this would not have been so except under a direc- tion to sell {Ji) ; for a trust to mortgage or lease, or a trust to maintain infants, could equally have been carried out by a trustee who had merely an indefinite term of years (?") . {h) Shaiu V. Weigh, 2 Str. 798 ; Bagshaiu v. Spencer, 1 Y. 144; Watson v. Pearson, 2 Ex. 581 ; Cropton v. Davies, L. E. 4 C. P. 159. (c) Gibson v. Lord Montfort, 1 V. 485. (d) Marshall v. Gingell, supra ; but see Carlyon v. Truscott, 20 Eq. 348. (e) Doe d. Cadogan v. Eioart, 7 A. & E. 636 ; Watson v. Pearson, sujH'a ; Doe v. Willun, 2 B. & Al. 84 ; Re Eddel, 11 Eq. 559. (/) Berry v. Berry, 7 C. D. 657 ; Re Tanqueray, WiUaume and Landau, 20 C. D. 465. {g) Villiers v. Villiers, 2 Atk. 72. (A) Doe d. Cadogan v. Ewart, 7 A. & E. 636. (») See CordalVs case, Cro. Eliz. 316; Doe v. Simpson, 5 East, 162 ; Ackland v. Lutley, 9 A. & E. 879 ; Heardson V. Williamson, 1 Ke. 33. QUANTITY OF ESTATE TAKEN BY TRUSTEES. 237 8. Clear intention to vest fee, althoiigli not re- 1 quired for trust. — And so, too, the trustees will take the fee simple where there is a clear intention to give it them, notwithstanding that a less estate would certainly enable them to perform the trust. Thus, if lands be devised unto and to the use of A. and his heirs, in trust for B. and his heirs, A. takes the legal estate (/«•), because there can be no other meaning given to the words used. But a devise unto and to the use of A. and his heirs, in trust for A. for life, and after A.'s death a direct devise to C, gives the trustees merely an estate during the life of A. (l) ; for the remainder is not limited by way of trust. 9. Trust to convey to another. — As another instance of the effect which will be given to a clear expression of intention, may be mentioned the case where a testator devises property to trustees and their heirs, upon trust to pay the net rents to A. for life, and after his death upon trust to convey the property to B. in fee simple. The direction to convey constitutes a special and active trust, which necessarily implies that the trustees should have the legal fee in them ; for no)i dat qui non habet (m). 10. Recurring trusts. — And where there are re- 1 curring trusts which require the legal estate to be in the trustees, with intervening limitations which, (k) Doe V. Field, 2 B. & A. 564. (l) Doe d. Woodcock v. Barthropp, 5 Taunt. 382. (m) Doe d. Shelley v. Edlin, 4 A. & E. 582 ; Doe d. Nolle V. Bolton, 11 A. & E. 188. 238 THE ADMINISTRATION OF A TRUST. taken alone, would vest tlie legal estate in the persons beneficially entitled, and there is no rcjyeti- tioii before each of fJie recurring trusts of the gift of the legal estate to the trustees, the legal estate is held to be in the trustees throughout, and the intermediate estates are equitable and not legal [n). To show the importance of this principle, it is well to refer to the leading case of Ilarton v. Ilarton (w). There the limitations were to trustees, in trust for A. for life for her separate use, remainder to the heirs of her body, remainder to B. for life for her sepa- rate use, with remainder to the heirs of her body. Here the separate use gave the trustees an estate during A.'s life, and also during B.'s life ; but had it not been for this last trust, they would not have taken the legal estate during the intermediate trust in favour of the heirs of A.'s body. As, however, there was a recurring trust, they did so ; and, therefore, as the estate of A., and the estate given to the heirs of her body, were both equitable estates, the rule in Shellei/'s case applied, and A. took an estate tail. 11. Trust of indefinite duration. — In Collier v. Walters (0) a testator, by will dated before the Wills Act, devised his estate to trustees and their heirs, upon trust that they and their heirs should stand seised of the same during the life of W. C, {n) Harton v. Harton, 7 T. E. 652 ; HaivMns v. Lus- combe, 2 Sw. 391 ; Brown v. Whiteivay, 8 Ha. 145 ; Toller v. Atwood, 15 Q. B. 929. (0) 17 Eq. 262. u«X' QUANTITY OF ESTATE TAKEN BY TRUSTEES. 239 and also until the whole of the testator's debts and the legacies thereinafter mentioned were paid, upon trust to let the same, and apply the rents in discharge of his debts, after payment of which, they were to apply the rents in payment of legacies, and finally hold the property upon trust to pay the rents to W. C. and his assigns during his life ; and after the decease of W. C. and pay- ment of the debts and legacies and all expenses, the testator devised the property to the heirs of the body of W. C, with remainders over. In 1830, the debts and legacies being paid, the trustees conveyed the estate to W. 0. for life, who shortly afterwards, relying on the rule in Shelleifs case, suffered a common recovery and barred the entail. Upon his right to do this coming in question, Sir George Jessel, M. R., said: "The first observation to make upon this will is this — that there is a gift to trustees and their heirs, and that the trustees and their heirs are to stand seised (they get legal seisin of something, and it was not denied that they must get an estate of freehold of some kind or other) ' for and during the term of the natural life of my brother William, and also until the whole of my just debts and all interest due thereon have been paid.' Now the rule is this — that trus- tees under a devise to them and their heirs prima facie take a fee. . . . Now this kind of case was considered in Poad y. Watson [p), and there {p) 6 E. & B. 606. 240 THE ADMINISTRATION OF A TRUST. Mr. Justice Coleridge puts the rule in this way : * The paramount rule is to look to the intention as appearing on the whole will. But there are secondary rules, one of which is, that the words of devise to trustees and their heirs are to have their natural effect to give a fee simple, unless something shows that it is cut down to an estate terminating at some time ascertained at the time of the testator's death. If no precise period for the termination can be shown, it remains an estate in fee.' Then Mr. Justice Erie says : ' These are words clearly meaning that the testator gave the trustees a fee simple ; but if a less estate would certainly enable the trustees to fulfil all the trust, the fee simple would be cut down to that estate.' . . . That rule is therefore a rule which I think is clearly and fairly settled by authority, and should govern me in construing this will. Now there is another rule which may be collected from all the authorities, that you cannot cut down the estate in fee simple unless you can point out on the face of the will what less estate the trustees take. Upon that there is immense difficulty here." Commenting ujoon the various sugges- tions by counsel, his lordship continued : " The first, that they took an estate for life with a chattel interest superadded, clearly will not do. . . . . If you are to imply a chattel interest from a gift to the trustees upon trust to pay debts and legacies, the chattel interest will be implied from the moment of the testator's death ; and it is impossible, therefore, to hold that they took QUANTITY OF ESTATE TAKEN BY TRUSTEES. 241 during the life of W. C, and then took a super- added estate by implication upon trust to pay- debts and legacies. Then, as regards the con- cuiTcnt chattel interest and life estate, did anyone ever hear of such a thing as taking a chattel interest and a freehold estate together? These two being rejected, Mr. Badnall to-day suggested a third, that they took a freehold interest for the life of the tenant for life, and, if necessary, a further chattel interest until the debts were paid." His lordship here gave reasons why, on the special wording of the will, this proposition •was untenable, and continued : " These sugges- tions being out of the way, I think I am at liberty to say that human ingenuity cannot sug- gest a fifth. Therefore we are reduced to this. The first rule being that those who say they do not take a fee shall point out what estate they take, they cannot suggest any estate which in my opinion can be fairly and properly implied from the words used in this will." His lordship therefore held, that the trustees took the legal fee, and that consequently, W. C, under the rule in Sheliei/^s case, took an equitable estate tail. Obs. — The rule restricting the estate taken by trustees to the quantity necessary for the perform- ance of the trust, gave rise to the doctrine of in- definite terms, and determinable fees. Thus, where property was devised to trustees upon trust out of the rents and profits to pay debts, &c., it was held that they took an indefinite term neces- U. T. R 242 THE ADMIN1STHATI0N OF A TRUST. sary to enable them to pay the debts (r/). And where the devise Avas to trustees and their heirs, in trust to raise and pay money, it was held that they took the fee only until the money was raised (r). The 30th and 31st sections of the Wills Act put an end to both these doctrines with regard to wills executed since that act ; but, apart from its provisions, ^ it is considered improbable that either doctrine would now be adopted (.s), and, indeed, the doctrine of determinable fees has been expressly overruled (t). Art. 31. — Banliruptcy of the Trustee. (1) The property of a bankrupt divisible among his creditors does not comprise property held by him as trustee for any other person (?«), although it is proj^erty in his order and disposition at the commencement of the bank- ruptcy [x). {q) Doe V. Simpson, 5 East, 162 ; Acldand v. Lutleyy 9 A. & E. 879 ; Ilmrdson v. Williamson, 1 Ze. 33. (r) OJover v. Monckton, 3 Bing. 13. (s) Hawkins on Wills, 149. {t) Doe d. Davies v. Davies, 1 Q. B. 430; Blagrave y. Blagrave, 4 Ex. 550. {ii) 46 & 47 Vict. c. 52 (Bankruptcy Act, 1883), s. 44. It may be conveniently mentioned here that on the con- viction of a trustee the trust property does not vest in the administrator appointed under the Forfeiture Act, 1870. See Trustee Act, 1893, s. 48. (a:;) Ex parte Barn/, 17Eq. 113; Ex parte Marsh , 1 Atk. 158. As to constructive trustees, see Ex parte Pease, 19 V. 46/and WhitefieU v. Brand, 16 M. & W. 282. INCIDENTS OF THE TRUSTEe's ESTATE AT LAW. 243 (2) If he has converted it into money or other property, and such money or other property would be liable in the hands of the trustee, it will also be liable in the case of the trustee's bankruptcy [y). Obs. — The only part of this rule which requires any illustration is sub-clause (2) ; but as the doctrine of following trust property into other property into which it has been converted is fully treated of in Division Y. Chapter I. (infra), the reader is referred to that chapter. Art, 32. — The Incidents of the Trustee's Estate at Law. At law, the estate of the trustee is sub- ject to the same incidents as if he were the beneficial owner, except where such incidents are modified by act of parliament. Illust. — 1. Power to commeiice actions. — Thus, he is the proper person to bring actions arising out of wrongs formerly cognizable by common law courts, and which necessitated the possession of the legal estate in those bringing them [z). But (j/) Frith v. Cartland, 2 H. & M. 417; Be Hallett, KnatchhuU v. HuUett, 13 C. D. at p. 719. (z) May V. Taylor, 6 M. & G. 261 ; and see E. S. C. 1883, Ord. XVI. r. 8. k2 244 THE ADMINISTRATIOX OF A TRUST. this does not prevent a cestui que trust doing so if the trustee declines. 2. Curtesy and dower. — So, at law, the estate of the trustee in real property was liable to curtesy («), dower (b), and, if of copyhold tenure, to free- bench (e) ; but of course the persons so taking could only take as trustees for those beneficially entitled (d) ; and since the Conveyancing and Law of Property Act, 1881, the devolution of freehold trust estates is entirely changed, and dower and curtesy no longer attach. Formerly, the estate of a trustee was also liable to forfeiture and escheat, but there can no longer be forfeiture or escheat of a trust estate (e). 3. Trustees of copyholds must be admitted. — So, again, trustees of copyholds who take an estate must be admitted by the lord of the manor on the customary terms (,/). 4. Trustees prove in bankruptcies. — Where a debtor to the trust estate becomes bankrupt, the trustee is the proper person to prove without the concurrence of the cestui que trust (g), unless in the case of a simple trust. Where it is as likely (a) Bemutty. Davis, 2 P. W. 319. (b) Noel V. Jevon, Pre. 43 ; Nash v. Preston, Cro. Car. 190. (c) Hinton v. Hinton, 2 V. sen. 638. {d) Noel V. Jevon, supra ; Lloyd v. Lloyd, 4 Dr. & War. 354. (e) 13 & 14 Vict. c. GO, s. 46; and see Trustee Act, 1893, s. 48. (/) WUson V. Hoare, 2 B. & Ad. 350. [g) Ex parte Green, 2 Dea. & Ch. 116. INCIDENTS OF THE TRUSTEe's ESTATE AT LAW. 245 as not that the dehtor has paid the cestui que trust direct, then it lies in the discretion of the judge to require the concurrence of the cestui que trust {//). 5. Trustee liable for rates. — The trustee of a private trust is, as legal owner, liable to be rated in respect of the trust property (?"). 6. Trustee of a business liable to creditors. — If the trustee, in pursuance of the trust, carry on a business for the benefit of the cestui que trust, he will yet be personally liable to the creditors of the business (k), and may be made a bankrupt (/). 7. Trustee entitled to custody of deeds. — A trustee in whom the legal estate is vested is en- titled to the custody of the deeds (m) ; but the cestuis que trusts are entitled, at all reasonable times, to inspect them (n). 8. Not entitled to exercise franchise. — On the other hand, the ordinary legal incident of voting for members of parliament does not belong to the trustee in respect of the trust estate, as the act 6 & 7 Yict. c. 18, s. 74, confers that right on the beneficiary. (//) Ex parte Dubois, I Cox, 310; Ex parte Oray,-iT)ea. & Ch. 778. (/) Beg. V. Sterrt/, 12 A. & E. 84 ; Beg. v. Stapleton, 4 B. & S. 629. [k) Fur hall v. Farhall, 7 Ch. App. 123 ; Owen v. Dela- mere, 15 Eq. 134. But of course he has a right to indemuity, as to which see Art. 65, infra. (/) Wigidman v. Tovmroe, 1 M. & S. 412; Ex parte Garland, 10 V. 119; Farhall y. Farhall, supra. (?n) Evans v. Bicknell, 6 V. 174. («) Wynne v. Humherston, 27 B. 421. 246 THE ADMINISTRATION OF A TRUST. Art. 33. — Trustee's Estate on Total Failure of Beneficiaries. (1) Where a trust does not exhaust the whole of the trust property, and there is no one in whose favour it can re- sult, it is now held in trust for the Crown [p). (2) Where, however, the person to whom it would have resulted died before the 14th August, 1884, intestate, and with- out an heir, and the trust property is real estate, it belongs to the trustees in whom the legal estate in fee simple is vested, absolutely [q). Illdst. — 1. Former law as to realty before August, 1884. — In the leading case of Burgess v. Wheate [q) , the settlor conveyed real estate unto and to the use of trustees, in trust for herself, her heirs and assigns, to the intent that she should appoint, and for no other use whatever. She subsequently died without having appointed, and without heirs ; and it was held that, there being holders of the legal estate — namely, the trustees — the crown could not claim by escheat, and that the {p) As to personal estate, see Taylor v. Haygarth, 14 Sim. 8 ; Middleton v. Sjiictr, 1 B. C. C. 201 ; and as to real estate, see 47 & 48 Vict. c. 71, s. 4. [q) Burgess v. Wh'afe, 1 Ed. 177; and Ee Lashman, Moody V. Penfold, (1891) 1 Cli. 258. TOTAL FAILURE OF BENEFICIARIES. 247 trustees (no person remaining who could sue them in equity) retained, as the legal proprietors, the beneficial interest also. 2. Devise of equitable interest to another set of trustees. — But if the settlor in the last case had appointed or devised her equitable interest to C, in trust for purposes which could not take effect, then, as between the original trustees and C, the latter would be entitled to the property as the nominee under the will. The court would, as be- tween those parties, only carry out the testator's directions, and would not inquire how far the directions could be executed in their integrity (r). 3. Old law applied to constructive trustees. — The rule also applied to a constructive trustee. Thus, a mortgagee in fee, whose mortgagor died intestate and without heirs, took the property absolutely, subject to the mortgagor's debts (.s) . Whether this would have been the case if the mortgagee had been a mere equitable mortgagee seems to be more doubtful ; but it is submitted that, on the principle of Oiis/ow V. Wal/is, the result would have been the same as if he were the legal mortgagee. 4. New law. — However, the foregoing illustra- tions have no application where the person to whom the proj^erty would have resulted has died, without heirs and intestate, since the 14th August, 1884. For by the 4th section of the Intestates' ''' (?•) Onslow V. Wallis, 1 M. & G. 506 ; and see Jones y. QoodchUd, 3 P. W. 33. (s) Beah v. Sijmonds, 16 B. 406. 248 THE ADMINISTRATION OF A TRUST. Estates Act of that year, it is enacted, that " from and after the passing of this act, where a person dies without an heir and intestate in respect of any real estate consisting of any estate or interest, whether legal or equitable, in any incorporeal hereditament, or of any equitable estate or interest in any corporeal hereditament, whether devised or not devised to trustees by the will of such person, the law of escheat shall apply, in the same manner as if the estate or interest above mentioned were a I legal estate in the same hereditaments." ( 249 ) CHAPTER III. The Trustees' Duties. Aet. 34. Duty of Trustee on acceptance of Trust. 35. Duty of Trustee to obey the Directions of the Settlement. 36. Duty of Trustee to act impartially between the Beneficiaries. 37. Duty of Trustee to sell Wasting and Reversionary Property. 38. Duty of Trustee, as between Tenant for Life and Remaindermen, in relation to Wasting and Re- versionary Property pending Sale. 39. Duty of Trustee in relation to the payment of Outgoings out of Corpus and Income respectively. 40. Duty of Trustee to exercise reasonable Care. 41. Duty of Trustee in relation to investment of Trust Funds. 42. Duty of Trustee to see that he pays Trust Moneys to right Persons, 43. Duty of Trustee not to delegate his Duties or Powers. 44. Duty of Trustees to act jointly where more than one. 45. Duty of Trustee not to set up jus tertii. 46. Duty of Trustee to act gratuitously. 47. Duty of Trustee not to traffic ivith, or profit by, the Trust Property. 48. Duty of Trustee to be ready with his Accounts. 250 THE trustees' duties. Art. 34. — Duty of Trustee on acceptance of Trust. I A trustee must acquaint himself, as soon as possible, with the nature and circumstances of the trust property, obtain, where necessary, a transfer of the trust property to himself, and, subject to the j)i'o visions of the settler ment, get in trust money invested on insufficient or hazardous security [a). A person who undertakes to act as a trustee, takes upon himself serious and onerous duties ; and when, as too often hapj^ens, he adopts a "policy of masterly inactivity," he entirely misapprehends the nature of the office to which he has been appointed. As Kekewich, J., said, in Hallotcs v. i/oyf/ (i) , " What are the duties of persons he- coming new trustees of a settlement ? Their duties are quite onerous enough, and I am not prepared to increase them. I think that when persons are asked to become new trustees, they are bound to inquire of what the property consists that is proposed to be handed over to them, and what are the trusts. They ought also to look into the trust documents and papers, to ascertain what notices appear among them of incumbrances and other matters affecting the trust." («) Ex, gr. in trade, Kirkham v. Booth, 11 Bea. 273. (b) 39 C. D. at p. 691. Precisely the same duties are binding on persons appointed original trustees. DUTY OF TRUSTEE ON ACCEPTANCE OF TRUST. 251 A trustee is, however, not liable for mere ignorance of a material fact, if he could not have become acquainted with its existence from mate- rials at his disposal (r). For trustees are not insurers, and their conduct ought to be regarded with reference to the facts and circumstances existing at the time when they have to act, and which are known, or which ought to be known, by them at that time (d). Illust. 1. — Inquiries as to acts of predecessors. — Thus a new trustee's first duty is to ascertain that the trust fund is properly invested, and that his predecessors have not committed breaches of trust which ought to be set right. For if, through not inquiring into such matters, the trust estate should suffer, he may be liable, although he himself took no part, and could have taken no part, in committing the original breaches of trust (e). 2. Must not allow property to remain under sole control of co-trustee. — A trustee who leaves the trust fund in the sole name, or under the sole control, of his co-trustee, will be liable if it be lost (/). 3. Should invest money so soon as possible. — A trustee who keeps money for an unreasonable length of time without investing it, is liable if it (c) Toude V. Cloitd. 18 Eq. 634. (d) Be Hurst, Addison v. Top^j, 67 L. T. 96. (e) Harvey v. OUtver, 57 L. T. 239. (/) Lewis V. Nubbs, 8 C. I). 591. 252 THE trustees' duties. be lost, however pure liis motives may have been (g). 4. Eflfect of not searching for notices of incum- brances. — A new trustee is liable to make good moneys paid by him bona fide to a beneficiary, if the papers relating to the trust comprise a notice of an incumbrance created by that beneficiary depriving him of the right to receive the money. For if the trustee had acquainted himself, as he was bound to do, with the trust documents and papers, he would have found what the true state of the case was {//). Where, however, no amount of search would have disclosed the notice, the trustee would of course not be liable, as his liability entirely depends upon his shirking the duty of search, which the law casts upon him (i). Moreover, he is not bound to inquire of the old trustees whether they have received notice of any incumbrances (J) . Nor is he liable if he honestly, but erroneously (ex. gr., from f orgetf ulness) , in- forms an intended incumbrancer that he has no knowledge of any prior incumbrance (k). Art. 35, — Duii/ of Trustee to obey the Directions of the Settlement, A trustee must fulfil the purposes of the trust, and obey the directions of the {g) Moyle v. Moyle, 2 R. & M. 710. {h) See Hallows v. Lloyd, 39 0. D. 686. (i) Hallows V. Lloyd, supra, (y) Fhipps V. Lovegrove, 16 Eq. 80. [k) Low V. Boucerie, (1S9I) 3 Ch. 82. TRUSTEE TO OREY DIRECTIONS OF SETTLEMENT, 253 settlement, except so far as these | directions — a. Are modified by the consent of all the beneficiaries, or by the authority of a competent court ; or /3. Are impracticable, illegal, or mani- festly injurious to the beneficiaries. This is the most important of all the rules relatiDg to the duties of trustees. It is founded on common-sense, and overshadows and modifies all other rules, which must be read as if they contained an express declaration that they are sub- ject to any provisions to the contrary contained in the settlement itself. As will be seen, how- ever, in articles 56 and 57, the rule is subject to modification, if all parties beneficially interested are sui juris, and concur in putting an end to or amend- ing the trust. For the beneficiaries collectively, being the only parties beneficially interested, are entitled, at any moment, to dej)ose the trustee, and distribute the trust property between themselves as they may think fit. The rule is also subject to the power of the court to interpose on behalf of parties beneficially interested, who are not sui juris ; and of course, as we have seen (/), it is not binding upon a trustee where the directions of the settlement are illegal. Another exception neces- sarily arises where the directions of the settlement are impracticable {ex. gr., if it directs an immediate (1) Art. 10, supra. 254 THE trustees' duties. sale, and no purchaser can he found). Lastly, an exception arises where it would be manifestly injurious to the beneficiaries to carry out the directions contained in the settlement. Illust. — 1. Neglect to purchase where directed to do so. — If trustees are, by the settlement, directed to call in trust moneys, and to lay them out on a purchase, and they fail to do so, and the fund is lost, they are liable for the loss so sustained (m). 2. Neglect to sell, where directed. — So, if a trustee for sale omits to sell property when it ought to be sold, and it is afterwards lost, although without any default on his part, he is liable for the loss which would not have happened had he not failed in performing an obvious duty (n) . 3. Direction to invest on particular securities. — jSo, where the settlement orders trust funds to be invested on particular securities, the trustees are bound to invest in such securities or in those pre- scribed by statute (as to which, see infra, Article 41). But it would seem that if they are directed to invest in specified securities and none other, they may not now even invest in the securities autho- rized by the Trustee Act, 1893, s. 1, the powers of which are only exerciseable if not forbidden by the settlement. The former, repealed, statutory power contained no such restriction (o) . (m) Craven v. Craddoch, W. N. (1868) p. 229. In) St. § 1269, n. (o) Be Wedderburn, 9 C. D. 112, decided on the llth section of Lord St. Leonards' Act, repealed by the Trust Investment Act, 1889. TRUSTEE TO OBEY DIRECTIONS OF SETTLEMENT. 255 4. Must observe conditions imposed on their dis- cretionary powers. — So, where there are any con- ditious attached to the exercise of any of their functions, they must strictly perform those condi- tions. As, for instance, where they are authorized to lend to a husband with the consent of his wife, they cannot make the advance without first getting the required consent, even though they subse- quently get it (/)). 5. So where trustees were empowered to vary investments " with the consent of the tenant for life," and they sold consols, and first made an investment with such consent upon a contributory mortgage (which was not an authorized security), and subsequently called the money in, and ivitJiout such consent reinvested it upon a mortgage which was an authorized one, it was held that, although there was no loss of capital, they were nevertheless bound to replace the consols which had since risen in price. For they sold the consols for the purpose of investing in an unauthorized security, which was contrary to the directions of the settlement ; and then when they realized that investment, they reinvested the proceeds without the consent of the tenant for life, which was again contrary to the directions of the settlement ; so that in both transactions they disobeyed the rule now under consideration, and consequently com- mitted breaches of trust, and were therefore bound {p) Bateman v. Davis, 3 Mad. 98; but see Stevens \. Rohertson, 37 L. J., Ch. 499, where it was held that a consent as to the mode of investing the trust fund might be given, ex post facto. 256 THE trustees' duties. to place the beneficiaries in the same position as they would have occupied if no such breach had been committed. In other words, to replace the consols which they had wrongly sold (*/). As Fry, L. J., said : "In the first place this is not a case in which the investment {i.e., the first investment) was within the terms of the trust at all. The trust required that it should be invested in the names of the trustees. The investment was made, not only in the names of the trustees, but also of another set of trustees whose concurrence was required to every act of the mortgagees. Therefore it did not satisfy those terms The only remaining question was this : whether the investment of 1879 [the second investment] was an investment which satisfied the require- ments of the trust, because it was argued for the appellants that even if the consols were to be restored, they should be restored as at the date of 1879, and not the year 1887 when this action was brought. That of course tio-ns on this question : was the mortgage of 1879 one that satisfied the requirements of the trust? As the case was pre- sented to us, it did not satisfy the requirements of the trust, because it was not shown that the tenant for life had given his consent." 6. Cannot accelerate a trust for sale. — On the same principle, where an estate is given in trust for A. for life, and after his death upon trust for sale, the trustees cannot sell during the life of A., {q) Re Massingherd, Clarh v. Trelawney, 63 L. T. 296 ; and see also Be Bennison, Cutler v. Boyd, 60 L. T. 859. TRUSTEE TO OBEY DIKECTIONS OP^ SETTLEMENT. 257 even -with A.'s consent, unless of course all parties beneficially interested in remainder are mi juris and consent. For tlie settlor has prescribed the time at which the sale is to be made, and the trustees must follow out his direction (r). Indeed it has been held, that even the court has no jurisdiction to order an earlier sale (s) ; although, of course, if the trust were being administered by the coui't, and the coui't did in point of fact order an earlier sale, the trustee would not be liable for obeying the order, and the piu-chaser would get a good title imder sect. 70 of the Conveyancing and Law of Property Act, 1881. It must also be pointed out that, notwithstanding such a trust, and notwithstanding the consequent iuabihty of the trustees to sell during the life tenancy, it is now competent for the tenant for life himself to sell, under the provisions of the Settled Land Acts, 1882 to 1890, and to cause the purchase- money to be paid to the trustees, they being (by virtue of their future trust for sale) trustees for purposes of those Acts, under sect. 16 of the Settled Land Act, 1890. (r) Leedham v. Chaumer, 4 K. & J. 458; Want v. Staliibras, L. E. 8 Ex. 175; Be Bryant and Barninghnm, 44 C. D. 218 ; Re Head and Macdonald, 38 W. E. 657, in both of wliicli two latter cases the Court of Appeal held that the piuxhaser was not bound to complete, even although the beneficiaries were ■willing to confirm the sale. But see also Soj/er v. Arnold, 14 App. Cas. 429. (s) Johnstone v. Baber, 8 B. 233 ; BlacMow v. Laws, 2 Ha. 40; Sunter v. G. W. Rail. Co., 23 W. E. 126; and Carhjon v. Truscott, 20 Eq. 348. U. — T. S 258 THE trustees' duties. Art. 36. — Duty of Trustee to act impartially between the Beneficiaries. A trustee must be impartial in the exe- cution of his trust, and must not so exercise his powers as to confer an advantage on one beneficiary at the expense of another. In particular, where the capital of the trust pro- perty is in any way augmented, the augmentation accrues for the benefit of all the beneficiaries, and is accord- ingly to be treated as capital, and not as income [t). Illust. — 1. Powers of sale and purchase. — Thus, where trustees are empowered to sell real estate and to lay out the proceeds in the purchase of another estate, they would not he justified in selling to promote the exclusive interest of the tenant for life ; but they must look to the inten- tion of the settlement, and whether another and better purchase is practicable, and not merely prohahle ; or at all events there must be some strong reasons of family prudence {u). 2. Trust to raise debts by sale of land. — Con- versely, if lands he devised to trustees upon trust it) Re Barton, 5 Eq. 238; Re Bouch, Sprouley. B., 12 App. Cas. 385. (m) Mortlock V. Buller, 10 V. 309 ; Malwn v. StanJiope, cit. 2 Sug. Pow. 412. TRUSTEES MUST BE IMPARTIAL. 259 to sell for payment of debts, and subject thereto upon trusts for divers persons successively, the trustees must not raise the money by sale of the timber, for that would be a hardshi]^ on the tenant for life {x). 3. Trustees should not purchase woodland estate. — Where money is directed to be laid out in the purchase of land to be settled on a person for life, with or without impeachment of waste, with re- mainders over, the trustees should not purchase an estate with an overwhelming proportion of trees on it. For if the tenant for life be impeachable for waste, he would lose the fruit of so much as was the value of the timber; and if he be not impeachable, he could, by felling the timber, possess himself of a great part of the corpus of the trust property (y). 4. Trustees should not purchase mining property or advowson. — Under a similar trust to the fore- going, trustees should not purchase mining pro- perty, nor an advowson, both of which might give an undue preference to one beneficiary (:;) . 5. Choice of investments. — Again, where trustees have a choice of investments, they must not exer- cise that choice for the sole benefit of the tenant for life by investing upon a more productive but less secure property {a) . And where any change of (x) Davies v. IVestcomhe, 2 Sim. 425. (y) Bingers v. Lamb, 16 V. 174. fz) Lew. 439. (rt) Rahij V. Ridehalgh, 7 D., M. & G. 104; and Stuart Stuart, 3 B. 430. S2 260 THE trustees' duties. investment is to be made with the consent of the tenant for life, and he bnpropcrJi) withholds his consent, the coiu't will compel him to give it (i). 6. Trustees must not exert influence against the interest of a beneficiary. — On the principle enun- ciated in the article now under consideration, trustees must not threaten to exert their influence with third parties to the prejudice of one of their beneficiaries, in order to coerce him into consenting to a disposition of the trust property more favour- able to another of the beneficiaries than would be the case if the settlement were strictly performed. Thus, in JEIlk v. Barker (c) , a testator desired his trustees to give up his farm to his nephew, the plaintiff, if the landlord would accept him as tenant ; and in that case he bequeathed to him the farming stock. He also gave some real pro- perty to the plaintiff, and gave legacies and annuities to the plaintiff's father and mother, and sisters, and other persons, including the trustees. One of the trustees of the will was steward to the landlord. There were hardly any assets to pay the legacies and annuities, if the plaintiff took the farming stock ; finding which to be the case, the trustees represented the matter to the landlord, who left it to their decision whether the plaintiff should be accepted as tenant. They accordingly refused to let him be accepted, unless he executed a deed making over the devised real estate for the {h) Costello V. O'Rourke, 3 Ir. Eep. Eq. 172. (c) 7 Ch. App. 104. TRUSTEES MUST BE IMPARTIAL. 261 purpose of paying the legacies and annuities. On these facts it was held, that it was a breach of trust on the part of the trustees to endeavour to induce the landlord to refuse his consent to the plaintiff having the tenancy which the testator had, by his will, expressed his wish for him to have ; and that the deed, having been obtained by means of a breach of trust, must be set aside ; and that the trustees, having made the suit necessary, and having hostilely contested the plaintiff's right to relief, must pay tlie costs of the suit. 7. Augmentation of capital. — Where a company out of a reserve fund creates new capital, and allots it gratis among the old shareholders, any shares so allotted to trustees will be held by them as capital, and will not belong to the person entitled to the trust income (d). 8. Bonuses. — So where bonuses are paid as part of capital, they will be retained by the trustees ; but where bonuses are mere expressions for extra dividends, this will not be the case. As Lord Jus- tice Fry said in Be Bouch, Sproule v. £. {e), in a passage quoted with approval by Lord Herschell in giving judgment on the same case in the House of Lords (./'), "When a testator or settlor directs or permits the subject of his disposition to remain as shares or stocks in a company which has the power either of distributing its profits as dividend {d) Be Bouch, Sproule v. B., 12 App. Cas. 385; Be Northage, Ellis v. Barfield, 60 L. J. Ch. 488. (e) 29 C. D. 635, at p. 653. (/) 12 App. Cas. 385, at p. 245. 262 THE trustees' duties. or of converting them into capital, and the com- pany validly exercises this power, such exercise of its power is binding on all persons interested under the testator or settlor in the shares, and consequently what is paid by the company as dividend goes to the tenant for life, and what is paid by the company to the shareholder as capital, or appropriated as an increase of the capital stock in the concern, enures to the benefit of all who are interested in the capital" [g). The bonus of a quarter per cent, which was offered to the holders of consols and reduced threes as an inducement to convert their holdings into new 2f per cents., was by the Conversion Act specially declared to be income and not capital. 9. Profit on realization of investments. — It need scarcely be pointed out that where, on a change of investment, trust securities realize more than was given for them originally, the profit accrues to the capital, and is not considered as income payable to the tenant for life. In the same way, where trustees of a mortgage debt foreclose, and subse- quently sell the property for more than the debt, the balance is to be held by them as an augmen- tation to the capital of the trust fund. For as any diminution of the trust property would have {g) See also Re Alsbury, Sugden v. Alshury, 45 C. D. 237 ; and lie NortJiage, ElHs v. BarfieU, 60 L. J., Ch. 488, in both of which bonuses were treated as income; •whereas, in Re Rouch, Sproule v. R., supra, they were treated as corpus; and conf. Re Hopkins, 18 Eq. 696; Straker v. Wilson, 6 Ch. App. 503; Ibhetson v. Elam, 1 Eq. 188 ; and Broione v. Collins, 12 Eq. 586. TRUSTEES MUST BE IMPARTIAL. 263 to be borne by all the beneficiaries, and would not fall on the tenant for life only, so it is only fair that any casual augmentation should belong to all, and not to the life tenant only. 10. A testator gave his estate upon the usual trusts for conversion, with power to postpone, and directed that, pending conversion, the income actually produced should be treated as income. Part of the residue consisted of shares in a company with 8/. per share paid up. The com- pany was reconstructed, and the new company paid 9/. 5s. for each of the old shares. The 11. 5s. was the proceeds partly of the regular reserve fund, and partly of profits which the directors had retained to meet contingencies. Held, that the right of a tenant for life of shares is only to receive dividends and bonuses in the shape of divi- dends declared during Ids life, and that, although the 1/. 5s. was profits, it was under the circiun- stances not payable as income {h) . 11. Whether trustees can safely pay the share of one beneficiary before paying the others. — The question sometimes arises, whether trustees can safely pay the share of one beneficiary who has attained a vested interest in possession, before paying the other beneficiaries who may not have attained a vested interest, or whose shares, by reason of incapacity or otherwise, are not presently payable. If he does so, it may happen that by reason of subsequent depreciation of securities, the (h) lie Armitage, Armitage v. Armitage, (1893) 3 Ch. 337. 264 THE trustees' duties. balance retained by tbe trustee may be insufficient to pay the other beneficiaries in full, in which case the first beneficiary will have got more than the others. It appears, however, to be well settled that if, when the first payment was made, the trustees have, and retain in their hands, assets, which, fairly valued, are sufiicient to meet shares which are not presently payable, but have to be held in trust, they are justified in paying other shares payable pari passu but payable at once, and are not liable if the assets so retained should, in the event, prove insufficient to pay the unpaid beneficiaries in full (?'). For the conduct of trus- tees is regarded with reference to the facts and circumstances existing at the time when they had to act, and therefore, if they make the valuation impartially at the time, they are not liable for an unforeseen loss. 12. Whether trustees can appropriate particular securities to answer particular shares payable in futuro. — The question sometimes arises whether trustees of a will can treat their trust as severable into several trusts, appropriating specific securities to each, or whether they must treat the trust pro- perty as one undivided fund, until it becomes necessary, on the death of a life tenant, to pay and distribute his share among his children. For instance, where a testator settles money either in a specific sum or as a share of residue upon each of his daughters for life, with remainder for her chil- (?■) Per Lindley, L. J., Re Hurst, Addison v. Topp, 67 L. T. p. 99 ; Be Winslmn, Frere v. Winshnv, 45 0. D. 249 ; and Fenwick v. Clark, 4 De G., F. & J. 240. TRUSTEES MUST BE IMPARTIAL. 265 ciren, ought the trustees to treat the daughters' fortunes as one trust, or as several ? If a severance and approj^riation of securities be lawful, it may sometimes be convenient ; but, on the other hand, the result may obviously be, that (by reason of the appreciation of one appropriated set of securi- ties, or the depreciation of another, or by both such causes) one family may get less, and the other more than their due proportion of the entire fund. Where the form of the trust is a trust of specific sums (ex. gr., 1,000/. to be held upon trust for a testator's daughter A. for life, with remain- der for her children equally, and 1,000/. to be held u^Don a similar trust for his daughter B. and her childi'en), such appropriation is not only un- doubtedly legitimate, but ought to be made {k). So where the form of the trust is to divide a testator's residuary estate between his children equally, the daughters' shares to be retained, and invested upon trust for them respectively for life, with remainder to theii' respective children, it is apprehended that if, when the appropriation is made, the securities are fairly valued and fairly appropriated, there can be no objection, and that when once the appropriation is made, the subse- quent depreciation of one appropriated fund cannot be made good out of the appreciation of another. Where, however, the form of the trust is such. (k) Fraser v. Murdoch, 6 App. Cas. 855; Be Walher, Walker v. Walker, 62 L. T. 449. But an appropriation of securities is only valid if the appropriated securities were both authorized and sufficient at the date of the appro- priation; see Be Waters, W. N. 18. 266 THE trustees' duties. tHat no immediate severance into shares is directed until a share of corpus becomes distributable, it would appear to be doubtful whether the authorities above referred to are applicable. In such a case it might well be argued that the settlor's intention was, that there should be a community of loss or gain between the beneficiaries who should for the time being be entitled to the trust fund or such part thereof as should for the time being remain undis- tributed. The point, however, does not seem to have been the subject of judicial decision, and un- doubtedly the usual practice, both of trustees and of the court itself (in the administration of estates and trusts), has been to make no appropriation in such cases. ^^Art. 37. — Duty of Trudee to sell Wasting and Reversionary Property. •Where the trust is for the benefit of several persons in succession, and the trust property is of a wasting nature, or is a future or reversionary interest, the trustee must convert the property into property of a permanent and immediately profitable character, un- less : — a. The settlement contains a direction or implication to the contrary ; or, /S. The settlement confers a discretion on the trustee to postpone such WASTING AND REVERSIONARY PROPERTY. 267 conversioiij which he bona fide and impartially exercises ; or, 7- The property in question is speci- 1 U-^^X fically settled. The above rule, known as the rule in Hoive v. v - Lord Dartmouth (/), is really only a corollary of the principle stated in Art. 36, viz., that the trustee must act impartially between the bene- ficiaries. For if wasting property (such as lease- holds, terminable annuities, and the like) were to be retained, the tenant for life would profit at the exjoense of the remaindermen; and if reversionary property were not converted, the remaindermen would profit at the expense of the tenant for life. It must, however, be borne in mind that the rule is based upon an implied or presumed intention of the settlor, and not upon any intention actually expressed by him ; and courts of equity have con- sequently always declined, to apply the rule in cases where the settlor has indicated an intention that the property should be enjoyed in specie, though he may not, in a technical sense, have specifically said so. The real question, therefore, in all such cases, is, whether the settlor has, with sufiicient distinctness, indicated his intention that the property should be enjoyed in specie {m) ; for (?) 2 W. & T. Lead. Cas. 262; and see also Hinves v. Hiuves, 3 Ha. 609 ; and Fickcriixj v. Pickering, 4 M. & C. 289. {m) Per Baggallay, L. J., Macdonald v. Irvine, 8 C. D. p. 112. 268 THE trustees' duties. [ tlie burden of showing this lies upon the party I who desires that the rule in Ilowe v. Lord Dart- \moutli should not be applied (w). Illust. 1. Long- annuities. — Where a testator's residuary estate was settled upon one for life, with remainders over, it was held that long, but ter- minable annuities, which formed part of it, ought to be sold, and the proceeds invested on permanent trust securities (o). 2. Leaseholds. — A testator gave to his wife the whole of the interest arising from his property, both real and personal, during her life, with remainders over. He died possessed of leaseholds, among other property. It was held that the widow was not entitled to retain the leaseholds, but that they must be sold and the proceeds invested in stock. The Vice-Chancellor (Shadwell) said : " As the will stands, there is nothing, on the face of it, preventing the application of the rule of law, that perishable property must be sold and con- verted into money, and invested in the funds, in order to produce the same interest to the remain- derman as was enjoyed by the tenant for life i^p). 3. Rule not applicable where contrary intention expressed. — As already stated, the rule in Kou-e v. Lord Dartmouth is subject to any contrary inten- (n) Per James, L. J. , same case. (o) Ticknery. Old, 18 Eq. 422; Porter v. Baddeley, 5 C. D. 542 ; but see contra, Wilday v. Sandys, 7 Eq. 455, wliere, on the construction of the will, it was held that the trustees were authorized to hold long annuities. (p) Benn y, Dixon, 10 Sim. 636. WASTING AND REVERSIONARY PROPERTY. 269 tion wliicli may be expressed or imj)lied in the i settlement. Moreover, it is immaterial whether the contrary intention is imperatively expressed, or whether a discretion to convert or not is ex- pressly given to the trustees ; for the court will not interfere with a discretion exj)ressly given, so long as trustees exercise it in good faith ((/) . Thus, in one case a testator gave his residuary estate, which included several leasehold houses (held upon short terms), to trustees, upon trust to pay the income to his wife for life, with remainder to his grandchildren, and gave his trustees jso^r^r to retain any portion ofhispropcrtijin the same state in irhich it s/ioutd be at his decease, or to sell and convert the same as they sliould think fit. It was held that the special power to retain existing investments took the case out of the general rule as to conver- sion of perishable property, and that the trustees were at liberty to retain the short leaseholds, and t atjc 'l^ ^^^ any other investments held by the testator, for lf*>'^ •' t^ -«^ ^\ such period as they should think fit (r). 4. So, again, where the testator devised wasting property to trustees, upon trust to sell " when in their discretion they should deem it advisable," and directed that the rents and profits should, until sale, be apphcable and applied in the same manner as the dividends or interests to arise from the investment of the sale moneys, it was held (7) Gishorne v. Qishorne, 2 App. Ca. 300 ; Tahor v. Brooks, 10 C. D. 273. (r) G7-ay v. Siggers, 1<5 C. D. 74. 270 THE trustees' duties, that the trustees were not hound to sell until they deemed meet (s). 5. Rule not applicable where impliedly negatived. — The ahove cases are instances of an express intention that the trustees should have a dis- cretion ; hut the same result will follow where that intention can he implied. Thus, a testator, after a specific hequest, gave all his residuary estate, hoth real and personal, to trustees (whom he also appointed executors) , upon trust, so soon as conveniently might he after his death, to sell so much and such part thereof as ihey might think necessary fo)' jiaying all his mortgage and other debts and funeral and testamentary expenses. He also directed the trustees, out of the moneys to arise from such sale and other his residuary estate, to pay dehts, funeral and testamentary expenses, and to invest the balance, and to stand possessed of such investments, and all other his residuary estate and the income thereof, upon trust for several persons successively for their respective lives, with remainders over. Part of the testator's estate consisted of leaseholds which were subject to a mortgage. Shortly after his death, this mortgage was paid off by the trustees, and the leaseholds retained unsold. On this state of facts it was held, that, on the construction of the will, the trustees had a discretion as to what part of the (s) Miller v. Miller, 13 Eq. 263 ; and see also Thursby V. Thursby, 19 Eq. 395 ; and Chancellor v. Broivn, 26 C. D. 42, where tlie projperty consisted of a business. WASTING AND IlEVERSIONARY PROPERTY. 271 testator's estate sliould be converted, and that the court could not interfere with such discretion (t). 6. So it has been hold that an express direction for sale at a particular period, indicates an inten- tion that there should be no previous sale (u) ; and a similar view has been taken of a direction to divide property after the death of the life tenant (.?■) . And so, in some cases, it has been decided that- a trust to pay rents to the tenant for life, irhcre the testator has only leaseholds {if), or a direction that the trustees should give a power of attorney to the life tenant to receive the income (s), is a sufficient indication of a contrary intention to take the case out of the general rule. 7. A testator gave his residuary estate to trustees in trust to convert into money such parts thereof as should not at his decease consist of money, or he invested in anij of t//e public fands or government secu- rities, and to invest the same in such public funds or government securities as to them should seem most advantageous, and to pay the interest, dividends, and annual proceeds of such residue to his children in equal shares for their lives, and after their deaths upon other trusts. On the construction of these words it was held, that long annuities, of which the testator died possessed, fell within the (t) Re SeweU, 11 Eq. 80. (m) AIcocJc v. Sloper, 2 M. & K. G97 ; Daniel y. Warren, 2 Y. & C. C. C. 290. («) Collins V. Collins, 2 M. & K. 703. (y) GoodenoughY. Tremaviondo, 2 B. 512; Cafey. Bent, 5 Ha. 36 ; Vachell v. Boberts, 32 B. 140. {z) Neville v. Fortescue, 16 Sim. 333. 272 THK trustees' duties. exception of public funds or government securities, and ought not to be converted {a) . On the other hand, in Tichier v. Ohl{b), where the direction was to convert the residue and invest in govern- ment or real securities, with power to continue invested any government stocks or real securities of which the testator might die possessed, it was held that government securities meant only such as were of a permanent character, and that long annuities ought to be converted. It will be per- ceived that it is not easy to distinguish these two cases, which convey a warning to the practitioner how extremely dangerous it is to advise trustees to act upon implied intentions, either one way or the other, without taking the opinion of the court on originating summons. 8. Property given specifically. — Although the mere absence of a direction to convert wasting property has never been construed to mean that it should be enjoyed in specie, yet, where such pro- perty is given specificalhj in the strict sense of the term, ^. e., where it is expressly referred to, the rule has no application. For in such cases, in the absence of express direction, the presumption is, that the testator, by naming the specific property, intended that it should be enjoyed in the shape in which he left it. If, therefore, a testator bequeaths specific leaseholds in trust for persons successively, (a) Wilday v. Sandys, 7 Eq. 455. (b) 18 Eq. 422 ; and see also Porter y. Baddeley, 5 C. D. 542. "WASTING AND REVERSIONARY PROPERTY. 273 it will not be the duty of the trustees to sell them ' and invest the proceeds on permanent investments ; but they must pay the entire rents to the first taker, notwithstanding that, by reason of the ter- minable nature of the property, the ultimate remainderman may be disappointed (r). This distinction between specific trust bequests and residuary trust bequests is well exemplified by the case of Macdonald v. Irvine [d). There a testator, being possessed of (among other things) a leasehold house held for lives, and a policy for 3,000/, on one of the lives, gave the leasehold house and the policy to J. M., and the residue of his estate to A. L. After making this will, he married, and, by a codicil, gave to his wife for her life the income, dividends, and annual proceeds of his entire estate, and postponed the payment of all legacies, and the distribution of all estates vested in him till after her death; and subject thereto, he confirmed his will. It was held that the gift of the leasehold house and policy to J. M. being specific, the intention of the testator was, that they were to be enjoyed in specie ; but that with regard to his residuary estate (which com- prised other wasting property), the rule in Hotve V. Lord Dartmouth must be applied (e). (c) lie Beaufoy, 1 Sm. & Gifi. 20. {d) 8 0. D. 101. (e) Baggallay, L. J., diss. U. — T. 274 THE trustees' duties. — INCOME AS BETWEEN vV Art. 38. — Duty of Tnifitce as between Tenant for Life and Remainderman in Relation to Property which ought to he converted. Where property ought to be converted, (either by express direction or under Article 37), and the proceeds invested, the tenant for life is, pending such con- version, entitled to receive either the whole or some part of income-bearing property, and to be credited with in- come in respect of reversionary pro- perty, in accordance with the following rules, viz. : — cc. He is entitled to the whole income of income-bearing property if the settlement so directs or imj)lies (/). /3. Where the property is of a wasting nature (and, semhle, even where it is not), if there is no express power to postpone conversion, but the property cannot be sold, he is only entitled to such interest as would be produced if the property were actually sold, and the proceeds in- vested in trust securities. If, how- (/) See Re Sheldon, Nixon v. Sheldon, 39 0. D. 50; Be Thomas, Wood y. Thomas, (1891) 3 Ch. 482. Where the property is of a non-wasting nature, the Court "will accept very slight evidence of impUed intention. ^JL ^ ' V << •- t*^ TENANT FOR LIFE AND llEMAINDERMAN. 275 ever, there is an express power to postpone conversion until a suitable opportimitfj occurs, lie is entitled to TcX j interest after the rate of 4 per cent, per annum [g). 7. Where tlie proj^erty is of a rever- 1^\ sionary nature, he is entitled, when " ; it falls in, to a proportionate part vS of the capital, rej^resenting 4 per f'^'-^- ' cent, compound interest(with yearly • ^^,^ ^ rests) on the true actuarial value of "J7' .'^t-^ the property at the testator's death, co-^-jl ir^ 6«a«- calculated on the assumption that ^ f'--* ^^■ the actual date when the j^rojoerty fell into possession could have been then predicted with certainty (h). ^. Where the trustees are mortgagees in possession of property which is believed to be an insufficient secu- rity, then, pending realization, the income, less 4 per cent., is to be treated as capital, and the 4 per cent, as income. But upon com- plete realization of an insufficient security, the money realized, plus the income received by the tenant (.7) Brown y. GeUatly, 2 Ch. App. 751. (h) Re Earl of Chesterfield, 24 C. D. 643. t2 276 THE trustees' duties. INCOME AS BETWEEN I for life, must be divided between tenant for life and remaindermen in the proportion of the sums which ought to have been received for income and capital respectively if no default had been made; the tenant for life giving credit for what he has actually received (z). This article is a further corollary of Art. 36, and the main principle of it forms the second part of the rule in Hoice v. Lord Dartmouth, viz., that, prima facie, pending a conversion which ought to be made, the tenant for life is entitled to the income which would be produced by the proceeds of the conversion, if it were made, and nothing more. The rule is, like so many equitable rules, founded on the maxim that equity regards that as done which ought to be done, and consequently has no application where, on the true construction of the settlement, the wasting or reversionary property is not to be converted ; nor does it apply where the trustees have a discretion in the matter, and it appears to have been intended that, until conversion, the income should be enjoyed in specie. Where, on the other hand, there is merely a power to postpone conversion /or the purpose of selling the property to the best advantage, and no intention is indicated that the power is inserted for the benefit of the tenant for hfe as against the remainderman, (/) Re Godden, Teague v. Fox, (1893) 1 Ch. 292. TENANT FOR LIFE AND REMAINDERMAN. 277 the rule applies. However, unless the settlement is very explicit, trustees should always be advised to take the opinion of the court before paying income to a tenant for life in specie. Illust. — 1. Settlement directing that income is to be enjoyed in specie. — Where a testator devised his brickfield (which was, of course, property of a wasting nature) to trustees upon trust to sell when, in their discretion, it might seem advisable, and directed that the rents and profits should, until sale, be considered as part of his personal estate, and be applicable and applied in the same manner as the dividends or interest to arise from the invest- ments of the sale moneys, it was held that the tenant for life was entitled to the whole of the royalties paid by tenants of the brickfield, although the trustees did not sell the property for ten years {j). If, however, the italicized words had not been inserted in the will, it seems plain that the power to postpone conversion would not of itself have authorized the payment of the whole of the royalties to the tenant for life. For, in that case, the inference would have been, that the power to postpone conversion was for the purpose of effi- ciently selling the estate, and not for the benefit of the tenant for life (/.) . The question is, in short, one of construction in all these cases, viz., [j) Miller v. MiUer, 13 Eq. 263 ; and see also Tlmrslnjy. Thursby, 19 Eq. 395, where the whole of colliery royalties •were held to be payable to the teuaut for life. {k) Re Carter, 41 W. K. 140 ; Brown v. Gtllatly, 2 Ch. App. 751. 278 THE trustees' duties. — INCOME AS BETWEEN whetlier the testator intended that the power to postpone should be exercised for the benefit of the tenant for life, or merely for the more convenient realization of the estate. 2. Settlement implying that income is to be enjoyed in specie. — A testator empowered his trustees, at their discretion, io continue all or any part of his personal estate in the state of invest- ment in or upon which the same should be at his death, or otherwise to convert the same, and to invest the proceeds in the names of the trustees in certain specified securities. At the death of the testator, part of his personal estate consisted of securities not specifically authorized. In an action for the administration of the estate, the chief clerk found that some of the securities were proper to be continued, and that others were proper to be called in. Held, that the tenants for life were entitled to receive in specie the income of those securities which were retained (/). It will be perceived that the testator authorized the continuance of securities, and not merely the postponement of their conver- sion, otherwise it is conceived that the decision might have been different. 3. Another good example of an implied inten- tion that income should, pending conversion, be enjoyed in specie, is afforded by the recent case of Re Thomas, Woody. Thomas (ni). There a testator (l) lie Sheldon, Nixon v. Sheldon, 39 C. D. 50 ; and see also as to rents of leaseholds, Oray v. Si goers, 15 CD. 74. (m) (1891) 3 Ch. 482. TENANT FOR LIFE AND BEMAINDEKMAN. 279 gave his residuary estate to trustees upon trust for conversion and investment of the proceeds in specified securities, with power to the trustees in their absolute discretion to retain any securities or property belonging to him at his death, uncon- verted, for such period as they should think fit, and declared that they should stand possessed of " the stocks, funds, shares, and securities for the time being constituting or representing the resi- duary personal estate and effects thereinbefore bequeathed, and of the income thereof, ^^ upon trust to pay the income to certain persons for life with remainders over. The estate comprised certain American bonds, which were not included among the securities authorized by the will as investments, but were retained by the trustees in exercise of the discretion given to them. These bonds, which bore 6 per cent, interest, were redeemable at par at a future date, and their market value was consider- ably above par. Held, that, on the true construc- tion of the will, the tenants for life were entitled to the whole income of the bonds in specie. In giving judgment, Mr. Justice Kekewich made the following remarks, which very lucidly set forth the law on the subject. His Lordship said: "I am not prepared to hold, that, where there is a direction for conversion of personal estate, followed by a power of retention of existing securities in the absolute discretion of the trustees, and then there are trusts for tenants for life, and afterwards for remaindermen, the power of reten- tion necessarily gives the tenants for life the 280 THE trustees' duties. INCOME AS BETWEEN ^^ f enjoyment in specie of the securities retained by '»t ! the trustees in the exercise of their discretion. I believe that so to hold would be against the law as laid down in many cases and many text-books, and against the practice of conveyancers, who, I believe, have invariably provided for the rents and profits of property given in trust for sale being paid to the tenant for life where that was intended; and I think that no such doctrine receives any support from the decisions of Mr. Justice North in lie Sheldon (n), and Lord Cairns in Broioi v. Gellathj (o) . I do not think either Mr. Justice North or Lord Cairns intended to decide, or did decide, any abstract question of the kind. But I have no doubt that one looks out with an expectant eye for a direction that the tenant for life shall receive the income when there is an express direction to the trustees to retain securities, or any indication of the testator's intention that I they shall retain indefinitely for so long as they I may think fit." 4. Eealty was settled upon trust to sell and invest the proceeds, and to pay the dividends to B. for life, with certain limitations over after his death. There was no direction as to payment of the intermediate rents pending sale. The land was sold without undue delay, but, pending the sale, the rents produced more than 4 per. cent per annum on the amount realized on the sale. On (n) 2 Ch. App. Vol. (o) 39 0. D. 50. TENANT FOR LIFE AND REMAINDERMAN. 281 these facts it was held by Kekewich, J., that, not- withstanding the absence of any power to postpone the sale, or any direction as to the interim rents, the whole rents belonged to B. the tenant for life {p). His Lordship carefully rested his judg- ment upon implied intention, and not upon any rule of law differentiating real estate which ought to be converted, from personal estate subject to a like trust. It is, however, difficult to understand how any such impHed intention was found in this case, apart from the obvious convenience of the decision ; and if convenience is to be the test of intention, it would seem to follow that such inten- tion should be implied in every case where land is dii-ected to be sold, unless the contrary is expressed. In other words, that the onus of proving intention in the case of land is reversed, and shifted from the shoulders of the tenant for life to those of the remaindermen. The learned judge was also care- ful to limit the extent of his judgment to cases where no undue delay had taken place, and no depreciation was proved. 5. Tenant for life not entitled to whole income of destructible property or unauthorized investments if settlement silent. — In the leading case of Brown v. Gdlathj {a), the testator, who was a shipowner, directed his trustees to convert his personal estate into money, when and in such manner as they should see fit, and gave them power to sail his {p) Hope V. D'Hedouville, (1893) 2 Ch. 361. \q) 2 Ch. App. 751 ; and see also Hume v. BicJiardson, 4DeG., F. & J.29. 282 THE trustees' duties. — INCOME AS BETWEEN ships -until tliey could be disposed of satisfactorily. The proceeds of his personal estate were then settled upon tenants for life with remainders over. The will contained a wide power of investment in specified securities. On his death the testator possessed (1) numerous ships; (2) securities falling within those authorized by the will ; and (3) shares and investments not so authorized. The ships could not be immediately sold, nor could the un- authorized securities. Both, pending sale, pro- duced a high rate of income ; and the question arose, whether the tenants for life were entitled to the whole of that income, or only to some, and if so, what, proportion thereof? In giving judg- ment, Lord Cairns said : " We find no indication whatever of an intention that the ships were to remain unconverted for any specific time. The testator, who had been engaged in the shipping business, knew perfectly well, and shows that he knew, that some time would necessarily be taken in converting the ships ; and therefore he very wisely provided that, until they were sold, the- executors should have a power (which otherwise they would not have possessed), viz., the power to sail the ships for the purpose of making profit. But, in giving that power, he does not give it as a power to be exercised for the benefit of the tenant for life as against the parties in remainder, or for the benefit of the parties in remainder as against the interest of the tenant for life, but says that it is to be exercised for the benefit of the estate, meaning, as I apprehend, for TENANT FOR LIFE AND REMAINDERMAN. 283 tlie benefit of the estate generally, without dis- arranging the equities between the successive takers. In that state of things, it seems to me that the case falls exactly within the third divi- sion pointed out by Sir James Parker, in the case of Meyer v. Simonsen (r), and that a value must be set upon the ships as at the death of the testator, and the tenant for life must have 4 per cent, on such value, and the residue of the profits must of course be invested and become part of the estate. Then, secondly, as to the authorized securities, the tenant for life is, in my opinion, entitled to the specific income of the securities, just as if they had been 3 per cent, consols. I understand the words of the will as amounting to the constitution by the testator of a larger class of authorized securities than this court itself would have approved of, and the coiu-t has merely to follow his directions, and treat the income accord- ingly, as being the income of authorized securities. Then comes the third question in the case, the securities not ranging themselves under any of those mentioned in the last clause of the will. As they do not come within the class of authorized secmities, it was the duty of the trustees to con- vert them at the earliest moment at which they properly could be converted. I do not mean to say that the trustees were by any means open to censure for not having converted them within the year after testator's death, but I think that the (r) 5 De G. & S. 723. 284 THE trustees' duties. INCOME AS BETWEEN rights of the parties must be regulated as if they had been so converted. I think the proper order to make, is that which was made in Dimes v. Scott (s), followed by Y.-C. Wigram in the case of Taylor v. Clark {t), namely, to treat the tenant for life as entitled, during the year after the testator's death, to the dividends upon so much 3 per cent, stock as would have been produced by the conver- sion and investment of the property at the end of the year." It will be perceived that his Lordship speaks of 3 per cent, stock as the proper measure of the interest to be paid to the tenant for life in respect of the unauthorized securities pending sale. Whether, however, this holds good since consols were converted to 2| per cent., and a larger range of securities authorized for the investment of trust funds, appears somewhat questionable. It is however submitted that consols, being the stock most favoured by the court, would still be the criterion of what the tenant for life ought to be allowed (u). G. Tenant for life entitled to part of corpus of non-income bearing property when realized. — In the above cases, the income actually received by the trustees exceeded that which they were autho- rized to pay to the tenant for life ; but the same principle applies in favour of the tenant for life, where the property is not presently saleable or (s) 4 Euss. 195. {t) 1 Ha. 161. {u) See per Kokewicli, J., in Hope y. D^HedouviUe, (1893) 2 Ch. at p. 368. TENANT FOR LIFE AND REMAINDERMAN. 285 realizable except at an unreasonable loss, and, pending realization, produces no income. For instance, where part of the estate consists of a policy of assurance on another's life, which does not fall in for some years after the testator's death, it would be unfair to the tenant for life that he should lose all the intervening income. In such cases, when it does fall in, the money must be apportioned, as between capital and in- come, by ascertaining the sum which, put out at 4 per cent, per annum on the day of the testator's death, and accumulated at compound interest with yearly rests, and deducting income tax, would, with the accumulations, have produced the amount actually received. The sum so ascertained must be treated as capital, and retained by the trustees; but the residue is income, and must be paid to the tenant for life {x). 7. Income derived fi'om property of wMch testator was mortgagee in possession. — Where part of a testator's residuary estate consisted of a colliery of which he was mortgagee in possession, the question arose as to how accumulations of the income, derived from working the colliery since the testator's death, were to be apportioned be- tween tenant for life and remaindermen. It was held that the proper principle was, that so much as would, if invested at the testator's death at 4 per cent, with yearly rests, have amounted to (cc) lie Earl of Chesterfield, 24 C. D. 643 ; and see also Massy v. Gahan, 23 L. E. Ir. 518. 286 THE trustees' duties. the sum in the hands of the trustees, should be treated as capital and the rest as income {y). In other words, the income received from the colliery, less 4 per cent., was considered as received on capital account, the 4 per cent, being paid to the tenant for life without prejudice to his rights to further allowances on account of interest in the event of the colliery being realized. 8. Corpus realized by insuiScient security where ^.^ interest in arrear. — Where a trust security turns ^(-.,1, out to be insufficient upon realization, and interest is in arrear, it is obvious that to attribute the whole amount realized to capital account would be unduly favouring the remaindermen at the expense of the tenant for life whose income is in arrear. In such cases, therefore, the security is treated as if it had been a secmnty for the amount ■J realized, plus the interest which has actually been received by the tenant for life. The sum thus ascertained is then divided between tenant for life and remaindermen, in the proportion which the interest (at the stipulated rate) which the tenant for life ought to have received, bears to the capital sum which was secured by the mortgage, the tenant for life giving credit for all income actually received by him (s) . (y) Re GoMen, Teague v. Fox, (1893) 1 Ch. 292. (z) Be Foster, Lloyd v. Carr, 45 C. D. 629 ; Be Ancketill, 27 L. E. Ir. 331. -H' i-t. \K Cf-wv-'l-* INCIDENCE OF OUTGOINGS. 287 Art, 39. — Diif// of Trustee in relation to the pay- ment of outgoings out of Corpus and Income respectively. Subject to the directions of tlie settle- ment, and of particular statutes — a. The corpus bears capital charges, and the income bears the interest on them [a). /3. The income bears current expenses incident to the possessory owner- ship of property (^) except the cost of repairs {c). i p^ ^' y. Where repairs are necessary (c?), ^ i>MiX»^ or fines become payable for the |l^ t*-C6***^ ' renewal of leases (c), application ^i^^^^/^^T should be made by the trustees to the court, which will give directions for the raising of money to pay for (a) Marshall v. Croivtlier, 2 0. D. 199 ; Whitlread v. Smith, 2 D., M. & Gr. 741 ; and see and consider Norton V. Johnstone, 30 C. D. 649, {b) Fountain v. Pellet, 1 V. jun. 337, 342, rates and taxes ; Shore v. Shore, 4 Drew. 510, receiver's commission and expenses of passing accounts. (c) He Courtier, Coles v. Courtier, 34 C. D. 136. (d) Per Cotton and Lindley, L.JJ., Be Ilotchkys, Frelce V. Calmady, 32 C. D, 408. (e) Seton on Decrees, 4tli ed. 1270 ; WJiite v. White, 9 V. 556 ; Nightingale v. Lawson, 1 B. 0. C. 440. The law as between tenant for life and remaindermen in respect to renewal of leases is not altered by sect. 19 of the Trustee Act, 1893 {Re Baring, Jeune v. Baring, (1893) 1 Ch. 61). 288 THE trustees' duties. them in such a way as to distribute the burden equitably between, in- come and corpus. . All costs incident to the protection of the trust property, including legal proceedings, are borne by )u.-U.. corpus (/) unless they relate ex- I clusively to the tenant for life {g). Illust. — 1. Express direction. — A testator created a trust of certain leasehold property, to which was annexed a perpetual right of renewal from time to time, on payment of a fine. The will directed the trustees to renew the leases " out of the annual rents and profits," hut empowered them, in case from any cause the money required to pay the fines should not he produced "hy the ways and means aforesaid," to mortgage the pro- perty for the purpose of raising the fines. On these facts it was held that, the rents heing suffi- cient for the purpose, the fines ought to he paid out of income {h) . The Master of the Rolls, in giving judgment, said : — " I think, on the con- struction of this deed, that renewal fines are pay- ahle out of income. I think the words in the first part of the deed are clear, that the trustee shall (/) Lord Brougham v. Poulett, 19 B. 135; Sanders v. Miller, 25 B. 154 ; Be Earl De la Warr's Estates, 16 C. D. 587 ; Stott V. Milne, 25 C. D. 710 ; explained by Andrews V. Weall, 37 W. E. 779. {g) See Re Marner, 3 Eq. 432 ; Re Evans, 7 Ch. App. 659 ; Re Smith, 9 Eq. 374. (/i) Selhy V. Wood, 29 B. 482. INCIDENCE OF OUTGOINGS. 289 pay the fines, fees, and expenses attending such renewal from time to time ' by and out of the annual rents, issues, and profits of the said here- ditaments, parts, shares, and premises.' This case is distinguishable from Allan v. Backhouse {i), where tlie direction was to raise it out of rents and profits. Here it is to pay it out of the annual rents, issues, and profits. I also think that the subsequent provision does not give the trustee the option of raising the fines out of the rents or by mortgage, as in Jones v. Jones (A:), Here it is impossible to say that the money has not been produced ' by the ways and means aforesaid.' The proviso gives power to raise the fines by mort- gage in three cases : — (1) If the money shall not be produced ; (2) in case the trustee requires money to pay off the mortgages ; or (3) in case he requires it otherwise in connection with the trusts of these presents. That means in matters other than and besides those previously enumerated. I am of opinion, therefore, that the case of Joies v. Jones does not apply here. There the direction was to pay the fines either out of the rents or by mort- gage, in which case the trustees had a discretion." 2, Statutory indication. — By the 32nd section of the Succession Duty Act (/) personal property settled upon different persons in succession is to be {i) 2 V. »fe B. 65, in wluch it was held, that as a gift of rents -was equivalent to a gift of corpus, so a direction to renew out of rents was equivalent to a direction to renew out of corpus. {k) 5 Ha. 441. (/) 16 & 17 Yict. c. 51. U. T. U 290 THE trustees' duties. treated, for the purposes of the act, as if it were bequeathed by the predecessor to the successor. The effect of this provision is, that the duty is a charge on capital, and where a tenant for life pays the duty he is, prima facie, entitled to a charge on the capital for the amount he has thus paid {m). On the other hand, succession duty on real estate is clearly payable out of income, by reason of the provisions of sect. 21. Again, compensation pay- able to an outgoing tenant under the Agricultural Holdings Act, 1883, is, by section 29, to be charged on corpus and income equitably, as the County Court judge may direct. 3. Charges and incumbrances. — Where a capital sum is secured on property, it is payable out of corpus, but the interest on it is payable out of in- come (n). And this rule obtains even where a debt is secured by, or is payable as, an annuity. In such a case the annuity must be valued, and the tenant for life will then contribute an amount equal to interest on the valuation at 4 per cent. (o). Arrears of interest on incumbrances accrued in the lifetime of the settlor, are a charge on corpus, the tenant for life merely paying interest on them [p) . (m) Cudden v. Cudden, 4 C. D. 583. \ri) Marshall v. Crowther, 2 C. D. 197; WMihread v. Smith, 3 D., M. & G. 741 ; and see AUhusen v. Whittell, 4 Eq. 295. (o) Bulwer v. Astley, 1 Ph. 422 ; Playfair v. Cooper, 17 B. 187 ; Ley v. Ley, 6 Eq. 174 ; Re Muffett, Jones v. Mason, 39 C. D. 534 (purchase-money consisting of a life annuity) ; and Re Bacon, Qrissell v. Leathes, 68 L. T. 522. ( p) Revel V. Watkinson, 1 V. 93 ; Playfair v. Cooper y 17 B. 187. INCIDENCE OF OUTGOINGS. 291 • 4. The strong inclination of the court to saddle capital charges on corpus, is well exemplified by the recent case of Norton v. Johnstone (q) . There, a testator had directed the income of certain estates to be accumulated until the amount of the ac- cumulations should be sufficient to pay off existing mortgages, and that, subject thereto, the property should be held to the use of the plaintiff for life, with remainders over. Before the accumulations were sufficient to discharge the mortgages, the mortgagees sold a part of the property, and, with the moneys so produced, and part of the moneys already accumulated, the mortgages were paid off. The tenant for life then claimed to be let into pos- session, and also to have the balance of the ac- cumulations paid to him. On the other hand, the remainderman urged that, inasmuch as the mort- gage debt had been paid off by means of a sale of the corpus, which was not what was contemplated by the testator, the accumulation of rents ought to continue, until such a sum was obtained as would be equal to the amount raised by the sale, and that the sum thus obtained ought to be employed in recouping the inheritance, the tenant for life receiving only the interest of it. Mr. Justice Pearson, however, decided in favour of the tenant for life, on the ground that the mortgage debts had been paid in a way different from that which (q) 30 C. D. 649 ; and see also Toivnson y. Harrison, 43 C. D. 55. u2 292 THE trustees' duties. the testator intended, and that he had not pro- vided for that event, and that consequently the ordinary rule as to the incidence of capital charges must govern the case. Where, however, on the expiration of a lease granted by the settlor, the tenant for life is obliged to pay compensation for improvements to the out- going lessee under a covenant in the lease, he has no claim to saddle the compensation on corpus. For as Jessel, M. R., said : *' If he lives long enough he will let the land again, and get the outlay from the incoming tenant, and so if he recovered it now he would be repaid twice over" (r). However, this does not apply to compensation payable under the Agricultural Holdings Act, 1883, as the incidence of such compensation is expressly provided for by section 29 of that Act. 5. Calls on shares. — Calls on shares which form part of a trust estate, are outgoings attributable to capital and not to income, and are accordingly payable out of corpus (s). 6. Current annual charges. — All charges of an annual character, except annual charges to secure capital sums, are payable out of income, for other- wise the corpus would inevitably decrease year by year, and would eventually be swallowed up. Thus, the income must bear rates and taxes (^), the rent payable for leasehold hereditaments. (r) Mamel v. Norton, 22 C. D. 769. (s) Todd V. Moorhouse, 19 Eq. 69. {t) Fountain v. Fellett, IjV., jun. 337, 342. INCIDENCE OF OUTGOINGS. 293 annuities charged on income (u), the commission or poundage payable to a receiver, and the expenses incident to the preparation and passing of his ac- counts (j^). So where a life policy forms part of the settled property, the premiums are payable out of income and not capital (y). On the same ground, where a rent-charge is redeemed by the tenant for life, he is only entitled to be recouped, out of corpus, the amount paid, less the value of the redemption to his life estate (2), Where trustees are directed to insure the trust property against loss or damage by fire, the premiums must be borne by income. Up to the end of 1888, it was questionable whether trustees could lawfully expend trust moneys in insuring against loss or damage by fire. However, by section 18 of the Trustee Act, 1893, trustees are authorized to make such insurances to any amount not exceeding three-fourths of the value of the building or pro- perty insured, and to pay the premiums out of income ; but the section does not apply to simple trusts. 7. Losses on trust business. — Where a business' is vested in trustees in trust for successive tenants for life and remaindermen, the net losses on one year's trading must, under ordinary circinnstances, be made good out of the profits of subsequent (w) Piney. Cooper, 17 B. 187, 193; Miller \ . HuddUston, 3 M. & G. 513. {x) Shore v. Shore, 4 Drew. 510. (y) Be Waugh, 25 W. E. 555. (z) Be Duke of Leinster, 21 L. E. Ir. 152. 294 THE trustees' duties. [ years, and not out of capital (a) . For the out- [ goings of a business are part of tlie regular current expenses, and there can be no profits until all losses are paid, whether such losses are incurred in a year in which gross profits exceed the losses, or were incurred in prior years. The same rule, however, does not seem to apply where a business is not carried on under a direction in the settle- ment, but is merely carried on temporarily until it can be sold profitably. In such cases, the annual loss or profit (if any) ought to be apportioned between capital and income, by calculating the sum which, put out at interest at four per cent, per annum on the day when the business ought to have been sold, if it could have been, and accumu- lating at compound interest at the like rate, with yearly rests, would, together with such interest and accumulations, after deducting income tax, be equivalent at the end of each year to the amount of the loss or profit sustained or made during that year, and then charging the sum so ascertained against, or crediting it to, capital, and charging the rest of the loss against, or crediting the rest of the profit to, income (b). 8. Secus where intention can be implied that losses shall be borne by capital. — However, where, on the facts, it appears to have been the settlor's intention, that losses on a trust business should be borne by capital, effect will be given to that (a) Upton v. Brown, 26 C. D. 588. (6) Be Hengler, Froivde v. Hengler, (1893) 1 Oh. 586. J INCIDENCE OF OUTGOINGS, 295 intention. For instance, wliere partners carry on a business, eacli partner having the right to bequeath his share, and it has beoi the partnership custom to write off the losses of unprosperous years from each partner's share of capital, that custom will be continued, even as between a tenant for life and remainderman, in whose favour one of the partners has bequeathed his share (c). As Pear- son, J., put it: " As I understand the will, he [the testator] intended that the business should be carried on in the same way in which it was carried on during his lifetime, with such modifications only as the change of circumstances would render necessary, and which, in the discretion of the trustees, acting under the powers given to them by his will, they might agree to. Subject to that, I conclude, from the terms of the will, that the testator's intention was that the business should proceed as it had proceeded, and that the daughter should be entitled to one moiety of those profits which he himself would have received if he had lived and had continued to be a partner in the business." 9. Repairs. — Very generally, well drawn settle- ments of house property provide that the trustees shall keep it in repair, and insured against loss or damage by fire, out of the rents and profits. "Where this is omitted, a tenant for life, whether legal {d) (c) Goiu V. Furster, 26 C. D. 6'72. (d) lie Cartivn'ght, Avis v. Neiuman, 41 C. D. 532, over- ruling the so-called doctrine of permissive waste. 296 THE trustees' duties. or equitable (e), is not compellable to keep the property in repair, and, not infrequently, the consequence is extremely embarrassing and pre- judicial to all parties. In the case of legal estates the court, apparently, has no jurisdiction to make any order charging the cost of repairs, or any part of it, on corpus (./'). Where, however, the legal estate in fee is in the trustees (at all events where they have a power of, or trust for sale (g)), it would seem that the court has jurisdiction to make an order empowering them to raise money for making repairs necessary for the preservation of the pro- perty {h), or even for erecting additional buildings necessary for rendering the property tenantable or I saleable (/), and apportioning the cost equitably 'between income and corpus (/.•). Indeed, it has been held that trustees may, without any order, do such repairs to leasehold property as are necessary to prevent a forfeiture of the lease (/), and to repay themselves out of income (/), but without prejudice to the rights of tenant for life and (e) Be Courtier, Coles v. Couriitr, 34 C. D. 136. (/) Re Be Teissier, De Teissier v. De Teissier, (1893) 1 Ch. 153. {g) See per Chitty, J., Be De Teissier, De Teissier v. De Teissier, supra. (Ji) See per Cotton and Lindley, L.JJ., Re Hotchhys, Freke v. Culmudy, 32 0. D. 408 ; Re Courtier, Coles v. Courtier, 34 C. L). 136; hut see contrei Hibhert v. Cooke, 1 S. & S. 552 ; and Dent v. Dent, 30 B. 363. {i) Comvay Y. Ftnton, 40 C. I). 512; Re Household, 27 C. D. 553 ; and see Drake v. Trefusis, 10 Ch. App. 364, and Frith v. Cameron, 12 Eq. 169. {k) Re Hotchkys, Freke v. Calmady, supra. (/) Be Fowler, Fowler v. Odell, 16 C. D. 723. INCIDENCE OF OUTGOINGS. 297 remaindermen inter se {m). But this was ex- pressly on the ground that trustees may expend money by way of salvage, and they have a lien both on income and corpus for expenses properly incurred by them as will be seen later on (w). However, the practitioner is emphatically warned that it would be highly dangerous to advise trustees to take any such responsibility upon themselves without the direction of the court (which can now be obtained on originating sum- mons) ; for if they should be afterwards attacked, either by tenant for life, or particularly by the remainderman, it might be very difficult to prove (and the onus of proof would be on the trustees) that the expenditure was really necessary (o) . It must also be pointed out, that although such ex- penditure has been allowed without the authority of the court, in order to avoid forfeiture of a lease, it has, so far, never been decided whether the same rule would be applied to prevent physical deteriora- tion of the estate, ex. gr,, to prevent the collapse of a house or other building (p). 10. Renewal of renewable leases. — By sect. 19 of the Trustee Act, 1893, a trustee of renewable (m) He Hotchkys, Freke v. Cahnady, supra. (n) Art. 65, infra. (o) See per Kekewich, J., Conway v. Fenton, 40 C. D. at p. 518; and per Kay, J., in Be Jackson, Jackson v. Talbot, 21 C. D. at p. 789. {•p) It would seem, however, that the court could and would authorise such expenditure if applied to, notwith- standing Hibhert v. Cooke and Dent v. Dent, supra, there being no longer any duty on a tenant for life to repair out of his own pocket. With regard to the repair of infants' estates, the reader is referred to the classitication. made by Mr. Kenyon Parker, set forth in 21 C. D. at p. 787. 298 THE trustees' duties. leases may, if he thinks fit, and must if required by any beneficiary so to do, use his best endeavours to obtain a renewal ; and for that purpose is em- powered to surrender existing leases. But where the beneficiary in possession is entitled, under the settlement, without any obligation to renew or to contribute to the renewal, then the Act does not apply unless he gives his consent. The 2nd sub-section provides that, " If money is required to pay for the renewal, the trustee effecting the renewal may pay the same out of any money then in his hands in trust for the persons beneficially interested in the lands to be comprised in the re- newed lease, and if he has not in his hands suffi- cient money for the purpose, he may raise the money required by mortgage of the hereditaments to be comprised in the renewed lease, or of any other hereditaments for the time being subject to the uses or trusts to which those hereditaments are subject, and no person advancing money upon a mortgage purporting to be under this power shall be bound to see that the money is wanted, or that no more is raised than is wanted for the purpose." This section applies to trusts created before, as well as after, the Act, but is of course subject to the directions of the settlement. It has been recently held by Kekewich, J., that its object was merely to assist trustees in renewing leases, and in no way affects the ultimate incidence of the expense as between tenant for life and remaindermen {q) . {q) Be Baring, Jeune v. Baring, (1893) 1 Ch. 61. INCIDENCE OF OUTGOINGS. 299 1 1 , Fencing of unfenced land. — Where the ques- tion arises as to the incidence of the cost, not of mere repairs, but of putting property into a better condition than it was originally in, it would seem that no part of the cost falls on income. Thus, the expense of fencing waste lands granted to a trustee for the benefit of the estate, must be paid out of corpus exclusively (r). 12. General costs incident to administration. — ' Legal expenses incident to the administration of a trust almost exclusively fall on capital, unless the settlor has expressly provided for them ; for they are for the benefit of all persons interested. Thus, the costs of the appointment of new trustees (s) , the costs incident to the investment or change of invest- ment of trust funds (/), the costs of obtaining legal advice (w), and of taking the direction of thecom-t (ic), the costs of an administration action (x), the costs of paying money into court under the Trustee Belief Act (y) , the costs of bringing or defending actions against third parties for the protection of lull^j the estate (:;), and the like, are all payable out of , (r) Earl Cowley v. WeUesley, 1 Eq. 656. (s) lie Fellows, 2 Jur., N. S. 62 ; Ee Fulliam, 15 ib. 69; Ex parte Bavies, 16 ib. 882. {t) But secus, of petition, to vary investment of funds in court, see Equitable Society v. Fuller, J. & H. 379. {h) Foole V. Pass, 1 B. 600. {w) Re Elmore, 9 W. E. 66 ; Re Leslie, 2 C. D. 185. {x) Re Tnrnley, 1 Ch. App. 152. {y) Re Whitton, 8 Eq. 353. (z) See Stott v. Milne, 25 C. D. 710; and see also Re Earl Be la Warr's Estate, 16 C. D. 587, and Re Earl of Berkeley's Will, 10 Ch. App. 56. And as to defending 300 THE trustees' duties. corpus. On the otlier hand, where money is paid into court under the Trustee Relief Act, the costs of all necessary parties to a petition for obtaining an order for the payment of the income to the tenant for life have been held to be payable out of income {a). But where a testator gave a fund to trustees upon trust for investment in land, which was to be settled to the use of several persons suc- cessively for their lives, and the fund was paid into court in an administration suit, it was held, by Malins, V.-C, that the costs of a petition by a tenant for life for payment of the dividends to him, were payable out of corpus {h). As the Y.-C. said: — "If the fund had been invested in land, the tenant for life would simply have entered into possession without incurring the expense of a petition, and I do not see why he should be in a worse position because the fund is in court. The fund'remains here for the advantage of all persons interested, and it seems to me that all should bear the costs of this petition." foreclosure actions and obtaining transferees of the mort- gage, see More v. More, 37 W. E. 414. |i (a) Re Marner, 3 Eq. 432 ; Be Evans, 1 Ch. App, 609 ; Re Whitton, 8 Eq. 352 ; Re Smith, 9 Eq. 374. The costs of a petition for advice as to the application of income have been ordered to be borne by income: Aiion., 8 W. E. 333; 2 L. T. 71; Re T , 15 0. D. 78. But secus, as to costs of petition in an. administration suit for payment of income to tenant for life, which are payable out of corpus: Lovguet v. Hockley, 22 L. T. 198; Scrivener V. Smith, 8 Eq. 310; but see Eady v. Watson, 12 W. E. 682, contra. (ft) Scrivener t. Smith, supra. TRUSTEE TO EXERCISE REASONABLE CARE. 301 Art. 40. — Duty of Trustee to exercise reasonable Care. (1) Trustees are not insurers (--« u~*-<<» » 318 THE trustees' duties. And, on similar grounds, trustees ouglit to ac- cumulate infants' property by way of compound interest (r) . 18. Not bound to insure. — A trustee is not bound to insure leasehold premises against loss by fire. In Bailey v. Gould (s), it was sought to charge an executor who .had neglected to continue an insurance ; but Baron Alderson said : "It (the insurance) was no claim existing at the time of the testator's decease. What then existed the executors did possess, that is, the leasehold pre- mises. Being in their possession, a fire, for which they were not to blame, occurred. It was a mere misfortune which took place. Can the loss be said to have happened by their default in not keeping up a contingent claim ? " Moreover, it was for many years considered doubtful whether trustees could lawfully insure trust property ; but by sect. 18 of the Trustee Act, 1893, they are ex- pressly authorized to do so to an amount not exceeding three-fourths of the value of the pro- perty insured, and to pay the premiums out of the income of that property or of any other property subject to the same trusts. The section does not, however, apply to property held on simple trust for beneficiaries absolutely, and is, of course, sub- ject to the express directions (if any) of the i settlement. 19. How far bound to see to repairs. — Trustees (r) Conveyancing and Law of Property Act, 1881, sect. 43. (s) 4 Y. & C. Ex. 221 ; and Dolson v. Land, 8 Ha. 216. TRUSTEE TO EXERCISE REASONABLE CARE. 319 are generally bound to see that trust premises do not fall into decay {f). But, as we have seen, the cost of repairs is not thrown exclusively on in- come (h) , and trustees should apply to the Court for directions as to raising the necessary money {t). It has, however, been held that when leasehold houses are held in trust to receive the rents and pay them to A. for life, and after his death in trust for B., the trustees, in order to avoid for- feiture, are entitled to apply the rents in keeping the houses in a proper state (.r). But this is with- out prejudice to the ultimate incidence of the costs {//) . 20. Mala fides. — Trustees being liable for gross negligence, are, a fortiori, liable where they com- bine reckless disregard of the interests of their cestuis que trusts with mala fides. Thus, where one trustee retires from the trust in order, as he thinks, to relieve himself from the responsibility of a wrongful act meditated by his co-trustee, he will be held as fully responsible as if he had been particeps criminis (s). {t) Per Cotton, L.J., Be Hotchhjs, Freke v. Galmady, 32 C. D. 408. (m) Art. 39, supra. (^) Re Fowler, Foioler v. Odell, 16 0. D. 723. But see Re Courtier, Coles v. Courtier, 34 C. D. 136, and. also Art. 75, infra. {y) Re Courtier, Coles v. Courtier, supra, and Re Hotch- hys, Frehe v. Calmady, supra. (z) Norton v. Pritchard, Reg. Lib. B. (1844), 771 ; Le Hunt V. Welster, 9 W. E. 918; Palairet v. Carew, 32 Beay. 567. 0- 320 THE TRUSTEES DUTIES. 21. Quasi trustees. — Even a quasi trustee, such as a vendor before completion of the sale, is obliged to take due care of the property, and to see that it does not become unnecessarily depre- ciated by want of care (a) . L'\..lV^^ , Art. 41. — Buti/ of Trustee in relation to the Invest- ment of Trust Funds. 1(1) A trustee can only lawfully invest trust funds upon securities authorized . by the settlement or by statute (b) ; I and not upon the latter if the settle- ment forbids such investment (c). (2) Even with regard to securities so authorized, a trustee is not free from liability, if, having regard to all the circumstaDces, and to the rules laid down in Arts. 36 and 40, it be im- ' proper or imprudent to make such investment (d). \S) In particular, in investing on mort- gage, he should (unless expressly (a) See Earl of Egmont v. Smith, 6 C. D. 475. {h) As to what securities are authorized by statute, see infra, p. 330 et seq. (c) Trustee Act, 1893, sect. 1. [d) See per Cotton and Lopes, L.J J., in Re Whiteley, WMteley v. Learoyd, 33 C. D. 347 ; aff. 12 App. Cas. 727. PERMISSIBLE INVESTMENTS. 321 authorized by the settlement) accept only a first legal mortgage (e) of freehold or copyhold property, which is not of a wasting character (/) ; should never join in a contributory mortgage ((/) ; and should always ob- tain a report as to the value of the property made by, and act upon the advice as to its propriety as a trust investment of, a person whom he rea- sonably believes to be an able practical surveyor or valuer, instructed and em- ploj^ed indej^endently of the owner of the property ; and should never ad- vance more than two-thirds of the value stated in such report (/«). (4) A trustee (unless authorized by the settlement), must not apply for, or hold any certificate to bearer issued under the authority of — a. The Indian Stock Certificate Act, 1863; (e) Norn's v. Wright, 14 Bea. 308 ; Lockhart v. ReiUy, 1 De G. & J. 476; and Swaffield v. Nelson (1876), p. 255. (/) Be Whitelty, Learoyd v. Whiteley, supra; Smethurst V. Hastincjs, 30 C. D. 490. As to copyholds, Wyatt v. Sharratt, 3 Bea. 498. (g) Webb v. Jonas, 39 C. D. 660; Re Massinghird, Clark V. TreJawney, 63 L. T. 290. (A) Trustee Act, 1893, sect. 8. U. T. T ■C-i^ U* t- 322 THE trustees' duties. 0. The National Debt Act, 1870 ; y. The Local Loans Act, 1875 ; or ^. The Colonial Stock Act, 1877(/^). (5) Where there is power to invest, such power carries with it the power to vary investments from time to time (z). (6) Where j^art of a testator's residuary- trust estate consists of securities on which the trustees are permitted to invest, they are not bound to convert I and then to procure others of the same nature, unless, having regard to all the surrounding circumstances, it would be imprudent to retain them (j) . Modern extension of trust securities. — For many years the court would not (in the absence of express direction) recognize any form of security as proper for the investment of trust funds, except (A) Trustee Act, 1893, sect. 7. Nothing in this section, however, is to impose on the Bank of England or of Ireland, or on any person authorized to issue any such certificate, any obligation to inquire whether a person ap- plying for such certificate is or is not a trustee, or to sub- ject them to any liability in the event of their granting such certificate to a trustee, or to invalidate any such certificate if granted. (i) Be Clergy Orphan Corporation, 18 Eq. 280; and see also Re Dick, Lopes v. Hume-Dick, (1891) 1 Ch. 433; aff. (1892) App. Cas. 112. (J) See Ames v. Parkinson, 7 Bea. 379, apparently not even a second mortgage, Robinson v. Robinso7i, 1 D. M. & G. 252. PERMISSIBLE IN VESTMENTS. 323 Britisli Government securities (/>•). During tlie last fifty years, however, public sentiment has caused Parliament, cautiously and gradually, to intervene ; and now, trustees are allowed, apart from the directions of the settlor, a consider- able choice of investments of a sound character. This action of the legislature is no doubt largely owing to the altered circumstances of the time. Half a century ago, government securities yielded a far larger interest than that now produced by railway debentures or sound mortgages, and the gradual shrinkage of interest on consols produced a real hardship on tenants for life, who were probably the persons whose interests were most dear to the settlor. The value of land, too, contemporaneously with the birth of the railway system, began to rise with great rapidity, so that most persons (wrongly, as it now appears) con- sidered that in a small country with an increasing population, the price, and therefore the security afforded by a mortgage of land, would continually increase. Moreover, fifty years ago, railways were in their infancy, and theii* success problematical, and the security of their mortgages (now uni- versally converted into debenture stocks) was considered to be scarcely an investment for other (A-) In spite of some dicta to tlie contrary, it was at least very doubtful whether, in the absence of express directions, trustees were entitled to invest on real securi- ties prior to the Act 22 & 23 Vict. c. 35 : Ilahy v. BidehaJgh, 7 De G., M. & a. 104. y2 324 THE trustees' duties. than persons of a speculative disposition. All such views have, of course, long since disappeared, and the security of the debenture stocks of our great railway companies is considered by men of business as but little inferior to that of the government itself. Still more recently, the greater corporate boroughs have obtained parliamentary sanction to borrow, for certain specified public purposes, on the security of their rates, laying by each year a proportion of the sum borrowed as a sinking fund. It is not surprising therefore, con- sidering these facts, and the great growth of trust funds caused by the vast accumulation of wealth made in commerce since the discovery of Australia and the introduction of steam power, that par- liament should have greatly enlarged the powers of trustees with regard to investment. Thus, in 1859 trustees were authorized (unless expressly forbidden by the settlement) to invest in real securities in any part of the United Kingdom, or on stock of the Banks of England or Ireland, or on East India Stock, provided iliat such investment was in otJter respects reasoncdile and proper {I) . It was held, however, that this act was not retrospec- tive, and did not apply to existing settlements ; and consequently, in the course of the next session, it was made retrospective i^m) ; and by the same act, trustees were further empowered to invest in stocks in which cash under the control of the court (0 22 & 23 Vict. c. 35, s. 32. (m) 23 & 24 Vict. c. 38, s. 12. PERMISSIBLE INVESTMENTS. 325 might be invested {ii). This act contained no ex- ception of funds with regard to which trustees were forbidden to invest on other than specified securities (o). By acts passed in 1865 and 1871, trustees with express power to invest in the shares, bonds, or securities of companies incorporated by act of parliament, were authorized to invest in mortgage debentures or debenture stock {p). In 1867 an act was passed extending the meaning of East Indian Stock to Indian Grovernment Securities, and enact- ing that trustees might invest in any securities guaranteed by parliament {q). In 1871, trustees were authorized to invest in stock of the Metro- politan Board of Works (now the London County Council) (/■) ; and in 1875, trustees, with certain express powers of investment, were authorized to invest in securities issued under the Local Loans Act, 1875 (.s) ; and, by divers Local Acts, obtained by municipal corporations, trustees who were by their settlements authorized to invest in railway deben- tures or debenture stocks, were further authorized to invest in the stock issued by such municipal corporations, at a price not exceeding the redemp- tion price (f) . Finally, by the Trust Investment {n) 23 & 24 Vict. c. 38, s. 11. (o) Fie Wedderbnrn, 9 C. D. 112. Ip) See 28 & 29 Vict. c. 78, s. 40 ; and 34 & 35 Vict. c. 27. {q) 30 & 31 Vict. c. 132, ss. 1 & 2. (r) 34 & 35 Vict. c. 47, s. 13. (s) 38 & 39 Vict. c. 82, s. 27. (t) Sucli investmeuts were authorized ■with, regard to the following corporation stocks by the following acts, 326- THE trustees' duties. Act, 1889 (now repealed and re-enacted by the Trustee Act, 1893), the powers of trustees in relation to investment are greatly extended, as will be seen hereafter. Illust. — 1. Investments authorized by the settle- ment itself. — Although the range of trust invest- ments has, as above stated, been greatly increased, the court still scrutinizes, with considerable jealousy, any direction to invest in securities not authorized by parliament ; and the following examples will show how careful a trustee ought to be, before assuming that the language of his settlement really authorizes investments which it appears at first sight, and to the average uncritical reader, to do. Thus, where a settlor empowers his trustees to place out the trust fund at interest " at their discretion," it seems to be the better opinion, that the discretion of the trustees is limited to a dis- cretion as to which of the several forms of security authorized hy law they shall invest in, and does not viz. : — Brighton, 49 & 50 Vict. c. 64, s. 44 ; Birmmgham, Local Gov. Ord. 1880, art. 7; Croydon, 47 & 48 Yict. c. 141, s. 105; Cardiff, 47 & 48 Vict. c. 222, s. 127; Leicester, 47 & 48 Vict. c. 32, s. 63 ; Glasgow, 46 & 47 Vict. c. 106, s. 57 ; Southampton, 48 & 49 Vict. c. 170, s. 76 ; Sheffield, 46 et 47 Vict. c. 57, s. 44 ; Portsmouth, 46 & 47 Vict. c. 211, s. 74; Eotherham, 45 & 46 Vict. c. 237, s. 43 ; Wolverhampton, 45 & 46 Vict. c. 240, s. 42; Eochdale, 47 & 48 Vict. c. 123, s. 52 ; Southport, 48 & 49 Vict. c. 122, s. 107 ; Sunderland, 48 & 49 Vict. c. 183, s. 120 ; "Worcester, 48 & 49 Vict. c. 164, s. 80 ; Newcastle, 45 «fe 46 Vict. c. 235, s. 42. On the following stocks there "was no restriction as to trustees purchasing at or below the redemption price, viz. : — Bristol, 47 & 48 Vict. c. 255, s. 45 ; Hull, 44 & 45 Vict. c. 94, s. 10 ; Liverpool, 43 & 44 Vict. c. 207, s. 9 ; Swansea, 44 & 45 Vict. c. 107, s. 10; Nottingham, 43 & 44 Vict. c. 208, s. 10. PERMISSIBLE INVESTMENTS. 327 give them power to invest in securities not so authorized ; such, for instance, as ordinary railway stock {i(). And indeed the word "invest" seems to point to a loan and not to an employment in a trading speculation, as also does a direction to place out at interest (r) or on security {x). 2. So, again, where a testator directed the con- version of all his property, except money in the fimds, and the investment of the proceeds in government securities in England, it was held that Greek stock guaranteed by the British gov- ernment could not properly be said to come under the expression "the funds or government secu- rities in England" {y). 3. So, again, where trustees are authorized to retain a settlor's shares in a particular company, they must not accept new shares on reconstruction of the company {z) , nor, a fortiori, ought they to increase their holding in the company. They («) Bethell v. Abraham, 17 Eq. 24, per Jessel, M. E. ; and see Re Brown, Brown v. Brown, 29 C. D. 889, where this principle seems to have been admitted, although under the circumstances the court would not say that the trustees were liable. (?;) Bdliell V. Abraham, supra; and see Cock v. Good- fellow, 10 Mod. 489 ; Dickenson v. Player, C. P., Cooper's Cases, 1837-8, p. 178. (x) Harris v. Harris, 29 B. 107 ; Murphy v. Doyle, 29 L. E. Ir. 333 ; Re Kavanagh, 27 ib. 495. [y) Barnie v. Getting, 2 Coll. 324. This was of course before the passing of the statutes by which trustees are now authorized to invest in foreign securities guaranteed by the British Government. (z) Bmknill v. Morris, 52 L. T. 462 ; and see also Blount V. a Connor, 17 L. E. Ir. 620. 328 THE trustees' duties. may, however, accept an allotment of bonus shares, but must promptly sell them (a). 4, On the other hand, in Cadett v. Earl{h), it was held that a direction to invest in foreign government securities authorized an investment in the securities of individual states of the United States of America, although they are not inde- pendent nations. And in recent cases it was held that a power to invest in the securities of any " public company " extended to the securities of companies incorporated under the Companies Acts, and was not restricted to companies incorporated by statute or royal charter [c) ; and that a company incorporated by charter under the provisions of a general Act of Parliament was a " company incor- porated by statute " {cl). 5. It need scarcely be pointed out that, in the absence of clear, express and imperative direction, trustees (even where they have a discretion) can- not, without breach of trust, lend trust fund on the security of a personal promise, or of personal property, however apparently trustworthy {e) ; and, as Lord Kenyon said in Holmes v. Dring^ this " ought to be rung into the ears of every one who acts in the character of trustee" (/). It is in) Re Pagh, W. N. 1887, p. 143. (b) 5 C. D. 710; and see also Arnould v. Grinstead, 21 W. R. 155. (c) Rf Sharp, RicMt v. Sharp, 45 C. D. 286. (of) ElvcY. Boyton, (1891) 1 Ch. 501. (e) Shjies V. Gye, 1 M. & G-. 423; Child v. Child, 20 Bea. 50 ; Mills v. Osborne, 7 Sim. 30. (/) 2 Cox, 1 ; Focock v. Btddington, 5 V. 794; Potts v. PERMISSIBLE INVESTMENTS. 329 true that in one case, Bacon, V.-C, held, that where trustees were authorized to invest on real or personal security, they might permit money to remain merely on the security of a personal pro- mise or bond (f/) ; but it is humbly submitted, that, however this might be if the expression "personal security" stood alone, its juxtaposition in this case with the alternative " real security " ought to have restricted its meaning to "the secu- rity of personal property," and that to enlarge it so as to cover the security of a personal promise was scarcely justified {h). And moreover, as the direction was not imperative, it is difficult to understand on what principle the Vice- Chancellor authorized such an investment. Anyhow it is quite clear that where trustees, authorized to invest on personal security, do so merely for the purpose of accommodating the borrower, and not bona fide for the benefit of their beneficiaries, they will be liable for any loss, notwithstanding the autho- rity (/). But of course if the trustees are not merely authorized, but are imperatively directed to invest on certain forms of investment, they are bound to obey the direction, however much they may disapprove (y). And also where they are Button, 11 Eq. 433; Bethell v. Abraham, 17 Eq. 24; Bi/der V. Bicker ston, 3 Sw. 81, n. (a). (f/) See Pickard v. Anderson, 13 Eq. 608, sod queere. (/<) See Re Johnson, W. N. 1880, p. 72, (?') Laugston v. OUphant, G. Coop. 33 ; and see Steivart V. Sanderson, 10 Eq. 26 ; and Francis v. Francis, 5 D. M. & G. 108. (y) Cadogan v. Essex [Lord), 2 Drew. 227 ; Beauclerky. Ashburnham, 8 B. 322. And see now Be Wedderburn, 9 C. D. 112. 330 THE trustees' duties. expressly authorized to allow money to remain on an unsatisfactory security for the purpose of con- veniencing a purchaser, they are justified in doing fio {k). 6. Again, a trustee must not, in the absence of express authority, invest on trade security ; as, for instance, in the shares of a public company, which are in reality no security at all, but merely docu- ments conferring a right to speculative profits (/). It was on this ground that, before the passing of the acts of parliament before referred to, trustees were not entitled to invest, even in stock of the banks of England or Ireland, or in the stock of the old East India Company {)n). 7. Investments authorized by statute. — As above fitated, the powers of trustees as to investment have been from time to time extended by statute. By the Trust Investment Act, 1889 (now repealed and re-enacted by the Trustee Act, 1893, ss. 1 to 6), these statutes are amended and consolidated; and, as these statutory powers of investment are of supreme importance to trustees and their advisers, no apology is needed for setting them out in full. 8. The sections of the Trustee Act, 1893, above referred to, are as follows : — 1. A trustee may, unless expressly forbidden by the instrument (if any) creating tbe trust, invest any trust (7c) Be Hurst, Addison v. Topp, 63 L. T. 665. (Z) Harris v. Harris, 29 B. 107 ; Cock v. Ooodfellow, 10 Mod. 489. (to) Howe V. Lord Dartmouth, 2 Lead. Cas. 262. PERMISSIBLE INVESTMENTS. 331 funds in his hands, whether at the time in a state of in- vestment or not, in manner following, that is to say : (a) In any of the parliamentary stocks or public funds or government securities of the United King- dom: (b) On real or heritable securities in Great Britain or Ireland : (c) In the stock of the Bank of England or the Bank of •* i^* ^ -u k..^^ Ireland : '^^'7 " A^»v'^'= (d) In India three and a half per cent, stock and India ' '^ three per cent, stock, or in any other capital stock which may at any time hereafter be issued by the Secretary of State in Council of India under the authoritj'^ of act of parliament, and charged on the revenues of India : (e) In any securities the interest of which is for the time being guaranteed by Parliament {n) : (f) In consolidated stock created hy the Metropolitan Board of Works, or by the London County Council, or in debenture stock created by the receiver for the Metropolitan Police District : (g) In the debenture or rentcharge, or guaranteed or preference stock of any railway company in Great Britain or Ireland incorpoi-ated by special act of parliament, and having during each of the ten years last past before the date of invest- ment paid a dividend at the rate of not Jess than three per centum per annum on its ordinary stock (0) : (h) In the stock of any railway or canal company in Great Britain or Ireland whose undertaking is leased in perpetuity or for a term of not less than two hundred years at a fixed rental to any such railway company as is mentioned in sub-sec- {n) This includes Canadian 4 per cent, stock (Pacific Eailway), 36 & 37 Vict. c. 45. (0) See note (0), p. 333. 332 THE trustees' duties. tion (g), oither alone or jointly with any other railway company : (i) In the debenture stock of any railway company in India the interest on which is paid or guaranteed by the Secretary of State in Council of India : (j) In the "B" annuities of the Eastern Bengal, the East Indian, and the Scinde Punjaub and Delhi Railways, and any like annuities which may at any time hereafter be created on the purchase of any other railway by the Secretary of State in Council of India, and charged on the revenues of India, and which may be authorized by act of parliament to be accepted by trustees in lieu of any stock held by them in the purchased rail- way; also in deferred annuities comprised in the register of holders of annuity Class D. and annuities comprised in the register of annuitants Class C. of the East Indian Railway Company : (k) In the stock of any railway company in India upon which a fixed or minimum dividend in sterling is paid or guaranteed by the Secretary of State in Council of India, or upon the capital of which the interest is so guaranteed : (1) In the debenture or guaranteed or preference stock of any company in Great Britain or Ireland, established for the supply of water for profit, and incorporated by special act of parliament or by Eoyal Charter, and having during each of the ten years last past before the date of investment paid a dividend of not less than five pounds per centum on its ordinary stock : (m) In nominal or inscribed stock issued, or to be issued, by the corporation of any municipal borough having, according to the returns of the last census prior to the date of investment, a population exceeding fifty thousand, or by any county council, under the authority of any act of parliament or j^rovisional order : PERMISSIBLE INVESTMENTS. 333 (n) In nominal or inscribed stock issued or to be issued by any commissioners incorporated by act of parliament for the pui'pose of supplying water, and having a compulsory power of levying rates over an area having, according to the returns of the last census prior to the date of investment, a population exceeding fifty thousand, provided that during each of the ten years last past before the date of investment the rates levied by such commissioners shall not have exceeded eighty per centum of the amovint authorized by law to be levied : (o) In any of the stocks, funds, or securities for the time being authorized for the investment of cash under the control or subject to the order of the High Court (o), and may also from time to time vary any such invest- ment (p). (o) These at present (see R. S. C. Ord. XXII. r. 17) are rather more restricted than the statutory investments, except as to that specified in sub-sect, (g) of the act, with , regard to which all that the court requires is that the '^■•^-*- p ^ raHway company has paid a dividend (not necessarily of ^^^'-^ ip*u*> t*J 3 per cent.) on ordinary capital for ten vears next before '^*'^'^ " . the date of investment. The "City Editor" of "The ' " ' Times" has recently stated that "lawyers differ" as to the effect of this, some contending that, with regard to investments oi^en to trustees, the rule of court is governed and restricted by the act. It is, however, conceived that this is an absurd contention. The act enumerates a series of investments that are to be permanently permissible, and then, by way of fiu-ther extension, and certainly not by way of restriction, says that also all stocks, &c. shall be permissible on which the coiirt may for the time being authorize its funds to be invested. At present the court permits its funds to be invested on the debenture stocks of railway companies which have paid any dividend for ten years past ; and therefore it follows, that, at j^resent, trustees may follow suit. It is difficult to understand how any lawyer could be of a contrary opinion, which would render sub-section (o) absolutely meaningless. {p) This applies even where the settlement contains no 834 THE trustees' duties. 2. — (1.) A trustee may under tlio powers of this act invest in any of the securities mentioned or referred to in section one of this act, notwithstanding that the same may be redeemable, and that the price exceeds the redemption value. (2.) Provided that a trustee may not under the powers of this act purchase at a price exceeding its redemption value any stock mentioned or referred to in sub-sections (g), (i), (k), (1), and (m) of section one, which is liable to be redeemed within fifteen years of the date of purchase at par or at some other fixed rate, or purchase any such stock as is mentioned or referred to in the sub-sections aforesaid, which is liable to be redeemed at par or at some other fixed rate, at a price exceeding fifteen per centum above par or such other fixed rate {q). (3.) A trustee may retain until redemption any redeem- able stock, fund, or security which may have been pur- chased in accordance with the powers of this act. I 3. Every power conferred by the preceding sections ' shall be exercised according to the discretion of the trustee, but subject to any consent required by the instrument, if any, creating the ti'ust with resjoect to the ' investment of the trust funds. 4. The preceding sections shall applj' as well to trusts created before as to trusts created after the passing of this act, and the powers thereby conferred shall be in addition to the powers conferred by the instrument, if any, creating the trust. I 5. — (1.) A trustee having power to invest in real secu- power to vary. Be Dicli, Lopes v. Hume-Dick, (1891) 1 Ch. 423; aff. (1892) App. Cas. 112; and see Re Outh- waite, (1891) 3 Ch. 49. The court will not, as a rule, interfere with the discretion of trustees as to varying investments. (Zee v. Young, 2 Y. & C. C. 532.) (q) This, of course, overrides the more stringent restric- tions imposed on trustees by the local acts under which these stocks were formerly made conditional trustee investments. PERMISSIBLE INVESTMENTS. 335 rities, unless expressly forbidden by tbe instrument creating the trust, may invest and shall be deemed to have always had power to invest — (a) on mortgage of property held for an unexpii-cd teiTa of not less than two hundred years, and not subject to a reservation of rent greater than a shilling a year, or to any right of redemption or to any condition for re-entry, except for non- payment of rent ; and (b) on any charge, or upon mortgage of any charge, made under the Impi'ovement of Land Act, 1S64. (2.) A trustee having power to invest in the mortgages or bonds of any railway company or of any other descrip- tion of company may, unless the contrary is expressed in the instrument authorizing the investment, invest in the debenture stock of a railway company or such other company as aforesaid. (3.) A trustee having power to invest money in the debentures or debenture stock of any railway or other company may, unless the contrary is expressed in the instrument authorizing the investment, invest in any nominal debentures or nominal debenture stock issued under the Local Loans Act, 1875. (4.) A trustee having power to invest money in securi- ties in the Isle of Man, or in securities of the government of a colony, may, unless the contrary is expressed in the instrument authorizing the investment, invest in any securities of the Government of the Isle of Man, under the Isle of Man Loans Act, 1880. (o.) A trustee having a general power to invest trust moneys in or upon the secirrity of shares, stock, mort- gages, bonds, or debentures of companies incorporated by or acting under the authority of an act of parliament, may invest in, or upon the security of, mortgage deben- tures duly issued under and in accoi'dance with the provisions of the Mortgage Debenture Act, 1865. ■ 6. A trustee having power to invest in the purchase of land or on mortgage of land may invest in the purchase. 336 THE trustees' duties. or on mortgage of any land, notwitlistanding tlie same is charged -with a rent under the powers of the Public Money Drainage Acts, 1846 to 185G, or the Landed Pro- perty Improvement (Ireland) Act, 1847, or by an absolute order made under the Improvement of Land Act, 1864, unless the terms of the trust expressly provide that the land to be purchased or taken in mortgage shall not be subject to any such prior charge. 9. The foregoing securities refer to ordinary- trusts {)•) ; but where the trust fund consists of capital money arising under the Settled Land Acts, 1882 to 1890, or is money which is liable to be laid out, under the trusts of a settlement, in the purchase of land (s), the trustee must invest it, according to the direction of the tenant for life, in some of the modes specified in sect. 21 of the Settled Land Act, 1882, or at the ojytion of the tenant for life, on the securities in which money produced by the exercise of a power of sale in the settlement might be invested thereunder (f). 10. Trustees not necessarily protected by invest- ing in authorized securities. — It is a mistake to suppose that a trustee is free from responsibility (r) The Act does not apply to trust funds of a building society {Re National Permanertt BuiJdinf] Society, 43 C. D. 431) ; but it does to trust funds held by a corporation in trust for a charitj (Manchester Eoyal Injirinary \. Att.- Gen., 43 0. D. 420). (s) Settled Land Act, 1882, s. 33; and Be Mackenzie's Trusts, 23 C. D. 750. [t) Settled Land Act, 1882, ss. 22 and 33. It is appre- hended that, notwithstanding the word "thereunder," trustees, for purposes of the Settled Land Act, would now be authorized to invest in any of the securities permitted by the Trustee Act, 1893. PERMISSIBLE INVESTMENTS. 337 if he invests trust funds in some of tlie securities authorized by the settlement or by statute. To invest in any other securities would, of itself, be a breach of trust ; but, even with regard to those which are permissible, he must take such care as a reasonably cautious man would use, having regard, not only to the interests of those who are entitled to the income, but to the interests of those who will take in future. It is not like a man investing his own money, where his object may be a larger present income than he can get from a safer security; but trustees are bound to preserve the money for those entitled to the corpus in re- mainder, and they are bound to invest it in such a way as will produce a reasonable income for those enjoying the income for the present. And in doing so, they must use such caution as a reasonably prudent man would with reference to transactions in which he may be engaged of a similar nature (»). Not that this means that a different degree of care is required in regard to the conduct of the business of a trust, according to whether there are persons to take in the future, or whether the trust fund is held in trust for one beneficiary absolutely. The question, in either case, is the due care of the capital sum {v) ; and in either case, the trustee is not allowed the same discretion in investing the trust fund as if he were (it) Per Cotton, L. J., lie Whiteley, Whiteleyy. Learoyd, 33 C. D. at p. 350. {v) Per Lord Halsbury, same case when before H. L., see 12 App. Cas. at p. 732. U. T. Z 338 THE trustees' duties. a person, sui juris, dealing with his own estate. Business men of ordinary prudence may, and fre- quently do, select investments which are more or less of a speculative character ; hut it is the duty of a trustee to confine himself not only to the class of investments which are permitted by the settle- ment or by statute, hut to avoid all investments of that class which are attended with hazard {ir). 11. Illustrations of permissible securities which might be improper under certain circumstances. — Thus, if any of the securities mentioned in the Trustee Act, 1893, were to become very much depreciated, so as to render them a hazardous investment, the fact that they are made permissible as trust investments by that statute, would not, it is conceived, protect a trustee who should invest trust funds upon them. And, a fortiori, would this be the case if he were to make such an investment for the purpose of procuring a larger income for the tenant for life. At the same time it must be acknowledged, that, save with regard to invest- ments on mortgage, the statutory power is so guarded, that it is difficult to foresee any case in which a trustee could be held liable for investing on any of the permitted securities. Formerly it was held, that where a non-British government stock was above par, and within a few years of redemption at par, it was not a proper investment for trust funds; because the effect of such an investment might be to benefit the tenant for life {w) Per Lord "Watson, same case, 12 App. Cas. at p. 733. PERMISSIBLE INVESTMENTS. 339 at the expense of those in remainder {x) . How- ever, the intention of parliament, as expressed in the new act, appears to be to fix a standard of prudence for such cases, viz., that a trustee should not pay more than a premium of 15 per cent, above the redemption price, and that the period of redemption should be at least fifteen years distant at the date of investment. This clause, no doubt, only refers to the investments in sub-sects, (g), (i), (k), (1), and (ra) of sect. 1, but, a fortiori, a trustee who adapted the rule to the other permissible securities would be safe. It may also be men- tioned here, that under special circumstances, a change of investment from one which is safe to one which, although permitted, is less safe for the purpose of affording a larger income to the life tenant may be proper enough if the trustee acts in good faith. For instance, wliere property is settled on a parent for life with remainder to his children, and it is very important that the parent should have an increased income for their better support and education (i/). In such a case, an investment in a redeemable stock above par would not merely benefit the tenant for life, but the remainderman also. Grenerally it may (it is con- ceived) be safely laid down, that where trustees act in good faith, and not coUusively for the (x) See Cockburn v. Peile, 3 D. F. & J. 170 ; Ungless v. Tuff, 9 W. E. 727 ; Waite v. LiUlewood, 41 L. J. C'h. 636. {y) Cockburn v. Peile, supra, per Turner, L.J. ; and see Montefiore v. Guedalla, W. N. 1868, p. 67 ; Be Ingram, 11 W. E. 980. z2 340 THE trustees' duties. manifestly sole benefit of tlie tenant for life, they will not now be held liable for changing a first class security for one which is authorized by the act, and which pays a better interest (z) . 12. Not always justified in investing on mort- gage. — Nevertheless, trustees should not invest on mortgage where it is not reasonable, merely to accommodate one of their beneficiaries. Still less ought they to do so merely to accommodate an outsider. Thus they would never be justified in lending a sum of stock (and, a fortiori, they would not be justified in selling it and lending the pro- ceeds) on mortgage of real estate bearing interest at the same rate as the stock itself. For no pos- sible benefit could accrue to the beneficiaries ; and on the other hand, the security of the government would be changed for the less reliable security of private property. Consequently, such a transaction would afford the strongest presumption of an in- tention to accommodate the mortgagor {a) . 13. Precautions to be observed by trustees who invest on mortgage. — As abov^ stated, trustees are not freed from responsibility because they invest on authorized securities ; but more especially is this the case when they lend trust funds on the security of a mortgage. The very simplicity of the (z) See per Turner, L.J., in CocTcburn v. Peile, supra; and per Kekewich, J., in Re Walker, Walker v. Walker, 62 L. T. 449. (a) Whitney v. Smith, 4 Ch. App. 521 ; and see also Me Walker, Walker v. Walker, 62 L. T. 449, where trustees were held liable for varying investments without any reasonable cause. PERMISSIBLE INVESTMENTS, 341 authority, empowering them to invest on " real securities," is apt to mislead, and gives no indication of the severity with which the court regards such loans by trustees. In the first place, in the absence of express authority, trustees who desire to invest on mortgage, are restricted to first legal mortgages of real property. The mortgage should be a first mortgage {h) , because otherwise trustees might not have funds available to redeem a prior incum- brancer who might threaten to foreclose. It should be a legal mortgage (c), because the protection afforded by the legal estate prevents any prior incumbrancer, of whom the trustees may have no notice, getting priority over them ; and if trustees do invest in a mere equitable mortgage (for instance, a mortgage by way of covenant to sur- render copyholds {d)), and any loss accrues, they ■will, it is apprehended (although this has never been expressly decided), be liable to make it good [e). It would seem, however, that there is no objection to the security being a sub-mortgage, as the trustees get the legal estate and in effect the additional security of the covenant of the {h) Norris v. Wright, 14 B. 308 ; and LocJchart v. Eeilly, 1 De G. & J. 476 ; and see also Worynan v. Worman, 43 C. D. 296, where it was held that trustees with power to purchase real estate, must not purchase an equity of redemption. (c) Swaffield v. Nelson, W. N. 1876, p. 255. {d) Lewin, 328. (e) See AWr/s V. Wright, supra; Drosier \. Brereton, 15 B. 221; Lockhart v. Reilly, supra; Swaffield v. Nelson, supra. 342 THE trustees' duties. original mortgagor (/') . Unless the settlement ex- pressly authorized a mortgage of leaseholds, trustees could formerly only properly advance trust funds on the security of freeholds or copyholds ; because the statutes which empowered trustees to invest on mortgage, confined them to mortgages of real estate ; and leaseholds, liowever long and however free from rent and covenants, were not real estate {g). However, as above stated (/?), the 5th section of the Trustee Act, 1893, authorizes in- vestment on mortgage of certain long leaseholds held at nominal rents. In the second place, the mortgage must not be a contributory mortgage, that is, a mortgage where the trustees join with other persons in a joint loan ; for, in that case, the trustees would be putting it out of their power to realize without the joinder of third parties. In other words, they would be intrusting the trust property to persons who were not trustees of it. A contri- butory mortgage is therefore prima facie a breach of trust (?'). In the third place, they must take precautions not to advance too much money on the security .offered. The law on this point was altered in (/) Smeth'urst v. Hastings, 30 C. D. 490. (g) Leigh v. Leigh, 35 W. E. 121 ; Be Boyd, 14 C. D. 626 ; but see as to long terms at peppercorn rents, Be Chevnell, Jones v. Chennell, 8 C. D. 492. (h) Supra, p. 334. (?■) Webb V. Jonns, 39 C. D. 660 ; Be Massingbird, Olarh V. Trelaivney, 63 L. T. 290 ; see last-mentioned case, p. 256, supra. PERMISSIBLE INVESTMENTS. 343 favour of trustees by sect. 4 of the Trustee Act, 1888 (now repealed and re-enacted in the eighth section of the Trustee Act, 1893). Previously to the 24t]i December, 1888, the duty of a trustee who was proposing to advance money on mort- gage was as follows : — He was bound (as he still is) to ascertain the real value of the property, and for that purpose to employ a valuer and soli- citor (/.•) of his own, and not trust to the valuer of the mortgagor (/) ; and to instruct such valuer that the valuation was required for the purpose of considering the advisability of investing trust funds on tlie security of the property (m). For a man may bona fide form his opinion, and yet look at the case in a totally different way when he knows on whose behalf he is acting. Moreover, he was (as he still is) bound to exercise his own judgment in the selection of the valuer, and not leave it to his solicitor (»). In the next place, he was not entitled to advance more than two-thirds of the amount at which the property was valued (o) (and that is still the same) ; and if it was house property not more than one- half (^j) ; and if it (k) Warimj v. Waring, 3 Ir. Ch. Eep. 331. [l) Frtj V. Tapson, 28 C. D. 268 ; Walcott v. Lyons, 54 L. T. 786 ; WariiKj v. Waring, 3 Ir. Ch. Rep. 331 ; Ingle V. Partridge, 34 B". 412. (m) See per Kay, J., lie Olive, Olive v. Westerman, 34 C. D. 70. (ft) Fry V. Tapson, supra; and see on all th.e points. Be Somerset, Somerset v. Lord Poulett, 68 L. T. 613; varied by C. A., W. N. (1893), p. 160. (o) Stickney v. Seiuell, 1 M. & C. 8; Drosier v. Brereton, 15 B. 221 ; Be Godfrey, Godfrey v. Faulkner, 23 C. D. 483. {p) Pudge V. Gummnn, 7 Ch. App. 719; Stretton v. Ashinall, 3 Dr. 12; Smethurst v. Bastings, 30 C. D. 490; 344 THE trustees' duties. were trade property, the value of whicli depended on the continued prosperity of the trade, it would have been hazardous to advance even so much as that (q) ; and if he did invest on the security of real property used for trade purposes, he was bound to altogether disregard the value of the trade (r). However, these proportions were not inflexibly observed ; and if, when the advance was made, the property was approximately up to the standards above indicated, trustees were not held liable for subsequent deterioration (s). By the eighth section of the Trustee Act, 1893, which applies to all mortgages made since the 24th December, 1888, the duty of a trustee under such circumstances is considerably lightened. By that section it is enacted, that — " (1) A trustee lend- ing money on the security of any j)roperty on which he can lawfully lend shall not be chargeable with breach of trust by reason only of the proportion borne by the amount of the loan to the value of the property at the time when the loan was made, provided that it appears to the court that in making the loan the trustee was acting upon a report as to the value of the property made by a person whom he reasonably believed to be an able practical surveyor or valuer (t), instructed and em- Stickney v. Seiuell, supra; Re Olive, Olive v. Westerman, 34 C. D. 70. As to cottage property, see Priest v. Upplehy, 42 C. D. 321. {q) Stretton v. Ashmall, supra; lioi/ds v. Eoyds, 14 B. 54 ; Walcott v. Lyons, 54 L. T. 786. (r) Whiteley v. Leuroyd, 12 App. Cas. 727. (s) Re Godfrey, Godfrey v. Faulkner, supra; Re Olive, Olive V. Westerman, supra. {t) The words "reasonably believed" do not refer to PERMISSIBLE INVESTMENTS, 345 ployed independently of any owner of the property, whether such surveyor or valuer carried on business in the locality where the property is situate or elsewhere, and that the amount of the loan does not exceed two equal third parts of the value of the property as stated in the report, and that the loan was made under the advice of the surveyor or valuer expressed in the report." It will he seen, therefore, that the act makes a very considerable alteration in the law, and it is apprehended that in future a trustee advancing trust money on mortgage will be safe if he observes the following particulars, viz. : — (1.) He must act on the valuation and report of a siu'veyor or valuer; not necessarily a local one ; (2.) He must have reasonable grounds for believing the surveyor or valuer to be an able practical man. For this purpose it is apprehended that the trustee must still exercise his own judgment, and not trust blindly to the nomination of his solicitor without inquiry ; (3.) The surveyor must not be the surveyor of the mortgagor in the matter ; (4.) The surveyor must be instructed by the trustee to make the valuation /by him ; and it is apprehended that his instructions should state that the trustee requires a the words " instructed and employed," Re Walker, Walker V. Walker, 62 L. T. 447 ; Re Somerset, Somerset v. Fouletf, 68 ib. 613. 346 THE trustees' duties. valuation for the purj)ose of considering the advisability of investing trust funds on the security of the property ; (5.) The surveyor must not merely value the property, but must advise the trustee that the property is a proper investment for the moneij proposed to he lent ; (6.) The trustee must not lend more than two- thirds of the surveyor's valuation, but he may lend that much, irrespective of the tenure of the property, or the purposes for which it is used. It must, however, be borne in mind that the act merely says thai: if the above precautions are taken a trustee shall not be liable for breach of trust by reason only of the proportion borne by the amount of the loan to the value of the property ; and it may, therefore, be doubted whether a trustee would not still be liable for advancing the money on property of a speculative character (such as a manufactory) on the ground not that he advanced too large a sum, but that he ought not to have advanced trust money on such a security at all {u). But in addition to getting a legal first mortgage of property of a proper value, the trustee was formerly bound to see that the mortgagor had a good legal title free from incumbrances (other than rent-charges created under the Drainage Acts or the Improvement of Land Act, 1864) ; and for this purpose it was his duty to employ a solicitor, {u) Consider Re Walker, Walkers. Walker, 62L.T. 447. PERMISSIBLE INVESTMENTS. 347 and if the solicitor so advised, to liavo the abstract perused by a conveyancing counsel. In IIop(jood V. Pctrkhi (r) tlie late Lord Romilly held, that trustees were liable if their solicitor made a mistake in the investigation of the title ; but for reasons which will be stated hereafter in the course of the illustrations of Art. 43, it is apprehended that that decision cannot be supported ; and, indeed, it has been expressly dissented from by Lindley, L. J., in SpeigJit v. Gaunt {iv). Here again, the burden has been, to some extent, lilted from the shoulders of a trustee, by the eighth section of the Trustee Act, 1893 (re-enacting the fourth section of the repealed Act of 1888), by which it is enacted, that — " (2.) A trustee lending money on the security of any leasehold property shall not be chargeable with breach of trust only ujDon the ground that in making such loan he dispensed either wholly or partly with the production or investigation of the lessor's title. " (3.) A trustee shall not be chargeable with breach of trust only upon the ground that in effecting the purchase of or in lending money upon the security of any property he has accepted a shorter title than the title which a purchaser is, in the absence of a special contract, entitled to require, if in the opinion of the court the title accepted be such as a person acting with prudence and caution would have accepted. (v) 11 Eq. 70. [w) 22 C. 1). at p. 761 ; and see per Lord Halsbmy, in He Whiteley, Whiteley v. Learoyd, 12 App. Cas. 727. 348 THE trustees' duties. " (4.) This section applies to transfers of exist- ing securities as well as to new securities, and to investments made as well before as after the commencement of this act, except where an action or other proceeding was pending with reference thereto on the twenty-fourth day of December one thousand eight hundred and eighty-eight." Lastly, trustees should not enter into any arrangement with the mortgagor for the continu- ance of the loan for a period of years (x) ; for they would thereby fetter themselves in the event of it being desirable (by reason of depreciation of the land or otherwise) to realize. Art. 42. — Diif// of Trustee to see that he pays trust mojieys to the right Persons. (1). The whole responsibility of handing the trust property to the persons entitled falls upon the trustee ; and if he hands it to the wrong person, either through mistake on his part(?/), or in consequence of some fraud practised upon him, he will have to make the loss good, however careful {x) Vicary v. Evans, 30 Bea. 376. {y) Be Hulkes, Foijnell v. Hulkes, 35 W. E. 194; as to fraud, see Cutler v. Boyd, 60 L. T. 859. MUST SEE RIGHT PERSON GETS PROPERTY. 349 he may have been. In cases of doubt, therefore, the trustee should apply to the court for its direction (s). \ (2). But if the person who is really entitled to trust property is not the beneficiary who appears on the face of the set- tlement (but some one who claims through him), and the trustees, having neither express nor constructive notice of such derivative title, pay upon the footing of the original title, they cannot be made to pay over again (a). Illust. — 1. Forged authority. — Thus, where a trustee makes a payment to one who produces a forged authority from the beneficiary, the trustee, and not the beneficiary, will have to bear the loss. For, as was said by Lord Northington (b), "a trustee, whether he be a private person or a body corporate, must see to the reality of the authority empowering him to dispose of the trust money ; for if the transfer is made without the authority of the owner, the act is a nullity, and in con- sideration of law and equity the right remains as before." (z) Talbot V. E. Radnor, 3 M. & K. 252; Mulin v. Blagrave, 25 B. 137 ; Ashhy v. Bhickwell, 2 Ed. 302 ; Eaves v. Hicksoii, 30 B. 136; Sporle x. Burnaby, 10 Jur., N. S. 1142. (a) Cathay v. Sydenham, 2 Br. Ch. Ca. 391 ; Leslie v. Baillie, 2 Y. & C. Ch. 91. (6) Ashby v. Blackwell, supra. 350 THE trustees' duties. 2. False certificate. — So, again, trustees who paid over the trust fund to wrong persons, upon the faith of a marriage certificate, which turned out to be a forgery, were made responsible for so much of the trust fund as could not be recovered from those who had wrongfully received it (c). 3. Mistake as to construction of settlement. — A trustee who, by mistake, pays the capital to the tenant for life, instead of investing it and paying him the income only, will have to make good the loss to the estate ; although he will, as will be seen hereafter, be entitled to be recouped out of the life estate (d). And similarly, trustees who have distributed a trust fund upon what turns out to be an erroneous, although bona fide, construc- tion of the trust instrument, are liable to refund the property distributed, together with interest thereon at four per cent. Thus, where execu- tors distributed a testator's residuary estate upon an erroneous assumption that it was divisible among five persons instead of six, it was held, that the overpaid legatees could not be made to refund, and that the executors must pay the sum necessary to make up to the unpaid legatees one-sixth of the residue (e) . (c) Eaves v. INcl'son, supra ; and. see also Bostock v. Floyer, 1 Ch. App. 26, and Sutton v. Wilder, 12 Eq. 373. (d) Barratt v. Wyatt, 30 B. 442 ; Davies v. Hodgson, 25 B. 177 ; Griffiths v. Porter, ibid. 236. (e) HilUard v. Fulford, 4 C. D. 389 ; and see also Re Ward, 47 L. J., Cli. 781 ; and Powell v. Hulkes, 33 C. D. S52. MUST SEE RIGHT TERSON GETS PROPERTY. 351 4. Formerly, a trustee who paid trust money to the attorney of a beneficiary, was liable, if it turned out that the power was revoked by death of the beneficiary or otherwise. However, by sect. 23 of the Trustee Act, 1893 (re-enacting 22 & 23 Yict. e. 35, sect. 2G), it was enacted that " A trustee acting or paying money in good faith under or in pursuance of any power of attorney, shall not be liable for any such act or payment by reason of the fact that at the time of the payment or act the person who gave the power of attorney was dead, or had done some act to avoid the power, if this fact was not known to the trustee at the time of his so acting or paying. Provided that nothing in this section shall affect the right of any person entitled to the money against the person to whom the payment is made, and that the person so entitled shall have the same remedy against the person to whom the payment is made as he would have had against the trustee." 5. Not bound to know of derivative title. — On the other hand, in Leslie v. Ba'iUle (/), a testator, who died, and whose will was proved in England, bequeathed a legacy to a married woman whose domicile, as well as that of her husband, was in Scotland. The husband died a few months after the testator. After his decease, the executors of the testator paid the legacy to the widow. It was proved that, according to the Scotch law, the (/) 2 Y. & C. Ch. 91 ; and see also i?e QuU, 20 Eq. 561. 352 THE trustees' duties. payment should have been made to the husband's personal representatives. It was however held, that in the absence of proof that the executors of the settlor knew the Scotch law on the subject, the payment to the widow was a good payment. 6. So where a solicitor for A. receives, and according to A.'s directions disposes of, the pro- ceeds of property, without notice that in reality A. has settled the property, he is not liable to the beneficiaries (17). 7. Effect of not searching for notices of incum- brances. — On the other hand, a new trustee is liable to make good moneys paid by him bona fide to a beneficiary if the papers relating to the trust comprise a notice of an incumbrance created by that beneficiary depriving him of the right to receive the money. For, if the trustee had acquainted himself, as he was bound to do, with the trust documents and papers, he would have found what the true state of the case was (h). Where, however, no amount of search would have disclosed the notice, the trustee would of course not be liable, as his liability entirely depends upon his shirking the duty of search, which the law casts upon him {h). (g) Williams v. Williams, 17 C. D. 437. (h) Hallows V. Lloyd, 39 C. D. 686. This is so even where the trustees have a discretion to pay the income to or for the benefit of the assignor, " his wife or children," if they do in fact pay it to the assignor {Hemming v. Neil, 62 L. T. 649). NOT TO DELEGATE HIS DUTIES OR POWERS. 353 Art. 43. — Buti/ of Trustee not to delegate his Duties or Powers. (1) A trustee may not delegate his duties or jjowers (or k fortiori, the receipt of trust moneys) either to a stranger (/) or to his co-trustee (k), save only — a. Where the settlement authorizes such delegation (^). /3. Where he is morally obliged to do so from necessity, and is acting con- formably to- the common usage of mankind, and as prudently as if i j^, acting for himself [m), and the agent employed is employed in the ordinary scope of his particular business (n). y. Where the delegated act is merely (t) Adams v. Clifton, 1 E.uss. 297 ; Turner v. Corney, supra ; Chambers v. Minchin, TV. 196 ; Wood v. Weiyht- man, 13 Eq. 434 ; lie Bellamy and Met. Board, 24 C. D. 387. {Tk) Langford v. Gascoigne, 11 V. 333 ; Cloiigh v. Bond, 3 M. & C. 497 ; Cowel v. Oatcombe, 27 B. 568 ; Eaves v. Hickson, 30 B. 136; Re Flower and Met. Board, supra. (Z) Eilhee v. Sneijd, 2 MoU. 199; Doyle v. Blahe, 2 Sch. & L. 245. (?«) Speight v. Gaunt, 9 App. Cas. 1 ; Ex parte Belchier, Amb. 219; Clough v. Bond, 3 M. & 0. 497; Bennett v. Wyndham, 4 De G. & J. 257. (n) Fry v. Tapson, 28 C. D. 268. TJ. T. A A 354 THE trustees' duties. ministerial, and involves no personal discretion (o). ^. Where the delegated act is the re- ceipt of money under sect. 56 of the Conveyancing and Law of Pro- perty Act, 1881, and the delegate is a solicitor authorized with all the ! statutory formalities (jo). £. Where the delegated act is the receipt of money payable under a ; policy of assurance, and the dele- ! gate is a solicitor or banker autho- rized with all the formalities pre- i scribed by sect. 17 of the Trustee Act, 1893 (^). (2) But even where a trustee may safely permit another to receive trust pro- perty, he will not be justified in allowing it to remain in such other person's custody for a longer period than the circumstances of the case require (r). General principle. — This rule is founded on the (o) Sug. Pow. 179 ; Farwell, Pow. 358, 360. (V) Trustee Act, 1893, s. 17, sub-s. 1. \q) Ibid., sub-s. 2. \r) Brice v. Stokes, 2 Lead. Cas. 865 ; Gregory v. Gregory, 2 Y. & C. 313 ; Re Fryer, 3 K. & J. 317, and as to sub- clauses ^. and £. Trustee Act, 1893, s. 17, sub-s. 3. NOT TO DELEGATE HIS DUTIES OR POWERS. 355 maxim drlcgatits non potest delegare ; for a trustee is merely an agent for others, and, being person- ally trusted by the settlor, cannot delegate to others the duties which were confided to his own discretion. It is therefore an invariable rule, that, even in cases where a trustee may employ an agent, he must still exercise his own judgment on every question, and must not give the agent carte hlanche to do what he may think fit (s). The general principle as to the impropriety of dele- gating fiduciary duties and powers has been modified, both by judicial decisions and by statute; but, although the Act 22 & 23 Vict. c. 35, s. 31 (now repealed and re-enacted by sect. 24 of the Trustee Act, 1893), enacted that " a trustee shall (without prejudice to the provisions of the instrument, if any, creating the trust) be charge- able only for money and securities actually received by him, notwithstanding his signing any receipt for the sake of conformity, and shall be account- able only for his own acts, receipts, neglects, or defaults, and not for those of any other trustee, nor for any banker, broker, or other 2^Grson icith whom any trust moneys or securities may be depo- sited''^ ; yet, as was pointed out by Lord Selborne, in the leading case of Speight v. Gaunt {t), this statute does not authorize a trustee, at his own mere will and pleasure, to delegate the execution of the trust and the custody of the trust moneys (s) See Re Weall, Andrews v. Weall, 42 C. D. 674. {t) 9 App. Cas. 1. aa2 356 THE trustees' duties. to strangers in the absence of a moral necessity from the usage of mankind for the employment of such an agency. Indeed, the only effect of the section appears to be, to shift the onus of proof from the trustee to the beneficiaries ; so that whereas formerly it lay upon a trustee whose con- duct was impugned to prove that he had acted from necessity according to ordinary business usage, it now lies on the beneficiaries, who make a charge of breach of trust, to prove that the trustee did not act from necessity or conformably to the universal custom (^0- The question was treated with great perspicuity by Mr. Justice Kekewich, in the case of Re Wcall, A)idren-s v. Weall {x), where his Lordship said : " Consider for a moment the position of that special agent called a trustee as regards the position of sub-agents. He certainly has the right to appoint them, if and so far as the work of the trust reasonably requires. For instance, he may appoint a broker to make or realize investments, or a solicitor to do legal busi- ness ; and the power of employment involves that of remuneration at the cost of the trust estate. The limit of the power of employment is, as pointed out in the well-known case of S2)eight v. Gaunt (i/), reasonableness; and reasonableness must also, I think, be the limit of the power of remuneration. A trustee is bound to exercise (m) See Re Brier, 26 C. D. 238. (,t) 42 C. D. 674. (y) Supra. NOT TO DELEGATE HIS DUTIES OR POWERS. 357 discretion in the choice of his agents, but, so long as he selects persons properly qualified, he cannot be made responsible for their intelligence or their honesty. He does not in any sense guarantee the performance of their duties. It does not, how- ever, follow that he can entrust his agents with any duties which they are willing to undertake, or pay them or agree to pay them any remunera- tion which they see fit to demand. The trustee must consider these matters for himself, and the court would be disposed to support any conclu- sion at which he arrives, however erroneous, pro- vided it really is /lis conclusion — that is the outcome of such consideration as might reason- ably be expected to be given to a like matter, by a man of ordinary prudence, guided by such rules and arguments as generally guide such a man in his own affairs." It must also be pointed out that, although trus- tees must always exercise their own judgment, and not surrender it to agents, and, a fortiori, not to beneficiaries, yet they are not debarred from inquiring what are the wishes and opinions of any of the parties interested. Thus in Firiscr v. Murdoch {z) trustees who were empowered by a testatrix to continue to hold all or any of the shares and stocks owned by her at her death, " should they consider it advisable or expedient to do so," wrote to the life tenant ask- ing her views as to whether she would like to (z) 6 App. Cas. 855. 358 THE trustees' duties. have some City of Grlasgow Bank Stock retained, but added that they did not consider it a very eligible trust investment. She answered that she vp-ould ; and accordingly they retained 200/. of the stock, which, by reason of the failure of the bank, was lost. In giving judgment, Lord Blackburn said : "I agree that trustees are to exercise their own discretion ; but I think they may inquire as to what are the wishes and opinions of others, especially of those who are interested, before they finally determine what, in the exercise of their own discretion, they think expedient ; and I think that, in this case, there is no evidence that the trustees did more than they properly might." And Lord Selborne said : — " The truster did not, indeed, direct them to take into consideration the wishes or the opinions of the life renters, but I think it was proper and reasonable for them to do so, as long as they did not unduly favour the life renters at the expense of their children. In this case, I find no indication of an improper purpose It would be extremely dangerous to hold that trus- tees, having such a discretion to exercise, might not freely discuss with the beneficiaries the reasons for and against a particular decision, without running the risk of being held to act against their own judgment, if they should disregard, in the end, objections to which they had thought it right in the first instance to direct attention." Iluust. — 1. Must not leave trust business en- tirely to co-trustee. — Thus a trustee for sale of ordinary property, who leaves the whole conduct NOT TO DELEGATE HIS DUTIES OR POWERS. 359 of the sale to his co-trustee, cannot shield himself from resj)onsibility for the latter's negligence, by saying that he left the matter entirely in his hands {a). For the settlor has entrusted the trust property and its management to all the trustees, and the beneficiaries are entitled to the benefit of their collective wisdom and experi- ence (5). 2. Should not associate a stranger in the manage- ment. — Conversely, a trustee must not associate with himself another person (who is not one of the trustees) in the management of the trust estate. For the settlor has trusted him, and not the other person, and by allowing the latter to have the joint control of the property, the trustee puts it out of his own power to deal with it promptly and effectually in case of necessity (c) . 3. Choice of advisers. — So, again, where trust property has to be valued for the purposes of sale, or property offered to trustees as a security for trust money has to be valued, or trust money has to be invested — the trustees must themselves choose the valuer or broker, and must not dele- gate that duty to theii- solicitors. No doubt trus- tees can employ a solicitor for legal matters which the trustee is not competent to undertake, for that is necessary; but the choice of a broker or valuer {a) Oliver v. Court, 8 Pr. 166; Re Chertseij Market, 6 Pr. 285 ; Hardivicke v. Mipul, 1 Anst. 109. [h) See Lithe v. South Kensingtoi, Co., 11 C. D. 121. (c) Salway v. Salway, 2 E. & M. 215 ; White v. Baugh, 3 CI. & Pin. 44. 360 THE trustees' duties. is not properly the business of solicitors, Lut is a matter on whicli a trustee should exercise his own judgment ((/). Of course, it must be understood that this does not preclude a trustee from asking advice or information as to the character of a broker, valuer, or other necessary agent, or from asking his solicitors to submit the names of such. All that is meant is, that he must judge for him- self on the facts reported to him to guide his choice, and must not delegate the duty of choos- ing the agent either to his solicitors or to anyone else. 4. Power to lease, sell, &c. — A power of leasing cannot be delegated, for in its exercise much judg- ment is required. The fitness and responsibility of the lessee, the adequacy of the rent, the length of the term to be granted, and the nature of the covenants, stipulations and conditions which the lease should contain, are all matters requiring knowledge and prudence {f) . On similar grounds, a trustee cannot delegate (as, for instance, by power of attorney) the execution of a trust or power to sell property. For the settlor has placed confidence in his discretion as to price and con- ditions, and it is a breach of that confidence to pitch-fork the entire business on to another person, without retaining any control or authority over it (/). On the other hand, a trustee may appoint (d) See per Kay, J., in Fri/ v. Tapson, 22 C. D. 727. (e) Eobson v. F/iyJit, 4 D., J. & S. 614. (/) Oliver v. Court, 8 Pr. 166 ; HardwicTce V. Mynd, 1 Anst. 109 ; Hawkins v. Kemp, 3 East, 410. NOT TO DELEGATE HIS DUTIES OU PO-\VERS. 361 an attorney merely to pass the legal estate, as sucli an act involves no discretion (g) . And where trustees had power to elect a clergyman, it was held that they could not appoint proxies to rote; but when the choice was once made, they could appoint proxies for the purpose of signing the formal presentation (h). However, the rule yields to necessity, and trustees may appoint an attorney to act for them in a foreign country, even in matters invohdng judgment and discretion {i). 5. Former inability of co-trustee to pass on dis- cretionary powers to new trustees. — The rule as to the impossibility of delegating discretionary or confidential powers is so stringent, that formerly, where a settlement contained no power to appoint new trustees icith similar powers to those conferred on the trustees appointed by the settlor, it was not even competent for the court to confer such powers upon new trustees, save only where the power was so i)itencoren with the trust itself, that there could he no execution of the trust tcithout the exercise of the pouer, in which case the power must of necessity be exercised by the new trustees {k) . Thus, where there were trustees for sale, with a power to give valid discharges for the purchase- money, and it became necessary to appoint new trustees, the power was properly exerciseable by them ; for without the power they could not sell the ((/) Farwell, Pow. 445. (h) Att.-Gen. v. Scott, 1 V. sen. 413. (/) Stuart V. Norton, 14 Moo. P. C. 1' (k) Lewin, 412. 362 THE trustees' duties. property, and tlie settlor's intentions would have been frustrated. They therefore took the power of necessifi/ (l). On the other hand, a power of sale (as distinguished from a trust for sale) could not, in the absence of express directions to that effect, be executed by a new trustee. How- ever (save so far as questions of title in rela- tion to past acts of trustees are concerned), the point will not arise in future ; for, by the 27th section of Lord Cranworth's Act {m), it was enacted, that every trustee appointed by the court, either before or after the 28th August, 1860, should have the same powers, authorities and discretions, and should in all respects act as if he had been originally nominated a trustee by the trust instrument. And by the same section it was also enacted, that a new trustee of any instrument coming into operation after the 28th August, 1860 (appointed under the statutory power thereby conferred), should have the like powers. And now by the 10th section of the Trustee Act, 1893, the same powers are conferred on new trustees irrespective of the date of the trust instrument. 6. May employ agents where morally obliged to do so. — On the other hand, where the property is (?) Ibid.; Drayson v. Pocock, 4 Sim. 283; Byam v. Byani, 19 B. 58 ; Bartley v. Bartley, 3 Dr. 385 ; Lord v. Bunn, 2 Y. & C. 98. (m) Eo-enacted by section 38 of tbe Conveyancing Act, 1881. These enactments do not, apparently, apply wbere a power is confided to an executor virtute officii, see Re Mainiuaring, Crawford v. Forshaw, (1891) 2 Ch. 261. KOT TO DELEGATE IIIS DUTIES OR POWERS. 363 of a nature (such as stock or shares) which, morally speaking, a trustee cannot personally sell, or which it would he distinctly contrary to the ordinary usage of mankind for him to sell per- sonally, he may employ an agent or broker, so long as he acts as prudently as he would have • done for himself in a like case («). For " where an investment of trust moneys is proper to be made upon securities which are purchased and sold uj-jon the public exchanges, either in town or country, the employment of a broker, for the purpose of purchasing those securities, and doing all things usually done by a broker which may be necessary for that purpose, is prima facie legiti- mate and proper. A trustee is not bound him- self to undertake the business (for which he may be very ill- qualified) of seeking to obtain them in some other way : as, for example, by public ad- vertisement or by private inquiry" (o). 7. May employ skilled persons. — So trustees may appoint stewards, bailiffs, workmen and other agents of the like kind ; for there is a moral necessity for them to do so {p). And on the same ground they may employ solicitors, valuers (g*), auctioneers, and other skilled persons to do acts which they themselves are not competent to do. {») Ex parte Belch ier, Amb. 219. (o) Per Selborne, L.C., iSpeiyht v. Gaunt, 9 App. Cas. 1. {p) Be Whiteh'i/, Whitelet/Y. Learoyd, 12 App. Cas. 727. (f/) With regard to valuers, a trustee is now expressly authorized to act on a valuer's report and advice as to the value of proi^erty offered as a security for trust funds (Trustee Act, 1893, s. 8, see supra, p. 34-5). 364 THE trustees' duties. They may employ an accountant where their accounts are of a complicated nature, and the occasion is one in which, according to the usage of business, a prudent man, acting for himself, would employ such a person (r). But of course trustees •are not entitled to have their books of account of income and expenditure regularly kept by an accountant, merely in order to save themselves trouble. As Lord Halsbury said, in Re WJdteley^ Whitcley v. Learoyd (s), " I think it is quite clear, that a trustee is entitled to rely upon skilled persons in matters in which he cannot be expected to be experienced. He may perhaps rely upon a lawyer on some matters of law, and in this case I do not deny that he would be entitled to rely upon a valuer upon a pure question of valuation. But unless one examines with reference to what question the skilled person gives advice, it is possible to confuse the reliance which may be properly placed upon the skill of a skilled person with the judgment which the trustee himself is bound to form on the subject of the performance of his trust. I do not think it is true to say that one is entitled to consider the special qualities or degree of intelligence of the particular trustee. Persons who accept that office must be supposed to accept it with the responsibility at all events for the possession of ordinary care and prudence." (r) See New v. Jones, 1 M. & G. 668, n. ; Henderson v. M'lver, 3 Mad. 275. (s) 12 App. Cas. 727, at p. 731. NOT TO DELEGATE HIS DUTIES OR TOWERS. 365 8. Whether liable for negligence of solicitor. — Lord Halsbury's phrase, " he may, jyer/utp.s, rely upon a lawyer in some matters of law," referred, it is conceived, to the douht thrown upon that proposition by the decision of the late Lord Eomilly in IIojMjood v. Parkin (f), where that learned judge carried the liability of trustees for the acts and defaults of their agents to a height which, it is with humility suggested, was by no means justified, either on principle or authority. In that case, trustees, having trust funds to lend on mortgage, employed a solicitor to investigate the mortgagor's title. Owing to the solicitor's negKgence, in failing to make proper inquiries as to previous incumbrances, the trust moneys advanced on the mortgage were to a large extent lost, and his lordship held that the trustees must replace them. But it is difficult to understand upon what grounds the learned judge based his opinion. The trustees were right in investing on mortgage : they were right in employing a skilled person to investigate the real value of the security ; indeed, it is apprehended, from the remarks of Sir George Jessel, M. li., in He Cooper {n), that it was the duf// of the trustees to employ a skilled person. In addition to which, there was a moral necessity for them to employ a skilled agent to investigate the title, and they were but acting conformably to the general " usage of mankind, and as prudently (0 11 Eq. 70. («) 4 C. D. 815. 366 THE trustees' duties. for tlie trust as for tliemselves, and according to the usage of business " (^') . If, then, they were right in employing the solicitor to investigate the title for them, upon what possible ground could they be held responsible for their agent's de- fault ? As Lord Hardwicke said, in Ex parte Bclchier {.r), if the defendant "is chargeable in this case, no man in his senses would act This coiu"t has laid down a rule with regard to the transactions of assignees, and more so of trustees, so as not to strike a terror into mankind acting for the benefit of others, and not for their own" ; and his Lordship then proceeded to lay down the rule as above stated. It is with great respect sub- mitted, that Lord Romilly confused the case with those in which it has been held that a trustee is responsible for a breach of trust which he has committed bona Me and under skilled advice. The distinction, is, however, clear. The trus- tees had not do)ie anything wrong. They had not committed any breach of trust at the instance of another. They had merely lent money through the medium of an agency, which they were en- titled, and indeed bound, to employ, on the ground of moral necessity, and they ought therefore to have been discharged from the loss. Had there been a distinct breach of some duty which the settlor had cast upon the trustees, then, although _ (v) Per Lord Hardwicke, Ex parte Belchier, Axah. 219 ; and to tlie same effect Lord Selborne in Speight v. Gaunt, 9 App. Cas. 1. [x) Supra. NOT TO DELEGATE HIS DUTIES OR POWERS. 367 they might have taken and followed the best advice procurable, they would, no douht, have been properly held responsible ; but here, the only possible breach of duty was the negligence of an agent, and, as has been said above, a trustee is only responsible for his agent where he has improperly employed one. Moreover, since the above was first written. Lord Justice Lindley, in Speight v. Gaunt (//), has expressly dissented from Hopgood V. Parkin, and, indeed, it seems to be quite inconsistent with the judgments of the learned Lords of Appeal in the former case. 9. In He JBird{z), on the other hand, Vice- Chancellor Bacon seems (if I may say so, with great submission) to have gone to the opposite extreme. There, one of three executors emj)loyed the solicitor of the testatrix for the purpose of obtaining a settlement with a creditor of the testatrix. The solicitor subsequently informed the executor that the compromise had been effected, and requested a cheque for the amount, which the executor sent. No compromise had ever been made, and the solicitor appropriated the money to his own use. Here it might have been anticipated that the executor would have been held liable, as, in accordance with Bostock v. [ij) 22 C. D. at p. 761 ; and see per Pearson, J., in Re Pearson, Oxley v. /S'c«?-i;/(, 51 L. T. 672; lie Weall, 42 0. D. 674. (z) 16 Eq. 203. 368 THE trustees' duties. FIoyer{a), he ought to have paid the money to the creditor personally and not to the solicitor; but the Yice-Chancellor decided that he was not liable, saying : "It seems to me that the executor has done just what any prudent man would think himself safe in doing. He finds that the testatrix had in her lifetime employed Mr. Hunt as her solicitor. He had been employed as her solicitor on various matters ; his credit was not called in question, his ability was not doubted. He had arranged for her some other claims, and when, after her death, a claim is made by these two companies, naturally enough Mr. Hunt is em- ployed to conduct the business, namely, the com- promise of these claims. Having employed this attorney to negotiate for a compromise, and being told by him ' I have got these terms for you, and 310(?. is payable,' the executor puts into his hands the 310/. What negligence is there in that ? What incautious trusting to some other person's repre- sentation ? It is all in the ordinary course of the business then being transacted, and I cannot think that the executor has neglected any caution which it was incumbent on him to exercise." It would seem, however, that this decision is directly in conflict with dicta of Lord Selborne in Speight v. Gaunt (b), and cannot be supported either on prin- ciple or by authority. (a) 1 Eq. 29. (b) 9 App. Cas. at p. 11 ; and see also Be Bellamy and Met. Board, 24 0. D. 387. KOT TO DELEGATE IllS DUTIES OR POWERS. 369 10. Whether a trustee rightly employing an agent may trust him with trust money. — Even where a trustee is justified, in delegating the sale or purchase of propert}^ to other persons (such as brokers, solicitors, and the like), it does not neces- sarily follow that he is justified in giving them the control of the purchase-money. That question must be regarded as a separate and distinct one, to bo solved on its own merits, but by the appli- cation of the same principle, viz., whether or not there is a moral necessity or a conformity to com- mon usage. Thus, where a trustee handed money to a solicitor for the pm-pose of re-investment, and the solicitor professed to have, but in reality had not, invested it, but had used it for his own pur- poses, and himself paid interest on it for some years until his death, it was held that the trustee was liable (c) ; for he ought not to have entrusted the money to a solicitor when there was no neces- sity. On similar grounds, it was formerly held, in Ro Bellamy and Met. Board {d), that trustees were not entitled to authorize their solicitor to receive purchase-money j)ayable to them, notwith- standing sect. 56 of the Conveyancing Act, 1881. However, by sect. 17 of the Trustee Act, 1893 (re-enacting sect. 2 of the Trustee Act, 1888), it is enacted as follows : — ' " (1.) A trustee may p.ppoint a solicitor to be lus agent : (c) Bostock V. Floyer, 1 Eq. 29 ; Roiuland v. Witherden, 3 M. & G. o68 ; Hanhnnj v. Kirkland, 3 Sim. 265 ; Dewar v. Brooke. 33 W. E. 497. But see Re Bird, 16 Eq. 203. (d) 24 C. D. 387. U. — T. B B 370 THE trustees' duties. ' to receive and give a discharge for any money or valuable consideration or property receivable by the trustee under the trust, by permitting the solicitor to have the custody of, and to produce, a deed containing any such receipt as is referred to in sect. 56 of the Conveyancing and Law of Property Act, 1881 ; and a trustee shall not be chargeable with breach of trust by reason only of his having made or concurred in making any such appointment ; and the producing of any such deed by the solicitor shall have the same validity and effect under the said section as if the person appointing the solicitor had not been a trustee. " (2.) A trustee may appoint a banker or solicitor to be his agent to receive and give a discharge for any money payable to the trustee under or by virtue of a policy of assurance, by permitting the banker or solicitor to have the custody of and to produce the policy of assurance with a receijit signed by the trustee, and a trustee shall not be chargeable with a breach of trust by reason only of his having made or concurred in making any such ai^pointment. "(3.) Nothing in this section shall exempt a trustee from any liability which he would have incurred if this Act had not been passed, in case he permits any such money, valuable consideration, or property to remain in the hands or under the control of the banker or solicitor for a period longer than is reasonably necessary to enable the banker or solicitor (as the case may be) to pay or transfer the same to the trustee. "(4.) This section applies only where the money or valuable consideration or property is received after the 24th day of December, 1888. " (5.) Nothing in this section shall authorize a trustee to do anything which he is in express terms forbidden to do, or to omit anything which he is in express terms directed to do, by the instrument creating the trust." The section is not, perhaps, so happily expressed NOT TO DELEGATE HIS DUTIES OR TOWERS. 371 as it miglit be. For instance, can a trustee autho- rize his solicitor to receive consideration monej, except by permitting him to have the custody of the deed, &c. ? And where the receipt is indorsed on a deed, and not contained in the body thereof, can that deed be said to be " a deed containinfj any such receipt as is referred to in the 56th section of the Conveyancing and Law of Property Act, 1881 P" The first of these queries is, it is submitted, by no means hypercritical, and in cases where any money or property is receivable by a trustee on any occasion where the execution of a deed by the trustee is not necessary (as, for example, the payment of a legacy by executors to the trustees of the legatee's marriage settlement), considerable doubt must exist as to whether the payment can be properly made to the trustee's solicitor under this sub-section, even although the solicitor be expressly authorized by the trustee to receive it. This view receives some support from the provi- sions contained in sub-sect. (2), which expressly authorize a trustee to appoint a solicitor his agent to receive policy moneys by perniiftiiicf him to have thecnstodij of and to produce the policy Kith a receipt signed by the trustee. For policy money would cer- tainly fall within the first sub-section as " money receivable by such trustee " ; and if, under sub- sect. (1), the trustee could appoint a solicitor in any other way than that indicated, there would have been no necessity for expressly authorizing (by sub-sect. 2) a trustee to appoint a solicitor to B b2 372 THE trustees' duties. be his agent to receive and give a discharge for policy moneys, and for declaring that no trustee shall be chargeable with a breach of trust by reason only of his having made or concurred in making an appointment of a solicitor for that purpose. Anyhow, the point does not appear to be free from doubt. With regard to the second query, it is probable that the court would consider an indorsed receipt as equivalent to a receipt contained in the deed on which it is indorsed, within the meaning of the sub-section. It will be perceived that sub-section (1) does not authorize a trustee to appoint anyone to receive money, valuable consideration, or property, except a solicitor. Consequently, the decision in Flower V. Metropolitan Board of Works {e), that one of several trustees cannot in general be authorized by his co-trustees to receive and give a good receipt for trust moneys, still holds good. It is appre- hended, however, that where one of the trustees is a solicitor, the money may be paid to him on pro- duction of a deed containing a receipt, notwith- standing that he may not be acting as the solicitor to the trustees. 11. Apart from statutory authority, where there is a moral necessity to entrust the agent with the money, a trustee will be justified in doing so, as was decided by the House of Lords in the im- (e) 27 0. D. 592. NOT TO DELEGATE HIS DUTIES OR POWERS. 373 portant case of Spc'ujlif \. Gaunt {/). There, the respondent, Isaac Gaunt, being acting trustee under the will of John Speight, a stuff manufac- turer at Bradford, wished to invest the sum of 15,275/., part of the trust estate, in the securities of municipal corporations in Yorkshire, and for that ])urpose he employed a young stockbroker, named Cooke, to buy the stock for him. Cooke having falsely represented that he had purchased the stock, the respondent gave him cheques for the amount, which Cooke embezzled. The beneficiaries then sought to make the trustee liable for the sum embezzled by Cooke. In giving judgment, ex- onerating the trustee from liability, the Earl of Selborne said : — " The principles of equity, with respect to the duties and responsibilities of trustees, and the distinction between those losses of trust funds for which they are, and those for which they are not, liable, are so well settled, and are of such great general importance, that the present ease, in which two courts have differed as to their application, has naturally been considered by your lordships with some anxiety. In the early case of Ex parte Belclner, before Lord Hardwicke (//) , it was determined, that trustees are not bound per- sonally to transact such business connected with, or arising out of, the proper duties of their trust, as, according to the usual mode of conducting business of a like nature, persons acting with (/■) 9 App. Cas. 1. [rj) Amb. 218. 374 THE trustees' duties. reasonable care and prudence on their own accuunt would ordinarily conduct through mercantile agents; and that when, according to the usual and regular course of such business, moneys, re- ceivable or payable, ought to pass through the hands of such mercantile agents, that course may properly be followed by trustees, though the moneys are trust moneys ; and that if, under such circumstances, and without any other misconduct or default on the part of the trustees, a loss takes place through any fraud or neglect of the agents employed, the trustees are not liable to make good such loss. That authority has ever since been followed ; and, in conformity with it, the statute 22 & 23 Yict. c. 25, s. 31 (//), enacts that every instrument creating a trust shall be deemed to contain a clause exonerating the trustees from liability ' for any banker, broker, or other person, with whom any trust moneys or securities may be deposited.' Neither the statute, however, nor the doctrine of Ex parte Bclchier, authorizes a trustee to delegate at his own mere will and pleasure the execution of his trust, and the care and custody of the trust moneys to strangers, in any case in which (to use Lord Hardwicke's words) there is no ' moral necessity from the usage of mankind ' for the employment of such an agency .... The j&rst point requiring consideration is, whether (A) Now repealed and re-enacted by sect. 24 of the Trustee Act, 1893. This section only seems to have the- effect of shifting the onus of proof from the trustee to the beneficiary {Re Brier, B.y. Evison, 26 C. D. 238, see p. 356, supra). NOT TO DELEGATE IllS DUTIES OR POWERS. 375 the payment of the 15,275/. to Cooke on the 24th of February was a breach of trust. That depends upon two questions — (1) whether it was proper for the respondent, as a trustee, to use the agency of a broker for the purpose of the intended in- vestment ; and (2) whether, if so, tlie payment of the money to the broker so employed, under the circumstances of this case, was justified upon the principle of Ex jMi'te Belch ic r .^^^ His Lordship then discussed the first question in the terms quoted in Illustration 6, and continued : " Thinking, therefore, that the employment of Cooke as a broker in this case, under the instructions actually given to him, was proper, and not inconsistent with the duty of the respondent as trustee, the next subject of inquiry is, whether it was a just and proper consequence of that employment, according to the principle of Ex parte Bekhier, that the trust money should pass through his hands. Uiion this point I must first observe that the ease appears to me to be different from what it would have been if Cooke had entered into contracts with the several corporations for direct loans to them by the respondent, and had reported to the respondent that he had done so. The agency of a broker, as such, is not required to enter into a contiact of that kind; and if the agency of a person who happens to be a broker is, in fact, employed to do so, I do not perceive why the consequences should be different from what they would be if a solicitor or any other person had been employed. The transaction could 376 THE trustees' duties. not be governed by the rules or the usage of the London or any other exchange. There would be no moral ^lecessit//, or sufficient practical reason, from the usage of mankind or otherwise, for pay- ment of the money to the agent ; there would be no difficulty or impediment arising from the usual course of such business in the way of its passing direct from the lender to the borrower, in exchange for the securities ; and if it should be found con- venient to send it by the hand of a broker, or of any other messenger or agent, this might be done by a cheque made payable to the borrower or his order, and crossed, as is usual in direct dealings between vendor and purchaser, debtor and creditor, when payments of considerable amount have to be made. I think it right not to withhold the ex- pression of my opinion that such a case would fall within the principle of Roicland v. Witherden and Floycr v. Bodocli, rather than that of Ex parte Belchier. On this subject I find myself in agree- ment with Lord Justice Bowen ; nor do I infer, from the judgments of Lord Justice Lindley and Sir George Jessel that either of them thought otherwise. If, however, the respondent — being justified (as I think he was) in the employment of Cooke in the way in which he employed him — was entitled to give credit to the representation made on the face of the bought note which he received from Cooke, and to act upon the faith of it, the rules and usages of the London Stock Ex- change are material ; and the payment to the broker, if made conformably to such rules and NOT TO DELEGATE HIS DUTIES OR TOWERS. 377 usage, was no breacli of trust, and was not at the respondent's peril. The whole evidence satisfies me that the usual and regular course of business on the London Exchange is, for the money, under such circumstances, to pass through the broker's hands." Their lordships, therefore, exonerated the trustee from responsibility. 12. On similar principles (viz., conformity to ordinary business usage), a trustee may allow an auctioneer who is selling the trust property, to receive the deposit money ; but he must not allow it to remain in the auctioneer's hands for an unreasonable time (/). 13. May entrust moneys to a banker pending investment. — So, again, a trustee may, and indeed should, deposit trust moneys in a respectable bank pending investment ; and he will not be liable for the failure of the bank, unless he left the money there for an unnecessarily long period. For it is according to the common usage of mankind to make use of banks for the safe custody of money {k). But a trustee will be liable where he has uunecessarUij left trust moneys in the hands of a banker who fails, when he ought to have in- vested them, or where he has paid money to a banker or broker for investment and has neglected for some time to make inquiries as to such invest- (i) Edmonds v. Peahe, 7 Bea. 239. (Jx) Johnson v. A^eivton, 11 Ha. 160; Femuick v. Clarke, 31 L. J. Ch. 728, and per Lord Hardwicke, Ex joarte Belchier, Amh. 219. & a*^ i-^- suu t«u j, o^-i^ 378 THE trustees' duties. ment (/) ; and the unual clause indenmifying him against the acts or defaults of others will not pro- tect him (;;?). In a comparatively recent case, Kay, J., held that six months was the maximum time for which trustees should deposit money in a bank ; and that if at the expiration of that period no other investment was available, the trustees ought to invest in consols. In the case in question the trustees had kept the money on de- posit for fourteen months, and were held respon- sible for the loss caused by the failure of the bank {n). On the same ground of conformity to universal usage, trustees may remit money through the medium of a respectable bank, as being the most convenient and the safest mode (o) ; but they should pay the money into the bank as trustees, and CO noniwe (p). 14. May employ a debt collector. — So, again, where there are numerous small debts to be col- lected, it cannot be expected of executors or trustees that they should personally call on each debtor. Consequently, if under such circum- stances they employ, in the usual course of business, a debt collector, and the money collected [l) ClialJen v. Shijij^am, 4 Ha. 555; Reliden v. Wesley, 29 B. 213; Matthews v. Brise, 6 B. 239; Moyle v. Moyle, 2 E. & M. 710. (m) Rehden v. Wesley, supra. (71) Canny. Cann, 51 L. T. 770. (0) Knight v. Earl of Plymouth, 1 Dick. 120. {'p) Wren v. Kuton, 11 V. 380. NOT TO DELEGATE HIS DUTIES OR POWERS. 379 is lost by reason of the collector's insolvency, the trustees are prima facie not responsible (q). 15. Joining with others in a sale. — On the prin- ciples enunciated in the article now under con- sideration, it has been held, that if " trustees for sale join with any other person in a joint sale of the trust property, and any other property, whether that person be a trustee himself or be a beneficial owner, they must take care that their share of the purchase-money is paid to them, and the purchaser must take care of that likewise, because he can only pay trust money to the trustees. Therefore, when they do join with other people the purchase-money must be ap- portioned before the completion of the purchase, and must be paid by the purchaser, the appor- tioned part coming to the trustees to be paid to them " {)•), or, now, to their solicitor, under sect. 17 of the Trustee Act, 1893 (s). '"" '^^< f^ {q) Be Brier, Brier v. Evison, 26 C. D. 238. (>•) Per Jossel, M.E., Be Cooper and Allen, 4 C. D. 815. (s) Supra, p. 369. 380 THE trustees' duties. Art. 44. — Duty of Trustees to act jointly where more than one. Where there are more trustees than one, all must join in the execution of the trust (2^), save only — a. Where the settlement or a compe- tent court otherwise directs ; 13. As to the receipt of income (ti) ; 7. As to such matters as can be law- fully delegated under Art. 43. This article is a corollary of Art. 43. For, if trustees cannot delegate their duties, it follows that they must all personally perform those duties, and not appoint one of themselves to manage the business of the trust. It is not unusual to find one of several trustees spoken of as the " acting trustee," meaning the trustee who personally interests himself in the trust affairs, and whose decisions are merely indorsed by his co-trustees. The court, however, does not recognize any such delegation ; for the settlor has trusted all the trustees, and it behoves each and every of them (t) Luke V. South Kensington Hotel Co., 11 C. D. 121; Ex parte OH fen, 2 Gl. & J. 116 ; i^e Flower and Met. Board, 27 C. t). 592. («) As to shares and stocks, see Companies Act, 1862, CI. 1 of Table A., and same Act, sect. 30; but consider Binney v. Ince Hall Co., 35 L. J. Ch. 363. As to rents, see Townley v. Sherborne, Bridg. 35 ; Goldsiuorthi/ v. Knight, 11 M. & W. 337 ; and Gough y. Smith, W. N. (1872), p. 18. TO ACT JOINTLY WHERE MORE THAN ONE. 381 to exercise his individual judgment and discretion on every matter, and not blindly to leave all ques- tions to his co-trustees or co-trustee (.r). Illust. — 1. Cannot act by vote of majority. — Thus, the act of a majority of private trustees cannot bind a dissenting minority, nor the trust estate. In order to bind the trust estate the act must be the act of all (//) . 2. Must all join in receipt. — So, all the trustees must join in the receipt of money, unless, of course, the settlement authorizes one of them to give good receipts and discharges. For, as Kay, J., said, in Flower v. Met. Bd. {z), "The theory of every trust is, that the trustees shall not allow the trust moneys to get into the hands of any one of them, but that all shall exercise control over them. They must take care that they are in the hands of all, or invested in their names, or placed in a proper bank in their joint names. The reason why more than one trustee is appointed, is, that they shall take care that the moneys shall not get into the hands of one of them alone ; that they shall take care that the trust moneys are always under the power and control of every one of them ; and they have no right, as between themselves and the (x) Munchr. CocJcerell, 5 M. «&; C. 179. {y) Luhe v. South Kensington Hotel Co., supra. It is otherwise, however, with regard to charitable trustees : see Charitable Trusts Act, 1869, s. 13. There is also an exception in the case of trustees of a manor with regard to enfranchisement, as to which, see Copyhold Act, 1887, s. 40. (z> 27 C. D. 592. 382 THE trustees' duties. cestuis que trust, unless the circumstances are Buch as to make it imperatively necessary to do so, to authorize one of themselves to receive the moneys "(r/). 3. Investments should be in joint names. — All investments of trust moneys should be made in the joint names of the trustees, for otherwise it would enable one trustee to realize and appropriate the money {b). But this must of course yield to necessity, as, for instance, where shares were epecifieally bequeathed to trustees upon certain trusts, and it was found that by the regulations of the company the shares could only be registered in the name of one trustee (c). 4. Income. — As a general rule, however, although trustees must join in the receipt of capital, it is permissible for them to allow one of their number to receive the income. Thus, in the case of rents, the trustees may delegate the collection to one of their number or to a rent collector. For it would be impossible for them all to collect the rents (d) . But if there is any fear of misappropriation by the collecting trustee, the others should notify the tenants not to pay him again {e) . A similar rule applies to the receipt of dividends on stocks or shares, from the necessity of the case, because the (a) See also Lee v. Sankey, 15 Eq. 204 ; Cloiigh v. Jiond, 3 M. & C. 490 ; and Walker v. Si/monds, 3 Sw. 63. (b) Lewis v. Nobbs, 8 C. D. 595; Swale v. Swale, 22 Bea. 584, (c) Consterdive v. Consterdine, 31 Bea. 330. (d) Townley \. Sherborne, 2 W. & T. L. C. (e) Ooiigh v. Smith, W. N. 1872, p. 18. TO ACT JOINTLY WHERE MORE THAN ONE. 383 eompanies are not Lound to recognize trusts, and always pay to the first of several joint holders (/) . 5. Trustee joining- in receipt for conformity. — In cases where, from necessity, a trustee may per- mit his co-trustee to receive moneys owing to the estate (ex. gr., where he permits him to collect rents), then, even though he join in the receij)t for such moneys, and thereby acknowledge that he has received them, he will not be liable // he can vrore [r/) that he did not in fact receive them, and only joined in the receipt for the sake of con- formity {/i). For one of several trustees cannot alone give a good receipt, unless expressly em- powered to do so by the settlement; nor can trustees empower one of their number to receive and give a good receii^t for trust moneys, and all must, therefore, join(j). So that, although at law the signature of a trustee is (or rather was (k) ) conclusive evidence that the money came to his hands, " equity, which pursues truth, will decree according to the justice and verity of the (/) See sect. 30, Companies Act, 1862, and tlie acts or charters of all the great companies. But tlie Court may- interfere in case of necessity : Bradford Bank v. Briggs, 12 App. Cas. 27 ; Birmn/ v. Ince Hall Co., 35 L. J. Ch. 363. As to when the Court will order dividends to be paid to one of several trustees, conf. lie Pryor, 35 L. T. 202 ; and Re Carr, Carr v. Carr, 36 W. E. 688. {g) Brice v. Stokes, 2 Lead. Ca. 865 ; Townlei/ v. Sher- borne, 2 Lead. Ca. 858; Be Fryer, 3 K. & J. 3i7. (h) Fellows V. Mitchell, 1 P. "W. 81 ; Be Fryer, supra, {t) Lew. 233. See Be Beldner, supra ; Walker v. Symonds, 3 Sw. 63 ; Lee v. Sankey, 15 Eq. 204 ; Be Fknver and Met. Board, 27 C. D. 592. {k) Not so since the regime of the Judicature Acts. 384 THE trustees' duties. fact"(/), and will hold that, under the circum- stances, seeing that it is an act which the very- nature of his office will not permit him to de- cline {m), it does not amount to an admission that he actually received the money. It was formerly thought that executors could not claim this privi- lege, on the ground that one alone could give a good discharge ; but this notion has been greatly modified by the case of Wesley v. Clarke («), and it may now be considered as settled, that, " if the receipt be given for the purpose of mere form, the signing will not charge the person not receiving ; but if it be given under circumstances purporting that the money, though not actually received by both executors, was under the control of both, such a receipt shall charge ; and the true question in these cases seems to have been whether the money was under the control of both executors " (o). An executor is, however, more strictly responsible than an ordinary trustee for any act by which he reduces any part of the testator's property into the sole possession of his co-executor {p). 6. Must not permit co-trustee to retain trust money. — Even where a trustee may safely permit his co-trustee to receive trust moneys, he will, nevertheless, be liable if he permit him to retain {I) See per Lord Henley, Harden v. Parsons, 1 Ed. 147. (m) Lew. 233. {n) 1 Ed. 357. (o) Per Lord Eedesdale, Joy v. Campbell, 1 Sell. & L. 341. {p) Toivnsend v. Barber, 1 Dick. 356; Candler v. Tillett, 22 B. 263 ; Hovey v. Blakeman, 4 Y. 608 ; Clough v. Dixon, 3 M. & C. 497 ; Lees v. Sanderson, 4 Sim. 28. TO ACT JOINTLY WHERE MORE THAN ONE. 385 them for a longer period than the circumstances of the case necessitate (q). Thus, in Walker v. Symonds (r), D., one of three trustees, received part of the trust money, and, with the assent of the other trustees, invested it in East India Com- pany's bills, payable to Jiim. These were paid off, and thereupon S., another of the trustees, wrote to D., requesting him to invest the money. D., however, begged that it might remain in his hands on mortgage. The other trustees assented to this. The mortgage was never, in fact, prepared, al- though 8. made frequent applications to D., who finally died insolvent five years after first receiv- ing the money. Upon this state of facts Lord Eldon said: "The money was laid out with the consent of the trustees on India bills, payable to D., a palpable breach of trust, by placing the fund under his control, secured by little more than a promissory note payable to himself. It was prob- able that in 1793 the money due on the bills would be paid, and it would be lodged in his hands ; and although the court will proceed as favourably as it can to trustees who have laid out the money on a security from which they cannot with activity recover it, yet no judge can say that they are not guilty of a breach of trust if they {q) Brice v. StoJ{es, supra; Thompson v. Finch, 8 D., M. & G. 560 ; Walker v. Symonds, 3 Sw. 1 ; Hanhury v. Kirk- land, 3 Sim. 265 ; Styhs v. Guy, 1 M. & Q. 422 ; Egbert V. Bailer, 21 B. 560 ; Rodhard v. Cooke, 25 W. R. 555. (r) Supra; and see also Lewis v. Nobbs, 8 C. D. 591, and Co)isterdine v. Consterdine, 31 B. 330. U. — T. C C 386 THE TRUSTEES DUTIES. suffer it to lie out on sucli a security for so long a time. The trustees were guilty of a breach of trust in permitting the money to remain on bills pay- able to D. alone, and in leaving the state of the funds unascertained for five years." 7. Must not permit co-trustee to sign cheques. — For like reasons, trustees, in whose names trust moneys are banked, should not authorize the bankers to pay cheques signed by one only of their number ; for that would be equivalent to giving the sole control of the trust funds to one trustee, whereas the beneficiaries are entitled to the safeguard of the trustees' joint control (.s). 8. Executor may remit money to co-executor to pay debts. — Again, where one executor lives at a distance from the testator's place of abode, he may remit money to his co-executor, who lives in the immediate vicinity, for the purpose of paying the testator's debts ; for " he is considered to do this of necessity. He could not transact business without trusting some person, and it would be impossible for him to discharge his duty, if he were made responsible where he remitted money to a person to whom he would himself have given credit" {t). For like reasons a trustee may intrust his co-trustee with a crossed cheque, signed by both of them, for delivery to the beneficiary {ii). (s) Clough V. Bond, 3 M. & C. 490 ; Trutch v. Lamprell, 20Bea. 116. {t) Per Lord Eedesdale, Joy v. CampheU, 1 Sch. & L. 341 ; Ex parte Griffin, 2 Gl. & J. 114. See, however, Chambers V. Minchin, 1 V. 193 ; Langford v. Oascoigne, supra. (m) Barnard v. Bagshaiue, 3 D., J. & S. 355. TO ACT JOINTLY WHERE MORE THAN ONE. 387 9. May allow title deeds to remain in custody of co-trustee. — On the ground of necessity, trustees may allow the custody of title deeds to remain with one of their number; for any other rule would be productive of the greatest inconveni- ence (r). But it seems that the rule is different with regard to bonds payable to bearer (x). 10. Must be joint mortgagees. — Apart from other reasons, the trust money cannot be advanced to one of the trustees on mortgage, however good the security may seem : for he cannot act both as mortgagor and mortgagee, and without his joinder in the latter capacity, his co-trustees cannot legally act (i/). 11. Must prosecute or defend jointly. — So, again, trustees ought, in the absence of very special cir- cumstances, to prosecute or defend an action jointly, and not by separate solicitors. As a general rule, where trustees sever in such proceedings, only one set of costs will be allowed between them out of the trust estate. But where a trustee refuses to join as co-plaintiff in a properly instituted pro- ceeding, and it consequently becomes necessary to make him a defendant, he will be altogether deprived of his costs {z). {v) Per Wood, V.-C, Cvttavi v. E. C. Ry. Co., 1 J. & H. 243. (a;) Leivis v. Nohhs, 8 C. D. 595. " [y] Strckney v. Snuell, 1 M. & Cr. 8 ; Francis v. Francis, 5 De G., M. & G. 108 ; Fletcher v. Green, 33 B. 426. (z) Hughes v. Key, 20 Bea. 395 ; CoUyer v. Dudley, T. & E. 421 ; Oompertz v. Kensit, 13 Eq. 369. cc2 .. : 1. . 3S8 THE trustees' duties. Art. 45. — Dut)/ of Trustee not to set up Jus tertii. A trustee, who lias acknowledged him- self as such, must not set up, or aid, the adverse title of a third party against his beneficiary (h). But [semhle) he may decline to execute the trust, if he receives information making it doubtful whether he ought to execute it ; and he has a right to have the direction of the court on the subject [c). Illust. — 1. Chapel trustees joining seceders. — In JSfeicsome v. Floicers (sup.), a chapel was vested in trustees, in trust for Particular Baptists. Subsequently a schism took place, and part of the congregation seceded, and went to another chapel. Still later, the surviving trustees were induced (not knowing the real object) to appoint new trustees, and vest the property in them. Immediately afterwards, the new trustees — who were in fact attached to the seceding congrega- tion — brought an action to obtain possession of the chapel. Their appointment was, however, set aside, and it was held that they could not raise the adverse claims of the seceders as a defence against the congregation of the chapel, who were {b) Neiusome v. Flowers, 30 B. 461. (c) Neale v. Davis, 5 D., M. & G. 258 ; per Wood, V.-C, and Turner, L. J., Knight-Bruce, L. J., dissentiente. i DUTY OF TRUSTEE NOT TO SET UP JUS TERTII. 389 their beneficiaries ; Lord Rorailly saying, " It is a common principle of law, that a tenant who has paid rent to his landlord cannot say, ' You are not the owner of the property.' The fact of his having paid rent prevents his doing it. The same thing occurs where persons are made trustees for the owner of property ; if they acknowledge the trust for a considerable time, they cannot say that any other persons are their cestuis que trusts." 2. Must not contest the title of their beneficiaries. — Nor, however honestly trustees may believe that the trust property belongs of right to a third party, are they justified in refusing to perform the trust they have once undertaken, or in communicating with such other person on the subject; but they must assume the validity of the title of their beneficiaries until it be negatived {d) . 8. They may appeal to court to relieve them of the trust. — Where, however, trustees have received notice of a paramount claim, and of the intention of the notifying party to hold them responsible if they deal with the fund in a manner contrary to Buch paramount claim, it is not yet thoroughly well settled whether, in face of such notice, the trustees are bound to go on steadily in executing the trust which they have undertaken, or whether they can apply to the court for relief in the nature of interpleader. In Nea/c v. Davis {e), an exe- cutrix executed a deed of trust, by which she (d) Beddoes v. Pngli, 26 B. 407 ; Lew. 253. (e) 5 D., M. & G. 258. 390 THE trustees' duties. recited that slie intended to appropriate part of lier testator's assets in payment of a debt due from him to her, and she tlien proceeded to declare trusts of such appropriated fund. She, however, died without making the appropriation, but it was subsequently made by her executors. New trustees of the deed of trust were appointed, who executed the usual declaration that they would hold the appropriated fund on the trusts of the settlement. They subsequently refused to carry out the trust, on the ground that they could not safely do so, there being no evidence forthcoming that the original testator was indebted to the settlor at the date of his decease. On these facts it was held, by Wood, Y.-C, and Turner, L.J. (Knight- Bruce, L.J., dissenfieiite), that the trustees were entitled to refuse to execute the trust. Lord Justice Turner said : — " It is said that they knew of this doubt when they accepted the trusts ; but I take it to be the law, that if a trustee has accepted a fund upon certain trusts, and then receives information, making it doubtful whether he ought to execute these trusts, he has a right to come to the court for its direction, whether the trusts ought to be executed." Lord Justice Knight-Bruce, however, energetically dissented, saying: — "I am of opinion that it is not com- petent in law, equity, or honesty, for men so to act. I am of opinion that if, by paying the fund to their cestuis que trusts they would make them- selves personally liable to the adverse claimant in the event of his being successful, they were and DUTY OF TRUSTEE NOT TO SET UP JUS TERTII. 391 are "bound to perform the trust which they under- took" (_/'). Tlie doctrine as enunciated in the rule, however, is, it is apprehended, correct. It must be borne in mind that where there is an adverse claim, of the validity of which the trustee is ignorant, he may safely execute the trust {g). ^ Art. 4G. — Duty of Trudee to act gratuitously/. A trustee has no right to charge for his time and trouble (//) except in the following cases : — a. Where the settlement j^rovides for it (/). /3. Where he has, at the time of accepting the trust, expressly stipu- lated for a remuneration (A"), and the beneficiaries have freely and without unfair pressure assented to such sti23ulation (/). (/) Neale v. Davis, supra; see also Neglian v. Roche, Ir. Eeps., 7 Eq. c!32 ; Hurst v. Hurst, 9 Ch. Ajjp. 762; and as to agents, Nicholson v. Knoivles, 5 Mad. 47. {g) Beddoes v. Pugh, supra. (A) Riihinson v. Fdt, 2 Lead. Ca. 215. By a recent Act of tlie Canadian Parliament, trustees in the Dominion are authorized to retain a commission. (i) Rohiitson V. Pett, supra ; \\ ebb v. Earl of Shaftesbury, 7 V. 480 ; Wdlis V. Kibble, 1 B. 559. (A;) Be Sherwood, 3 B. 338 ; Douglas v. Archbut, 2 D. & J. 148. {I) Ayliffe v. Murray, 2 At. 58. 392 THE TRUSTEES DUTIES. JL^' ..a •/ fuj- y- Where the trust is before the court, and tlie trustee has, before accepting the trust, expressly stipu- lated for such remuneration (wz). ^- Where one who is not an express trustee has projoerly traded with another's money under circum- stances which make him a con- structive trustee of the profits (n). £. Where the trust property is abroad, and it is the custom of the local courts to allow remuneration (o). Illust. 1. — Solicitor-trustee must not generally charge. — Thus, a trustee who is a solicitor will not be allowed to charge for his time and trouble or for his professional attendance ; for, as was somewhat dryly said by Lord Lyndhurst, in JS^ew v. Jones {p), "A trustee placed in the position of a solicitor might, if allowed to perform the duties of a soli- citor, and to be paid for them, find it very often proper to institute and carry on legal proceedings which he would not do if he were to derive no emolument from them himself, and if he were to employ another person." The incapacity not only applies to the solicitor-trustee personally, but also (m) Barrett v. Hartley, 12 Jur., N. S. 426; Moore v. Froud, 3 M. & C. 48. (n) Brown v. Litton, 1 P. W. 140. (o) Chambers v. Goldwin, 9 V. 267. {p) 9 Jar. Prec. 3o8. DUTY OF TRUSTEE TO ACT GRATUITOUSLY. 393 to liis firm, who cannot, by acting as //in solicitors,' charge profit costs, either in an action, or for pre- paring leases and the like on behalf of the trust estate (q). 2. Alitor if authorized by the settlement. — But if the settlement provides that the trustee mai/ charge, he will be allowed to do so, although his charges will be strictly limited to those indicated by the settlor. Thus, if a solicitor-trustee is autho- rized to make professional charges, he will not be allowed to charge for time and trouble expended other than in his position of solicitor (;•). But, on the other hand, where a testator by his will autho- rized any trustee thereof who might be a solicitor to make the usual professional, or other proper and reasonable charges, for all business done and time expended in relation to the trusts of the will, loJtether such business nris usually uithin the business of a solicitor or not, it was held that the taxing master had power to allow to a trustee who was a solicitor, the proper charges for business not strictly of a professional nature transacted by him in rela- tion to the trust estate (.s). And this holds good even where a legacy is given to the solicitor- trustee {q) Re CorseJlis, Laivton v. Ehves, 34 C. D. 675. As to protit costs charged by a solicitor-mortgagee against the mortgagor, see Tie RoJierts, 'i3 C. D. 52 ; Field v. Hopldns 44 C. D. 524 (where it was held by Kay, J., that even an express agreement in that behalf was invalid) ; Re Wallis, Ex parte Liquorish, 25 Q. B. D. 176 ; Re Doody, Fisher v. Doody, 67 L. T. 650. (r) Harbin v. Darby, 28 B. 325 ; Re Chappie, Newton v. Chappie, 27 C. D. 584. (s) Re Ames, Ames v. 'Taylor, 25 C. D. 72. 394 THE trustees' duties. conditionally upon his accepting the trust (t). However, in all such cases, the trustees cannot, in the absence of special powers, settle the amount payable to the solicitor-trustee so as to bind the beneficiaries, and the latter are consequently entitled to have the solicitor's costs investigated (t). 3. Exception where solicitor acts for self and another. — There is a curious exception to the rule that a solicitor-trustee cannot, in the ab- sence of an enabling clause, charge profit costs. This exception (known as the rule in Cradoch v. Flper (m) ) is, that " where there is work done in court, not on behalf of the trustee who is a solicitor alone, but on behalf of himself and a co-trustee, the ordinary principle will not prevent the solicitor, or his firm, from receiving the usual costs, if the costs of appearing for, or acting for, the two, have not increased the expense ; that is to is^j- ^^u-.u.' say, if the trustee himself has not added to the expense which would have been incurred if he or his firm had a];)peared only for his co-trustee " {x). The exception in Cradoch v. Fipcr is, however, limited to the costs incurred in respect of business done in an action or matter, and does not apply to business done out of court (,r) ; and where a solicitor- trustee is acting for the trud estate, he will not be allowed to make profit costs merely on the ground (t) Be Fish, Bmnett v. Bennett, (1893) 2 Ch. 413. («) 1 M. & G. 664. {x) Per Cotton, L. J., in Be Corsellis, Lawton v. Elives, 34 C. D. 675. j^,',45«-iVdnA<- ^ (.--.. DUTY OF TRUSTEE TO ACT GRATUITOUSLY. 395 that a third party {c.r. (jr., a lessee or mortgagor) has to repay the costs to the trust estate {ij) . 4. Cannot generally claim a salary. — In general, a trustee, whether express or constructive, will not be permitted to claim a salary or any remunera- tion for managing a trade or business (s). Thus, in Barrett v. Hartley {a), where a trustee had carried on a business for six years, in consequence whereof great advantage had accrued to his bene- ficiaries, it was held that he had no right to exact or charge any remuneration or bonus in respect of such services ; for his exertions were incident to the performance of the duties imposed by the deed of trust which he had accepted. 5. Exception. — But this does not apply to one I who riglitfuUy becomes possessed of another's money and rightfully trades with it ; for he will be entitled to a reasonable remuneration, although he is of course a constructive trustee of the profits of the trade {h). For instance, in Broun v. Litton (c) the plaintiff's testator was the captain of a ship, who, being on a voyage, had 800 dollars which he intended to invest in trade. The {y) Be CorselUs, Laivton v. Elices, supra; but see and distinguish Art. 47, Illust. 6, infra, p. 400. {z) Stocken v. Dawes, 6 B. 1371 ; Jhirdon v. Burdon, 1 V. &B. 170. (o) L. E., 2 Eq. 787. For a case in wliicli, on the appointment of a new trustee by tbe court, he was authorized to retain a commission, see Re Freeman, W. N. (1887), p. 210. {h) lJ7-oum V. De Tastet, Jac. 284 ; Wedderhurn v. Wed- derbnrn, 22 B. 84. (c) 1 P. W. 140. 396 THE trustees' duties. captain died, and the defendant, who was the mate of the ship, becoming captain in his place, took possession of these 800 dollars, and by judiciously trading with them made considerable profits. Upon a bill being filed against him for an account, the Lord Keeper Harcourt said : " He ought clearly to account for the profits made of the money ; the primary intention in carrying abroad this money, was to invest it in trade, and not to return with it home again, and therefore the defendant, having observed the intent of the testator in trading therewith, and having taken such a prudent care in the manage- ment of it as (it may be presumed) he would have taken of his own money, the defendant would not have been liable for any loss that might have happened, and to recompense him for his care in trading with it, the master shall settle a proper salary for the pains and trouble he has been at in the management thereof." ^' Art. 47. — Duty of Trustee not to traffic icith or otheru-ise profit by Trust Property. (1) A trustee must not use or deal with trust property for liis own private advantage (d). (d) Webb V. Earl of Shaftesbury, 7 V. 488 ; Ex parte Lacey, 6 V. 625 ; and see lie Imp. Land Co. of Marseilles, 4 C. D. 566; a.ndL Aberdeen Town v. Aberdeen University, 2 App. Cas. 544. jS'ot to traffic with trust property. 397 (2) A trustee is absolutely incapacitated while he remains a trustee from pur- chasing, or leasing, or accepting a mortgage of trust property either from himself (e) or his colleagues (/), how- ' ever fair the transaction may be (ff), unless : — a. Under an express power in the settlement ; or /3. By leave of a competent court (/^). (3) A trustee may, however, purchase, or lease, or accept a mortgage of trust property direct from beneficiaries (/) ; but in that case, if the transaction be impeached, it is incumbent on the trustee to prove (k) affirmatively and conclusively : — a. That he and the beneficiaries were at arm's length, and that no con- fidence was reposed in him; (e) Fox V. Mackreth, 1 Lead. Cas. 141. (/) lb. ; and Whichcote v. Laivreiice, 3 V. 740, and Morse v. Royal, 12 ib. 374. (,<7) Ex 'parte Lacey, supra; Ex parte Bennett, 10 V. 393; Oihson V. Jeyes, 6 V. 277. [h) Farmer v. Deane, 32 B. 327 ; and see Tennant v. Trenchard, 4 Ch. App. 547. (i) Gibson Y. Jeyes, supra; Morse v. Royal, supra; Ex parte Lacey, supra. {Ic) Cases in note (?') ; and also Randall v. Errington, 10 v. 427 ; Coles v. Trecothick, 9 ib. 247. ^m-^i^^ Ji-. 398 THE trustees' duties. /3. That the transaction was for the advantage of the beneficiaries ; and 7- That full information was given to the beneficiaries of the value of the property, of the nature of their interest therein, and of the circum- stances of the transaction. (4) A trustee cannot qualify himself to ; become a purchaser by retiring from ' a trusteeship with that view(/). Illust. — 1. Must not trade with trust fund. — Thus, a trustee must not actively import trust moneys into his trade or business, or use them in speculations of his own ; and if he does so (as has been said before) he will be a constructive trustee of the profits ; and if there be no profits he will be liable for the breach of trust, and will have to pay compound interest at five per cent., as will be seen hereafter (m) . Where, however, there has been no active breach of trust, but only an omission on the part of a trustee, in whose business the settlor had money invested, to settle up the accounts and properly invest the balance, such an omission will not make him liable to account for the profits (n) . 2. Must not get lease renewed to himself. — On similar principles, a trustee of leaseholds cannot (l) Ex parte James, 8 V. 337; Spring v. Pride, 4 D., J. & S. 395. (m) Div. v., Ch. I., infra. [n) Vyse v. Foster, L. E., 7 H. L. 318. I NOT TO TRAFFIC WITH TRUST PROPERTY. 399 use his position for the purpose of getting a new lease granted to himself on the expiration of the term of which he is trustee (o) . And this prin- ciple has been carried so high, that where a trustee of a lease endeavoured fairly and honestly to treat for a renewal on account of the beneficiaries, and, the lessor positively refusing to grant a renewal for their benefit, the trustee took the lease for himself, it was held that even in such a case it was so difficult to be sure that there was not collu- sion, that it was incumbent on the trustee to hold the renewed lease for the benefit of the bene- ficiaries (p) . 3. Commission paid to trustee by persons employed in the trust business. — Where the solicitors in an administration action presented their client, the trus- tee, with half their profit costs, Mr. Justice North (while holding that in the administration action he had no jurisdiction in the matter) intimated that if a separate action were brought against the trustee by the beneficiaries to make him hand over the sum so received, he would have no defence (q). 4. Accretion to trustee's estate belongs to trust. — Where trust moneys were lent on mortgage, and the mortgagor being a person of eccentric character, (o) Sand ford v. Keech, Sel. Ch. Ca. 61 ; Bfiinett v. Oas and Coke Co., 52 L. J., Ch. 98; Re Lord Ranelarjh, 26 C. D. 590 ; and Brinton v. Liilham, 53 L. T. 9. (/;) Per Lord Eldon, in Ex parte James, 8 V. 337, at p. 345. (2) Re TJiorpe, Vipont v. Raddiffe, (1891) 2 Ck 360. !For further examples of profits made by fiduciary persons the reader is referred to pp. 118 — 120, and 205 — 208, supra. 400 THE TRUSTEES DUTIES. devised the equity of redemption to "tlie mort- gagee," it was held, that, although the mortgagor did not know that the mortgagee was a trustee, yet, as the devise was made to him as mortgagee, and as it was the trust which caused him to occupy that position, the devise of tlie equity of redemp- tion belonged to the trust, and not to the trustee beneficially (r), 5. Must not sport over trust estate. — Lord Eldon once directed an inquiry whether the right of sporting over the trust property could be let for the benefit of the beneficiaries, and, if not, he thought that the game should belong to the heir of the settlor. The trustee might appoint a game- keeper, if necessary, for the preservation of the game, but must not keep an establishment of mere pleasure for his own enjoyment (s). 6. Rule does not apply to indirect gains. — The rule does not, however, apply where a trustee remotely, and only incidentally, profits by his connection with the trust ; as, for instance, where a trustee who is a solicitor lends trust moneys on mortgage to one of his own clients, and thereby obtains a fee ft'om the latter for preparing the security (t) . 7. Rule inapplicable where trustee is the bene- ficiary subject to specific charge. — The rule does not apply where the trustee is also the ultimate (r) Re Payne, Kihhle v. Payne, 54 L. T. 840. (s) WeU V. Earl of Shafteshurtj, 7 V. 488. [t) Whitney Y. Smith, 4 Ch. App. 513; and see also Butler V. Butler, 7 0. D. 116. But conf. Re Corsellis, Lawton v. Elwes, 34 C. D. 675. NOT TO TRAFFIC "WITH TRUST PROPERTY. 401 beneficiary subject to setting aside a specific sum for another. For although in form a trustee, he is substantially beneficial owner, subject to an equitable mortgage for securing the specific sum in question. Thus, in Re Cameron, Cameron v. Cameron («), a testator gave his real and personal estate to his son A. upon trust to convert, and, out of the proceeds, to set aside and invest 20,000/. for the benefit of his son 0. for life, with remainders over ; and, subject thereto, he gave the residue of the moneys produced by such conver- sion, to his two sons A. and B. The trustee son, A., neither paid nor appropriated funds to meet the 20,000/. trust legacy, but retained the trust estate in its original state of investment, paying C. mean- while interest on 20,000/. at 4 per cent. The investments having risen considerably in value, C. and his children claimed to participate in the increase, on the ground that A., the trustee, could not retain profits earned by his own default. The action was, however, dismissed, Stirling, J., saying : " It is argued that the defendant has been guilty of a breach of trust in not investing the legacy, or appropriating proper securities to meet it : and that he cannot be allowed to benefit by such a breach of trust, but must account to the legatees for any profit he has made. If it were made out that the defendant had unwarrantably applied the money of his cestuis que trust to his own purposes — if, for example, the estate of the testator, after (w) (1893) 3 Ch. 468. U. T. D D 402 THE trustees' duties. payment of debts, had been less than 20,000^,, and the defendant had sold the investments and embarked the proceeds in trade — it might be right to make him account for all the profits earned. But what has been done is simply to leave the estate as it was at the testator's death, without making any investment or appropriation to meet the legacy. ... I think that the residuary legatees ought to be treated, under the circum- stances of this case, as the owners of the estate, subject to a charge thereon of the plaintiff's legacy with interest at 4 per cent." 8. Purchases of trust property by trustees. — Perhaps the most important branch of the subject is that relating to the purchase or lease by trustees of the trust property. With regard to such pur- chases from themsekes (as distinguished from purchases from their beneficiaries), the doctrine stands much more upon general principle than upon the circumstances of any individual case. It rests upon this : that the purchase is not per- mitted in any case, however honest the circum- stances, the general interests of justice requiring it to be destroyed in every instance, as no court is equal to the examination and ascertainment of the truth in much the greater number of cases {x). Consequently, under no circumstances can an active trustee, nor, indeed, a passive trustee ^cho has been an active one, nor even a person who (x) Per Lord Eldon in Ex j)arte James, 8 V. 337, at p. 345 ; and see Beningfield v. Baxter,. 12 App. Cas. 167. KOT TO TRAFFIC WITH TRUST PROPERTY. 403 has been orroneously treated by all parties as a trustee (y) {i.e., a trustee do son tort), purchase trust property from himself or his colleagues, either directly or collusively through the inter- vention of a third party (s). Such a transaction is voidable at the instance of a beneficiary ex debito justitice, and without proof of any injury or loss, a fact which ought to be borne in mind by every trustee. Such a sale also affects all subsequent purchasers with notice from the trustee {a) ; and, therefore, even if a trustee cares to risk such a purchase as between himself and the beneficiaries, he should remember that it practically precludes him from ever parting with the property to a subsequent purchaser. How- ever, this rule does not prevent a trustee selling to a joint stock company in which he is a share- holder ; for a sale by a person to a corporation of which he is a member is not, either in form or substance, a sale by him to himself and others. Nevertheless, in such a case, there is such a con- flict of interest and duty„ that if the sale be impeached by the beneficiaries, the onus will lie on the company to show affirmatively that the trustee had taken all reasonable pains to secure a (y) Plowright v. Lamhert, 52 L. T. 646. (z) Campbell v. Walker, 5 V. 678 ; Knight v. Majori- lanks, 2 M. & G. 12. (a) Aberdeen Town Council v. Aberdeen University, 2 App. Cas. 544 J Cookson v. Lee, 23 L. J., Ch. 473. dd2 404 THE trustees' duties. purchaser at tlie best price, and that the price given by the company was not inadequate at the time, although a better price might have been obtained by waiting (i). It must also be observed that the fact that a trustee has sold trust property in the hope, subsequently realized, of being able to repurchase it for himself at a future time, is not of itself a sufficient ground for setting aside the sale, where the price was not inadequate at the time, and there was no agreement or under- standing existing at the time of the first sale that the purchaser should sell or reconvey the property to the trustee ; and the fact that the trustee many years afterwards made a handsome profit by the property makes no difference (c). However, in the case just cited, over twenty years had elapsed without the sale being impeached and many of the parties were dead, and, as the court said, the pre- sumption of law that a transaction was legal and honest is a presumption that is strengthened by lapse of time. 9. Same rule applies to agents. — An agent em- ployed for the sale of an estate cannot purchase it for himself, for he is a constructive trustee (d). 10. Cannot lease or mortgage to himself. — So trustees cannot lease or mortgage the trust estate {b) Farrar v. Farrar, Limited, 40 C. D. 395. (c) Re Postletliwaite, Postlethwaite v. Hickman, 37 W. E. 200 ; and see also Dover v. Buck, 5 Giff. 57 ; and Baker v. Peck, 9 W. E. 472. (d) Re Boyle, 1 M. & G. 495 ; De Bussche v. Alt, 8 C. D. 287. NOT TO TRAFFIC WITH TRUST PROPERTY, 405 to one of themselves, and if they do so the lessee will have to account for the profits {e). 11. Rule inapplicable to bare trustees. — The rule as to selling to himself only applies vs^here the express or constructive trustee is substantially an active trustee ; for where he is the mere de- pository of the legal estate without any duties, and without ever having had any, he may be a purchaser ; for instance, trustees to preserve con- tingent remainders (/), or persons nominated trustees who have disclaimed (g). But one who was originally an executive trustee, and has be- come a mere bare trustee by performance of the trusts, would, it is apprehended, be disqualified; for he would have had an opportunity of becoming acquainted with the property and its value (A). 12. May purchase from beneficiary. — But al- though a trustee is incapable of purchasing from himself or his colleagues, there is no fixed and arbitrary rule that the trustee can, under no circumstances, purchase the interests of his bene- ficiaries from the beneficiaries themselves. But even in such cases the court regards such purchases with great jealousy, and, if impeached, they can- not stand unless the trustee can affirmatively show that the parties were completely at arm's length (e) Ex parte Hughes, 6 V. 617 ; Stichney v. Sewell, 1 M. & C. 8; Francis v. Francis, 5 D., M. & G. 108. (/) Sutton v. Jones, 15 V. 587 ; Pooley v. Quilter, 4 Dr. 18y. (g) Stacey v. Elph, 1 M. & K. 195. (A) Ex parte Bennett, 10 V. 381. 406 THE trustees' duties. in making tlie bargain ; that the bargain was a beneficial one to the cestuis que trust ; and that the trustee candidly disclosed all facts known to him which could in any way influence the vendors {/i). 13. In reference to sales by the beneficiaries, the transaction was upheld where a beneficiary took the whole management of a sale upon him- self, acd then agreed to sell a lot, which he had bought in, to one of the trustees for sale (?). 14. Whether trustee of share of proceeds can purchase. — A question sometimes arises in practice, whether, on a sale by trustees, the property can be purchased beneficially by a person who is a trustee of a subsidiary settlement by which a share in the proceeds of the sale is settled. Curiously enough, this point never seems to have been decided ; but it is submitted that such a purchase might be im- peached. For it is the duty of the subsidiary trustee to watch over the interests of //is bene- ficiaries. It is obviously to their interest that the sale shall realize a high price, whereas it is the interest of a purchaser that it shall be sold cheap. By becoming a purchaser, therefore, the subsidiary trustee is acting in a character wholly inconsistent with his fiduciary duty, and little doubt is enter- tained that, if the sale were impeached by his cestuis que trusts, the onus would be cast on him (7i) lie Worssu7n, W. N. 1882, p. 61. (?■) Coles V. Trecothick, 9 V. 234 ; and Clark v. Swaile, 2 Ed. 134. NOT TO TKAFFIC WITH TRUST PROPERTY, 407 of proving his complete bona fides, and that he gave an adequate price. 15. Trustee of trustee's settlement not debarred from purchasing. — Although a trustee cannot pur- chase from himself, it has been, held that the rule does not preclude the trustees of his marriage settlement from purchasing the property (k) . IG. Mortgage by beneficiary to trustee. — A trus- tee may take a fair mortgage from his beneficiary ; and, in that case, may rely on his possession of the legal estate, as giving him priority over prior mortgagees of whose claims he had no notice when he made the advance (/) . 17. Purchase by solicitor from client. — So, where a, client was very desirous of selling property, and, after vainly endeavoiuing to do so, finally sold it to his solicitor (who was of course a constructive trustee), and it was proved that the transaction was fail' and the price adequate, and indeed more than could have been obtained elsewhere at the time, and the client quite understood his position, it was held that such a sale was good and binding, although it lay upon the solicitor to prove that it was unimpeachable (w). A solicitor purchasing from his client should always make him employ a separate solicitor {)i). The rule equally apjalies (k) HicMey v. Ilichhy, 2 C. D. 190. {l) Neivman t. Neivman, 28 C. D. 674. {m) Spencer v. 'Topham, 22 B, 573; 2 Jur., N, S. 865; Gibson V. Jeyes, 6 V. 278 ; Johnson v. Fesenmayer, 3 D. & J. 13 ; Edwards v. Merrick, 2 Ha. GO. (h) Cockburn v. Edwards, 18 C. D. 455. 408 THE trustees' duties. wliere the solicitor purchases, not directly from the client, but from the latter's trustee in bank- ruptcy (o) . 18. Purchase by person occupying a position of confidence towards vendor. — The rule applies even where the party from whom advice is sought is not a professional adviser ; for the fact that he accepts the position of adviser places him in a fiduciary position towards the party seeking advice. Thus, T., a young man aged twenty-three, entitled to a moiety of a freehold estate, the entirety of which brought in about 440/. a-year, being pressed for payment of his college debts, amounting to about 1,000/., and being estranged from his father, wrote to his great-uncle for advice and assistance as to the payment of the debts. The uncle deputed the defendant (his nephew) to see T. on the subject. At the interview, T. refused to com- promise the debts, but said he would sell his moiety of the estate, upon which the defendant offered him 7,000/. for it. This offer was accepted ; but before the agreement was signed, the defendant had the property valued, and it turned out that the mines alone under the property were worth 20,000/.; but this fact he omitted to communi- cate to T. On these facts it was held, at the suit of T.'s heir, that the defendant had stood in a fiduciary relation towards T., which made it his duty to communicate to T. all material information which he had acquired affecting the value of the (o) Luddy's Trustee y. Peard, 33 0. D. 500. NOT TO TRAFFIC WITH TRUST PROPERTY. 409 property ; and that, a3 he had not done so, the sale must be set aside {})). 19. The rule does not apply to certain constructive trustees. — The rule as to the extreme fairness to be observed in purchasing from cestuis que trusts does not apply to persons who are only constructive trustees by virtue of some business contract entered into with the so-called cestuis que trusts. Thus mortgagees can freely purchase from their mort- gagors ((/) , partners from the representatives of a deceased partner (r), and other persons bearing analogous relations enjoy a similar freedom ; for though contracting parties may by a metaphor be said to be trustees for each other, the trust is strictly limited by the contract. They are trustees only to the extent of their obligation to perform that contract, and the trust is limited to the discharge of that obligation (.s). 20. Purchase by trustee by leave of the court. — Where there are infant beneficiaries, the court will, on the application of the trustee, allow him to purchase, if it can see that, under the circum- stances, it is clearly for the benefit of the bene- ficiaries, but not otherwise (/) . The best course of procedure in such an application is to issue a {p) Tate Y. Williamson, 2 Ch. App. ob. (q) Knight v. Majorihanks, 2 M. & G. 10. {r) Chambers v. Hoivell, 1 1 B. 6. (s) See per Westbuiy, L.C., in Knox v. Qye, L. E., 5 H. L. 675 ; but see per Jessel, M.E., KymontY. Smith, 6 C. D. 469. {t) Farmer v. Deane, 32 B. 327 ; Campbell v. Walker, 5 V. 681. 410 THE trustees' DUTIES. summons under R. S. C. 1883, Order LY. r. 3, asking tliat it may be inquired whether it is for the benefit of the infant beneficiaries that the trustee should be permitted to purchase for a certain sum. If the chief clerk certifies that it is, the order will be made as a matter of course. In one case in which the present writer was counsel {ii)^ Mr. Justice Pearson ordered the costs of the action to be paid out of the trust estate, on the ground that it was for the infant's benefit, the trustee offering more than the market price ; and it is conceived that the course followed by his lordship is correct. Art. 48. — Diifi/ of Trustee to be ready with his Accounts. ' (1) A trustee must : — -a:. Keep clear and accurate accounts of the trust proj^erty [x) ; and /3. At all reasonable times, at the request of a beneficiary, give him full and accurate information as to the amount and state of the trust property (y), and permit liim or his (m) Nunneley v. Nunneley, April, 18tli, 1883. {x) Springett v. Dashwood, 2 Giff. 521 ; Burrows v. Walls, D., M. & G. 253; Newton v. Askew, 11 B. 145, 152 ; Pearse v. Oreeji, IJ. & W. 140. (y) Be Tillott, Lee v. Wilson, (1892) 1 Ch. 86; Re Page, Jones V. Morgan, (1893) 1 Ch. 304, 309; Tallot v. Marsh- field, 3 Ch. App. 622 ; Ryder v. Bickerton, 3 Sw. 81. TRUSTEE TO BE READY WITH HIS ACCOUNTS. 411 solicitor (z) to inspect the accounts and vouchers, and other documents relating to the trust (a). (2) A trustee is, nevertheless, not bound to supply copies of accounts or trust documents (Z»), or to supply informa- tion which necessitates expenditure (c), except at the cost of the beneficiary requiring the same. Illust. — 1. Failure to keep accounts. — The estate of a testator, who died in 1832, was dis- tributed in 1847, as the evidence showed, at the written request of the persons beneficially entitled. Another part of the estate, which fell in in 1852, was distributed, also at the request of the beneficiaries, and in 1871 the acting trustee died. No accounts or vouchers were forthcoming from the trustees. A bill filed in 1872 by one of the beneficiaries against the surviving trustee for administration, was dis- missed ; but owing to the breach of duty committed by the trustees in not keeping accounts and. vouchers, the siu'viving trustee had to bear his own costs {d). If, however, the action had been successful, the trustee w' ould in all probability have had to pay (z) A'e??y? v. Bimi, 4 Giff. 348. (a) Cvwm V. GraveU, 34 W. E. 735 ; Ottley v. Gilby, 8 B. 602. (6) Uttley V. Gilby, supra. (c) Be Bostvorth, Martin v. Lamhe, 58 L. J., Ch. 432. (d) Payne v. Evens, 18 Eq. 356; and see to same effect, Re Baye, Jones v. Moryan, (1893) 1 Ch. 304. t-a 412 THE trustees' duties. the plaintiff's costs as well (e) up to the hearing (/). But, as the reason of this is that such costs are caused by the trustees' neglect to keep and furnish accounts, the plaintiff will not in general be en- titled to costs against the trustee beyond the time when the account is actually rendered, or ordered by the court to be rendered, from which time, if the accounts are substantially accurate, the trustee will be entitled to his costs out of the estate (r/), or, if the plaintiff sues alone, out of his share in the estate {h). It is no defence that the trustees are illiterate and incapable of keeping accounts ; for in that case they would be justified by necessity in employing, and be bound in point of law to employ, a competent agent to keep the accounts for them (/). However, where trustees have rendered no account, or an insufficient one, the court now frequently orders the application for an account to stand over, in order that a proper account may be rendered and vouched out of court, the costs being reserved (/.•) . 2. Inaccurate accounts. — The importance of keeping accounts is shown by the fact, that although the court will generally saddle with costs a trustee whose only fault is that he has (e) Eglin v. Sanderson, 3 Giff. 434 ; Newton y. Askew, 11 B. 145. (/) Springett v. Dashwood, 2 Giff. 521. {(j) (Htley V. OiJhij, 8 B. 602. (A) Thompso7i V. C/ive, 11 B. 475. (r) Wroe v. Seed, 4 Giff. 425, 429. {k) See Be Hayter, 32 W. E. 26, and Hilliard v. Ful- ford, 4 C. D. 389. TRUSTEE TO BE READY WITH HIS ACCOUNTS. 413 failed to do so, yet wliere a trustee lias kejot and furnished accounts, wliich, by an honest mistake, turn out to be inaccurate, and show an erroneous balance in the trustee's favour', he will be allowed his costs, for he will not have been guilty of any breach of duty, but only of a bona fide mistake (/). 3. Supplying information. — " A trustee is bound to give his cestui que trust proper information as to the investment of the trust estate ; and where the trust estate is invested on mortgage, it is not sufficient for the trustee merely to say, * I have invested the trust money on mortgage,' but he must produce the mortgage deeds, so that the cestui que trust may thereby ascertain that the trustee's statement is correct, and that the trust estate is so invested. . . . Wliere a portion of the trust estate is invested in consols, it is not sufficient for the trustee to say that it is so invested, but his cestui que trust is entitled to an authority from the trustee to enable him to make proper application to the bank in order that he may verify the trustee's own statement ; there may be stock standing in the name of a person who admits he is a trustee of it, which at the same time is in- cumbered ; some other person having a paramount title may have obtained a charging order on the stock, or placed a distringas upon it" (m). At the same time, although it is the duty of a trustee (7) Smith V. Cremer, 24 W. R. 51. (m) Per Chitty, J., in ^e Tillott, Lee y. Wilson, (1892) 1 Ch. at p. 88. 414 THE trustees' duties. to give all his beneficiaries, on demand, informa- tion with respect to the mode in which the trust fund has been dealt with, and where it is, yet, in. the words of Lord Justice Lindley (;?), "it is no part of the duty of a trustee to tell his cestui que trust what incumbrances the latter has created, nor which of his incumbrancers have given notice of their respective charges. It is no part of the duty of a trustee to assist his cestui que trust in selling or mortgaging his beneficial interest, and in squandering or anticipating his fortune ; and it is clear that a person who proposes to buy or lend money on it, has no greater rights than the cestui que trust himself. There is no trust or other relation between a trustee and a stranger about to deal with a cestui que trust, and although probably such a person, in making inquiries, may be regarded as authorized by the cestui que trust to make them, this view of the stranger's position will not give him a right to the information which the cestui que trust himself is not entitled to demand. The trustee is therefore, in my opinion, under no obligation to answer such an inquiry." 4. Expensive information. — As above stated, a beneficiary is entitled, either personally or by his solicitor, to ins^iect the trust accounts and documents, but if he requires a copy of an account or document he must pay the necessary expense himself ; for it is not fair that it should be saddled on the trust estate, nor of course can the trustee be expected to {n) Loio y. Bouverie, (1891) 3 Ch. at p. 99. TRUSTEE TO BE READY WITH HIS ACCOTTNTS. 415 incur the expense personally (o). On the same ground, where a beneficiary demands information as to his rights under the settlement which cannot be fm-nished by the trustee without the assistance of a solicitor, the trustee is not bound to incur that expense (or if he be himself a solicitor with power to charge, he is not bound to incur the loss of time), unless the beneficiary is willing to pay the costs of complying with his requisition (p) . (o) Ottlej/ V. 6=1%, 8 B. 602. Ip) Be Bosworth, Martin v. Lanibe, 58 L. J., Ch. 432. ( 416 ) 4 CHAPTER IV. ^ The Powers of the Teustee («). Aet. 49. General Poivers of Trustees. ,, 50. Power of Trustees in relation to the conduct of Sales. „ 51. Power of Trustees to give Receipts. ,, 52. Power of Trustees to compound a7id settle Disputes. ,, 53. Power of Trustees to allow Maintenance to Infants. ,, 54. Power of Trustees to pay to Attorney appointed by Beneficiary. ,, 55. Suspension of the Trustees^ Powers hy Adminis- tration Action. Art. 49. — General Poicers of Trustees. (1) A trustee may exercise such power and discretion as may be expressly confided to him by the settlement, so long as he exercises it bona fide, and not for the purpose of benefiting one (a) I have excluded from this chapter any exposition of, or reference to, the powers of managing infants' estates conferred by sect. 42 of the Conveyancing and Law of Property Act, 1881, and also the powers conferred by the Settled Land Act on " trustees for purposes of that Act," because the ti'ustees referred to in those enactments are not ordinary trustees, but rather moral police oflBcers, or guardians, or mere donees of powers. GENERAL POWERS OF TRUSTEES. 417 of the beneficiaries at the expense of the others (a). (2) In addition to the power expressly given to him by the settlement, and subject to any restrictions contained therein, and to the provisions of any statute requiring the consent of the court to any act, a trustee may, without a])plication to the court, do such of the following acts as the court would sanction if applied to (b), viz., a. Acts which are reasonable and proper for the realisation, protection or benefit of the trust property (c) ; and /3. Acts which are reasonable and proper for the protection, safety, support or rej^utation of a bene- ficiary who is incapable of taking care of himself (d). (a) Oisborne v. Gislorne, 2 App. Ca. 300 ; Austin y. Austin, 4 C. D. 233; Tabor v. Brooks, 10 C. D. 273; Be Blake, Jones v. Blake, 29 C. D. 913; Ld. Gainslorough v. Watcomhe Terra Cotta Co., 54 L. J., Ch. 991. (i) Lee v. Brown, 4 V. 369; Inwood v. Tivt/ne, 2 Ed. 153; Seagram v. Knight, 2 Ch. App. 630; Broivn v. Smith, W. N. 1878, p. 202. {c) Ward V. Ward, 2 H. L. C. 784 ; Waldo v. WaJdo, 7 Sim. 261 ; Bright v. North, 2 P. H. 220; Bowes v. E. L. Water Co., Jac. 324. (d) Sisson v. Shaw, 9 Y. 288 ; Malerhj v. Turton, 14 V. U. — T. E E 418 THE POWERS OF THE TRUSTEE. j Provided, that such acts do not benefit one beneficiary at the expense of j another (e), and do not interfere with ' any le^al beneficial interest. Ir.LusT. — 1. Discretionary powers. — The leading ease of Guhorne v. Gisborne (/) is the hest example of the right of trustees to exercise a discretion expressly given to them hy the settlement. There a testator devised his real and personal estate to trustees upon various trusts, one of which was, that " my said trustees, in their discretion and of their uncontrollable authority, pay and apply the whole, or such portion only, of the annual income of my real and personal estate as they shall think expedient, to and for the clothing, hoard, &c., and for the personal and peculiar benefit and comfort, of my dear wife." The wife also had property of her own, and was a lunatic, and one of the trustees was the residuary legatee under the testator's will. Under these circumstances, the trustees, bona fide (as the court found), refused to permit the whole income of the trust fund to be applied for the wife's support in the asylum, and proposed to allow only so much for that purpose as would be 499 ; Cotham v. West, 1 B. 381 ; Ex parte Green, 1 J. & W. 253; Be Howorth, 8 Ch. App. 415; De Witte v. Palin, 14 Eq. 251 ; Siviirnock v. De Crispe, Free. 78. (e) Seagram v. Knight, supra ; Lee v. 'Brown, supra ; Wood v. Patteson, 10 B. 544. (/) 2 App. Ca, 300; and see also Costahadie v. Costa- hadie, 6 Ha. 410. GENERAL POWERS OF TRUSTEES, 419 sufficient, after taking into account the income o£ the wife's own property. The House of Lords, on these facts, held, that the trustees had an absolute discretion in the application of the fund, and that so long as they exercised that discretion bona fide, the court could not interfere with them ; although if no such discretion had existed, the court would have ordered the trust fund to have been applied jirimarily in the support of the lunatic. 2. So, again, in Tahor v. Brooks {(/), the trustees of a marriage settlement had power to apply the income of the settled fund for the benefit of the husband and wife and their children, as they should " in their uncontrolled and irresponsible discretion think proper." The husband and wife subsequently separated, and the trustees, taking the view (bona fide) that the husband was in the right, paid the whole of the income to him. On these facts, Malins, V.-C, while expressing an opinion that the trustees were not acting judi- ciously, declined to interfere with their discretion, there being no proof of mala fides. It would seem, however, from the judgment of the Vice- Chancellor, that in his opinion where the word " uncontrolled " (or its equivalent) is omitted, the court would control a caprieiom exercise of the trustees' authority. But perhaps this distinction may be respectfully doubted. (g) 10 C. D. 273 ; and see also He Lofthouse, 29 C. D. 921, and Be Courtier, Coles v. Courtier, 34 C. D. 13G. ---'■'-- E E 2 420 THE POWERS OF THE TRUSTEE. 3. Discretion sometimes limited to time and manner. — The practitioner must, however, care- fully scrutinize the words conferring the authority and discretion, and must not assume that a discretion as to the mode of applying a fund for a person's benefit, gives trustees a discretion as to how much of the fund is to be so applied. Thus, in Re Weaver [h) the trustees were directed to pay the income of the trust property, at such time and in such manner as the trustees should think fit, towards the maintenance of a lunatic during her life, with power to invest any surplus, not required for the purpose, as capital. The Court of Appeal held, however, that the trustees had no such discretion as would oust the jurisdiction of the court to apply the whole of the income for the lunatic's maintenance in exoneration of her own property. Jessel, M.E.., in delivering judgment, said : "In Gishorne v. Gishorne there was a power to apply the whole or such portion of the income as they might think fit. In the present case the trustees have only a discretion as to the time and manner of the application." So, too, where absolute discretion has been given to trustees to do a par- ticular act {ex. gr., to sell the trust property), the court cannot compel them to exercise the power ; but if they do exercise it, the court will see that they do not exercise it improperly or unreason- ably («■). (7i) 21 C. D. 615. («■) Temjest v. Lord Camoys, 21 C. D. 571 ; Marq. of GENERAL POWERS OF TRUSTEES. 421 4. Powers in the nature of trusts. — A caref al dis- tinction must also be made between discretionary powers and powers coupled with a duty. Where a power is merely part of the machinery provided by the settlor for effectually executing a general trust of management, then, even although discre- tionary in form, its exercise will be enforced by the court in cases where the non-exercise of the power would paralyse the entire management (J). For instance, where a testator devises divers real estates to trustees, in trust to manage them during the minority of an infant, with power to lease in their discretion, the trustees will not be allowed to decline to exercise the power of letting. For, as Bowen, L.J., said in lie Courtier, Coles v. Courtier (/i), " one can understand that, where the machinery for management of the estates is given to the trustees, and the court undertakes to enforce the trusts for management, it is right for it to compel the trustees to utilize the machinery en- trusted to them." In fact, the coui't looks at the substance rather than the form ; and where what appears to be a mere discretionary power is, in reality, part of a trust for management, the court will make the language bend to the implied in- tention, and order the trustees to exercise the power. Camden v. Murray, 16 C. D. 161 ; Re Blake, Jones v. Blahe, 29 C. D. 913; lie Courtier, Coles v. Courtier, supra; and Re Burraye, Barrage v. Burningham, 62 L. T. 752. (/) Tempest v. Lord Camoys, 21 C. D. 576, note; Nickisson v. CockhiU, 3 D. & S. 622. {k) 34 C. D. 136. 422 THE POWERS OF THE TRUSTEE. 5. Implied discretionary powers. — With regard to the principles enunciated in sub-clause (2) (in relation to the unexpressed authority of a trustee), the case of Ward v. Ward (/) may be cited. There, by the immediate realization of the trust property, the trustee would have ruined one beneficiary from whom a large debt was due to the trust estate, and would have very seriously prejudiced others. In- stead of doing so, the trustee made an arrange- ment with the debtor for payment of the money by instalments ; and it was held that he was justified in having taken that course, because he had exercised a sound discretion, and such as the court would have approved. But no practitioner should venture to advise a trustee to take upon himself the risk of adopting such a course. In all such cases a trustee should apply for the sanction of the court, under the provisions of Ord. LY. r. 3. 6. Power to do all necessary acts for protecting the trust property. — So, again, as was said by Lord Cottenham in Bright y. North [m), "Every trustee is entitled to be allowed the reasonable and proper expenses incurred in protecting pro- perty committed to his care. But if they have a right to protect property from immediate and direct injury, they must have the same right where the injury threatened is indirect but prob- able;" and, therefore, his lordship allowed the (0 2 H. L. C. 784. (m) 2 Ph. 220; and see Stott v. Milna, 25 C. D. 710. GENERAL POWERS OF TRUSTEES. 423 trustees (who were, in tliat instance, trustees of public works) the expenses of opposing a bill in parliament which would have been prejudicial to those works if passed. Here again, however, trustees should always be advised to obtain the sanction of the com-t before incurring such serious expense. 7. Power to take necessary steps for keeping property in repair. — On the same grounds, a trustee whose duty it is to keep property, forming part of the trust estate, in repair, may, it would seem, retain income for that purpose, but without prejudice to the ultimate rights of the tenant for life and remainderman ititcr se {>/). 8. Power to exchange policy for a fully paid up ^ t^t-V- one. — On similar grounds, it would seem that a trustee may surrender a policy of assurance forming part of the trust property, in exchange for a fully paid up one of less amount, in cases where the party liable to pay the premiums cannot possibly do so (o). But of course no sane lawyer would allow a trustee who was his client to do this without the sanction of the court. 9. Power to thin timber. — So, again, in cases where the court would, if applied to, authorize the cutting down of timber which has arrived at maturity, and which would only degenerate if allowed to stand, or where it is necessary to cut it (n) Be Fowler, Foivler y. Odell, 16 C, D. 723 ; but see supra, pp. 295 et seq. (o) Ee Steen, Steen v. Peebles, 25 L. E. Ir. 544. 424 THE POWERS OF THE TRUSTEE. for the purpose of tliinning it, the trustee may fell it on his own authority {])). 10. Power to grant certain leases. — On the same principle, a trustee who has the management of property, may grant a reasonable agricultural lease (*7), unless expressly or impliedly (r) re- strained from doing so by the settlement. But he may not grant a mining lease, for that would benefit the tenant for life at the expense of the reversioner {s) . Moreover, where there is a tenant for life, his consent would, it is conceived, now be necessary under section 56 of the Settled Land ,Act, 1882. 11. No power to make problematical or specula- tive improvements. — On the other hand, trustees must not do acts, however beneficial they may possibly be to the property, if they are in their nature unreasonable and problematical. For instance, they ought not to make merely orna- mental improvements (f), nor take down a mansion-house for the purpose of rebuilding a better one (u), nor build a villa for the mere im- (2)) Waldo V. JVaJdo, 7 Sim. 261 ; and see Seagram v. Knight, 2 Ch. App. 630 ; but see Illust. 16, p. 427, infra. {q) Naylor v. Arriitt, 1 E. & M. 501 ; Bowes v. E. L. Water Co., Jac. 324 ; Att.-Gen. v. Oiven, 10 V. 560; Fitz- patrick v. Wary, L. E. Ir. 35. (r) Evans v. Jackson, 8 Sim. 217; and see MicheUs v. Corbett, 34 B. 376. (s) Wood V. Patteson, 10 B. 544. But this is now pro- vided for on equitable terms by the Settled Land Act, 1882. {t) Bridge v. Brown, 2 Y. & C. 181. (m) Bleazard v. Whalh-ij, 2 Eq, Eep. 1093. GENERAL POWERS OF TRUSTEES. 425 provement of the estate {x). If, however, they are by the settlement expressly given a power " generally to superintend the management of the estate," it would seem that their powers of management are almost unlimited, so long as they are exercised bona fide (v/). Trustees are also empowered to carry out certain specified improvements by the Improvement of Land Act, 1864. 12, Power to retain married women's trust funds to enable them to claim equity to a settlement. — With regard to acts for the benefit of the bene- ficiaries, a familiar instance occurs in the case of trusts of personalty for married women, where, if the trustee paid over the fund to the husband, the wife would probably get no benefit from it. In such cases the trustee is justified, if he thinks fit, in refusing to pay the money to the husband, and in j)ayiag it into court instead, so that the w^ife may have every faciLity for enforcing her equity to a settlement (s). But this right has, it is apprehended, ceased in the case of property coming under the pro^asions of the Married Women's Property Act, 1882. 13. Power to allow maintenance to infants. — So, trustees might always allow, by way of mainte- (.r) Vyse v. Foster, L. E. 7 II. L. 318. [y) Bowes v. E. Strathmore, 8 Jur. 92; and see also as to powers of building, &c., Be Leslie, 2 C. D. 185; -and consider principle in (iishorne v. Oishorne, 2 App. Cas. 300. (z) Wat. 360 ; Re Swan, 2 H. & M. 34 ; Ee Bendysche, 3 Jul-., N. S. 727. 426 THE POWERS OF THE TRUSTEE. nance, a competent part of the income of property to the father of an infant beneficiary {a), where the father could not support it according to its position (h), even where there was a trust for accu- mulation (f), if the circumstances showed that the settlor looked on the infant as his heir (d) ; and, if the infant were an orphan, maintenance might be allowed to the mother (e), or stepfather (/), whether they could support it or not. And now, as will be seen under Article 53 (infra), the powers of trustees in relation to the maintenance of infants are greatly enlarged. It has been also held that a trustee mai/ under special circumstances, as, for instance, where the capital is considerably under a thousand pounds (g), allow maintenance out of the capital : but a trustee would be very ill-advised to take upon himself the responsibility of doing so {//). 14. Power to advance. — Upon the same prin- ciple, a trustee may apply part of an infant's (a) Sisson v. Shcnu, 9 V. 288 ; Maherhj v. Turton, 14 V. 499; Cothamr. West, 1 B. 381. (6) Maintenance has been allowed to a father with an income of 6,000/. a year [Jervoise v. Silk, 1 G. Coop. 52 ; and see lie Allan, Havelock v. Havelock, 17 C. D. 807). (c) Collins V. Collins, 32 C. D. 229; Re Allan, Havelock V. Havelock, supra; ^e Colgan, 19 CD. 305; lie Thatcher, 26 C. D. 426. (d) See Be Alford, Hunt v. Parrij, 32 0. D. 382. (e) Douglas v. Andrews, 12 B. 310. (/) Lew. 492, commenting on BilUngsley v. Critchett, 1 B. 0. C. 268, as affected by 4 & 5 Will. 4, c. 76, s. 57. (9) Barlow v. Orant, 1 Ver. 255 ; Ex parte Green, 1 J. & W. 253 ; Be Howarth, 8 Ch. App. 415 ; Be WiUe V. Balin, 14 Eq. 251. (/i) See Walker v. Wetherell, 6 V. 255. . GENERAL POWERS OF TRUSTEES. 427 capital for its advancement in the world (/) . But here again (in the absence of express power) he would be undertaking an unnecessary risk in acting without the sanction of the court. 15. Secus where infant only contingently entitled. — But where, by making an advancement, the trustee would injure the contingent rights of another beneficiary, he will do it at his peril as against the latter (/.•). For instance, where 100/. was bequeathed uj)on trust to apply the income towards the maintenance and education of A. during his minority, and upon trust to pay the corpus to him on attaining twenty-one, but in case of his dying before that age, upon trust for X., it was held that, as against X., the trustees had no authority to advance part of the capital to A., who died before attaining his majority (/). 16. No power to interfere with legal remainders. — On the principle that the court in general can- not interfere with legal interests, it is apprehended that a trustee for another for life only, (the trustee merely taking an estate ijur autre vie,) would not (?■) Swinnock v. Crisp, Free. 78; Boijd v. Boyd, 4 Eq. 305 ; Roptr-Ciirzon v. Roper-Curzon, 11 Eq. 452. (/.•) Worthimjton v. McCrear, 23 B. 81 ; Itt Breed, 1 C. D. 226; but under power conferred by the Conveyancing' and Law of Property Act, 1881, trustees of settlements may now allow maintenance to infants contingently en- titled {Re Cotton, 1 C. D. 232), in cases where, upon their shares becoming vested, they would bo entitled to past income {Re George, 5 C. I). 837) ; but not otherwise {Re Judkin, 25 C. D. 743; Re Dickson, Hill v. Grant, 29 C. D. 331 ; and Re Jeffrey, Bunt v. Arnold, (1891) 1 Ch. 671 ; and see art. 53, infra). (/) Lee V. Brown, 4 V. 362. 428 THE POWERS OF THE TRUSTEE. be justified, without tlie consent of tlie legal re- mainderman, in cutting timber which had arrived at maturity (as in Ilkistration 9), inasmuch as, not being the trustee for the remainderman, he could not do acts for the benefit of the estate generally which would be in derogation of the latter's legal rights {ju) ; nor could he invest the proceeds so as to equitably arrange the benefit between the tenant for life and the remainderman. 17. So, it would seem, that although, where an equitable beneficiary is an infant, the court can authorize trustees to mortgage the trust property for the purpose of raising money to carry out necessary repairs {n), yet, on the other hand, where the legal estate is not in the trustees, but in an infant tenant for life, the court has no jurisdiction to do so (o). Art. 50. — Poiver of Trustees in relation to the conduct of Sales. (1) Where a trust for sale is vested in trustees they may carry out the sale as follows : — «• Irrespective of the date of the settlement they may sell in such (m) See and consider Seagram v. Knight, 2 Cli. App. 630, and compare it with Waldo v. Smith, 7 Sim. 261, and Oent V. Harrison, John. 517. (n) Jackson v. Talbot, 21 C. D. 786. (o) Jesse V. Lloyd, 48 L. T. 656. POWER OF TRUSTEE TO CONDUCT SALE. 429 manner, and eitlier alone or jointly with any adjoining or any co- owner, as (having regard to the nature of the property, the title, and all the surrounding circum- stances) may be reasonable and for the probable benefit of the bene- ficiaries (/j). But, unless they fall under the next paragraph, they cannot buy in the property at an auction (q), or, sonble, rescind a con- tract for sale. /3. If the trust was created by a settlement coming into operation between the 27tli August, 1860, and the 1st January, 1882, then (subject to anything to the contrary contained in the settlement), they may safely, and without the neces- sity of making inquiries as to the best mode of selling, sell together or in lots, by public auction or by private contract, subject to any such conditions respecting title or evi- dence of title, or other matter, as the trustees think fit; with power (p) See Be Cooper and Allen, 4 C. D. 802. [q) Taylor v. Tabrum, 6 Sim. 281 : Ex parte Lewis, 1 Gl. & J. 69. 430 THE POWERS OF THE TRUSTEE. to vary or rescind any contract for sale, and to Ijuy in at any auction, and to resell (r). 7. If the trust was created by a settle- ment coming into 02:)eration on or after the 1st January, 1882, then (subject to anything to the contrary contained in the settlement) they may exercise the j^owers specified in sub-clause /3, with the addition that they may sell subject to prior charges or not, and may concur with any other person in selling, without the necessity of making inquiries as to whether the course adopted is the best under all the circumstances (s). ^. By leave of the court (but not other- wise) they may sell the surface, re- serving the minerals, with incidental powers of working the same(^). (2) No sale made by a trustee since Christmas, 1888, can be impeached by any beneficiary upon the ground (r) Lord Cranworth's Act, 23 & 24 Vict. c. 145, ss. 1,_2, and 34. Although, this Act only refers to trustees with power of sale, it is apprehended that a tricst for sale is clearly within the Act (see 3 David. Prec. 3rd ed. 565). (s) Trustee Act, 1893, sect. 13, sub-sect. 1, re-enacting Conveyancing and Law of Property Act, 1881, sect. 35. {t) Trustee Act, 1893, sect. 44. POWER OF TRUSTEE TO CONDUCT SALE. 431 that any of tlic conditions subject to whicli the sale was made were un- necessarily depreciatory, unless it also appears that the consideration for the sale was thereby rendered in- adequate (u) ; nor can any such sale after execution of the conveyance be impeached as against the purchaser upon such ground, unless it apj)ears that the j^urchascr was acting in collusion with the trustee at the time when the contract for sale was made (v). And no purchaser, upon any sale made by a trustee, is now at liberty to make any objection against the title upon the ground aforesaid (^f). (3) A trustee who is either a vendor or a purchaser may sell or buy without excluding the application of section two of the Vendor and Purchaser Act, 1874(4 Illust. — 1. Power to sell under the old law in- dependent of statute. — For an example of the law relating to old settlements, the case of Ite Cooper and Allen (x) may be cited. The question in that case was whether persons who were mortgagees («) Trustee Act, 1893, sect. 14. ((') Ibid., sect. 15. (x) 4 C. D. 802, and cases there cited. 432 THE POWERS OF THE TRUSTEE. of a life estate, and also mortgagees (for a different sum) of the reversion, with power of sale under both mortgages, could sell the fee simple in possession. Although that was a case of mortgagees selling, and not of trustees in the strict sense, yet, as Jessel, M.R., pointed out, "a mortgagee selling, is, in effect, a trustee with reference to the pro- perty comprised in the mortgage." His Lordship, in giving judgment, said : " First of all, on prin- ciple, what is the duty of trustees for sale ? It is their duty to sell the estate to the best advantage they can, that is, in the manner most beneficial to the cestuis que trust. It is, further, their duty to take care to receive the purchase-money, and to invest it properly according to the trusts. If, therefore, the sale of the property can be effected at a higher price by joining with somebody else, so far from that being a breach of that principle, they are only carrying out their trusts, and performing their duty in so obtaining that higher price. . . . Secondly, it is their duty, as I have already said, to receive the purchase-money. If, therefore, they do join with any other person, whether that other person be a trustee himself or be a beneficial owner, they must take care that their share of the purchase-money is paid to them, and the purchaser must take care of that likewise, because he can only pay trust money to the trustees. Therefore, where they do join with other people, the purchase- money must be so apportioned before the comple- tion of the purchase, and must be paid by the purchaser; the apportioned part coming to the POWER OF TRUSTEE TO CONDUCT SALE. 433 trustees being paid to tliem." His Lordship then proceeded to point out that the trustees were the proper persons to make the apportionment, and that unless a pui'chaser has notice that the appor- tionment is an improper one, he would be quite safe in accepting the trustees' apportionment ; and then examined the cases in which the joinder with other parties was pn'iiid facie right, and when it required evidence to support it, pointing out that in the case of adjacent proj)erties, as a general rule, trustees should not agree to a joint sale with- out some evidence of its desirability, but that in the case of trustees entitled only to a limited or partial estate in property, it is obviously, and without the necessity of proof, for the benefit of the estate that they should join in a sale of the entii'e fee simple with the other parties interested. That being so, of com'se it could make no difference that the mortgagees of the life estate, and of the remainder, happened to be the same individuals ; and consequently his Lordship held that they were entitled to sell the fee simple in possession by one sale and at one price. 2. No power formerly to buy in at a sale by auction. — As an instance of the inability of trustees under old settlements to buy in the property at an auction, may be mentioned a case in which the assignees of a bankrupt had bought in two lots of the bankrupt's property, and upon the subsequent sale of the two lots, had gained on one, and lost on the other. It was held by Lord Eldon, that the original buying in of the two lots being a u. — T. F F 434 THE POWERS OF THE TRUSTEE. breacli of trust, the assignees were liable for the loss (if any) on each lot, and could not set off the gain on one against the loss on the other (//). 3. Must not impose unnecessarily restrictive con- ditions. — Prior to the passing of the Trustee Act, 1888, trustees for sale were not permitted to impose imnecessarily stringent and depreciatory conditions (z). However, by that Act (repealed and re-enacted by the 14th section of the Trustee Act, 1893) the power of trustees to impose de- preciatory conditions was considerably extended, as to which, the reader is referred to p. 312, supra. Art. 51. — Power of Trustees to give Receipts. '' The receipt in writing of any trustee for any money, securities, or other personal property or effects payable, transferable, or deliverable to him under any trust or power shall be a sufficient discbarge for the same, and sliall effectually exonerate the person paying, transferring, or delivering the same from seeing to the application {v) Ex 'parte Lewis, 1 Gl. & J. 69. (z) Dunce v. Ooldinghcnn, 8 Ch. App. 902 ; Dun7i v. Flood, 25 C. D. 629; and on App. 28 C. D. 586. POWER OF TRUSTEES TO GIVE RECEIPTS. 435 or bclnf^ answerable for any loss or misapplication thereof." (a). The above rule is comparatively modern, dating only from 1881, when it formed section 36 of the Conveyancing and Law of Property Act of that year. It applies, however, quite irrespective of the date of the settlement, and consequently, now, few, if any, questions of practical interest can arise under the old law. All, therefore, that need be said is, that where, previously to the 1st of January, 1882, a person paid purchase or other moneys to trustees, the payer was bound to see to the appli- cation of such moneys {b), except in the following cases, viz. : — (1) Where the settlement expressly exempted him from doing so ; (2) Where the settlement was dated subse- quently to the 28th August, 1860 (c) (or, in the case of purchase-money, subsequently to 13th August, 1859 ((/)), and the duty was not expressly cast upon him by the settlement ; (3) Where the trusts of the money were not simple trusts (e), or, being simple trusts, it was gathered from the settlement that the settlor con- tonplated the possibility of any of the beneficiaries being imder disability, at the date of the sale or pay- (a) Trustee Act, 1893, sect. 20. (6) Dart, 670, Gth ed. ; Elliott y. Mernjman, 1 L. C. C4. (c) 23 & 24 Vict. c. 145, s. 12. (d) 22 & 23 Vict. c. 35, s. 23. (e) See Storey, § 1134, and cases cited as illustrations, infra. r F 2 436 THE POWERS OF THE TRUSTEE. ment (/), or in any other case where an intention to impose tlie duty on the purchaser or person paying could not be reasonably inferred {g). It may perhaps be respectfully observed, that the wording of the new power is not beyond criticism ; for it might be, speciously enough, urged that the words " the receipt of any person to whom any purchase or mortgage money shall he joayable upon any express or implied trust," only enable the money to be paid to the trustee where the trust is not a simple trust ; and that, in fact, the payer is left to decide the same question as was imposed upon him by the old law, viz. whether the purchase-money is payable to the trustee or to the beneficiaries. It is, however, apprehended that such criticism would not prevail, inasmuch as, if acted on, it would practically make the new power entirely nugatory and meaningless. The wording of the repealed section of Lord Cranworth's Act (A), was, however, free from all doubt, and might, it is submitted, have been re-enacted with advantage (/) . (/) Dart, 671, Gth ed. ; Hoivarshy v. Lacey, 4 Mad. 142 ; Lavender v. Stanton, 6 ibid. 46 ; Balfour v. Welland, 16 V. 151 ; Breedon v. Breedon, 1 E. & M. 413. {g) Dart, 673, 6tli ed. ; and see generally Elliott v. Merryman, supra. (h) 23 & 24 Vict. c. 145, s. 12. (i) For examples of the old law, the reader is referred to Elliott V. Merryman, 1 L. C. 64 ; Johnson v. Kennett, 3 M. & K. 624 ; Elaitd v. Eland, 4 M. & C. 420 ; Forbes V. Peacock, 1 Ph. 717; Rohinson v. Loioater, 5 D., M. & G. 272; Re Langmead, 7 D., M. «S; G. 353; Sowarshy v. Lacey, 4 Mad. 142; and Dart's Y. & P., 672, 6th ed. POWER TO COMPOUND AND SETTLE DISPUTES. 437 ■^A-RT. 52. — Poiccr to compound and to settle Disputes. " (1) An executor or administrator may 23ay or allow any debt or claim on any evidence that lie thinks suffi- cient "(/r). " (2) An executor or administrator, or two or more trustees, acting together. or a sole acting trustee where by the instrument, if any, creating the trust a sole trustee is authorized to execute the trusts and powers thereof, may, if and as he or they may think fit, accept any composition or any security, real or jDcrsonal, for any debt or for any 23roperty, real or personal, claimed, and may allow any time for payment for any debt, and may compromise, compound, abandon, submit to arbi- tration, or otherwise settle any debt, account, claim, or thing whatever relating to the testator's or intestate's estate or to the trust, and for any of those purposes may enter into, give, execute, and do such agreements, instruments of composition or arrange- (Jfc) Trustee Act, 1893, sect. 21, sub-sect. 1. Ij Jev 'if 43S THE POWERS OF THE TRUSTEE. ment, releases, and other things as to him or them seem expedient, without being responsible for any loss occa- sioned by any act or thing so done by him or them in good faith" (/). " (3) This section applies only if and as far as a contrary intention is not expressed in the instrument, if any, creating the trust, and shall have effect subject to the terms of that instrument, and to the provisions therein contained " (m). The above article constitutes the first three sub- sections of section 21 of the Trustee Act, 1893, which is merely a re-enactment of section 37 of the Con- veyancing and Law of Property Act, 1 881. What the effect of the section may be is by no means clear. In lie Oiceiis (//), the late Sir George Jessel, M.R., intimated that the probable effect of it was to "revolutionize the law on the sub- ject," and to make the question in every case one entirely of good faith, quite apart from any ques- tion of prudence. On the other hand, it has been suggested that the section is merely a statutory expression of the law of the court (o), m Trustee Act, 1893, sect. 21, sub-sect. 2. (m) Ibid., sub-sect. 3. \n) 47 L. T. 61 ; and see pp. 308, 309, supra, (o) See Lewin, 512, 7th ed. ; TlV^es v. (Jresham, 5 D., M. & Gr. 770; Ex parte Ogle, 8 Cb. App. 715. POWER TO COMPOUND AND SETTLE DISPUTES. 439 with this important difference, that it "shifts the onus of proof, where any particular transaction is impeached, from the trustee to the cestui que trust. Formerly a trustee had to justify his action in compromising, compounding, &c. ; henceforth the dissatisfied cestui que trust must prove impropriety of motive " {p). However, in a recent case, Lord Justice Lopes laid it down broadly, that the only excuse for not taking action to enforce payment of a debt due to the trust, is " a well found belief on the trustee's part, that such action would be useless, and that the burden of proving the grounds of such well founded belief is on the trustee "((?) . If this be indeed so, it is difficult to give any meaning whatever to the section ; but it is only fair to add that the section was not drawn to the attention of the court when the Lord Justice made the above-quoted observations, and that very probably it would not have been applicable to that case (r). It may perhaps be pointed out, that although the wording of the Act is open to criticism, it must (it is conceived) be construed to mean that the power is to be exercised by not less than two trustees, unless a sole trustee is expressly autho- rized to execute the trusts, and cannot be construed (as doubtfully suggested by the learned authors above quoted) to enable am/ two of a greater {p) Brett and Gierke's Conveyancing, &c. Acts, 3rded., 159. (5) Ee Brogden, Billing v. Brogden, 38 C. D. 546, 574. (r) See also pp. 304, 309, supra. 410 THE POWERS OF THE TRUSTEE. number of trustees to compromise or compound without the joinder of their fellows. '^^^j^RT, 53. — Power to allotv Maintenance to Infants. (1) Where any property was, or is, held by trustees, in trust for an infant for life or for any greater interest, and whether absolutely or contingently on his attaining the age of twenty-one years, or on the occurrence of any event before his attaining that age : — «• The trustees may, in their dis- cretion, make an allowance for his maintenance and education, whether there be any other fund applicable to the same purpose, or any person bound by law to pro- vide for such maintenance and education or not, and may pay it to the guardian or parent (if) of the infant instead of expending it directly themselves [u). (3. Since the 1st January, 1882, they may make such allowance, not only (t) Be Cotton, 1 C. D. 232. (m) Lord Cranwoitli's Act, 23 & 24 Vict. c. 145, s. 26. i POWER TO ALLOW MAINTENANCE TO INFANTS. 441 for maintenance and education, but also otherwise /or the benefit of the infant (rr). I (2) Provided, nevertheless, that the above powers do not authorize the allowance of maintenance where the infant on attaining twenty-one would only be entitled to the corpus, and not to the intermediate interest (^). Illust. — 1. Cases to which the power applies. — Although the statute allows maintenance out of the income of a contuigent legacy or fund, yet if, on the true construction of the settlement, that income is payable to some one else during the infancy, and is not to bo accumulated so as to pass along with the corpus if and when it vests, the infant will not be entitled to be maintained. For if he were, his maintenance would come, not out of his own contingent property, but out of somebody else's income, which would be manifestly unjust. Consequently the first question which the practi- tioner has to solve in aU cases of maintenance is, whether or not the income of the fund will go (.r) Conveyancing and Law of Property Act, 1881, s. 43. (?/) Re JDickson, Hill v. Grant, 29 C. D. 331 ; Re Jttdkin, 25 C. D. 743 ; Re George, o C. D. 837 ; Re Collins, Collins V. Collins, 32 C. D. 229; Re Jeffery, Burt v. Arnold, (1891) 1 Cla. ()T1; Re Burton, Banks v. Ilmvens, (1892) 2 Ch. 38; Re Humphries, 62 L. J., Ch. 498; Re Adams, (1893) 1 Ch. 329. 442 THE POWERS OF THE TRUSTEE. along with, the capital if and when the capital vests in the infant. If it will, then maintenance may be safely allowed. If it will not, then main- tenance must be refused. Thus, where the rents were directed to be accumulated during the infancy, and the proceeds to be invested in the purchase of real estate, it was held that maintenance must be refused (s). And so where a legacy is given to a child if and when it attains twenty-one, then, as the intermediate income is undisposed of, and goes to the residuary legatees, the infant can have no maintenance (r/). But, on the other hand, where a legacy was given to trustees immediateJy upon trust to invest it, and to pay and divide it amongst a class of grandchildren contingently on their attaining twenty-one, with remainders over, it was held that by the immediate gift to trustees, the legacy was severed from the rest of the estate, and segregated and set apart, and that the income went with the corpus, so that maintenance could be ordered {h) . The rule was tersely expressed by Fry, J., in Guthrie v. Walroncl (c) as follows : — " I think the law is plain, that when a specific legacy is given (z) Re Alford, Hunt v. Parry, 32 C. D. 383; and see Me Jt'ffcry, Burt v. Arnold, (1891) 1 Ch. 671. (a) Guthrie v. Walroncl, 22 C. D. 573 ; but see and distinguish Be Adams, Adams v. Adams, (1893) 1 Ch. 329. {b) Be Medloch, Buffle v. Medlock, 55 L. J. Ch. 738. (c) 22 C. D., at p.'578. The dicta of Jessel, M.E., in Ziong V. Ovenden, 16 C. D. 691, to the contrary, are inconsistent with this case and with Be Medlock, Buffle v. Medlock, supra ; and have been disapproved by Chitty, J., in Be Clements, W. N. (1894), p. 29. POWER TO ALLOW MAINTENANCE TO INFANTS. 443 on tlie liappening of a contingency, the interest upon it, and any accretions to it before the hap- pening of the contingency, fall into the residue of the testator's estate, or go to his next of kin, as the case may be. But when a specific legacy is vested at once in the legatee, and the enjoyment only is postponed until the happening of the contingency, the interim interest and accretions go to the legatee. 2. Contingent share of residue. — Where a testator bequeaths a share of residue to such of a class as shall attain twenty-one, it would seem that so long as they are all infants they are entitled to mainte- nance, on the curiously refined ground that although they do not take an interest in the income qua income of the capital to which they are con- tingently entitled, yet as it is undisposed of in- come, it becomes iiart of the residue itself, and the infants take a contingent interest in it as residuary legatees (f/). Whether, however, under such a gift, the whole income is not payable to such of the class as have for the time being attained twenty-one to the exclusion of the infants, appears to be doubtful (?) ; but it is conceived that it is not, and that Mr. Justice North's decision in Re Jejf'enj, Burt v. Arnold (e) to the contrary effect, was decided upon an erroneous reading of Fur)ieaux v. Rueker (/"), which is inaccurately {(1) Re Adams, A-- APPOINTMENT OF NEW TRUSTEES. 479 to be paid into court, or is imme- diately divisible (^^). (3) Every new trustee, both before and after the trust proj^erty is vested in him, has the same powers, authorities and discretions, and may in all re- spects act as if he had been an original trustee. (4) Any person who can hold property is capable of being appointed ; but a person ought not to be appointed who is not sui juris ; nor (except under very exceptional circumstances) one who resides out of the lurisdiction of ''-ff-^^ the court ; nor one who is a bene- ficiary, or husband of a beneficiary. The donee of a power of appointing new trustees cannot ajDpoint himself [u). Illust. — 1. Appointment of new trustees under express power. — Express powers to appoint new trustees are construed somewhat strictly. Thus, where an express power to appoint new trustees {t) Re Gardiner, 33 C. D. 590; Davies v. Hodgson, 32 ibid. 225; Re Lamhe, 28 ibid. 77; Re Harford, 13 ibid. 135; Re Martyn, 26 ibid. 745; Re Aston, 23 ibid. 217; Re Toutt, 26 ibid. 45; but see i^e i^oz<;/er, W. N. (1886) p. 183, and Re Leon, (1892) 1 Ch. 348, wbere tbe Lunacy Court made an order vesting the trust estate in three of the original foui* trustees, the fourth having become lunatic. {u) Skeats V. Allen, 37 W. E. 778; Skeafs v. Evans, 42 C. D. 522. 480 DEATH, RETIREMENT, ETC. OF A TRUSTEE. is vested in " the surviving or continuing trustees or trustee, or the heirs, executors, or administra- tors of the last surviving and continuing trustee," and the two trustees are desirous of retiring, they cannot do so by appointing two new trustees in their place by one deed ; but one must appoint a new trustee in the place of the first retiring trustee, and then the new trustee must appoint one in the place of the second retiring trustee {x). This singular instance of verbal subtlety all turns upon the idea, that trustees who are about to retire cannot he said to be continuing (y), but that if one retired first, the other would be a continuing trustee, although he might intend to retire the next day. If, in addition to the words " sur- viving and continuing," the words " or other trustee or trustees" had been added, the two re- tiring trustees might have appointed two new ones by the same deed (x). 2. So, again, the words " unfit and incapable " are very strictly construed. Thus, where a new trustee was to be appointed if a trustee became (03) Lord Camoysy. Best, 19 B. 414 ; Be Ooates and Par- sons, 34 C. D. 370 ; Be Norris, 27 C. D. 333. This notion ■was strongly disapproved by Bacon, Y.-C, in Be Glenvy and Hartley, 25 0. D. 611; but the V.-C.'s dicta were equally strongly disapproved by Pearson, J., in Be Norris, supra, and by North., J., in Be Ooates and Parsons, supra. {y) With regard to appointments made under the statu- tory power, this is not so, as the statute enacts that a continuing trustee shall include a refusing or retiring trustee, if 'willing to act, as donee of the power (Trustee Act, 1893, s. 10, sub-s. 4); but he is not a necessary party if unwilling to act (see Be Norris, Allen v. Norris, 27 0. D. 333). APPOINTMENT OF NEW TRUSTEES. 481 incapable of acting, it was held that the bank- ruptcy of one of the trustees did not fulfil the condition, as it only rendered him unfit but not Incapable {z). And so where the words were *' unable to act," it was held that absence in China or Australia did not disable {a), although it clearly unfitted (i'^) , a trustee for the ojQfice. On the other hand, it has been held that lunacy disables a trustee so as to bring a power into operation (c) . With regard to a trustee becoming icnfit to act, bankruptcy (at all events where the trust property consists of money or other property capable of being misappropriated, and where the cestuis que trust desire his removal (d)), and liquidation or composition {d), or conviction of a dishonest crime (e), are grounds for his removal bi/ the court under section 25 of the Trustee Act, 1873 (which has taken the place of section 147 of the Bank- ruptcy Act, 1883) . Whether, however, they would enable a donee of a power of appointing new trustees to displace him hostilely on the ground of unfitness seems questionable. Anyhow, it has been held that infancy is not unfitness, although an infant will be removed by the court (/). Lastly, with (z) Turner v. Maule, 15 Jiu\ 761 ; see Be Watts, 9 Ha. 106. (a) Withingtonv. Withington, 16 Sim, 104; Re Harrison,. 22 L. J., Ch. 69 ; but see Re Bignold, 7 Ch. App. 223. {b) Mennard v. Welford, 1 Sm. & G. 426. A mere tem- porary absence abroad would not unfit a trustee for tlie office. Re Moravia Society, 4 Jur., N. S. 703. (c) Re East, 8 Ch. App. 73o. {d) See Re Barker, 1 C. D. 43 ; Re Adams, 12 C. D. 634. (e) Turner v. Maule, 15 Jur. 761. (/) Re Tallatire, W. N. 1885, p. 191. IJ. — T. I I 482 DEATH, RETIREMENT, ETC. OF A TRUSTEE. regard to inccqiacUi)^ the word is strictly limited to incapacity of the trustee arising from some personal defect {(f) , as illness, lunacy (//) , or, possibly, infancy. 3. Where the power is vested in a tenant for life he may exercise it even after alienating his life estate (/). On the other hand, where a decree for administration by the court has been made, the donee of a power (whether express or statutory) can only appoint a new trustee under the super- vision of the court, which will, however, accept his nominee, unless there be strong grounds for rejecting him {k). 4. Appointment of new trustees under the statu- tory power. — If there be no express power, or even if there be one and the statutory power is not expressly negatived or modified, new trustees may he appointed under the provisions of section 10 of ihe Trustee Act, 1893, which is in the following words : — (1.) Where a trustee, either original or substituted, and whether ajipointed by a court or otherwise, is dead, or remains out of the United Kingdom for more than twelve months, or desires to be discharged from all or any of the trusts or powers reposed in or conferred on him, or refuses •or is unfit to act therein, or is incapable of acting therein, then the person or persons nominated for the purpose of appointing new trustees by the instrument, if any, creating (g) See Re Watts, 9 Ha. 106 ; Turner v. Maule, 15 Jur. 761 ; Re Biqnold, 7 Ch. App. 223. {h) Re East, 8 Ch. App. 735 ; Re Blake, W. N. 1887, p. 173. (i) Hardaher v. Moorhouse, 26 C. D. 417. (k) Re Oadd, Eastwood v. Clarke, 23 C. I). 134 ; Re Hall, Hall V. Hall, 33 W. K. 508. APPOINTMENT OF NEW TRUSTEIN. 483 the trust (/), or if thero is no such person, or no sucli per- son ablo and willing to act, then the surviving or con- tinuing trustees or trustee for the time being, or the personal representatives of the last sundving or continuing trustee (»)), may, by writing, appoint another person or other persons to bo a trustee or trustees in the place of the trustee dead, remaining out of the United Kingdom, desiring to be discharged, refusing, or being unfit or being incapable, as aforesaid. (2.) On the appointment of a new trustee (n) for the whole or any part of trust property — (a) the number of trustees may be increased ; and (b) a separate set of trustees may bo appointed for any part of the trust property held on trusts distinct from those relating to any other part or parts of the trust property, notwithstanding that no new trustees or trustee are or is to be appointed for other parts of the trust property, and any existing trustee may be appointed or remain one of such separate set of trustees; or, if only one trustee was originally appointed, then one separate trustee may be so appointed for the first-mentioned part ; and (c) it shall not be obligatory to appoint more than one (Z) Where there was no express jjower but merely a declaration in a marriage settlement that the husband and wife and the survivor of them should have power to appoint new trustees, it was held that they could exercise this statutory power as the persons nominated for the purpose, &c. Re Walker and Hughes, 24 G. D. 698. (?h) This inclvides the executor of a solo trustee [Re Shafto, 29 C. D. 247), but not the executor of a person who was nominated trustee of a will but died before the testator. Niclwlsvn v. Field, (1893) 2 Ch. 511 ; but of. Re Ambler, 59 L. T. 206. («) These words govern the whole sub-section, so that the number of trustees cannot be increased unless there be a vacancy to be filled up. Re Oregson, 34 C. D. 209 ; Re Driver, 19 Eq. 352. Il2 484 DEATH, RETIREMENT, ETC. OF A TRUSTEE. new trustee wliere only one trustee "was originally appointed, or to fill up the original number of ti'ustees where more than two trustees were origin- ally appointed ; but, except where only one trustee was originally appointed, a trustee shall not be discharged under this section from his trust unless there will be at least two trustees to perform the trust; and (d) any assurance or thing requisite for vesting the trust property, or any part thereof, jointly in the persons who are the trustees, shall be executed or done. (3.) Every new trustee so appointed, as well before as after all the trust property becomes by law, or by assur- ance, or otherwise, vested in him, shall have the same powers, authorities, and discretions, and may in all resjiects act, as if he had been originally appointed a trustee by the instrument, if any, creating the trust. (4.) The provisions of this section relative to a trustee who is dead include the case of a person nominated trustee in a will but dying before the testator, and those relative to a continuing trustee include a refusing or retiring trustee, if willing to act in the execution of the provisions of this section. (5.) This section applies only if and as far as a contrary intention is not expressed in the instrument, if any, creating the trust, and shall have effect subject to the terms of that instrument and to any provisions therein contained. (6.) This section applies to trusts created either before or after the commencement of this Act. This section (which is a re-enactment of sect. 31 of the Conveyancing and Law of Property Act, 1881) has put an end to many questions which formerly presented much difficulty. For instance, where a trustee had gone abroad, it was always a source of trouble to determine what amount of APPOINTMENT OF NEW TRUSTEES. 485 absence constituted a disability or unfitness for his continuing a trustee (o). Now, however, twelve months is specified as the period. It will be seen that the power is exerciseable in six cases, viz. : — (1) on the death of a trustee, (2) where he remains out of the kingdom for twelve months, (3) where he desires to be discharged, (4) where he refuses to act, (5) where he is unfit to act, and (6) where he is incapable of acting. The first three cases require no comment. With regard to the case of a refusal to act, it is apprehended that it clearly extends to the case of a disclaimer — i.e., to a case where the person nominated trustee has never accepted the oflBce (;;). With regard to a trustee becoming unfit to act or incapable of acting, the reader is referred to illustration 2, supra. Where there are joint donees of a power of appointment named in the settlement, and they differ as to the person to be appointed, they will be deemed to be "unable or unwilling" to appoint, so as to vest the statutory power in the surviving or continuing trustees {q). Lastly, it may be observed that the statutory power is not impera- tive, and imposes no obligation on the donee of the power to appoint new trustees [r) ; and by sect. 47 applies to trustees for purposes of the Settled Land Acts. (o) See Re Harrison, 22 L. J., Cli. G9; Re Bignold, 7 Ch. App. 223. {p) See Re Iladlei/, 5 De G. & Sm. 67. (q) Re She^-ijmrd, W. N. 1S88, p. 234. (r) I'eacock y. Colling, 33 W. E. o28 ; Re Kniyld, 26 C. D. 82. 486 DEATH, RETIREMENT, ETC. OF A TRUSTEE. 5. Appointment of new trustees by the court. — The power of the court to appoint new trustees is now contained in sect. 25 of the Trustee Act, 1893, ■which is as follows : — (1.) The High Court may, whenever it is exi^edient to appoint a new trustee or new trustees, and it is found inexpedient, difficult, or impracticable so to do without the assistance of the court, make an order for the appoint- ment of a new trustee or new trustees either in substitu- tion for or in addition to any existing trustee or trustees, or although there is no existing trustee. In particular and without prejudice to the generality of the foregoing provision, the court may make an order for the appoint- ment of a new trustee in substitution for a trustee who is convicted of felony, or is a bankrupt. (2.) An order under this section, and any consequential vesting order or conveyance, shall not operate further or otherwise as a discharge to any former or continuing trustee than an appointment of new trustees under any power for that purpose contained_in any instrument would have operated. (3.) Nothing in this section shall give power to appoint an executor or administrator. And by sect. 37 of the same act, it is enacted that — Every trustee appointed by a court of competent juris- diction shall, as well before as after the trust property becomes by law, or by assurance, or otherwise, vested in him, have the same powers, authorities, and discretions, and may in all respects act 'as if he had been originally appointed a trustee by the instrument, if any, creating the trust. It will be perceived that application should only be made to the court to appoint new trustees in APPOINTMENT OF NEW TRUSTEES. 487 cases where, from some reason or other, it is difficult, inexpedient, or impracticable to appoint them under an express power, or the statutory power ; and if such an application (which is now made by summons in chambers (.s)) be made unnecessarily, it will be dismissed with costs. 6. Illustrations of cases where application to court is proper. — However, there are many cases in which it is still impossible to appoint new trustees out of court. Thus, if a last surviving, or a sole trustee, die intestate, and leave no personal estate, so that no one can take out letters of administration to him, and no one is named in the settlement to appoint new trustees, it would be necessary to apply to the court. And so where a trustee has become, through old age and infirmity, incapable of acting in the trust, the court has exercised its jurisdiction of appointing new trustees {f). 7. Appointment by court where no original trustees. — Again, where, by inadvertence, or by reason of disclaimer, death or otherwise, there never were any original trustees of the settlement, and no express power of appointing any, the court will appoint some (^u). 8. Appointment by court where trustee an infant. — So, where a trustee is an infant, the court will (s) E. S. C. Ord. LV. r. 13a. {t) lie Leman, 22 C. D. 633; Be Phelps, 31 0. D. 251. (m) Dodkiii V. Brunt, 6 Eq. 580; If Adhemar \. Ber- trand, 35 B. 19; ^e Smirthwaite, 11 Eq. 251; Be Davis, 12 Eq. 214; Be Moore, McAlpiney. Moore, 21 C. D. 778; Be Williams, 36 0. D. 231. 488 DEATH, RETIREMENT, ETC. OF A TRUSTEE. appoint another in his place ; but this will be done without prejudice to any application by the infant, on coming of age, to be restored (.r). 9. Appointment by court in cases of doubt. — So, if there is a doubt whether the statutory (or an express) power applies, the court will solve it by appointing new trustees itself (y). 10. Appointment by court where donee of power abroad. — So it has been held that where the power of appointing new trustees was given to a husband and wife jointly, and they were judicially separ- ated, and the husband was living in Australia, it was a case in which it was " difficult or imprac- ticable " to appoint new trustees, without the assistance of the court, so as to give the latter jurisdiction (z). 11. Power only exerciseable with consent of a lunatic. — It would seem that where the power of appointing new trustees is vested in a person who can only exercise it with the consent of a lunatic, the proper course is for the committee of the lunatic to apply to the Lords Justices, for leave to give the required consent on behalf of the lunatic (a) . In the absence of other circumstances, therefore, the mere fact of a necessary consenting party being a lunatic, affords no ground for an application to the court to appoint new trustees. (x) Be Shehnerdine, 33 L. J., Ch. 474. {y) Be Woodyate, 5 W. E. 448. 'z) Be Somerset, W. N. 1887, p. 122. a) Be Garrod, 31 C. D. 164. APPOINTMENT OF NEW TRUSTEES. 489 12. Appointment by court where trustee a felon or bankrupt. — Where a trustee is a felon, or a bankrupt, and refuses to join in the appointment of a new trustee in his place, the court can and will remove him, and appoint another person if the cestuis que trust desire it {b) ; and a similar observation applies to a trustee who has become a lunatic (c), or has gone to reside permanently abroad [d), or has absconded. 13. Summary procedure only applicable where trust is clear. — The regular procedure for the ap- pointment of new trustees by the court under the statutory jm^isdiction, is by originating summons ; but it would seem that where the trust is not clear on the face of written documents (ex. gr., where a conveyance is taken in the name of some other person than the real purchaser (e) ), the court first requires the trust to be established to its satisfaction, and that can only be done by an action. 14. Court wiU not re-appoint existing trustees. — It was at one time thought that where there were (6) Coomles v. Brookes, 12 Eq. 61 ; Re Adams, 12 C. D. 634; Re Foster, 55 L. T. 499. (c) If a vesting order is also required and the lunatic is " so found," the summons must be intituled not only in Chancery but also in lunacy (see Re Vickers, 3 C. D. 112 ; Re Mason, 10 Ch. App. 273), unless the lunatic is out of the jurisdiction. Re Gardiner, 10 C. D. 29. {d) Re Bignold, 7 Ch. App. 223. As to the length of absence abroad, see Hutchinson v. Stephens, 5 Sim. 499. (e) Re Martin, W. N. 1886, p. 183; and see also Re Carpenter, Kay, 418 ; and Re Weeding, 4 Jur. N. S. 707. 490 DEATH, RETIREMENT, ETC. OF A TRUSTEE. properly appointed trustees in existence, and it was impossible otherwise to vest the trust property in them, or where it was desirable to remove one of several trustees and impossible to get anyone to serve in his place, the court could, in the one case, re-appoint all the existing trustees and order the trust property to vest in them ; or, in the other case, re-appoint the continuing trustees in the place of themselves and the trustee whom it was desired to remove. However, it is now well settled that the court has no jurisdiction to re- appoint existing trustees (_/). 15. Court rarely reduces the number of trustees. — Where one of three trustees absconded, the court refused to re-appoint the two remaining ones and vest the estate in them alone [g). For, apart from the objection that the court had no jurisdiction to appoint existing trustees to be new trustees, it was said by North, J., to be a well- settled rule that the court will not reduce the number of trustees of a continuing trust, although it will deviate from that rule if the trustees have no duties to perform except to distribute a fund which is immediately divisible. On the other hand, in a subsequent case (A), to that last cited (/) Re Vicat, 33 C. D. 107; Re. Deivhirst, ihid,. 416; Re Gardner, ibid. 599; Re Batho, 39 ibid. 189; overruling iZe Rathbone, 2 C. D. 483 ; Re Dalgleish, 4 ibid. 143 ; and Re Crtnve, 14 ibid. 610. (ry) Rr Gardiner, 33 C. D. 590, and cases cited in judg- ment of North, J. {h) Re Fowler, W. N. 1886, p. 183. I ArPOINTMENT OF NEW TRUSTEES. 491 (in "wliicli it was referred to), Chitty, J., appointed three new trustees in the place of four original ones, where it had been found impossible to obtain four. His lordship is reported to have said, " The court has power to appoint three new trustees in place of the original four, and if special circum- stances are necessary for the exercise of this juris- diction, the disclaimer of one of the four trustees, and the difficulty of getting new trustees, are special circumstances sufficient to justify the making of the order." Under these circum- stances the practice on the point is not so well settled as could be wished. 16. Court can increase the number at any time. — Although the statutory power of increasing the number of trustees on an appointment out of court, can only be exercised when there is a vacancy to be filled up, yet there is no such limitation on the power of the court to increase the number of trustees at any time if it should be deemed expedient (/). 17. Appointing person to perform the duties incident to office of executor. — Although sect. 25, sub-sect. 3 of the Trustee Act, 1893, expressly prohibits the court from appointing an executor or administrator, yet where a testator has not appointed a trustee of trust legacies, and where, consequently, the trusteeship is incident to the office of executor, the court has jurisdiction on (i) Re Oregson, 34 0. D. 209; and see Re Driver, 19 Eq. 352. 492 DEATH, RETIREMENT, ETC. OF A TRUSTEE. the death of the executor to appoint someone to perform those fiduciary duties (k). 18. General principles as to persons proper to be appointed new trustees. — In selecting persons to be new trustees, the Court acts upon the following principles, and it is apprehended that donees of powers ought to be guided by the same considera- tions, although, no doubt, their appointments would not be invalidated if they failed to observe them. First, the Court will have regard to the wishes of the settlor as expressed in, or plainly deduced from, the settlement. Secondly, the Court will not appoint a person ■with a view to the interest of some of the bene- ficiaries in opposition to the interest of others. Thirdly, the Court will have regard to the question whether the appointment will promote or impede the execution of the trust ; but (semb/e) the mere fact of a continuing trustee refusing to act with the proposed new trustee, will not be sufficient to induce the Court to refrain from appointing him (/). [ 19. Persons proper to be appointed new trus- tees. — With reference to the question as to the personal fitness of a proposed new trustee, an infant can, no doubt, be appointed an original trustee, but it would not be a wise appointment ; (k) Re Moore, McAlpine v. Moore, 21 C. D. 778 ; and see Trustee Act, 1893, sect. 50 (interpretation of "Trust" and " Trustee.") [l) Re Tempest, 1 Ch. App. 485. APPOINTMENT OF NEW TRUSTEES. 493 and a retiring trustee most certainly ouglit not to concur in the appointment of an infant to replace him. For an infant cannot properly carry out a special trust dui"ing his minority. As V.-C. Wood said, in King v. Bcllord {m), "It is not in the power of a testator to confer upon an infant that discretion which the law does not give him, although he may make the infant his hand — his agent — to execute his purpose. He cannot give an estate to an infant, and say that he may sell it, when the law says that he cannot do so." An additional objection to making an infant a trustee consists in the fact that he cannot he made liable for a breach of trust arising from negli- gence {n), although he is liable to account on coming of age(o). He would seem to be liable for actual fraud if it can be shown that he had sufficient ability to contrive a fraud {p). For these reasons, therefore, an infant is not a proper person to be appointed, and a person who should appoint one might not improbably find that he would have to pay the costs of an action instituted for the purpose of removing the infant {q), as he cannot be supplanted as " unfit " by the appoint- {m) 1 H. & M. 343 ; but consider Re Cardross, 7 C. D. 728. (n) Hindmarsh v. Soiithgate, 2 Euss. 324. (o) Games v. Applin, 31 C. D. 147. {p) Evroy v. Nicholas, 2 Eq. Ca. Ab. 489 ; Stikeman v. Daivson, 1 D. & S. 503 ; Wright v. Snowe, 2 ibid. 321 ; Davies v. Hodgson, 25 B. 177. {q) See Baikes v. Baikes, 35 B. 403. 494 DEATH, RETIREMENT, ETC. OF A TRUSTEE. ment of a new trustee under sect. 10 of the Trustee Act, 1893 (r). 20. Appointment of tenant for life to be trustee. — A tenant for life has been held to be a not improper appointment («) ; but it certainly is not an advisable one. For one of the main objects of a trustee is to protect the remainderman against the tenant for life. 21. Appointment of remainderman. — It has been held (t) that a remainderman is not a person whom f/ie court will appoint, at all events where there is an infant tenant for life. For the interest of a person entitled in remainder is somewhat opposed to that of a tenant for life ; and it would be for his advantage to lay out trust money in making improvements on the property, instead of making accumulations for the benefit of the tenant for life. Of course, however, such an objection would be inapplicable where a tenant for life is sui juris and consents to the appointment. 22. Appointment of solicitor to the trust. — The solicitor to the trust is not a proper person to be appointed a new trustee. Such an appointment would not, however, be bad, so as to invalidate the acts of the trustee so appointed; but the court would not make, or sanction, such an ap- pointment (u). (r) Ee Tallatire, W. N. 1885, p. 191. (s) Forster v. Abraham, 17 Eq. 351. h) Be Paine, 33 W. E. 564. {u) Be Norris, 27 C. D. 333. APPOINTMENT OF NEW TRUSTEES. 495 23. Husband of beneficiary appointed trustee. — .^w^^ The husband of a beneficiary entitled for her separate use ought not to be appointed; for his interests are entirely in conflict with those of his wife. The court will never make such an appoint- ment unless it is impossible to get another person, and even then will generally do so only upon condition that a direction is inserted in the order, stipulating that, upon his becoming sole trustee, there shall be another appointed (x). In a recent case (ij), Kay, J., appointed two persons, one of whom was a beneficiary, and the other the husband of a beneficiary, upon their both undertaking, if either were left sole trustee, to endeavour to obtain the apjjointment of a new trustee. 24. Person out of jurisdiction appointed trustee. — It is not proper to appoint a trustee who resides out of the jurisdiction, save under very excep- tional circumstances (;:). But where all the bene- ficiaries were resident in Australia, the court appointed a person resident there (a). 25. Appointing alien trustee. — An alien may, '- «K(vX since the passing of the statute 33 & 34 Yict. c. 14, " "T*.)!^ hold real estate, and may therefore (it is appre- hended) be either a settlor or a trustee, although the court usually objects to appoint one unless he be permanently domiciled in England. Prior to (x) Re Parrott, 30 W. E. 97. (y) Be Lightbody, 33 W. E. 452. (z) Be Curtis, 5 Eq. 422. (a) Be Freeman, 37 C. D. 148 ; Be Lidiard, 14 C. D. 310 ; Be Cunard, 10 C. D. 29 ; Be Austen, 38 L. T. 601 ; Be Hill, W. N. 1874, p. 228. I.. ?... 496 DEATH, RETIREMENT, ETC. OF A TRUSTEE. that act lie could purchase lands for an estate of freehold, but could not take them by operation of law, as, for instance, by descent or jure mariti {b). And even if he took them by purchase, he was liable to be ousted by the crown on inquisition found, and could not make a good title. Thus, in Fish v. JT/ein (c), a testator devised and be- queathed the residue of his real and personal estate to his wife and one Klein (an alien) upon trust to sell the same. The estate was sold for 60,000/., but doubts having arisen as to Klein's capacity to convey the estate to a purchaser, the matter came before the court ; and the then Master of the RoUs said : " The estate being out of Klein, it is impossible to consider his alienee in any better situation as to title than Klein him- self." No doubt, however, the crown could have made a good title, and could have executed the trust {cl) ; but there would seem to be no means of forcing the crown to execute a trust (e) ; although, it is apprehended, that jTvactically, by means of a petition of right, the crown would be as amenable to the court in this matter as an individual. 26. Appointment of married woman as trustee. — A married woman may undoubtedly be a trustee (_/'), but prior to the Married Women's (h) Lew. 25. (c) 2 Mer. 431. (d) Lew. 29. (e) Paulett r. Att.-Oen.,'Ka,Td.. 467; Hodge y. Att. -Gen., 3 Y. & 0. 342. (/) Smith V. Smith, 21 B. 385. APPOINTMENT OF NEW TRUSTEES. 497 Property Act, 1882, she was not a desirable ^ ^ Lajtoxa^* .^-' du-'^ person for the office. No doubt she could always exercise powers collateral, or in gross, or appen- t^^^^^I^'T**!--' dant (^) ; but she could only execute a trust to cr^^^;^' (ft'' /" sell, unaccompanied by a power of appointment, """'^ ,^^u. V with her husband's consent and joinder. For not ;. .< :^'-S '^'' , only was he the party liable {h), but, as she took a mere legal estate, she took it subject to her legal disabilities and incidents (/). And it is appre- hended, that even where there was a poicer vested in her to sell, she would not have been capable of entering into a binding contract to execute the power, as it was no question affecting her separate estate (li). However, it is conceived that, as, since the Married Women's Property Act, 1882, a mar- ried woman has the same proprietary rights and powers as a feme sole, the above objections have ceased to apply (/) . 27. Appointment of a trust company, — Lastly, the court will not appoint (nor ought the donees of a power to appoint) an incorporated company formed for the purpose of acting as a trustee {rn) . ((/) Oodolphin v. Oodolphin, 1 V. sen. 21. (h) Smith V. Smith, 21 B. 385; Bahin y. Hughes, 31 C. D. 390. (?:) Lew. 33. {k) Avery v. Griffin, 6 Eq. 607. {I) See Be Berkley, Berkley v. Berkley, 9 Ch. App. 720, where a spinster was appointed by the court; and see Married Women's Property Act, 1882, sects. 1, 18 and 24 ; and Be Hawksicorth, W. N. 1887, p. 113. {m) Be Brogden, Billing y. Brogden, W. N. 1888, p. 238. U. — T. K K 498 DEATH, RETIREMENT, ETC. OF A TRUSTEE. Art. 63. — Vesting of Trust Froperty in new Trustees. (1) On the retirement of a trustee, or the appointment of a new trustee out of court, everything requisite should be done for vesting the trust property jointly in the persons who are for the future to be the trustees [n). This may be done : — a. By the ordinary modes of trans- ferring property. ^. Since the 31st December, 1881, by a declaration in the deed by which he is appointed or by which he retires, to the effect that any estate or interest in any land, or in any chattels, or the right to recover and receive any chose in action, subject to the trust, shall vest in the per- sons who, by virtue of the deed, become and are the trustees. Such a declaration does not, however, transfer the legal estate or right in (1) copyholds or customary lands, (2) lands held by way of mortgage, or (3) shares, stocks. i (n) Trustee Act, 1893, 8. 10, sub-s. 2 (d), and s. 11, 8UD-S. 2. VESTING TRUST PROPERTY IN NEW TRUSTEES. 499 annuities or property only transfer- able in the books kept by a com- pany or other body, or in manner prescribed by or under act of parliament (o). 7. Where none of the foregoing means are feasible, application may bo made, by summons to a judge of the Chancery Division of the High Court of Justice (or, in case of lunacy or unsoundness of mind of a trustee who is being displaced, to the Lord Chancellor or Lords Justices), for a vesting order (/>). (2) On the appointment of a new trustee by the court, a vesting order will be made, vesting the trust property in the new trustee or trustees, either alone, or jointly with the continuing trustee or trustees, as the case may require. t (0) Trustee Act, 1893, s. 12. \p) Trustee Act, 1893, ss. 26, 32, 34, 35, and 36; and as to lunatic trustees, or trustees of unsound mind, Lunacy Act, 1890, ss. 133 — 143. The court cannot, however, iinder this act make a vesting order where the legal estate in the entirety, and the beneficial interest iu part of land, is vested in the Crown. In such a case the proper procedure is to issue a summons asking for a sale under sect, o of the Intestates' Estates Act, 1884. Re PraU, do L. T. 313. kk2 500 DEATH, RETIREMENT, ETC. OF A TRUSTEE. Ons. 1. Vesting declarations on appointments out of court. — Before the year 1882, difficulties used frequently to arise in relation to the vesting of the trust property on the appointment of new trustees, owing to the fact that the legal estate could only be transferred hy the persons in whom it was legally vested, or by a vesting order of the court. For instance, a trustee might leave the country permanently, or become. a lunatic, or (being a sole trustee) die intestate and without any heir. The legal estate being vested in him, could only be got out of him by a duly executed conveyance or assignment, or by an order of the court ; and as the former could not be obtained, the latter became a matter of necessity. However, by sect. 34 of the Conveyancing and Law of Property Act, 1881, re-enacted by sect. 12 of the Trustee Act, 1893, this difficulty was to a great extent obviated, although not completely ; for it does not apply to all kinds of property, so that applications to the court for vesting orders will still have to be made in many cases. ^ The section in question is in the following words, viz. : — I (1) "WTiere a deed by wliicli a new trustee is appoiated to perform any trust, contains a declaration hy the ap- pointor to the effect that any estate or interest in any land subject to the trust, or in any chattel so subject, or the right to recover and receive any debt or other thing in action so subject, shall vest in the persons who by virtue of the deed become and are the trustees for performing the trust, that declaration shall, without any conveyance or assignment, operate to vest in those VESTING TRUST PROPERTY IN NEW TRUSTEES. 501 persons, as joint tenants, and for the purposes of the trust, that estate, interest, or right. (2) Where a deed by which a retiring trustee is dis- charged under this act contains such a declaration as is in this section mentioned hy the retiring and continuing trustees, and hij the other person, if any, empoiuered to appoint trustees, that declaration shall, without any con- veyance or assignment, operate to vest in the continuing trustees alone, as joint tenants, and for the purposes of the trust, the estate, interest, or right to which the de- claration relates. (3) This section does not extend to any legal estate or interest in copyhold or customary land, or to land con- veyed by way of mortgage for securing money subject to the trust, or to any such share, stock, annuity, or property as is only transferable in books kept by a company or other body, or in manner directed by or under Act of Parliament. (4) For purposes of registration of the deed in any registry, the person or persons making the declaration shall be deemed the conveying party or parties, and the conveyance shall be deemed to be made by him or them imder a power conferred by this act. (5) This section applies only to deeds executed after the 31st of December, 1881. It will be perceived that the declaration must be contained in the deed by which the new trustee is appointed. With regard to property which does not pass by a vesting declaration, copyholds must be vested by surrender and admittance, in the usual way. Mortgages are invariably trans- ferred without disclosing the trust, so as to keep it off the face of the mortgagor's title. Stocks, I shares, &c., are transferred by deed of transfer, i duly registered with the bank or company. 2. Vesting orders made by the Chancery Division 502 DEATH, RETIREMENT, ETC. OF A TRUSTEE. of the court (q). — The jurisdiction of the court to make orders vesting trust property in the trustees for the time being of a settlement, is codified in sects. 26, 32, 34, 35, and 36 of the Trustee Act, 1893, and as to trustees who have become lunatic or of unsound mind, in sects. 135 and 136 of the Lunacy Act, 1890. The sections of the Trustee Act, 1893, above referred to, are as follows : — 26. In any of the following cases, namely : — (i.) Where the High Coui-t appoints or has appointed a new trustee (r) ; and (ii.) Where a trustee (s) entitled to or possessed of any land [t), or entitled to a contingent right therein, (q) By sect. 41 of the Trustee Act, 1893, this jurisdic- tion extends to land and personal estate in Her Majesty's dominions, except Scotland. SeeBe Heiuitt, 6 W. E. 537, and Re Lamotte, 4 C. D. 325. It is proposed to give similar powers to the Irish Courts by the Trustee Act, 1893, Amendment Bill, 1894. (r) It is apprehended that the intention of the legis- lature was that each of these paragraphs should stand alone, and that the circumstances enumerated in each should give jurisdiction to make a vesting order. That was so under the Trustee Act, 1850, and the court made vesting orders on the appointment of new trustees, even though there was no incapacity in the person in whom the estate was vested to convey it to the new trustees. lie Mcnnn'ng, Kay, App. xxviii. ; Hancox v. S/nttle, 3 Sm. & Giff. 478. However, in the new section, the language is not very happy, as if we read paragraph (i), and omit paragraphs (ii) to (vi), there is nothing to show to what the words '" the land," which is to be vested, refer. (s) The word "ti'ustee" includes a constructive trustee, ex. gr,, the heir of a testator whose trustees have pre- deceased him or disclaimed. JVi'lkes v. Groom, 6 D., M. & G. 205 ; and see Trustee Act, 1893, s. 50. (/) It is apprehended that "land" includes leaseholds; for it was stated in the memorandum annexed to the bill that the words "entitled to or possessed of" were sub- stituted for the words " seised or possessed of," which were used in the Act of 1850, for the express purpose of VESTING TRUST PROPERTY IN NEW TRUSTEES. 503 either solely or jointly {it) -with, any other per- son, — (a) is an infant (y), or (b) is out of the jurisdiction of the High Court (x), or (c) cannot be found ; and (iii.) Where it is uncertain who was the survivor of two or more trustees jointly entitled to or possessed of any land ; and (iv.) Whore, as to the last trustee known to have been entitled to or possessed of any land, it is uncertain whether he is living or dead ; and (v.) Where there is no heir or personal representative to a trustee {y) who was entitled to or possessed of land and has died intestate as to that land, or where it is uncertain who is the heir or personal representative or devisee of a trustee who was en- titled to or possessed of land and is dead ; and including leaseholds. See also sect. 50, where land is defined as including land of any tenure. The matter might, however, with advantage, have been made plainer. Under the old act there was no power to vest leaseholds, except on the appointment of new trustees by the court. The corresponding section of the Lunacy Act, 1890, con- tains the old words "seised or possessed," and conse- quently it seems questionable whether the lunacy judges have power to make vesting orders of leaseholds. As to whether the court has jurisdiction to vest the right to the title deeds, see Be SayresY. De Sayres, 87 L. T. Notes, 93. (m) The word "jointly" is not to be construed strictly. It includes coparceners. Re Greenwood, 21 C. D. 359. (v) Even if the infant be also a lunatic, this gives the Chancery Division jurisdiction. See Lunacy Act, 1890, s. 143. (x) A merely temporary absence {ex. qr,, that of a sailor on a voyage) is not sufficient. Hutchinson v. Stephens, 5 Sim. 499. On the other hand, where a person out of the jurisdiction is a lunatic, this j)aragraph gives to the Chancery Division a jurisdiction which in the case of a lunatic in England would be only exerciseable by the lunacy judges. Be Gardner, 10 C. D. 29. {y) See Me Williams, 56 L. T. 884 ; Be Backstraiv, 52 ibid. 612 ; Be Filling, 26 C. D. 432. u-y*- 504 DEATH, KETIREMENT, ETC. OF A TRUSTEE. (vi.) Wlioro a trustee jointly or solely entitled to or . possessed of any land, or entitled to a contingent '\Jt}J5i^^ I right therein, has been recjuircd, by or on behalf of a person entitled to require a conveyance of the land or a release of the right, to convey the land or to release the right, and has wilfully (2) refused or neglected to convey the land or release the right for twenty-eight days after the date of the require- ment ; the High Court may make an order (in this Act called a vesting order) vesting the land in any such person in any such manner and for any such estate (a) as the court may direct, or releasing or disposing of the contingent right to such person as the court may direct. Provided that — (a.) Where the order is consequential on the appoint- ment of a new trustee the land shall be vested for such estate as the court may direct in the persons who on the appointment are the trustees ; and (b.) Where the order relates to a trustee entitled jointly with another person, and such trustee is out of the jurisdiction of the High Court or cannot be found, the land or right shall be vested in such other person, either alone or with some other person. 32. A vesting order under any of the foregoing pro- visions shall in the case of a vesting order consequential on the appointment of a new trustee, have the same effect (z) A trustee's conduct in not conveying cannot be considered wilful, if the title of the applicant to call for a conveyance is subject to a dispute which leads the trustee to entertain a ho)id fide doubt as to his title. Re Mills. 40 C. D. 14. (a) Under these words the court can vest the estate of a tenant in tail in a purchaser in fee simple, but it usually appoints some person to execute a regular disentailing assurance under sect. 33. See Caswell v. S/ieen, W. N. 1893, p. 187; and Powell v. Matthews, 1 Jur. N. S. 973; Mason v. Mason, W. N. 1878, p. 41. VESTING TRUST PROPERTY IN NEW TRUSTEES. 505 as if the persons who before the appointment were the trustees (if any) had duly executed all proper convey- ances of the land for such estate as the High Court directs, or if there is no such person, or no such person of full capacity, then as if such person had existed and been of full capacity, and had duly executed all proper conveyances of the land for such estate as the court directs, and shall in every other case have the same effect as if the trustee or other person or description or class of persons to whose rights or supposed rights the said pro- visions respectively relate had been an ascertained and existing person of full capacity, and had executed a conveyance or release to the effect intended by the order. 33. In all cases where a vesting order can be made under any of the foregoing provisions, the High Court may, if it is more convenient, appoint a person to convey the land or release the contingent right, and a conveyance or release by that person in conformity with the order shall have the same effect as an order under the appro- priate provision. 34. (1.) Where an order vesting copyhold land (6) in any person is made under this act with the consent of the lord or lady of the manor, the land shall vest accordingly without surrender or admittance. (2.) Where an order is made under this act appointing any person to convey any copyhold land, that person shall execute and do all assurances and things for completing the assurance of the land ; and the lord and lady of the manor and every other person shall, subject to the customs of the manor and the usual payments, be bound to make admittance to the land and to do all other acts for completing the assurance thereof, as if the persons in whose place an appointment is made were free from disability and had executed and done those assui-ances and things. (i) As to what fines are payable, see Paterson v. Pater- son, 2 Eq. 31 ; and Hall v. Bromley, 35 0. D. 642. 506 DEATH, RETIREMENT, ETC. OF A TRUSTEE. 35, (1.) In any of the following cases, namely : — (i.) Where the High Court appoints or has appointed a new trustee ; and (ii.) Where a trustee entitled alone or jointly with another person to stock (c) or to a chose in action — (a) is an infant, or (b) is out of the jurisdiction of the High Court {d), or (c) cannot be found ; or (d) neglects or refuses to transfer stock or receive the dividends or income thereof, or to sue for or recover a chose in action, according to the di- rection of the person absolutely entitled thereto for twenty-eight days next after a request in writing has been made to him by the person so entitled, or (e) neglects or refuses to transfer stock or receive the dividends or income thereof, or to sue for or recover a chose in action for twenty-eight days next after an order of the High Court for that purpose has been served on him ; or (iii.) Where it is uncertain whether a trustee entitled (c) Stock includes fully paid-up shares, and any fund, annuity or security transferable in books kept by any company or society, or by instrument of transfer, either alone or accompanied by other formalities, and any share or interest therein. Sect. 50. Under the repealed Act of 1850, stock includes shares not fully paid-up {Ee Neiv Zealand, &c. Co., (1893) 1 Ch. -lOS) ; but query whether the above definition would admit of such a construction being given to the new act. As to orders under Lunacy Act, see Ee Oregson, (1893) 3 Ch. 233. {d) See note (.t), supra, p. 503. Where one trustee was a lunatic and the other out of the jurisdiction, and two new ones had been appointed under a power, the Court of Appeal, acting in lunacy, vested the stock in the one out of the jurisdiction, and then, acting under their chancery jurisdiction, "it appearing that he was out of the juris- diction," vested it in the new trustees. Ee Batho, 39 C. D. 189. VESTING TRUST PROPERTY IN NEW TRUSTEES. 507 alone or jointly with another person to stock or to a chose in action is alive or dead (e), the High Court may make an order vesting the right to transfer (/) or call for a transfer of stock, or to receive the dividends or income thereof, or to sue for or recover a chose in action, in any such person as the court may appoint : Provided that — (a) Where the order is consequential on the appoint- ment by the court of a new trustee, the right shall be vested in the persons who, on the api)ointment, are the trustees ; and (b) Where the person whose right is dealt with by the order was entitled jointly with another pei'sou, the right shall be vested in that last-mentioned person either alone or jointly with any other person whom the court may appoint. (2.) In all cases where a vesting order can be made under this section, the court may, if it is more convenient, (e) It will bo perceived that, except where the court is appointing new trustees, it has no jurisdiction to make a vesting order of stock where the last surviving or only trustee has died without leaving a legal personal repre- sentative. At one time (as also in the case of leaseholds) the court used to get over this difficulty by re-appuinting trustees already appointed out of couit, and by making a vesting order consequential on such re-appointment. Re Rathbone, 2 C. D. 483 ; Re Dalylrish, 4 C. D. 143 ; Re Crowe (No. 2), 14 C. D. 610. However, it is now well settled that the court has no jurisdiction to re-appoint trustees who are already validly appointed. Re Vicat, 33 C. D. 103; Re Dewhirst, ibid. 41G; iZe Gardner, ibid. 590 ; Re Batho, 39 C. D. 189. Consequently, the former device is no longer available, and a legal personal repre- sentative has to be constituted in such cases. (/) Where the trust funds are invested in unauthorised stocks, the order will give the new trustees, or purchasers from them, the right to call for a transfer, &c. ReFtacock, 14 C. D. 212. 608 DEATH, RETIREMENT, ETC. OF A TRUSTEE. appoint some proper person to make or join in making the transfer. (3.) The person in whom the right to transfer or call for the transfer of any stock is vested by an order of the court under this act, may transfer the stock to himself or any other person, according to the order, and the Banks of England and Ireland and all other companies shall obey every order under this section accoi'ding to its tenor. (4.) After notice in writing of an order under this sec- tion it shall not be lawful for the Bank of England or of Ireland or any other comj^any to transfer any stock to which the order relates or to pay any dividends thereon except in accordance with the order. (5.) The High Court may make declarations and give directions concerning the manner in which the right to any stock or chose in action vested under the jirovisions of this act is to be exercised. (6.) The provisions of this act as to vesting orders shall apply to shares in ships registered under the acts relating to merchant shipping as if they were stock. 36. (1.) An order under this act for the appointment of a new trustee or concerning any land, stock, or chose in action subject to a trust, may be made on the application of any person beneficially interested [g) in the land, stock, or chose in action, whether under disability or not, or on the application of any person duly appointed trustee thereof. (2.) An order under this act concerning any land, stock, or chose in action subject to a mortgage may be made on the application of any person beneficially in- terested in the equity of redemption, whether under disability or not, or of any person interested in the money secured by the mortgage. (g) This includes a person contingently interested {Re Sheppa7-d, 4 D., F. & J. 423), but not the committee of a lunatic beneficiary. lie Bourke, 2 D., J. & S. 426. VESTING TRUST PROPERTY IN NEW TRUSTEES. 509 3. Vesting orders made by the lunacy judges (k). — With regard to vesting orders of property held by trustees who are lunatics or persons of unsound mind, the Lunacy Act, 1890, contains the follow- ing enactments, viz. : — 135. (1.) "WTien a lunatic (?) is solely or jointly seised or possessed of any land upon trust or by way of mort- gage, the judge in lunacy may, by order, vest such land in such person or persons {k), for such estate, and in such manner as he directs. (2.) When a lunatic is solely or jointly entitled to a contingent right in any land upon trust or by way of mortgage, the judge may, by order, release such trustees from the contingent right, and dispose of the same to such person or persons as the judge directs. (3.) An order under sub-sects. (1) and (2) shall have the same effect as if the trustee or mortgagee had been (7i) As to what applications must be made in chancery, and what in lunacy, and what in both lunacy and chancery, the reader is referred to "The Annual Practice," notes to Ord. 16, r. 17, where the result of the cases is summarised. (i) This word includes lunatics not so found (sect. 341). As to what the word comprises, see lie Martin, 34 C. D. 618, and Jie Barber, 39 C. D. 187, and conf. Be Dewhirst, 33 C. D. 416. If the lunacy is disputed, the lunacy judges have no jurisdiction to make a vesting order. See Re Combs, 51 L. T. 45; Be Fhillips, Or. & Ph. 147. (A-) The court will not vest the property in a beneficiary who is absolutely entitled, but will appoint a new trustee. Re Holland, 16 C. D. 672 ; conf. Re Godfrey, 23 ibid. 205 ; and Re Cnrrie, 10 C. D. 93. Where one of several trustees becomes insane, the court will not vest the pro- perty in the remaining trustees, even if it has jurisdiction to do so, but a new trustee must first be appointed {Re Nash, 16 C. D. 603), unless the fund is immediately divisible. Re Watson, 19 C. D. 384, and Re Toutt, 26 C. D. 745. 510 DEATH, RETIREMENT, ETC. OF A TRUSTEE. sane, and had executed a deed conveying th.e lands for tlie estate named in the order, or releasing or disposing of the contingent right. (4.) In all cases where an order can be made under this section, the judge may, if it is more convenient, appoint a 'person to convey the land, or release the contingent right, and a conveyance or release by such person in conformity with the order, shall have the same effect as an order under sub-sects, (1) and (2), (5.) "Where an order under this section, vesting any copyhold land in any person or persons, is made with the consent of the lord or lady of the manor, such land shall vest accordingly, without surrender or admittance. (6.) Where an order is made appointing any person or persons to convey any copyhold land, such person or persons shall execute and do all assurances and things for completing the assurance of the lands ; and the lord and lady of the manor shall, subject to the customs of the manor and the usual payments, be bound to make admit- tance to the land, and to do all other acts for completing the assurance thereof, as if the persons in whose place an appointment is made were free from disability, and had executed and done such assurances and things. 136. (1.) Where a lunatic is solely entitled to any stock or chose in action upon trust or by way of mort- gage, the judge in lunacy may, by order vest in any person or persons the right to transfer or call for a transfer of the stock, or to receive the dividend thereof, or to sue for the chose in action. (2.) In the case of any person or persons jointly entitled with a lunatic to any stock or chose in action upon trust or by way of mortgage, the judge may make an order vesting the right to transfer, or call for a transfer, of the stock, or to receive the dividends thereof, or to sue for the chose in action, either in such person or persons alone, or jointly with any other person or persons. (3.) When any stock is standing in the name of a deceased person whose personal representative is a lunatic, SEVERANCE OF TRUST ON APPOINTMENT. 511 or wlieii a chose in action is vested in a lunatic as the personal representative of a deceased person, the judge may make an order vesting the right to transfer, or call for a transfer, of the stock, or to receive the dividends thereof, or to sue for the chose in action, in any person or persons he may appoint. (4.) In all cases where an order can be made under this section, the jiidge may, if it is more convenient, appoint some proper person to make or j oin in making the transfer. (5.) The person or persons in whom the right to transfer, or call for a transfer, of any stock, is vested, may execute and do all powers of attorney, assurances and things to complete the transfer to himself or themselves or any other person or persons, according to the order ; and the bank, and all other companies and their officers, and all other persons, shall be bound to obey every order under this section according to its tenor. (6.) After notice in writing of an order under this section, it shall not be lawful for the bank or any other company, to transfer any stock to which the order relates, or to pay any dividends thereon, except in accordance with the order. Art. 64. — Severance of Trust on A2)pointment of neio Trustees. '' A separate set of trustees may be appointed for any part of the trust property held on trusts distinct from those relating to any other part or parts of the trust property, notwith- standing that no new trustees or trustee are or is to be appointed for other parts of the trust property, and any existing 512 DEATH, RETIREMENT, ETC. OF A TRUSTEE. trustee may be appointed or remain one of such separate set of trustees ; or, if only one trustee was originally appointed, then one separate trustee may be so appointed for the first- mentioned part " (l). Illust. — Explanatory example. — Thus, if a tes- tator gives real and personal estate to trustees, upon trust to pay the income to A. during her life, and after her death to sell and divide the proceeds into two parts, and to hold one of such parts in trust for A.'s daughter Mary, for life, •with remainder for her children, and the other of such parts in trust for A.'s daughter Ann, for life, with remainder to her children, then upon the death of A., and the appointment of new trustees, separate sets of trustees may now he appointed to administer the trusts of Mary's and Ann's respec- tive shares. It would seem that, prior to the 31st December, 1882, this could not have been done, except by the court (m) . The section applies notwithstanding that the trusts, although separate for a time, may ultimately again unite in favour of one individual (n). (l) Trustee Act, 1893, s. 10, re-enacting Conveyancing Act, 1882, s. 5, as amended by Conveyancing Act, 1892, s. 6, by which the decision of North, J., in Savile v. Couper, 35 W. E. 829, was overruled. (m) Cooper v. Todd, 29 W. R. 502. The court, however, could do it. See Re Cunard, 27 W. R. 52 ; Be Moss, 37 C. D. 513. {n) Be Eetherington, 34 C. D. 211. ( 513 ) 'V rp CHAPTEE YII. HE Rights of Trustees. Abt. 65. )) 66, >> 67, 68, Right to Reimhursement and Indemnity. Right to Discharge. Right to take Direction of a Judge. Right toiMij Trust Funds into Court under certain Circumstances. 69. Right under certain Circumstances to have the Trust administered by the Court. Art. G5. — Right to Reimhursement and Indemnity. (1) A trustee is entitled to be reimbursed out of the trust property (a) all expenses which he has properly paid or incurred in the execution of the trust (h). And where a trustee accepts the trust at the request of one who is a henefieiary ., the latter is, as a general rule, personally liable to indemnify the trustee ( ^ ^'X- with the provisions of a will or settlement, they ^""^ are entitled to be indemnified out of the trust estate against any liabilities which they have properly incurred («). And this right will prevail 'Z^^ k^c'^"*'' even against creditors of the testator himself if they have assented to the business being carried on in the interest as well of themselves as of the bene- ficiaries under the will (»). But where the settle- X, c ^(vr,, <^ h-u ■ j^gQ^ jja^g directed a trustee to employ a specific "^iTcIL^.^:*,- portion only of the estate for the purpose of carrying on the business, the rule is, that, although the trustee is personally liable to creditors for debts incurred by him in carrying on the trade pursuant to the settlement, his right to indemnity is limited to the specific assets so directed to be employed (o). The creditors of a trust business ' . \ have no original right to claim payment of their .j^ debts out of the trust estate (^j). Their remedy is (to) ffiighes-HaUett y. Indian Mammoth Gold Mines Co., 22 C. D. 561. [n) Dowse v. Gorton, (1891) App. Cas. 190; Be Evans, Evans v. Evans, 34 C. D, 597. (o) Re Johnson, Shearman v. Rohinson, 15 C. D. 548; Re Webb, 63 L. T. 545. {p) Ibid. I .li f. RIGHT TO REIMBURSEMENT AND INDEMNITY. 517 against the trustee wliom they trusted ; but they have also a right to he put in his place against the trvist estate (17). If, therefore, the trustee is (by reason of breach of trust or otherwise) himself indebted to the trust estate to an extent exceeding his claim to indemnity, then, inasmuch as he ^ \^^_^ ,; cannot be entitled to an indemnity except upon c (.,',. /,- ij> the terms of making good his own indebtedness to the trust, the creditors are in no better position, , . ^ ^ ; and can have no claim against the estate (/*). 1-- -^- 4. Solicitor's costs. — A trustee or executor will be allowed the amount of a solicitor's bill of , . costs which he has paid for services rendered in h-v^.t., . ' ' the matter of the trust (.s) ; even, it would seem, '-■-■•^'" ■ where the necessity for the services arose through " ' want of caution on the part of the trustee ; ex. (jr., where proceedings had to be taken by an ad- ministrator against an agent to whom he had en- trusted moneys to make payments (/). However, under the Solicitors Act (6 & 7 Yict. c. 73, s. 39), beneficiaries may, at the discretion of the court, obtain an order to tax the costs of the trustee's solicitor. Even before that act, if the trustee paid the solicitor's bill without taxation, the beneficiaries ((/) Re Johnson, Shearman v. Itobinso)i, 15 C. D. 548; Be l\'ebb, 63 L. T. 545 ; StricMandx. Symons, 26 C. D. 245; and see also Redman v. Rymer, 60 L. T. 385 ; and Lady Wenlock v. River Dee Commissioners, 19 Q. B. D. 155. (r) Re Johnson, supra; Exp. Oarland, 10 Ves. 110; recognized in Re Blundell, Blundell v. Blundell, 44 C. D. at p. 11. (s) Macnaraara v. Jones, Dick. 587. {t) Re Davis, Muckalt v. Davis, W. N. 1887, p. 186, sed (jucere. CJU. 518 THE RIGHTS OF TRUSTEES. had a right to have the hill referred to a master " to he moderated ;" and if, on such reference, the charges were reduced, they were disallowed the trustee, and he was left to get them hack, if he could, from the solicitor {h). 5. Costs of administration suit, together with " costs, charges, and expenses." — Unless trustees have been guilty of misconduct, they are entitled to their costs of an action for the administration of the trust as between solicitor and client, and not merely as between party and party (r), and, in addition thereto, any other costs, charges, and expenses properly incurred by them in the execu- tion of the trust. To deprive a trustee of his costs, charges, and expenses, has been called " a violent exercise " of the court's discretion. A trustee can only be deprived of them for gross miscon- duct [w) ; and, contrary to the usual rule of the court, an order depriving a trustee of costs, or limiting him to a particular fund, is aj^pealable by him on that ground (x), although, if he be allowed costs, the beneficiaries cannot appeal against such allowance {//). If trustees are co-plaintiffs or co- defendants, they ought, except under special cir- cumstances, to sue or defend jointly (z), and will {u) Johnsou V. Tt'lford, 3 Euss. 477 ; Langford v. Mahoney, 4 Dr. & War. 110. (v) lie Lore, Hill v. Spurgeon, 29 C. D. 348. (w) Birks v. Micklethivait, 34 L. J., Ch. 364. {x) See Re Chenndl, Jones v. Chennell, 8 C. D. 492 ; Be Love, Hill V. Spurgeon, 29 C. D. 348 ; Be Knight, 26 C. D. 82. (y) Charles v. Jones, 33 C. D. 80. (z) Morgan & Wm-tzburg's Treatise on Costs, 2nd ed., pp. 124—126, and 403. RIGHT TO REIMBURSEMENT AND INDEMNITY. 519 only be allowed one set of costs between them (r/) ; and if a trustee improperly refuses to join bis co- trustee as plaintiff, and consequenty has to be made a defendant, he may be deprived of costs altogether («). But, on the other hand, where, owing to one trustee being also a beneficiary, it is necessary that one should be plaintiff, and the other defendant, they will each be allowed separate sets of costs as between solicitor and client {b). 6. Paramount lien on trust property for trustees' expenses, — In an administration action, the costs of all parties were directed to be taxed and paid out of the trust estate, the costs of the trustees to include any charges and expenses properly incurred by them. It subsequently appeared probable that the trust fund would be insufficient for the pay- ment of the whole of the costs in full, and the trustees moved to vary the minutes by the inser- tion of a direction that if the trust funds were insufficient to pay the whole of the costs, charges, and expenses thereby directed to be taxed and paid, their costs, charges, and expenses should be paid in priority to the costs of the beneficiaries. Bacon, V.-C, in giving judgment, said : " It is ai good rule that trustees should have a priority for theu' costs, because, until those costs are provided for, it is impossible to say what the trust fund is. I, therefore, hold that these trustees are entitled to {a) Hughes v. Key, 20 B. 395 ; Gompertz v. Kensit, 13 Eq. 369. {h) Be Love, Hill v. Spurgeon, supra. 620 THE RIGHTS OF TRUSTEES. payment of their costs, charges, and expenses, in priority to the costs of all other parties, and the order must therefore be varied accordingly " (c) . In short, the trustees' lien takes precedence of all beneficial interests. Even where property is settled on a married woman for life, without power of anticipation, and she improperly com- mences administration proceedings, which are dis- missed with costs against her personally, the court may authorize the trustees to recoup themselves out of her life interest [d). 7. Trustees' lien good even where settlement void under Bankruptcy Act. — One Ilolden executed a post-nuptial voluntary settlement. He subse- quently commenced an action to set it aside, but failed in his contention, the action being dismissed with costs. He then became bankrupt within two years of the date of the settlement, which accord- ingly became void under sect. 47 of the Bank- ruptcy Act, 1883. It was held that, although the settlement was void, yet as it had originally been valid, but voidable, and as the trustees had incurred costs in the execution of their duty which they could not recover from the bankrupt, they were entitled to be fully indemnified out of the trust funds {e). It would seem, however, that the same principle does not apply to settlements void under (r) Dodds v. Tuke, 25 C. D. 617. [d) Edwards v. Dewar, 34 W. R. 62 ; and conf. Married Women's Property Act, 1893, s. 2. (e) Re Holden, 20 Q. B. D. 43. RIGHT TO REIMBURSEMENT AND INDEMNITY. 521 the 13th Eliz. c. 5, or to cases where the execution of the settlement was an act of bankruptcy (/). 8. Exception where trustee has mixed his money with trust fund. — Where, however, a trustee for purchase has advanced money of his own to enable a particular property to be purchased, the price of which exceeded the whole trust fund, it was held that he had not a first charge on the property for reimbursing himself his advance, but that the beneficiaries had a first charge on the estate for the amount of the trust fund, and that he only had a second charge for the amount of his advance {g) . The ratio decidendi in this case would seem to have been, that it was not so much a question of indemnity for costs and expenses incurred in the performance of his duty as of a gratuitous mixing of his own moneys with the trust moneys ; and that that (as will be seen later on) gave the trust estate a first and para- mount charge. 9. Other instances of costs allowed trustees. — Itj has been held that a trustee is entitled to be I reimbursed costs of former trustees, paid by himj to their personal representatives previously to the| latter transferring the trust estate {h). He isj also entitled to be reimbursed costs incurred by him previously to his appointment, in obtaining a (/) See lie Butterworth, 19 C. D. 588; Dutton v. Thompson, 23 C. D. 278 ; Exp. Vaughan, 14 Q. B. D. 25. {(/) Be Bumplirey, Worcester, &c. Banking Co. v. Blick, 22 C D. 255. {h) Harvey v. Oliver, W. N. 1887, p. 149. 522 THE RIGHTS OF TRUSTEES. statement of the trust property, and ascertaining that the power of appointing new trustees was being properly exercised [g) ; and also costs in- curred by the donee of the power of appointment in relation to the trustee's appointment (A). 10, Costs of trustees who have committed a breach of trust. — Where the sole object of a suit is to make trustees answerable for breach of trust, and a judgment to that effect is obtained, the trustees will not only not get their costs allowed, but will almost invariably have to pay the costs of the plaintiffs up to the judgment (?) ; and the costs subsequent to the judgment will be in the discre- tion of the judge, who may disallow the trustee his costs if he considers that, but for the trustee's misconduct, there would have been no need for the action at all (/). And the same result will follow where the conduct of a trustee is vexatious or oppressive (/.•), or unreasonably cautious {I). {g) Be Pumphrey , Worcester, &c. Banhing Co. v. BUck, 22 0. L). 255. (A) Harvey v. Oliver, W. N. 1887, p. 149. (?;) Per Lord Langdale, Byrne v. Norcott, 13 B. 336 ; Gough V. Etty, 20 L. T. 358 ; Easton v. Landor, 67 L. T. 833. (y) Easton v. Landor, supra. \k) See Marshall v. Sladden, 4 D. & S. 468 ; Patterson v^ Woolen, 2 C. D. 586 ; Att.-Gen. v. Murdoch, 2 K. & J. 571 ; Palairet v. Carew, 32 B. 564 ; Griffen y. Brady, 39 L. J., Cli. 136. {I) Smith V. Bolden, 33 B. 262 ; Me Cull, 20 Eq. 561 ; Firmin v. Piilham, 2 D. & S. 99 ; Cockcroft v. Sntcliffe, 25 L. J., Ch. 313 ; and see also cases collected in Morgan & Wurtzbm-g's Treatise on the Law of Costs, 2nd ed., p. 412 et seq. RIGHT TO REIMBURSEMENT AND INDEMNITY. 523 But wliero an administration suit is necessary, apart from the breach of trust, and tlie latter only forms an incidental feature of the suit, the trustee will, as a rule, be allo^Yed his general costs of the suit as between solicitor and client, although he may have to pay the special costs caused by the breach {m). But he will not be allowed to receive them until he has made good the loss to the estate caused by his breach {n). And, in spite of a decision of the late Y.-C. Hall to the contrary (o), the weight of authority is in favour of applying the same rule to costs incurred by a trustee defendant, even after he may have become bank- rupt {p). 11. Expenses incurred in unsuccessfully defending an action, — Where a trustee takes upon himself the responsibility of defending an action in relation to the trust estate without procuring the sanction of the court, and the defence is unsuccessful, the onus lies upon him of proving that he had reason- able grounds for defending it. If he cannot prove such grounds, he is not entitled to retain out of the trust property the costs of the action beyond the amount which he would have incurred if he had applied for leave to defend {q) . (m) Pride v. Fooks, 2 B. 430 ; CampheU v. Bainhridge, 6 Eq. 2(39; Bell v. Turner, 47 L. J., Ch. 75. (?/) Bw Knott, Bax v. Balmer, 56 L. J., Ch. 318. (o) Clare v. Clare, 21 C. D. 865. (p) Lewis V. Trask, 21 C. D. 862 (North, J.); Be Basham, Hannay v. Basham, 23 C. D. 195 (Chitty, J.); McEiven v. Crombie, 25 C. D. 175 (North, J.). (q) Be Beddoe, Downes v. Coitarii, (1893) 1 Ch. 547. (Il,*^ 524 THE RIGHTS OF TRUSTEES. 12. Unreasonable expenses disallowed. — Trustees "will not be allowed to reimburse themselves every out of pocket exj)ense, but only such as are reason- able and proper under the circumstances. Thus, where a receiver (who is, of course, a trustee) made several journeys to Paris, in order that he might be present at the hearing of a suit brought in the French courts in relation to the trust property, and it appeared that his presence was wholly needless (the sole question being one of French law, and not of fact), his travelling expenses were dis- allowed, on the ground that they were, under the circumstances, improperly incurred (r) . 13. And so where trustees attempted, at the solicitation of their beneficiaries, some of whom were married women uithout power of anticipation, to sell the trust property before the date named in the settlement, it was held that they were not entitled to be indemnified against the costs of an action for specific performance brought against them by the purchaser (s) . 14. Again, a trustee, although entitled to obtain legal advice in relation to the execution of the trust, is not entitled, out of an excess of caution, to charge the estate with unnecessary legal pro- ceedings. For instance, on retirement, he is not entitled to have an attested copy of the settlement, or of the appointment of new trustees, made at the expense of the estate [t) . (r) Malcolm v. 0' Callaghan, 3 M. & C. 62. (s) LeedJiam v. Chaivner, supra. [t) Water \. Anderson, 11 Ha. 301. RIGHT TO DISCHARGE. 525 Art. 66. — Right to Discharge. Upon the completion of the trust, a trustee is entitled to have his accounts examined and settled by the bene- ficiaries, and either to have a formal discharge given to him or to have the accounts taken in court. He cannot, however, demand a release under seal (ii). J Illust. 1. — Thus, a trustee, on finally trans- ferring stock to a beneficiary, demanded from the latter a deed of release. The beneficiary, however, refused to give him anything except a simple receipt for the amount of stock actually transferred, which, of course, left it open to him to say that that amount was not the amount to which he was entitled. The court held, that no deed was demandable, but the judge said : " Though it may not have been the right of the trustee to require a deed, I think that it was his right to require that his account should be settled ; that is to say, that he and his family should be delivered from the anxiety and misery attending unsettled accounts, and the possible ruin, which they who are acquainted with the affairs daily litigated in the Court of Chancery well know to be a frequent result of neglect in such a matter. . . . He was (?/) Chadwich v. Heatley, 2 Coll. 137 ; Re Wright, 3 K. & J. 421 ; King v. Mullins, 1 Dr. 311. 526 THE RIGHTS OF TRUSTEES. bound to give an account if demanded, but giving the accounts he was entitled (to use a familiar phrase) to have them wound up. It is true that the accounts, though settled, might be liable to be surcharged and falsified. That might or might not be, but still the trustee had a right to have his accounts gone through, executed, and settled. .... If the plaintiff was satisfied, upon the accounts as sent in, that nothing more was coming to him, lie should have expressed his willingness to close the account. On the other hand, if he was dissatisfied with it, he should have asked to have the account taken " (r). 2. "In the case of a declared trust, when the trust is apparent on the face of the deed, the fund clear, the trust clearly defined, and the trustee is paying either the income or the capital of the fund, if he is paying it in strict accordance with the trusts, he has no right to require a release under seal. It is true that in the common case of executors, when the executorship is being wound up, it is the practice to give executors a release. An executor has a right to be clearly discharged, and not to be left in a position in which he may be exposed to further litigation ; therefore, he fairly says, unless you give me a discharge on the face of it protecting me, I cannot safely hand over the fund; and therefore it is usual to give a release ; but such a claim on the part of a trustee would, in strictness, be improper, if he is paying (y) Chadivick v. Heatley, supra. RIGHT TO TAKE DIIIECTION OF A JUDGE. 527 in accordance witli tlie letter of the trust. In such a case he would have no right to a release " (x). 3. Where trust moneys have been re-settled, the trustees or executors of the original settlement or will are, it has been said, entitled to a release under seal from their beneficiaries, though they are entitled only to a mere receipt from the trustees to whom they pay the moneys {>/) . But, on the other hand, where a married woman, having a general power of appointment by will, appoints the fund in pursuance of the power and appoints executors, the trustees of the fund can safely hand it over to the executors on their receipt, and cannot demand a release under seal from the beneficiaries (s). ^ RT. 67. — Right to take Direction of a Judge (a). (1) Trustees may, in cases of any doubt as to what course they ought to adopt, safe-guard themselves by taking out an originating summons, returnable in the chambers of a judge of the Chancery Division, for the determina- {x) Per Kindersley, V.-C, in King v. Mullins, 1 Drew. 311. (?/) Re Cater, 25 Beav. 366. {z) Re Hoskin, 5 C. D. 229 ; 6 ibid. 281. (o) The taking of a judge's advice on petition, under the statute 22 & 23 Vict. c. 35, s. 30, is practically- obsolete. 528 THE RIGHTS OF TRUSTEES. tion (without general administration by the court) of : — a. Any question affecting the rights or interests of the cestuis que trusts (j^|. /3. The ascertainment of any class of creditors, legatees, devisees, next of kin, or others ( Jiv^ 530 THE RIGHTS OF TRUSTEES. rities belonging to a trust, may pay the same into the High Court; and the same shall, subject to rules of court, be dealt with according to the orders of the High Court. ^'(2) The receipt or certificate of the proper officer shall be a sufficient dis- charge to trustees for the money or securities so paid into court. *^(3) Where any moneys or securities are vested in any persons as trustees, and the majority are desirous of pay- ing the same into court, but the con- currence of the other or others cannot be obtained, the High Court may order the payment into court to be made by the majority without the concurrence of the other or others ; and where any such moneys or secu- rities are deposited with any banker, broker, or other depositary, the court may order payment or delivery of the moneys or securities to the majority of the trustees for the purpose of pay- ment into court, and every transfer payment and delivery made in pur- suance of any such order shall be valid and take effect as if the same EIGHT TO PAY TEUST FUNDS INTO COURT. 531 had been made on the authority or by the act of all the persons entitled to the moneys and securities so trans- ferred, paid, or delivered " (m). (4) Payment into court is not, how- ever, justifiable merely in order to determine some question which can be determined more cheaply by means of an originating summons (n), nor where the equities are perfectly clear (o); and if trustees do so, they may have to pay the costs of getting the money paid out (^;). Illust. — 1. Payment into court where bene- ficiaries are under disability. — A trustee is justified in paying money into court where he cannot get a vaHd diseliarge; as, for instance, where beneficiaries a/L^ttr {m) Trustee Act, 1893, s. 42. It -would seem at first sight that bj' the operation of sub-sect. G of sect. 25 of the Judicature Act, 1873, these provisions are extended to all constructive trustees, such as insui-ance companies, &c. But although in one case {Re Haycock, 1 C. D. 611) this was held to be so, that view has been twice dissented from. [Matthew v. Northern Assurance Co., 9 C. D. 80, and Me Sutton, 12 C. D. 175). Whether, however, these cases are still binding authorities, having regard to sect. 50 of the Trustee Act, 1893 (definition of " Trustee,") seems open to question. in) Re Giles, 34 W. E. 712. (o) Re Cull, 20 Eq. 561 ; Re Elliott, 15 Eq. 194. (p) Ibid., and Re Leake, 32 B. 134; Re Ileming, 3 K & J. 40. M M 2 532 THE RIGHTS OF TRUSTEES. wlio are absolutely entitled are infants (q) or lunatics (;•) . 2. Dispute between beneficiaries. — Formerly where, under a creditor's deed, money was claimed both by the settlor and the creditors, the trustee was held to have been justified in paying the money into court (s). Whether, however, this decision could be sustained, seems questionable ; for, as has been previously explained, the creditors are not beneficiaries, and it seems to be scarcely consistent with principle, to hold that a mere agent can pay into court money intrusted to him by his principal, on the ground that a third party claims an interest in it {t). 3. Where money claimed by a representative. — It has been said that a trustee may properly pay money into court where it is claimed by the "^ representative of a beneficiary ; for non constat but that the latter may have disposed of it (li). ^ But here again an originating summons would seem to be the more appropriate course. 4. Payment to one who claims in default of appointment. — A trustee ought not to hesitate to pay the money to a beneficiary who claims in default of appointment, if he has no notice of any iq) Re Cawthorne, 12 B. 56; lie Beavderk, 11 W. E. 203; Be Coulson, 4 Jur. (N. S.) 6 ; Be Bichards, 8 Eq. 119. (r) Be Upfull, 3 M. & G. 281 ; Be Irby, 17 B. 334. (s) Be Headington, 6 W. E. 7 ; but see Be Moseley, 18 W. E. 126. {t) See Art. 45, supra, p. 388. \u) Be Lane, 24 L. T. 181 ; King v. King, 1 D. & J. 663, sed quaere. IJIU RIGHT TO PAY TRUST FUNDS INTO COURT. 533 appointment by the donee of the power, and no ground for believing that any appointment has been made ; for in tliat case they could not be made liable if they paid over the fund, even if an appointment were subsequently discovered {x). Anyhow, now, trustees in such a case would only be allowed the costs of a summons. 5. Payment into court to enable married woman to assert equity to a settlement. — Where the bene- ficiary is a married woman, married before 1883, . /pf and whose iitle accrued prior to that date, it has been held that the trustee may pay into court, in order that she may assert her equity to a settle- ment. But in cases to which the Married Women's Property Act, 1882, applies, it is con- ceived that a trustee could not properly pay into court, because she and not her husband would be the absolute owner. 6. Reasonable doubt or claim. — Again, where the trustee has a bona fide doubt as to the law (//), or has received a bona fide claim sanctioned by respectable solicitors (;:), he may properly pay the fund into court, unless the question could be settled by summons. 7. Undue caution. — But where a beneficiary in reversion who had gone to Australia, and had not {%) Per Jessel, M.R., lie Cull, 20 Eq. 561, distinguish- ing Re Wylli/, 28 B. 4o8 ; but see also lie Swan, 2 H. & M. 34 ; lie Boherts, 17 W. R. 639 ; Be Bendijshe, 5 W. E. 816 ; Be Williams, 4 K. & J. 87. [y) King V. King, 1 D. & J. 663 ; Be Metcalfe, D. J. & S. 122 ; Gunvell v. Whitear, 18 W. R. 883. (z) Be Maclean, 19 Eq. 282. 534 THE RIGHTS OF TRUSTEES. been heard of for some years, suddenly reappeared, and there was no reasonable doubt as to bis iden- tity, it was beld that the trustee was not entitled to pay the trust fund into court instead of paying it over to him, Malins, V.-C, saying : " I think these proceedings were perfectly unjustifiable ; and although it is clear that the court will incline towards the payment of the costs of trustees when they act in a bona fide way, yet, on the other hand, it is most important that trustees should not incur unnecessary expenses for the purpose of relieving themselves of all liability, and particu- larly so when there is no reasonable doubt." His honour therefore ordered the trustees to pay the costs of all parties (a). 8. General warning. — Lastly, the reader must be warned that now that most questions of doubt or difficulty can be decided on originating sum- mons, the right of paying money into court can only be used with safety in very rare cases. It seems matter for regret that those who were responsible for the drafting of the Trustee Act, 1893, did not insert some words in sect. 42, warning trustees of the danger they run in accepting the apparently unconditional invitation extended to them by the words of that section, an invitation which in most eases can only be accepted at the risk of having to pay costs. (a) Re EUiott, 15 Eq. 194; Re Foligno, 32 Bea. 131; Re Knight, 27 ibid. 45 ; Re Woodburn, 1 D. & J. 333. TO HAVE TRUST ADMINISTERED BY COURT. 535 Art. 69. — RigJit under certain circumstances to have the Trust administered by the Court. (1) Where the trust property is not capable of being paid or transferred into court, or where the trustee wishes to be discharged from the office of trustee, he may institute an action for the administration of the trust by the court (b). But it is not obligatory on the court to make an order for ad- ministration, if the questions between the parties can be properly determined without it (c). (2) Where, however, the equities are perfectly clear and unambiguous (d), or the trustee merely craves to be released from caprice or laziness, or is otherwise not justified in the course he has pursued (e), he will have to pay all the costs ; and even where he acts [1) Talbot V. Earl Radnor, 3 M. & C. 252 ; Ooodson v. Ellison, 3 Russ. 5b3 ; and as to sunimons, E. S. C. 1883, Ord. LV. r. 3. (c) R. S. 0. 1883, Ord. LY. r. 10; Re Blake, Jones \. Blake, 29 C. D. 913. (d) Re Ki'iqht. 27 B. 145 ; Lawson v. Copeland, 2 B. C. C. 156 ; Re Elliott, 15 Eq. 194; Re FoUgno, 32 B. 131; Re Wooilbiirn, 1 D. & J, 333; Beaitie v. Curzon, 7 Eq. 194 ; Re Iloskins, 5 C. 1). 229. (e) Forshaw v. Iliqqinson, 20 B. 845 ; Re Stokes, 13 Eq. 333 ; Re Cabburn, 46 L. T. 848. «. ijXc^.' 536 THE KIGHTS OF TRUSTEES. bona fide, but without any real cause, lie will not be allowed his own costs (/). And where he brings an action when the same object might have been obtained by payment into court or by a summons in cham- bers (y), he will not be allowed the extra costs occasioned thereby (Ji) ; and he will always appeal from an order of the court at his own risk (z). Illust. — 1. When general administration will be ordered. — With regard to actions for the ad- ministration of a trust by the court, such actions are now comparatively rare. Formerly, a decree for general administration (that is to say, a decree whereby the court took upon itself to supervise the execution of the trust) was granted to a trustee or a beneficiary as a matter of course ; and the only check upon an abuse of the process of the court, was the rather remote contingency that the trustee might possibly be deprived of his costs, or, in very flagrant cases, have to pay the costs of all parties, upon the action coming on for further consideration. However, by the Rules of {f) Re Leahe, 32 B. 135 ; Re Ileming, 3 K. & J. 40. (,(/) Re Giles, 34 W. E. 712. {h) Wells V. Malhon, 31 B. 48; but see Smalhuood v. Rntter, 9 Ha. 24. (/) Rniularidv. Morgan, 13Jur. 23; 2'ucJcer y. Horneman, 4 D., M. & G. 395. TO HAVE TRUST ADMINISTERED BY COURT. 537 the Supreme Court, 1883, Ord. LY. r. 10, the old practice has been reversed, and now it is no longer obligatory upon the court or a judge to pronounce or make a judgment or order for the administration of any trust, if the questions between the parties can be properly determined on summons without such judgment or order, as mentioned in Article 67. The principles on which the court will, under this new rule, grant or refuse general administration, have been dis- cussed in two cases, one before the late Mr. Justice Pearson (k), and the other before the Court of Appeal (/), in which the learned Lords Justices were more inclined to restrict the right to a decree than was Mr. Justice Pearson. Lord Justice Cotton in the latter case said : " Formerly, if anyone interested in a residuary estate instituted a suit to administer the estate, he had the right to require, and as a matter of course obtained, the full decree for the administration of the estate; and the court, even if it thought that, although there were really questions which required decision, these questions might be decided upon some only of the accounts and inquiries which formed part of the decree, found itself fettered and unable to restrict the accounts and inquiiies to such only as were necessary in order to work out the question. Now, liowever, the practice is laid down by rule 10 of Ord. LV., as follows: — " (His Lordship here {k) Be Wilson, Alexander v. Calder, 28 C. D. 457. (/) Be Blake, Jones v. Blake, 29 C. D. 913. 538 THE KIGHTS OF TRUSTEES. read tlie rule and continued) " Where there are questions which cannot properly be determined "without some accounts and inquiries or du'ections which would form part of an ordinary administra- tion decree, then the right of the party to have the decree or order is not taken away, but the court may restrict the order simply to those points which will enable the question which requires to be adjudicated upon, to be settled. That is the result of Ord. LV. r, 10. Then we have Ord. LXV. r. 1, which says, ' subject to the provisions of the acts and these rules, the costs of and incident to all proceedings in the Supreme Court, including the administration of estates and trusts, shall be in the discretion of the court or judge.' These two rules must be read together, and we then find this : that if a party comes and insists that there is a question to be determined, and, for the purpose of determining that question, asks for an administration judg- ment, the court cannot refuse the judgment unless it sees that there is no question which requires its decision ; but rule 1 of Ord. LXV. puts the party who applies for the judgment and insists upon it in this position — that if it turns out that what has been represented as the substantial question requiring adjudication is one which was not a substantial question, or that the applicant was entirely wrong in his contention as to that particular question, the court can, and, in my opinion, ought ordinarily to, make the person who gets the judgment pay the costs of all the TO HAVE TRUST ADMINISTERED BY COURT. 539 proceedings consequent upon liis unnecessary, or possibly vexatious, application to the court" (m). 2. Deductions from Lord Justice Cotton's judg- - ment. — It will be seen, from the above judgment, ' '^ f^*-^ ^' that now that almost all isolated questions of construction or administrative difficulty can be dealt with singly, very few cases can arise necessi- tating general administration, except where the trustees cannot pull together, or the circumstances of the estate give rise to ever recurring difficulties requiring the frequent direction of the court, or where a prima facie doubt is thrown on the bona fides, or the discretion of one or more of the trustees. Possibly, also, it would still be held that a trustee would be entitled to a general administration judgment, to relieve him of trouble and annoyance, in a case such as the following, viz., where there were divers disputes as to the proper beneficiaries, out of which disputes several actions had sprung, to all of which the trustee was a necessary defendant (;;). For if he brings the money into court under the act, he still remains a trustee, and though he would be under no liability quoad the fund brought in, he would not be discharged from liability quoad the past income ; and, moreover, he must be served with (??i) This seems to refer rather to the case of an action commenced by a beneficiary. It requires a very flagrant case to render a trustee liable to pay costs; see p. 518, supra. {n) Barher v. PeiJe, 2 Dr. &, Sm. 340 ; and see Hirst r. Hirst, 9 Ch. App. 262. 540 THE RIGHTS OF TllUSTEES. notice of all proceedings under the act in relation to the fund, and this of necessity would compel him to incur some expense in employing a solicitor. 3. But where there is no dispute respecting the amount of a trust fund, and no justifiable ground for the trustee retiring from his office, the only doubt being as to the proper persons entitled, and the trustee, instead of paying the money into court under the Trustee Act, or, issuing an originating summons, institutes a suit for the purpose of having the rights of the beneficiaries declared, he will be allowed such costs only as he would have been entitled to if he had paid the fund into court under the act (o), or had issued a summons [p). (o) Wells V. Malbon, 31 B. 48. Ip) Be Giles, 34 W. R. 712. ( 541 ) Division V. THE CONSEQUENCES OF A BREACH OF TRUST. Chapter I. — The Liability of the Trustees. Art. 70. Measure of the Trustee's Responsihility . ,, 71. Liahility Joint and Several . ,, 72. No Set-off alloived of Gain on one Breach against Loss on another. ,, 73. Property acquired out of Trust Property becomes liable to the Trust. ,, 74. Any Beneficiary may compel Performance of neg- lected Duty, or prevent Commission of Breach. ,, 75. Fraudulent Breach of Trust a Crime. Chapter II. — Protection accorded to Trustees. Aet. 70. Protection against Breaches of Trust by co-Trus- tees. ,, 77. Concurrence of or release by Beneficiaries. ,, 78. Statute of Limitations and Laches. ,, 79. Trustees generally entitled to contribution inter se, but may be entitled to be indemnified by co- Trustee or Beneficiary who instigated Breach. 542 THE LIABILITY OF TRUSTEES. Chapter III. — Liability of Third Parties AND Beneficiaries. Art. 80. Liahilitj/ of Third Parties and Beneficiaries ivho are Parties to a Breach of Trust. ,, 81. Follounng Trust Property into the Hands of Third Parties. CHAPTER I. The Liability of the Trustees. Art. 70. Measure of the Trustee's Responsihility, ,, 71. Liability Joint and Several. ,, 72. No Set-off alloived of Oain on one Breach against Loss on another. ,, 73. Property acquired out of Trust Property becomes liable to the Trust. ,, 74. Any Beneficiary may compel Performance of neg- lected Duty, or prevent Commission of Breach. ,, 75. Fraudulent Breach of Trust a Crime. W'^ C-^ - ». A" Art. 70. — The Measure of the Trustee's Responsibility. (1) The general measure of a trustee's responsibility for a breach of trust, is the amount by which the trust pro- perty has been depreciated without interest [a) : But — (a) See Att.-Gen. v. Alford, 4 D., M. & G. 851 ; Stafford y. Fiddon, 23 B. 386 ; Vyse v. Foster, 8 Ch. App. 333, MEASURE OF TRUSTEe's RESPONSIBILITY. 543 a. Where he has received interest, he is liable to account for it (b). /3. Where he ought (if he had obeyed the trust) to have received interest, he will be liable to account for what he ought to have received (c). 7. Where the object of the breach was to further his own personal advan- tage (6?), he wall be estopjoed from denying that he actually received interest, and will be liable to pay simple interest at 4 or 5 per cent., according to the circumstances ; and where he has employed the trust property in trade or specula- tion, he will be liable at the option of the beneficiaries, either to pay compound interest at 5 per cent., with yearly, or even half-yearly, aff. 1 H. L. 318 ; Burdkk v. Garrard, 5 Ch. App. 233 ; and Hale v. Sheldrake, 60 L. T. 292 ; but see Ex parte Ogle, 8 Cli. App. 717, which, howevei', seems to be quite inconsistent with all the other authoi'ities, as the trustee did not receive interest, nor was there any evidence that he ought to have received the rate (5 per cent.) charged against him. {b) Cases cited in note (a), and also Jojtes y. Foxall, 15 B. 392. (c) Att.-Gen. v. Al/ord, supra; Stafford v. Fiddon, supra ; Price v. Price, 42 L. T. 636. {d) See and consider judgments, Att.-Gen. v. Alford, supra. 644 THE LIABILITY OF TRUSTEES. [ rests, if he may reasonably be pre- i sumed to have made that amount, or to account for all the profits made by him (c). (2) Where a trustee improperly advances trust money on a mortgage security which would at the time of the invest- ment be a proper investment in all respects for a smaller sum than is actually advanced thereon, the secu- rity is deemed an authorized invest- j ment for the smaller sum, and the trustee is only liable to make good the sum advanced in excess thereof with interest (/). Illust. — 1. Loss caused by disobeying the direc- tions of the settlement. — For a good example of the measure of the trustee's Hability for disregarding the express directions of the settlement, the reader is referred to illustration 5, on p. 255, supra. Another (which seldom occurs now) happens where trustees are expresdy directed to invest in (e) See Jones v. Foxall, supra; Vyse v. Foster, supra; Burdick v. Garrard, supra. (/) Trustee Act, 1893, s. 9. This section applies to investments made as well before as after the commence- ment of the act, except where an action or other pro- ceeding was pending with reference thereto, on the 24th day of December, 1888. Prior to the latter date the trustee had to take over the mortgage and to pay the actual money invested. MEASURE OF TRUSTEE's RESPONSIBILITY. 545 particular securities (ex. {/r., British Government funds), and, instead of doing so, retain the money in theii" hands. In such cases the beneficiaries may elect either to claim the money itself, or the amount of government stock which the trustees might have purchased therewith at the date when they ought to have made the investment {g). However, where trustees have a choice of invest- ments, it is obvious that the same rule cannot apply, because it would be imj)ossible to say which of them they would have chosen if they had exercised their discretion. In such cases, therefore, the beneficiaries are only entitled to the money with interest at 4 per cent. {h). 2. Not liable for increased value caused by act of third party after breach. — The trustee of gas shares allowed the husband of one of the beneficiaries to get them into his hands. The husband surrendered them to the company, accepting allotments of new shares in their stead, on which new shares he paid calls, and finally became bankrupt. On these facts, it was held that the trustee was only liable for the value of the shares, less the calls paid by the husband, that being the true measure of the loss to the trust (/). 3. Cases where there must always have been a loss. — So, where there must always have been a {g) Shepherd v. Mouls, 4 Ha. 500, 504. (A) RoUnson v. Bobinson, 1 D., M. & G. 295; Marsh v. Hunter, 6 Mad. 295. ((') Briggs v. Massey, 30 "W. E. 325 ; and see also ^e Hulkes, Powell v. Eulkes, W. N. 1886, p. 111. U. — T. N N 646, THE LIAI5IUTY OF TRUSTEES. loss on the realization of trust property, apart from any breach of trust, then if a breach of trust further depreciates it, the measure of the trustee's responsibility is confined to the further deprecia- tion, and he is not responsible for the difference between the nominal value and the actual amount realized (/.•). 4. Loss of interest caused by unreasonable delay in investing. — A trustee who is guilty of unreason- able delay in investing trust funds will be answer- able to the beneficiaries for simple interest at 4 per cent, during the continuance of such delay (l) ; for if he had done his duty, interest would in fact have been received. 5. Breach of trust to accumulate. — On the same ground, where an executrix allowed trust money to remain uninvested in her solicitor's hands for nine years during the infancy of the beneficiary, she was charged with compound interest at the rate of 3 per cent, per annum, with half-yearly rests, as it was her duty to have accumulated the income, by investing it from time to time in consols (m). 6. Improper calling in of good security. — A trustee who, without proper authority, calls in trust property invested on mortgage at 5 per cent., would be liable for that rate of interest; for (h) Lord Gainsborough v. Watcombe Terra Cotta Co., 54 L. J., Ch. 991. {I) Stafford v. Fiddon, supra. But quaere "whetlier iu these days the rate ought to be as high as 4 per cent. {m) Gilroy v. Stephen, 30 W. E. 755 (Fry, J.); and see also Be Emmet, Emmet v. Emmet, 17 C. D. 142. MEASURE OF TRUSTEe's RESPONSIBILITV. 547 although he may not actually have received that rate, he ought to have done so («). 7. Mixing trust funds with trustee's own moneys, — A trustee retained trust funds uninvested for several years, and mixed them with his own private moneys, but did not trade or speculate with them, or get any personal benefit from them. Lord Cran worth in delivering judgment, said : — " Generally speaking, every executor and trustee who holds money in his hands is bound to have that money forthcoming ; he is, therefore, charge- able with interest, and is almost always to be charged with interest at 4 per cent. It is pre- sumed that he must have made interest, and 4 per cent, is that rate of interest which this court has usually treated it as right to charge." His lord- ship then commented on the misconduct attributed to the trustee, and proceeded as follows : — *' It is not misconduct that has benefited him, unless indeed it can be taken as evidence that he kept the money fraudulently in his hands, meaning to appropriate it. In such a case, I think the court would be justified in dealing, in point of interest, very hardly with an executor, because it might fairly infer that he used the money in speculation, by ichich he either did make 5 per cent., or ought to be estopped from saying that he did not. The court would not inquire what had been the actual proceeds, but in application of the principle, in odium spoliatoris (^n) See judgment in Jones v. Foxall, supra ; and see principles stated in Be Massingherd, Clarh v. Trelaiuney, supra, pp. 255, 256. N N 2 548 THE LIABILITY OF TRUSTEES. omnia jjrwsumiiniur, would assume tliat he did make the higher rate, that is, if that were a reason- able prestcmption" (o). 8. Solicitor-trustee using trust funds in his busi- ness. — In Burdick v. Garrard {2)), a solicitor, as the agent of the plaintiff, held a power of attorney from him, under the authority of which he received divers sums of money, and paid them into the hank to the credit of his (the solicitor's) firm. On a hill being filed by the client for an account, the Yice- Chancellor made a decree for payment of the princi- pal with compound interest. The Court of Appeal, however, reversed this decision, Lord Hatherley saying : " The Vice-Chancellor has directed in- terest to he charged at the rate of 5 per cent., which appears to me to be perfectly right, and for this reason, that the money was retained in the defendants' own hands, and was made use of by them. That being so, the court presumes the rate of interest made upon money to be the ordinary rate of interest, viz., 5 per cent. I cannot, how- ever, think the decree correct in directing half- yearly rests, because the principle laid down in the case of The Attorney-General y. Alford appears to be the sound principle, namely, that the court does not proceed against an accounting party by way of punishing him for making use of the (0) Att.-Oen. V. Alford, supra; and see Jones v. Searle, 49 L. T. 91 ; and see Be Emmet, Emmet v. Em,met, 17 C. D. 142. {p) 5 Ch. App. 233. See also Hale v. Sheldrake, 60 L. T. 292, wliere a husband of the tenant for life was ordered to replace a trust fund, but without interest, as the wife had allowed him to receive the income. MEASURE OF TRUSTEe's RESPONSIBILITY. 549 plaintifi's money, by directing rests, or payment of compound interest, but proceeds upon this prin- ciple, that either he has made, or has put himself into such a position that he is presumed to have made, 5 per cent., or compound interest, as the case may be." His Lordship then pointed out that no doubt where a trustee employs money in ordinary trade, he will be made liable for com- pound interest, because trade capital is presumed to yield it ; but that that reason had no applica- tion to capital employed in a solicitor's business, upon which a solicitor is frequently receiving no interest at all. It may be also questioned whether, in these days, the court would presume the rate of interest made upon money to be 5 per cent. ; for cer- tainly it is no longer correct to say that 5 per cent., or even 4 per cent., is the ordinary rate of interest. 9. Partner trustee allowing trust fund to remain' in business. — In order to charge a trustee with compound interest, or with actual profits for employing the trust funds in trade, there must be an active calling in of the trust moneys for the purpose of embarking them in the trade or speculation; a mere neglect to withdraw funds already embarked by the settlor in the trustee's trade, is not sufficient. In Vz/se v. Foster (q) the facts were as follows : — A testator was partner in a well-established and prosperous business, one of the terms of the partnership being that, on the death of any partner, his share was to be taken (2) 8 Cli. App. 309, affirmed 7 H. L. 318. 550 THE LIABILITY OF TRUSTEES. by the surviving partners at a certain price, which was to be paid by instalments extending over two years, with interest at 51. per cent, per annum from his death. The testator appointed three executors, oiw of whom was one of the partners in his business, and another some years after his death became a partner ; the third never was concerned in the business. The value of the testator's share was ascertained, but not paid, the amount being allowed for some years to remain in the hands of the firm, who treated it in their books as a debt, and allowed interest on it at bl. per cent, per annum, with yearly rests. One of the testator's residuary legatees claimed, but unsuccessfully, to be entitled to a share in the profits of the business arising from the use of the testator's capital. Lord Justice James said : ''Is the mere fact of the union of the three characters — debtor, executor, and trader — in the same person, sufficient to entitle the estate to an investigation into the trader's own business, because there has been some delay, or great delay in paying off the debt? We have found no case in which this has been laid down, even in the case of a sole executor, sole debtor, or sole trader. In no case, so far as we are aware, has it ever been held, that where there has been no active breach of trust in the getting in or selling out trust assets, but where there has been a mere balance on the account of receipts — legitimate receipts — and payments, the omission to invest the balance has made the executor liable to account for the profits of his own trade." MEASURE OF TRUSTEe's RESPONSIBILITY, 551 10. Liability for loss caused by insufficient mortgage security. — Prior to the Trustee Act, 1888, where a trustee invested the trust fund on mortgage, and advanced more than two-thirds of the value, that prima facie constituted the entire investment a breach of trust. It was not an investment which the trustee ought to have made at all, and consequently having, by making it, committed a breach of trust, the whole item — the entire sum so invested — was disallowed him in his accounts, and the mortgage was either realized and he was charged with the deficiency, or he was dii-ected to replace the entire sum, and upon doing so the mortgage became his absolutely (>-). Consequently, although a trustee might only have erred in advancing, say one-eighth more than two- thirds of the value, he thereby became liable to repay to the estate the whole of the amount invested, recouping himself so far as possible out of the mortgage. This is, however, no longer so, the 9th section of the Trustee Act, 1893, (re-enacting the 5th section of the Act of 1888) having enacted, that where a trustee has advanced too much on a mortgage security " icJdch icould at the time of the investment he a proper investment in all respects for a smaller sum,'' he will only be liable for the excess over that smaller sum, although that may not represent the loss to the estate. A trustee is not, however, protected by this enactment (r) Frjj V. Tapson, 28 C. D. 282 ; Re WhiteUy, Whiteley V. Learoijd, 33 C. D., at p. 354. Improper and Improvident Investment — Real Securities.] -Where trustees invest a larger sum than is justified by the value of the pro-,S. perty upon mortgafje of undivided shares of real property, part of which consists of china- clay works, and part of which is let on leases r one in ail for lives, one of the trustees being himself^Qj^ggq^gj^^^y interested in other of the undivided shares, the . ^, , *' investment is an improper one, and therefore mvestea On will not be deemed an authorised investment ^^ where for a smaller sum, under section 9, sub-section 1 ■{ of the Trustee Act, 1893. Turner, In re /lenoids, Or Ot Earlier v. /riwfy, GO L- J- Ch. 282; [1897] 1 j^ ^ Ch. 536 ; 76 L. T. 116 ; 45 W. R. 495— B>rne, J. „„.,^^ sji. uiic i.jj:s.t;;, u, trusiee will stili be liable for tlie entire sum invested. And where in such a case the trustee in fault retires, the new trustees may realize the security without notice to him, and charge him with the entire deficiency {f). Art. 71. — The Liahilitij, Joint and Several. Each trustee is in general liable for the whole loss when caused by the joint default of all the trustees, even although all may not have been equally blame-worthy (ii) ; and a decree against all may be enforced against one or more only (x). Illust. — 1. All parties to breach are equally liable. — All parties to a breach of trust are (s) Re Walker, Walker v. Walker, 59 L. J., Ch. 386. {t) Re Salmon, Priest v. Uj^plehij, 42 0. D. 351. (u) Wilson V. Moore, 1 M. & K. 126 ; Li/se v. Kingdom, 1 Coll. 184 ; Ex parte Norris, 4 Ch. App. 280. This applies not only to express trustees, but to all persons who meddle with the trust property with notice of the trust. See Coivper v. Sfoneham, 68 L. T. 18. {x) Att.-Oen. v. Wilson, Cr. & Ph. 28; Fletcher v. Green, 33 B. 426. LIABILITY, JOINT AND SEVEKAL. 553 equally liable, and there is between them no primary liability (i/) ; and this liability is not con- fined to the express trustees, but extends to all who are actually privy to the breach of trust. Thus, where trustees delegated their trusteeship to their solicitors, who received the moneys, and did not invest them, but made use of them in their busi- ness, it was held that both the trustees and the solicitors were equally liable, and that judgment might be levied by the beneficiaries against the solicitors only (z). This principle does not, how- ever apply to professional payments made by trustees to a solicitor or other agent who knows that the money is trust money, unless facts are brought home to him which show that, to his knowledge, the money was being applied in a manner inconsistent with the trust ; or, in other words, that the solicitor or other agent was party either to a fraud, or to a breach of trust on the part of the trustees. As Mr. Justice Stirling put it in a recent case : " To make an agent liable to return costs, he must be fixed with notice that, at the time when he accepted payment, the trustee had been guilty of a breach of trust such as would preclude him altogether from resorting to the trust estate for payment of costs, so that in {y) Per M. E., in Wilson v. Moore, 1 M. & K. 126. (2) Cowper V. Stoneham, 68 L.^T. 18 ; and see also Blyth V. Fladgate, (1891) 1 Ch. 337, and art. 81, infra, where the liability of thii'd parties is more fully discussed. 554 THE LIABILITY OF TRUSTEES. fact the application of the trust estate in payment of costs would be a breach of trust " {a). Art. 72. — iVb Set-off" allowed of Gain on one Breach against Loss on another. A trustee is only liable for the actual loss in each distinct and complete transaction which amounts to a breach of trust, and not for the loss in each particular item of it (^) ; but a loss in one transaction or fund is not com- pensated by a gain in another and distinct one (c). Illust. — 1. Where breach of trust causes bene- fit to the estate, not liable for outlay. — In Vt/se v. Foster (h), a testator devised his real and personal estates upon common trusts for sale, making them a mixed fund. His trustees were advised that a few acres of freehold land which belonged to him might be advantageously sold in lots for building purposes, and that, to develop their value, it was desirable to build a villa upon part of them. {a) Re Blundell, Blundell v. Blundell, 40 C. D. 370. (/;) Vyse v. Foster, 8 Ch. App. 336, affirmed 7 H. L. 318. (c) Wiles V. Oresliam, 2 Drew. 258 ; Dimes v. Scott, 4 Euss. 195; Ex parte Lewis, 1 Gl. & J. 69. AVHEN SET-OFF ALLOWED. 555 They accordingly built one at a cost of 1,600/. out of the testator's personal estate. The evidence showed that the outlay had benefited the estate, but Vice-Chancellor Bacon disallowed the 1,600/. to the trustees in passing their accounts. The Court of Appeal (and subsequently the House of Lords), however, reversed this, the Lord Justice James saying : " As the real and personal estate constituted one fund, we think it neither reason- able nor just to fix the trustees with a sum, part of the estate, bona fide laid out on other part of the estate, in the exercise of their judgment as the best means of increasing the value of the whole." 2. Loss on one transaction cannot be set-off against gain on another. — In Wiles v. Grcsham {d), on the other hand, by the negligence of the trus- tees of a marriage settlement, a bond debt for 2,000/. due from the husband was not got in, and was totally lost. Certain other of the trust funds were without proper authority invested in the purchase of land upon the trusts of the settlement. The husband, out of his own money, greatly added to the value of this land ; and upon a claim being made against the trustees for the 2,000/. they endeavoured to set-off against that loss the gain which had accrued to the trust by the increased value of the land, but their con- tention was disallowed, the two transactions being separate and distinct. {d) Supra. 556 THE LIABILITY OF TRUSTEES. 3. Again, trustees had kept invested on un- authorized security a sum of money which they ought to have invested in consols, and which was in consequence depreciated. Eventually part of the money was invested in consols, at a far lower rate than it would have been if invested according to the directions in the will. The trustees claimed to set-off the gain against the loss, but were not allowed to do so ; because " at whatever period the unauthorized security was realized, the estate was entitled to the whole of the consols that were then bought, and if it was sold at a later period than it ought to have been, the executor was not entitled to any accidental advantage thence accruing (e). This case is at first sight difficult to be distinguished from V//se v. Foster, but it will be perceived that the loss and gain resulted from two distinct transactions. The loss resulted from a breach of trust in not realizing the secu- rities ; the gain arose from a particular kind of stock being at a lower market value than usual at the date at which the trustees bought it. 4. Where, however, trustees committed a breach of trust in lending trust moneys on mortgage, and upon a suit by them the mortgaged property was sold, and the money paid into court and invested in consols pending the suit, and the consols rose in value, the trustees were allowed to set-off the gain in the value of the consols against the loss under the mortgage, for the gain and loss arose (e) Dimes v. Scott, 4 Euss. 195. PROPERTY ACQUIRED OUT OF TRUST PROPERTY. 557 out of one transaction (/). It is, however, very difficult to reconcile this case with the last one, but it seems to be reasonable, and in accordance with common sense. Art. 73. — Properhj acquired either icholly or partly out of Trust Property becomes liable to the Trust. (1) If a trustee has, in breach of trust, 1 converted trust property into some! other form, or has invested it in some ■ unauthorized shape, the property into ; which the trust property has been| so converted, or the investments in: which it has been so invested, become subject to the trust. If all the bene- ficiaries are sui juris, they can collec- tively elect to adopt the breach, and take the property as it then stands; but if one of them objects to do so, he may require it to be reconverted, and in that case any gain accrues to the trust estate, and any loss falls on the trustee (^). (/) Fletcher v. Oreen, 33 B. 42G. [g) See per Pearson, J., Patten y. Guardians of Edmonton, 31 W. E. 785 ; Be Hallett, KnatchhuU v. Hallett, 13 0. D. 696 ; Taylor v. Plumer, 3 M. & S. 562 ; Frith v. Cartl-and, 558 THE LIABILITY OF TRUSTEES. (2) If a trustee has mixed trust moneys with his own, or has, partly with his own and ])SiYt\y with trust moneys, purchased other property or invest- ments, then the beneficiaries cannot elect to take the whole of the mixed fund or the entire property or invest- ments so purchased ; but if the mixed fund, or the property or investments so purchased, can be traced (into whatever form they may have been converted), the beneficiaries will be entitled to a first charge thereon (h). Illust. — 1. Stock bought with trust money. — Thus, where money is handed to a broker for the purpose of purchasing stock, and he invests it in unauthorized stock, and absconds, the stock which he has purchased will belong to the principal, and not to the broker's trustee in bankruptcy. For a broker is a constructive trustee for his principal, and, as was said by Lord EUenborough, " tho property of a principal, entrusted by him to his 2 H. & M. 417 ; Hopper v. Conyers, 2 Eq. 549; La7ie v. Dightnn, Amb. 409 ; Scales v. Baker, 28 B. 91 ; Cook v. Addison, 7 Eq. 466 ; Ernest v. Craysdill, 2 D., F. & J. 175 ; Ex parte Barker, 28 W. E. 522. (/i) Be Hallett, KratchbuU v. Ilallett, 13 C. D. 696; Lnpto7i V. White, 15 V, 432 ; Pennell v. BeffeJl, 4 D., M. & G. 372 ; and see also Be Pumpbrey, Worcester, &c. Banking Co. v. Blick, 22 C. D. 255, cited supra, p. 521. PROPERTY ACQUIRED OUT OF TRUST PROPERTY. 559 factor for any special purpose, belongs to the principal, notwithstanding any change which that property may have undergone in form, so long as such property is capable of being identified and distinguished from all other property" (i). 2. Money produced by trust chattels. — So, if goods consigned to a factor be sold by him and reduced into money, yet if the money can be traced — as, for instance, where it has been kept separate and apart from the factor's own moneys, or kept in bags, or the like {k), or has been changed into bills or notes (/), or into any other form (m), or has been paid into the factor's account at the bank {n) — the employer, and not the creditors of the factor, will, upon his bankruptcy, be entitled to the property into which it has been converted. For the creditors of a defaulting trustee can have no better right to the trust property than the trustee himself ; and it makes no difference in this respect that the trustee committed a breach of trust in converting the property ; for an abuse of trust can confer no right on the person abusing it, nor on those claiming through him (o). 3. Sale by trustees of property wrongfully ac- quired out of trust moneys, — So, where the trustees (t) Taylor v. Plumer, supra ; Ex 2^arte Cook, 4 C. D. 123 ; Be HaUeit, Knatdilull v. Halktt, 13 0. D. 696. (^•) Tooke V. HolUaijworth, 5 T. E. 277. (Z) Ex. parte Dumas, 2 V. sen. 582. (m) Erith v. Cartland, 2 H. & M. 417 ; Birt y. Birt, 11 C. D. 772. {n) Be HaJJett, KnatchbuU v. HaJlett, supra. (o) Taylor v. Plumer, supra. 560 THE LIABILITY OF TRUSTEES. of a ■will invested trust moneys in an unauthorized purchase of land, and afterwards contracted to sell it for a largely increased prioe, it was held that they were acting properly in so doing, and that the concurrence of one heneficiary was sufficient to make a good title, on the purchasers seeing that the purchase-money was invested in the names of the trustees as trustees (^9). For, as Mr. Justice Pearson put it : "I see no reason why the trustees should not now do what it was all along their duty to do, and what the court would have ordered them to do. At the same time, I agree that it would he proper to take the concurrence of one of the cestuis que trusts, because, if all of them elected to take their shares of the land after it had been purchased, they would have been entitled to do so ; but if one of them objected to take the land, but required that it should be sold, then the others could not compel him to take his share of the land as representing his share of the money." 4. Trust property mixed with other property so as to be untraceable. — The case is comparatively simple where (as in the foregoing illustrations) the trustee has spent or converted the trust property, and nothing but the trust property. It, however, becomes more difficult when the trustee has mixed the trust moneys with his own, and either kept the mixed fund, or spent it in the purchase of other property. The case then turns entirely upon the question, whether the mixed fund, so formed, {p) Patten y. Guardians of Edmonton, 31 W. E. 785. PROPERTY ACQUIRED OUT OF TRUST PROPERTY. 561 can be identified, or, if it has been spent, whetber it can be traced into tbe property whicb has been purchased with it. If it has become so mixed up with the trustee's private property as to render it impossible to trace it (for instance, where it has been converted into money, which has been put in circulation {q), or has otherwise become indistin- guishable) , then, as the right of the beneficiary is only to have the actual trust property or that which stands in its place, or to have a charge on it, and as the actual property is gone and that which stands in its place cannot be identified, the beneficiary can only proceed against the trustee generally for the breach of trust, or, if he be bankrupt, can only prove as a creditor (r). 5. Trust property mixed with other property which can be traced. — But where the mixed fund can be traced (as, for instance, where the trustee has paid in the trust fund to his general banking account («) , the beneficiaries wiU have a charge, or lien, upon the whole mixed fund. In the case of Be Hallett, KnatchhuU v. Hallett (s), the "^ «k-»-^'- late Sir Greorge Jessel, M. E., elaborately re- viewed all the authorities touching on this ques- tion. His Lordship said : — " The modern doctrine of equity, as regards property disposed of by per- sons in a fiduciary position, is a very clear and (<7) Miller v. Race, 1 Bar. 457. (r) Ex parte Dumas, 1 A.b. 234 ; Ryall y. Boll, Ch. 172; Scott v. Surman, Willes, 404. (s) Re Hallett, KnatchhuU v. Hallett, 13 C. D. 696, over- ruling the decision of Fry, J., in Ex parte Dale, 1 1 C. D. 772. U. T. O O 562 THE LIABILITY OF TRUSTEES. well-defined doctrine. You can, if the sale was rightful, take the proceeds of the sale, if you can identify them. If the sale was wrongful, you can still take the proceeds of the sale, in a sense adopting the sale for the purpose of taking the proceeds, if you can identify them. There is no distinction, therefore, between a rightful and a wrongful disposition of the property, so far as regards the right of the beneficial owner to follow the proceeds. But it very often happens that you cannot identify the proceeds. The proceeds may have been invested, together with money belong- ing to the person in a fiduciary position, in a pur- chase. He may have bought land with it, for instance, or he may have bought chattels with it. Now what is the position of the beneficial owner as regards such purchases ? I will first of all take his position when the purchase is clearly made with what I will call, for shortness, the trust money, although it is not confined, as I will presently show, to express trusts. In that case, according to the now well-established doctrine of equity, the beneficial owner has a right to elect, either to take the property purchased, or to hold it as a security for the amount of the trust money laid out in the purchase ; or, as we generally express it, he is entitled, at his election, either to take the pro- perty, or to have a charge on the property for the amount of the trust money. But in the second case, where a trustee has mixed the money with his own, there is this distinction, that the cestui que trust, or beneficial owner, can no longer elect PROPERTY ACQUIRED OUT OF TRUST PROPERTY. 563 to take the property, because it is no longer bought with the trust money simply and purely, but with a mixed fund. He is, however, still entitled to a charge on the property purchased for the amount of the trust money laid out in the purchase ; and that charge is quite independent of the fact of the amount laid out by the trustee. The moment you get a substantial portion of it furnished by the trustee, the right to the charge follows {f) I have only to advert to one other point, and that is this : — supposing, instead of being invested in the purchase of land or goods, the moneys were simply mixed with other moneys of the trustee, does it make any difference accord- ing to the modern doctrine of equity ? I say none. It would be very remarkable if it were to do so. Supposing the trust money was 1,000 sovereigns, and the trustee put them into a bag, and by mis- take, or accident, or otherwise, di'opped a sovereign of his own into the bag ? I do not like to call it a charge of 1,000 sovereigns on the 1,001 sovereigns, but that is the effect of it. I have no doubt of it. It would make no difference if, instead of one sovereign, it was another 1,000 sovereigns. But if, instead of putting it into his bag, or after putting it into his bag, he carries the bag to his bankers, what then? According to law, the bankers are his debtors for the total amount; but if you lend the trust money to a {t) See also, to same effect, Be Pumphrey, Worcester, &c. Banking Co. y. Blick, 22 C. D. 255, cited supra, p. 521. oo2 564 THE LIABILITY OF TRUSTEES. third person you can follow it. If in tlie case supposed the trustee had lent the 1,000/. to a man without security, you could follow the deht and take it from the debtor If instead of lend- ing the whole amount in one sum simply, he had added a sovereign, or had added 500/. of his own to the 1,000/., the only difference is this, that instead of taking the debt, the cestuis que trusts would have a charge for the amount of the trust money on the debt." 6. A judgment creditor of a stockbroker obtained a garnishee order on a balance at a bank standing to the credit of the broker. All moneys in the bank to the broker's credit, ?w;r, in fact, moneys received for clients. Since money of a client had been paid in, drawings out in excess of the then balance had been made. And so in the case of another client. Except those two, there was no client who claimed any part of the fund. Held, on appeal, that as no part of the moneys in the bank was the debtor's own, the judgment creditor had no right against the balance ; and that, it being clearly shown that the balance in hand was equal in amount to the sums remaining due from the broker to the two clients in question in respect of moneys of theirs paid into the account, and that there was no claim on behalf of any other client, the money belonged to these two clients (m). Wliere, however, a trustee has overdrawn his banking account, his bankers have a first and paramount lien on all moneys paid in if they have (m) Hancock v. Smith, 41 0. D. 456. PROPERTY ACQUIRED OUT OF TRUST PROPERTY. 565 no notice that they are trust moneys (x) ; for where the equities are equal the law prevails, and, in the case supposed, the bankers have in point of law received the money in payment of their debt. 7. As another example of the effect of mixing trust funds with the trustee's private moneys, the case of Cook v. Addison {//), may be cited. There one Addison, who was the owner of a leasehold house, let it to S., as tenant, who covenanted to repair it. S. afterwards borrowed (legitimately) a sum of money from trustees, of whom Addison was one, and therewith purchased from Addison the furniture in the house, and executed a mortgage of his underlease, and a bill of sale of the furniture to the trustees. S. getting into difficulties, Addison put an end to the tenancy, and re-entered and took possession. He subsequently assigned the premises to Fowler at a rent of 310/., and a premium of 100/. The furniture was purchased by Fowler for 550/., and he also paid 250/. towards repairs. Addison invested a sum to make good the principal trust fund, but refused to pay the interest which had accrued due from S. It was held, however, that he had, by his conduct, mixed the trust funds with his own, and that the interest must be paid out of the sum received by him from Fowler for repairs. 8. Again, trustees had power, with the consent of the tenant for life, to sell the trust property, {x) Thomson v. Clydesdale Bank, (1893) App. Cas. 282. (V) 17 Eq. 471. 566 THE LIABILITY OF TRUSTEES. and they were directed to invest the purchase- money in the purchase of other real estate, to be settled on the like trusts. The trust property was sold under this power for 8,440/., and the tenant for life was allowed (wrongly) to keep the purchase-money. About the same time he purchased another estate for 17,400/., of which sum 8,124/, was part of the above-mentioned trust money. This estate was conveyed to him in fee simple. The tenant for life eventually became bankrupt, and it was held that, as against his assignees in bankruptcy, the original trustees of the settlement had a lien on the estate which he had purchased, to the extent of the moneys invested in its purchase (z). j 9. No lien unless it can be shown that trust fund I forms part of a specific fund or property. — However, wherever the trustee has mixed the trust fund with his own moneys, then, before a charge or lien can be substantiated, it must be shown that the trust fund in fact forms part of the fund or property on which the lien is claimed. "Where, therefore, it appeared that the actual bank notes, of which the trust fund consisted, had not been paid by the trustee into his banking account, it was held that the cestuis que trusts had no lien on the balance lying at the trustee's bankers, because the trust i'uud could not be traced to the , bank {a) . Of course, if the trust fund could have (z) Price v. BlaTcemore, 6 B. 507 ; and see also Hopper v. Conyers, 2 Eq. 549, and Middleton v. Pollock, 4 C. D. 49. {a) Ex parte Hurdcastle, 29 W. E. 615. PERFORMANCE OF A NEGLECTED DUTY. 567 been proved to have been paid into the trustee's account, then, notwithstanding that he might sub- sequently have drawn out and paid in moneys, the lien would have been upheld. ^r. Art. 74. — Ani/ of the Beneficiaries may compel Perfonnance of a neglected Duty or prevent the Commission of Breach. Where the court is satisfied that trust^ property is in danger, either through the supineness [h) of, or a contem- plated or probable active breach of ^ - duty (c) by, the trustees, or where the latter are residing out of the jurisdic- tion of the court (J), an injunction will be granted at the instance of any person with an existing, vested or con- tingent interest (e), either compelling the trustees to do their duty (/), or restraining them from interfering with the trust property (c), as the (h) Foley y. Burnell, 1 B. C. C. 277 ; Fletcher v. Fletcher, 4 Ha. 78. (c) Talhot V. Scott, 4 K. & J. 139 ; Middleton v. DodsweU, 13 V. 266 ; Dance v. Goldingham, 8 Ch. App. 902. {d) Noad V. Backhouse, 2 Y. & C. C. 529. (e) Lew. 697 ; Scott v. Becher, 4 Pr. 346 ; but see as to contingent cestuis que trusts, Davis v. Angel, 10 W. E. 723, and Cloiues v. Hilliard, 4 C. D. 413. (/) See note (6), supra. 668 THE LIABILITY OF TRUSTEES. case may require; and, if expedient, a receiver will be appointed ((/). Illust. — 1. Right to use name of trustee in action at law. — Thus, if one commits some trespass upon lands in the possession of the trustee, and the latter refuses to sue him, the court will oblige him to lend his name for that purpose, on receiv- ing a proper indemnity from the beneficiaries (A) . 2. Trustee will be ordered to renew leases. — And so, if a tenant for life refuses to renew lease- holds, the court will compel him to do so, and a receiver of the income of the trust property will be appointed to collect a sufficient sum to pay the renewal fine (?). 3. Where same persons trustees under conflicting settlements. — In Earl Talbot v. Scott (k), lands were vested in trustees by act of parliament, upon trust for sale, and subject thereto, upon trusts inalienably annexing the rents to the Earldom of Shrewsbury. The Earl of Shrewsbury attempted to disentail (which of course he could not do effectually), and devised the lands to the same trustees, upon trust for a particular claimant of the title. The trustees accepted this trust, and claimed to receive the rents in that character, pending proceedings by the plaintiff to establish {g) See cases in note (c) ; and Bennett v. Colley, 5 Sim. 192. {h) Foley v. Burnell, supra. \i) See Bennett v. Colley, supra, and Trustee Act, 1893, s. 19. {k) Supra. PERFORMANCE OF A NEGLECTED DUTY. 569 his claim to the earldom. A receiver of the rents was, however, appointed on his application, upon the ground that the trusts of the will were in conflict with the prior trusts upon which they held the estate. 4. Beneficiaries may get a receiver appointed where property in danger. — So, in Evans v. Coven- try (/) , a bill was filed by a plaintiff insured in a society whose funds were liable to pay the insur- ance money, on behalf of himself and other persons so insured, charging a loss of the funds through the negligence of the directors. The answers and affidavits showed that the secretary had absconded with part of the funds, and that some of the directors were in needy circumstances, and the court granted an injunction restraining the direc- tors from touching the funds, and appointed a receiver of them. Lord Justice Knight Bruce said : " The application before the court is founded on the common right of persons who are interested in property which is in danger, to apply for its protection. ... In my judgment, the objec- tions which have been urged against this applica- tion might be urged with as much reason, as much force, and as much effect, if this were an application to restrain the felling of timber in a case of waste, partly perpetrated and partly imminent." 5. On similar grounds, the court will appoint a receiver and grant an injunction where, from the (0 5 D., M. & G. 911. 570 THE LIABILITY OF TRUSTEES. character or condition of the trustee, he is not a fit person to have the control of the trust property ; as, for instance, where he is insolvent {m), or about to become bankrupt («), or is a person of dissolute habits, or dishonest (o) . 6. Injunction granted to restrain improper sale. — Again, the court will grant an injunction to restrain a sale by trustees at an undervalue (p) (although this was at one time doubted {q)). Art. 75. — Fraudulent Breach of Trust is a Crime. A trustee who fraudulently appropriates or disposes of the trust property, in any manner inconsistent with the trust, is guilty of a misdemeanour, and is liable to a maximum punish- ment of seven years penal servitude ; but no criminal proceedings can be instituted without the sanction of the Attorney-General, or of the Solicitor- General, or (if civil proceedings have (to) Mansfield v. Shaw, 3 Mad. 100 ; Ghtddon v. Stone- man, 1 Mad. 143, n. in) Re H:s Estate, 1 C. D. 276. (o) See Everett v. PrythergcJi, 12 Sim. 365. [p) Anon., 6 Mad. 10; and see Welhy. Earl of Shaftes- bury, 1 V. 488; Milliiian v. Mitchell, 1 M. & K. 446; Dance v. Goldingham, 8 Ch. App. 902. (j) Pechel v. Fowler, 2 Anst. 549. FRAUDULENT BREACH OF TRUST A CRIME. 571 been commenced) of tlie judge of the court wherein they have been com- menced (r). The fact, that a breach of trust is a crime, does not affect the vaHdity of any civil proceeding, nor any agreement for restoration of the trust property [s). \ (r) 24 & 2o Vict. c. 96, s. 80. (s) Ibid., s. SO. %Z^i.AS^- ( 572 ) CHAPTER II. Pkotection accorded to Trustees. Art. 76. Protection against Breaches of Trust hy co- Trustees. ,, 77. Concurrence of or release hy Beneficiaries. ,, 78. Statute of Limitations and Laches. ,, 79. Gainer by or instigator of Breach of Trust must, pro tanto, indemnify Trustee. # Art. 76. — Protection against the Acts of Co-Trustee. 1(1) A trustee is not answerable for the I receij^ts, acts, or defaults of his co- trustee («), save only — a. Wliere he has handed the trust pro- perty to him without seeing to its proper application. /3. Where he allows him to receive the trust property without making due inquiry as to his dealing with it. 7. Where he becomes aware of a breach of trust, either committed (a) Daivson v. Clarice, 18 V. 254; and as to settlements made since, see 22 & 23 Vict. c. 35, s. 31. K.,.U6-. •/^'^'i C.^-«4tA..^«Jt..t-^i- U,iU ^r^-*--' ^"-''•■-. i-^M^ L. r - '■ -. ' '''-'■" -'- -- PROTECTION AGAINST ACTS OF CO-TRUSTEE. 573 ."^ ^-^^ *"i^. .c or meditated, and abstains from - u_..^ taking the needful steps to obtain \ restitution and redress, or to pre- vent the meditated wrong. (2) Even in the above three cases he may, by express declaration in the, settlement, be made irresponsible (h). Illust. — 1. Thus, in the case of Wilkins v. Hogg (c), which now governs the subject, a testa- trix, after appointing three trustees, declared that each of them should be answerable only for losses arising from his own default, and not for in- voluntary acts or for the acts or defaults of his co- trustees ; and particularly, that any trustee who should pay over to his co-trustees, or should do or concur in any act enabling his co-trustees to receive any moneys for the general purposes of her will, should not be obliged to see to the due application thereof, nor should such trustee be subsequently rendered liable by any express notice or intimation of the actual misapplication of the same moneys. The three trustees joined in sign- ing and giving receipts to two insurance companies for two sums of money paid by them, but two of the trustees permitted their co-trustee to obtain [h) As to the whole of the article, see judgment of Westbuiy, L.C., in Wim.ins v. Hogg, 3 Giff. 116; 8 Jur. N. S. 25 ; and see also Dix v. Burford, 19 B. 409 ; MucJclow V. Fuller, Jac. 198 ; Brumridge v. Brumridge, 27 B. 5. (c) Supra. 574 PROTECTION ACCORDED TO TRUSTEES. the money without ascertaining whether he had invested it. This trustee having misapplied it, it was sought to make his co-trustees responsible ; but Lord Westbury held that they were not, saying : " There are three modes in which a trustee would become liable according to the ordinary rules of law — first, where, being the recipient, he hands over the money without secur- ing its due application ; secondly, where he allows a co-trustee to receive money without making due inquiry as to his dealing with it ; and thirdly, where he becomes aware of a breach of trust, either committed or meditated, and abstains from taking the needful steps to obtain restitution or redress. The f ramer of the clause under examina- tion knew these three rules, and used words suffi- cient to meet all these cases. There remained, therefore, only personal misconduct, in respect of which a trustee acting under this will would be responsible. He would still be answerable for collusion if he handed over trust money to his co- trustee with reasonable ground for believing or suspecting that that trustee would commit a breach of trust ; but no such case as this was made by the bill." 2. In the recent case of Pass v. Dundas (d), the settlement contained a similar protective clause to that stated in the last illustration. Part of the trust estate consisted of a business, and one of the trustees authorized his co-trustee to draw money {d) 29 W. E. 332. CONCURRENCE OF THE BENEFICIARIES, 575 out of the bank for the purposes of the business, which money the co-trustee misapplied. It was held that, under the words of the clause, the trustee was protected. Art. 77. — Concurrence of or Release by the Beneficiaries. (1) A beneficiary who has assented to J or concurred in, a breach of trust (e), or who has subsequently released or confirmed it (/), cannot after- wards charge the trustees with it : Provided — I a. That the beneficiary was sui juris atj the date of such assent or release (^); /3. That he had full knowledge of the facts and knew what he was doing (/i), and the legal effect thereof {i) ; | (e) Brice v. Stokes, 11 V. 319; Wilhinson y. Parry, 4 Euss. 272 ; Nail v. Punter, 5 Sim. 555 ; Life Association of Scotland v. Siddal, 3 De G., F. & J. 58,- Walker v. Si/monds, 3 Sw. 64. (/) French v. Hohson, 9 V. 103 ; Wilkinson v. Parry, supra ; Creswell v. Dewell, 4 Giff. 465. (_(/) Underwood v. Stevens, 1 Mer. 717 ; Leach v. Leach, 10 V. 517 ; Lord Montford v. Gadorjan, 19 V. 9. {h) Re Garnett, Gaudy v. Macaidey, 31 C. D. 1 ; Buck- eridge v. Glass, 1 Cr. & Ph. 135 ; Hughes v. Wills, 9 Ha. 773 ; Cockerill v. Cholmeley, 1 E. & M. 425 ; Strange v. Fooks, 4 Giff. 408 ; 3furch v. Russell, 3 M. & C. 31 ; Aveline V. Melhuish, 2 D., J. & S. 288. {i) Re Garnett, Gandy v. Macauley, supra ; Cockerill y. 576 PROTECTION ACCORDED TO TRUSTEES. 7. That no undue influence was brought to bear upon liim in order to extort the assent or release (Jc). (2) A beneficiary, who is not sui juris, and who concurs in a breach of trust, cannot afterwards charge the trus- tees, if he employed fraud (/) 5 but a married woman vjithoiit j)02ver of alien- ation [m) cannot even by fraud estop herself from making the trustee pri- marily responsible ; although under the circumstances stated in Article 79 she maif be ordered by the court to indemnify him. Illust. — 1. Plaintiff party to breach of trust. — Stock was settled on a married woman for her separate use for life, with a power of appointment by will. The trustees, at the instance of the hushand, sold out the stock and paid the proceeds to him. The wife filed a bill to compel the trustees to replace the stock, and obtained a decree, under which the trustees transferred part of the Cholmeley. supra; Marl-er v. Marl-er, 9 Ha. 16; Burrows V. Walls, 5 D., M. & G., 254 ; Stafford v. Stafford, 1 D. & J. 202 ; Strange v. Foohs, supra. {k) Bowles V. Stewart, 1 Sch. & Lef . 226 ; Chesterfield v. Janssen, 2 V. 158. {I) Lord Montford v. Cadogan, supra; Sharpe v. Foy, 4 Ch. App. 35 ; Be Lush, ibid, 591. (m) Arnold v. Woodhams, 16 Eq. 33 ; Stanley v. Stanlei/, 7 0. D. 589. CONCURRENCE OF THE BENEFICIARIES. 577 stock into court, and were allowed time to re- transfer tlie remainder. The wife then died, having by her will appointed the stock to the husband. He then filed a bill against the trustees, claiming the stock under the appointment, and praying for the same relief as his wife might have had. It is needless to say that his claim was promptly rejected («). 2. Release. — A formal release under seal, or an express confirmation, will, of course, estop a bene- ficiary from instituting subsequent proceedings; and it would seem that any positive act or expres- sion indicative of a clear intention to waive a breach of trust, will, {/' mpported by valuable consideration {Iioivever slight), be equivalent to a release (o). 3. Infants incapable of release or acquiescence. — ^An infant cannot lose his right to relief, either by concurrence or release ; for the law presumes that he has not the requisite discretion to judge. 4. Married women, how far capable of releasing or acquiescing.— Where property was settled, be- fore the Married Women's Property Act, 1882, upon a married woman simply, and not to her separate use (in which latter case she is in the same position as a feme sole Q;)), or where it is (n) Nail v. Punter, 5 Sim. 555. (o) See Stackhouse v. Barnston, 10 V. 456 ; per Sir W. Grant; and Farrant v. Blanchford, 11 "W". E. 178. (7>) Brewer v. Swirles, 2 Sm. & G. 219 ; Fletcher v. Green, 33 B. 426 ; Butler v. Compton, 7 Eq. 16; Jones v. Higgins, 2 Eq. 538 ; Taylor v. Cartwright, 14 Eq. 175. TJ. — T. P P 578 PROTECTION ACCORDED TO TRUSTEES. ! settled to lier separate use hut she is restrained from alienating or antici2oating it (q), she is not competent to consent to, or to release, a Lreacli of trust ; and her concurrence or release would, at all events before the passing of the Trustee Act, 1888, afford no protection to the trustee, except in cases falling within the provisions of 3 & 4 Will. 4, c. 74, or 20 & 21 Vict. c. 57. For instance, where money was, prior to 1883, settled upon a hus- band for life, with remainder to his wife for life or absolutely, her concurrence in a breach of trust during the life of her husband had no effect, unless testified by a duly acknowledged deed made with the approbation of her husband. Neither would it even now, if she were entitled for her separate use and were restrained from anticipation; for, as was said by Vice-Chancellor Malins in Stanley v. Stanley (r), "In no case, and by no device what- ever, can the restraint upon anticipation be evaded." .^' However, this dictum is no longer strictly accu- rate, because, by section 45 of the Trustee Act, 1893 (which re-enacts section 6 of the Act of 1888), the court may, if it thinks fit, impound the interest of a married woman restrained from alienation, who has instigated, or consented in writing to a breach of trust, for the purpose of indemnifying the trustee. It is somewhat curious, that, although the act gives the court this discre- tionary power of indemnifying the trustee, it does not {q) Stanley y. Stanley, 7 C. D. 589. (r) Supra. CONCURRENCE OF THE BENEFICIARIES. 579 enable the trustee to set up the instigation or eon- sent as a defence. It is conceived, therefore, that if such an one were to sue a trustee to replace the trust fund, he would have no defence, and must replace it, trusting, however, to be indemnified out of the lady's interest. The danger incurred by trustees who listen to the supplications of married women who are re- strained from anticipation, was very vigorously pointed out by Lord Langdale in Tijler v. Tyler (s), in a passage which ought to be learnt by heart by every trustee. " We find," said his lordship, " a married woman throwing herself at the feet of the trustee, begging and entreating him to advance a sum of money out of the trust fund, to save her husband and her family from utter ruin, and making out a most plausible case for that purpose. His compassionate feelings are worked upon, he raises and advances the money ; the object for which it was given entirely fails, the husband becomes bankrupt, and in a few months the very same woman who induced the trustee to do this, files a bill in the Court of Chancery to compel him to make good that loss to the trust. These are cases which, when they happen, shock everybody's feelings at the time ; but it is necessary that relief should he given in such cases, for if relief were not given, and if such rights icere not strictly maintained, no such thing as a trust could ever be preserved." (s) 3 B. 563. pp2 580 PROTECTION ACCORDED TO TRUSTEES. I 5. A married woman is, however, legally respon- sible for a fraud, and her ordinary incapacity will not avail her ; but if the property were settled upon her toitliout power of anticipation^ her fraud will not prejudice her if). A settlement was made on the marriage of a female infant, whereby the husband covenanted to induce her to settle her real estate upon attaining twenty-one, and to concur in such settlement himself. He neglected to do so, however, and they subsequently mortgaged the real estate, but the mortgagee had no notice of the covenant until just before the deed was acknow- ledged. It was held, that the wife's fraud in not disclosing the existence of the settlement bound her estate, and bound her not to consent to the settlement which the husband had covenanted that he would induce her to make (w). u..^- ^ Art. 78. — Statute of Limitations, and Laches. (1) In the case of actions or other pro- ceedings for breach of trust com- menced after the 1st January, 1890, (except where the claim is founded upon fraud, or is to recover trust property, or the proceeds thereof still retained by the trustee, or previously received (i) Stanley v. Stanley, supra. I , (u) Sharp y. Foy, 4 Ch. App. 85 ; and see Be Lush, ^ if, •,../' ibid. 591. STATUTE OF LIMITATIONS, AND LACHES. 581 by him and converted to his own use,) the following provisions apply, viz : — a. All rights conferred by any statute of limitations apply to the same extent as if the trustee or person claiming through him had not been a trustee (x). \ /3. If the action or other proceeding is brought to recover moneij or other jpro'perty^ and is one to which no other statute of limitations applies, the trustee or person claiming- through liim, may plead the lapse of six years since the breach, in ^ /t^ \r any) of that beneficiary in the trust estate {z) ; >^ w-^ J)y\ but the court will not, as a rule, order the over- ^y^ ^ ' A paid beneficiary personally to refund to the '^ .4^ trustee who has been disallowed the item in his ■^ accounts, because (it is presumed) it was not done at the instigation of the beneficiary {a). However, it would seem that a co-hencficinry could compel repayment of the excess (i) ; but the onus would lie upon him of proving- that what the other beneficiary had received was an over-payment, having regard to the value of the estate at the date of the payment, and did not arise merely by reason of subseqttent depreciation (c). This, of course, pre-supposes that payment at all, at the date in question, was proper ; for otherwise, if the date for payment had not arisen, the payment would itself have been a breach of trust to which the payee would have been i)rivy. and see also Morris v. Livie, 1 Y. & C. , Cli. 380 ; Irhy v. Irltj, 25 B. 632 ; Burnett v. Sheffield, 1 D., M. & G. 371 ; and Cole v. Muddle, 10 Ha. 186. (z) Livesey v. Livesey, 3 Euss. 287; Dihhs v. Ooren, 11 B, 483. (a) Downes v. Bulloch, 25 B. 54 ; Bate v. Hooper, 5 D., M. & G. 338. (6) Harris v. Harris (No. 2), 29 B. 110. (c) Re Winsloiu, Frere v. Winslow, 45 C. D. 247 ; Fen- ruiclc V. Clarke, 4 D., F. & J. 240; Peterson v. Peterson, 3 Eq. Ill ; and Hilliard v. Fulford, 4 C. D. 387. AVnO ARE PARTIES TO A BREACH OF TRUST. 611 12. Rule does not apply to legal beneficial interests. — But where a testator devised certain real estate for life to one of his executors and trustees, and the devisee afterwards committed a breach of trust, and filed his petition for liquida- tion, it was held that, as against the trustee in liquidation, the other cestuis que trusts had no lien on the interest of the trustee ; the Lord Justice James saying : " The estate of a legal devisee is, imder no circumstances, under the control of the court" {(l). And in the more recent case of Re Broicn, Dixon v. Brown (e), Kay, J., said : "It has always been a rule of the Court of Chancery that if a trustee misappropriates trust money, and has an equitable interest under the trust deed, the court will not allow him to receive any part of the trust fund in which he is equitably interested under the trust, until he has made good his default as trustee. That is a doctrine which is not in the least in question, and is very thoroughly established. But if the trustee has, under the will or other instrument which created the trust, a legal interest in land which is not bound by the trust at all, then the Court of Equity has no power to lay hold of that legal interest or to assert anything in the nature of a lien or charge upon it in order to recoup the breach of trust." (d) Fox v. Buckley, 3 C. D. 511 ; but see WoodyaU v. Gresley, 8 Sim. 180. (e) 32 C. D. 597 ; and see also Hallett y. Hallett, 13 0. D. 232, and Ee Akerman, Akerman v. Akerman, (1891) 3 Ch. 212. R R 2 6l2 LIABILITY OF THIRD PARTIES, ETC. RT. 82. — Follmcing Trust Property into the Hands of Tldrd Parties. If trust property comes into the hands of any person inconsistently with the trust, then — a. If such person has got the legal estate, or legal possession he will be a mere trustee for the persons i entitled under the trust ; unless he, or some person through whom he claims (/), has bona fide purchased the property for valuable considera- tion and without receiving notice of the existence of the trust before completion of the jDurchase, and before payment of the purchase- money {g). 0. If he has not got the legal estate (h), (/) Harrison v. Forth, Pr. Ch. 51 ; Martins v. Joliffe, Amb, 313; M'Qmen v. Farquhar, 11 V. 478. (g) Bassett v. Nosworthy, 2 W. & T. L. C. 1 ; Boursot v. Savage, 2 Eq. 134 ; Mackreth v. Symiyions, 15 V. 349 ; Pitcher v. Rawlins, 1 Ch. App. 259 ; and as to the time at which the notice is effectual, Lady Bo'/miny. Variderbendy, 1 Ver. 179; Jones v. Thomas, 3 P. W. 243; Att.-Oen. v. Gower, 2 Eq. Ca. Ab. 685, pi. 11 ; More v. Mahoiv, 1 Ch. Ca. 34 ; and as to receipt of trust money by way of pay- ment for services rendered, without notice of the trust, see Blundell v. Blundell, 40 C. D. 370 ; and as to transfer of shares in a company which forms part of a trust estate, see London, &c. Co. v. Dtiggan, (1893) Aj)p. Cas. 506. {h) See per Lord Westbury, Phillips y. Phillips, 4 D., F. & J. 208. FOLLOWING TRUST PROPERTY. 613 or if the property is a chose in action (^), lie will be a mere trustee notwithstanding that he purchased it bona fide for value and without notice ; unless (being a chose in action) the property consists of a negotiable instrument (/t), or an instrument which was intended by the parties to it to be transferable free from all equities attaching to it {I). Illust. — 1. Relative rights of legal and equit- able claimants. — The rule enunciated in this article is derived from two well-known maxims, viz. : (1) where the equities are equal the law prevails ; and (2) as between mere equitable claimants qui pi'ior in tempore, potior in jure est. In fact, where one of two innocent parties must suffer, then as equity is not called upon to interfere on behalf of either of them, the common law must take its course, and he who has got the legal estate, or its equivalent, will take priority over him who has a mere equitable claim, notwith- (?■) Tarton v. Benson, 1 P. W. 496 ; Ord v. White, 3 B. 357 ; Mangles v, Dixon, 3 H. L. Cas. 702 ; Doering y. Doering, 42 C. D. 203. (k) Anon., Com. Rep. 43. (/) Re Blakel^j Co., 3 Ch. App. 154 ; Be General Estates Co., ibid. 758; Crouch v. Credit Fonder, 8 Q. B. 374; and Bee Judicature Act, 1873, s. 25. 614 LIABILITY OF THIRD TAllTIES, ETC. standing tliat the title of the legal claimant may have accrued after that of the equitable one. The rule is very strikingly and completely illustrated by the case of Care v. Cave (;>i). There a trustee, who was a solicitor, fraudulently misappropriated the trust fund, and with it bought an estate which was conveyed to his brother. The brother then mortgaged the projoerty by legal, and afterwards by equitable mortgages, the solicitor trustee acting on all such occasions as the solicitor both for mortgagor and mortgagees. The parties bene- ficially entitled under the trust claimed to follow their trust money into the property which had been bought with it, on the ground that, as the solicitor of the mortgagees had notice of the breach of trust, that notice must be imputed to the mort- gagees themselves. It was, however, held that, as the solicitor was a party to the fraud, notice of the equity of the beneficiaries could not be con- structively imputed to the clients, the mortgagees, as the conduct of the agent raised a conclusive presumption that he would not communicate to the client the fact in controversy, and that consequently their equities and the equity of the beneficiaries were equal; whence it followed, on the maxim " where the equities are equal the law prevails," that the legal mortgagee, having the legal estate, took priority over the bene- ficiaries, but that the latter took priority over {m) 15 C. D. 639. FOLLOWING TRUST PROPERTY. 615 the equitable mortgagees, because their equity was first in point of date. 2. Again, the trustees of a settlement advanced the trust money on the security of real property which was conveyed to them by the mortgagor, the mortgage deed noticing the trust. The sur- viving trustees of the settlement afterwards re- conveyed part of the property to the mortgagor on payment of part of the mortgage money, which he forthwith appropriated. The mortgagor then conveyed that part of the property to new mort- gagees, concealing, with the connivance of the trustee, both the prior mortgage and the recon- veyance. When the fraud was discovered, the beneficiaries under the settlement filed a bill against the new mortgagees claiming priority ; but the court refused to interfere. Lord Justice James saying : "I propose to apply myself to the case of a purchaser for valuable consideration without notice, obtaining on the occasion of his purchase, and by means of his purchase deed, some legal estate, some legal right, some legal advan- tage ; and, according to my view of the established law of this court, such a purchaser's plea of a pur- chase for valuable consideration without notice, is an absolute, unqualified, unanswerable plea to the jurisdiction of this court. ... In such a case a purchaser is entitled to hold that which, without breach of duty, he has had conveyed to him"(w). (?i) Filcher v. Raivlins, 7 Ch.. App. 259. 616 LIABILITY OF THIRD PARTIES, ETC. 3. Notice of doubtful equity. — It would seem that a bona fide purchaser for value would not be bound by notice of a very doubtful equity ; for instance, where the construction of a trust is ambiguous or equivocal (o) ; but where he is ignorant of any well-understood doctrine of equity, such, for instance, as that relating to the separate estate of married women (p), he will not be excused. 4. Notice of lien of unpaid vendor. — So, where there is a lien for unpaid purchase-money (which, as we have seen, burdens the estate with a trust pro tanto), a subsequent purchaser with notice of the lien (such, for instance, as that which was formerly (but is no longer) constructively afforded by the absence of an indorsed receipt on the con- veyance {q)), will take the estate subject to it (r). 5. Notice of prior contract for sale by subse- quent purchaser. — Again, A. contracted with B. for the purchase of property in fee, in ignorance that B. was only entitled to an estate pur autre vie, and that B.'s wife was entitled to the re- mainder in fee. D., with full knowledge of this (v) Hardy v. Reeves, 5 V. 426 ; Cordwell v. Mackrill, Amb. 516 ; Warwick v. Warwick, '6 At. 291 ; but see and consider per Lord St. Leonards, Thompson v. Simpson, 1 Dr. & War. 49 L [p) Parker v. Brooke, 9 V. 583. (5) 2 Prest. Conv. 429. (r) Mackreth v. Symmons, 15 V. 349 ; and see also as to dealings with pioperty alter notice of piior equities, Sdciete Generule v. Walker, 11 App. Cas. 20, an^ Bradford Bk. V. Briygs, 12 ibid. 29. FOLLOWING TRUST PROPERTY. 617 contract, took a conveyance, from B. and his wife, of the fee simple. A. then sued for specific per- formance, and it was held that, as D. had notice of this contract, A. was entitled to a conveyance from D. of B.'s interest, with compensation in respect of the interests of B.'s wife, which B. was unable to bind without her consent (s) . 6. What constitutes notice. — The subject of notice is now governed by the 3rd section of the Conveyancing Act, 1882, which is retrospective, and therefore the old cases may be considered obsolete, except so far as they may throw light on the construction of the new rules. Notice is usually spoken of as either actual or constructive. Actual notice, under the new law, is defined as " an instrument, fact, or thing which is in the party's own knowledge." Constructive notice is defined as " an instrument, fact, or thing which would have come to the party's knowledge if such inquiries and inspections had been made as ought reasonably to have been made by him, or which (in the same transaction with respect to which the question of notice arises) has come to the know- ledge of his counsel, solicitor, or agent as such, or would have come to the knowledge of his solicitor or agent if such inquiries and inspections had been made as ought reasonably to have been made by them." 7. Actual notice. — With regard to actual notice, knowledge is absolutely necessary. Mere gossip (s) Barnes v. Wood, 8 Eq. 424. 618 LIABILITY OF THIRD PARTIES, ETC. or report is not sufficient. Whether the notice must be given by a X'^rty interested or his agent is perhaps doubtful. Lord St. Leonards seemed to think that it must. Mr. Dart, on the other hand, doubted it, and said it is one thing to say that " mere flying reports are not notice, and another to affirm that a purchaser could not be affected by a deliberate and particular statement of an adverse claim, unless made by a party interested. The credibility of the informant must surely be considered ; nor does there seem to be any reason why, where notice has been given to the purchaser prior to the commencement of the treaty, the court should not consider whether such notice must not have been present to his mind during the treaty." That passage was written by Mr. Dart before the passing of the Conveyancing Act, 1882, and that statute seems to adopt his view, as the definition of actual notice (therein differing from the defini- tion of constructive notice) does not state that the instrument, fact, or thing, must have come to the party's knowledge in the same transaction, nor have been notified by a party interested. Indeed, it would seem that actual notice is entirely a matter of evidence, and if the court comes to the conclusion that a party had in fact at the date of the transaction, such knowledge as would operate on the mind of any rational man, or man of business, and make him act with reference to the knowledge he has so acquired, then he will be taken to have had actual notice, whether he acquired his knowledge before or at the time of FOLLOWING TRUST PROPERTY. 619 the transaction, and wliether lie acquired it from a party interested or not {t). 8. Constructive notice. — With regard to con- structive or imputed notice, on the other hand, it is quite clear that a man is not liable for notice acquired by his counsel, solicitor, or agent, unless it has come to their knowledge in the very trans- action with respect to which the question of notice arises. The fact that a solicitor has been in the habit of acting for a particular person cannot reasonably constitute that solicitor the agent of the client to bind him by receiving notices or information ; for non co)isfaf that the client may not have ceased to regard him as his solicitor (ic). It has also been held that constructive notice of an equity through counsel, solicitor, or agent, is not imputed to the client, where the counsel, solicitor, or agent is party to a fraud which would be exposed if he had communicated the notice to his client (cc). This case {Care v. Care) must, however, be carefully distinguished from the earlier cases of Boursot v. Sacage{y), and Bradley y. Riches [z), which seem at first sight in direct conflict with it. The point in Boursot V. Sarage was, that where a client has notice of t/ie existence of a trust, and intends to get the (t) Lloyd v. Banhs, 3 Ch. App. 448 ; and see also London, &c. Co. v. Duggan, (1893) App. Cas. 506, and Redman v. Bymer, 60 L. T. 385. {u) Saffron Walden v. Rayner, 14 C. D. 406. (x) Cave \. Cave, 15 C. D. 639, cited as the 1st Ulust. to this article. (y) 2 Eq. 134. (z) 9 C. D. 189. 620 LIABILITY OF THIRD PARTIES, ETC. equitable interests of beneficiaries from them, tbe fact that he gets the legal estate from a trustee who happens to be his solicitor, does not protect him if the solicitor forges the signatures of the beneficiaries. For he had notice of the equitable interests, and the fact that he was the innocent victim of a forgery does not give him an equal equity with the beneficiaries. In Bradley v. Riches the point decided was, that the presumption that a solicitor has communicated to his client facts which he ought to have made known is not rebutted by proof that it was the solicitor's interest to conceal the facts. There the fact omitted to be communi- cated was the existence of a valid mortgage ; whereas in Cave v. Cave the fact omitted to be communicated was the prior commission of a fraud by the solicitor himself. 9. There is another species of imputed notice mentioned in the Conveyancing Act of 1882, of quite as much importance as that mentioned in the last illustration, viz., notice of "an instrument, fact, or thing which would have come to the party's knowledge, or to the knowledge of his solicitor or agent (not his counsel), if such inquiries or inspections had been made as ought reasonably to have been made by them." Thus, it has been held that whenever a purchaser, mortgagee or lessee, forgoes his strict rights to title, whether by express contract or even by not negativing imi^llcd statutory conditions^ he runs the risk of having constructive notice imputed to him of anything contained in any of the documents which he ought FOLLOWING TRUST TROPERTY. 621 to have examined (a). It must also be borne in mind, that notice of the existence of a deed afPecting the title, or which necessarily affects it, is notice of its contents if it can be got at. *' Of course there may be cases where the deed cannot be got at, or for some other reason where, with the exercise of all the prudence in the world, you cannot see it, and then there will be no constructive notice affecting the title. There is also a class of cases, of which I think Jones v. Smith {b) is the most notorious, where a purchaser is told of a settlement which may or may not affect the title, and is told at the same time that it does not affect it, and in such cases there is no constructive notice. Sup- posing, as in Jones v. Smith, you are buying land of a married man, and you are told at the same time that there is a marriage settlement, but that it does not embrace the land in question, you have no constructive notice of its contents. Because, although you know there is a settlement, you are told it does not affect the land at all. If every marriage settlement necessarily affected all a man's land, then you would have constructive notice ; but as a settlement may not relate to his land at all, or only to some other portions of it, the mere fact of your having heard of a settlement does not give you constructive notice of its contents if you are told at the same time that it does not (a) Patman v. Harland, 17 0. D. 355. (6) 1 Ha. 43. 622 LIABILITY OF THIRD PARTIES, ETC, affect the land"(c). A similar instance of the same rule occurs in the case of mortgages, where the purchase-money is expressed to be advanced hy several mortgagees on a joint account. No doubt in ninety-nine cases out of a hundred such mortgagees are trustees ; but as there is nothing on the face of the deed to show that the money is trust money, and as the fact of persons advancing money on a joint account does not necessarily imply that it is trust money, a purchaser or transferee never inquires whether there is a trust. 10. In addition to documents, constructive notice may be imputed to a purchaser from the state, appearance or occupation of property. For instance, the existence of a sea-wall bounding pro- perty has been held to give constructive notice of a liability to keep it in repair (d). So notice of a tenancy is notice of its terms ; and generally, where a person purchases property where a visible state of things exists, which could not legally exist, or is very unlikely to exist without the pro- perty being subject to some burden, he is taken to have notice of the nature and extent of the burden (e). 11. Absence of notice will not protect a volun- teer. — If an alienee of trust property is a volunteer, then the estate will remain burdened (c) Per Jessel, M. E., Patman v. Harland, supra. {d) Morland v. Cooh, 6 Eq. 252. (e) Allen v. Seckham, 11 0. D. 795. FOLLOWING TRUST PROPERTY. 623 with the trust, whether he had notice of the trust (/) or not {g) ; for a volunteer has no equity as against a true owner. 12. Transfer of fund into court equivalent to alienation for value. — However, some transfers, apparently voluntary, have been held to he equiva- lent to alienations for value. Thus, in TJiorndihe v. Hunt {/i), a trustee of two different settlements having applied to his own use funds subject to one of the settlements, replaced them by funds which, under a power of attorney from his co- trustee under the other, he transferred into the names of himself and his co-trustee in the former. In a suit in respect of breaches of trust of the former settlement, the trustees of it transferred the fund thus replaced into court, and it was held by the Court of Appeal that the transfer into court was equivalent to an alienation for value without notice, and that the beneficiaries under the other settlement could not follow the trust fund. 13. Part of trust fund in court transferred to a separate account. — So incumbrancers on a fund in court which has been transferred to a separate account before the incumbrances were created, are not postponed to prior equitable claims of other beneficiaries under the same settlement, subse- quently discovered (/). For, when a fund is (/) Mansell v. Mansell, 2 P. W. 678. (g) Ibid. ; Spurgeon v. Collier, 1 Ed. 55. [h) 3 D. & J. 56 ; and see Case v. James, 3 D., F. & J. 256 ; and Daivson v. Prince, 2 D. & J. 41. (?■) Be Eyton, Bartlttt v. Charles, 45 C. D. 458. 624 LIABILITY OF THIRD PARTIES, ETC. carried over to a separate account in an action for administering the trust, it is released from the general questions in the action, and becomes ear- marked as being subject only to the questions arising upon the particular matter referred to in the heading of the account (/»•) . All other questions are in fact treated as res judicata. That fund has been awarded by the court to the parties falling under the heading of the separate account, and it is too late for others to try to upset the court's award. It is in fact equivalent to a transfer of the legal estate or interest. 14. Purchaser with notice from purchaser with- out. — A purchaser with notice from a purchaser without notice is safe ; for if he were not, an innocent purchaser for value would be incapable of ever alienating the property which he had acquired without breach of duty, and such a restraint on alienation would necessarily create that stagnation against which the law has always set its face (l). 15. Where equities are equal, and no legal estate in either claimant. — Where a trustee, holding a mortgage (m) or a lease {n), deposits the deed with another to secure an advance to himself, the lender will have no equity against the cestuis que trusts, however bona fide he may have acted, and however {k) Per Lord Langdale, M. R., Be Jervohe, 12 B. 209. (l) See cases cited uote (/), supra, p. 612. (m) Newton v. Newton, 4 Ch. App. 143; and Joyce v. De Moleyns, 2 J. & L. 374. {n) Re Morgan, Pill(/rem v. Pillgrem, 18 C. D. 93. FOLLOWING TRUST PROPERTY. 625 free lie may have been of notice of the trustee's fraud ; for he has not got the legal estate, and therefore his equity, being no stronger than that of the cestuis que trusts, the maxim, " Qui inior in tempovc^ potior in jure est " applies. 16. On the same principle, where a trustee has wrongfully spent trust funds in the purchase of property, and then sold such last-mentioned pro- perty to a third party without notice, then, if the legal estate has not been conveyed to the third party, the cestuis que trusts will have priority over him (o) . For they have a right (as has been shown in Art. 73) to follow the trust fund into the property into which it has been converted, and to take it or to have a charge upon it, at their election ; and as their right was prior in time to that of the third party, and as he has not got the legal estate, the maxim above referred to applies (^;). 17. Choses in action are assigned subject to all equities. — It is upon this principle that choses in action are generally taken subject to all equities affecting them. Thus, in Turfon v. Benson (q), a son, on his maniage, was to have from his mother, as a portion, a sum equal to that with which his intended father-in-law should endow the intended wife. The son, in order to induce the mother to give him a larger portion, entered into a collusive (o) Frith V. Cartland, 2 H. & M. 417. ( p) And see as to deposit of share certificates forming part of a trust estate, Poivell v. London and Provincial Bank, 41 W. K. 545. {q) 1 P. W. 496. U. T. S S 626 LIABILITY OF THIRD PARTIES, ETC. arrangement witli the father-in-law, whereby, in consideration of the latter nominally endowing his daughter with 3,000/., the son gave him a bond to repay him 1,000/., part of it. This bond, being made upon a fraudulent consideration, was void in the hands of the father-in-law, and it was held, that, being a chose in action, he could not confer a better title upon his assignee. 1^. Negotiable instruinents. — Negotiable instru- ments are, however, an exception to the rule as to choses in action passing subject to all prior equities. For the common Jaiv, with regard to them, adopted the custom of merchants, and recognized that such instruments were transfer- able. Consequently, the transferee of a negotiable instrument has a legal, as well as an equitable, interest; and where the equities are equal he is jli-.-' '" protected against prior equities by his legal title (r). Of course, however, where the transferee has notice (express or imputed (.s)) of prior equities, he will be postponed. 19. Bona fide purchasers from trustees cannot after notice get legal estate from them. — The bona fide purchaser of an equitable interest, without (r) London Joint Stock Bank v. Simmons, (1892) App. Cas. 201. It is not infrequently a task of difficulty to determine whetlier debentures issued by public coinpanies are negotiable instruments passing free from undisclosed equities or not. As to this, the reader is referred to Re Natal Co., 3 Ch. App. 355; Be Gemral Estates Co., ibid. 757 ; and Be Romfm-'i Canal Co., 24 C. D. 85. (s) See I.orrJ Sbejffltld y. London Joint Stock Bank, 13 App. Cas. 333. FOLLOWING TRUST PROPEKTY. 627 notice of an express trust, cannot defend his position by subsequently, and after notice, getting in an outstanding legal estate from the trustee ; for by so doing he would be guilty of taking part in a new breach of trust {t). But if he can perfect his legal title without being a party to a new breach of trust (as, for in^tance, by registering a transfer of shares which have been actually transferred before notice, or hy getting in the legal estate from a third party), he may legiti- mately do so (^0- ft^^(6f^«| {t) Saunders v. Dehen, 2 Ver. 271; Collier v. McBean, 34 B. 426; Shnrples v. Adarns, 32 B. 213; Carter v. Carter, 3 K. & J. 617. (m) Bodds V. Hills, 2 H. & M. 42+. THE EN ss2 ( 629 ) INDEX. ABEOAD, person residing, ouglit not to be appointed a trustee, except under exceptional circumstances, 495. ACCELERATION of a trust for sale, breach of trust, 256. ACCEPTANCE OF A TEUST, 221 et seq. duties of a trustee on. See Duties of a Trustee (1). prior agreement not equivalent to, 218. express declaration, 221. executing settlement, ib. permitting action to be brought in trustee's name, ih. permitting another to deal -with property in trustee's name is equivalent to, ib. exercising any act of ownership, equivalent to, ii. long acquiescence equivalent to, ib., 223. taking out probate equivalent to, 222. interfering with trust property generally equivalent to, ih. but aliter if interference plainly referable to some other ground, 223. taking charge of trust property pending the appointment of new trustee may not be equivalent to acceptance, ib. joining in legacy receipt, not conclusive evidence of accept- ance, ib. ACCOUNTS. See Duties of Trustee (15). ACCEETION, to trustees' estate belongs to beneficiaries, 399. belongs to corpus, and not to income, 262, 263. See Duties OF Trustee (3). ACCUMULATE, duty of trustees of infant's property to, 546. liable for compound interest if they do not, ib. ACCUMULATION. See Perpetuities. direction for, untH a given age, generally futile, 451 et seq. ACQUIESCENCE. See Concurrence and Laches. in voluntary trust after learning its true nature, 109, 120 — 122. 630 ixuEx. ACTIONS, trustee the proper plaintiS in, relating to the trust pro- I^erty, 243. trustees should in geneial act jointly as to, 387. if they sever in, for administration they may be allowed only one set of costs, 519. aliter, where it is necessary for one to be plaintiff and the other defendant, ih. trustees may bring, for protection of trust property, 422. trustee is bound to bring, for protection of trust property if indemnified, 568. ADMINISTEATION. See Court (2), (3), and (4). summons for determination by judge of any question aris- ing in the administration of a trust, 527 et seq. when trustee is justified in commencing action for, 535 et seq. order for, suspends powers of trustees, 445 et seq. under what circumstances court will make order for, 536 et seq. ADVANCEMENT, of infants, 426. of wife or child. See Eesulting Trust (3). ADVERSE TITLE. See Jus Tertii. ADVICE, trustee committing breach of trust in pursuance of legal or technical, how tar indemnified, 300, 350, 364, of valuer as to advancing money on mortgage, how far it protects trustee, 344. although trustee may take, he must exercise his own judg- ment on every question, 359 et seq. of judge, trustee may get, 527. on summons under Ord. LV. r. 3...ih. not given on contingent questions, 528. ADVISER, gratuitous and non-professional, is a quasi-trustee, 408. ADVOWSON, trustees for pui-chase should not buy an, 259. AGENT, is a constructive trustee, 207. and sometimes an express one, 588. when trustee may employ an. See Delegation. ALIEN, may be a cestui que trust, 107. may be a trustee, 495. INDEX. 631 ALIENATION. See AxxicirATioN-. ALLOWANCE. See Sal^vry and Reimbttksement. ANIMALS, trust for the benefit of, not void except so far aa it may transgi-ess nile against jierpetuities, 90. trust for benefit of certain, may be good as charitable trust, though not limited in point of time, ih, ANNUITY, person for whom an, is directed to be purchased may claim capital money, 453. even though anticipation be restrained on pain of for- feiture, 454. charged on capital, how borne, 290. ANTICIPATION, restraint on, generally void, 84, 451 — 454. alitor, in case of pay, pensions or property inalienable by statute, 13 et seq. aliter, in case of married woman during coverture, 84. married woman restrained from, cannot release a breach of trust, 576 et seq. not liable for fraud, 580. interest of married woman restrained from, who insti- gates breach of trust may now be imjDounded, 578, 592 et seq. may nevertheless bar estate tail, 461. expression of settlor's wish, and request that female bene- ficiary should not sell, imports restraint on, 32, n. {t). dii'ection to settle on a married woman, imports restraint on, 163, 164, 167. APPEAL by trustee at his own risk, 536. APPOINTMENT OF NEW TRUSTEE. See New Trustees. APPORTIONMENT, of incomings. See Duties of Trustee (3) and (5). of outgoings. See Corpus and Income. APPRECIATION of securities is cajntal and not income, 262 et seq. APPROPRIATION of securities to answer the share of par- ticular beneficiary, 264. See Be Lepine, (1892) 1 Ch. 210. ARTICLES, marriage, construed liberally. See Executory Trusts. ATTORNEY. See Solicitor. power of. See Powers of Trustees (6). trustee may appoint, and act thi'ough, in cases of necessity, 361. 632 INDEX. AUCTIONEER, trustee may allow, to receive deposit but not to retain it, 377. is a trustee. See Crowther v. Elgoody 34 C. D. 691. AUTHORITY, of trustee. See Powers. of cestui que trust. See CESTUI QUE TRUST. BANK, trustee may deposit in, for a reasonable time pending in- vestment, 377. six months held to be the maximum time, 378. BANK ANNUITIES. See Investment. BANKER, wben trustee liable for failure of, 377 et seq. See Delegation. BANKRUPT TRUSTEE, may be removed by Court, 489. query, whether may be removed hostilely under power, 481. receiver will be appointed in case of, 570. BANKRUPTCY. 5fee Purchaser for Value. trust for personal enjoyment notwithstanding, is illegal, 82. trust until, and then over, good, ib. a settlor cannot settle upon himself until, and then over, ib. , 132. what settlements are void against the settlor's creditors in, 141 e< seq. questionable whether void against pui'chasers for value from beneficiaries, 146. of trustee, 242. he should prove against his own estate, 310. trust property not divisible amongst his creditors, if recognizable, 242, 558 et seq. aliter, where it cannot be identified, 557 et seq. of agent or factor, money of principal not divisible among creditors, 558. BARE TRUSTEE, meaning of, 468, n (/). BARRING ENTAIL, married woman restrained from antici- pation is capable of, 461. BEARER, trustee should not obtain stock certificates payable to, 321. BENEFICIARY, definition of, 2. And see Cestui que Trust. BILL IN PARLIAMENT, trustee may oppose, 422. BONUS. See Duties of Trustee (3). INDEX. 633 BOEEOWEE, trustee cannot legally be, of trust moneys, how- ever good a security lie may offer, 387. BEEACH OF TRUST. See Concurrence ; Release ; Tenant FOR Life ; Married Woman ; Infant ; Waiver ; Laches ; Limitations, Statute of. (!) definition of, 2. (2) trustee retiring to enable co-trustee to commit, is liable, 319, (Did see 573. (3) gainer by, or instigator of, may bave to indemnify the trustee, 592 et stq., 596 et seq. law on the subject jjrior to 1888... 596 et seq. new law by statute, 597 et seq, court empowered to impound interest of instigating beneficiary to indemnify trustee, 598. applies to married woman restrained from antici- pation, ib. mere request, as distinguished from instigation, sufficient, ib. request need not be in writing, but consent must be, ib., 592, n. (A;). the court is not restricted to indemnifying trustee merely to the extent to which the instigating beneficiary was benefited by breach, 598. trustees cannot impound where they have parted with trust fund to trustees of subsidiary settle- ment, 600. to render beneficiary liable to indemnify trustee he must have known that act was a breach of trust, 598. a fortiori, must this be so in case of a married woman, 599. (4) gainer by, or instigator of, liable to have all his beneficial interest impounded at suit of other beneficiaries to make good the loss, 602, 606. right of beneficiaries distinct from right of trustee to impound by way of indemnifying himself, 606. right of beneficiaries takes priority over piu-chasers or mortgagees of instigators' interest, 609. rule does not apply to legal beneficial interests, 6n. risky investment at request of tenant for life, 598. how far married woman liable to indemnify trustee, 599. (5) loss by, a joint and several debt from the trustees, 552 et seq. one only of the trustees or of any of the persons privy to the breach may be sued without joining the others, 553. 634 INDEX, BEEACH OF TRUST— continued. _ ; but in general trustees entitled to contribution among themselves, 591, 593. aliter, if one has benefited by, or advised, breach, 591, 594. unless the benefit only remotely connected witli breach, 596. alitor, in case of representatives of deceased trustee where ho left the fund properly invested, 593, n. {n). (6) measure of trustee's responsibility for, 542 et seq. only liable for actual loss, ib. omission to invest in securities imperatively directed gives beneficiaries right to have actual securities, or their market value, at date of judgment, 544. not liable for increased value caused by third party after breach, 545. where there must have always been some loss, trustees only liable for additional loss caused by breach, ih. extent of liability for loss occasioned by insufficient mort- gage security, 544, 551. formerly trustee liable to pay the entire sum seciu-ed, and to take over the security, 551. now only liable for the excess over the sum for which it would have been a proper security at its date, ih. new rule only applicable to mortgages the only impro- priety of which consists in too large a sum having been invested, ih. how far new trustees entitled to realize insufficient mortgage, and to charge fonner trustee with loss without giving him the offer of taking over the security, 552. where interest payable by trustee, 543, 546 et seq. where trust money actively used in trade, compound interest charged, 543, 547 et seq. aliter, where business such that compound interest cannot be gained, 548. where trust money invested by settlor in trustee's busi- ness is allowed by trustee to remain there, 549. unreasonable delay in investing trust moneys, 546. where there is an express or implied trust to accumulate, compound, interest charged, ib. improperly calling in investments, ib. mixing trust moneys with private moneys, 547. property acquired by trustee out of trust funds. See Fol- lowing Property. where set-off of gain against loss allowed, 554 et seq. injunction to prevent, 567. INDEX. 635 BEEACn OF TUVST— continued. appointment of a receiver to prevent, 567. fraudulent, is a crime, 570. cestui que trust party to, is liable to extent of his interest. Set CONCUKRENCE. third persons parties to. See Trustee de son Tort. how far trust property may be followed into hands of third parties claiming under a. See Following Trust Pro- perty. BROKEE, when trustee liable for default of. See Delegation. BUSINESS. See Trade. CALLS, paid by trustees on shares forming part of trust property may be recovered by them, 515. are payable out of capital, and not out of income, 292. CAPRICIOUS TRUST, to defer the enjoyment of property by any person, illegal, 89. CATS. See Animals. CESTUI QUE TRUST, definition of a, 2. an apparent, is not always one in reality. See Illusory Trust. who may be a, lOfi et seq. corporation, 107. alien, ih. married woman, 108. infant, ib. animals. See ANIMALS, powers of, 447 et seq. (1) in simple trusts, 447. (2) of all collectively in special trust, 450. if of one mind and sui jui'is, they may put an end to the trust, ib. what persons are not sui juris, ib. where cestui que trust has got an absolute vested interest, any attempt to postpone payment is nugatory, 451. interest vested at twenty-one, and payment postponed to twenty-four, ib. aliter, where intermediate interest does not go to same beneficiary, 453. 636 INDEX. CESTUI QUE TBJJST—coydinued. powers of — continued. (2) of all collectively in special trust — continued. bequest of sum to purchase life annuity entitles annuitant to the sum itself, 453. notwithstanding attempt to restrain antici- pation, 454. absolute gifts to daughters, and direction to settle on them on marriage, nugatory, ih. alitor, if direction to settle on them and their issue, Aob. direction to sell and divide proceeds, bene- ficiaries can collectively stop sale and take property as unconverted, ib. variation where a mere power of sale, il. power of mortgagee of all beneficiaries, 456. (3) powers of one of several beneficiaries in a special trust, 457 et seq. generally depends on terms of settlement, ib. if sui juris, cannot be restrained from alienation, ib., 460. alitor, in case of married woman during coverture, ib., 461. restraint on alienation by married woman does not prevent her barring an entail, 461. man can practically be restrained by inserting gift over on attempt at alienation, 460. gift over on alienation to pay to, or expend income for benefit of beneficiary, his wife, or children, 461. tenant for life under trust of land has powers conferred by Settled Land Acts, 458. when entitled to possession, ib. concurrence of, in breach of trust. See Concurrence. liability of, who instigates, requests, or consents to a breach of trust, 593, 596, 601 et seq. to indemnify trustee who has had to make good breach, 593, 596 et seq. And see BREACH OF TRUST, to make good loss to the other beneficiaries, 602, 606. beneficial interest of, may be impounded at suit of trustee or other beneficiaries, 593, 596, 602, 606. this right takes priority of purchasers or mort- gagees of the beneficial interest sought to be impounded, 609. does not apply to legal beneficial interests, 610. release by. ;S'ee Eelease. INDEX. 637 CESTUI QUE TRVST—continned. laches of. See Laches. •where none left, estate now goes to Crown, 247. And see Failure. CHAEGE. See Incumbrance. no rosnlting trust of resifhie after payment of, 177, 178. Statute of Limitations appUes to a, 583, 589. tenant for life paying off, is entitled to be recouped out of corpus, 212. is legal, 78. CHATTELS, trust of, may be declared verbally, 92, 96. CHEQUE, imperfect gift of a, not equivalent to declaration of trust, 63. CHILD. See Advancement ; Maintenance ; Eesulting Trust (3) ; and Illegitimate Children. CHOSE IN ACTION, now freely assignable, 71, n. («). piu'chaser of, takes subject to all equities, 625 et seq. secus, if it be a negotiable instrument, 626. CLASS, power of disposal among a, raises a trust, 22, 25, 30, 31. CLEEGYMAN, undue influence of, 118. COMMISSION. See Salary. COMPANY. See Investment and Directors. COMPOUND INTEEEST. See Interest. CONCUEEENCE, of cestui que trust in breach of trust, 575 et seq. estops him from proceeding against trustees, ih. instance where one party to a breach subsequently became beneficially entitled, 576. alitor, if not sui juris unless he use fraud, ib. a married woman restrained from anticipation cannot effectually concui', even though she use fraud, 577, 579. but her beneficial interest may now be impounded if the court thinks fit, by way of indemnity to the trustee, 578, 592 et seq. And see Breach of Trust. is legally responsible for a fraud, 580. 638 INDEX. CONCURRENCE— coTz^/HMfcZ. renders him li ible to the other cestuis que trusts, and his interest may be impounded, 601 et scq., G()6 et seq. his interest impounded notwithstanding assignment, (JOS. interest of a legal life tenant cannot be impounded, ib., Gil. CONDITIONS, of sale. See Sale. trustees must fulfil all. See Duties of Trustee (2). how iai' they create trusts, 22, n. (c). CONFIDENCE, the root of a trust, 1. CONFIRMATION. See Waiver and Release. CONFLICTING TRUSTS, 453. CONFORMITY. See Receipts. CONSENT, where required must be obtained. See Duties OE A Trustee . ^^)- in one case held sufficient where given ex post facto, 255, n. ip). in writing of beneficiary to a breach of trust, may render him liable. See Breach of Trust. CONSIDERATION. See Valuable Consideration. who are considered parties privy to the, 49, 51 et seq. total failure of, makes trust revocable, 109, 112. CONSTRUCTION. See Executed and Executory Trusts. CONSTRUCTIVE TRUSTS AND TRUSTEES, 169 et seq. And see Resulting Trusts. definition of, 12. summary of, 169. profits made by persons holding fiduciary positions, 204 et seq. renewal of lease, 205. profit costs shared by solicitors with trustee, ib. by tenants for life, ib., 206. by joint tenants, 206. by mortgagees, ib. by pai tners, directors or promoters, 207. by agents and solicitors, ib., 208. INDEX. 639 CONSTRUCTIVE TRUSTS AND TRUSTEES— conimwei. vendors and ])urchasers are, for each other, 209. vendor's lion, ih. partnership liens, 213. property acquired by fraud, ih. equitable mortp-agors are, 210. mortgagee's heirs were formerly, 211. mortgagee in possession is a. ih. where incumbrance paid off by tenant for life, a construc- tive triist is created in his favour binding the fee simple, 212. CONSULT, trustee may, one of his beneficiaries before making investment. And see Advice. CONTINGENCY. See Trust Property. court will not give ojiinion on question depending on, 527, 528. CONTINGENT REI^IAINDER, legal rules as to, do not apply to trusts, 78. CONTRACT. See Covenant. CONTRIBUTION among trustees, 591 et seq. as general rule where one trustee has been sued for breach he is entitled to contribution from co-trustees, 591, 593. where one has been guilty of fraud, or is solicitor to tho others, he may have to bear loss exclusively, 591, 594. alitor, where no fraud, even although one of the trustees may have indirectly benefited by breach, 596. trustee who is entitled to contiibution has lien for such contribution or costs awarded out of the estate to his co-trustee, 593. CONTROL OF COURT, funds under. See Investment (2). CONVERSION. See Following Trust Property. where directed, to whom property results, 194, 196 ei seq. directed by will, property results as unconverted, ib. even where testator says that it is to be considered as converted for all jiurposes, 197, n. (?"). person to whom property subject to, results, holds it, as converted, if conversion ought to take place, 195, 198. immaterial that conversion has not in fact been made if it ought to have been, 200. same ride applies to property subject to, under instrument inter vivos, 202. mere power to effect, 203. 640 INDEX. CONVICT, cannot create a trust, 94. trustee, estate does not vest in administrator, 242, n. (w). COPYHOLDS, voluntary covenant to surrender, not enforceable, 54, 55. trustee can demand admission to, 244. how far capable of being settled by way of trust, 75, 78, 79, n. (a). COEPORATION, cannot be cestui que trust of lands except by mortmain licence, 107. bow far able to create trusts, 104. stocks of, trustees may invest in, 332, 325, n. {t). COEPUS AND INCOME. what incomings attributable to each. See Dttties OF Trustee, (3) and (5). what outgoings are chargeable to each, 287 et seq. where settlement directs whether outgoings are to come out of cajwtal or income, ib., 288. where settlement silent, 287 et seq. statutory direction, 289. charges and incumbrances, corpus bears capital, and income bears interest, 287, 290. even sometimes where it is evident that settlor did not intend this, 291. annuity charged on capital, how borne, 290. calls on shares, 292. rates and taxes, ib. premiums on life policies, 293. premiums on fire policies, ib. losses on trust business ordinarily fall on in- come, ib. ahter, where intention collected to the con- trary, 294. repairs, 295. in absence of direction, tenant for life not bound to keep in repair, ib. trustees shoiild apply to the court for direc- tions, 297. renewal of renewable leases, ib. implied intention contra, 288, 289, n. (?"). law as to, not altered by Trustee Act, 1893, 287, n. (e). fencing of unfenced land, 299. general costs incident to administration, ib. INDEX. 641 COSTS. See Eetirement; Eemoval ; Court; ajid Eeim- BURSEMENT. direction for payment of, does not mako employes cestnis que trusts. /See Illusory Trust. out of what fund payable. See Corpus and Income. CO-TRUSTEE, trustee cannot relieve himself of responsibility by deputing his duties to. See Delegation. may be safely permitted to receive, but not to retain, trust moneys, 572. when trustee answerable for defaults, acts, or receipts of, ib., et aeq. opinion of Lord Westbury as to responsibility for, 574. effect of special protective clause as to, ib. trustee retiring in order to enable, to commit breach of trust, 319, 573. COURT, (1) trustee may apply to, for directions when third party claims trust property, 389. (2) when trustee may pay into, 529 et seq. effect of paying trust money into, 530. what sufficient justification for paying into, 531 et seq. where beneficiaries under disability, ib. where dispute between beneficiaries, 532. where money claimed by representative, ib. where money payable in default of appoint- ment, ib. to enable married woman to assert equity to a settlement, 533. where reasonable doubt or claim, ib. undue caution, ib. generally, trustees must not pay into court where question can be determined by means of originating summons, 534. (3) originating summons for determination by, of specific questions, 527. (4) trustee instituting administration suit in, 535 et seq. what will justify a trustee in instituting a suit in, ib. when general administrator will be ordered, 536 et seq. not justifiable where all questions could be solved by payment of fund into court or by issuing an originating summons, 540. (5) appointment of new trustees by. See New Trustees (1) and (6). U. T. T T 642 INDEX. COTJUT— continued. (6) retirement of trustee under sanction of. See Eetire- MENT. (7) secmities autliorized by, for the investment of funds under its control, 333. alleged inconsistency between, and Trustee Act, 1893, s. 1, ib., n. (o). COVENANT, to settle, raises a trust when based on value, 68. aliter, wbere voluntary, 48. duty of trustee to enforce against settlor, 310. CREATION OF TEUST. See Declared Trust. CEEDITOES, trustee personally liable to, of business carried on by him, 516. but may generally claim reimbursement out of trust estate, 516. tbey may stand in trustees' shoes by way of subroga- tion, ib. where trust is for payment of debts, are not generally cestuis que trusts, 43 et seq. settlement intended to defeat. See Vaxidity (2). of settlor on bankruptcy. See Bankruptcy. CEOWN. See Failure. CUSTODY. See Documents. DAMAGES, recovered from trustee may be reimbiu-sed out of trust estate, 514. may sometimes be recovered from a voluntary settlor, 48, n. {d). DEATH OF TEUSTEE, 463 et seq. (1) sui'vivorship of office and estate, ib. survivor can exercise all the powers, ib. sale by survivor, 464. (2) devolution of office and estate on death of survivor, 465 et seq. since 1881 devolves on legal personal representative, ib. aliter, as to copyholds, ib., 467. law prior to 1882. . .466—469. whether legal personal representative can execute trust depends on language of settlement, 466, 470 et seq. special executors to administer trust cannot be appointed, 465. See Be Parker, W. N. 1894, p. 14. INDEX. ' 643 DEATH OF TRUSTEE— co//'guage. RECOUPMENT. See Ovek-payment; Breach of Trust; and Instigatiox. REFUNDING overpaid share. See Overpayment. REIMBURSEMENT, of trustees' costs, charges, and expenses, 513 ef seq. damages and costs recovered by third parties, 514. costs of unsuccessfully defending an action without obtaining the leave of the court, 523. solicitor's costs, 517. calls on shares, 515. liabilities incurred in carrying on a trust business, 516. only entitled to reimbui'sement if business rightly carried on, ib. where by settlement specific fund appropriated for carrying on the business, trustees are restricted for their reimbursement to that fund, ib. creditors of business cannot claim directly against the trust estate, but only against trustee, ib. they are, however, entitled by subrogation to be placed in the shoes of the trustee as against the trust estate, ib. 678 INDEX. EEIMBURSEMENT— co/i«inMecZ. of trustees' costs, charges, and expenses — continued. liabilities incurred in carrying on trust business— co/iifcZ. trustee of trust business cannot claim, reimburse- ment until he has made good breaches of trust, if any, 517. creditors of business in no better position in this respect than trustee himself, ih. not allowed expenses of unnecessary journeys, 524. not allowed costs of unnecessary legal documents, ib. costs of administration suit, oly. where trustees sever, generally only allowed one set of costs, 519. lien on trust proiDerty for, 512, 519. overrides all beneficial interests, 519. good even where settlement void under Bankruptcy Act, 520. does not take priority of beneficial interests where trustee has advanced money to make up purchase- money for estate, 521. costs of or incidental to appointment of new trustee, ih. costs of trustees who have committed breach of trust, 517, 522. EELEASE, by cestui que trust, bars claim, unless improperly obtained, 575, 577. what amounts to, 577. alitor, if not sui juris, or if ignorant of effect, 576, 577. whether trustee entitled to a, under seal, 525 ct seq. by court, from the office of trustee, only obtainable by suit, 535 et seq. when entitled to apply to court for a, ib. EELIGIOUS INFLUENCE, effect of, on vaHdity of a settle- ment, 118. EEMAINDERMAN, is not proper person to be appointed a new trustee, 494. EEMAINDERS expectant on trusts, based on value, when con- sidered voluntary, 49. " EEMAINING, WHAT SHALL BE." See Language. EEMOTENESS. See Perpetuities. INDEX. 679 REMOVAL of trustee, 474 et seep EEMUNERATION. See Salaky. EEPAIR, duty of trustees to see that premises are kept in, 318, 423. as to how costs of, are to be borne. See Corpus and Income. of infants' estates, law as to, 297, n. {p). REPAYMENT. See Overpayment. REPRESENTATIVES OF CESTUIS QUE TRUSTS. See Mistake. REQUEST, breach of trust committed at the, of beneficiary. See Breach of Trust. ' ' REQUESTS." See L.iNQUAGE. RESULTING TRUST, (1) where donee not intended to take equitable estate, 171. where declared trust insufficient to exhaust trust property, ib, where declared trust cannot be carried out, 172. gift to " my trustees " generally rebuts all presump- tion that they were to take beneficially, ib. where realty devised upon trusts only applicable to personalty, 173. where lands conveyed to a trustee, but trusts not declared in writing, I'b. where declared trust too uncertain, 174. failui'e of declared triist by lapse, ib. where no consideration is given for a gift, and there is no apparent intention to benefit donee, ib. but where gift is of chattels, aliter, ib, trust to paj^ debts or annuity, and there is a surplus, 175 et seq. secus, where intention appears that creditors are to take the whole property in accord and satisfaction, ib. explanation of Lord Halsbury's judgment in Smith V. Cooke, 176, n. (il). unclaimed di\'idends under creditor's deed, how ap- plicable, 176. settlement in view of marriage which never takes place, 177. no resulting trust where there is a mere charge, 17S. nor where intention apparent that trustee should take beneficially, 177. 680 INDEX. RESULTING TUJIST— continued. (2) wliere declared trusts illegal, 178. doctrine of pares delicti, ih. illegal intention only, does not destroy resulting trust, 179. •where allowing tiie illegal trust to take effect would effectuate a fraud, or defeat a legal prohibition, ib. trust to defeat creditors, ib. trust in view of possible forfeiture, 180. trust to avoid serving an office, ib. perpetuities, 181. charitable uses, ib. fraud on game laws, 182. settlement on marriage with deceased wife's sister, ih. when executed, is good and binding, ib. alitor, where limited to settlor until the marriage is solemnized, 184. (3) purchases in another's name, ib. et seq. presumption of resulting trust to real purchaser, 185. aliter, if pui'chase in name of wife or child, ib., 187, 189 et seq. presumptions pro and con. rebuttable, 185. by surrounding circumstances, ib., 188 et seq. money lent to purchase, creates no trust for the lender, 186. where there is a joint advance the purchasers take according to the proportion of their contributions, ib. subsequent acts of the settlor, how far evidence of in- tention not to advance child, ib., 189 et seq. contemporaneous acts, ib. surrounding CLi:cumstances, 186, 189. augmentation of a settled fund, no resulting trust, 187. express evidence that no resulting trust intended, 188. where son is a solicitor, advancement is rebutted, 191. purchase by mother in name of child, ib. purchase by one in loco parentis in the name of the adopted child, 193. (4) to whom property results, 194 et seq. And see Conversion. EETIEEMENT OF TEUSTEE, how accomplished, 474. under what circumstances justifiable, 476. trustee must generally pay costs occasioned by, ib. must never be effected in order to permit of the continuing trustee committing a breach of trust, 319, 573. INDEX. 681 EEVERSIOX. Sec PERISnABLE PllOrERTY. EEVOCATION, power of, not essential to validity of a voluntary settlement, 110, 115 et seq. of a trust, -wlietlier based on value or voluntary, not per- mitted if it bo complete and executed, 47, 50, 54, 110, H seq. See. VOLUNTARY TRUST. alitor, if the veiy object with which trust was created has failed, 109, 112. if there was fraud or undue influence attendant on creation of trust, 109, 114, 118 et seq. if settlor created trust in ignorance or mistake as to its legal effect, 109, 113. improvident provisions, how far evidence of mistake, 111. not revocable even in above cases, if acquiesced in, 120. or if parties cannot be placed in statu quo, 122. onus of proving bona fides on cestuis que trusts where they occupy a fiduciary position towards settlor, 118 ei seq. alitor, where there is no fiduciary relation, 117. SALARY, when trustee entitled to a, 391 — 396. a, when capable of being alienated, 73. SALE directed, but no trustee appointed to sell, 70. SALE, TRUSTEES FOR. See Purchase. should sell at date prescribed by the settlement, 254. cannot sell before that time, 256. selling at the request of the life tenant, where sale directed to take place at his death, commits a breach of trust, ib. leaving conduct of sale to co-trustee is liable, 358. should sell to best advantage, 311, 314. should generally not join with adjacent landowners, 311. alitor, if clearly beneficial, ih., 379. may in general join with joint owners in a sale of entire property, 312, 379. joining with adjacent landowners, should see that his pro- portion of purchase-money is apportioned before sale, 379. should not unnecessarily limit the title, 312. should invite competition, 314. should not sell impro^ddently, ib. 682 INDEX. SALE, TRUSTEES VOR— continued. should ascertain real value of the property, 314. may employ necessary agents, ib. should not sell to promote the exclusive interests of tenant for life, 258. should not sell timber only, ib. surviving trustees can execute powers of, 464. cannot sell to one of themselves. See Purchase. injunction will be granted to restrain completion of sale if very improvident, or where conditions are depreciatory, oG7. SECRET TRUST, 96 et seq. SECURITIES. See Investment cmd Appropetation. depreciated, not necessarily the duty of trustees to realize, 307, n. (o). SEPARATE USE, in executory trusts may be implied, 163, 165, 167. jiroperty settled to the, of mari'ied woman makes her in equity equal to a feme sole, 1U8. See also Married "Woman and Anticipation. with regard to property given for, husband was a mere trustee, 69. all property of women married since 1882, or whose title has since accrued, belongs to them for theii", 108. SEPARATION, trust in relation to, between husband and wife, when legal, 86. SET-OFF of gain against loss, when allowable, 554 et seq. SETTLE, DIRECTION TO, 163 et seq. on lady and her children, ib. on daughter on marriage, 454. on daughter and her issue on marriage, ib. on daughters strictly, 165. on man till marriage, and then on wife and children, ib. special indications of intention, 166. separate use imported into, 163, 165, 167. cross remainders implied in, 168. what powers implied, 163 — 167. SETTLEMENT, trustees should strictly obey provisions of. See Duties OF Trustees (2). married woman's equity to a, 425, 533. of beneficial interest under a trust, original trustees with- out notice of, 351. INDEX. 683 SETTLOR, definition of a, 2. who may be a, 102 et seq. infant, ib, married woman, 103. corporation, 104. lunatic, 105. alien, 106. convict, 105. SEVERANCE, of trusts on appointment of new trustees, 511. no longer confined to cases where new trustees of entirety are being appointed, ib. of trustees in litigious matters, exposes them to risk of being deprived of costs, 519. SHARES, new, allotted gratis to old shareholders are corpus and not income, 261, 263. calls on. See Calls. SHELLEY'S CASE, rule in, appUes to executed trusts, 156 et seq. does not apply to executory trusts, ib. SHOOTING, trustee for infant ought not personally to avail himself of the, 400. SIMPLE TRUST, definition of a, 14. "SOLE USE AND BENEFIT." ^Jee Language. SOLICITOR, trust for payment of costs does not make him a cestui que trust, 45 et seq. nor does a direction to employ him, ib. trustee liable for embezzlement by, 369, but see 367. aliter, in case of pui-chase or policy moneys received by solicitor under statutory power, ib. trustee liable for negligence of, quoere, 365, may not generally purchase from client, 407. voluntary settlement in favour of a. See Validity. who is a trustee, must not charge, 392. secus, if expressly authorized, 393. but authority construed strictly, ib. even if authorized to charge, he ought to inform beneficiaries of their right to tax his bill : Be Webb, (1894) 1 Ch. 73. secus, where trustee solicitor acts in litigious business for self and co-trustees, 394. not debarred from indirect gain, 400. \ 684 INDEX. SOJAGlTO'R—conthmed. •who is a mortgagee, cannot charge profit costs against mortgagor, 393 n. (q). trustee may employ a, 517. but must not delegate his discretion to, 343. employing trust funds in his business, how far liable fo: interest. See Interest. where a son is a, presumption of advancement rebutted, 191 who is a trustee, liable to indemnify co-trustees for breach of trust committed by his advice, 592, 594. who gets possession of trust funds is liable unless he pays to all the trustees joiatly or sees that they are invested on proper securities in their joint names, 605. assisting in getting money paid out of court to wrong per- son. Cable, if he knew or had means of knowing of the fraud, 605. who retains trust moneys is an express trustee, and Statutes of Limitation do not run in his favour, 589, 606. SPECIAL TRUST, definition of, 14. STATUS, change of, precludes cancellation of settlement, 122. STOCK CERTIFICATES, to bearer, trustees should not obtain, 321. should not be intrusted to trustee's solicitor : see Field v. Field, (1894) 1 Ch. 425. STOCK MORTGAGE, trustees should rarely invest on a, 340. STOLEN TRUST PROPERTY, trustee not bound to replace, 316. secus, if property obtained from him. by fraud or for- gery, ib., 349. SUB -MORTGAGE a good investment for trustees, 341. SUCCESSION DUTY, out of what fund payable, 289. SUMMONS. See Administration. trustee entitled to issue, for the direction of Chancery judge on points of difiiculty, 527 et seq. SURPLUS, after satisfying express trusts, results. See Resulting Trust (1). SURROUNDING CIRCUMSTANCES may rebut presump- tion of resulting trust, 189. SURVmNG TRUSTEE can execute original powers, 463. SUSPENSION of trustee's powers by suit, 445. IKDEX. 685 TAXES borno by income, 292. TENANT FOR LIFE. See Corpus and Income. a constructive trustee, 205, 206. must not avail himself of his position to profit at the ex- pense of remaindermen, ib. paying off charge on inheritance or calls on shares, is entitled to be recouped, 212. aliter, as to expenditure on improvements, 213. trustee must not unduly favour. See Duties of Trus- tees (3). •when allowed possession of trust property, 458. not a desirable person to be appointed a new trustee, 494. paying off specific charge, is entitled to be recouped out of corpus, 212. THEFT of trust property, trustee not liable for, unless negli- gent, 316. THELLUSSON ACT, 81. THIRD PARTIES. See Jus Tertii ; Trustee de son Tort ; Property; Purchasers; and Following Trust Property. TIMBER, trustees should not buy an estate with large proportion of, 259. should not sell, to pay debts, 258. may cut down, when arrived at maturity, 423. aUter, where legal rights would be interfered with, 428. TOMBS, trust to erect, is not void, but is probably not enforceable, 89. trust to keep in rftpaii- is not valid if limited in point of time so as to avoid transgressing rule against per- petuities, 90. trust to keep churchyard generally in repair need not be so limited, as it would be a charitable trust, ib. TRADE, trustees employing trust property in their own, liable to account for profits or to pay compound interest. See Breach of Trust. trustees may not charge for managing a, 395. losses on, generally come out of income, 293. losses on, trustees have a right to be reimbursed, 516. And see Reimbursement. creditors of trust, not entitled to claim dii'ectly against trust fund, but only against the trustees, 516. but may by subrogation stand in the trustee's place against the trust fimd, 517. 686 INDEX. TBUST. See Declared Trust : Express Trust ; Construc^ TiVE Trust; Resulting Trust ; Simple Trust; Specie Trust ; Executed Trust ; Executory Trust ; Valu-] ABLE Consideration ; Voluntary Trust ; Breach oi Trust ; and Settlor. definition of a, 1. by other writers, 2 et seq. who capable of creating a. See Settlor. in form but not in intention. See Illusory Trust. TEUSTEE. See Constructive Trust ; Eesulting Trust ;1 Acceptance; Disclaimer; Estate of Trustee; Duties of Trustee ; Powers of Trustee ; Breach of Trust ; and Protection. definition of a, 2. active, definition of an, 14. passive, definition of a, ih. bare, definition of a, I'b. failure of, 69. where none appointed, ih. who is a fit person to be a, 492 et seg. infant, i'b, tenant for life, 494. remainderman, ib. solicitor to the trust, ib. husband of cestui que trust, 495. person residing abroad, ib. alien, ib. married woman, 496. bankrupt, 489. voluntary settlement upon a. See Validity (1). TEUSTEE DE SON TOET, 601, 604. all persons who meddle with trust funds or mix themselves up with a breach of trust become equally Kable with the trustees, 601. where such j^erson has a beneficial interest it may be im- pounded to make good such liability, 602, 606 et seq. whether the interest be original or derivative, ib., 607. trust fund lent to tenant for life, ib. third party who is knowingly paid a debt out of trust pro- perty improj^erly is liable, 603. bankers parting with fund which they know is a trust fund, ib. person obtaining trust fund on faith of forged certificate, 604. INDEX. 687 TEUSTEE DE SON TORT— continuerJ. agents who have accepted a delegation of the trustees' duties, and have so got fund under their control, 604. solicitor to whom trust fund has been paid can only dis- charge himself by paying to the duly appointed trustees, 605. not sufficient to show that at theii- request he invested it in imauthorized seciuities, ib. solicitor knowingly procuring fund in court to be paid out to wrong person, ib. solicitor retaining trust money on payment off of mortgage, COG. TRUSTEE EELIEF ACT. See Court. TRUST PROPERTY, definition of, 2. (1) what it may legally consist of, 70 ef seq. equitable property, 71. chose in action, ib. reversionary propertj', 72. possibility, ib. expectant legacy, ib. salary, 73. pension, ib. pay, ib. property inalienable by statute, 74. copyholds, 7o. foreign lands, 76. (2) vesting of, on appointment of new trustees, 498 et seq. (a) by ordinary modes of transfer, ib. (b) by statutory vesting declaration, ib., 500. section of statute, 500. declaration must be in same deed by which trustees appointed, 501. does not apply to mortgages, copyholds, stocks, or shares, ib. (c) by vesting order of the Chancery Division, 499, 502. statutory provisions as to, ib, extends to lands in any of her Majesty's dominions, ib. n. {q). jurisdiction of Irish coiu'ts as to this, ib. applies to leaseholds as well as freeholds and copy- holds, ib. n. {t). applies to constructive trustees, ib. n. (s). the various cases enumerated for giving the court jurisdiction must be read disjunctively, 502 n. (r). 688 INDEX. TRUST 'PROFEWIY— continued. (2) vesting of, on appointment of new trustees — continued. (c) by vesting order of the Chancery Division — contd. Chancery Division has jurisdiction in case of lunatic trustee who is infant or out of jurisdic- tion, 503 n. {v). temporary absence of trustee on voyage not sufiB.- cient to give court jurisdiction to divest him of estate, ib. n. (re). not applicable where trustee refuses to convey on account of bona fide dispute as to title, 504 n. (z). court can vest fee tail in person for an estate in fee simple, ib. n. (a), what fines are payable on vesting order of copy- holds, 505 n. {h). whether the word stock includes shares not fully paid up, 506 n. (c). procedure where one trustee lunatic and the other out of the jurisdiction, ib. n. (d). no power in coiu-t where last surviving trustee of personalty has died without legal personal representative, except where court appoints new trustees, 507 n. (e). former device for getting over necessity of appointing personal representative where new trustees had been appointed out of court, by reappointing them, no longer available, ib. where trust funds are invested in unauthorized stocks or shares the order may give purchasers from them the right to call for transfer, 507 ^•(/)- -. . . order may be made on application of any person. having a vested or contingent interest, 508. (d) by vesting order of Lunacy Court, 509 et seq. as to what applications for vesting orders must be made in Chancery and what in Lunacy, ib. n. (A), meaning of word lunatic, ib. n. (i). court will not vest property in beneficiary abso- lutely entitled, ib. n. (A-). court will not vest property in same trustee alone unless fund is immediately divisible, ib. following. See Following Trust Property. does not pass to the creditors of bankrupt trustee, 242, 557, 558. trustee cannot borrow, even on mortgage, 387. trustee cannot purchase. See Duties of Trustees (14). INDEX. 689 UNCERTAINTY. See Language and Eesulting Teust (1). UNDISPOSED of equitable estate, results. See EESULTiNa Trust (1). UNDUE preference of one cestui que trust. See Favour. influence. See Validity (1). UNFIT AND INCAPABLE. See New Trustees (4). VALIDITY OF A TEUST, as to object. See Illegal Trust. and where voluntary. See Voluntary Trust. (1) As against the settlor, 97 et seq. A)i(l see Eevocation. as to -who may be a settlor. See Settlor. as to who may be a beneficiary. See Cestui Que Trust. total failure of consideration, 109, 112. fi-aud, 109, 114. onus of proving, 112. undue influence, 109. onus of proving, 112. of clergyman, 118. of father, 119. of legal adviser, 119, 407. of near and trusted relative, 408. of trustee, 112, 408. mistake, 109 et seq., 113. on whom the onus of proving mistake lies, 110 et seq. ignorance of the effect of the settlement, ib., 109, 113. settlement executed when settlor very ill, 114. even where value given, ib. omission of intended provision, 109, n. (c). subsequent acquiescence validates, 109, 120 — 122. where defendant has changed his or her status in con- sideration of, it cannot be set aside, 122. onus of proving validity of a voluntary settlement, 110 et seq. power of revocation in voluntary settlements not essential to, ib., 115 et seq. U. — T. T Y 690 INDEX. VALIDITY OF A TBJJST— continued. (1) As against the settlor — continued. when against public policy or statute, 76 et seq. perpetuities, 79. accumulations, 81. against policy of Bankruptcy Act, 83. restraint on alienation, 84. trusts for future bastards, ih. separation deeds, 86. restraint of marriage, 87. in favour of no human object, 89. (2) As against creditors, under 13 Eliz. c. 5... 123 et seq. examination of authorities as to whether intent to defraud must be proved, 124 et seq. direct intention to defraud, ib., 129 et seq. sham assignment of all debtor's goods to one of several creditors, 129. settlement to avoid the consequences of an. anticipated judgment, 130. settlement of part, and reckless expenditure of the rest of a debtor's property, ib. settlement of entire property on commencing a speculative trade, 131. settlement on self until bankruptcy, 82, 132. settlement on oneself until alienation appears to be valid, ib. criticism on last proposition, 133. marriage settlement with intent to defraud creditors, when void, ib., 134. other settlements based on value made with intent to defeat creditors, when void, 134. fraudulent settlement will be upheld in favour of bona fide parties to valuable consideration, such as marriage, ib. whether intent to defraud will be presumed from the surrounding circumstances, 136. intent to defraud is matter of fact, and not an inference of law, 129 et seq., 137 et seq. where no direct intention to defraud, but the settlor insolvent, 137 et seq. fraudulent intent not presumed merely because the unforeseen but inevitable result was to defeat creditors, 129 et seq., 140. (3) As against creditors in bankruptcy, 141 et seq. where assets insufl&cient to pay oS mortgage on the settled property, 144. INDEX. 691 VALIDITY OF A TnUST— continued. (3) As against creditors in bankruptcy — continued. postnuptial settlement, where life estate under it taken with other property of settlor, renders him solvent, 144. covenants to settle future property only void if property earmarked, ib. questionable whether settlements void on bankruptcy are void as against purchasers from the bene- ficiaries, 146. (4) As against subsequent purchasers, 146 et seq. statement of law prior to the Voluntary Conveyances Act, 1893, and alterations made by that Act, 148. direct intention to defraud, 149. power to revoke, ib. voluntary settlements bad in the hands of cestuis que trusts against purchasers from settlor prior to Voluntary Conveyances Act, 1893... 148, 150. examples of old law, 150 et seq. VALUABLE CONSIDERATION, definition of, persons privy to, 49. where there is, formalities are immaterial, 48, 51, 68. where there is not, 47 et seq. children of a future marriage are not privy to, 52. trust based on, when enforceable by volunteers, 47 et seq. what limitations in a marriage settlement are not based on, 49. children of a woman's former marriage are not privy to, 52. VALUER, advice of, how far a protection to trustee, 344. trustee must choose his own, and not leave it to his solicitor, 343. VENDOR, constructive trustee for purchaser, 209. must take reasonable care of estate before completion, 320. VERBAL TRUST, 91 et seq. And see Writing. intended to be testamentary is generally void, 92. secus, where fraud, ib. VESTING, property in newtrustees, how effected. See Trust Property. period of, may be suspended by means of a trust, 78. 692 INDEX. VOLUNTARY TRUST, 47 et seq. See VALUABLE OONSIDEEA- TION. when prima facie valid, 47 et seq. must be complete, ih. property transferred to trustees, trust "will be enforced, ib., 53, 54. mere covenant to settle not enforceable, 48, 54, 55. even where persons, other than plaintiff, have given valuable consideration for it with the view of benefiting the plaintiff, 55, 56. but damages for breach of the covenant may be recovered, 48, n. {d). when settlor has done all in his power to create an executed trust it will be enforced, 47, 56. instances of cases where settlor has, and has not done all in his power to transfer the property, 56 et seq. assignment of mortgage debt without the security said to be incomplete, 58. alitor, if the security is merely a bill of sale, ih. where settlor has declared himself a trustee, trust will be enforced, ib. declaration may be implied from conduct, ib. where party who has given value insists on trust being enforced, it will be enforced in favoiu- of volunteers, 48, 51. but inchoate trust based on value will not be en- forced at the instance of persons who are not privy to the valuable consideration, ib, but imperfect gift not equivalent to declaration of trust, 50, 61 et seq. conflict of authorities as to effect of imperfect gift, 61, n. {d). gift of a bond, 63. gift of a cheque, ib. effect of imperfect gift by husband to wife, 66. when invalid from fraud, undue influence, or mistake. See Validity (1). when invalid as against creditors. See Validity (2). when invalid as against creditors in bankruptcy. See Bank- ruptcy. when invalid as against subsequent purchasers. See Va- lidity (4). damages may sometimes be recovered against settlor if settlement under seal, 48, n. {d). VOLUNTEER, definition of a, 49. INDEX. 693 YOLTTNTEER—conUmied. equity gives no assistance to, 49. can only enforce trust based on value if complete and exe- cuted, 47, 48 et seq. assignee of a lease cannot be a, in what cases, 151. who is considered a, under a marriage settlement, 49, distinction between a, under a voluntary trust, and one under a trust based on value, ib. trust, whether voluntary or based on value, will be enforced at suit of, where completed and not resting in contract, 47 et seq. trust, whether voluntary or based on value, will not be en- forced at suit of, if incomplete or resting on contract, 48 et seq. examples of trusts enforced at suit of, 53 et seq. covenant to surrender copyholds in favour of, cannot be enforced, 53. where property vested in trustee the trust can be enforced at suit of, 47 et seq., 53 et seq. a mere contract with a thii-d party to settle on, not enforce- able by, 47, 53, 55. where settlor has done all in his power to vest property in trustees the trust will be enforced at suit of, 47, 56 et seq. where settlor has declared himself a trustee the trust will be enforced at suit of, 47, 58. where it can be gathered that settlor considered himself a trustee for, the trust will be enforced at suit of, 58. where settlor only meant a gift which he has failed to per- fect he will not be considered a trustee for, 61 et seq. donee of trust property under a breach of trust cannot retain it, 622. See also Voluntaey Trust and Valu- ABLE CONSIDEEATION. WAIVEE of breach of trust, what amotmts to. See Laches. WASTING PEOPEETY. See Duties of Trustee (4) and (5). " WELL KNOWS." See Language. WIDOW, children of, are not within the consideration of a second marriage, 52. WIDOWEE, children of, are not within the consideration of a second marriage, 52. U. — T. Z Z 694 INDEX. WIPE, imperfect gift to, 66. advancement of. See Eesulting Trust (3), and see also Mabeied Womak. WILL. See Settlement and Writing. WEITING, necessity of, in declarations of trust of real estate and lease- holds, 91 et seq. aliter, iq. personal property, ib., 96. wliat the writing must show, 91. where fraud writing unnecessary, ib., and 99 et seq. resulting trust, where declared trust was not reduced into, 98, 173. necessity of, in all cases where trust is intended to be testa- mentary, 91 et seq., 96. how far letters sufficient, 93 — 96. WEONG PEESON, payment to. -See Mistake. FEINTED BY C. F. EOWOETH, GEEAT NEW STEEET, FETTEE LANE, B.C. Kelly's Conveyancing Draftsman. The Draftsman, containiug a Collection of Concise. Precedents and Forma in Conveyancinff, with Introductory Observations and Practical Notes. Fourth Editioii. Thorouo^hly Revised, with many new Forms. By Leonaed Henry West, LL.D., of the University of Loudon, Solicitor, Law Tutor to the Incorporated Law Society of the United Kingdom, and WiLLiiM Austin, LL.D., Solicitor. Price \^s.\ for Cash, post free, 12.s. b-d. 1900 " The precedents are well prepared and acourato, and the introductory notes to each series of precedents are valuable from the point of view of practical utility." — JiistiCf oj'thi- Peitcf. Tudor's Leading Cases. A Selection of Leading Cases on the Law relating to Beal Property, Conveyancing, and the Construction of Wills and Deeds ; with ' Notes. By O. D. Tudok. Esq., Barrister-at-Law. Folirth Edition. Price 506-. ; for Cash, post free, 40s. M. 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